IN PRAISE OF DEVELOPERS
Did I happen to mention I love Real Estate Developers? Not like I love my wife or my kids, or even my dog, but Real Estate Developers are definitely among my favorite people.
Think about it.
Real Estate Developers are like Gods. [Well, miniature gods, at least.] They create much of the physical world we inhabit. The homes and condominiums we live in. The grocery store and pharmacy down the street. The resorts and casinos and golf courses we enjoy for leisure. Restaurants. Shopping centers. Office buildings. Movie theaters. Truck terminals. Medical and surgical centers. Spas. Factories. Warehouses. Auditoriums. Parking garages. Hotels.
You name it; if its “man-made”, attached to dirt, and we can get inside it, a Real Estate Developer was probably involved.
Real Estate Developers are visionaries. They have the vision to recognize trends and the need for change. They recognize imbalances between what exists and what is needed. They see neighborhoods and towns and regions in flux as opportunities for renewal and improvement. Not only do Real Estate Developers see opportunity, they seize it. They envision change and commit to it. Then work with it; massage it; shape it; squeeze it; stir it; shake it; blend it; juggle it; and make it happen.
How could anyone not love that?
Real Estate Developers are visionaries with a purpose. Visionaries who know how to transform their vision into reality. They are optimists. They are dreamers and doers wrapped into one. And for me, they are fun. Not funny, necessarily, but fun to be around. Fun to work with. Fun to dream with.
I remember back in 1992 when John L. Marks of Mark IV Realty Group walked into my office and said he wanted to buy and redevelop the Marina City Commercial Complex in downtown Chicago. At the time, the Marina City Commercial Complex was a rat hole. Largely vacant. In foreclosure. Languishing in bankruptcy. Burdened with nearly $10,000,000 in unpaid and delinquent real estate taxes. Physically decaying and needing tens of millions of dollars in repairs. The residential condominium owners occupying the top 40 floors of the two landmark corn cob shaped towers were understandably hostile and uncooperative – having been burned in the past by broken promises of prior owners.
Yet, in all of this mess, John saw opportunity. He had a vision that this dilapidated, decaying behemoth of an eyesore could be transformed into an economically viable and thriving jewel.
We spent most of the next four years working on that project. The transformation was remarkable. We had a blast making it happen.
Today, the Marina City Commercial Complex is home to the House of Blues, the House of Blues Hotel, Smith and Wollensky Steak House, Bin 36 Wine Café, Crunch Fitness, 10 Pin Bowling Lounge, Marina Management, Skipper Bud's Marina, and numerous other thriving businesses. The pie-shaped condominiums starting above the 20 story parking garage in each of the residential towers have risen substantially in value and offer some of the most dramatic skyline views in Chicago. The entire Marina City complex has been reestablished as a thriving mixed-use and entertainment mecca in the heart of Chicago.
Why? Because Chicago Real Estate Developer John L. Marks had the vision and commitment to make it happen.
Did I mention I love Real Estate Developers?
More recently, in the Spring of 2005, I got the call to join the development team of Madkatstep Entertainment LLC.
Madkatstep Entertainment is a combined venture of Sears, Roebuck and Co., the retailing giant, and Ryan Companies US, Inc., a remarkably creative and entrepreneurial Real Estate Developer based in Minneapolis, Minnesota. [Yes, I love Ryan Companies too.]
It started with an idea.
Ryan Companies had the notion to build and own a sports and entertainment venue in an affluent community in need of convenient and unique entertainment options.
Sears had moved its corporate headquarters to Hoffman Estates, Illinois in the early 1990s. As part of that move, Sears had acquired a large tract of adjacent land that was ready and available for development.
Hoffman Estates is a forward looking community in a growing and affluent region northwest of Chicago in search of quality of life amenities for its residents.
It was a match made in heaven.
By the time I was called in as lead development counsel, Sears and Ryan had already negotiated a Memorandum of Understanding with the Village of Hoffman Estates setting forth a basic framework for the new Sears Centre Arena, including general terms for municipal financing.
A major tenant for the new Sears Centre Arena is a professional hockey team. A key development objective was to have the 11,000 capacity, 240,000 square foot arena built and ready for occupancy in time for the Fall 2006 hockey season. It was already April 2005, only 18 months from the target opening date. Even the most accelerated construction schedule required a minimum of 14 months from groundbreaking to opening. Time was running out.
In the 100 day rush that followed, the entire development team entered a zone and worked nearly around the clock with the Village of Hoffman Estates.
The Real Estate Developer, Ryan Companies US, Inc., working closely with the real estate department at Sears, Roebuck and Co., negotiated agreements, confronted issues and overcame obstacles to obtain formal development approval, finalized municipal financing, formalized the naming rights agreement and ownership agreements, and accommodated project dissenters who were threatening litigation to delay or stop the arena from being built.
In the end, it was creativity, perseverance and intense focus that led to the official groundbreaking for Sears Centre Arena on July 21, 2005. It is a unique sports and entertainment facility that will serve the Village of Hoffman Estates and neighboring towns for decades to come. It is already serving as an economic engine for complementary development that will provide new jobs, new opportunities and a broadened tax base.
These two examples of creative development by visionary Real Estate Developers are not unique. Between these two notable examples, and beyond, the scenario plays out over and over again in large and small development projects every day.
Renewal of functionally obsolete or declining shopping centers, warehouses and other structures into modern and thriving enterprises.
Resurrection of blighted and decaying areas in cities and towns into homes and condominiums with retail and service businesses to support new neighborhoods.
Recycling of contaminated brownfields into safe and productive environments for consumers and business.
Greenfield developments to provide new opportunities, new jobs and new services for emerging communities and families.
Real Estate Developers are seeing a need, stepping up to the challenge and improving the world in which we live.
I have been blessed to work with some amazingly creative and dedicated Real Estate Developers, both large and small, who are making a difference – and a profit – while having fun in the process.
Did I say fun? Maybe not during every moment while facing every challenge, but by and large Real Estate Developers are people who genuinely enjoy what they are doing. As a commercial real estate attorney, working with Real Estate Developers has always been, for me, exhilarating.
Why do I love Real Estate Developers? Ask yourself: How many times do you have the opportunity to work with people who make your job “exhilarating”? What’s not to love about that?
So, the next time you meet a Real Estate Developer, please, grab the developer’s hand, look him or her directly in the eye and say with deepest gratitude and sincerity:
“Thank you! My friend Kymn Harp thinks you are the most wonderful person in the world. He loves you and thinks you are brilliant.” [Then slip him my business card and ask him to call me.]
Thanks for listening.
R. Kymn Harp
P.S. For those of you with “normal” names – or at least conventional name spellings, you may appreciate this assist:
My name “Kymn” is a family name and is pronounced “Kim”. Think of “Kymn” as being like a “church hymn”, with a “K” instead of an “H”. To remember this, associate my last name “Harp” with “Angels”. Then, if it helps, think of me as “Kymn Harp, the Real Estate Developer’s dirt-angel” (with a law degree).
Thanks again,
Kymn
Think about it.
Real Estate Developers are like Gods. [Well, miniature gods, at least.] They create much of the physical world we inhabit. The homes and condominiums we live in. The grocery store and pharmacy down the street. The resorts and casinos and golf courses we enjoy for leisure. Restaurants. Shopping centers. Office buildings. Movie theaters. Truck terminals. Medical and surgical centers. Spas. Factories. Warehouses. Auditoriums. Parking garages. Hotels.
You name it; if its “man-made”, attached to dirt, and we can get inside it, a Real Estate Developer was probably involved.
Real Estate Developers are visionaries. They have the vision to recognize trends and the need for change. They recognize imbalances between what exists and what is needed. They see neighborhoods and towns and regions in flux as opportunities for renewal and improvement. Not only do Real Estate Developers see opportunity, they seize it. They envision change and commit to it. Then work with it; massage it; shape it; squeeze it; stir it; shake it; blend it; juggle it; and make it happen.
How could anyone not love that?
Real Estate Developers are visionaries with a purpose. Visionaries who know how to transform their vision into reality. They are optimists. They are dreamers and doers wrapped into one. And for me, they are fun. Not funny, necessarily, but fun to be around. Fun to work with. Fun to dream with.
I remember back in 1992 when John L. Marks of Mark IV Realty Group walked into my office and said he wanted to buy and redevelop the Marina City Commercial Complex in downtown Chicago. At the time, the Marina City Commercial Complex was a rat hole. Largely vacant. In foreclosure. Languishing in bankruptcy. Burdened with nearly $10,000,000 in unpaid and delinquent real estate taxes. Physically decaying and needing tens of millions of dollars in repairs. The residential condominium owners occupying the top 40 floors of the two landmark corn cob shaped towers were understandably hostile and uncooperative – having been burned in the past by broken promises of prior owners.
Yet, in all of this mess, John saw opportunity. He had a vision that this dilapidated, decaying behemoth of an eyesore could be transformed into an economically viable and thriving jewel.
We spent most of the next four years working on that project. The transformation was remarkable. We had a blast making it happen.
Today, the Marina City Commercial Complex is home to the House of Blues, the House of Blues Hotel, Smith and Wollensky Steak House, Bin 36 Wine Café, Crunch Fitness, 10 Pin Bowling Lounge, Marina Management, Skipper Bud's Marina, and numerous other thriving businesses. The pie-shaped condominiums starting above the 20 story parking garage in each of the residential towers have risen substantially in value and offer some of the most dramatic skyline views in Chicago. The entire Marina City complex has been reestablished as a thriving mixed-use and entertainment mecca in the heart of Chicago.
Why? Because Chicago Real Estate Developer John L. Marks had the vision and commitment to make it happen.
Did I mention I love Real Estate Developers?
More recently, in the Spring of 2005, I got the call to join the development team of Madkatstep Entertainment LLC.
Madkatstep Entertainment is a combined venture of Sears, Roebuck and Co., the retailing giant, and Ryan Companies US, Inc., a remarkably creative and entrepreneurial Real Estate Developer based in Minneapolis, Minnesota. [Yes, I love Ryan Companies too.]
It started with an idea.
Ryan Companies had the notion to build and own a sports and entertainment venue in an affluent community in need of convenient and unique entertainment options.
Sears had moved its corporate headquarters to Hoffman Estates, Illinois in the early 1990s. As part of that move, Sears had acquired a large tract of adjacent land that was ready and available for development.
Hoffman Estates is a forward looking community in a growing and affluent region northwest of Chicago in search of quality of life amenities for its residents.
It was a match made in heaven.
By the time I was called in as lead development counsel, Sears and Ryan had already negotiated a Memorandum of Understanding with the Village of Hoffman Estates setting forth a basic framework for the new Sears Centre Arena, including general terms for municipal financing.
A major tenant for the new Sears Centre Arena is a professional hockey team. A key development objective was to have the 11,000 capacity, 240,000 square foot arena built and ready for occupancy in time for the Fall 2006 hockey season. It was already April 2005, only 18 months from the target opening date. Even the most accelerated construction schedule required a minimum of 14 months from groundbreaking to opening. Time was running out.
In the 100 day rush that followed, the entire development team entered a zone and worked nearly around the clock with the Village of Hoffman Estates.
The Real Estate Developer, Ryan Companies US, Inc., working closely with the real estate department at Sears, Roebuck and Co., negotiated agreements, confronted issues and overcame obstacles to obtain formal development approval, finalized municipal financing, formalized the naming rights agreement and ownership agreements, and accommodated project dissenters who were threatening litigation to delay or stop the arena from being built.
In the end, it was creativity, perseverance and intense focus that led to the official groundbreaking for Sears Centre Arena on July 21, 2005. It is a unique sports and entertainment facility that will serve the Village of Hoffman Estates and neighboring towns for decades to come. It is already serving as an economic engine for complementary development that will provide new jobs, new opportunities and a broadened tax base.
These two examples of creative development by visionary Real Estate Developers are not unique. Between these two notable examples, and beyond, the scenario plays out over and over again in large and small development projects every day.
Renewal of functionally obsolete or declining shopping centers, warehouses and other structures into modern and thriving enterprises.
Resurrection of blighted and decaying areas in cities and towns into homes and condominiums with retail and service businesses to support new neighborhoods.
Recycling of contaminated brownfields into safe and productive environments for consumers and business.
Greenfield developments to provide new opportunities, new jobs and new services for emerging communities and families.
Real Estate Developers are seeing a need, stepping up to the challenge and improving the world in which we live.
I have been blessed to work with some amazingly creative and dedicated Real Estate Developers, both large and small, who are making a difference – and a profit – while having fun in the process.
Did I say fun? Maybe not during every moment while facing every challenge, but by and large Real Estate Developers are people who genuinely enjoy what they are doing. As a commercial real estate attorney, working with Real Estate Developers has always been, for me, exhilarating.
Why do I love Real Estate Developers? Ask yourself: How many times do you have the opportunity to work with people who make your job “exhilarating”? What’s not to love about that?
So, the next time you meet a Real Estate Developer, please, grab the developer’s hand, look him or her directly in the eye and say with deepest gratitude and sincerity:
“Thank you! My friend Kymn Harp thinks you are the most wonderful person in the world. He loves you and thinks you are brilliant.” [Then slip him my business card and ask him to call me.]
Thanks for listening.
R. Kymn Harp
P.S. For those of you with “normal” names – or at least conventional name spellings, you may appreciate this assist:
My name “Kymn” is a family name and is pronounced “Kim”. Think of “Kymn” as being like a “church hymn”, with a “K” instead of an “H”. To remember this, associate my last name “Harp” with “Angels”. Then, if it helps, think of me as “Kymn Harp, the Real Estate Developer’s dirt-angel” (with a law degree).
Thanks again,
Kymn
posted by R Kymn Harp | 12:51 PM
2 Comments:
Liked your articles and have printed them out for further reading.
Have a question for you regarding certain listing practice that I recently heard of:
A broker takes a listing on a property at what he agrees with the owner is the 'true' value of the property but then advertises the property to the public and other brokers as being some 10%, 15%, 20% above the listing document price. Is this legal? Seems to me a case could be made that the broker is fraudulently advertising.
Just thought it might be worthy of debate.
thanks.
S.Stephens.
Steve,
I would be interested to see what others think about this issue. As to the question of whether it "is legal", the answer depends upon the underlying facts and what the listing Seller has actually agreed to with the listing Broker.
In checking with real estate licensing lawyers in my office, I am advised that, in Illinois, a Broker must present a "truthful picture" in the Broker's advertising.
Even so, the listing Broker's fiduciary duty is to the Seller. As such, the listing Broker need not (and, in fact, must not) disclose confidential information obtained from Seller to the detriment of Seller. Consequently, if the listing agreement says something to the effect that "the property will be listed and advertised for sale for $1,200,000, but Seller agrees that Seller will accept an offer (or, at least, be obligated to pay a Broker's commission) if the offer is for not less than $1,000,000", this may be acceptable and not violate real estate licensing laws.
The advertised listing price of $1,200,000 presents a "truthful picture" of what the Seller wants for the property, but does not reveal confidential information as to what the Seller might, in fact, actually be willing to accept.
The reason a listing Broker may want to proceed in this way is to avoid a commission dispute with the Seller if an offer comes in for less than the listing price (which, as we all know, is remarkably common).
Also, if the listing Broker really thinks the property's value is $1,000,000, but the Seller wants to test the market at a higher price, the Broker may reasonably want to protect itself against the risk of spending time and money marketing a property, only to have the Seller refuse to accept a full value offer (which happens to be less than the price the Seller wants to try to get).
As the current commercial real estate market demonstrates clearly, determining real estate values is not, by any stretch of the imagination, an exact science.
If anyone else is interested in posting a comment on this topic, the post would be welcome.
Thanks for your post.
R. Kymn Harp
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