June 22, 2015

$215M next phase of North Gulch’s Capitol View project to begin

Three new buildings with an overall total construction cost of $215 million are coming to the North Gulch in the next phase of the mixed-use Capitol View development.

By year’s end, construction should start on a $90 million, six-story, mixed-use building on the former car dealership site across 11th Avenue North from where headquarters for two subsidiaries of the HCA hospital chain is rising. It would include up to 60,000 square feet of ground-level retail space and up to 50,000 square feet of second-floor office space, up to 375 apartment units and a roughly 1,000-space parking garage, according to drawings the developers behind the project provided this week.

Property owner Northwestern Mutual and its development partners Boyle Investment Co. and Northwood Ravin also disclosed the project’s Atlanta-based architect Cooper Carry is finalizing separate drawings for the next office building at Capitol View.

That 10-story, 300,000-square-foot Class A office building is part of an overall $125 million project planned for five acres at 11th Avenue North and Nelson Merry Street, which is also expected to include 20,000 square feet of ground-floor retail space and a 1,200-space garage and a 150-room limited-service hotel. That office building and the hotel, which will be a separate building, will wrap around the garage.

“We’re thrilled to get started,” said Jeff Haynes, a partner in real estate investment firm Boyle, adding the partnership settled on that mix after a year studying the best use for the first two blocks of Capitol View and many successful urban mixed-use projects nationwide.

Phil Fawcett, chief manager of Boyle’s Nashville office, said the company is in serious discussions with a grocery store chain for retail space at the mixed-use building planned at the former Hansen Chrysler Plymouth Jeff-Eagle dealership, which also was at one time a temporary Greyhound bus station, at 11th Avenue and Charlotte.

Last fall, development kicked off at the 32-acre Capitol View site with the $200 million headquarters for HCA’s cancer arm Sarah Cannon and health-care business solutions company Parallon under construction on part of the 10.5-acre tract the hospital chain purchased from Northwestern. Those subsidiaries are expected to occupy the building west of 11th Avenue and closer to Interstate 40 by the end of next year, bringing the first group of an anticipated 2,000 employees HCA plans at that location.

After the new buildings are built, Northwestern and Boyle will still have half of Capitol View’s overall acreage to develop. Upon completion, Capitol View is expected to offer up to 1 million square feet of office space, up to 300,000 square feet of retail space, up to 1,000 multifamily units, two hotels and over 4,000 parking spaces.

Tom Frye, an independent real estate broker with Baker Storey McDonald Properties in Nashville, said the new office space would be a welcomed addition to the market, but he would be surprised if Northwestern and Boyle move forward with building without at least 50 percent preleasing.

“Until they controlled that piece of land, all of the activity was pushing south of Broadway,” he added. “Capitol View pulls things back to the north again, which adds to vibrancy of the entire central business district.”

Haynes said the mixed-use building with the apartments and retail space planned on the former car dealership site doesn’t require any preleasing. However, Northwestern Mutual wants to have a certain number of office tenants in hand before kicking off construction on the office building planned at 11th Avenue and Nelson Merry.

“We’re in the middle of talking to a number of office prospects who will allow us to satisfy that office preleasing hurdle,” Haynes said, adding Northwestern Mutual will be the lender and equity partner for both of those buildings.

Northwood Ravin of Charlotte, N.C., is the multifamily residential partner for the next phase at Capitol View. Hoar Construction will be the general contractor with locally-based civil engineer Barge Waggoner and Franklin-based landscape architect Kiser Vogrin also part of the team.

In addition to Capitol View, Boyle’s other mixed-used projects in the Nashville area include Berry Farms in Franklin, CityPark Brentwood and Meridian Cool Springs.

Reach Getahn Ward at 615-726-5968 and on Twitter @getahn.

Originally published in The Tennessean

By Getahn Ward