Lantern
Gateway underachieving
Eric Lowry
Issue date: 11/6/06 http://www.thelantern.com/news/2006/11/06/Campus/
The South Campus Gateway made only $1.2 million last year - a fraction of the $8.7 million consultants predicted in 2004.
Campus Partners for Community Urban Development, a developer affiliated with Ohio State, reported the news to the OSU Board of Trustees on Friday.
"These are tough kinds of projects with overwhelming obstacles," said Terry Foegler, president of Campus Partners.
He cited lackluster retail occupancy rates and higher than expected expenses as major contributors to the difference in year-end profits on the $151 million Gateway project. As a result, Campus Partners will not be able to put $600,000 into the university's general fund this year or next as was expected.
But the OSU affiliate is still making a profit on the project and was able to make all service payments on it.
Trustee Leslie Wexner said the project has been successful in eliminating blight in the neighborhood and making it a safer place for students.
Though it was always expected to be profitable, the Gateway project was initiated to "help revitalize High Street and be an important amenity to the neighborhoods around it," said Steve Sterrett, spokesman for Campus Partners.
A year after opening, only 72 percent of retail and 82 percent of office components of the project have been leased, according to the report. That's far from the first-year projection of 95 percent occupancy forecasted by consultants at Jones Lang LaSalle. The difference in occupancy for retail and office space resulted in a loss of $4.4 million of projected revenue.
Campus Partners said they experienced higher than expected interest payments and lower than expected parking revenues and residential occupancy.
Though the addition of Sunflower Market in September has generated further interest in the project, Sterrett does not expect all of the retail spaces to be leased until 2007. But the goal of the Gateway was not to generate large profits.
"The real deal was the protection of the university," Wexner said.
Campus Partners hoped to change the dynamic of the blighted area and create an upward spiral, Sterrett said.
While retail occupancy is slow, the 190 apartments in the Gateway have been at nearly full occupancy.
Apartments in what is now the Gateway area used to be the last to be leased to students, but now they're the first to get leased for the year, Foegler said.
Gateway underachieving
Eric Lowry
Issue date: 11/6/06 http://www.thelantern.com/news/2006/11/06/Campus/
The South Campus Gateway made only $1.2 million last year - a fraction of the $8.7 million consultants predicted in 2004.
Campus Partners for Community Urban Development, a developer affiliated with Ohio State, reported the news to the OSU Board of Trustees on Friday.
"These are tough kinds of projects with overwhelming obstacles," said Terry Foegler, president of Campus Partners.
He cited lackluster retail occupancy rates and higher than expected expenses as major contributors to the difference in year-end profits on the $151 million Gateway project. As a result, Campus Partners will not be able to put $600,000 into the university's general fund this year or next as was expected.
But the OSU affiliate is still making a profit on the project and was able to make all service payments on it.
Trustee Leslie Wexner said the project has been successful in eliminating blight in the neighborhood and making it a safer place for students.
Though it was always expected to be profitable, the Gateway project was initiated to "help revitalize High Street and be an important amenity to the neighborhoods around it," said Steve Sterrett, spokesman for Campus Partners.
A year after opening, only 72 percent of retail and 82 percent of office components of the project have been leased, according to the report. That's far from the first-year projection of 95 percent occupancy forecasted by consultants at Jones Lang LaSalle. The difference in occupancy for retail and office space resulted in a loss of $4.4 million of projected revenue.
Campus Partners said they experienced higher than expected interest payments and lower than expected parking revenues and residential occupancy.
Though the addition of Sunflower Market in September has generated further interest in the project, Sterrett does not expect all of the retail spaces to be leased until 2007. But the goal of the Gateway was not to generate large profits.
"The real deal was the protection of the university," Wexner said.
Campus Partners hoped to change the dynamic of the blighted area and create an upward spiral, Sterrett said.
While retail occupancy is slow, the 190 apartments in the Gateway have been at nearly full occupancy.
Apartments in what is now the Gateway area used to be the last to be leased to students, but now they're the first to get leased for the year, Foegler said.
