The 25 acres that once made up the Rapids on the Reservoir water park have been designated for a new life as a commercial development, but the location is hardly a sure bet as a viable shopping destination, real estate professionals say.
Too much commercial space is already going begging in the communities near the tract once slated for the Mandalay residential near the Ross Barnett Reservoir, said John Burwell, developer of the stalled Harbor Walk mixed-use project planned for the reservoir’s Main Harbor area.
“I think it’s a mistake. They’ve got so much empty commercial space around here they don’t need anymore,” Burwell said.
“I’d say that within a mile-and-a-half of where I am, we’ve got 30 to 40 percent vacancy. Just drive around and look at the storefronts.”
The property’s movement toward a commercial designation began with BankPlus’ foreclosure on a loan to Bryan Co. after the developer stalled on getting the Mandalay built on the site. The bank followed in early October with a successful bid at a foreclosure sale.
Now it wants a developer to take over the property and its 60-year renewable lease, said Tom Hudson, BankPlus general counsel.
Original debt issued by BankPlus on the project in Feb. 2008 totaled $1.75 million, he said.
While Bryan Co. owned the land, the Pearl River Valley Water Supply District gave the tract a residential designation to accommodate plans for nearly 400 condo units, a clubhouse and a commercial component.
BankPlus began lobbying for a commercial designation soon after taking ownership of the lease.
“On Oct. 12 they came to us and asked would we reconsider reclassifying it as commercial instead of high density residential,” said John Sigman, general manager of the water supply district.
The water district’s governing board approved the reclassification to commercial on Oct. 22.
A commercial designation is viewed more favorably by reservoir area residents than is a residential one, according to Sigman, who said residents voiced concerns about the increased population, traffic and burdens on schools the dwellings would bring.
He acknowledged, however, that no assessments have been done of the impact of a commercial development on the 25 acres that could include retail, restaurants and recreational elements.
“Any development has some impact,” he said. “We feel like this commercial classification is much more acceptable to our residents.”
The mix that ends up in the project will be up to the bank or the developer to which it assigns the lease, Sigman said.
The amount paid for the lease will have to be adjusted up or down depending on the uses planned, he added.
One way commercial could be a success on the former water park property is to put in something that will draw residents from throughout the metro area, Burwell, the Harbor Walk developer, said.
“If you’ve got a good idea it will work out here,” he said. “If you’ve got good food they will find you. You just don’t need another nail shop out there.”
The original condo plan showed the most promise, Burwell said, especially if the buildings could have gone to four stories and the units sold for between $275,000 and $350,000. He said had hoped to see the condos built so that people who worked at his planned Harbor Walk development would have a nearby place to live.
Like Burwell, retail leasing specialist Robert Flowers said he does not see the potential for commercial success on the reservoir tract. “If you could attract a large office user. Or make a little office park there, that might make sense,” said Flowers, president of Wolf Ridge Properties in Ridgeland and the Mississippi/Alabama director of the International Council of Shopping Centers.
“It’ll be pretty difficult” for retail there.
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