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The phoenix in the park; Pavilion in the Park re-emerges with a 75 percent occupancy rate.

The Phoenix In The Park

Pavilion In The Park Re-Emerges With A 75 Percent Occupancy Rate

Before Pavilion in the Park was built in 1985, it was rumored the parcel of land on Cantrell Road in west Little Rock soon would be home to a Japanese restaurant.

Instead, a European-style shopping center was carved out of the rocky hill.

In its opening days, Pavilion in the Park wowed the town.

There have been many days since then that the developers, cardiologist C.D. Williams and David Jones, have wished a Japanese restaurant had been built.

Six years after its construction, it's still too early to tell if the project will fly.

But some believe there are the makings of a phoenix here.

That's because the center no longer is operating under the dark cloud of foreclosure.

A foreclosure suit, filed in January 1989 and batted about for almost two years, was dismissed in October 1990, giving Pavilion managers some breathing room. A proposed settlement will be presented to the Resolution Trust Corp. for approval later this summer.

Occupancy rates have risen slowly after falling from a reported 64 percent in 1988 to 54 percent in 1989. Last year saw occupancy rates hover at 61 percent.

The occupancy rate is now 75 percent, a high for the lovely-to-look-at facility.

The increase is due in part to a change in emphasis. The focus is now on renting both office and retail space, rather than just retail. More competitive leases are another part of the formula.

Although Pavilion in the Park's future is not assured, one thing is certain: There are more reasons for optimism than at any time since the ribbon was cut and everyone smiled for the camera.

Breathing Room

"I don't have any expectations of a great deal," says Norman Burnette, manager of Pavilion in the Park.

The khakis-and-button-down CPA is talking about reaching a settlement with the RTC.

The more he talks, the smarter he sounds.

"To me, a great deal would be a loan we could pay, making the center solvent again," he says.

The 67,000 SF-facility, which cost $7.8 million to build, is carrying $5.2 million in principal debt. At one time, interest payments on that debt were calculated at more than $1,000 per day.

It is a sign of the times that the two creditors, Aspen Savings and Loan Association of Aspen, Colo., and Security Savings Association of Texarkana, Texas, are both controlled by the RTC.

Later this summer, Burnette will present the RTC with a proposal allowing Williams and Jones to keep the property. The RTC could take from nine to 18 months to review the plan.

The government agency is conducting a new appraisal of the property. An informal consensus puts the value of Pavilion in the Park at about $2.5 million.

Burnette believes the center's developers -- Williams with 90 percent ownership and Jones with 10 percent -- will be allowed to hold onto their dream.

"They (the RTC) don't want another shopping center," Burnette says. "They have tons of shopping centers. And we're showing them we can turn things around."

Since April, Pavilion has signed five tenants.

"I've already had an increase in sales," says Sherrie Wright, who moved her 7-year-old women's boutique, Someplace Special, from the Heights to Pavilion in the Park in May. "All I have are good things to say."

The other recently signed tenants are the men's store Partners, the restaurant Splash, fragrance and gift seller Powder & Smoke (scheduled to open Aug. 1) and Nilo D'Nard Furs (scheduled to open by Labor Day).

More leases are expected to be signed soon. Burnette will not say who the prospects are.

A New Mix

The successful formula for the three-level facility involves putting retailers in the spaces with exterior entrances and other business in spaces with interior entrances and on the upper levels. All bays with exterior entrances are leased.

On a square footage basis, retailers still dominate the center. A head count shows offices and retailers to be even.

Ron Blasingame, owner of Equity Resources Group Inc., was one of Pavilion's first office tenants. He moved his company from west Little Rock's One Financial Centre in May 1990.

"It's a nice change from an all-office environment," he says. "Very pleasant. I shop and eat here, too."

Skeptics reason that Pavilion in the Park must be giving space away to attract tenants.

Not so, says Jim Nosari of AMR Real Estate Inc., the leasing agent.

However, rates have been adjusted downward through the years.

A 1988 "Arkansas Business Retail Lease Guide" showed the center's cost at $16 per SF. The 1990 listing puts it at $9 per SF.

Burnette says each lease agreement is different and that "the deals are slacking off."

In other words, some rent is better than no rent.

Pavilion in the Park also is focusing on being a "Little Rock center."

That's after losing major national tenants such as Laura Ashley, Benetton and The Bombay Company to a remodeled Park Plaza.

Pavilion in the Park is removing "ritzy" from the "glitzy".

"When I moved here (in 1986), people told me I couldn't shop here," Burnette says. "And they didn't even know what I made. It had that reputation."

Flake and Co. -- now Flake Tabor Tucker Wells and Kelley -- managed and leased the center from February 1988 until March 1990. The firm takes credit for plans to convert part of the center to office space and for signing the third and most successful anchor tenant, B Barnett.

Beyond that, there is debate over why the center didn't fare better under Flake's control.

Burnette, who had served as controller for Williams and Jones, took over management and leasing duties in April 1990. He brought in AMR to handle leasing in January.

The new team predicts the facility will be 86 percent leased by the end of the year. It is shooting for a 95 percent occupancy rate by 1996.

If all goes well with the RTC, there are plans for executive suites, a concept that should work in the interior of the building. There also are plans for a larger parking lot.

"B Barnett can fill up the parking lot anytime it wants with a designer trunk show," Burnette says.

Well, no one said all the glitz is gone.

PHOTO : PAVILION IN THE DARK: When Pavilion in the Park was built in 1985, optimistic developers could not have been more wrong in their predictions of how the facility would fare. The upscale shopping center was a dismal failure. Six years later, with a 75 percent occupancy rate, Pavilion seems to be off the critical list.

Kelly Ford Arkansas Business Staff
COPYRIGHT 1991 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Little Rock, Arkansas mixed-use commercial center
Author:Ford, Kelly
Publication:Arkansas Business
Article Type:company profile
Date:Jul 1, 1991
Previous Article:Real Estate Locators Planning & Management Associates.
Next Article:Scandalous past, prosperous future.

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