A plan to remake the Eastland mall site into movie studios appears dead after the city of Charlotte on Thursday recommended against signing a five-month extension with the developer, Bert Hesse.
The City Council’s economic development committee met Thursday for an update about the Eastland project, but there was little new information about the project’s financing and no more detailed information about how much the studios would cost.
Council members criticized how Hesse’s Studio Charlotte Development has worked with the city over the last six months, when it had an exclusive window to reach an agreement on Eastland.
Hesse conceded the project is in jeopardy.
“I won’t say it’s dead, but it’s on life support,” Hesse said after the meeting.
City staff said Hesse contacted the city this week and asked for an extension. He also asked that the city split the cost of some environmental and utility planning work for the 80-acre site. Hesse said after the meeting that the city’s share would be about $150,000.
The city’s economic development director, Brad Richardson, recommended against both the extension and helping with the study. Most council comments were skeptical about the partnership with Hesse.
No formal action was taken Thursday. But it appears the committee will vote March 20 to sever ties with Hesse, leaving the Eastland property in limbo.
The city bought Eastland Mall in the summer of 2012 for $13.2 million. It is almost finished tearing the mall down, which cost about $1 million.
The city has hoped to remake the mall site, which was once the commercial hub of east Charlotte.
Hesse accused the city Thursday of essentially stealing his idea to turn the area into movie studios.
He said he wasn’t willing to spend more of his money doing prep work on the site, in part because he said the project had already “cost $200,000 to win my idea back.”
Hesse was referring to the city’s decision to issue an RFP for Eastland, in which it hoped to remake the site into movie studios.
Soon after the city bought the mall, Hesse held an informational meeting in east Charlotte in which he touted his vision for the site, which would include studios, office space, retail and possibly a film school.
Richardson said after the meeting that developers had often come to the city looking to build film studios, as the city began landing more movie and TV productions, like Showtime’s “Homeland.” Richardson said Hesse was the first person that he could remember who suggested that Eastland be used for studios and sound stages.
Other developers who were interested in the site dropped out, and the City Council voted last fall to give Hesse an exclusive window to reach a deal with the city.
But over the last several months, the city and Hesse couldn’t overcome several obstacles.
• Hesse wanted the city to deed him the 80 acres for $1. The city preferred a long-term lease for $1.
• The city was going to help Hesse finance the project by refunding him a portion of the property taxes that would be generated by his project.
But Richardson said the city needed the “hard costs” of the construction, not including Hesse’s costs for consultants, architects and other nontaxable expenses. Hesse didn’t provide that information Thursday.
• The city also wanted more details about how Hesse would finance the project. Hesse said Thursday he had a new investor, but that party wanted to remain anonymous, for now.
Pat Mumford, who heads the city’s Neighborhood and Business Services department, said the city didn’t necessarily need information on Hesse’s new partner.
“We understand why a development group doesn’t want to share,” he said. “What we’re challenged with is not having enough (financial) information. We haven’t seen any further information.”
At-large council member Claire Fallon said she isn’t in favor of an extension.
“I don’t see any seed money put in,” Fallon said. “I’m not inclined to give you any more time. It’s time for us to go in another direction.”
Richardson said the city will begin thinking of new ways to develop the property. He said having one developer tasked with developing all 80 acres may be too difficult.
He also said the city could still work with Hesse on Eastland, if he provides more information and if council members believe he is the best person for the project.
Hesse said his movie studio project will move forward, though probably not at Eastland. He said it could move to South Carolina.
“We have other locations we’re looking at,” he said
He also said the city had enough information to make a decision.
“I gave very specific numbers,” Hesse said.