The Village at Meridian is a big deal in the Treasure Valley.
Positioned on Idaho's highest-traffic intersection at East Fairview Avenue and North Eagle Road, the project will be a 827,196-square-foot retail center featuring a 15-screen cinema multiplex, a fountain and a plethora of businesses, including restaurants, bars, retailers and a dentist office..
Construction is under way. The Village is slated for an October opening, though several stores have been open for months, and others are opening one by one.
The developer is CenterCal LLC, a California company specializing in retail development that is a joint venture of CenterCal Properties LLC and the California State Teachers Retirement System.
CenterCal negotiated a $150 million loan to finance about half of the project. The developer and its partners are funding the rest, CenterCal CEO Fred Bruning says. "We try to make it an easy decision for the bank to make," Bruning says.
U.S. Bank was the loan agent and majority lender. Bank of the West and PNC Bank were also lenders in the deal, contributing undisclosed portions of the loan.
The loan was the biggest in the history of U.S. Bank's Western Idaho/Eastern Oregon regional office. Three executives from U.S. Bank discussed it with Business Insider:
Joel Hickman, district president, who took over when Regional President Tony Olbrich retired May 27.
Senior Vice President and Relationship Manager M.K. Long.
Senior Vice President and Market Manager Ann Young.
They declined to disclose terms of the loan.
Q: How does this loan compare to other large loans U.S. Bank has made in the Treasure Valley?
Hickman: I've been working in this market since 1979. Obviously, not every deal is disclosed, but I'd tell you this is one of the single largest transactions of its kind in the last 30 years or since anyone started keeping track. The Boise Towne Square was built for less than $150 million. It's the largest transaction U.S. Bank has done in the market.
Long: This is absolutely rare. There aren't too many 800,000-plus-square-foot-projects that ever get built.
Q: Did U.S. Bank have a pre-existing relationship with CenterCal?
Young: U.S. Bank is working with CenterCal on a concurrent project in the Yakima market in Washington. It's a continuation of an existing Valley Mall of Union Gap that CenterCal owns. That has a $10.7 million loan for development of a Cabela's Outpost and a J.C. Penney.
Long: CenterCal is already active in the Boise market. They own the Treasure Valley Marketplace in Nampa.
Young: I'm sure having an existing relationship with CenterCal helped. We had a past history or performance where they'd do what they said they'd do.
Q: How is the process different on a loan of this size?
Young: It's not much different. Obviously the magnitude of this loan carries considerably more risk and exposure. But for the most part, we have medium-sized, $10 million loans that are more complex and have multiple tenants. That brings challenges. A large loan isn't necessarily (more difficult) than a small loan.
Q: Other than the bank's relationship with CenterCal, were there any other factors that made the bank comfortable with making such a large loan?
Young: CenterCal is very strategic. The strong tenant interest early on led them to the decision to move forward. That's a key to any lender in terms of validating the project in the market.
Q: Does this deal portend more big loans in the Treasure Valley for U.S. Bank?
Hickman: I've been here a long time, and we've never seen anything like this. We thought Boise Towne Square was the cat's meow. It's one of the largest retail centers we have in the state. I won't say (a project similar to Village at Meridian) won't happen again, but I don't think we'll see too many projects of this size and scope in the near future.
Zach Kyle: 377-6464