Any person with real estate development experience had a good laugh listening to the proposal about the Regency Mall. The current owner and proposed developer, the Cardinale family, has never had any intentions of developing the property and never will. There are a couple of ways the whole thing could play, though.
The most likely scenario is that nothing will happen. The Cardinale family will not develop the property because what is being proposed is not financially feasible. A grocery store has not committed to the site, and stating one will be part of the project is disingenuous at best. Grocery stores do not make location choices based on conceptual drawings and pipe dreams. They base decisions on facts, and the facts are the area has declining population growth, low wages, low housing values, low disposable income and failing schools. It also has growing crime.
All of the above reasons are also why market rate apartments will not be built on the site. It is possible some component of affordable tax credit housing could be built but standard market rate apartments will never be built on the Regency Mall site. If crime and failing schools are not enough of a reason, financing will prohibit it from being built. No lender is going to loan millions of dollars to build brand new apartments in that part of town because rents sufficient to justify cost of construction can’t be generated. As interest rates go up and inflation gets worse, the likelihood of market rate apartments being built shrinks.
A very likely scenario is that Cardinale will use its influence to get the city to rezone the project and then sell it. Multiple projects have been proposed in the past for the site only to fail because Cardinale refused to sell for less than $50 million. After the Mayor Hardie Davis Jr. land lease fiasco, that price jumped to more than $70 million. Even with getting the property rezoned and entitled for a bunch of different uses, it won’t generate a sales price of $50 million. I will make the prediction that if Cardinale sells it, the company will generate $25-30 million as a sales price. That purchaser will either shelve the project until the timing is more feasible or they will completely alter the project to something that is feasible.
The city could get involved and bail out the project. Mayoral candidate Steven Kendrick held a press conference announcing the new mall development but was very careful in the language he used. He indicated that as of now, no one is asking for tax incentives, bonding or any government assistance. The way that was worded makes it clear that the Cardinales will ask for it at the most opportune time. Cardinale knows that the city is so desperate to see something happen with the site that leaders will do anything to claim credit for a win on the site despite the cost to taxpayers. Hardie Davis Jr. proposed the worst deal I have seen in 16 years of working in real estate as proof of this thought. Kendrick’s announcement reeks of the same. Government assistance will be part of the project if Cardinale ever is involved in any development.
At the end of the day, the property is owned privately, and the owners should be able to do whatever they want with the property as long as it meets county regulations. In the meantime, Augusta’s leadership should use its powers under the new blight ordinance and code enforcement regulations to put incredible pressure on the mall’s owners either to demolish the buildings or to sell the site to someone who will develop it. Cardinale is not going to develop the site and trying to convince the citizens of Augusta otherwise is going to be a painful lesson for Kendrick and his campaign for mayor.