City estimates monthly revenue loss for Main Street delay at about $100,000

 

The city has estimated about a $100,000 revenue loss per month for each month that the next phase of the Main Street Oak Ridge project is delayed.

Oak Ridge City Manager Mark Watson provided the rough estimate of probable sales tax revenues per month, based on “quick calculations,” to the Oak Ridge Industrial Development Board on Monday and League of Women Voters of Oak Ridge on Tuesday.

The project was delayed in January when the Oak Ridge City Council voted 4-3 in its second and final vote to reject a revised plan that had been drafted as the developer, RealtyLink, prepared to welcome a second wave of tenants to the 58-acre site.

It hasn’t been clear since then what might happen next or whether there will still be a second phase.

But on Monday, Watson said he has talked to RealtyLink, and on Tuesday, he said, “I think we will see a re-submittal.”

The project is being re-assessed, Watson said during an annual “State of the City” presentation to the League of Women Voters on Tuesday.

“He’s looking at what he can or cannot do,” Watson said, presumably referring to Neil Wilson, RealtyLink principal. The company is reported to have a few dozen projects across the country.

It’s not clear how any plan that is resubmitted by RealtyLink could differ from the earlier plan that ran into opposition from some members of the Oak Ridge Municipal Planning Commission and Oak Ridge City Council.

It’s also not clear if the four national retailers who had been reported to be interested in building as part of the second phase are still interested in doing so. The four national retailers have not been publicly identified. In January, Wilson said the four national tenants were notified that Council had rejected the proposed changes to the planned unit development for Main Street Oak Ridge, and the potential tenants would be notified if something changes.

Any plan that is resubmitted will have to follow a path similar to the earlier plan. That would include discussion and consideration by the Planning Commission, two separate votes by City Council, a public hearing, and a 14-day public notice period. The Planning Commission and City Council could both have special-called meetings if they want.

Watson said the city would like to resolve the issue as quickly as possible. He called the delay a setback but said RealtyLink has a lot of money invested in Main Street Oak Ridge, which is the redevelopment of the former Oak Ridge Mall site.

Council unanimously approved a revised plan for Main Street Oak Ridge, subject to certain conditions, in December. That was the first of two readings.

But Council rejected the plan in a 4-3 vote in the second and final reading in January.

The rejection hinged on concerns that included the proposed closure of the access road from Rutgers Avenue to the roundabout at Main Street, the movement of mixed-use areas to a future phase along Wilson Street, and questions about whether there are other site plan options and whether the development would or should establish a “city center.” People who rejected the revised plan or asked Council to reject it said they support the development and want continued negotiations with RealtyLink.

Those who had supported the revised plan, on the other hand, warned that rejecting it could affect funding for Oak Ridge and Anderson County governments and school systems by diminishing expected sales and property tax revenues, possibly in the range of several hundred thousand dollars. They worried about the impact on the city’s retail community, property tax values, and new housing developments. They called the project a “once in a generation” opportunity and said it could be a few decades before another similar proposal emerges.

So far, there has not been a proposal submitted that would appear to be acceptable to both RealtyLink and the planning commissioners and City Council members who opposed the revised plan, but it’s not clear if any minds or proposals have changed since the January vote.

Besides the 10 stores already built at Main Street and a few other businesses on nearby parcels, there is a Burkes Outlet store under construction next to Electronic Express and a building under construction by Walgreen’s.

The revised plan for Main Street had been proposed after the first phase went well. Among the proposed changes were:

• adding about 78,000 square feet of retail in four new stores between PetSmart and JCPenney and possibly a self-storage facility along Rutgers Avenue,
• closing the access road from Rutgers Avenue to the roundabout to allow the four new stores to be built along a sidewalk between PetSmart and JCPenney,
• eliminating the proposed multi-family residential units in the area between JCPenney and Walmart, and
• moving the proposed mixed-use areas to the future development phase along Wilson Street. (Mixed-use developments can include residential, retail, and commercial.)

The revised plan would have included potential small retail shops and a possible restaurant near Belk and Cinemark Tinseltown. It would have also included two small open space areas, possibly about 1/3 to 1/2 of an acre each, with one area near the American Museum of Science and Energy and the other near Belk and Cinemark Tinseltown. And it would have included future retail or commercial development areas along Rutgers Avenue.

People who had supported the revised plan said Oak Ridge didn’t have the leverage or the retail expertise to dictate what should happen at the shopping center. They said the city and county need the retail development and the expected sales tax and property tax revenues. They pointed out that the original plan for Main Street was prepared by an earlier developer who is no longer part of the project. That plan, which is still in effect, had included the apartments and mixed-use areas and has been cited by Oak Ridge residents who say they were promised something different. Rejecting the revised plan, the supporters warned, could delay the rest of the project for several decades, and RealtyLink, one of a half-dozen firms of its type, could move on to other projects in other communities. Rejecting the plan would do great damage and “set the city back,” the supporters said.

But those who had opposed the revisions said the proposed plan was a significant change. They said the project had been envisioned as a mixed-use city center but might be, at least for now, primarily a shopping center. They emphasized the need for restaurants at the site; advocated for unique stores, as opposed to chain stores; and objected to the plan to close the access road from Rutgers Avenue to the roundabout. They didn’t like the proposed self-storage facility or having the mixed-use development designated to the future phase along Wilson Street, and they requested changes to sidewalks and parking lots as part of an effort to ensure a pedestrian-friendly development. They said they wanted open space, a central gathering place, and they sought a center where they could go to buy a beer or buy a T-shirt, a place, some said, like Market Square in downtown Knoxville.

Wilson said there was a “disconnect” between what the majority of City Council wanted in January and what RealtyLink could deliver.

“We’re not going to promise something that we can’t deliver,” he said. He said retailers are “driving the bus” on this development, not him and not the City of Oak Ridge.

In January, Wilson said RealtyLink has compromised and done the best it could with a plan originally proposed by another developer.

In a work session after the City Council meeting, Council members suggested next steps for the project. Among other things, they said the site should have a main entrance; there should be a way to get into and see the center of Main Street; and Main Street should be walkable and have a comprehensive system of sidewalks. Individually or collectively, they objected to the proposed layout of the buildings as the site prepared to welcome the second wave of tenants, advocated for a public forum on the project, and mentioned the importance of mixed-use development.

The plan for Main Street Oak Ridge had been to build phase I. If that was successful, as it has been reported to be, then phase II, the next phase, would be built. The goal had been to open the next phase by the spring of 2020.

Then, if phase II had succeeded, phase III would be built. A mixed-use development area in front of the American Museum of Science and Energy could have been completed as part of this third phase by 2025, and the self-storage building could have been completed by the spring of 2020.

In October, Wilson said the first phase of Main Street Oak Ridge had exceeded expectations. He said RealtyLink has invested between $60 million and $70 million in the project, and could invest more than $100 million, including the redevelopment of the former AMSE property on South Tulane Avenue, where a 217-unit apartment complex has been proposed, among other planned or completed projects.

More information will be added as it becomes available.

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