A nearly yearlong process to redevelop Hilton Head Island's languishing mall wound its way toward a close Thursday.
Town Council gave initial approval to an agreement with developers to revitalize The Mall at Shelter Cove, after hearing objections from nearby residents to gas sales.
Council voted 5-0, with Ken Heitzke and Bill Ferguson absent.
A real estate affiliate of The Kroger Co. purchased the 42-acre property and 300,000-square-foot mall a year ago for about $17.3 million.
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Plans call for demolishing much of the mall except for the Belk department store and an area that would become a Kroger supermarket. There would be no more than seven fuel pumps, with a cashier's kiosk.
"We've wanted to have a store on the island for a many number of years," Don Barnett, corporate real estate manager with Kroger, said. "We think this is an opportunity for Kroger to have a marquee store it will be proud of, and a shopping center the community will be proud of."
The development agreement has already been endorsed by the Planning Commission and will be sent back to Town Council for final approval Oct. 16.
The developer also still needs to go through the town's design review process and submit a formal set of site plans.
Mark Senn, president of Blanchard & Calhoun, the project's developer, said the complex would take about 18 months to build and generate about 250 jobs.
Mall demolition would begin late this year. Construction of the retail portion would begin early next year with expected completion in November, Senn said. Construction on accompanying apartments would begin in 2014, he said.
Council member Kim Likins, who represents the area, praised the company for working with Newport Villa owners to address some of their concerns, such as adding "lush" landscaping to screen fuel pumps from view, reducing the number of apartment units beside Newport and moving some units farther away.
"Hopefully, I think it will be a product we can all be happy with," Likins said.
The property would have 295,000 square feet of commercial space and up to 210 apartments, many of which would be built along Broad Creek in what is now Shelter Cove Community Park.
The town would give the developers 4.9 acres northeast of the mall to build the four-story apartment buildings. In exchange, developers would give the town 5.11 acres for a new waterfront park.
Town covenants and restrictions would prohibit converting the apartments to condos, leases for less than 12 months and sub-letting by tenants.
Mall developers would build the new park, the cost of which has not been determined but would not be more than $4.5 million under the agreement. Once completed, the town would buy the park from the mall owners at half the construction price, including engineering, design, permitting and equipment costs.
Shelter Cove Lane would be relocated farther inland to accommodate the new park. The street would create a waterfront drive that would intersect a new pedestrian-friendly road that would have a variety of businesses and on-street parking.
Plans also call for liquor sales -- which some residents of neighboring Newport Villas have objected to despite their support for redeveloping the mall -- as well as outside dining.
"This is a great day for Hilton Head Island," Mayor Drew Laughlin said after the meeting. "It's going to revitalize that area of the island. ... You're going to get a lot of really good synergy with the apartments, the community park and retail that will make that area a lot more vital and attractive."