A potential snag has developed in the discussions between the Tuscaloosa City Council and developer Stan Pate over the possibility of City Hall purchasing the former McFarland Mall site.

According to a confidential City Hall report obtained by The Tuscaloosa News, there is a wide discrepancy in the appraised values of the nearly 39-acre site at the corner of Skyland and McFarland boulevards.

Now, Pate and city officials are working on defining the potential scope of what a third-party appraiser would examine in order to reach some kind of consensus.

“It may be one or the other or it may be somewhere in the middle,” Pate said. “It’s been a friendly process and a professional process and we’ll see what the outcome is.”

McFarland Mall opened in 1969 and at its peak had four anchor stores, an additional 40 smaller stores, a 12-screen movie theater and a food court. But a steady exodus of stores through the years has left barren Tuscaloosa's most visible retail site. Plans for a $75 million retail center, to be called Encore Tuscaloosa, on the mall site were announced in 2014 but never materialized, leading to lingering questions over what to do with the area once described as the “front door to Tuscaloosa.”

Property negotiations

In March, the City Council voted to begin negotiations with Pate on two properties: the 39-acre former McFarland Mall site and an almost 7-acre tract off Rice Mine Road Loop, where Pate’s attempts to rezone this land to use as apartments or condominiums has been repeatedly met with opposition from nearby residents.

Now, a third tract has been added to the discussions. Dubbed the Moore property, this 25-acre wooded lot near the Encore Tuscaloosa/mall site is located between the Memory Chapel Funeral Home Property and Interstate 20/59.

Two appraisals funded by Pate list the value of these combined properties at between $47.7 million and $46.3 million.

The city’s appraiser, meanwhile, lists them at about $24 million.

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With an appraisal difference of more than $20 million, the two sides now want an independent appraiser, one favored by both City Hall and Pate, to take a look at the tracts for what could be a final determination on the value of the land.

A consensus on which third-party appraiser to select has yet to be found.

“We’re in the process of trying to just get a review to see which one is more accurate,” said Councilwoman Sonya McKinstry.

Options abound

McKinstry represents District 7, in which lies the mall and Moore properties, and wants to see the tracts redeveloped into a public use.

What that use may be has yet to be defined.

A number of options exist for the mall site, ranging from fully, publicly owned facilities, such as a recreational complex of some kind, to a joint public-private investment agreement that incorporates public usages like a conference or convention center alongside new retail, restaurants and hotels.

And while she would like to see such an addition to District 7, McKinstry said she’s also aware of the city’s financial limitations.

“It’s something I’m in favor of and it’s something I’m initiating,” she said, adding that moving forward with require “a clear and accurate price within what the city could afford.”

“Let’s see what it actually appraises for,” McKinstry said, “and that doesn’t mean that a deal is a done deal.”

Pate, too, acknowledges that either he or the city could walk away based on the findings of the third-party appraiser.

However, he said he remains hopeful that a deal can get done.

“My goal is to see something important happen down there,” Pate said. “But maybe they don’t have the appetite as a body and maybe, if they have an appetite, it’s not the right time given their current cash flow situation.”

Questions of costs

Interviews with the City Council members show there is certainly an appetite for the properties.

Funding, however, stands to be an issue.

Whether the land is $24 million or $47 million, the city will have to finance the purchase through municipal bonds over a typically 20- or 30-year window.

Similar bonds will have to be obtained to fund upcoming road projects, like the $23.3 million widening of Jack Warner Parkway and Martin Luther King Jr. Boulevard and the projected $54.5 million expansion of McWright’s Ferry Road.

While the Tuscaloosa County Road Improvement Commission agreed last year to reimburse City Hall for this work, the nearly $80 million in bonds be obtained in the city’s name.

This, combined with the more than $111 million in debt service the city has going into fiscal 2019, stands to put the city close to its legally permitted borrowing powers.

“That’s not a place I feel comfortable being, and I don’t think the rating agencies would look favorably on it, either,” said District 4 Councilman Matt Calderone, who chairs the City Council’s finance committee.

Calderone said he is in favor of the city owning these properties -- particularly, the McFarland Mall site -- yet his reservations stem from the millions in taxpayer dollars it would take to do so.

“I would like to control that property and I’d like the city to own it,” Calderone said. “But we’d need to have a very thoughtful plan … because it would be a significant investment and it would need to be a plan we could afford.

“As it stands today, I’ve not seen anything to indicate that we’re in a position to make this kind of investment.”

District 6 Councilman Eddie Pugh agrees with Calderone and said the cost and lack of a specific plan for the site is what makes him reluctant.

“Really, both appraisals are too high, in my opinion,” Pugh said. “I think the bottom line is we’re wasting Mr. Pate’s time because we don’t have the money to afford the property unless the price comes way down.

“I just don’t think we can afford it.”

Worth exploring

Council President Cynthia Almond, who represents District 3, and District 1 Councilwoman Phyllis W. Odom couldn’t be reached Friday for comment.

But Councilman Kip Tyner and Councilwoman Raevan Howard said they agreed with McKinstry that, for now, the matter is worth considering.

“I felt from the beginning that it’s probably the most prime piece of real estate in the state of Alabama,” Tyner said of the McFarland Mall site. “If there’s an opportunity for us to do something very special with it, I’m certainly open to exploring it.”

Howard voiced a similar sentiment.

“I’m all in favor of (purchasing) the Encore project,” she said. “I think its location and the value it could bring to the city is something to definitely be investigated or looked into.”

While the discussions evolved to include a total of three properties, Pate said he’s willing to break up the package, if that’s where the discussions lead.

“Everything’s negotiable, and neither party has to do this deal,” Pate said. “The question is what’s best for the city, what’s best for the community, what’s best for the south side of town and what’s best for north of the river.”

Reach Jason Morton at jason.morton@tuscaloosanews.com or 205-722-0200.