It's been about a decade since what was then known as the Charlotte Housing Authority began laying redevelopment plans for its 16-acre site in Dilworth.
Long known as the Strawn Cottages site, the housing authority — now called Inlivian — selected The Fallon Co. out of Boston four years ago to serve as master developer of a new mixed-use, mixed-income project. The 16.2-acre site is between South Boulevard and Euclid Avenue, at the front door of uptown and South End.
After years of planning, designing and conceptualizing, Fallon and Inlivian will next year break ground on the first phase of what will be a $400 million-plus redevelopment.
The project, now called Centre South, will include up to 1.4 million square feet of development across multiple phases, including 330,000 square feet of office, 60,000 square feet of ground-floor retail, 745 residential units, potentially a 180-room hotel and open space. The first phase will include an office tower on South Boulevard and housing.
Centre South will include 145 residential units affordable for households earning 60% and 80% of the area median income. Those units will be mixed in with market-rate development.
The land was once home to 124 cottage-style affordable units that have since been demolished. Strawn Tower, a 12-story building on part of the site, is an affordable senior-housing complex owned by Inlivian that will remain with the redevelopment. That building underwent $15 million-plus in renovations several years ago.
The property was the subject of an Urban Land Institute study in 2008, which recommended office and street-level retail development for the site. Inlivian rezoned the land in 2010 and the Centre South project will adhere to that zoning, the developers say.
Since selecting Fallon, the project has largely gone quiet as adjacent South End and uptown boomed. A number of city infrastructure projects, including the $41.5 million Myrtle Morehead storm drainage project, have been done on and around the site over the past four years.
Fallon and Inlivian were also working to create a development program and consulting with the Dilworth neighborhood on project design, scale and scope.
"We’ve been developing the right strategy to create that inclusive community that Charlotte definitely needs," said Fulton Meachem, president and CEO at Inlivian.
Michael Fallon, president of The Fallon Co., said Centre South will be a multiphase project but full details of what those phases will include is not finalized. A hotel, for example, is being considered but wouldn't break ground in phase one.
Although Fallon opened a Charlotte office in 2016 — around the same time it was picked for the Strawn Cottages redevelopment — Centre South is the firm's first major project here. Fallon also owns what was formerly known as the Cameron Brown Building in uptown.
The company has developed more than 6 million square feet and $5 billion in real estate on the East Coast, with projects in Boston, New York, Raleigh and Charlotte.
Even despite the economic uncertainties with the Covid-19 pandemic this year, Fallon said the firm feels very bullish about Charlotte and the Centre South development.
In light of Covid-19, Fallon said all real estate groups are asking the same question. "At this point in time, right now, are you comfortable making a bet?" he said. "We are comfortable making a bet right now. We’re all in and we’re moving."
The 330,000-square-foot office tower is seen by Fallon and Inlivian as the site's iconic structure.
Fallon said the building will be going out to market soon for an anchor tenant. John Ball and Karah Stumler at Foundry Commercial have been hired to lease the office space.
Fallon said commercial real estate activity will eventually return but the time is right to begin work on the development.
"This site represents such a critical juncture in between uptown and South End," he continued. "This site delivering along with the pedestrian bridge creates a connection and knits together two different urban fabrics."
No city funds, such as Housing Trust Fund dollars or tax-increment grants, will be sought for the affordable-housing units onsite, Inlivian and Fallon say. The units will remain affordable in perpetuity.
Already owning the land was critical to being able to develop affordable housing without subsidy, Meachem said. But finding a partner that had done mixed-income development was something Meachem and the Inlivian board said was a priority from the start.
Fallon said mixed-income, mixed-use development is not uncommon in other parts of the country. Charlotte, grappling with an affordability crisis as it grows, has over the past several years become more aggressive about its affordable-housing strategy.
Fallon declined to comment on specifics about the structure of the deal but said conventional financing sources and the firm's own private equity are being used.
Adding units that rent below 60% AMI was considered but, Meachem said, Strawn Tower has units that lease at 30% AMI. Building housing with rents closer to workforce housing AMI levels made the development work financially and also provides a continuum of housing on site, Meachem said.
Especially with all of the luxury units that have delivered in the past several years, Meachem said it was critical to get a mixed-income housing development built, especially in a high-opportunity area like Dilworth.
Having all-affordable or all-market-rate housing has divided Charlotte into two worlds, he continued.
"I think that’s what we need — people from all walks of life mingling, learning from one another, not this homogenized type of housing," Meachem said. "That’s what we’ve intentionally designed into this project, to make sure that it was inclusive."
The firms also have a goal of hiring 30% minority- and women-owned businesses to contract with on the project.
The project's residential component will include mostly rental units but 20 for-sale townhouses are planned on the east side of the site, near Euclid Avenue.
Infrastructure projects remaining are related to the development, such as structural foundation, water, sewer and electric work. Fallon said much of the public open space will be developed at the start of the project.
The partners declined to say when groundbreaking will exactly occur, only that the first phase will begin sometime next year. Horizon Development Partners, part of Inlivian, continues to own the site today.
"This is a very important site and a very important project for us to get right," Fallon said. "I’m confident we will."