Forging Ahead

Forging Ahead

The Forge, Birmingham’s proposed downtown entertainment district, continues to seek financing.

March 06, 2008
At the February 22 Birmingham-Jefferson Convention Complex board meeting, board members were informed by BJCC executive director Jack Fields that John Elkington, CEO of Performa Entertainment Real Estate, was ahead of schedule in meeting benchmarks to begin building the 176,000-square-foot downtown entertainment district recently named “The Forge.” (It was temporarily known as “The District.”) Dismissing reports that Elkington was lagging behind in fulfilling his commitments, Fields told the board of directors: “According to the agreement that was signed on the fifth of May [2007], if we take every one of those steps that is outlined in that agreement, then Mr. Elkington is not behind. He is ahead . . . I think Mr. Elkington, in his exuberance, has sometimes placed some timelines on himself that are far beyond what is in the agreement. For our purposes for right now, he is ahead of the timelines that are specified.” Elkington reportedly has met requirements that 50 percent of the square footage be pre-leased. Nevertheless, the process of securing financing for the development has been slower than predicted. Three months ago, Fields told Black & White, “It’s been a bummer, no question about that, but we don’t see that this is anything that would affect the continuation of the development. . . . According to Mr. Elkington, he feels that if he gets his lending package and the approval of it by the first week of February—that’s the goal—then we are still right on schedule to open in June or July of 2009, with a 14-month construction period.”

Even with a projected total cost for a new downtown entertainment district ballooning from $25 million to $50 million, the Birmingham-Jefferson Convention Complex board seems untroubled about the prospects of financing the project.

Fields told board members on February 22 that Elkington would instead have financing in place by the end of March. In a February 29 interview, Fields was confident that all is well. “I know that there is continued progress going on. Obviously, we have great concern about that, so we keep up, and we are very pleased with his progress,” he said. “Normally, the most difficulty that developers have is getting the equity. So if his equity is on the line and is ready to go, that really bodes well.” The Performa president has reportedly cleared that hurdle, according to Fields. “What Mr. Elkington has stated is that he [has] obtained $6 million equity—has arranged his equity with the lenders—and he would be entering into a loan that would be $24 or $25 million . . . that’s toward the entertainment center, not the hotels. If you put the hotels in it we’re talking about much, much more money than $31 million.” The BJCC and Performa signed a $25 million contract in May 2007, but cost estimates for the entertainment, dining, and retail area have increased to $40 to $50 million. The projected total cost, including two hotels, is now $80 million.

In November of 2007, it was widely reported that a 130,000-square-foot retail and entertainment complex that Performa planned for Trenton, New Jersey, had failed to obtain a $21.8 million loan. (Performa projects in Shreveport, Louisiana, and Jackson, Mississippi, have also failed to come to fruition.) The Trenton development had been scheduled to open in late 2007. Elkington blamed unemployment and tighter bank lending requirements for that setback. Stricter lending standards have also been cited by Elkington for delays on gaining funds for the Birmingham entertainment district.

In mid-January, the BJCC board traveled to Memphis for a business retreat. The city is home to Performa’s flagship development, the revitalized Beale Street entertainment area. “What impresses me about Beale Street is the constant activity that takes place on it,” said Fields regarding the trip. “What I really am encouraged about as far as our development is that, with Beale Street, [Elkington] was basically confined to a definite layout and a definite framework to work with. Whereas here, he has a clean slate where he can optimize the design, traffic flow, and can create as much synergy as you possibly can in a development. . . . And of course Beale Street is what it is, and that is blues and rhythm and blues, and barbecue and things like that. Whereas here it’ll be a much, much broader offering of music and cuisine.”

• • •
font size=”5″In other business at the BJCC board’s February 22 meeting, members approved the funding of a feasibility study to investigate the lowering of a brief stretch of Interstate 59/20 near the BJCC below ground level. (If approved, 80 percent of the needed funds would probably be provided by the federal government.) The current elevated portion of I-59/20 is deteriorating, according to Operation New Birmingham (ONB) Vice President of planning Chris Hatcher, who said that the highway is in the final third of its life and will have to undergo repair anyway.

The board voted 4-2 to invest $35,000 in the study, which would explore whether an entrenched I-59/20 is financially and physically possible. Those board members opposed to the study called it a waste of money, believing that the federal government will simply ignore any research results and reconstruct the highway as it pleases. ONB has been pushing for the interstate to be set in a mammoth gully no deeper than 40 feet, according to Hatcher. The plan would allow for the city’s street grid layout to be retained via bridges. Two decks above the highway are also proposed, one near the Birmingham Museum of Art and the other near the Alabama School of Fine Arts. Hatcher told the board that those two entities would be asked to contribute to the $100,000 feasibility study, as well.

BJCC executive director Jack Fields said burying the interstate will offer advantages for The Forge entertainment district. “[The interstate] is really not creating that much of a physical obstruction as far as traffic because you can move underneath it back and forth,” said Fields. “But it’s just the visual obstruction that seems to psychologically provide a separation between the rest of downtown and the BJCC. In other words, [the BJCC and The Forge] is on the other side of the tracks. . . . Where the entertainment center will get the most visibility is really in that 280 connection coming into I-59/I-20. That’s where it’s going to hit you like crazy.”

“Channel, ditch . . . trench” is how ONB president Mike Calvert described the proposed burial of the interstate, adding, “But it would be, for the most part, open above.” He echoed Fields’ affirmation of the project. “The big advantage is that the elevated highway is at least a psychological barrier to the connection between the BJCC complex and the rest of downtown,” said Calvert. “Now, you can walk underneath that, but it is very unpleasant as far as the trucks kind of thundering over your head. And visually it would disappear. And it’s our understanding that the sound would be directed, for the most part, upwards rather than emanating horizontally.” &

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