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| Passion Investments: Property |
From the Ashes
Michael Verdon
12/01/2004
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Gentry and his
partners asked those questions 11 years ago as they started their first venture
in urban revitalization by transforming an abandoned trolley barn in Tennessee
into the Big River Grille. The six-month project was a dicey gamble.
Chattanooga, where the 12,000-square-foot brick building was sited, was a
decaying steel town that the Environmental Protection Agency once called the
dirtiest city in the United States. The city’s urban renewal plans were still in
their infancy. A world-class aquarium had been built to attract visitors, but
little else was happening downtown. “When we opened in ’93, there was only one
other restaurant,” Gentry recalls.
Over the past decade, Chattanooga has
embarked upon an ambitious makeover of its downtown and waterfront, filling
once-blighted city blocks with hotels, restaurants, art galleries and a minor
league baseball stadium. The Big River Grille has evolved into one of its
commercial anchors, posting year-over-year profits since it opened. Gentry notes
that the 1901 building is well-suited to life as a brew pub: The 30-foot
ceilings and original brick walls accentuate the spacious feel of the
9,000-square-foot restaurant, while the 3,000-square-foot basement provides
ample room for the brew tanks. Gentry estimates that the renovation cost between
$80 and $125 per square foot.
The founders of Gordon Biersch, which Gentry
and his partners acquired in 1999, followed a similar route in the late ’80s.
They renovated the Hills Bros. Coffee building in San Francisco long before the
warehouse district on the waterfront became a trendy nightspot. The company, now
with 25 locations, has since transformed other older buildings into brew pubs.
“We have suburban locations, but we’re primarily an urban renewal company,”
Gentry points out. “We like to be the pioneers of downtown.”
Gentry estimates
that general development costs range from $50 to $200 per square foot, depending
on the building and its location. “The costs could change from a building that
you are turning into a shell, with just walls and a roof, to a complicated
warehouse with multiple stories,” he says. “And there is a big difference in
price between San Francisco and Chattanooga in doing construction.”
Old
industrial structures can be full of hidden financial land mines that can bring
misery to developers on tight budgets. O’Neill says that dealing with hazardous
materials such as asbestos can end up costing more than the building itself.
“It’s expensive and tedious,” he points out. “Like brain surgery, there’s only
one way to do it—the right way.” Yet, despite such potential pitfalls,
Leith-Tetrault believes the mining of America’s former industrial sites will
continue to intensify. “Many are spectacular buildings when they’re finished,”
he says. “And they often have a catalytic impact on the community, promoting
ancillary development.
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