Boom-era plans shrink, languish

Grand ideas hit dead ends

Like hangovers from better times, ambitious projects have been abandoned, delayed or downsized.

By Kerry Hall Singe
ksinge@charlotteobserver.com

Posted: Thursday, Jan. 20, 2011

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Kerry Hall Singe

Kerry Hall Singe writes on business and development for The Charlotte Observer.

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(704) 358-5085

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Graphic: Boom Era Projects
The Observer took a look at five significant projects announced during the boom. Here's where they stand:

Augustalee

Original plans: A $515 million mix of luxury residences, high-end retail, offices and hotels on 104 acres south of Cornelius. Cornelius officials predicted it would attract 4,600 jobs.

Where it stands: In 2009, a lender started foreclosing on the project after the developer failed to sign a significant tenant for the first office building.

Another lender involved in the project, Fifth Third Bank, bought the land at a foreclosure sale in July for $12 million.

In September, the bank put the land up for sale for $18 million, or $173,000 per acre - around half the $34.5 million the developer paid.

CB Richard Ellis vice president Tom O'Brien said the goal is to sell the land to one developer who will turn it into a high-density corporate park. He said he didn't expect the land would be sold piecemeal.

City Park

Original plans: Recreation was to be the centerpiece of a $624 million, 190-acre community of homes, stores, restaurants and offices.

A three-mile trail would loop the community off Tyvola Road, creating pedestrian, bike and golf cart links to an existing park, golf course, farmer's market, office buildings and hotel. A connector road was planned between Billy Graham Parkway and Tyvola Road.

Where it stands: The old Charlotte Coliseum was imploded in 2007 and a sculpture of nine huge holly bushes was destroyed the following year when the developer couldn't find a home for the artwork. Otherwise, "there's not a whole lot happening out there," said Brad Richardson, the city's economic development manager.

Mason Zimmerman, the project's developer, couldn't be reached for comment.

The city agreed to reimburse the developer for some of the cost of the connector road, which hasn't been built. The agreement says the developer must begin road construction by January 2012. Richardson said the city plans to revisit this agreement with the developer next year.

Cornerstone

Original plans: Crosland LLC envisioned higher-end retail on the 108 acres it is developing on the corner of U.S. 521 and Jim Wilson Road in Indian Land, S.C. There was talk of as much as 1 million square feet.

Where it stands: The developer is cutting the project's size and focusing on "value-oriented" stores, said Mike Wiggins, senior vice president of retail.

Crosland anticipates building up to 475,000 square feet. The budget is around $60 million - up to 25 percent less than originally projected.

While Wiggins still believe it will be a community gathering place, it won't be another Birkdale Village, which features national upper-scale tenants such as Williams-Sonoma.

Morningside Village

Original plans: When developers announced the $400 million project in 2005, it renewed interest in east Charlotte among residential developers. Plans included 1,000 homes and shopping next to Veterans Park.

Where it stands: A sign off Morningside Drive still announces Morningside Village, a 32-acre mixed-use village coming soon. A deteriorated apartment complex was demolished and some roads paved.

But the land sits empty, scheduled to be sold "as is" at a foreclosure auction later this month.

In September the project's lender, Wachovia Corp., now Wells Fargo & Co., started foreclosure, saying the developer was in default because it failed to pay a loan in full when it matured in August 2009. Morningside Village LLC owes more than $20.5 million in principal.

Riverwalk

Original plans: A 1,000-acre complex of retail, residential and industrial projects planned on the site of the former Celanese plant on U.S.21/Cherry Road at the Catawba River in Rock Hill. About 250 acres is to be donated to the city for green space. Project to include miles of hiking and mountain biking trails and a velodrome, or oval bike track.

Where it stands: The velodrome is on track to open this year. A 21/2-mile walking trail along the Catawba River opened last summer.

The first phase of single-family homes, set to go on the market this year, will be cheaper than planned, priced in the $200,000s to $400,000s, about $50,000 to $75,000 less than projected.

Offices and retail will come later than scheduled.

Developer Dave Williams, partner with The Assured Group of companies based in Cincinnati, Ohio, said he thinks the project will be completed during the next decade.

Developers announced ambitious plans during better days - ranging from densely packed urban communities with shops and condos to suburban office and hotel projects the size of a small town.

Then one by one, the recession and credit crunch killed the projects as developers could no longer get the money to build their dreams.

And the aftermath is being felt in various ways.

Unfinished residential sites have unsightly foundation slabs or utility stubs sticking out of the ground. Land is back on the market at depressed prices. City employees spent hours approving zoning requests or studying site plans for projects that will likely never happen.

In west Charlotte, the old Charlotte Coliseum off Tyvola Road was imploded in 2007 to make way for a $624 million community of homes, retail, hotel rooms and offices. Today, a trailer sits alone surrounded by gravel and grass.

In Cornelius, a massive mixed-use project was planned that leaders predicted could generate thousands of jobs. The bank now owns the farmland.

Some projects survived, such as the Riverwalk in Rock Hill, a commercial/residential/recreational mix being built on the site of the old Celanese chemical plant. The developer said single-family homes should hit the market this year.

But most local large-scale land development is likely dead for at least three years, because the projects depend on speculation and work best when the market is "frothy," says consultant and commercial real estate broker John Culbertson of Cardinal Real Estate Partners LLC.

"There's got to be a lot of momentum," Culbertson said. "You've got to get the land sold quickly."

A bright spot among the nonstarts is that they were killed early, minimizing the number of vacant buildings or partially developed projects, said real estate analyst Frank Warren.

"We got ahead of ourselves, and we were not in a sustainable pattern," Warren said.

When the bulls are back and ready to dig, don't expect acres of square footage built on speculation. Forget parking decks in outer suburban areas because they will be too costly to build, developers say.

Future projects will be smaller - think $15 million or less, and built in phases, experts say.

Crosland LLC executive Mike Wiggins remembers five years ago giving helicopter tours to potential retailers, flying over a proposed mixed-use project in northern Lancaster County.

"They were saying, 'Bigger,' " recalls Wiggins, senior vice president of retail development. "They wanted three-quarters to a million square feet. Then the world changed.

"Developers are by nature enthusiasts," Wiggins said. "And we may have gotten caught up in our own designs and dreams."

The near future looks more like Crosland Greens - a Crosland mixed-use development on 36 acres at Scaleybark Road and South Boulevard near the light-rail line.

Crosland is building homes suitable for a variety of incomes and has commitments for at least 20,000 square feet in a proposed 60,000-square- foot office building. The retail plan calls for a grocery store, restaurants and other services that support a neighborhood's everyday needs.

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