Urban Revitalization Brings New Development to Memorial Parkway
January 27, 2017
The Huntsville City Council approved a development and annexation agreement at its regular meeting on Jan. 26 with Arora Properties, LLC, in support of a new $22 million dollar commercial retail development at 2615 Memorial Parkway. The complex will be built across the street from Whole Foods in Merchant’s Square.
The development will include 41,500 square feet of commercial space and will offer three restaurants, new to the market. The City will pay $3 million – half of the cost of a new $6 million public parking deck to support the project. The City will own the garage; however, the developer will be required to maintain the facility for 50 years.
“This is part of our ongoing effort to revitalize our urban core, those sections of our City showing signs of blight,” said Mayor Tommy Battle. “We can’t make these projects happen, but if a developer comes to us with a good idea, we are here to listen. If it’s good for the community, improves quality of life and has a strong return-on-investment for our taxpayers, we are open to new ideas.”
The 5.3-acre site, currently designated as a tax island, has a history of industrial use. The now vacant property will be annexed into the City, allowing Huntsville to collect sales and property taxes. Urban Development Director Shane Davis estimates that in year one of the project, the City will collect about $1.5 million in sales, construction and property taxes. By 20 years, revenues should reach $20 million.
“The City will recapture its total investment in two years. As we move years out, the return on investment for the life of the project is expected to be 650 percent above our initial investment,” said Davis.
- Arora Properties will redevelop the 5.3 acre site into a 40,000+ SF commercial and retail property
- Arora will annex the property into the City of Huntsville
- City will construct a new 300 space public parking garage. The City’s cost will be capped at $3 million of the garage’s estimated $6 million price tab. Aurora Properties will be responsible for paying the balance, cost overruns and change orders
- Arora Properties will provide 100 percent operating, maintenance, repairs, and insurance on the parking garage for 50 years
- Arora provides the City with a 50-year, zero-cost lease agreement for the parking garage, giving the City legal rights to the land under the parking deck
- Should Arora Properties fail to complete the 40,000 SF of retail/commercial space within 24 months – Arora Properties must reimburse the City the full amount of the City’s financial participation in the parking facility