Council approves long-term ground lease for Crossplex site; members seek more due diligence

After extended debate, the Birmingham City Council voted to authorize a redevelopment ground lease for roughly 38 acres adjacent to the Birmingham Crossplex on Bessemer Road.

Under the agreement the Urban Community Development Consortium LLC will lease the property from the city for a 50-year initial term with nine 5-year extension options; the lease includes staged base rent (first 5 years $5,000 per year, years 6–25 $7,500 per year, years 26–50 $10,000 per year) and a percentage rent equal to 5% of gross receipts from subleasing. The city would subordinate its fee-simple interest to mortgage lenders facilitating private financing and has committed up to $5,875,000 for infrastructure improvements to the property.

Supporters said a ground lease maintains city control over long-term development and helps leverage the nearly $60 million the city has invested in the Crossplex area; one sponsor said the city needed to move forward because the project had stalled for years and residents were awaiting investment. “We are in the process of getting this done, finally,” a council member said in urging approval.

Opponents and some committee chairs pushed to refer the item back to committee, citing missing due diligence: market and traffic studies, fair-market valuations of the parcels, and concerns about the unusually long management term for a developer without extensive mall-scale development experience. “We haven't done a market study. We've not done a traffic study,” the economic-development chair said, calling for the item to be worked out in committee.

Council ultimately considered substitute motions, a request for a special call committee meeting and motions to delay. After debate on amendments and assurances that language on oversight and change orders was included, the council approved the item on the floor; the clerk recorded the item as passed with one abstention from Councilor Tyson.

Ending: The council approved the ground-lease framework and directed whatever oversight steps the administration and committees require; critics asked for follow-up committee review and additional documentation (market, traffic, and valuation studies) to be provided to the council.