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One of Idaho’s tallest buildings and a vibrant part of Downtown Boise will have new owners next week.
Laird Norton of Seattle is purchasing the US Bank Building and Clearwater Building at Main St. and Capitol Blvd. from Salt Lake City-based Gardner Company. The two buildings make up the City Center Plaza development, next to the Grove Plaza
The deal is expected to close next week for an undisclosed price. The Ada County Assessor values the two buildings at $66.9 million.
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A return to Idaho for Laird Norton
“This is a big purchase for us,” Laird Norton CEO Jeff Vincent said. “We are entering a totally new market. We’ve been investing in Seattle, Portland, Denver and Salt Lake City. We are excited about this being our first step back into the Boise market with these two building acquisitions.”
Laird Norton’s history with Boise dates back to the 1912 purchase of shares in the Barber Lumber Company. It helped bring together several lumber businesses that formed the basis of the Boise-Payette lumber company. Boise Payette eventually became known as Boise Cascade Corporation – a large lumber and paper products company based in Boise. Laird Norton family members also had an early stake in the Potlatch timber company based in North Idaho.
Today, Laird Norton is operated by seventh and eight generation members of the family.
Gardner Co. bought the US Bank Plaza in 2013 under a $37 million loan, and worked to develop a former surface parking lot that surrounded the building. Crews built the new Clearwater Building throughout 2015, which includes Boise Centre East, Boise State University downtown campus and Valley Regional Transit transit center. The public components of the project are owned separately under condominium agreements and not included in the transaction.
Morrison-Knudsen built the Idaho First Plaza in the 1970s. It later became West One Bank Plaza, US Bank Plaza – and finally the US Bank Building. At 19 stories, it stood as Idaho’s tallest commercial building until Gardner Co. built the Eight and Main Building across the street in 2013.
Laird Norton’s interest in Boise
“Boise is one of the fastest growing cities in the country – but it’s also a place where we think family businesses like ours can have an impact and effect a long term view,” Vincent said.
The firm’s interest in Boise started with another, undisclosed property before it learned Gardner Co. listed the Clearwater Building for sale.
“It was originally marketed as just Clearwater,” Matt Anderson with Laird Norton’s real estate arm Heartland, LLC said. “But when we looked at it, we liked the two together – from an acquisition standpoint, it makes sense to have the multi-tenant US Bank building as well. So the two together were really attractive.”
Gardner president David Wali said the Clearwater Building generated nine offers, and most wanted more than just the one building.
“Everybody wanted the US Bank Building as part of it,” Wali said. “Most everybody wanted all three buildings (including 8th and Main), but Gardner wasn’t eager to sell everything downtown. It made sense to sell these two because they were on that side of the street.”
Wali said Laird Norton dovetailed well with Gardner.
“There was something unique about their personalities,” he said. “When you got on a conference call with them and you understand their history with the community in the past, they were most in alignment with the principles of Gardner Co. and with Boise as a whole.”
Gardner Co. will continue to operate the buildings on behalf of Laird Norton.
“We want to build upon what the Gardner family has done,” Vincent said. “They did a really good job with the US Bank building with Dave Wali’s guidance.”
Strategic sale for Gardner
Gardner says the sale prepares it for future projects.
“It’s part of a larger strategy,” Wali said. “We are divesting ourselves of three other buildings in the Salt Lake City market. It will free up a significant of capital for other projects we are planning in the future.”
Wali said Gardner will soon start construction on a new housing development along Park Blvd. and is looking at other options in the Boise area.
The multi-owner component of the Clearwater Building made the transaction more complicated, but Laird Norton is excited about what some of the owners bring to the table.
“It’s really attractive to have Boise State in the project as a condominium owner, and Valley Regional Transit providing transit to the building well as GBAD with their facilities and their plaza,” Anderson said. “That’s really what makes it work. It’s more than just managing these relationships, we see that as a real asset to the project.”
Boise growth ahead for Laird Norton
Laird Norton calls this a “beachhead” in Boise, and is looking at other ideas and concepts in the area.
“We are going to be looking for other opportunities as they present themselves,” Vincent said. “We’re doing some workforce housing and student housing in the Seattle area and we’d be interested in doing things like that in Boise.”
Company president Jim Reinhardsen said entering Idaho could bring along ideas for other parts of the business.
“The possibilities are endless. For example, Heartland, our real estate services division, will be able to provide a full range of advisory services to real estate companies, investors, corporations and non-profits.”
“We like Boise from a real estate investment perspective,” Anderson said. “We all see opportunities in Boise for our various lines of business. The acquisition of these two properties is planting a flag, but is really just the beginning. It gives us a big reason to be present and grow with diff opportunities.”
Anderson said Boise represents significant opportunities in coming years.
“It’s a big transaction. It’s a big investment and a big effort for the whole transaction team. We’re just really excited to be part of it and be part of what’s going on in Boise over the long term,” Anderson said. “Everyone in the organizations are really excited.”