The redeveloper of Madison Square Mall has about two months to design a new plan for the struggling former “Super Mall” at University Drive and Research Park Boulevard in Huntsville.
The Huntsville City Council voted Thursday to enter an agreement with Mid-City Owner, LLC, to revitalize a portion of the property not needed for infrastructure upgrades, such as roads, stormwater improvements and public open space under the city’s Cummings Research Park East urban renewal plan.
Here are five things we know right now about the project:
1.) What about the other property owners?
The Grove Huntsville, which is affiliated with RCP Companies, bought CBL & Associates’ share of the property in April 2015 for $5 million. Sears, JCPenney and TouchStar Cinemas/Madison Square 12 also own portions of the land. Shane Davis, Huntsville’s director of urban development, said conversations with the other owners about the city’s ongoing land acquisition process are underway.
“We’ve notified those guys that we want them to remain in Huntsville,” Davis said. “We don’t want them to go anywhere. We want them to find a new home and actually the development agreement with the redeveloper is working to try to bring some of those guys back that are there.”
Davis told AL.com the city is already working with JCPenney to find another site within the market. They have identified 3-4 possible locations, he said.
“We’ll give them some time to see how that pans out for those guys,” he said. “The next phase is we’ll start appraising properties and then we’ll be making those offers to those entities and going through the normal course of real estate acquisition for these new roads and the park as we would any other road project that we do.”
2.) What will the mixed-use project look like?
Mid-City Owner, also owned by RCP, must develop a minimum of 150,000 square feet of commercial and office space, 350,000 square feet of retail, a hotel with at least 100 rooms and 560 multi-family units. A clause in the agreement said 70 percent of the businesses must be new to the Huntsville market.
The redeveloper will come back to the city this summer with a plan, which must be approved by the council before it can move forward. If the development is anything like RCP’s other projects, Huntsville residents can expect something new and different at the site.
RCP recently developed the Whole Foods-anchored Shops at Merchants Walk on South Memorial Parkway and is about to start construction on CityCentre at Big Spring at the old Holiday Inn site in downtown Huntsville. In early March, RCP said AC Hotels by Marriott will anchor the $100 million mixed-use project.
RCP Companies Director of Acquisitions and Asset Management Odie Fakhouri said Thursday they will “deploy one of the most forward-thinking urban development teams in the world to deliver a redevelopment plan like never before seen in the Southeast and that is deserving of the Huntsville community.”
3.) When should work begin on the site?
The city anticipates construction will begin in the first quarter of 2017 with the first stores in place by late next year.
The multi-year plan, which is subject to changes, will be implemented as follows:
- 2016: Project design
- 2017-18: Phase I
- 2019-20: Phase II
- 2021-22: Phase III
- 2021-22: Phase IV
Davis said the city must complete its public improvements within a timeline that coincides with the developer’s schedule to construct each phase of the project.
4.) How much will it cost and what is the return on investment?
Davis said the developer plans to spend $350 million to $450 million in private investment on the project, while the city’s contribution will be $10 million to $12 million over a 5-7 year period.
The city has run preliminary data on the return on investment, which Davis they will present to the council when Mid-City comes back with a more concrete site plan and design guide. He said the payback will be about 18 months.
5.) What would happen if the deal did not go through?
In mid-February, the council approved an urban renewal agreement to transform Research Park East into an economically viable, attractive and functional part of the community. CRP East, the original and oldest section of the park, has struggled in recent years as vacancies rise and companies move out due to deteriorating conditions.
The plan identifies four priority zones, the first of which is the Madison Square Mall site. Without changes, Davis said the area will keep getting worse as Madison Square hits 70 percent vacancy and property values drop 80 percent. Last year, the area had 1,475 police calls and more than 300 arrests.
“All the pieces point to say we’ve got to roll our sleeves up,” Davis said.