Behind the scenes on the planned Belk flagship store at Bridgestreet
Belk's recent announcement that it will relocate from Madison Square Mall to Bridge Street Town Centre in the fall of 2014 generated an onslaught of critical comments from Huntsville Times and al.com readers.
http://blog.al.com/breaking/2012/10/..._river_default
The Times sat down this week with Huntsville Director of Urban Development Shane Davis, who agreed to take readers inside the Belk negotiations that began last winter.
Davis said O&S Holdings, which owned Bridge Street until recently, first approached the city about bringing in Macy's. When Huntsville residents were surveyed in 2011 about their most-wanted stores, Macy's finished second to Trader Joe's.
But the high-end department store wanted about $20 million worth of city incentives to come to Bridge Street, said Davis, and Macy's couldn't promise that a store would stay in Huntsville long enough to recoup the investment.
Because the city generally pays off retail incentive packages over 20 years, "we need to know there's a 20-year return," Davis said Monday. "Macy's wasn't willing to make that commitment."
Neither was Nordstrom, which expressed interest in Bridge Street after Macy's. Davis said the Seattle-based department store chain was seeking roughly $12 million in incentives.
Belk entered the picture last November. Davis said the company approached the city about anchoring a major expansion of Bridge Street that would include several other new stores and restaurants.
The city's negotiators - Davis, Battle and Economic Development Director Michelle Jordan - told Belk they weren't interested in helping the company pull out of Madison Square.
"Our initial reaction was, no, we aren't going to work one site against another in our own market," Battle said Wednesday.
For the next few weeks, city officials, Belk representatives and Madison Square owner CBL & Associates Properties explored various scenarios for keeping Belk at the University Drive mall.
"We exhausted all efforts in keeping Belk in Madison Square," said Davis.
But as the negotiations progressed, it became clear Belk was determined to make a move. The Madison Square store "has seen sales go down to levels that would seem to be unprofitable for them," said Battle.
Davis said Belk told the city it had three locations in mind for a new $25 million flagship store: Bridge Street; Decatur Mall; or along Interstate 565 in the Madison area. (
Sounds like retail blackmail
"At that point," he said, "our focus became keeping those tax dollars in Huntsville."
The resulting development agreement calls on the city to spend a maximum of $4 million on public infrastructure upgrades at Bridge Street to accommodate a 170,000-square-foot Belk and 45,000 square feet of additional shopping and dining, including a large restaurant that Davis said may be revealed next month.
Davis said about $2.5 million of the total will be spent on an underground culvert to carry rainwater from the west side of Bridge Street to a city-owned lake in nearby Cummings Research Park. The city will also pay to run new electric, water, sewer and natural gas lines to the Belk site.
Belk and Institutional Mall Investors, which acquired Bridge Street from O&S Holdings in May, will not receive any sales or property tax breaks, said Davis.
"We told them we would do what we always do to accommodate new businesses, and that's upgrade public infrastructure."
Making room for Belk and other new stores means draining and filling in most of the scenic manmade lake on the west side of Bridge Street. Davis said IMI will foot the bill for that work, and also pay to turn the large surface lot outside Red Robin into a two-story parking deck.
Meanwhile, Belk "has guaranteed to put in their highest line of apparel and product" at Bridge Street, said Davis. "It will have product lines similar to a Macy's or Nordstrom."
Belk expects to throw back the curtains on its Bridge Street store - and close its Madison Square location - in the fall of 2014. The development deal with the city says all the new stores and restaurants must open by March 31, 2015.
If Davis' projections for $60 million to $65 million in annual sales for the new Bridge Street shopping and dining come to pass, the city would gain about $2.1 million a year in sales taxes. He estimates 20 percent of that total would be new dollars not currently being spent in Huntsville.
Davis said Bridge Street now pays about $7,000 a year in property taxes on the lake. Turning that area into shopping will increase the tax bill to $472,000, he said.
Also, city officials estimate 40 percent of the construction materials will be purchased in Huntsville. That's another $900,000 in sales taxes, said Davis.
Less clear is what the loss of Belk two years from now will mean for Madison Square. Davis said owner CBL & Associates recently hired a consultant who specializes in the revitalization of large shopping centers. Open since 1984, Madison Square has about 1 million square feet of retail space.
Davis said he and Battle have had multiple conversations about the mall's future with Michael Lebovitz, CBL's executive vice president for development. Efforts to reach Lebovitz for an interview were not successful.
"They've guaranteed Mayor Battle and the city that they will not let Madison Square go dark," said Davis. "We're excited about their energy at keeping the tenants at Madison Square and putting life back into the property."
"They have a great track record at doing what they say."
Prev
Linear Mode
