City to consider buying Eastland Mall

City to consider buying Eastland Mall

City to consider buying Eastland Mall

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by STEVE HARRISON & DAVID PERLMUTT / The Charlotte Observer

WCNC.com

Posted on July 17, 2012 at 10:48 PM

CHARLOTTE, N.C. -- The city of Charlotte on Monday will consider buying Eastland Mall for $13.2 million in an effort to make the site attractive to an outside developer.

Eastland, which was the hub of east Charlotte since it opened in 1975, has been completely closed for two years after a slow, multi-year exodus of anchor stores and other tenants.

The city has long hoped to redevelop the 90-acre site, possibly with a mixed-use community of homes, stores and offices.

After several years of stops and starts in dealing with the mall, the City Council voted unanimously in closed session Monday night to put the Eastland purchase on this Monday’s agenda, according to multiple people familiar with the meeting.

The city has been interested in the mall for years.

In 2008, it spent $400,000 on options to buy the Belk and Dillard’s anchor stores. It took out the options to have a “seat at the table” as the mall’s future was discussed.

In the fall of 2009, the city came close to buying the then-dying mall for as much as $22.2 million. But some council members pushed back before the deal was to close, seeking a much lower buying price of $7.4 million.

That offer was rejected. The city lost the money it spent on options.

In June 2010, Houston-based Boxer Property bought the interior of the mall – the area that contains the small stores – for $2 million from Miami Beach-based LNR. Boxer president Andrew Segal said he wanted to redevelop the mall with a Hispanic theme, but his project hasn’t yet gotten off the ground.

Boxer is known for buying distressed commercial and office buildings.

Segal said Tuesday that he has some tenants lined up and is preparing to reopen the mall, but he said selling was a better opportunity. Segal declined to say how much Boxer will get from the sale.

This spring, at the urging of council member John Autry, city staff began taking an active role again to try to redevelop Eastland.

The city is considering buying the mall to consolidate the site, which is made up of seven owners. For instance, the empty mall is owned, in pieces, by Belk, Sears and Dillard’s, who each have veto power over how the property is used.

City officials have long said the ownership structure makes it difficult for a new developer to buy the property and rebuild it.

Jamie Banks, a spokesperson for the city’s economic development office, said in a statement: “We are not at liberty to discuss any conversations or topics raised in closed session.”

The deal

Walker Wells, owner of Freeman, McClintock & Wells, a Charlotte commercial real estate firm, brokered the land deal and was able to secure 81 acres and offer it to the city.

The deal would include the main mall, anchor stores and two outlying parcels.

“This one (redeveloping Eastland) is needed so badly for the community,” said Wells, whose firm has brokered land deals for projects such as Bank of America Stadium and Time Warner Cable Arena.

“The tax base is dropping so badly on the east side, “ he said. “That mall was a $150 million asset not too many years ago. Now that whole side of town is being brought down by the failure of the mall.”

Wells said the deal must be closed by Aug. 31.

The money to buy the mall was part of an earlier bond referendum that included $16 million for Eastland redevelopment. Demolition costs are estimated at $10 million.

City officials wouldn’t say if anyone is interested in redeveloping the site. Three years ago, the Veterans Administration considered building a hospital at the site, city officials say.

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