The multimillion-dollar project will include more suites for his hotel across the street, the Inn on Fifth, which during the past three months has experienced some of its best occupancy rates in its 14-year history. He sees other promising signs on the street, including an improvement in vacancy rates, which he estimates have fallen to 5 percent from 20 percent a few years ago.
“It’s all going in the right direction,” McCabe said.
He owns three buildings on Fifth Avenue South, not including his hotel. He has 26 tenants along the street and only a few empty spots. “We are on the other side of this recession,” he said. “It’s time for something like this. Fifth Avenue needs this kind of investment.”
A new building like this hasn’t been undertaken on the street in years, as the economy stumbled and the real estate market crumbled.
“It’s a huge investment by me,” McCabe said. “But it should be a good investment.” He planned to start the project a few years ago. It will span 38,000 square feet. “Obviously, everything was put on hold because of the bursting bubble,” McCabe said. “But I think now is the time because of the improving economy to move forward on this. ”He describes it as a “leap of faith.”
While tenants in the old building are losing their spots, McCabe said the new building will create new jobs and generate more business along the street by attracting more visitors, including tourists staying in his new suites.
“It’s wonderful that somebody is putting product on Fifth Avenue, getting rid of an old building and creating jobs,” said Jack Antaramian, a Naples developer who years ago was a force in downtown redevelopment. “It’s all very positive.”
In 2007, Antaramian sold seven buildings and a piece of land on Fifth Avenue South, setting his sights elsewhere. “I don’t own anything down there anymore,” he said. He said putting hotel suites on the top floor, instead of condominiums, is a brilliant move, since there’s not enough demand for the housing. “I can’t attest to the market turning on Fifth Avenue on condominiums,” he said.
McCabe’s project will replace one of the older retail buildings on the street, which he estimates is at least 35 years old. He purchased the building for $4.55 million in 2005.
“The building is in desperate shape,” he said. “It’s just old. It needs to be replaced.” During Hurricane Wilma in 2005, the building nearly lost its roof.
The new building will be a big shot in the arm for Fifth Avenue, McCabe said. He boasts it will be the best building on the entire street. His timing for the project is also driven by the fact that he’s found a national tenant as an anchor: JPMorgan Chase bank. He recently finalized the contract.
In the new building, one-third of the first floor will be taken up by the bank. The rest of the floor will be retail. “My ambition here is to put good retail in,” McCabe said. “A restaurant is very interested in that retail space and I’ve said no. I’m not putting a restaurant in there.” On the second floor, professional offices are planned. On the third floor, there will be 21 hotel suites.
“We cannot get those rooms none to soon because there is demand,” McCabe said. The inn just experienced its best December and January since its opening. His inn has 87 rooms, but only 11 of those are suites. “The demand is for the suite and the suite would be on a five-star level,” McCabe said. The new suites will offer concierge services, such as a breakfast buffet and evening cocktails.
“This is a wonderful opportunity for the city, a wonderful investment into the city and a great use, really a great use for the city,” McCabe said. He’s grown more confident about Fifth Avenue South because of the city’s commitment to improve it, which he believes helped attract a tenant like JPMorgan Chase.
Last year, the city’s Community Redevelopment Agency invested in new lights and landscaping. “They put in new lights that raised the look on the street, which was desperately needed,” McCabe said. “The original lighting on the street was very, very inadequate for retail at night.”
Last year, the city voted to create a business improvement district for downtown. Owners are paying annual assessments based on their property values, which are passed on to tenants. The hope is to raise about $300,000 the first year. The money will be used to market, promote and manage the street.
“The management by the city is so vastly improved,” McCabe said. “It has made a big difference in the way everything looks downtown.” Naples Assistant City Manager Roger Reinke said he wasn’t surprised to learn about McCabe’s plans to put up a new building on Fifth Avenue. “The things I hear are all positive,” he said. “All anybody has to do is walk down the street and they see a lot of people. It’s bustling. Every time I go down there it’s busy.”
Lou Vlasho, who operates Vergina restaurant on Fifth Avenue South and sits on the Community Redevelopment Agency’s advisory board, said traffic seems to be up on the street this season. “People are still cautious,” he said. “They are still watching where they spend money. I think they are spending less.”
Some businesses on the street are doing fantastically well, while others still are struggling, Vlasho said. He said it’s great to see McCabe making such a big commitment on the street by putting up a new building. “This is a positive story,” Vlasho said. “This is a positive move by Mr. McCabe.”
Karen Bishop, owner of Altered Elements, selling local art, jewelry and photography, is on the other side of Park Street. “It’s a very small store,” she said. “We would benefit from an increase in traffic on Park Street.”
She welcomes the new building and hopes it will turn Park Street into a destination because now it isn’t.
Though The Von Liebig Art Center shares the same street, it has “no curb appeal,” Bishop said. “The more tourists we have, the more people that are coming and enjoying Naples and getting to be a part of paradise … that can only benefit everybody downtown,” she said.
While she supports the project, she is concerned construction will be a “nightmare” for her business, especially if it limits access to the street. “I’m sure there will be some inconveniences, but he’s picking the right time of year to do it, and in theory at the end it will be worth it,” Bishop said.
On Feb. 1, McCabe notified the tenants in his old building that it will be torn down to make way for a new one. They have until July 31 to move out. After the tenants are out, McCabe plans to start the project right away, with the opening planned for November 2012.
The City Council and the city’s Design Review Board approved the original project he planned to build a few years ago. However, McCabe will have to seek new approvals for modifications to his plan, including new elevations and a drive-thru for the bank.
He’s working with his architects and the city to revive a master plan that would create a more park-like setting along Park Street, incorporating the Von Liebig, a contemporary art center offering exhibits, lectures and workshops.
“The real story here is how we may go into a second major redevelopment of Fifth Avenue due to the opportunity of this new building,” McCabe said.
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden