City and developer will work on Eastland Mall studio deal

dperlmutt@charlotteobserver.comAugust 15, 2013 

Developer Bert Hesse was blunt in his meeting with City Council members Thursday: He’s grown tired of “just holding hands” with Charlotte and wants a more “exclusive” relationship as he tries to transform the former Eastland Mall site into movie studios.

Hesse is the last developer standing with plans to redevelop Eastland’s 82 acres in east Charlotte. Two others had made proposals, but dropped out – including ARK Ventures of Charlotte this week.

So Hesse came before the council’s economic development committee thinking he and Charlotte would take their relationship a step further with a memorandum of understanding – a more formal but nonbinding agreement for both parties to work out details.

He got one – but it wasn’t easy.

Pat Mumford, head of Charlotte’s Neighborhood & Business Services, told the committee that before his staff could recommend Hesse’s Studio Charlotte project, it needed six months to bore down into details.

Among the major details, Mumford and committee members agreed, was what it would cost Charlotte to make the deal.

Yet Mumford said the city doesn’t normally enter into exclusive agreements.

Hesse acted jilted.

“I am still confused on what our relationship is here,” he said. “For more than a year, I’ve spent nearly $1 million on dating the city of Charlotte. Are you telling me we’re going to get engaged with the potential of getting married? Or do you want six more months of holding hands?

“If you want six more months of holding hands, I’m not interested. My investors aren’t interested in that.”

He said he has investors “lined up” and that other cities have already made overtures “to get married.”

Council member Warren Cooksey asked Hesse if he already had the details the committee would need to recommend the project.

Hesse said he didn’t.

So the committee unanimously voted to recommend to the full council that the city and Hesse “drill down” on details under a six-month exclusive agreement.

“The committee wants to make sure that the appropriate (accounting) analysis is done completely like all private-public partnerships,” council member James Mitchell, the committee’s chair, said in an interview. “We’re not looking for anyone else, and they’re not looking to go anywhere else.

“We’re engaged to be married.”

Cost to the city?

Eastland Mall, built in 1975, was once east Charlotte’s commercial hub. But it began to lose customers and started a slow decline until the mall closed in 2010. The city bought the shuttered structure last year for $13.2 million and plans to spend nearly $900,000 to tear it down – knowing it might not recoup any of the money.

The council was looking for the right project to revitalize not only the site, but all of east Charlotte.

At Thursday’s committee meeting, several residents from the community packed into the small conference room to show support for Studio Charlotte.

Mayor Pro Tem Patrick Cannon, a committee member, said in an interview that east Charlotte residents should “feel good about the committee’s decision to move forward” with Studio Charlotte.

“We have to determine the benefits, what the timing might be, what the financial structure might be and what will be ‘the ask’ of the taxpayers,” Cannon said.

Hesse has said he wants to own the land. Cannon said that needs to be worked out in the next six months.

“The city has to determine how it would want to enter into that agreement: a cash disbursement or gifted,” he said. “From my perspective, if you want that land gifted to you, you need to agree not to come back to the city to ask for any more resources.”

After the meeting, Hesse told reporters that the agreement “was critical.”

“Without the city going into a serious discussion with us, we were not going to spend any more time on it,” he said.

“This shows our investors that Charlotte wants to be in the film business, and they want to figure out how to make it work.”

Perlmutt: 704-358-5061

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