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Wonder of It All
Tampa developer Rick Wolfe believes a 78-year-old former Wonder Bread factory will convert nicely to upscale condominiums. He's betting his money on it.
By David R. Corder
Associate Editor
Rick Wolfe just knew he had a lock on the deal. The announcement by Interstate Brands Corp. couldn't have come at a better time for the Bradenton native, who made his mark years earlier with the successful renovation of the dilapidated SoHo Apartments in South Tampa's Hyde Park community.
The maker of Wonder Bread and Twinkies decided a little more than a year ago to close and sell its aging bread factory a couple of blocks north of the Old Hyde Park Village shopping plaza. Wolfe, 40, considered the light-industrial site perfect for condominium redevelopment. He wasted no time setting up a meeting with Interstate Brands' general counsel, Ray Sandy Sutton, to talk about purchasing the 2.5-acre site at 420 S. Dakota Ave.
"I just knew I was going to be the only person looking at the deal," Wolfe recalls. "When I showed up, it looked like a mall parking lot after Thanksgiving. ¦ There was practically a line to get in."
Wolfe persevered. In mid-December, an investment group he formed acquired the property for $3.4 million in a cash-backed deal. The buyers - backed by Tampa Bay area developers James Landers and Jeffrey Craft - plan to convert the site into 32 loft-style condominiums.
Desiring more
In 1986, Wolfe earned a bachelor's degree in marketing from Stetson University in Deland and returned temporarily to his hometown. While there, Longboat Key developer Robert Wilhelm, then a principal in Arvida Corp., offered him an internship and then hired him to work in Boca Raton.
It was a bad time for young career-minded developers such as Wolfe. The U.S. commercial real estate industry entered a recession in the mid-1980s under the collapse of the savings-and-loan industry. The Tax Reform Act of 1986 compounded the situation. A glut of foreclosed commercial properties flooded the market.
Because of the lack of development opportunities, Wolfe took a job as a commercial real estate broker in the Tampa office of Cushman & Wakefield of Florida Inc. Paragon Group Inc. later recruited him to work as a landlord representative. During his 3 1/2 years there, Wolfe represented the Dallas-based company at one of the dominant fixtures on Tampa's downtown skyline - the 42-story office building now known as the Bank of America Plaza.
Wolfe, the entrepreneur, wanted more. In 1992, he formed Rick Wolfe & Associates Inc. Positioned mostly as a tenant representative, the South Tampa commercial real estate brokerage has done well. Since opening the firm, Wolfe says he has closed on nearly $45 million in sales contracts.
But still a longing persisted. "I found myself with one foot on the dock and one foot on the boat," he says of his desire to balance the success of his commercial brokerage with his development aspirations.
A catalyst
South Howard Avenue in Hyde Park today offers the amenities essential to its growing population of affluent young professionals: a Starbucks coffee house and dozens of popular restaurants, all within a short distance of homes that sell for around $200 a square foot. It wasn't so in 1996 when Wolfe signed a lease-to-purchase option on a 28-unit apartment building at 807 S. Howard Ave. In fact, anyone from vagrants to prostitutes loitered on the adjoining vacant lot - now occupied by Starbucks.
But Wolfe saw an opportunity in the apartment building. "The project was such an opportunity because it was so dilapidated that it allowed me to use sweat equity to build value," he says.
He embarked on a full-scale renovation. "I had enough money to either buy or renovate but not enough to do both," he says. " So I structured a deal that allowed me to lease the entire complex and have the right to make improvements before I purchased it."
On a recommendation, Wolfe approached Al Rogers and Joe Chillura at Manufacturers Bank - now Colonial Bank - about financing the acquisition. "I went to them at 8 in the morning on the recommendation of my lawyer," he says. "By 11 o'clock, I had a term sheet. Two weeks later we closed."
The property he bought for $765,000 in August 1997 now carries a just market value of about $1.2 million. Monthly rents of about $400 in 1996 escalated to $700 after the renovation. Today, the units go for about $900.
"I spent every dime I had, even maxed out my credit cards," Wolfe says. "I went to (Rogers and Chillura) with my pockets turned inside out, but they were able to see value in the deal I created."
Wolfe renamed the building the SoHo Apartments - capitalizing on a derivative form of South Howard Avenue and the spirit of SoHo districts in New York City, London and Australia. Today, the term "SoHo" is used commonly by locals to describe this section of Hyde Park.
New directions
Success at the SoHo came at a cost. "During 1996-97, my tenant representation business literally dried up," Wolfe says. "From 5 a.m. to 11 p.m., I was on this project."
Wolfe capitalized on his membership in a local social group known as the Meridian Club. He joined in various backpacking and fishing expeditions throughout much of 1998. The exhaustion he experienced during the renovation quickly gave way to new adventures in foreign lands. It also led him to a business partner.
"I was in Australia unknowingly forging a relationship with a new partner in Rick Wolfe & Associates - Jack King," Wolfe says. "My relationship solidified with him while diving on the Great Barrier Reef. We first met in Tampa for lunch, just as he was about to run the New York Marathon and then on his way to Australia."
About five years ago, Wolfe married Michelle. They now have a son, Trey, 4, and a daughter, Taylor, 2.
"I bought and sold a few properties in the interim, and learned how to select good partners," he says.
He's referring to his with Rubio & Wolfe Investments Inc., though he would not talk about details. In May 2000, Wolfe and Mark J. Rubio acquired 9,215 square feet of professional office space on 18,250 square feet of land at 4320 W. Kennedy Blvd. for $768,000. Two years later the partnership dissolved and they sold the property for $1.5 million to West Kennedy Investments of Sarasota Inc., a company controlled by Mermes Eraclides.
Although dissatisfied with that partnership, Wolfe says the experience also opened new doors. The Rubio-Wolfe venture bought the Kennedy Boulevard property from a company controlled by Bob Walter, one of the sons of the late-Tampa builder and entrepreneur Jim Walter. "I ended up in a great relationship with Bob Walter," Wolfe says.
Over the past year and half, Wolfe has refocused on the real estate brokerage business and finding other creative redevelopment opportunities such as the SoHo Apartments. "To find (new developments) takes a lot of time," he says. "And Jack is so good at what he does I trust him helping me with my biggest clients, which allows him to learn more about the tenant representation business and liberates me to go find deals like the Wonder Bread building. And my experience in the past with the building on Kennedy enabled me to find the right partner for the Wonder Bread deal."
The right partners
The partnership Wolfe forged with Landers and Craft evolved by chance. About two years ago, he heard that Atlanta-based Post Properties Inc., one of the nation's largest multifamily developers, had once expressed an interest in the bread factory site. That's why Wolfe quickly called Interstate Brands' Sutton when he heard about the company's plans to close the factory.
Despite the competition from other suitors, Wolfe regained his confidence when he learned Tampa real estate broker Greg Andretta represented the seller. "Greg has done business in the market longer than I've been here," Wolfe says. "To have a knowledgeable person on the seller's side is so valuable because they're goal-oriented. They want to get the deal done. When you have someone of integrity like Greg, then you know you have a fair shot at the deal."
Wolfe sought construction advice from Landers and Craft, partners in South Tampa-based LandCraft Development Corp. Over the past two years, Landers the developer and Craft the general contractor have produced several multifamily properties in South Tampa.
"They liked the project so much they asked if they could be my partner on it," Wolfe says. "I told them I needed to talk with my original partner on it - Frank Rosenblatt."
Rosenblatt cites Wolfe's honesty, integrity and follow through, adding, "You've got to like him. He has a charming, pleasing personality."
Wolfe wanted Rosenblatt to join him in the bread factory venture. Rosenblatt took great interest. "After listening to him and getting a lot of questions and answers, I simply showed him where he didn't need me," Rosenblatt says. "He had all the development money through the general contractor."
Rosenblatt helped Wolfe identify three possible development scenarios. "Buy it and immediately look for a buyer with plans on paper," Wolfe says. "That was the least risk. Second, we buy it and go through to get the entire plan development approvals and then sell it as one package. Third, buy it and carry it all the way through the sale to a finished project."
Despite the age of the structure, the partnership won't seek an historic preservation designation to capitalize on tax incentives. So the renovation project does not fall under the oversight by the city's Architectural Review Commission. Nor does it fall within the realm of Hyde Park Preservation Inc., the local homeowners association.
"Having said that, our intent is to renovate the building and bring it to as close to its original condition as is practical," Wolfe says. "Remember, we're converting a building intended for manufacturing bread to a building that will be a dwelling unit for numerous families. While we don't anticipate noticeable changes to the outside of the building, we have to tend with fire and building codes, which might necessitate some changes."
Wolfe expects work to begin quickly. Plans first call for demolition, particularly in the loading dock area. Development is expected to begin this quarter.
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