Note: This story was last updated at 1 p.m. Nov. 3.
If it were a football game, the long-awaited redevelopment of the former Oak Ridge Mall would be in the “red zone”—not across the goal line yet but close enough to score, a project executive said Tuesday.
Seventy-five percent or more of the new retail space has been leased or is under negotiation, said James Downs, partner of Crosland Southeast, the North Carolina commercial real estate firm that has proposed the project.
The company could have a groundbreaking in the spring of 2015. Construction work, which will include demolition of areas between anchor stores, could be completed by the summer of 2016, making it available to retailers by the fall of 2016.
The redevelopment, named Main Street Oak Ridge, will have 350,000 square feet of commercial space, including the space already occupied by the two remaining anchors, Belk and JCPenney, who will stay.
“They both intend to be here on a long-term basis,” Downs said.
There will be other anchor retailers, as well as smaller retailers and neighborhood service-type businesses, he said.
There could also be about eight to 12 restaurants with some green space that would complement the Cinemark Tinseltown Theater, 150 apartments, and a hotel featuring between 110-130 rooms. There could also be some office space, said Downs, who gave a project update during a Tuesday morning Rise and Shine sponsored by the Oak Ridge Chamber of Commerce at The Courtyards Senior Living on Briarcliff Avenue.
“There is a lot of work ahead of us to get over that goal line,” Downs said. But, “we’re in the red zone, and we’re excited about punching it into the end zone.”
He said Crosland Southeast—whose other projects include Biltmore Park in North Carolina, Providence Marketplace in Tennessee, and Richmond Center in Kentucky—has a niche redeveloping “dead malls.”
The former, mostly-empty Oak Ridge Mall, now officially known as Oak Ridge City Center, has been in decline for many years, and some retailers left, Downs said.
“We saw unmet demand from a retail perspective,” he said. “The market was really underserved.”
It’s a complicated, time-consuming project, but it could also be more rewarding, he said. The redevelopment of the 58-acre site in the center of Oak Ridge could “raise the tide” for other businesses and the community.
“It’s a downtown that has lost its soul, if you will,” Downs said. “We want to restore its soul.”
Developers can’t disclose the identity of potential retailers or tenants, or developers who might be interested in building the apartments or hotel.
The Tinseltown Theater and Walmart are not part of the project, but Crosland Southeast is working with them, and those two companies are excited about the redevelopment, Downs said.
He said Crosland Southeast is in “advanced discussions” with potential developers of the apartments and hotel. Those companies would buy the sites with infrastructure already installed, and could “go vertical” as Main Street Oak Ridge is built, Downs said.
The U.S. Economic Development Administration has denied a $1 million grant application for the project. The grant would have been matched by city funds and used for public infrastructure, including the reconstruction of Wilson Street and the two main streets, as well as for a traffic signal on Rutgers Avenue at the main entrance. Those roads would become public streets, said Ray Evans, the city’s retail consultant.
Since that grant application was denied, city officials plan to use $500,000 from an Oak Ridge Industrial Development Board grant and $500,000 in proceeds from a tax increment financing, or TIF, agreement. But Evans said the city could reapply for the EDA grant next year.
Meanwhile, the Tennessee Comptroller of the Treasury and commissioner of Economic and Community Development notified the city on Monday that a 10-year extension of the city’s portion of the $13 million TIF agreement has been approved, pushing it from 20 years to 30. It had already been approved by the Oak Ridge City Council and Anderson County Commission. A TIF agreement uses new property tax revenues generated at a site to help pay for development costs.
“We’ve passed all the hurdles with the state,” Evans said.
Discussions continue between Crosland Southeast and local lenders who could help finance the TIF loan portion of the project. Those lenders are encouraged, but the discussions aren’t complete, said Chris Johnson, president of ORNL Federal Credit Union and board chair of the Oak Ridge Chamber of Commerce.
“This can and will be transformative to our community,” said Johnson, who also serves on the Oak Ridge Industrial Development Board.
It’s all part of what appears to be a brighter economic picture for Oak Ridge. New developments include a range of new businesses along Oak Ridge Turnpike and South Illinois and Rutgers avenues.
Parker Hardy, president of the Oak Ridge Chamber of Commerce, said another 20-plus restaurants and retailers could enter the city’s market in 2015 or make announcements. The new businesses include the Main Street Oak Ridge project, a 15,000-square-foot shopping center next to Aldi grocery, new retail and commercial space by Kroger Marketplace, including a small shopping center across Oak Ridge Turnpike, and more businesses in legacy shopping centers such as Jackson Square. Filling the 60-acre hold in the center of town (the mall site) creates huge cross-retail opportunities, Hardy said.
“You don’t have to be in the Main Street project to benefit from it,” he said.