Title
Eastland Mall Redevelopment Property Transactions
Action
Action:
A. Adopt a resolution authorizing conveyance of options to purchase certain portions of real property (hereinafter “Private Development Parcels”), pursuant to a Master Development Agreement, to C4 Development, LLC. The Private Development Parcels are located along Central Avenue between North Sharon Amity Road and Wilora Lake Road and comprise of approximately 57.5 acres of the 77.96-acre site (parcel identification numbers 103-041-08 and 103-041-99), commonly known as Eastland Mall, and
B. Authorize the City Manager, or his designee, to negotiate and execute any and all documents necessary for the conveyance(s) pursuant to the Master Development Agreement.
Body
Staff Resource(s):
Tracy Dodson, City Manager’s Office
Todd DeLong, Economic Development
Background
§ The City purchased approximately 80.4 acres of the former Eastland Mall property in August 2012 as an opportunity to aid economic development and neighborhood revitalization in the area. The mall structure was demolished in 2013.
§ The redevelopment principles created by the Eastland Area Strategies Team help guide the redevelopment of the site. Principles include:
- Enhance the perceptions of the Eastland area and East Charlotte,
- Unify local communities,
- Create connectivity and walkability for surrounding neighborhoods,
- Take advantage of natural features,
- Create opportunity for civic development, and
- Increase equitable economic development opportunities.
§ In June 2017, the City Council Economic Development Committee (Committee) provided direction to seek a private development partner prior to engaging in additional site preparation work.
§ In March 2018, four development teams interested in partnering with the City presented general development concepts to the Committee.
§ In September 2018, the Committee voted unanimously (Council members Mitchell, Driggs, Harlow, Mayfield, and Newton) to direct staff to engage exclusively with the development team led by Crosland Southeast, LLC (Developer) to work through the terms of a pre-development agreement, which would outline the necessary site work to start a joint redevelopment effort between the City and the development team.
§ Throughout 2019, the City partnered with the Developer to lead a robust and broad outreach effort for more inclusive community engagement.
§ In June 2020, City Council approved rezoning the City’s approximate 69 acres as well as an additional 7.96 acres under contract by the Developer located at 5745 Central Avenue in Council District 5.
§ In September 2020, City Council accepted the assignment from C4 Investments, LLC (a Crosland Southeast affiliate) of the Purchase and Sale Agreement and approved the purchase of the property at 5745 Central Avenue.
§ In October 2020, City staff presented City Council with the general terms of a public private partnership with the Developer by virtue of a Master Development Agreement.
§ On November 9, 2020, City Council authorized the City Manager to negotiate and execute the necessary agreements for the reimbursement of costs for public infrastructure, public parking, and other public improvements.
- These agreements include the following:
§ A Master Development Agreement with the Developer setting forth the general terms and conditions of the City and Developer’s partnership regarding phased property transactions, revenue sharing, and community benefits in the Eastland Mall redevelopment.
− Final transfer of properties requires an additional vote from City Council
§ A contract for reimbursement of public infrastructure costs in an amount not to exceed $17.25 million to be reimbursed from the City’s Capital Investment Plan.
§ A contract for reimbursement of public infrastructure, public parking, and other public improvements in an amount not to exceed $11 million, which will be reimbursed through 45 percent of the incremental property taxes from a designated area over 20 years, or until fully reimbursed.
Explanation
§ This action approves the transfer of properties as outlined in the October 2020 presentation to City Council and the Master Development Agreement.
§ The Master Development Agreement contemplates the transfer of Private Development Parcels that have been identified by the City and the Developer to be ready for development in accordance with the following terms:
- The City will convey to C4 Development, LLC (a Crosland Southeast affiliate) options to purchase certain portions of real property comprising approximately 57.5 acres of the 77.96-acre site.
- C4 Development, LLC shall deliver to the City a written notice specifying the Private Development Parcels to be acquired in fee simple and the closing date for such conveyance.
§ The closing date must occur within 60 to 90 days from the date of the notice.
§ With each notice C4 Development, LLC shall deposit 10 percent of the purchase price of the applicable parcels subject to the conveyance as earnest money.
§ The City and C4 Development, LLC will enter into a Supplemental Private Improvements Agreement prior to the closing of any parcel.
− The Supplemental Private Improvements Agreement will define the specific Private Development Parcel to be conveyed, the minimum square footage, and product type that shall be constructed on a parcel and the required completion date.
§ To keep the option to purchase from terminating, each of the following must be satisfied:
− The closing on the initial acquisition must occur no later than December 31, 2023, and include a minimum of five acres.
− Thereafter, within 24 months after the initial acquisition, and within 18 months after each subsequent acquisition, C4 Development, LLC must close on at least one additional acquisition comprised of at least two acres.
− C4 Development, LLC must acquire all parcels no later than 60 months from the date of the initial acquisition.
§ The initial purchase price for parcels conveyed to C4 Development, LLC on or before August 31, 2025, shall equal $3.19 per square foot of net land area within the parcel(s) conveyed.
− The purchase price for all parcels conveyed after August 31, 2025, shall equal the greater of the initial purchase price or the then Fair Market Value determined by the parties or three licensed real estate appraisers as defined in the Master Development Agreement.
− The purchase price for the parcels reserved for use as single-family residences shall remain the same as the initial purchase price.
§ The City will have the right to reacquire conveyed parcels in the event of the failure to commence or complete the designated improvements on any parcel in accordance with the Master Development Agreement. This right shall be set forth in the applicable special warranty deed.
§ The Private Development Parcels shall be developed for various uses, which may include for-sale residential, commercial, market rate rental residential, and senior housing rental residential; the senior housing rental component shall be comprised of a minimum of 70 senior affordable units with affordability targets between 30-80 percent of Area Median Income with specific unit sizes and numbers as designed and required by the North Carolina Housing Finance Agency.
§ Before beginning construction on any parcel, C4 Development, LLC must submit construction plans to the City for its review in accordance with the Master Development Agreement.
Fiscal Note
Proceeds from the sale will be deposited in the General Capital Investment Plan.
Attachments
Attachment(s)
Resolution