THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, October 9, 1994 TAG: 9410080188
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Long : 206 lines
Robert B. Smithwick, Norfolk's development director, stood outside the 11th-floor elevator doors at Main Street Tower, greeting businesspeople and community leaders who had come that morning to hear about the city's latest project - the $270 million MacArthur Center shopping mall.
But the main attraction at the downtown breakfast meeting hovered a few feet away.
Impeccably dressed but understated, Alexius C. Conroy blended well with the crowd of downtown business and civic leaders. Which was fine with the typically reticent Conroy.
If Conroy prefers working mainly behind-the-scenes, his presence in Norfolk - or at least that of his company - is about to become very public.
Because the real estate developer is Norfolk's appointed leader in arguably the city's most ambitious and expensive project, MacArthur Center. While little is publicly known about Conroy, the Connecticut resident has left a trail of real estate developments in the Northeast and Southeast that hint at his penchant for corporate partnerships and difficult projects.
MacArthur Center, the enclosed, three-story shopping center proposed for 17 acres downtown, drew Conroy to Norfolk and compelled him to sign up as the city's developer.
``It's the largest underserved market between Washington and Atlanta,'' Conroy said in a recent interview. ``I didn't realize what had happened downtown already. I didn't realize there was a business core, that there was a cultural revolution going on with the opera house and the baseball park and Nauticus all happening, not just something that people were talking about.
``If you can get someone to come down here, if you can get them to be open-minded, Norfolk's a winner,'' Conroy said. ``It just has so many things going for it.''
Dressed in a dark, pin-striped suit, the 47-year-old Conroy recently visited Norfolk sporting a MacArthur Center button on his lapel. The large button acted as a focal point and read: ``A five-star shopping experience.''
Norfolk officials laud Conroy and consider his involvement a coup d'etat.
``We needed to have a class A person. He's a consummate professional,'' said Smithwick, Norfolk's economic development director, who originally wooed Conroy at a Las Vegas International Council of Shopping Centers convention.
``With as many people as we've met in the development industry, we came away with the feeling that he could help us make it happen,'' said Charlie Bauman, business manager for Norfolk's development department. The city chose Conroy primarily for his reputation and guarantee to finish the mall in the time frame outlined by the city, Bauman said.
Conroy describes himself as ``a nice guy.''
``I think I live up to my promises,'' he said, ``and that I try to have a high level of integrity and follow through with what I say I'm going to do. And I'm loyal to people who are loyal to me.''
Although Norfolk officials readily cite Conroy's resume - executive at Macy's, president of Cadillac Fairview Shopping Centers' U.S. division - few in the industry are intimately aware of his track record. Some who are familiar with Conroy refuse to talk about him, saying, ``If you can't say something nice about someone, don't say anything at all.'' Others joke about Conroy's veil of privacy that reporters try to pierce.
``We don't associate with just any riffraff,'' teased Art Burak, who heads Macy's real estate division. ``If we didn't have confidence in Alex, we wouldn't do business with him.''
Most are familiar with the big firms he worked with before striking out on his own with Conroy Development Co.
``They're a low-profile company,'' said Mark Schoifet, a spokesman for International Council of Shopping Centers. ``They're based in Greenwich, Conn. That's primarily where they got their start.''
As president of Conroy Development Co., incorporated in Delaware, the developer is the sole stockholder in the private company, which employs only eight people. All the rest are hired per project.
``This is the big time now,'' Schoifet said of Conroy's involvement in MacArthur Center. ``The Norfolk project is going to put them on the map. It's quite a feat to have Macy's and Nordstrom move into a downtown mall.''
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Working with big names isn't new to Conroy.
Born outside Chicago, Alexius Conroy grew up in Orland Park, Ill., when its population was still 300 and the town was still rural. His family owned a small real estate company, which influenced his career path. He attended the Wharton School of Business as an undergraduate at the University of Pennsylvania, where he majored in real estate and finance. He received an MBA from the University of Southern California.
From 1969 to 1979, he worked as an executive in the corporate real estate department of R.H. Macy & Co., eventually becoming vice president of the department.
In 1979, he joined Cadillac Fairview Shopping Centers Ltd., a Canadian real estate firm with $5 billion (Canadian) in assets, and worked in the company's White Plains, N.Y., office. In charge of all the American retail projects - now nine regional shopping centers from Louisiana to New York - he worked his way up to president of the firm's U.S. division in 1983. During this time, he was involved in the development of more than 12 million square feet of retail, office and mixed-use properties.
Conroy resigned from Cadillac Fairview in 1985 and formed the Conroy Co. in partnership with Melvin and Herbert Simon, owners of Indianapolis-based Melvin Simon & Associates, one of the nation's largest shopping center developers.
Conroy and his new partners worked on the 1.2 million-square-foot Far East Center in Washington, a mixture of office and retail space that was envisioned as a major financial hub in the city's Asian district. The $220 million project has stalled, but Melvin Simon & Associates bought out Conroy's interest in the project a while ago, said Alvin McNeal, planning commissioner for the District of Columbia. D.C. officials who worked on the Far East Center said they had little interaction with Conroy.
Conroy's projects in the Northeast have been more high-profile for the Fairfield, Conn., resident.
Typically, Conroy works on two types of projects: smaller, quick-hit projects like a stand-alone retail store and larger, complicated developments like suburban malls. He turned a former Jordan Marsh department store site in Danbury, Conn., into a 103,000-square-foot Home Depot store in two years. Another project - a former Bloomingdale's building in Stamford, Conn., that Conroy planned to develop into a mall - fell through.
``Those (projects) provide cash flow to the company and allow us to work on bigger projects that take a longer period of time,'' Conroy said.
Two of those larger projects have stymied Conroy, including a $200 million, 900,000-square-foot mall in White Plains, N.Y., that would link an existing Saks Fifth Avenue department store to specialty shops. That project - Westchester Place - hit a snag last year when one of the proposed mall's anchors could not get out of its previous lease, said Joseph Potenza, White Plains planning commissioner. Bloomingdale's had agreed to move from its present location across the street to Westchester Place, but its landlord, New York Hospital, refused to let Conroy assume Bloomingdale's lease.
``At this point, the project is not being advanced,'' Potenza said. ``We have met with his people for several months.''
At the same time, critics of the mall view the project as ``impossible'' because it would face a nearly completed, upscale mall almost directly across the street called The Westchester. That mall boasts anchor tenants such as Nordstrom and Neiman Marcus. Another mall near The Westchester also would compete against Conroy's shopping center.
The developer's other big venture, Providence Place, has been embroiled in local and state politics. Plans for a $370 million, 1 million-square-foot downtown shopping center in Providence, R.I., have polarized members of the community because the city and state want to use federal highway funds to build a parking garage for shoppers that's essential to the project. While developers are willing to put up $220 million in private financing for the 11-acre mall itself, space limitations in downtown Providence require a hefty 5,000-car garage to accommodate shoppers.
When the project stalled under Melvin Simon & Associates, the Syracuse, N.Y.-based Pyramid Co. took over development of Providence Place. As one of the original developers, Conroy remains a limited partner in Providence Place.
``It's a very big, expensive project,'' said John Palmieri, director of city planning in Providence. ``Everyone has been making political hay of the state and city subsidies.''
Providence Place is strikingly similar to MacArthur Center: a downtown mall, close to the freeway, with substantial public-sector involvement and use of federal funds for financing. It also was designed with a desire to preserve the city's original architecture.
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Conroy recalls his first impression of Norfolk: ships, immense, larger than life. The flavor of a Navy town. Huge dry docks. All of this loomed in his mind when he returned to Norfolk 25 years after first seeing the city.
Although he indulged in a few moments' reminiscence about the Norfolk of earlier years, he soon turned his attention to business.
The investment in MacArthur Center - Conroy's and the city's - is immense by most standards. While the $370 million Providence Place is an even bigger project, MacArthur Center is still formidable. And it is - like Providence Place - not without risks. Norfolk's inner city, once a center for family-owned department stores, has seen retail shopping shift to the suburbs in the past few decades, leaving Granby Street and adjacent blocks full of boarded-up storefronts.
MacArthur Center is viewed as the catalyst that will revive downtown.
Scheduled for groundbreaking next spring, the mall is set to open in fall 1996. Anchored by Macy's and Nordstrom department stores, the mall will have a third anchor tenant, yet to be named. The three-story structure will occupy 17 vacant acres now used for parking.
Norfolk will put up about $100 million for the mall, and Conroy will fund the remaining $170 million through private financing, both his own equity and bank loans. Right now, he is using his own money and has been talking to a few banks. He plans to be done with the financing procedure in three to four months.
Kajima International Inc., a New Jersey construction company, has been named as MacArthur Center's construction guarantor, which means it will essentially be a third developer and help secure financing for the mall. Its $16 billion parent company, Kajima Corp., has ties to projects valued at more than $300 billion, Conroy said. As guarantor, Kajima would complete the mall if construction costs exceed the financing that's already been arranged.
The mall will employ 3,000 people. Conroy expects it to have a huge economic impact - a multiplier effect of 212 times - which would mean 7,500 more service-type jobs. Plus, 1,500 construction jobs will be created during its building.
Conroy speaks about MacArthur Center with unbridled enthusiasm.
``Frankly, I didn't understand the magnitude of the opportunity until I flew down. I had a lot of the stereotypes of Norfolk that other people had, and I hadn't seen much of what had happened. So the image of the city was very different from the reality of it when I got here.
``There's a real story here,'' he said. ``It's not just made-up, a PR gimmick. There are not many cities around that I can think of that have had this commitment and the effect of it, the positive results that have happened.'' ILLUSTRATION: Color photo
RICHARD L. DUNSTON/Staff
Photo
RICHARD L. DUNSTON/Staff
The opportunity to develop 17 acres of downtown land into the $270
million MacArthur Center drew Connecticut developer Alexius C.
Conroy to Norfolk. ``There are not many cities around that I can
think of that have had this commitment,'' he says.
KEYWORDS: PROFILE BIOGRAPHY COMMERCIAL REAL ESTATE
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