A four and one-half acre Eastwood Road trailer park purchased in 1995 for $425,000 became the site for Lumina Station, the Phase I flagship retail, restaurant and office destination, which sold last week for $8.739 million.
Principals of the Myrtle Beach based investment firm, Burroughs and Chapin, are the new owners.
It was almost 20 years to the day, recalled Lumina Station’s managing partner Joel Tomaselli, that the LLC’s documents were filed with the N.C. Secretary of State’s office. His partners were Jim Wallace of Intracoastal Realty, and Gene Miller, who subsequently split his third with John Elmore and Lionel Yow.
Lumina Station II’s ground level retail assets also closed the same day for $5.826 million. The combined sale totals $14.565 million, which excludes Lumina II’s upper level office condominiums, and Spartina, a town-home complex currently under construction.
During an April 2 interview with Lumina News, Tomaselli said he and his partners never put the project on the market.
“We have been approached by people two or three times a year for the last 15 years,” Tomaselli said. “They called us. We never listed it.”
The team might have sold sooner, before the 2008 recession hit, Tomaselli said, adding the right buyer had not materialized.
“Burroughs and Chapin, I thought, understood the vision and the concept, the sense of place, the local orientation, the landscape,” Tomaselli said, adding, “understood and appreciated enough to pay the premium. Burroughs and Chapin is almost local in that they’re in Myrtle Beach.”
It is the group’s first acquisition in North Carolina. It filed documents in Raleigh March 9 to conduct business as Lumina Station Commercial, LLC.
“The current management is young and bright. They get it and understand the value of local. The local merchants here, you don’t find them in the other markets. That’s why people come here,” Tomaselli said.
Short history of an idea
A Cherry Hill, N.J., native, Tomaselli had been a builder of single-family homes for 20 years in the Atlanta, Ga., market. But Atlanta outgrew its charm. He moved with his wife and two sons in 1993 to Wilmington where Tomaselli built homes in Avenel, Providence, Pine Valley and Oak Village, and was one of the original developers of Laurel Lea, he said.
He saw the Eastwood Road trailer park site as a great location: adjacent to Lions Gate and across the road from Landfall, en route to the beach. With the paving of I-40 from Raleigh, he envisioned the potential.
“The trailer park was charming, I love trailer parks,” Tomaselli said. “But its time had passed and it was time for something different.”
The property was not located in the city at the time but in New Hanover County and the governing authority would not consider multi-family, only commercial or single family. With no experience as a commercial developer, Tomaselli turned to the broker who had been selling his homes, Jim Wallace. Miller would be the builder; and they found their architect in Frank Smith.
“He was a young and up-and-coming architect and I said, ‘Frank let’s do something architecturally appropriate for this location, let’s make it pedestrian friendly, and let’s save as many of the trees as we can,’” Tomaselli said.
The economic value associated with the Lumina name, evoking the name Lumina Pavilion, and the trolley era, were all part of the aesthetic and the brand appeal.
“Coming from a larger market, seeing that you can make the economics work if you put the time and money into the design and the landscaping, and the amenities, and the atmosphere, there’s an economic return, I think, on that investment. It may take a little longer, but in the long run you’ve got something people love and appreciate,” Tomaselli said.
Construction began in the summer of 1995 with completion in 1996. After a minor setback in the wake of Hurricane Fran, Tomaselli said, “We were open for Christmas of ’96.”
Tomaselli phased out of homebuilding to the primary developer of Lumina Station.
In 1999 the project won a contextual design award from “Coastal Living.”
“When we designed Lumina II — it was designed for retail down and residential apartments and condos upstairs — we went to the governing authority and they said, ‘No, no you cannot put residences above retail, we don’t have a zoning for that.’ They said, ‘Well you can do offices,’” Tomaselli said. “So we said, ‘Let’s condominimize the offices — this is not part of the original plan — it’s in response to the authorities. Fast forward 10 years, I’m working on Lumina III, which is where Spartina is. I go to the governing authority and I say we want to do three-story condos with parking below. They say, ‘We don’t like that. Everything’s mixed use now. We want retail on the bottom and we want residential upstairs.’”
Because of the recession, Lumina III was never leveraged, never built. The original design was a $22 million project but the banks would not loan on a large condo project. In Tomaselli’s mind, it would have been a better use of land.
“If we didn’t have the real estate depression we would have built something like that,” Tomaselli said.
Money to develop Spartina’s new townhome design can be borrowed in smaller sums and paid back more quickly, he explained.
Looking back, looking ahead
“When we came out of the ground, I really didn’t know I’d be here for 20 years, but I loved it, it was fun, it was creative. Developers by their nature are optimistic and creative, and they enjoy the design process, and the teamwork, and the consensus building, and the challenge of the 1,000 things you need to do to go from concept to occupancy,” Tomaselli said.
Though the primary partnership has dissolved, Tomaselli and Wallace own additional land between Allens Lane and Wrightsville Avenue, adjacent to Spartina.
“That’s a nice piece of property. We’re waiting to see what the Galleria’s going to do and once we have a sense of that we’ll probably complement it, do something that works, that does not compete. They’re still working on their plans. So that’s a ways out. Spartina may be another year before it’s done. I’m a small partner in Spartina,” Tomaselli said.
Sue Sielecki, who has been Tomaselli’s office manager, will cross over to become Burroughs and Chapin’s property manager, and they’ll share the office they currently occupy.
“I’m not leaving,” Tomaselli said, leaning against a credenza beneath a bank of windows that look over his flagship enterprise. “I have a five-year lease on this office. I’m not going anywhere.”