By John Kanelis
Amarillo's lone bona fide skyscraper is going to get a good bit darker in a couple of years.
Two of the Chase Tower's major tenants are moving out. When they do, the lights will go out in 13 of the tower's 31 floors.
West Texas A&M University is moving its downtown Amarillo campus to new digs at the Commerce Building at the corner of Eighth Avenue and Tyler Street. Xcel Energy is moving to a brand new seven-story office complex where construction has just begun.
So, what happens to the Chase Tower's vacant space? The tower likely won't stay dark for long, according to someone involved with seeking to fill the vacancies.
Aaron Emerson, a partner with the Gaut-Whittenberg-Emerson commercial real estate brokerage firm, is not overly concerned about the upcoming vacancy. He said the market is well-positioned to "absorb" that space. Plus, he said, downtown Amarillo is emerging from a "C-minus" category of business district to one that is "getting into the A range."
Emerson said Xcel will vacate a total of 10 floors in the spring of 2017. West Texas A&M University is planning to re-settle at the Commerce Building in the fall of that year, leaving three more floors in the Chase Tower vacant.
"You always hate to lose a tenant," Emerson said, "but I'm glad they're going to be staying downtown."
The Chase Tower has been through some down periods already, but has come back. "Back then" about a decade ago, Emerson said, "we were coming off a long period where the Chase Tower was 60 percent occupied. Now it has been historically 98-plus percent occupied for years. The building was stale and cold. Now it is the most active building in Amarillo."
Joe Bob McCartt, who once co-owned the Chase Tower with several other local partners, agrees that the building is well-positioned to refill those offices, possibly soon.
"The building was 60 percent occupied when we bought it" in August 2006, McCartt said. "It had 120,000 square feet vacant," he said, "but in two years we were able to lease out 90,000 square feet."
McCartt – who run the McCartt and Associates development firm – said the downtown district has a serious lack of commercial space, but he believes that the building's loss of the two major tenants "really isn't that big a deal. We ought to be able to absorb that space fairly quickly."
The city's business community "needs that space," McCartt said. "They took 100,000 square feet off the market when WT decided to move into the Commerce Building," he said.
"The Chase Tower isn't any more vacated now than it was when we took it over," McCartt said.
Xcel's "footprint in the tower" used to be a lot bigger than it is today, said McCartt.
"Back when the company was SPS (Southwestern Public Service)," he said, "they occupied 50 percent of the tower. But when Xcel bought it, they reduced that footprint to 100,000 square feet."
McCartt said Xcel will have "a comparable amount of space" when it moves into its new building in 2017.
"Look, it's not the end of the world," McCartt said of WT and Xcel vacating the Chase Tower. "We don't have any downtown office space now."
Emerson was quick to add that "a lot of private money" has been pumped into downtown's revival. He ticked off several projects that have improved downtown's quality: Happy State Bank, the Wells Fargo Center, The Courtyards by Marriott Hotel, several downtown-area churches and Toot 'n Totum. He also noted that the Potter County Courthouse Square, which was renovated with state historic preservation grant money, also has contributed greatly to downtown's spruced-up appearance.
Emerson estimated the amount of private investment at around $120 million for all the projects.
"Back in 2004 and 2005," Emerson recalled, "the Chase Tower was frumpy and there just wasn't much sex appeal about downtown Amarillo." The building's appearance has improved significantly and downtown's "sex appeal" has improved greatly in the past decade, he said.
Emerson acknowledged that he's had several firms express interest in filling the Chase Tower space that's about to be vacated, although he wouldn't divulge the names of the interested principals. Xcel, he said, has been given some flexibility in setting a departure date, but believes that "Xcel will give us a firm date by mid-December. We won't know when space will become available until they give us that date."
Emerson said he has been able to fill one floor already that was vacated by Stanley Marsh 3 shortly before Marsh's death this past year. Marsh's 12th-floor suite of offices now belongs to Phillips 66 Oil Company. "It looks really different up there now," Emerson said.
Emerson said it would be better for the skyscraper – which was built in 1971 – and for the economic health of the downtown district if tenants can be attracted to move here from outside of Amarillo or the region. "It helps the market if we can find someone to move here from somewhere else," he said. There's already been shuffling and relocating of local businesses to and from the downtown district, he said, adding "that's not all that desirable."
The Chase Tower has undergone a significant makeover in recent years. The building's owners – David and Peggy Long of Chino, Calif. – have invested in new elevators and have redesigned the first-floor lobby. The upper floors also have been re-done. Emerson said more improvements are on the way, such as a gymnasium on the sixth floor and upgrades to the Ed Davis Conference Room on the ninth floor.
Emerson added that the building will be outfitted with additional security cameras throughout the building and will expand storage capacity in the basement.
"This is a great building," he said, "but it will take three to four years to get it filled back up."