City leaders want at least one more week to decide whether to proceed with the purchase of two tracts of land owned by Tuscaloosa developer Stan Pate.
That was the decision Tuesday by the City Council’s finance committee, which agreed to consider again next week a deal in which the city would essentially act as a conduit between Pate and two private development companies that have expressed interest in the properties.
The City Council wants assurances that these private development companies — Alumni Property & Investments LLC of Clanton and Tuscaloosa-based Kuykendall & Powell Oil Co. — will purchase the land as soon as the city closes on the estimated $28 million deal.
The finance committee opted to ask Pate for more time to make a final decision, based on the feedback from Keith Owens of Alumni Property & Investments and Tripp Powell, owner of Kuykendall & Powell Oil Co., both of whom said they needed an additional five to nine months to know whether they could commit to the deal.
A representative for Pate’s companies said the developer would be unlikely to extend talks that have gone on for the better part of two years, but city officials said they would contact him at at the council’s insistence.
“I just think we need to ask Mr. Pate for the additional time,” said District 6 Councilman Eddie Pugh.
Council President Cynthia Almond said she wants assurance that the city will not be committing to having $28 million in debt on its books for the long term in order to support the transaction.
“I definitely would not be in favor of moving forward without some assurance,” Almond said.
But Councilwoman Sonya McKinstry, who now chairs the finance committee, said she was ready to proceed with the land purchases.
“We entertained everything that was asked ...,” McKinstry said. “They might as well go buy it from Pate. (Waiting) makes no sense.”
The council’s actions were based on the proposals City Hall received during its request for proposal process.
Owens, whose company developed the Shoppes at Legacy Park, and Powell, who owns the company behind the Buddy’s Food Mart franchise, were the only developers to submit responses to the city’s request for proposals to private companies on how they would develop the tracts.
Powell, who is interested in the 7.6-acre Rice Mine Road tract that’s being offered for $4.5 million, is proposing an estimated investment of $15 million to $20 million to develop a “multiuse family entertainment venue,” a project that would require the acquisition and use of the nearby Buddy’s Food Mart at Rice Mine Road and McFarland Boulevard.
Owens, meanwhile, is proposing an investment of $80 million to $90 million for the McFarland Mall site.
His offer is to level the site — except for the former Cheddar’s Scratch Kitchen building, which isn’t for sale — to construct an open-air mall “blending a mix of anchor retail along with complementary small shops ... (and) an assortment of inline fast-casual and full-service restaurants,” according to the response he submitted to the city.
Neither developer was interested in acquiring the Moore property, a 27.4-acre tract just east of the McFarland Mall site’s 38.6 acres, and Owens asked that the $2.7 million appraised value of the Moore property be removed from the overall $23.5 million asking price for the combined 64.2 acres of the McFarland Mall and Moore property sites.
However, both developers said that they would need more time in order to commit to their respective deals.
Powell said he needs about five months to determine whether the development will be economically feasible and acquire a signed letter of intent from an interested tenant.
“This particular tenant has been trying to come to Tuscaloosa for about three years and this might be the only opportunity to do it,” Powell said.
Owens said he needs at least six to nine months to know whether he can commit to redeveloping the McFarland Mall site into a new retail shopping center.
“I believe in the real estate,” Owens said. “There’s some interest to come to the market and find a spot. ...
“But it’s going to be hard for me to purchase it without some time.”
Neither developer included any aspect of public use in the responses they sent the city.
McKinstry wants some of the McFarland Mall site to be used as a joint police and fire station near one of Tuscaloosa’s busiest intersections, and the initial justification for the city purchasing the Rice Mine Road site was to incorporate it into a future extension of the city’s Riverwalk multiuse trail.
Powell said he was open to including the Riverwalk in his final design.
Owens, however, was more reluctant and unsure how a joint police and fire station would fit into his shopping center design.
Regardless, Mayor Walt Maddox said it was the most productive conversation in some time regarding the city acquiring these tracts.
When the topic of the city’s involvement came up, the mayor explained that Pate needs the city to purchase the property to qualify for tax breaks as a result of selling the land to a public entity for less than the $43.9 million for which these properties were appraised, according to the requests for proposals sent out by the city.
The city can then flip the properties as long as the negotiations continue, Maddox said.
”We’re closer than we’ve been in a long time,” Maddox said. “I think there’s some positive things here and (we need) maybe a little bit more time, if it’s possible, to work through some things.”
Reach Jason Morton at firstname.lastname@example.org or 205-722-0200.