Building?s Seismic Steel Stands Superior

When Fayetteville candle maker Burt Hanna and auto dealership mogul Dave Slone partnered up, the result should have been a groundbreaking car wax.

Instead, the duo formed Hanna-Slone LLC and broke ground on the 396,000-SF Superior Commercial Building on Moberly Lane in Bentonville. The Superior site is four stories of Class A office space “at a C-plus price” and is the largest building of its kind in Benton and Washington counties, according to developers and officials at the Center for Business and Economic Research at the University of Arkansas’ Walton College.

The building permit for the project is valued at $45 million and Slone-Hanna LLC recently obtained a $22 million loan from Arvest Bank-Fayetteville in relation to the project.

As the owner and builder of Hanna’s Candle Co., Hanna is no stranger to construction. He even owns Kerzen Construction that is serving as the general contractor for the Superior Commercial Building to defray costs.

“I think Bentonville is the epicenter of the financial world and is going to continue to grow until it gets to the size of Dallas,” Hanna said. “There’s plenty of room for more commercial space, unless Wal-Mart goes out of business. And if Wal-Mart goes out of business, we’re all in trouble.”

The Superior building would especially be in trouble since its amenities appear tailored for Wal-Mart vendors. Companies needing between 20,000 and 100,000 SF for product mock-ups can lease at a base rate of $14.75 per SF. Plus, a fleet loading dock, wide corridors and stairways, and high ceilings should make it even more inviting.

While balconies are being built for smokers, there are tentative plans for a fitness center for more health-conscious tenants. Other space may be used for retail and restaurants as well.

Colliers International Dickson Flake Partners is the leasing agent.

“The focus is going to be getting all the tenants in the building, with enough amenities to provide services for anything and everything those tenants need,” said Colliers partner Ramsay Ball. “You’ve got vendors like Procter & Gamble who are approaching 100,000 SF and Kraft Foods that’s 55,000 SF, so there’s definitely a need for more space.”

The name “Superior” comes from Slone’s business interests. His Superior Automotive Group has 12 locations, including eight in Northwest Arkansas and four in the Conway area.

Hanna’s Candles grossed $22.1 million in revenue in 2005 while Slone’s Superior Automotive Group brought in $310 million.

What a Steel

Both Hanna and Slone declined comment on the total construction cost, only to say it’s 40 percent to 50 percent less than what anyone else could build the same building for in this market.

The chief reason construction costs are cheaper is because of an “80 percent discount” Hanna got on the 4.4 million pounds of steel for the building. Hanna came across the deal when a computer company in California backed off one of its projects after the terror attacks of Sept. 11, 2001.

Because it was slated for a building on shaky ground, the Superior Commercial Building is constructed at California’s seismic standards. Hanna said it’s classified for Seismic Zone 3, which puts it among the second sturdiest buildings in the country. (Seismic Zone 4 is the strongest and is required for buildings built along the San Andreas Fault in southern California.)

All of Northwest Arkansas is in Seismic Zone 1.

“They had built the same building five different times and they were going to build a sixth, but when Sept. 11 happened, it never got built,” Hanna said. “Probably no building around here has that much tonnage in structural steel. It’s a lot more solid feeling because steel flexes. In this, you don’t feel much give in it.

“If you can go in some of these other smaller buildings, you can feel movement that you won’t feel in this building.”

Other reasons for the cheaper price tag are because of the “good deals” Hanna received on the land and the installation of heating, ventilation and air conditioning at the building.

“Most people think it’s going slow,” Hanna said. “But if you look at the how many square feet we’ve accomplished in a year, we’re going four times faster than anybody else. Most people would spend 14 months on a 100,000 SF building, and we’ll probably be done in February or March.”

Slone owns the 40 acres of land that the 10-acre project (including the building, parking and landscape) is situated on. Mirroring his “hands off” approach with the project, Slone left all comments about the building up to Hanna.

Basically, the partnership formed because Slone had the land and Hanna had the materials.

“It’s big, but most everything I do is big,” Hanna said. “I just wanted to maximize the steel.”

Laying Bricks

Hanna said construction of the Superior Commercial Building will include “well over” one million bricks. While most buildings in the area are stucco, granite or marble, the idea to use bricks for the exterior came during a family vacation in the summer of 2004.

While walking around St. Louis’ historic downtown region with his 14-year-old son, Jake, the idea hit Hanna — like a brick.

“You look at those buildings that are 100 years old and they probably haven’t even cleaned the exterior in 50 years and they still look good,” Hanna said. “If you look around at other buildings, stucco and even granite or marble on the outside of a building wears out after 20 or 30 years.

“That’s why we went with brick. We want this building to last 50 to100 years.”

One early idea was to split the construction into two buildings on the enormous, 100,000-SF footprint, but that only would have added to expenses. So instead, it was decided to include a light floor in the center that would “get rid of that boxed-in feeling” that comes with a large footprint by shedding natural light into the third and fourth floors.

There are eight total elevators, including a freight elevator. The corridors and stairways are 14-feet wide, allowing future tenants to move larger equipment and supplies easier. There’s also a fleet loading facility where tenants can back up a tractor-trailer for loading and unloading.

Even though his candle company is one of the largest in the nation, Hanna targeted local companies for everything.

PB2 Architecture and Engineering of Rogers is serving as the architect as well as the mechanical, electrical and plumbing engineer.

Spectrum Engineering of Fayetteville is the structural engineer while CEI Engineering Associates Inc. of Bentonville is the civil engineer.

Campbell Electric of Bentonville is handling the electric while Built-Well Construction Co. of Hiwasse is installing the drywall, metal stud framing and suspended acoustical ceilings.

Built-Well operations manager Lance Schaffer said the size of this project isn’t unique to his company since it has worked on several large buildings at the University of Arkansas and Northwest Arkansas Community College.

However, the amount of drywall used has been substantial.

“Oh my goodness,” Schaffer said. “I hate to even guess what that speced out at … But it was many, many semi loads.”

Seeking Signatures

Construction began on July 7, 2005, and at least three levels are expected to be completed by March 2007.

The brick masonry should be completed by mid-October and once all the blue-tinted windows are installed soon after, Hanna said the building will look “a whole lot better.”

Colliers has been sending out monthly proposals to companies in the area, but no leases or letters of intent have been signed.

“Vendors are getting pressure from Wal-Mart and they have to cut costs somewhere, so the last thing they need is expensive office space,” Ball said. “Because Burt has done such a good job and done his homework on it, he’s been able to keep cost way down and make our part of it much easier.”

Colliers broker Butch Gurganus is in charge of leasing the office space. He said it’s rare to sign a tenant before a project is completed, but he has signed some in the past as early as “four months out” on other projects. A benefit in working with such a large footprint is the project is flexible in the number of tenants it can house.

“With that much space, you can do a lot of things,” Ball said. “Let’s say you take 20,000 SF. You can take 5,000 and do a store mock-up because at those rates, you can afford to put in some shelving and do your store setup there so you can have other buyers come in and can see your store setup.”

Despite the lack of signatures, no one sounds too worried about finding occupants. A short drive down the road, office space is leasing for about $20 per SF in Pinnacle Hills.

“In Bentonville, the middle of the market is $16 to $17.75 [per SF],” Gurganus said. “This will be class-A space in that mid-range pricing and I’ve already had several calls from people who want to be on a second or third story in Bentonville.

“From talking with everybody, we are expecting it to really take off in the next month or so,” Gurganus said.

Several Wal-Mart vendors have more than one location, which can cause headaches when several phone calls and e-mails are needed to accomplish what should be a simple task.

Hanna said he experienced the same problem with Hanna’s Candle Co., before centralizing operations at a 24,000-SF office in Fayetteville.

“I had people in about three or four different locations, and it was always hard to get everybody on the same page,” Hanna said. “But when everybody can be consolidated together in the same place, it’s just so much more efficient.”