Yahoo Finance The $700M Brooklyn Village development still hasn’t begun. What’s behind the delays?
High interest rates and a lack of lending support has delayed construction of the Brooklyn Village mixed-use development in Second Ward.
However, developers believe their money issues will be righted by the end of the year, leading to a summer 2025 groundbreaking.
The estimated $700 million project was set to begin construction in the fall of 2023, which was already a delayed start. But Donahue Peebles III, executive vice president of The Peebles Corp., said financing troubles are leading to unclear construction start dates.
“Interest rates have more than doubled. There’s significant stress in the banking and commercial markets in large part due to the loss in commercial value, which has caused a number of lending institutions to pull back their real estate exposure,” Peebles said. “The financial headwinds that we’re experiencing are outside of our control.”
Delays in construction projects have become an almost natural occurrence as the country continues to bounce back from the pandemic due to inflation and high material costs. Lenders are also keeping a tight grip on their funds as they recoup from commercial market losses.
With these issues in mind, the development group in May sent Mecklenburg County a technical notice of delay letting the county know of their financial challenges. They informed the county that vertical construction could not occur at this time, according to Peebles and other news outlets.
But Peebles said he anticipates that interest rates will go down as the year progresses, allowing the group to move forward with the project.
What is the Brooklyn Village project?
In 2016, Peebles Corp, in partnership with Conformity Corp. under the name BK Partners, were selected by the county to be the master developers of a new community in uptown Charlotte.
It’s a section of the city that was home to a vibrant and predominantly Black neighborhood, Brooklyn, until it was destroyed in the name of urban renewal. The former Brooklyn neighborhood used to house Black businesses and families but later became a place for parking lots, the long-shuttered Board of Education building, Marshall Park and Bob Walton Plaza.
The first phase of the project, or Brooklyn Village South, centers around the Plaza where two towers will have about 500 apartment units, along with retail space and a hotel.
Altogether, the project will have over 1,200 residential apartments with at least 10% of the units being listed between 30% to 80% of the area median income. For a family of four, 30% AMI would be about $29,900.
Besides housing, the 17-acre plot will have office space, retail, hotels and a cultural space.
Delayed but not stalled
Although there is a delay on the vertical development, Peebles said other aspects of the project are moving forward.
Most of the horizontal development, which mainly includes infrastructure projects, has been completed. Walton Plaza was demolished late last year. Peebles said sewer and utility work is almost completed, laying the pathway for quick vertical development when the group is able.
Peebles said the group is also continuing to accept stories about the old Brooklyn neighborhood through their website.
BK Partners is soliciting stories of the neighborhood from community members to pay homage to past residents and provide a reminder to folks who will eventually call Brooklyn Village home.
Peebles said the group would love to see the memories splayed across the lobbies and integrated into the whole design.
But first, the buildings need to be constructed.
“Despite all of the headwinds we remain super optimistic. We plan to continue to move forward and get the site developed as quickly as we can,” Peebles said. “Projects like these represent a meaningful opportunity for communities to right historical wrongs...The hope is to create something that speaks to the legacy of Brooklyn.”
