The Rotunda redevelopment project has received final governmental approval for the construction of 382 rental apartments and 84,000 sq. ft. of retail space, according to FREIT. This is in addition to the existing 138,000 sq. ft. of office space and 66,000 sq. ft. of retail space.
FREIT holds a 60% interest in Grande Rotunda, LLC, which owns The Rotunda.
In a letter from CEO Robert S. Hekemian and Donald W. Barney, President, Treasurer / Chief Financial Officer, the company said the cost of the redevelopment project is expected to be $150 million.
The Rotunda is on an 11.5-acre site. Its original building plans incorporated an expansion of approximately 180,500 sq. ft. of retail space, approximately 302 residential rental apartments, 56 condominium units and 120 hotel rooms, and structured parking. That redevelopment activity was placed on hold by FREIT during the fourth quarter of Fiscal 2008.
During Fiscal 2012, the original plans for the Rotunda redevelopment project were revised, primarily attributable to the Giant supermarket lease termination and related termination agreement. The Giant lease contained significant restrictions on Grande’s ability to make modifications to the property.
As a result of Giant terminating its lease and vacating its space at the Grande Rotunda shopping center, the revised building plans incorporate an expansion of approximately 115,000 square feet of retail space, approximately 350 residential rental apartments, and structured parking.
FREIT said it has had, from time to time, ongoing discussions with potential sources of financing and potential major national and local tenants.
Grande has agreed not to lease more than 20,000 sq. ft. of any space in the property for use as a food supermarket through March 31, 2035. But if Grande decides to lease space for use as a food supermarket, it must first offer the space for the same use to Giant, which will have thirty days to accept the offer before the space may be leased to a third party.
The $19.1 million mortgage loan on FREIT’s Rotunda property matured on February 1, 2013. The Company reported that it was intending to negotiate an extension of this loan until construction financing for the development of the Rotunda property can be put in place.