College Town Update

College Town Update

Jerry Kutz
6/28/2014

"CollegeTown Phase II was recently approved and construction will begin in the near future. It will likely be on line by 2015 season.

I recently wrote a story about CT with updated financial information. What I learned from that exercise is that you have to look at a much bigger picture when evaluating CT early success. It's kind of like lining up a putt. If you just read the green, without looking at the overall topography of the course, you'll probably miss the putt.

The CT project has exceeded financial expectations for investors and is producing revenue that Seminole Boosters uses to fund athletics, so in the very short term it is fulfilling its goal. CT has enjoyed 100 percent occupancy in its residences, very close to 100 percent occupancy in its retail and while several of the establishments struggled in their first year, which is typical of any new project, adjustments are being made to help those retailers and there is a healthy list of retailers wanting to lease space in CT. The area referenced about America's Back Yard will be developed. There were some concerns about the original plan with just ABY so the developer, ABY and the Boosters are re-imagining what will be built there. In the mean time its good parking for CT. I would imagine we'll see construction on that site in the next couple of years.

When you look at CT you have to look at the bigger picture and what CT in conjunction with the City of Tallahassee's work along Gaines has inspired in that area. 4000 new beds will open in August. Numerous retailers are moving into the once blighted area. Railroad Avenue is growing.

If you want an unbiased measurement of CT just look at what property values have done in the area.

While the Boosters income statement on CT is better than projected for the first year, the real bonanza is on the balance sheet where Booster real estate holdings in that area have escalated beyond expectation. That's great for the financial health of the Boosters and Athletics. As just one example, the Hoggly Woggly convenience store on Pensacola, donated to the Boosters some years ago, was recently leased to CVS pharmacy at a much, much higher lease rate. CVS had the vision to see what was happening in the area and wanted in. That drives the value of that parcel north as well as the other 20-plus acres of land held by the Boosters in the area. Urban Outfitters opened this past winter. There's a condo project -- Railroad Lofts -- selling well, a boutique hotel with parking garage in the planning stages, and a major grocer taking a hard look too. North American properties is leasing retail as well as residential at excellent pace.

The university and Boosters commitment to develop that side of campus gave national apartment complex developers like North American and retailers like CVS and Urban Outfitters the confidence to invest and the retailers in college town will enjoy the impact of those 4000 new residents this fall. The city of Tallahassee is investing in infrastructure too with beautification of Gaines, the renovation of Woodward from campus to gaines with wider sidewalks, underground utilities, street lamps, etc. An area that had generated little or no sales tax or real estate tax for the city is now generating millions of dollars which is great for the city, county, state, university, Boosters and athletics.

You will see CT continue to evolve as it matures as mixed use properties tend to do in their early years but throughout the process, look around at the bigger picture and realize all of that development ultimately benefits FSU."