By Collin Huguley – Staff Writer, Charlotte Business Journal
Aug 21, 2024
Charlotte Douglas International Airport is in exclusive negotiations with Crosland Southeast on a deal to develop the city-owned Destination District Central property.
CLT chose Crosland through a request for proposals process that kicked off earlier this year. The parties are in the early stages of negotiations. Stuart Hair, CLT's director of commercial and community engagement, said he hopes to present a deal to Charlotte City Council for final approval this winter. The property is critical to the airport's commercial development strategy as it sits at CLT's entrance.
Destination District Central spans nearly 40 acres at Wilkinson Boulevard and North Josh Birmingham Parkway. A specific site plan has not been finalized for the Crosland-led development. Bobby Speir, Crosland's senior vice president for mixed-use investment, said the project would likely include multiple phases initially focused on retail and hospitality development.
"This is the front door of the airport," Hair said. "This is a once-in-a-generation opportunity."
Why did CLT pick Crosland?
Several notable developers lined up during the RFP process for the chance to develop the Destination District property. The RFP process initially included 90 total acres at the airport's entrance.
Other developers to submit proposals included Lansing Melbourne Group, which has been very active in remaking downtowns throughout the region. A group consisting of general contractor Samet Corp., Providence Group Capital and design firm Gensler made a significant proposal as well. Hotel developers such as DreamCatcher Hotels, Vinta Group LLC and Naman Hotels made proposals for smaller portions of the site.
The airport only accepted Crosland's proposal for Destination District Central. The airport plans for Crosland to lead development of the entire 39-acre site.
Crosland has an existing relationship with the city as the master developer of Eastland Yards. The Charlotte developer will now turn to the west side of Charlotte to create an identity at the airport's gateway.
"We formally have not been in the space where we really defined a place as a part of our commercial development strategy," Hair told the Charlotte Business Journal. "That placemaking opportunity was something that Crosland Southeast has been working closely with the city on for Eastland. We thought that they were going to be exceptional at that in the Destination District project overall."
Crosland's initial RFP response called for 72,000 square feet of office/life sciences space, 50,000 square feet of retail and two hotels totaling 300 rooms. The proposal also included a brewery, Charlotte Area Transit System facilities and a gas station/convenience store. That will almost certainly not mirror the final site plan.
Speir and Hair both touted retail and hospitality uses at Destination District Central, especially in the first phase. Specific details are light as negotiations are still early and ongoing. It appears office is not part of the project plan. Hair said if the office market rebounds, that could be explored in a future phase several years down the line.
"We don't envision any office space on this site," Speir said. "Unless the airport has a direct need for office space, we don't think the market supports any office space here today."
Crosland is also behind major mixed-use projects like Commonwealth in Plaza Midwood and Waverly in south Charlotte. The Destination District site is not as large and will not require the investment those projects did. Speir said Crosland will use a similar philosophy at the Destination District that it did at those projects.
"What we like to do is find opportunities where we can leverage our skillset to create a place where there was no place and activate areas of influence within the community to create an area that the community can be proud of and we can be proud of," Speir said. "On its own scale, this opportunity is aligned with that same vision."
What happened to Destination District East?
CLT put out its initial RFP for 90 acres of city-owned land in the Destination District. The parcel targeted by Crosland is Destination District Central, which was planned by the airport for commercial uses. The other property, Destination District East, is 51 acres and was being planned for industrial uses.
Hair told CBJ that the airport is putting the Destination District East land "back on the shelf" for now. The airport decided those 51 acres could eventually be used for aviation-related operations.
Major developers such as Trammell Crow Co., Seefried Industrial Properties and Portman Industrial made proposals for significant industrial development at the East site. Hair said the site could become available if CLT decides it does not need the land for aviation-related activities. CLT could eventually initiate another RFP process or circle back to the interested industrial developers if the East land is made available again.
"We heard loud and clear: industrial wants to locate there," Hair said. "We think that demand is not going to waver. So, if we reach the strategic decision in the next couple of months that we do not anticipate an airport operational need for it, that land might come back off the shelf."
What's next for project?
Crosland and the CLT team still have a ways to go before any development at the Destination District can become reality.
Hair said that a best-case scenario would see a groundbreaking there in early 2026. If a deal is reached and approved by City Council this winter, the entitlement process for the site would likely take 12 to 15 months.
The deal itself still is far from complete. The two sides did not specify an exact financial structure for a development agreement at the Destination District.
A public-private partnership can take on several forms, including a long-term land lease, a joint venture or other structures. Crosland's initial RFP response proposed a joint venture deal that called for the developer and airport to find an equity partner, city documents show. The proposal noted those terms were only a starting point in discussions and were not binding.
Crosland and CLT have not finalized a structure for its partnership at the Destination District. A total investment amount for the project is also unclear as the site plan is not finalized.
"We've got a path towards a deal structure that we think will work and we're still negotiating through that," Speir said.
