By Matt Wright
In a world of instant gratification, patience is not much of a virtue for most people and Lakeland is no exception to that rule. Yehuda Netanel, developer of The Lake District, knows that well and he hears the questions about why certain elements of the $400 million mixed-used project are not complete. “With all the progress we have made,” Mr. Netanel said, “people have to remember, the world changed during the COVID pandemic.”
Mr. Netanel said 2022 became particularly challenging due to rising interest rates and he doesn’t expect that to change in 2023. “Lots of projects locally, and worldwide, are challenged due to economic conditions, especially the interest rates.” Another notable problem that came out of the COVID era was supply chain issues and while some of those are now corrected, new ones are starting to be seen. “It took one of our businesses nine months just to get the shelving they needed to open,” he said as an example of supply chain issues.
The Lake District is not the only development in the Memphis market that would like to speed up the process, but market conditions will not allow that to occur. “Investment funds (lenders) are not lending due to investment concerns. This is a problem everywhere,” Mr. Netanel said. He cited a project in Mid-Town Memphis that has been approved for 2 years and still cannot secure financing. “And while that provides some challenges, we are constantly looking for investment options. We want to diversify our funding sources to manage the current challenges,” he said.
Fundamentals of The Lake District Are Strong
With all the concerns of market conditions and rising interest rates, Mr. Netanel says the fundamentals of The Lake District are very strong. There are currently thirteen stores open or about to open in the development. “When people come out to The Lake District for the first time, they always say how amazing it is right now. How unique it is,” he said. People forget that just five years ago the property located at I-40 and Canada Road held a long abandoned outlet mall that was overgrown with nothing but broken glass and graffiti inside. Now the property is comprised of multiple in-line retail buildings, a Starbucks, custom townhouse models and Chick-fil-A recently announcing they have purchased an outparcel in The Lake District to build their largest store in the Mid-South.
“Businesses contact us all the time now because they see the success stories. People are noticing,” Mr. Netanel said. He added that he has six signed leases right now for new stores, and he hopes to make those public very soon. While the progress has been slower than many hoped, it’s still a far cry from what the property was previously. But with all the openings and success stories, there also comes the stories and rumors of stores and restaurants that never came to fruition.
Examples of businesses that people were excited about but unfortunately will not be part of the development include Marshalls Steakhouse, Brickhouse Fitness, and Malco Movie Theaters. Because of COVID Malco simply could not expand in the current climate and Marshalls struggled with financing. “They struggle with economic conditions just like anyone else, financing being the main one,” Mr. Netanel said. One entire building on The Lake District property was originally built to be a gym for Brickhouse Fitness but investors were worried about the health club business because of COVID. But that loss has been turned into a huge positive for the development. “We had to pivot and totally retrofit that building for regular business but that’s what we did. Now that’s where Villa Castrioti and VC To Go are located. It’s also where StretchLab, Effin Egg Breakfast (under construction) and another restaurant which will soon be announced are also located,” Mr. Netanel said. “We’re also going to start construction on more in-line retail which will be located on Canada Road between Chick-fil-A and Starbucks and that will offer 13 new retail locations,” he added.
Residential Additions Slow But In The Works
While the retail side of The Lake District has added many great retail additions, the residential side has been slower than expected. There are currently some townhouses completed, all models, and none of the high end “multifamily” additions. Multifamily housing, which are apartments, plays a key role for the overall development. Before The Lake District was conceived, apartments were approved years ago when the property was owned by Belz Enterprises. But Mr. Netanel’ s vision of apartments is different than most. His will be a three-story building with retail on the ground floor and he says residents can expect a premium feel. “Our apartments will be very nice. Very upscale,” Mr. Netanel said. “For example, we will offer dog walking services, and dry cleaning services to residents. Your dry cleaning can be placed directly in your closet if you prefer.” He painted a picture more of a park than apartments with pools, walking trails and of course they will overlook the large lake that’s been engineered to hold acres of water. The clearing of the land for the multifamily is already done, but Mr. Netanel is working to secure final funding before starting construction in 2023.
Additional Multifamily Units Could Be Coming
Mr. Netanel hopes to get approval for some additional multifamily units by reducing thirty-six zero lot lines homes and adding another two hundred plus apartments, many of which will be age restricted. These apartments would be on a different part of the property and once again he says the additional units would be very upscale. “For example, the parking would be underneath the building, not outside,” he said. But why the need for more units? One example given is the soon to be Blue Oval Ford project down I-40 in Haywood County. The Ford project alone is expected to produce 6,000 new jobs for the area and Mr. Netanel says he feels like Lakeland can play a role in that story. “I think we can weave a welcome rug welcoming the new influx of well trained and highly paid specialists who will be creating the country’s most in demand vehicles,” he said. “The often forgotten Southeast portion of The Lake District can easily provide another 250 additional multifamily units with best-in-class amenities. This will come with no change in the street design layout, with virtually no visual impact to anyone outside the property and provide a compelling advantage over the neighboring cities while doubling the tax benefit to the Lakeland community.” Mr. Netanel says he’s been working with Lakeland City Hall on the changes and will be presenting the change to the Lakeland Municipal Planning Commission on January 19, 2022.
“While we have seen our share of roadblocks here at The Lake District, I hope people see the positives we have already produced,” he said. “Remember, America was built on positive virtues. Not by people that said this is hard, let’s go back to England! I know the power of a dream is still alive in America and we will keep overcoming challenges to make sure The Lake District becomes what we all want it to be,” he said.