The redeveloped Oak Ridge mall will have a new name, and local banks and credit unions are considering helping with project financing, executives said Tuesday.
The redeveloped mixed-use property will be known as Main Street—Oak Ridge, said Crosland Southeast, the North Carolina development firm that has been working with the city of Oak Ridge to redevelop the site, including through significant demolition and new construction. The name was chosen after long consideration of a new brand identity for the development, including involvement by Oak Ridge High School students.
“Most everyone we talked to in Oak Ridge was positive about creating a downtown destination for the community—something that says this place is the heart of the city,” said Crosland Southeast partner Tim Sittema. “The site already has Main Street running through it; so Main Street—Oak Ridge is the obvious choice.”
Construction is expected to begin in early 2015, with an opening anticipated in the third quarter of 2016, based upon completion of the financial arrangements.
In a press release, Crosland Southeast said a consortium of local financial institutions, led by CapitalMark Bank and Trust of Oak Ridge, is considering substantial involvement in the financing of the redevelopment “due to the transformative nature of this project in the city core.”
“In addition to our bank, ORNL Federal Credit Union and others have held discussions together about providing lending support to the mall project,” said David Bradshaw, executive vice president of CapitalMark. “Although details have not been finalized and commitments have not yet been made, there is very strong interest among our local banks and credit unions to be engaged in this important long-term investment in the Oak Ridge community.”
Crosland Southeast called the Tuesday announcement regarding the name change and financing “two big steps toward the re-birth of the existing mall retail properties.”
The press release said the city manager’s office, along with its economic development consultant, has been working with the local financial consortium for the last several months to develop a viable financial plan for the tax increment financing, or TIF, portion of the project funding. The Industrial Development Board and the Oak Ridge City Council will consider a series of resolutions during special-called meetings on September 29. Oak Ridge City Manager Mark Watson said the IDB and City Council will act on resolutions that will extend the city’s portion of the tax increment from 20 years to 30 years. The approvals were initially approved in January by the city and county for a 20-year recovery period.
“This will make the TIF loan a much stronger project for the community of Oak Ridge,” the press release said of the extension.
The IDB and City Council will also be asked to consider resolutions to fund certain peripheral public infrastructure improvements. Those improvements would be funded from existing city resources and grants. Those efforts would then allow up to $2 million of the TIF funding to be placed in a reserve fund.
“After months of analysis and scenarios, it was obvious from our discussions with the local lenders that their primary motivation here is clearly to serve the community,” Watson said. “This project must do what it reasonably can in order to limit risk and move this critical community project forward.”
“Collaboration with the public and private sectors is essential, and we cannot be more pleased with the local leadership that has been demonstrated over the past year,” Sittema said. “The nature of regional mall redevelopment is complex and much more time-consuming when compared to traditional open land development. That having been said, these developments are often much more rewarding than green field development as they can be transformative for communities.”
Sittema indicated that national and regional retailers are very “bullish” about the project, and the Crosland team is pleased with the pre-leasing discussions that have taken place.
“We look forward to making announcements about our new tenants soon after the first of the year,” he said.
According to estimates, the proposed new development will create almost 1,000 new jobs and increase annual city and county sales tax revenues by more than $2 million. At final build-out, the private investment in the project could total approximately $80 million.
The press release said Crosland Southeast plans to announce a more definitive project schedule during the next several months.
For more information about Crosland Southeast, visit www.CroslandSoutheast.com.
Update: See this newer story for more information on a special Monday, September 29, meeting of the Oak Ridge Industrial Development Board meeting on the Oak Ridge mall.
See also this previous story on the mall project.