Azalea Fund terminates contract for Cactus Café

By Jessica Vaughn
Posted 12/13/18

FOLEY – The Azalea Fund, a development group from Mobile that recently signed a purchase agreement with the City of Foley for the Cactus Café building back in September, has now terminated that …

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Azalea Fund terminates contract for Cactus Café

Posted

FOLEY – The Azalea Fund, a development group from Mobile that recently signed a purchase agreement with the City of Foley for the Cactus Café building back in September, has now terminated that agreement. The group identified challenges within the building that drove away potential financiers during a due diligence process.

After the initial signing, the Azalea Fund stated plans to not only renovate the Cactus Café building, but the downtown area in which it resides. The co-owners of the group stated interest in seeing the Cactus Café turned into a new restaurant or perhaps even an old-fashioned grocery store. Foley agreed to sale the building to the group for $45,000, a significantly low cost for a building of that size and in that area. The reasoning behind the price was the state of the building, which has been vacant for a while. Foley hoped by selling the building at a lower cost, the buyers would have enough funds left to put into the building to bring it back up to operating standard.

The Azalea Fund was given a 90-day due diligence period where they were able to inspect and evaluate the property’s condition. The results uncovered several obstacles standing in the way.

In a release from the Azalea Fund, it was stated that “a host of issues are named in the nearly 4,000 page environmental report.” The group then states that certain issues such as asbestos mitigation are common in buildings of the Cactus Café’s age, but that many other issues were brought to light as well. Subsurface metals and gases in concentrations that exceed EPA regulations were found during the screening, as well as utility and easement complications, such as access. The group states that the electric and wastewater service lines are not immediately adjacent to the property, and easements would be required to bring these utilities through adjacent properties.

“We still love the potential we see in this historic property,” said Leah Reddick, co-owner of Azalea Fund. “But, the unknowns were just too risky for us to responsibly proceed with the development.” When asked if more time could have allowed the development to move forward, Reddick responded, “More time may have helped, but it’s like buying a house: you put it under contract so that you can have an inspection. If the inspector finds serious issues, you have to make a decision. Either you accept those risks, or you look for another house.”

With the agreement terminated, the Cactus Café has returned to the City of Foley, which will decide the next steps to take for the building. At this time, City Administrator Mike Thompson is preparing to speak with the Foley council as a whole to decide the best course of action to take concerning the Cactus Café building.

“We had a handful of other entities that made offers back when the council choose to offer it to the Azalea Fund,” said Thompson. “After I get some input from Mayor Koniar and Council President Trawick, I think our next steps will become clearer.”