28 November 2007

The Man and the Plan



“Buckeye” Kinghoffer

From the Arlington Star, November 1979:

Colonial Village, Buckingham, Big Pink, Hyde Park, Claremont.

Within the last six months,   five major Arlington County apartment complexes have been sold to out-of-state buyers. The sales affect as many as 10,000 tenants, many of them elderly or recently arrived ethnic minorities who live on low to moderate incomes.

Since the sales, anxious tenants and curious county officials alike have been speculating about the new owners' plans. Last week, multimillionaire real estate developer James D. Kinghoffer of Columbus, Ohio, bought the Buckingham, Big Pink, Hyde Park and Claremont Apartments, plus two small shopping centers adjacent to Buckingham and Claremont and a large tract of vacant land on South Four Mile Run.

Buckingham (1,800 units), Hyde Park (323 units) and Big Pink (250 units) are located on a tract assembled by the late industrialist Allie S. Freed, and developed by his widow, Frances. The properties were regarded as trail-blazing designs in their day.

Mrs. Freed retired as president of the Paragon Communities in the early 1970s due to a lengthy illness. She passed away in November, 1975, and the properties have been shopped around by her son Gerald ever since.

“The hot market is out in Fairfax,” said an associate, who did not wish to be named. “We are pressing hard to develop the area east of the Star Tank Farm just outside the Beltway with contemporary houses on large lots. We are seeing a real pattern of flight from the area. The houses in Arlington are too small.”

Several months ago a subsidiary of the Texas Company bought Colonial Village (1.092 units), located across from the Hyde Park Apartments.

James “Buckeye” Kinghoffer, the man who became one of Arlington's biggest landlords last week, is a multimillionaire real estate developer from Ohio who owns a string of properties from coast to coast.

Kinghoffer plunged into the Arlington real estate market with $48 million, buying the Paramount Community's 200-acre package, which included four apartment complexes, two small neighborhood shopping centers and a large tract of vacant land.

It was one of the biggest real estate transactions in Arlington in recent years.

Kinghoffer said he does not plan to convert any of the complexes to condominiums. He said a major three-year rehabilitation of the Buckingham Neighborhood, the largest and oldest of the four, would begin shortly, and that tenants would not be displaced despite the construction.

The high-rise Hyde Park and Big Pink apartments will continue to operate unchanged, Kinghoffer said. "I don't quite know what   to do with Claremont," he admitted. Like Buckingham, Claremont is a garden apartment project that houses a large number of elderly people and families on fixed incomes.

“We basically bought it as a long-term real estate investment," said Kinghoffer.

At   41, Buckeye Kinghoffer does not match the profile of a multi-millionaire developer who breezes in and out of town, beating dozens of New York shark by plunking down millions of dollars in the midst of an energy crisis for a property that's been on the market for over a year. He shuns the limelight.

"I'm a long-term real estate holder," said Kinghoffer, who has a trim athletic profile and well-tanned face. Like Governor Reagan of California, he dresses in a brown pin-striped suit. His tie is a shiny orange, and he has neither cufflinks nor watch.

“'While condominium conversion is a possibility, it seems that the property is good as a long-term asset," said Kinghoffer who has built apartments and townhouses in Springfield, Reston and Columbia. "We didn't do a hell of a lot of looking at Arlington. To me the location is incredible. 1 thought ($48 million) was cheap."

Kinghoffer's rehabilitation plans for Buckingham, which was built in 1937, include air-conditioning the apartments, putting in new kitchens and laundry rooms and extensively landscaping the grounds. Kinghoffer said he expects the improvements will cost tenants a maximum of $50 per month in rent increases. Rents currently range from $198 for a one-bed-room apartment to $310 for a three-bedroom unit.

"Buckingham is built like a fort. There are copper gutters, slate roofs, parquet or solid oak floors. But I think the kitchens are the pits and the grounds are lousy. Have you been to the laundry rooms there? They're horrible: two dryers blowing away, not en- closed, and the washers just empty into this big barrel in the middle of the room. I can't believe anybody goes down there."

Among his chief concerns, Kinghoffer said, is providing housing for a variety of tenants and improving the deteriorating "quality of life" at Buckingham. "Are you single?," Kinghoffer asked suddenly. "Let me ask you a marketing question: What do you think of a setting aside a section of Buckingham for single girls-not banning men or anything-but putting a heavy emphasis on security? I think if you analyze a lot of tenancies you'd find a lot of single women living there on the lower end of the wage scale.

"I don't want to throw out the Vietnamese or the elderly and substitute them with girls, but we try to cater to tenants' needs. I'm just thinking out loud, but maybe we could take 500 units and specialize in “over 50” tenants. I'm trying to find out what it is these people want"

He said several members of his staff would be poring over rental records in the next few weeks trying to determine the types of tenants who live at Buckingham.

Kinghoffer, his wife and four children are spending this year living in a building he owns in San Francisco. "I commute to Columbus once a week," he said, noting wistfully that the recent gas crisis had hurt everyone. He sold his private airplane and now travels by commercial jet.

A native of a small town in Ohio and a graduate of Ohio State University, Kinghoffer built one of his first projects when he was a first-year medical student at Stanford University in the late 1950s. "I borrowed a lot of money," he recalled, "and then took a year's leave of absence to finish it and never went back."

"Arlington has one choice," said Buckeye, who apparently views Buckingham as a microcosm of Arlington.

"Does it want to be a declining lower-middle class community, or does it want to be an upper-middle class community? It's got two things going for it: location and convenience. Its long-term future has to be to continue to upgrade it's housing.

Copyright 2007 Vic Socotra
www.vicsocotra.com

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