HUNTSVILLE, AL  |  July 30, 2023 – Thirteen years ago, the city of Huntsville agreed to invest $76 million in an idea.

Thirteen years later, that investment built the infrastructure for a mixed-use office park that is Redstone Gateway with more than 2 million square feet of occupied space and room for that square footage to more than double.

With the ratification by the city council Thursday, the city of Huntsville has completed its obligated work at Redstone Gateway. The work at the development, however, is far from over.

“This finishes the city’s portion of this, but there is still 2.7 million square feet of office space, retail, hotel space that will be built there,” Mayor Tommy Battle said. “And the Redstone development company, owned by (Corporate Office Properties Trust), will be finishing out the rest of the development. The city was able to help facilitate this. But we were very careful to make sure that we did it at no risk to the citizens.”

The project, launched in 2010 with an expected $1 billion in investment, is a complex financial arrangement between the city and LW Redstone, the Army’s hand-picked developer for Redstone Gateway – which functions as a key research and development hub just outside the main gate of Redstone Arsenal. In addition to office space, the development has one hotel and another one under construction as well as restaurant and retail offerings.

“It’s been super successful,” said Shane Davis, the city’s director of urban and economic development.

LW Redstone is a partnership between Maryland-based Corporate Office Properties Trust, a major developer of office space for the federal government, and Montgomery-based Jim Wilson & Associates – the developers of the Riverchase Galleria in Hoover.

The project began with LW Redstone agreeing to loan the city up to $76 million to build the infrastructure – which included roads, sidewalks and a sewer system as well as relocating an electric substation. The city is paying back that $76 million in a tax increment financing district with property and sales taxes collected from the project. Finance Director Penny Smith said that debt is projected to be paid off by 2045.

Davis told the council that Huntsville taxpayers are protected because the project, financially speaking, is self-contained. The money the city borrowed to build the infrastructure comes from within Redstone Gateway and the funds to repay that money — via tax revenues — comes from within Redstone Gateway.

The city ultimately borrowed about $73.7 million for the Redstone Gateway infrastructure but the city council voted Thursday to reinvest the remaining $2.3 million available in infrastructure for a smaller portion of Redstone Gateway located behind the arsenal’s gates.

According to Redstone Gateway’s website, 16 buildings have been completed outside the arsenal gates with one completed behind the gates. The development includes Boeing’s hub of operations in Alabama. Another four buildings are under development.

Davis said Redstone Gateway, along with Cummings Research Park, gives Huntsville the “best of both worlds.” Cummings is the second-largest research park in the country, the fourth largest in the world and is home to HudsonAlpha Institute for Biotechnology, Lockheed Martin, Blue Origin and the University of Alabama in Huntsville as well as more than 300 other companies.

Cummings tenants typically purchase the land for their sites and, as a result, the park’s buildings are more spread out.

At Redstone Gateway, office space is typically leased and the master plan is much more compact.

Whether leasing space or buying land, Davis said, Huntsville has offerings for both.

“The density of it is kind of the magic of it,” Battle said of Redstone Gateway. “It makes it into a real park and it has much more density than we would have in (Cummings) Research Park itself. This extends the life of research park probably 10 or 12 more years. So that research park will still be able to be for those who want a broad campus, a large campus and building on four acres of land. That’s still available. But it is available (at Redstone Gateway) here to lease property in an office park setting.”

 

This article was written by Paul Gattis for al.com. To view the original article, please visit:

https://www.al.com/news/2023/07/how-huntsvilles-76-million-office-park-investment-is-paying-off.html