International firm's partnership is "jolt" for University Park Alliance plans
International firm’s partnership is “jolt” for University Park Alliance plans
By Betty Lin-Fisher
Beacon Journal business writer
Published: October 16, 2011 - 07:27 AM
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The University Park Alliance, a nonprofit group working on the redevelopment of 50 city blocks around the University of Akron and surrounding downtown areas, has entered a partnership with an international real estate firm known for its work on sports stadiums and aquariums.
Last spring, the UPA showed off what it called a “Master Plan” put together with the university, business partners and city and county government. The plan divided the area into four districts of downtown along three major roads — Market, Exchange and Main streets.
Now KUD International LLC, with offices in New York, London, Long Beach, Calif., and Orlando, Fla., has joined with UPA on what is being called a “master services agreement.” It will give the company responsibility for developing a portion of the projects outlined by UPA.
The partnership also allows KUD, whose parent company is Kajima Corp. of Japan, to work on financial and other resource issues to help local and other developers secure financing and reduce risk.
Financial details of the partnership were not disclosed.
KUD International has worked on aquariums in Tampa and Long Beach, baseball and football stadiums in San Francisco and Philadelphia and what it called a “large-scale research park” in Israel. The parent Kajima Corp. has offices in 20 countries worldwide.
“This is huge. This is going to give us the competitive advantage we really need,” said Eric Anthony Johnson, UPA executive director. “If you take this off the table, we’ll be no different than any other entity trying to secure financing for projects in a difficult environment.
“This is a jolt to local development,” he said.
The KUD partnership will be celebrated with a welcoming event/news conference Wednesday, with President and Chief Executive Officer Marvin J. Suomi attending. Suomi is a graduate of the University of Michigan and Princeton. He has worked in government service as well as business. He joined Kajima International in 1979.
Service guarantee
KUD’s development services include guarantee commitments, meaning a project is delivered by a certain date and if not, KUD will pay “damages that are equivalent to the debt service so investors and whatever entity sold the debt are protected ... in the case of a delay,” said Tom Winter, KUD senior vice president.
The KUD guarantee, which the company charges a fee to developers to use, also promises the project will be completed according to the agreed budget. If not, KUD pays the cost overruns, Winter said.
“Because we wrap the entire project, all the design, consulting, construction, everything under one guarantee umbrella, it really does protect the public entity from any type of construction risk,” Winter said.
Johnson said KUD’s expertise will be seen by UPA’s partners and local developers.
“They’re going to use their project management and construction expertise to make sure everything is really in line to make sure whatever entity can actually perform,” he said.
Johnson said many local developers’ proposed projects have been stymied because of difficulty securing financing. That’s where KUD comes in.
“This is not about them doing all of the projects. It’s about them providing that security blanket that will allow the execution of the Master Plan, which really supports the local guys that may be working on plans in line with the Master Plan,” Johnson said.
Visibility boost
The addition of KUD could give Akron the visibility it needs for additional investment, including from out of state.
KUD officials pursued the UPA, said Johnson, and made six trips to Akron before the agreement was reached. KUD was introduced to the community vision through Stanton Eckstut, the principal from the architecture firm EE&K who is the lead planner on Akron’s Master Plan.
Aligning goals
KUD is a good match with UPA and Akron and the collective goals for redevelopment, said Eckstut.
“KUD is there for a long haul,” he said. “They stay with the users and the clients.”
KUD was attracted to the overall emphasis of the Akron development, said Johnson and Eckstut.
“They’re not coming in for the small projects. They see the vision that has been developed,” said Johnson. “When people on the national scene hear about this, they will say, ‘Why is this different?’ Because of [KUD’s] reputation worldwide, this will help us get across the goal line.”
One of the first projects KUD and the UPA are focusing on is the former Fred Martin Chevrolet auto dealer property on East Market Street across state Route 8 west of Akron City Hospital. Johnson has said the former dealership land is the key to the what’s being called the “Crossroads District” of the Master Plan.
The Crossroads District is the shortest path between the University of Akron and Summa Health System and in an area known as the “biomedical corridor.” The Master Plan has targeted this area to be built around technology and innovation.
The former car dealership buildings have been demolished in preparation for purchase by the UPA. Final plans for the property have not been made, Johnson said, but the idea is for mixed use — a combination of office space, neighborhood retail outlets and housing. It could be a site for a food market, he said.
Akron Mayor Don Plusquellic said “anytime a community can attract a major, well-known successful developer, it says something. It’s a good message that gets out not only locally but in the development community across the country. This must be a good place or they wouldn’t invest their money or be interested.”
Winter said the combination of the university, the hospitals and government was attractive to KUD. “Akron has a lot going for it,” he said. “It does have a sense of vibrancy. We see the pieces are there to do this development. The alliance is very unique and critical to bringing all of this forward. We don’t often see that kind of partnering.” Among KUD’s other projects are a convocation center for the University of Central Florida, where KUD utilized “off-balance sheet financing.” That allowed the project to use revenues from other projects nearby (student housing and retail) to support the debt for the new center.
UA interest
The university is interested in talking to KUD about several projects, including a potential downtown arena (which would have a community/university function), additional residence halls and research buildings, said UA President Luis Proenza.
While the UA has not had difficulty in securing financing for its various projects, Proenza said “these alternative approaches become more attractive because there’s someone else backing the overall project.” Proenza helped found the former UPA about 10 years ago before it merged with the former University Park Development Board.
Proenza said KUD’s interest in Akron “is a testament to the vision” of UPA and its partners.
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty
