Developer buying city property on Second Avenue for a mixed-use project

Jan 11 – Downtown Decatur could get a combined commercial-residential development on Second Avenue Southeast that would replace a small, city-owned parking lot just north of Grant Street.

Decatur City Council is considering a deal for Franklin, Tennessee developer Richard M. Winstead to purchase an option to purchase Lots 3 and 4, a total of 0.15 acres, south of Casa Grande Garden Park in the block 200 from Second Avenue Southeast, for $ 81,000.

The lots are located on the east side of Second Avenue and directly across from the Shops on Second Avenue and DA Allen Stoner’s office.

Winstead was not available to comment on his plans for the property, but some details came out during the council’s discussion of his proposal at its December 27 working session and at its meeting last week.

Urban planner Lee Terry told council at the business meeting that Winstead wants to buy the two lots which are used as parking lots.

Terry said Winstead planned to use the property “for typical downtown development. The first floor would be commercial and the second floor would be residential.”

Council Chairman Jacob Ladner said he believed Winstead was planning “class A apartments” to accompany the development of retail.

“They are expected to be beautiful, upscale apartments,” Ladner said.

City development manager Dane Shaw negotiated an option and they accepted the appraised value of the property, Terry said.

According to the proposed agreement, Winstead must pay a deposit of 10% of the purchase price on an option valid for one year.

The closing date will be within 90 days of the exercise of its purchase option. As a deposit, the option fee will be credited to the purchase price after the sale is completed.

Ladner asked City Attorney Herman Marks if council could include stipulations in the sale that the buyer must use the property for its intended mixed-use development and do so on a set schedule.

Marks said the board could, and reported last week that Winstead had agreed to these stipulations:

—Winstead must use the property for multi-family and commercial development, and it “must be used exclusively for such purposes for 20 years.”

—It must begin construction within 24 months of the option exercise date, and the property must be ready for a certificate of occupancy issued by the city building department within 60 months.

– If Winstead does not respect the terms of the agreement, “all rights, titles and interests transferred, including improvements, will revert” to the city.

– The buyer can terminate the contract if he deems in good faith the land unfit for construction and the option costs will be reimbursed to him.

The council views the proposed purchase of a city property as a change in ordinance, so the sale proposal must be presented at a meeting for a first reading, as was done last week, then the board will vote on it at a second meeting, which is scheduled for Jan. 18.

The development of Winstead would be the first project fully initiated by Shaw, who began working for the city in May. Shaw came out and found Winstead interested in pursuing a development, gave him a tour of Decatur and he chose the site at Second Avenue Southeast, Mayor Tab Bowling said.

“Dane was successful in helping with the hotel and parking lot project, but this is the first time he’s gone hunting and found a developer,” Bowling said.

Ladner said Shaw did a good job finding Winstead and growing the relationship.

“It’s exciting because that’s why we hired a development manager,” Ladner said. “And it looks like he (Winstead) is planning to act pretty quickly.”

– or 256-340-2432. Twitter @DD_BayneHughes.

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