A North Carolina company has signed a contract to purchase the Oak Ridge Mall.
Crosland Southeast, a development and investment company headquartered in Charlotte, N.C., signed a contract in late January to buy the mostly empty mall from Oak Ridge City Center LLC, according to a Wednesday morning press release from the Oak Ridge Chamber of Commerce.
“We feel the Oak Ridge market is under-served in terms of retail and feel very positive about the retailers we believe we can bring to this new center,” Crosland Southeast partner Tim Sittema said in a Wednesday morning press release from the Oak Ridge Chamber of Commerce.
A sale price for the roughly 60-acre site in the heart of Oak Ridge has not yet been disclosed, but it would become public after the deal closes.
“In my book, this is one of the most exciting days I’ve had here in a decade at the Oak Ridge Chamber of Commerce,” said Parker Hardy, president of the Oak Ridge Chamber of Commerce. “This is a big deal.”
Crosland Southeast is currently conducting its due diligence on the property. City officials weren’t sure how long that would take.
It wasn’t immediately clear which specific properties at the mall site, including a vacant lot where Diversified Product Inspections LLC was once located, might be included in the sale. Steve Arnsdorff, chief manager of Oak Ridge City Center LLC, which owns the mall, was not immediately available for comment Wednesday morning. Neither was Sittema.
The relative lack of retail activity at parts of the site has frustrated residents, city officials, and business leaders. The interior of the 500,000-square-foot mall has been mostly empty for years, and only two anchor stores remain: Belk and JCPenney.
The property has been for sale since last spring, and local officials had reported that it had a price tag of $10.5 million.
Crosland Southeast has developed more than 24 million square feet of retail and mixed-use projects, including Biltmore Park Town Square, a 790,000-square-foot mixed-use development in Asheville, N.C., the press release said. The company also developed Providence Marketplace, a 835,293-square-foot mixed-use development in Mount Juliet near Nashville.
“They’re very deliberate,” said Ray Evans, an economic development consultant for the city. “They do things right. They’re just a phenomenally good company.”
Hardy said he was impressed by the company’s work in Asheville.
“I was just blown away,” he said. ”We know that Crosland Southeast has the relationships with retailers to bring shopping and dining options Oak Ridgers and our neighboring cities and surrounding communities have been asking for.”
Evans said the company has had a good reaction from retailers and would like to have as many local businesses as possible.
“They like a nice mix between the national retailers and local retailers,” he said.
The Chamber said demolition of the current mall could begin by early 2014. Site plans have not been developed yet, but the Chamber said Crosland Southeast plans to create a mixed-use center that would include retail stores, restaurants, office space, and more.
“The lack of retail and sales tax leakage have been huge issues to everyone who lives in Oak Ridge for a number of years,” Oak Ridge Mayor Tom Beehan said. “Crosland Southeast has a solid reputation for taking shopping centers like the Oak Ridge Mall and turning them into thriving, quality developments. This is a great day for Oak Ridge.”
In June, city officials said potential developers at the mall are likely to ask for public money to help pay for infrastructure improvements ranging from rerouted roadways and new traffic lights to building upgrades and property demolition.
“It will unquestionably be required,” Evans said Wednesday. “Every prospect said the deal can’t work unless there is some public-private participation.”
But city officials said the potential public involvement hasn’t been spelled out yet.
It’s not clear how many prospective buyers looked at the mall. Although he wasn’t directly involved in the negotiations, Beehan said in June that 40 companies interested in redeveloping the property had signed confidentiality agreements, and the owners wanted to narrow the list down. The companies were national firms with mall development and redevelopment experience, Beehan said then.
On Wednesday, Hardy said the Chamber worked with five companies, but he’s not sure how many companies had expressed interest to to the owners. Evans said there were at least five serious prospects, and a handful of others that responded to specific inquiries.
In August, Arnsdorff said the owners were focused on one potential buyer. Arnsdorff is a Chattanooga businessman who bought the mall, which was renamed the Oak Ridge City Center, for $6 million in 2003.
In 2002, 56 percent of Oak Ridge voters rejected a controversial $23.2 million bond resolution that would have supported a plan to convert the mall into a town square that would have included new school administration headquarters and a senior citizens center.
Redevelopment plans have languished in the decade since, although there have been occasional bursts of optimism as new or revived proposals were announced.
Municipal officials have said they would still like to create a city center.
“That is something the city is interested in, and the community is interested in,” Beehan said in an earlier interview.
It’s one in a string of new business developments announced or completed in Oak Ridge in the past year, including restaurants and a bank at Jackson Square, a plan to convert the dilapidated Alexander Inn into an assisted living center, a new Kroger Marketplace shopping center at Oak Ridge Turnpike and Illinois Avenue, and a new hotel, Aubrey’s, Panera Bread, Aldi, and Weigel’s along South Illinois Avenue.
Evans said the mall site, which has dropped in value from $60 million to $6 million, affecting tax revenues and quality of life, has historically been one of the economic drivers in the community. The property was once home to the Downtown Shopping Center, which was “absolutely viable” and included many local businesses, Evans said.
“That’s, by far, the most important piece of property in the community,” he said, and it could be the heart and soul of Oak Ridge.
“The best opportunity we have is this 60 acres to create a heart and soul,” Evans said.
Note: This story was last updated at 11:24 a.m. Feb. 14.