A lost lease has created an uncertain future for Jackson entertainment institution Hal & Mal’s, a gathering place for Jacksonians for more than three decades.
Owner Malcolm White said he wants the business to “stay and continue to be the cultural center of the redevelopment of downtown” but insisted: “We want our lease back.”
White, who lost his brother and business partner Hal White to a fatal brain aneurysm in late March, has been operating under a month-to-month arrangement with new landlord Full Spectrum South for the past several months.
It’s an arrangement White said he wants no part of and believes the State of Mississippi put him in a very uncomfortable position by taking away his lease to the circa 1923 train depot on Commerce Street he has occupied for 32 years and invested around three-quarter of a million dollars in upgrades and maintenance.
White, who serves as Mississippi’s director of tourism, said he and his late brother kept the business going more “as a labor of love” than anything else and he wants to continue to do so. But Hal White, he said, was the managing partner and took care of most of the business responsibilities.
White said his troubles started when the Legislature directed the Mississippi Department of Finance & Administration to give the lease to Full Spectrum South, a real estate development company that has been working to redevelop the area of Commerce and Jefferson streets for a half dozen years with no actual progress to show.
Full Spectrum South’s Malcolm Shepherd said he wants Hal & Mal’s to be a lynchpin for his “sustainable urban” development and that is why he persuaded lawmakers in 2011 to transfer the lease to him.
But White said he learned of the lease transfer only after he received notice several months ago from the state he had a new landlord for the train depot at 200 Commerce St. White said he had been month-to-month with the state the past six years but before that he held a series of long-term leases with the DFA. “We were comfortable spending money and investing, knowing we had a shot at recouping that investment” he said. “Now we don’t have that comfort.”
White said the state never offered him and his late brother the opportunity to buy the building. But he said he was assured he would get that opportunity through a plan Full Spectrum promised to initiate.
As part of the master plan for Full Spectrum’s ambitious Old Capitol Green mixed-use project, Full Spectrum would buy the train depot and sell it to the Whites. However, a “lease” or “purchase” were options included in legislation passed in 2006 to authorize a master developer for the state property and again in 2010 that designated full Spectrum South as the master developer.
With Full Spectrum unable to secure financing for any part of its Old Capitol Green project, the purchase of the depot never occurred. Thus White’s opportunity to buy the building from Full Spectrum never came.
Instead Hal & Mal’s has a new landlord, no lease and an uncertain future, White said.
“We are not happy. We have no interest in leasing from Full Spectrum,” he said.
“We are interested only in doing what we have been doing for 30 years, which is running Hal & Mal’s.”
Added White: “We just want them to go and develop whatever they are going to develop and leave Hal & Mal’s out of it.”
Shepherd, meanwhile, says he wants to see White show an increased willingness to negotiate. “He is the one who has been delaying his future,” Shepherd said, and claimed Hal and Mal’s “has not kept up with” required tenant improvements.
Shepherd said he plans to “reposition” the building to increase the number of apartments from there to 10 and add a second floor artist workshop.
“We need more mixed use in the building” he said, while emphasizing he had no plans to convert any of the space now used by Hal & Mal’s.
The legislation conveyed the lease with a “non-recourse” provision, meaning any disputes over the lease must be worked out between Full Spectrum and Hal & Mal’s.
Under terms of the lease, Full Spectrum would have to give Hal & Mal’s six months notice for an eviction.
The lease transfer authorized by the state requires that Full Spectrum initiate improvements on the train depot building within five years from July 2012. Otherwise, control of the lease reverts to the state.
Full Spectrum has been on time with its lease payments to the state, the DFA says.
The legislation transferring the lease occurred without the participation of two Jackson legislators, Sen. David Blount and Rep. Cecil Brown. Both said they hope the developer and White can work out their differences, noting they see Hal & Mal’s as a cultural fixture of downtown Jackson.
“Obviously, it’s a great part of the city,” Brown said, adding he “honestly” did not know the lease transfer had occurred.
Likewise, Blount said he was unaware of the transfer. “The state needs to be supportive” of Hal & Mal’s, Blount said. “It’s a great cultural institution in Jackson.”