Steve Foutch is managing director of Foutch Brothers, which is the developer of Stove Factory Lofts. This is the development at the former Tire Town, or Great Western Stove, complex in the area of Choctaw and Esplanade streets.
1. There's been a lot of recent activity at the site of the Stove Factory Lofts. Can you provide us an update on the project?
The bank loan and investor financing have finally closed and we are under construction. You won't see a lot of activity from the outside of the building just yet, but as the weather gets warmer and the pile of dirt on the south side gets transferred back into the center courtyard, you'll see more contractors and workers on site.
2. Is the project being done in phases? If so, can you provide a timeline for when each phase is supposed to be completed?
We have technically split the project into phases for financing reasons, but we are basically working from east to west. The first 36 units may be done by the end of the year, but depending on the progress of the adjacent building(s) and how codes/life safety will allow occupancy next to active construction, those may have to wait until spring of 2014. The whole east side of Second Street should be done by the end of 2014, and the west side building following a few months after that.
3. Can you provide an overview of what the buildings will be used for once the project is completed?
A majority of the complex will be residential apartments: studios for monthly visitors, and one, two and three bedroom apartments for annual rental. We will also have 10,000 square feet of dynamic office space that we would like to get under contract and build it out to suite the tenant. We will also have a restaurant that needs an operator or be leased out. The center courtyard will all be landscaping, rainwater retention water features and general seating and tenant space.
4. Many people remember the site as the former location of Tire Town. How was the name Stove Factory Lofts selected?
Actually our "legal" name is Stove Factory Lofts since Tire Town and Great Western Stove are still operating businesses and we don't want to interfere with their operations. The original name and owner of the complex is the Great Western Stove complex, which is its "historic" certification name, which it is also very well known. We thought about new names for a while, but had to create a new legal entity quickly, so Stove Factory Lofts was about the best we came up with. Sorry.
5. What are some the hurdles the project has encountered?
Many, many hurdles to get a project of this size moving and getting investors wanting to afford the risk. The biggest hurdle was when the state capped the Historic Tax Credits a few years ago; we were almost done with financing arrangements when that decision stopped everything and the investors pulled out since they couldn't guarantee when they would get reimbursed. Then the recession hit, and for three years no bank was lending on projects like this. So when we finally did get a financial team back together, it took 15 months to review environmental reports and compliance regulations, historic design documents and state/federal approvals to proceed, market studies if rental rates and demand would hold up since there are very few comparables in the area, etc. In the middle of that time, an IRS case called "The Boardwalk Decision" almost stopped the whole project again — a legal case in which the structure of an equity deal was not set up properly, so all other deals in the works were reviewed and changed to meet the IRS code. The city staff and commission all know of other local hurdles we went through, which were minor compared to what the risk-averse bankers and equity investors want for comfort.