Developers are betting $800 million that shoppers, workers and new residents will be drawn to a 54-acre site in the historic city of Savannah, on whose streets Civil War generals, cotton merchants, and the writer Flannery O'Connor once strolled.
The Savannah River Landing site lies east of the city's fabled downtown on a stretch of land so marshy that rice was grown there by plantation owners. Over the past six months, trucks have hauled in 500,000 cubic yards of dirt to raise the land and grade it for the largest multi-use project in downtown Savannah.
“We have to be above a certain height to stay out of the tidal surge area,” says Eddy Benoit, president of AmblingPartners, which is developing the project with Ambling Land & Resort. They are affiliates of Ambling Cos. Inc., a Valdosta, Ga.-based development firm. Now underway, the project is expected to be completed by 2014.
To start, a 250,000 sq. ft. luxury shopping district, offices and two hotels will be built. Later, 17 homes priced around $4 million, 110 townhouses, and 600 con-dos will follow. Savannah River Landing, whose master plan was approved last year, will house at least 2,000 people and is expected to create 1,000 jobs and expand the city's tax base. “It's going to have a phenomenal impact on our downtown area. I think it'll solidify the downtown's role as an economic hub of the region,” says Lise Sundrla, executive director of the Savannah Development and Renewal Authority.
Savannah's offerings may soon rival those of Charleston. “We have eight new hotels under development,” says Sundrla, adding some 1,000 rooms to the hotel supply. The Landing project will double the half-mile river walk. A proposed pilot project would run a streetcar along the river, and the city is considering a $16 million streetcar program. Projected growth in the metro area from 2000 to 2010 is a healthy 13%, spurred by an increase in the number of retirees relocating to Savannah and expansion of the city's port, second-largest on the East Coast.
Officials insisted that Savannah River Landing not be gated and that its style conform to the city's historic character. A previous developer found the policy too restrictive — he wanted gated apartments — but Ambling was not deterred. “That was a real big concern for the city,” Benoit says, that streets remain open so pedestrians could stroll past riverfront homes. The city worked with Ambling's designers for two years. “They embraced us and embraced the whole concept of creating an extension to the downtown,” Benoit says. Six planned public squares follow the pattern designed in 1733 by city founder General James Oglethorpe.
Forum Development Group of Atlanta will build the shops, expected to open in 2009. Savannah's 6.3 million annual visitors and the 6,000 students at area universities factored into the decision to undertake the retail project, says Ron Pfohl, Forum co-founder. He recently presented the concept to retailers in New York and, and is seeking commitments for about 65% of the properties before closing the loans.
Retail developers' profit margins have thinned, Pfohl says. “Rents haven't necessarily kept up with costs. In years past, 12% was a standard return. It's very tough to get double-digit returns today.” But Savannah's vibrant economy and the project's land value are attracting investors. “I challenge you to look around the country and see where you can find this type of acreage,” Pfohl says. “If you're sitting down with your investors, all you have to do is show them the land, the proximity to the historic district and the water. It's a great piece of real estate.”