Five acres of undeveloped Downtown Boise real estate may be on the market soon.
The Greater Boise Auditorium District is planning to expand Boise Centre, the convention center it owns and operates on the Grove Plaza, and would sell Parcel B if that plan becomes reality.
What's less clear is the best use for Parcel B, an undeveloped five-acre lot between 11th, 13th, Myrtle and Front streets. Some developers say a hotel would work. A retail center interests others. Some worry traffic on Myrtle and Front will discourage customers. Others drool over its visibility.
"It's an incredibly visible gateway, obviously, property to the Downtown," said Tommy Ahlquist, chief operating office for the Gardner Co., which finished Eighth & Main, Idaho's tallest building, early this year.
Gardner's latest project might be the push that puts Parcel B up for sale. The company wants to build the $70 million City Center Plaza just off the Grove on U.S. Bank Plaza, which it bought in August. The development would feature two buildings with about 300,000 square feet of retail, office, convention and parking space, as well as a 40,000-square-foot underground transit hub.
The auditorium district wants to buy or lease 30,000 square feet of ballroom, meeting, kitchen and pre-function space in City Center Plaza. In addition, it would renovate Boise Centre, the 24-year-old convention center it owns and operates. Executive Director Pat Rice estimated the district's cost at $37 million.
The district would pay for the bulk of its expansion with savings and income from a 5-percent tax on hotel rooms inside its boundaries, which surround Boise. But that wouldn't be enough. The district would need a few million dollars more, and selling Parcel B could yield them.
The auditorium district bought Parcel B in 2000 for $4.25 million. A few years later, the district bought the J.R. Simplot Co.'s first right of refusal on the property, bringing its total cost to $5 million.
The district's board of directors voted in 2012 to consider only Parcel B as the future location for a new convention center to replace Boise Centre, which it owns. That stance lasted less than a year, as the board voted early in 2013 to consider other ideas, such as a small Downtown theater and a multi-sport stadium.
Then came Ahlquist's idea to include convention space in City Center Plaza.
Rice said the district probably won't put Parcel B on the market until City Center Plaza is closer to completion. At that point, he said, the district would need to get between $5 million and $8 million for the lot.
Peter Oliver, a district board member and cofounder of Boise commercial real estate firm Thornton Oliver Keller, stated the strongest case for Parcel B's attractiveness in eight words: "largest unencumbered flat piece of land left Downtown."
Besides that, the property's most noticeable feature is that Myrtle and Front streets - both five-lane arterials that usher traffic between Downtown Boise and the Connector - run along its north and south sides. That traffic cuts both ways. On one hand, it's a negative characteristic because it can frustrate retailers' efforts to attract on-foot shoppers.
"But it also is a benefit in that you don't have an opportunity at better exposure," said Chris Penland, president of Boise developer Rocky Mountain Companies.
Steve Hosac, whose company built CitySide Lofts just south of Parcel B, doesn't see traffic on Myrtle and Front as a huge obstacle to a successful development.
"You could put acceleration, deceleration lanes in on both sides whichever side you want to have access," Hosac said. "That would probably eliminate the problem."
HOTEL? STORES? OFFICES?
Penland and Oliver said the best project for Parcel B would be some sort of mixed-use development. In order to justify the sales price, Penland said, the project should have a lot of stories to maximize the amount of square footage generating income. He said a developer would need an agreement with an anchor tenant to take 50,000 to 100,000 square feet - the way Gardner attracted Zions Bank to Eighth & Main and partnered with tech firm Clearwater Analytics on City Center Plaza's west building. Those kinds of agreements decrease projects' risk, which makes it easier to find financing, Penland said.
Rice, who predicts increasing hotel demand once Boise Centre expansion is done, would love nothing more than to see a major hotel rise on Parcel B or another lot within a block or two of the convention center. Hosac and Penland said a hotel on Parcel B is a possibility.
Ahlquist, though, said a major retail development with two big stores and plenty of parking might be the most likely to succeed.
THE JUMP POINT
Developers and Rice agreed that development going on just east of Parcel B will have a big impact on the value of its neighbors. The Simplot family is building Jack's Urban Meeting Place, which will feature event space, classrooms, activity studios and recreational space, as well as the J.R. Simplot Co.'s headquarters, on the land between 9th, 11th, Front and Myrtle streets.
Rice and Penland said the Simplot developments' primary effect will be a westward extension of Downtown.
"While everyone likes the idea of being right Downtown - 8th and Idaho, 8th and Main - out of necessity it's going to grow," Penland said. "And people's habits and preferences are going to change."
Parcel B seems isolated from the Downtown core today, Rice said, but that will change once JUMP and the Simplot headquarters are complete. In addition to the buildings themselves, JUMP will have an outdoor recreation area with Boise's historic Pioneer Path meandering through it. The path will help shoppers, workers or hotel guests walk between Downtown and whatever Parcel B's development ends up being, Rice said.
"The impact of JUMP is going to be tremendous," Ahlquist said. "Especially when the (J.R. Simplot Co.) office component is done, and having that right there, there's no doubt that the value of (Parcel B) just goes up."
Oliver cautioned that it might be years, however, before major development on Parcel B is viable. He said Downtown Boise, as ascendant as it appears at this moment, is still recovering from the Great Recession. There's still empty retail and office space that should fill up before companies start leasing new space farther out, Oliver said.
"We still have cleanup to do," he said.
'HIGHEST AND BEST'
Rice said he hasn't heard from anybody interested in buying Parcel B. He thinks that'll change once City Center Plaza and the Boise Centre expansion takes off.
"If (the district's) not going to use it, I wish they'd sell it to somebody so that it could be developed, because it just sits there and grows weeds, and it's ugly," Hosac said. "I'm not the best person to try to say, 'Here's the highest and best use.' There's a variety of potential, possible uses there, and I'll leave it to somebody else to figure out what the highest and best might be."
Sven Berg: 377-6275