Brooklyn Village developers push start date to 2026. Commissioners question delay
Construction of the long-awaited Brooklyn Village mixed-use project is now set to start in the summer of 2026. The update left some Mecklenburg County commissioners disappointed and with a sense of “I told you so.”
On Wednesday, developers of the $700 million project presented an update to the Mecklenburg Board of County Commissioners explaining the reasons for the delay and possible next steps.
Donahue Peebles III, executive vice president of The Peebles Corp., said high interest rates, lack of lending support, oversupply of apartments and, mainly, a five-year closing process, have pushed back the construction start date.
However, Peebles added that if the financial conditions right themselves by the end of the year construction could begin sooner.
“We’ve seen the most rapid interest rate rise in American history and rates are the highest they’ve ever been in 25 years,” Peebles said. “If the economic conditions allowed us to start the project tomorrow, we would start tomorrow.”
A Brooklyn Village refresher
Peebles Corp., in partnership with Conformity Corp. under the name BK Partners, were selected by the county in 2016 to be the master developers of the new community in Charlotte’s Second Ward.
The plan is to create an ode to the Brooklyn neighborhood, a once vibrant and thriving Black community that was dismantled in the name of urban renewal. The area used to house Black businesses and families but later became a place for parking lots, the long-shuttered Board of Education building, Marshall Park and Bob Walton Plaza.
Overall, Brooklyn Village would bring over 1,200 residential apartments with at least 10% of the units being listed between 30% to 80% of the area median income. For a family of four, 30% AMI would be about $29,900.
The 17-acre development also calls for a hotel, retail and commercial space.
But choosing BK Partners was a contentious selection in 2016 with the board voting 5-3. Current Commissioner Pat Cotham and past Commissioners Ella Scarborough and Matthew Ridenhour voted no.
Since then, new commissioners have voiced their concerns on the project, citing the need for more affordable housing and more green space.
Latest update on Brooklyn Village
The development was initially supposed to be completed in 2021. Then a groundbreaking was set for the fall of 2023 before it was moved to the summer of 2025.
At the commissioners meeting, Peebles said the initial delay started with the need to clarify who owned the property. In the early 2000s, the city of Charlotte and Spectrum Properties were originally set to redevelop the site. That plan fell through and the county looked for other developers to work on the site, eventually going with BK Partners.
After a dispute between the county and city regarding ownership, the issue was resolved in 2021 and BK Partners closed on the site in 2023.
Peebles said when it comes to the financial issues, the economy isn’t where it was in 2016. He cited higher interest rates, which were around 3% in 2016 and that are now around 6.5%. He also added that lenders aren’t doling out funds as they recoup from commercial market losses.
But since closing, Peebles said much of the horizontal development, which mainly includes infrastructure projects, has mostly been completed. Walton Plaza was demolished late last year. Peebles also said that sewer and utility work is almost completed, which will make the site ready for vertical construction once they are financially able to.
There will be three phases of construction, with the first phase being Brooklyn Village South. It centers around the Plaza where two towers will have about 552 apartment units with 56 of them being listed income-restricted. The site will also have retail space and a hotel.
Some commissioners aren’t pleased
Cotham and Commissioner Laura Meier said they didn’t agree with Peebles when it came to the financial delay. Cotham also stated that she hasn’t been on board with the project since it was presented.
“I know there’s some tough times, but I don’t think it’s as bad as you’re making it out to be,” Meier said.
She added that “apartments are going up everywhere” and noted that the board recently approved Atrium Health’s “innovation district” and that project is almost completed. That vote took place in December 2021.
Commission Chair George Dunlap countered her argument by saying that BK Partners doesn’t have the same capital as Atrium.
“(Atrium is) sitting on billions and billions of dollars,” Dunlap said. “This is a developer… They don’t necessarily have that kind of cash flow. So they have to depend on borrowing money. You heard in this presentation, the cost of borrowing money has increased not just for the developer, but for any one of us who wants to borrow money.”
To the point of other properties completing their projects, Peebles said timelines matter. Some of those projects, Peebles said, began capitalizing two years ago, when interest rates were lower and when apartments were in demand.
What’s next for Brooklyn Village project
Commissioners Elaine Powell, Susan Rodriguez-McDowell and Mark Jerrell expressed concerns about next steps in the project.
Rodriguez-McDowell and Jerrell wondered whether BK Partners would need to revamp their plans to accommodate the current commercial market.
Powell asked what repercussions would occur if BK Partners didn’t break ground by 2026.
Dunlap said the county attorney Tyrone Wade would need to look into the contracts to determine what was agreed upon and if the developer could change their plans.
Wade said once he looks the contracts over, he can present the information to the board at a later date.
Commissioner Vilma Leake also expressed concerns about the delays in the project. She questioned County Manager Dena Diorio and Peebles on whether the project will ever be completed. It’s a notion she said her constituents have been wondering about.
Diorio and Peebles said yes, the project will eventually come to fruition.
“Well, you better hurry up,” Leakes said.
This story was originally published August 7, 2024 at 11:44 PM.
