by Hanno van der Bijl, Birmingham Business Journal
The third building in the 20 Midtown development is expected to start coming out of the ground in the next couple weeks after the developers nailed down financing for the project.
It’s a $110 million project by Dick Schmalz of RGS Properties and Scott Bryant of Scott M. Bryant & Co. that features a five-story building that will take up the whole city block at Third Avenue South and 20th Street.
The mixed-use building will feature 312 residential units with amenities as well as 45,000 to 50,000 square feet of retail space along with parking. The retail component has the option for a partial or full second floor, adding to the base retail square footage. Schmalz said office space is also an option in the retail component.
The service retail tenants are expected to include a bank, hair care salon, dry cleaning service and restaurants as well as potential for mercantile retail.
The amenity deck on the fourth floor, which is open to the sky, will include a pool, a fully staffed indoor and outdoor fitness center, grilling area, bocce ball courts and green space. On the fourth and fifth floors, the apartments will face outward and inward on the amenity deck with balconies. A dedicated elevator also will allow residents of the first and second 20 Midtown buildings to access the amenity deck using their key fobs as part of their list of benefits, Schmalz and Bryant said.
It is the second phase of the three-building 20 Midtown development, which includes two other buildings that opened in 2016 and 2017 with 111 multifamily units above 45,000 square feet of commercial space with tenants Publix, Chipotle, Starbucks and AT&T.
Covered parking will be provided on the ground floor, mezzanine, and second and third floors. With its parking and drive thrus for the retail in a downtown environment, Schmalz and Bryant like to call the arrangement “suburban urbanism” or “urban suburbanism.”
Construction of phase two is expected to be complete 22 months from now in 2022 with most of the retail space and some of the apartments coming online sooner than that projected timeline.
CCR Architecture and Interiors is the designer. The contractors include KKA Construction, Ard Contracting and Arlington Construction. Arlington Properties is managing the property while the Birmingham office SRS Real Estate Partners is handling retail leasing. Bhate Geosciences, MMTR Engineers and Gonzalez-Strength & Associates are also involved in the project.
Schmalz said the project had been put on hold as the team responded to market conditions and opportunities.
“A couple of our original partners came to us and said, ‘Let’s just raise the money ourselves and do it,” he said. “They and we were successful in doing that, and so, it’s not on hold anymore — thank goodness — and yes, we are all happy about it.”
Those predominantly local investors are providing $62 million for the entire development, and the team recently secured a $63.63 million construction loan from OZK Bank in Dallas, according to Jefferson County public records. New York Mortgage Trust is providing the preferred equity for the project, bridging the gap between the construction loan and the team’s equity, Schmalz said.
It’s a $110 million project that, once complete, will come to between $170 and $180 million with the additional interest carried, Schmalz said.
Schmalz said they looked into using the Opportunity Zone program but decided not to go that route.
“Yesterday was a huge step forward,” he said. “We still have some things that we need to get done with the city. The city has been extremely supportive and cooperative, so we’re optimistic about being able to have everything worked out within the next two or three weeks.”
The team is working on a couple other projects in the area that are also gaining traction. Together, they have helped catalyze more activity in the Midtown area with several historic renovation projects underway, including the second phase of The Battery. More multifamily and student housing development is also forging ahead in the Parkside District nearby as Orchestra Partners makes program on its master plan for the area.
The project comes at a time when Birmingham like other cities is grappling with the economic challenges of the coronavirus pandemic. Multifamily real estate experts say a second stimulus package would help the market, which is being held together in part by low interest rates.
Article originally published by Birmingham Business Journal.