Nashville group buys NoDa block home to Neighborhood Theater
Property records show Nashville development firm AJ Capital Partners bought the block that contains Neighborhood Theater and other businesses for just over $10 million.
For more, WFAE's Marshall Terry speaks with Tony Mecia of the Charlotte Ledger Business Newsletter for our segment BizWorthy.
Marshall Terry: So there was some big development news in Charlotte's NoDa this week. Property records show Nashville development firm AJ Capital Partners bought the block that contains Neighborhood Theater and other businesses for just over $10 million. For more on what the sale means, we turn now to Tony Mecia of the Charlotte Ledger Business Newsletter for our segment BizWorthy. Tony, has this development firm said what it plans to do with this block?
Tony Mecia: It has not. We don't know what exactly is planned for the block. I think it's worth pointing out that real estate changes hands all the time and that it doesn't necessarily mean that big changes are imminent. A lot of times these things take years to play out. I would point out that the previous owner of this parcel bought the land, I believe, in 2016 and didn't really do what people would fear, which would be, you know, knock down the Neighborhood Theater and build a huge apartment building. I mean, that's sort of the, the fear. Anytime you have a key block changing hands to a developer, like this one, that is known for developing multi-use residential types of, type of property. So we don't really know what it means. At the moment, it will play out over a number of years. I mean, this is a block that has a number of different businesses in it. The Neighborhood Theater probably is the best known, but you also got Salud and Boudreaux's, a couple of restaurants, a couple other retail shops. So people are probably right to wonder what it means. But the short answer is we don't really know.
Terry: Well, often this sort of news is met with outcry from business owners and residents. Is that the case here?
Mecia: I don't sense that there's a huge outcry or picketing or people outraged necessarily, but it's sort of the absence of information about what exactly it means. So if a developer, hypothetically, were to come in and say, we're going to knock down the Neighborhood Theater and build a 10-story apartment building, I think there would be a lot of outrage in NoDa. This is a very key part of NoDa. It's really the main intersection there at 36th and North Davidson. I would guess that neighbors there are pretty tuned in. It's a pretty active neighborhood association. Some in the local media, I think The Observer and Axios, have talked to some of the tenants that are in there -- Neighborhood Theater and some of the other retailers and restaurants. And those tenants say they've been kept in the loop and they have existing leases and they're not planning to go anywhere -- that, you know, there is a way to get out of those leases. Sometimes, you know, tenants are bought out of leases if something is redeveloped. But the tenants for the moment are saying they're comfortable with where they are and that they don't foresee any changes in the near future.
Terry: Well, speaking of Nashville, where this development group is from, that's one of three cities Spirit Airlines is adding daily nonstop flights to/from Charlotte. What are the other two cities?
Mecia: Los Angeles and Dallas. With this addition, Spirit Airlines will fly to eight cities. So it's a relatively small player compared with American Airlines, which has closer to 600 daily flights. But just sort of another expansion, another low-fare option. Although, I would point out the fares are not always lower. Sometimes they're lower than American and competitors. But sometimes they're higher.
Terry: All right. Well, let's move over to office towers now. You've reported Charlotte's office tower construction boom has come to an end because of high construction costs and the popularity of hybrid work. But now it looks like some existing towers might be in trouble. How so?
Mecia: Well, Marshall, we've known the hybrid work arrangements and work-from-home arrangements are really changing the modern office a lot. Instead of going in five days a week, you have people now that are in more like three or four days a week. That is sort of leading to fewer new office towers being built. But it's also causing problems for existing office towers, where the tenants have moved out to some newer building. So we've seen that. This month, a couple of reports of buildings on College Street that Fitch Ratings came out and said that the Charlotte Plaza building on College Street is in default of a loan, the owners are. And so I think you're starting to see some of these older office towers have problems meeting their financial obligations. In addition, CoStar News said this month that One Wells Fargo Center, also on South College Street, that it has a loan coming due in May. And that the thinking from the bank is that, that loan repayment might be in jeopardy. So you're starting to see some financial troubles on the part of owners of these older office buildings as the tenants leave and go for newer places. So it's going to take a little while, I think, to sort out what this means for the office landscape in Charlotte. And I should point out, it's not just Charlotte. This is happening everywhere.
Terry: Finally, dozens of SouthPark residents attended a public hearing at Monday's City Council meeting on plans for an apartment complex on Colony Road. Typically, we hear about residents showing up to protest a new development, but not this time. What happened?
Mecia: It was fairly unusual with the City Council meeting on Monday. You had several dozen supporters of a rezoning. We're talking about the Trianon condos on Colony and Roxborough roads in the SouthPark area. That's because it's unusual to have a condo complex selling to a developer who then wants to redevelop it. You have 118 condos there. And so these are individual owners that banded together and said they want to sell to a company called The Related Group, out of Florida, which is planning 730 apartments, a mix of retail and restaurants and a couple dozen townhomes. So while the Trianon condo owners support it, there is another group in Barclay Downs that say that the development would cause too much traffic, and that it would be too tall and would be out of character with the neighborhood. So we'll expect a decision on that from the City Council in the next few weeks.
Terry: All right, Tony. Well, thank you.
Mecia: Thanks, Marshall.
Support for WFAE's BizWorthy comes from UNC Charlotte's Belk College of Business, Sharon View Federal Credit Union and our listeners.
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