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Article in The Business Journal of the Greater Triad Area
http://triad.bizjournals.com/triad/stories/2007/02/19/story1.html?page=1

Friday, February 16, 2007
$40M expansion: Revolution Mill project keeps getting bigger

The renovation and restoration of the historic Revolution Mill off Yanceyville Street in Greensboro has expanded to include the entire former Cone Mills property, and future phases could include residential development and the renovation of the nearby Printworks mill.

Jim Peeples, a partner in Revolution Studios LLC, which also includes Greensboro contractor Frank Auman, said that due to the availability of historic tax credits and the initial success of the project since its launch in 2003, the mill has "blossomed into close to a $40 million program" from its original $5 million price tag.

"Over the next three and a half years, we'll be bringing on about 100,000 square feet per year," Peeples said. Currently, about 210,000 square feet of the 600,000 square feet in the mill, which takes up most of Revolution Mill Drive, has been redeveloped and leased, Peeples said. Of that, 88,000 square feet of space is occupied by the Nussbaum Center for Entrepreneurship, the state's largest small-business incubator.

In addition to the renovation, big changes are in the works for the area surrounding Revolution Mill.

Brown Investment Properties is working with High Point contractor Wayne McDonald on nearby Olympia Mill, also a former Cone Mills facility, which will be renovated into 140,000 square feet of office condominiums. And a stand-alone building that fronts Yanceyville Street and sits next to Revolution Mill -- currently being used as a self-storage facility -- will likely be renovated by Auman and Peeples into residential units.

"We've got an architect working on plans for that right now," Peeples said. "That will probably be a year to two years before we start it."

Down the line, Peeples and Auman, in a separate partnership that includes the Greensboro demolition and construction firm D.H. Griffin, hope to move across Yanceyville Street and renovate the former Print Works mill, at 1800 Fairview St.

Road improvements are also expected. Peeples said his and Auman's plan is to create an entrance to the mill from North Church Street going underneath the Norfolk Southern tracks.

The city of Greensboro also has part of the area tapped for a greenway that could include jogging and biking trails next to Buffalo Creek.

Entire area enjoys rebirth

Ann Buffington, a broker with Brown Investment Properties in Greensboro, said the former mill is gaining a reputation and helping change the overall look of the Yanceyville corridor. She's working with The Arc of Greensboro, which will soon move into about 4,000 square feet of space at Revolution Mill.

"It's just an exciting venture," Buffington said. "It's one of the neatest projects I've seen in a while."

The mill is just one piece of the rebirth of Yanceyville Street, however. Medical office projects line both sides of the street down the road from the mill, including the Yanceyville Professional Center.

And within a three-mile radius sits the United House of Prayer for All People redevelopment project, which includes the renovation of a former U.S. Postal facility, and the former Pet Dairy project being undertaken by John Kavanagh and Brown Investment Properties, bringing the total potential investment within the area to more than $175 million.

"There is a lack of space on North Church Street," Buffington said, giving one explanation for the growth on Yanceyville. "There's a general lack of land and lack of property. Yanceyville was the obvious place to grow. It used to just be a mill road, but it's not anymore."

Peeples' and Auman's decision to bring the entire building online and expand the project was also due to the availability of $14 million in historic tax credits. Revolution Studios LLC used an accounting firm and an attorney in the Charlotte area to market those tax credits and eventually sold them to Chevron, which is infusing some of the upfront capital to make the Revolution Mill project happen.

Peeples and Auman essentially create a basic suite of space and let the tenant decide the specifics of how it is finished off, including workstations and offices. A number of the suites connect to one of the many courtyards that have been created, and entrances are spread throughout the property to give tenants easy access.

Incubator helps feed growth

Those tenants are paying below-average rents for the Greensboro market. Peeples declined to discuss specific lease rates, but when the project came online in 2003, the developers were quoting between $9 and $12 per square foot.

Average Greensboro office lease rates are typically anywhere from $15 to $25 per square foot depending on the type of space and location. Buffington said she leases space at the Yanceyville Professional Center down the street for about $19 per square foot.

Peeples said that having the Nussbaum incubator on site has been a boon to the success of Revolution Mill thus far, though not all of the tenants are incubator graduates.

One of those tenants is Premedia Group LLC, a graphic-arts firm that moved into the mill in January 2006. Brian Criscuolo, one of Premedia's co-owners, said the space has fit his firm's needs and has improved greatly in the last six months.

"I can't say enough about the vision of Jim Peeples and the group he has," Criscuolo said. Recent improvements, he noted, include "finishing off the common areas, the decorating of the common areas and repaving the parking lots."

Criscuolo said for his firm, the uniqueness of the space helps sell his firm's creative vision to its clients.

Some of the largest Revolution Mill tenants, however, are incubator grads. Select Diagnostics, a laboratory testing firm, is one of those, and it has expanded since first moving into Revolution Mill.

Peeples said there is a wide variety of tenants in the mill, including hair salons, a sock importer, graphics firms, nonprofits and even a Pizza Hut regional office.

"There's a pretty diverse group of businesses here now, and I'd love to see some other businesses move in and supplement this type of environment," Criscuolo said.

Eventually, Peeples estimates there will be between 1,500 and 1,800 workers at the mill. Space for a deli is already being renovated to give tenants an on-site meal option.

"I think one of the keys is that we offer really unique space," Peeples said. "And frankly, now we have location. The new Wal-Mart and what's happening at the former Carolina Circle Mall makes this area much improved."

Reach Matt Harrington at (336) 725-1163 or mharrington@bizjournals.com.