In the making for 14 years, South Charlotte development is delayed again. What to know
Much of a development that promises to revitalize a long-vacant site just below South End is on hold, yet another snag in a nearly 15-year effort under two developers.
Developer Beacon Partners announced plans in early 2019 to bring offices, retail, apartments and hotel to the property, adjacent to the Scaleybark light rail station.
But Jon Morris, a senior partner with Beacon, said recently the office buildings and hotel were paused amid COVID-19. The latest plans call for one 80,000-square-foot office building, and another that would accommodate 500,000 to 800,000 square feet of offices. Both would have retail on the ground floor.
The delay is the latest setback in years worth of plans to revamp the Scaleybark site.
Beacon initially put the land on the market last year, but Morris said the offers weren’t as high as they would have liked, though he felt they were fair.
“It was a little bit like we were looking in the mirror,” Morris said of the companies that bid on the property. “We decided, hey, there’s good potential upside here. The office space is not going to die as an asset class. We like this product, we like this location.”
A slew of challenges
In 2018, city leaders cut ties with developer Peter Pappas, 11 years after selling his company the land. The original plans drawn up before the 2007 opening of the LYNX Blue Line called for offices, shops and apartments, including some affordable housing.
Pappas’s firm, Pappas Properties, tried and failed three times to obtain state tax credits to build the low-income tax credits.
As a result, the site languished while development along the Blue Line has extended further south along the light rail. The surrounding area, which some developers and businesses refer to as “LoSo” or Lower South End, has become a hub for nightlife and entertainment.
Before starting the “LoSo Station” development, Morris said the company wanted to wait until leasing activity picked up at another project it is working on in South End called The Square. That building, a 10-story tower at the corner of South Tryon Street and West Boulevard, is opening in the second quarter of this year, he said.
Ideally, Morris said, the firm would have seen success at The Square and started on the Lower South End project in the fourth quarter of last year. But while they’ve seen some activity with smaller tenants at The Square, he said there’s not much demand for larger office spaces.
The coronavirus sent many of Charlotte’s workers home, and few large employers have returned en masse to the office.
“What we aren’t seeing is the big corporate users,” Morris said. “We’ll just have to see where the jury ends up on those deals.”
Moving forward
Beacon is in the process of tweaking the plans for the Lower South End site, and expects to have an announcement in the next month or so, spokeswoman Robin Bookmiller said.
Meanwhile, the multifamily housing on the site is moving forward. While the office and retail sectors have been hit hard during the pandemic, demand for new housing has continued.
Crescent Communities said last year it had started construction on a 344-unit apartment complex called Novel LoSo that will open this year.
And nearby, DreamKey Partners, formerly the Charlotte-Mecklenburg Housing Partnership, will soon start work on an 82-unit affordable housing complex. Sixteen of the homes would be priced for those earning 30% of the area median income or below. That 30% income threshold, for which there is the largest housing shortage, is about $25,000 for a family of four.
Morris said the residential development will help bring activity to the site.
“The first thing you need for amenities is people close by,” he said.
This story was originally published March 8, 2021 at 6:30 AM.
