By Bob Druckman
South Huntsville Neighbors
Scott McLain, JD, CCIM, CRE, CIPS, is a fixture in the Huntsville business community. Besides his affiliation with Cold well Banker Commercial, as Managing Broker, he is well known for his service to the Huntsville community, working to make it a better place. His commercial real estate projects have contributed mightily to Huntsville’s growth. Scott is truly a model for all entrepreneurs.
I had the opportunity to sit down with Scott recently for a wide ranging interview.
How did you decide to get into commercial real estate?
My dad, Gene McLain was a real estate lawyer. I also graduated law school and became a real estate lawyer. I found that I was drawn to the entrepreneurial side of real estate, so on Oct 31st 1984 I Fed-Exed my resignation to the law firm I worked for. Haven’t looked back since.
In commercial real estate you wake up every day unemployed and have to figure out how to make money. That’s true of most entrepreneurs. It reminds me of the old Ed Sullivan Show where the there was an act with someone spinning plates on a stick. I have to work on many deals and keep up with every deal. Each deal is different, with different players and knowing who is doing what. Really need a high level of organization.
What challenges did you face? How did you overcome them?
The first thing is to challenge yourself and realize that there are no safety nets, no security of a paycheck every 2 weeks. You have to rely on your own self initiative, creativity, and persistence. You really can’t give up. We tend to build walls around ourselves and we are the only people who control those brick walls and how to break them down.
There is a cyclical nature to this business. It’s not recession proof as evidenced by the recession of 2008-2009 and the sequestration of 2013. I often refer to it as the 6 year recession. Commercial real estate is based on optimism and growth. We were able to overcome those challenges with a lot of hard work and understanding what Huntsville has to offer.
The other thing about commercial real estate is deals can take 9-16 months or more with no assurance of getting paid. Once we are at the closing table, shake hands and leave with a folder then we know that the deal is done.
It’s easy to say but staying focused, keeping the energy level high and creating a new reality when things get tough are the keys to overcoming challenges.
What would you say has been the development project you enjoyed the most? Why?
There have been 2 or 3 projects that I have enjoyed the most. One was actually a volunteer opportunity. I was the Board Chair of the Huntsville Museum of Art when they decided to expand. We envisioned a new museum located in the park. In working with Urban Planning and the City Council we decided that the Museum should stay where it is and be the centerpiece of Big Spring Park. Now we have skating, a great pizza restaurant and a place to relax all with the museum as an anchor.
Another pet project was the Mall at Fountain. It needed to be redeveloped and with people going in that direction, we felt it would be a great power center. Now it houses Home Depot and Costco and the outparcels around it
I also enjoy working with families that have farms and are looking to sell. Sometimes those are difficult decisions because the farm has been in the family for generations. Selling though, can give the family an opportunity to reinvest the money for college education etc. The dollar benefit can change the family history.
Let’s Talk about Constellation. It changes Huntsville’s Skyline pretty dramatically.
Constellation has been a 22 year project. My dad brokered the mall. For those who remember, the Symphony Ball was staged inside the mall, so it had some history. It is in such a great location. About 130,000 vehicles pass by it every day so redevelopment was a natural fit.
It did have its stops and starts though. We started with an institutional partner out of Atlanta, but the recession hit and they backed out. I found another Atlanta partner, but they found the project too hard and backed out. I found a partner in Chicago and they have stayed with me. Now we are ready to go as you can see driving by.
The apartments will be ready for tenants next month. Soon we will have an announcement about retail and restaurants coming in. It’s an opportunity for more growth and adds to the skyline of Huntsville. In the area across from the Still Serving Veterans offices on Clinton Street, we are planning 42 world class condos, with the very best of amenities.
Growth always brings challenges. With all the growth happening in Huntsville what challenges are we facing? What opportunities do we have?
We are well positioned to handle prosperity. Traffic is still easy. There are times of the day when traffic does get busy but nothing like a major metropolitan area.
The widening projects of 565, 72 and 53 will be starting. City traffic management has done a good job identifying the areas of concern and working thru them.
Huntsville was very fortunate to have a wonderful transportation director, the late Richard Kramer; he really understood traffic, its flow and its impact on communities.
Currently there is a shortage of housing in Huntsville; even with the 18,000 apartments being built in the metro area. There is a market limit on growth and lenders lend based on market studies. If they detect any slowness in the market they will put the brakes in lending.
Huntsville rents are not considered high which is why the apartment construction that we see are 4 stories only. In order to do high rise apartment buildings, Huntsville rents would have to be much higher and the market doesn’t justify it.
Malls are another challenge. Currently in the U.S. there is 25 sq ft of retail space per person. Comparatively, England has 12 sq ft of retail space per person. There is a transformation going on in many malls. They are transitioning to entertainment malls or medical malls. It happened right here in Huntsville, when Huntsville Hospital bought the old Dunnavants Mall and turned it into the Medical Mall. In Nashville, Vanderbilt took over 100 Oaks and its now both retail and medical.
Where do you see Huntsville in the next 5 years?
We are well positioned for growth. We continue to connect Athens and Decatur along with Meridianville and Hazel Green. Redstone Arsenal is so well run that more and more government agencies will be looking to relocate and will fuel Huntsville’s growth.