Wednesday, December 12, 2018

[Failure to Launch] Costco Anchored Decatur Landing Grounded Before Take Off

The redevelopment of North DeKalb Mall (Decatur Landing) is likely headed for another years long delay with word Tuesday that the developer has withdrawn their rezoning application for the property.  Kathryn Zickert, the attorney representing the developer, Sterling Organization, told neighbors that "the project has become too expensive to proceed."
Decaturish first reported the news with quotes from both Zickert, as well as Jeff Rader, District 2 Commissioner in DeKalb County.  Zickert seemed almost angry that the plan is again at a standstill, essentially blaming the neighborhood, the commissioners, the staff, for all having "their hands out."  Rader, on the other hand, seemed a little more hopeful that an agreement can be reached that will satisfy all parties.  Rader also noted that Sterling is meeting with county officials in January to discuss the mall's future.

Medlock Area Neighborhood Association, INC posted the following on their official website.

"The DeKalb Cross Neighborhoods Council has been notified that Sterling Enterprises is withdrawing their rezoning application for the proposed redevelopment of North DeKalb Mall. Their lawyer, Kathryn Zickert, informed us that the project has become too expensive to proceed. At this point the owner/developer has not shared their future plans for the property. We will share more information as it becomes available."

ToNeTo Atlanta spoke with another developer who indicated that the story sounds all too familiar.  It takes money to redevelop any property, a great deal of money, when you consider North DeKalb Mall spans nearly 70 acres.  The fact that there are a number of legacy tenants - AMC Theatres and Marshalls among them - make a redevelopment even more challenging, given they dictate their leases.  With term (years) left on leases, they come from a position of leverage in demanding concessions or rent reductions if they are forced to relocate and / or remain closed for an extended period of time to allow for the the project to be constructed.

ToNeTo Atlanta reported in late November that Stein Investment Group purchased the roughly six acre Williamsburg Village shopping center for $9.8 million.  They eventually plan to redevelop the center, too, but like Sterling, have the added hurdle of existing tenants with term left on long-term leases.  Stein has not commented on any plans or timeline for the property, and is likely working behind the scenes to secure buyouts with existing tenants in an effort to expedite the redevelopment.
Williamsburg Village shopping center 
While one might have thought that Sterling and their attorneys had already made progress with their legacy tenants at North DeKalb, that seems not be the case, as they are reportedly one of the major roadblocks to the redevelopment.

Everyone seems to want the project to happen in some form but folks are not on the same page when it comes to who should pay for what, and to what extent the mall should be redeveloped.

The Costco store at North DeKalb Mall was first proposed by then owner Hendon Properties in 2008. Earlier this year, with confirmation coming that the store had been given the "green light" from Costco corporate, the store was said to be on track for a late 2020, early 2021 opening. 

The residential portion was one of the least popular components for area neighbors, many of whom cited increased traffic as the leading reason they were not in favor.  As proposed in April, the project would have brought some 425 apartments, 40-50 town homes and a 150 key hotel to the mall site.

In April, the developer hosted an information session for neighbors that ToNeTo Atlanta attended.  We asked then if the development would still happen if zoning needed for the apartment/town homes and/or hotel was not approved. Webb said he couldn't say but indicated that the residential portion is "driving the redevelopment." 

Unlike what is being proposed at Northlake Mall, where new owner ATR Corinth Partners is planning to reconfigure the existing mall, Sterling was essentially looking to start from scratch.

Tony Ruggeri, Partner with ATR, has been ridiculously secretive when it comes to releasing plans for Northlake Mall.  ToNeTo Atlanta has been in constant communication with Ruggeri, who in a phone call Tuesday afternoon indicated he was aware of the developments at North DeKalb Mall.  Ruggeri said that while he and his team have encountered a few setbacks, they are very much still moving forward with their project.  He stopped short of supplying an exact timeline or really any timeline, but that may be best given the collapse of the Costco plans.

Similar to Sterling's move to control more of the mall site when they purchased the Macy's property from the retailer, ATR previously purchased the Sears "box" at Northlake Mall in an effort to gain greater control over the direction of the development.

Among the possibilities rumored at Northlake Mall are new restaurants, retailers, a grocer, medical space and likely one marquee "anchor."

Although Ruggeri has previously done at least one deal with Costco, there is no indication that he has the room for a store of Costco's size at Northlake, should the store fail to materialize at North DeKalb.

ToNeTo Atlanta spoke to a source at Costco who indicated that the retailer remains interested in being part of the North DeKalb Mall redevelopment and hopes the developer can get their act together to get the deal done.

A representative from Sterling indicated that there may be more to the story and that a spokesperson would be in touch to clarify the status of the project.  As of 11:30 PM Tuesday, no call or email had been received.

For now, the Costco remains what one neighbor called it back in April, a "ghost."
Ross at left, Marshalls at Right in Roswell Village in late November 
While Sterling regroups and rethinks their North DeKalb Mall plans, they are moving full steam ahead on another local project.  Roswell Village in Roswell, once anchored by a Publix Super Market, had low occupancy and was in overall bad shape when an affiliate of Sterling purchased the center for $10.6 million in October 2014.  This year, Sterling signed retailers ROSS and Marshalls, fitness facility Crunch, and Sarah Donuts, among others, to open in the revamped center.  At a mere 14 acres, the project is far smaller than North DeKalb Mall and represents a "value add" opportunity (revamp existing vacant space) rather than a complete tear-down, as was planned for the mall property.   

What are your thoughts on the redevelopment of North DeKalb Mall? Are you surprised that the project is again stalled?  If you are a neighbor against some portion of the project, what are you most opposed to?

Please share your thoughts below. 


Anonymous said...

Somehow I think that a big part of the difference between the Roswell project and the North Dekalb project (and probably Northlake as well) is Dekalb County.

Anonymous said...

Eli, I sat down at my computer this morning and boy, was I glad to see your article! People on "" are very stirred up by Dan's article and yours gives further information/clarification. Thank you for this article!


Anonymous said...

Very nice, thorough work on this Eli!

As always, the ubiquitous ridiculous "more traffic" argument is in place.

- JB

Anonymous said...

Looking over the documents related to this project, it appears Sterling was trying to do things "on the cheap." A number of things the county planning staff recommended would be amenities that would make it more desirable for tenants/townhome residents. Connectivity to PATH? Yes, please. Shade from some trees? That would be nice. A covered MARTA bus shelter for the expected rapid bus service? Uh, no-brainer. And not a lot of money either. I can rent plenty of apartments that offer that and more.

There's something going on here that Sterling isn't telling us.

Anonymous said...

DeKalb Commissioners are pushing the residential component of the development. This way they can force Sterling to go through rezoning and the commissioners keep a financial strangle hold.

Since the Mall is already fully zoned commercial, there is NO rezoning needed for Sterling to redevelop the Mall and the whole acreage into new commercial establishments (stores large and small, shops, restaurants, theater, parking, etc.), which could also include a section for professional business offices, e.g. doctors, dentists, attorneys, accountants, etc.

Nearby neighborhood homeowners are begging for middle and upper-class stores and dining. Please, Sterling, BIFURCATE! Move forward with redeveloping the commercial portion of your plan -- which can be done without new permit nor nosey individual residents who don't even live within 5-10 minutes. If you want to do any residential, treat that separately, on its own track.

Anonymous said...

give this neighborhood nothing!! Let this development die and let the neighbors look at it forever abandoned!!

Anonymous said...

I'd much rather the mall be redeveloped into something like Plaza Fiesta and just keep the Burlington and theater the way they are.

Anonymous said...

Lol!!! Put something like a Big Lot's or Ollie's Bargain Outlet or Sears outlet in place of the mall. Maybe even a dollar tree/dollar general store next to it for variety. Cry baby's!

Anonymous said...

@December 14, 2018 at 8:55 PM

Costco would still need a SLUP for fuel pumps. That's a public hearing/commissioners vote process.

Anonymous said...

Sterling's strength is owning operating strip centers with a grocery anchor. They have no mixed-use properties. North DeK Mall is a mixed use site for a Town Center according to DeKalb Comp Plan. DeKalb will give them all the density they want. The Comp Plan envisions 60 units per acre and no cap on FAR. Sterling doesn't look like the right developer for this property. Their plans undershoot the opportunity that exists.

Jenna said...

That would be a bummer if it does not pan out.

Patrick said...

One of the very first "Everything is $1.00" stores in existence was at North DeKalb. Small. Quiet. Humble. That company eventually became Dollar Tree. But it began with a handful of stores including the one in North DeKalb. And yeah, the merchandise was WAY better back then. Not the cheap junk it is today.

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