Brookstown gets a boost
Plans for the Brookstown development near Winston-Salem’s West End neighborhood began in 2009 during a time of economic uncertainty. Five years later a baseball stadium sits at the interchange between Business 40 and Peters Creek Parkway, a 205-apartment complex is almost complete, but some uncertainty about the area’s future remains.
At its Sept. 15 meeting, the Winston-Salem City Council voted to extend the financing of the four properties for five additional years with the assistance of $930,361 from the city at five and a half percent interest along with annual principal payments of $25,000 during the past three years. The land was sold to Brookstown Development Partners LLC on June 17, 2009, for $980,361 according to city documents.
Councilman Robert Clark said he thinks a struggling economy has led to the delays in the project “” something that has plagued the entire country.
“My thinking of it is, like everything else, the Great Recession just delayed everything four or five years,” he said. “I would certainly like to see more development but I understand why there hasn’t been a lot in the last five years because the world hasn’t needed anything in the last five years.”
Clark remains optimistic about Brookstown’s future during the next five years. He said the city currently uses the property that has not been developed for storage.
“It’s no harm to the city,” he said.
“We’re still using the building. We pay him, he pays us and we are getting $25,000 a year principle.”
Clark noted that the city also came to a similar arrangement with Goler Community Development Corporation.
The latest construction delays are nothing new to Brookstown. BB&T Ballpark was originally scheduled to be completed in time for the 2009 season but it was not completed until a year later due to a labor dispute between subcontractors and the developer.
The Link Apartments, which are located across Peters Creek Parkway from the stadium, are halfway complete said Assistant Property Manager Mike McHatton. He said the first 60 units were turned over Aug. 1 and some have been leased. An additional 40 were expected to be completed by Sept. 30.
“Things are coming along,” he said.
“It should be done by the first of the new year or just after the first of the year.”
Because there is still construction on the building’s exterior, McHatton said he thinks this has led people to believe that the apartments are not open yet. He said the current residents, including him, have been enjoying their experience so far.
“It’s a great place to be,” he said. “It’s perfectly situated near downtown and the ballpark, the West End neighborhood is pretty neat too with all the nice little restaurants and shops and bars.”
Chamber of Commerce President Gayle Anderson said the original plan for Brookstown was a mixed-use development that would include the ballpark, retail space and office space. She thinks the city made the right decision to finance the sale of the 30-acre area around the ballpark in 2009.
“When the city agreed to step in and help with the financing they also said that the Brookstown development had to develop a master plan for that area, so that they would understand the parking and how everything was going to work, but that had to be done before the city could do any additional development,” she said. “The bottom line was at some point the ballpark development got in trouble financially because it was going to cost more.”
She said toward the end of 2012 the plan to build the apartments was approved. This year a balloon payment on the lease was due to the city, but the five-year extension will give the property additional time to generate a profit from sales. Anderson said the balloon payment gives the developer the option of paying the loan back over time or at the end of the five years.
“Usually businesses like the balloon payments because they can keep the profits they’re making and earn a little interest until it’s time to pay the whole thing back,” she said.
She said the extension of the financing does not jeopardize the financial health of Winston-Salem.
“All the city really has done is defer that big payment that we’re due this year to the future. It doesn’t let them off the hook. They still owe all that money, they still have to pay all that money, but it just makes it a little easier right now,” she said. “It would be no different than if you had a loan that was due Dec. 31 and you went to the bank and said, you know it’s really going to be a strain for me to pay this Dec. 31, but if you let me pay it two years from now I’ll pay you back, and the bank says yes. That’s what I think happened.”
Billy Primm, the owner of the corporation, could not be reached for comment.
Anderson said improvements in the economy have made the financing of the land less risky now than it was then. According to the Bureau of Labor Statistics, the US economy added over 200,000 jobs every month between February and July and the unemployment rate fell to 6.1 percent in August.
The city currently has a lien on the property, which means if it is sold the city will receive the money back that it paid the developer. Anderson said the city could also become the developer if this happens.
“It’s a little risky, but there’s collateral,” she said. “They’ve got all that land. So eventually the city will get its money back no matter what, it’s just a matter of when.” !