In The News

By Andrew Robinson – Reporter, Louisville Business First
Mar 22, 2013, 6:00am EDT

Shelbyville Road Plaza has landed a national retailer to fill a large space that has been empty since 2009.

Seattle-based Nordstrom Inc. plans to open a 33,000-square-foot Nordstrom Rack store in October at Shelbyville Road Plaza, owned by Hagan Properties Inc. The location previously housed a Circuit City store.

Tommy Edwards, leasing agent for Hagan Properties, declined to disclose terms of the lease or the cost of renovation work, but he said the renovations would cost “a significant amount for both sides.”

Edwards said he was aware of Nordstrom’s interest in the site for several years. The location will be one of two dozen the company plans to open this year nationwide.

“They have a timeline you have to work under,” Edwards said. “But we’re very excited. They’re a first-class company.”

Workers have been in the building since last week to prepare it for renovations, which will include a new facade.

Stores offer wide selection
Nordstrom Rack is described by the company as “the off-price retail division of Nordstrom Inc.”

It carries merchandise from Nordstrom stores and Nordstrom.com at 50 percent to 60 percent off original Nordstrom prices.

It also carries apparel, accessories and shoes that are purchased for Nordstrom Rack stores from many brands carried in Nordstrom stores, including Hugo Boss, Kate Spade and Trina Turk.

Nordstrom officials confirmed the plans for the location but declined further comment.

In a statement, Geevy Thomas, president of Nordstrom Rack, said, “We’ve been looking for ways to better serve our customers living in Kentucky who have been making the drive to visit our Rack stores in Cincinnati and Indianapolis.”

Nordstrom operates 240 stores in 31 states, including 117 full-line stores and 121 Nordstrom Rack locations. It also operates two Jeffrey boutique locations, a Treasure & Bond store and a clearance store.

Nordstrom Rack rapidly growing
Blake Nordstrom, president of Nordstrom, said during the company’s earnings conference call last month that the company expects to nearly double the number of Rack stores to more than 230 during the next four years.

In 2012, Rack’s total sales were up 20 percent, with same-store sales up 7.4 percent.

Nordstrom Rack stores averaged $550 in sales per square foot last year, Blake Nordstrom said.

Michael G. Koppel, CFO for Nordstrom, said at the Bank of America Merrill Lynch 2013 Consumer & Retail Conference on March 13 that Nordstrom Rack typically draws a younger customer than the company’s Nordstrom stores.

Nordstrom launched its Rack concept about 20 years ago, and Koppel said it took company officials several years to understand how to make the brand a good growth opportunity for the company.

“The ability for us to get great real estate and put great product in that real estate just seems to get better as we scale that business up,” Koppel said.

Borders space remains vacant
Nordstrom Rack will be the second clothing retailer to open at Shelbyville Road Plaza this year.

Ross Dress For Less opened earlier this month in a 28,000-square-foot space that had housed a Wild Oats store.

But a 26,000-square-foot space that previously housed a Borders bookstore remains vacant in the St. Matthews shopping center.

Edwards said Hagan officials still are determining whether the space should be leased as one space or be broken up for multiple tenants.

Edwards has spoken with several potential tenants since Borders closed in October 2011.

The shopping center’s newest tenant might help attract more interest, Edwards said.

“There might be some tenants who would like to piggyback off Nordstrom Rack being here.”

By Andrew Robinson – Reporter, Louisville Business First
Nov 5, 2012, 3:01pm EST Updated Nov 5, 2012, 3:16pm EST

Ross Stores Inc. is planning to open a Ross Dress For Less location at 4600 Shelbyville Road in the Shelbyville Road Plaza shopping center.

The store will occupy the former Wild Oats space, which is about 28,000 square feet, according to Tommy Edwards, a retail leasing representative for Hagan Properties Inc., which owns the property.

Wild Oats closed the store in 2007, following its merger with Whole Foods.

Edwards said he expects Ross Dress For Less to open in March.

Ross Dress For Less opened a location at Jefferson Mall earlier this year.

Ross Stores (NASDAQ: ROST) is based in Pleasanton, Calif., and operates 1,097 Ross Dress For Less stores across the country.

Ross offers discounted name-brand and designer apparel, accessories, footwear and home fashions, according to the company’s Web site.

By Kevin Eigelbach – Staff Writer
Jul 22, 2011, 6:00am EDT

The owners of The Paddock at Eastpoint, a 500-unit apartment complex off La Grange Road, recently refinanced the complex in a $39.5 million deal.

The Louisville-based Mercer Rowland Ryan Financial Group of UBS Financial Serv­ices provided the loan, which was the largest such loan in terms of dollars that the Louisville office has done since at least 2000, said Todd Mercer, senior vice president for UBS in Louisville.

Hagan Properties Inc., which built, owns and manages The Paddock, had searched for permanent financing for well more than a year before closing the deal with UBS, Hagan Properties principal Wendy Hagan said.

It was not very difficult to find financial institutions willing to lend money based on the future cash flows from an apartment complex, she said. “Apartment communities are sort of the darlings of financing right now,” she said.

But it was hard to find a financial institution willing to fund such a large complex, Hagan said.

A $40 million refinancing would exceed the lending limits for most community banks unless they decided to collaborate on a loan, which rarely happens, said Tim Martin, chairman of the real estate department at Louisville law firm Frost Brown Todd LLC.

Regional banks, such as PNC Financial Services, could make a loan that big, he said, but their willingness to do so would depend on how much of that particular asset class they had in their loan portfolios.

Underwriting standards at banks have tightened since 2008, he said, with banks requiring more up-front equity to make a loan. If he had a client that wanted $35 million or so to finance an apartment complex, he said, he would refer them to a life-insurance company.

“They are less risk-averse (than banks),” he said. “They love apartments.”

Many offers to purchase
Hagan Properties had many offers to purchase The Paddock complex, but that isn’t the company’s business model, which is to build then manage its own properties, Hagan said.

Hagan Properties connected with UBS through Wendy Hagan’s husband, Scott Hagan, principal and founder of Hagan Properties.

UBS handles Scott Hagan’s personal wealth management, Mercer said.

Scott Hagan and Mercer were talking about the lack of a go-to bank for large real estate lending because of the 2008 financial crisis, Mercer said, when Scott Hagan mentioned that Hagan Properties needed permanent financing for The Paddock. Mercer arranged for financing through a UBS division that specializes in real estate lending.

In addition to being an investment manager, Zurich, Switzerland-based UBS AG is one of the world’s largest banks, Mercer said. “We want people to think of us on both sides of the balance sheet.”

Takes risk off the table
The loan provides Hagan Properties with a 10-year locked-in interest rate with a 30-year amortization schedule, Mercer said.

It replaces two previous loans, a permanent loan from Nationwide Insurance and a construction loan from Regions Bank, Wendy Hagan said.

“We’re really excited about doing the deal,” Mercer said. The Paddock “is probably, if not the nicest, then one of the nicest and premier multifamily properties in Louisville.”

The loan took a lot of risk off the table for Hagan Properties by changing variable-rate loans to a fixed interest rate, Wendy Hagan said. The interest rate dropped to 5.29 percent from 6 percent, she said, and the interest savings will be substantial, but she declined to say how much.

She said the change enables the company to “spend more time doing business and less time worrying about financing.”

By Kevin Eigelbach – Staff Writer
Jul 8, 2011, 6:00am EDT

Things are happening again at Signature Point, an ambitious apartment/condominium development in far eastern Louisville that ran into financial trouble before even 5 percent of the planned dwellings were built.

An investor group, Managed Assets of Kentucky LLC, led by developer Michael Schroering, plans to build 392 upscale apartments on 32 acres of the 90-acre property.

Managed Assets purchased the site from PBI Bank in May 2010 for $3.8 million, Schroering said.

Schroering hopes to cash in on the fact that rents are rising at existing apartment complexes, which are at capacity because the rental market has been swamped as foreclosures push people out of single-family homes.

“The apartment market is really red hot right now,” Schroering said.

The location and existing infrastructure at Signature Point made the site appealing for his planned apartments. “We really like the development,” he said.

Roads, sewers, clubhouse in place
If Schroering breaks ground on the apartment complex in August as planned, it will mark the first construction at the development since March 2010, when work on condominiums at the site halted with some units not completed, according to court documents.

Those units still stand, and some are occupied. But others are incomplete and do not have decks built outside second-story patio doors.

The original plan for the development called for the subdivision to be divided into two major sections, Schroering said.

The northernmost section would contain 350 condominiums, and the southernmost — the site purchased by Managed Assets — would contain 400 apartments.

Between March 2007 and March 2010, a clubhouse, pool, roads, sewers and 20 condominiums were built at Signature Point before the developers ran into financial trouble, according to court documents.

PBI Bank wound up with property
The 90-acre Signature Point property came into PBI Bank’s possession in March 2010 when Signature Point Condominiums LLC, Signature Point Apartments LLC and Signature Point KTC LLC deeded the property to the bank in lieu of foreclosure, according to a deed filed at the Jefferson County Clerk’s office.

In March 2007, the bank had agreed to grant the companies a $25.5 million development and construction loan in connection with the project.

The note was guaranteed by James Mims, George McGehee, J. Scott Hagan, Mark Sneed and Wendy Hargrove, according to court documents.

As part of a lawsuit that Kelsey Construction LLC filed in 2009 in an effort to be paid for work done on the development, PBI Bank alleged that the companies had failed to make payments on the loan and asked Jefferson Circuit Court to foreclose on the property.

PBI Bank officials did not return calls for comment on this story, and it could not be determined what the bank plans for the remaining acres at Signature Point.

Too expensive, too many stories
Schroering said he thinks there were three key problems with the original Signature Point plan:

• At $500,000 apiece, the condominiums were priced too high.

• Their three-story design was fine for big cities such as New York City, he said, but not for Louisville.

• And the economic downturn hit soon after construction started.

Hagan declined to comment for this story, saying that the matter was in litigation. He referred Business First to attorney Larry Zielke, who did not return messages left seeking comment.

The Signature Point companies, of which Hagan is a member, sued Schroering, Managed Assets and PBI Bank last year over the sale of the property to Managed Assets, according to court records.

The suit claims that PBI used confidential information about the original developers’ plans for the property to increase the purchase price.

In its response to the suit, PBI denied the allegations, saying that the claims did not accurately reflect the negotiations that went on among the parties.

Court records indicate that the suit still is pending, but Schoering said he does not believe the lawsuit would affect his plans since his group now holds title to the property.

Another turnaround project
Schroering hopes to break ground on the apartment complex, which he plans to call Cool Springs Apartments, in August, and he is negotiating the financing with PBI Bank and BB&T bank.

It would be one of several local housing-related projects left incomplete because of the recession but resurrected by new owners.

Business First has reported recently on several developments that fit that description, including River Breeze Apartments, Landis Springs and Brookfield.

Fine finishing touches
Designed by Bayus Design Works, 2908 Eastpoint Parkway, the Cool Springs apartments will be 8 percent to 10 percent larger than typical apartments in this area, Schroering said.

The one-bedroom apartments, for example, would be between 706 and 749 square feet apiece.

The units will have plenty of storage, granite kitchen countertops and stainless steel appliances, he added.

Schroering expects the first phase of 144 units to cost about $15 million, and the total project to cost $30 million to $35 million, he said.

The project gets a big boost from being able to use the clubhouse and pool already built for Signature Point, he said.

“It makes it easier to get a real feeling that you’re part of something,” he said of the appeal to prospective renters.

Condo part of Signature Point being reworked
Meanwhile, on behalf of PBI Bank, Schroering’s The Schroering Company Inc. has taken over marketing and sales of the condominiums that already have been built at Signature Point.

The asking price has been lowered to $350,000 for the least-expensive units.

Schroering said he has been working with PBI Bank on a redesign of the condominium portion of the development.

The project is expected to have about half as many dwellings as originally planned, and it will be refashioned to include condominiums, duplexes and single-family homes.

Schroering said he expects the bank to sell parcels to builders, but the development will have an overall design plan that the buildings must conform to, within limits.

He described the plan as similar to the Norton Commons development, located off Interstate 71 close to the Oldham County border.

| Signature Point
Size: About 90 acres

Location: On South English Station Road just east of the intersection of the Gene Snyder Freeway and Interstate 64

Original plan: 400 apartments and 350 condominiums

Built to date: 20 three-story condominiums, with 11 of them sold as of June

Original owners: Signature Point Condominiums LLC, Signature Point Apartments LLC and Signature Point KTC LLC

Current owners: PBI Bank and Managed Assets of Kentucky LLC. The latter is a partnership between Michael Schroering, Paul Elmes, Jim Tutt and Harry Borders.

By Sarah Jeffords  – Business First Staff Writer
Sep 10, 2007, 12:00am EDT Updated Sep 6, 2007, 3:04pm EDT

After three-plus years in the planning stages, there are visible signs of progress on the Signature Point residential community.

Roads are in. Landscaping is in bloom, and the first 20 townhomes are under way.

Three of those units will be models so prospective buyers can see different floor plans and finishes, said Wendy Hargrove, condominium developer for Hagan Properties Inc.

The Louisville real estate firm is developing the 90-acre site, located on South English Station Road behind Christian Academy’s English Station campus, just east of the Gene Snyder Freeway.

Plans call for Signature Point to have 500 units, ranging in price from $370,000 to $488,000. At least 200 of those units will be townhomes, also known as brownstones, with two, two-and-a-half or three levels.

Manor homes, which will be divided into four, one-level condominiums, are a second type of home that Hagan Properties will build at Signature Point. Construction of manor homes will start in October.

The developer has proposed a third residential option that would be a four-story structure with a garage on the first floor and three upper levels of condos.

Referred to as a butterfly building because of the design, it would have two units per floor and a central bank of elevators.

The concept needs design approvals from the Louisville Metro Planning Commission’s Land Development and Transportation Committee, Hargrove said.

Estimated completion date is 2016
Hagan Properties plans to invest $250 million in the community by the time the project is wrapped up in 2016.

The firm is spending about $78 million on the first 200 brownstones, Hargrove said. The project is being financed by PBI Bank.

Before making an investment of that size, Hagan Properties visited several communities, including Boston and Washington, D.C.’s Georgetown district, to get a sense of those traditional neighborhoods. Closer to home, St. James Court was considered a model.

Then, with the help of Winter Park, Fla.-based Fugleberg Koch Architects, Hagan officials incorporated those concepts into their own traditional neighborhood development.

Amenities help foster sense of community
The end result is architecture reminiscent of the Federalist and Georgian styles, a network of sidewalks and common spaces designed to foster interaction among residents, and resort-style amenities, Hargrove said.

In particular, Signature Point will have a 5,700-square-foot clubhouse, named Magnolia Hall, that is under construction.

There also will be an outdoor pool, a hot tub, and two separate buildings — housing a fitness center and a children’s activity center — that each will be 1,000 square feet.

A park with a fenced-in puppy playground, a gazebo with a butterfly garden and a small amphitheater where concerts and events will be held also are part of the development.

As Signature Point grows, Hargove said, a concierge will be hired to coordinate dry cleaning service, on-site farmers’ markets, gourmet cooking classes, wine-and-cheese parties, children’s activities and other events.

Several open house events planned
The lifestyle that Signature Point offers has caught the attention of more than 100 potential buyers who have expressed an interest in the brownstone units.

No units have been sold — developers were waiting to sign contracts until the Louisville-Jefferson County Metropolitan Sewer District gave final sewer approvals, which happened last week.

But Hagan officials plan to host an open house this month for prospective residents, and a series of open-house events is planned for area Realtors.