BOCC to Greenfire: Go ahead, we're right behind you

Monday night's special session of the BOCC brought a relatively small turnout to the commission chambers downtown, a crowd far more sparse than the heavily-attended discussions over the City's incentive plans last spring. (Besides local officials, there were only a handful of residents in attendance, all with links to downtown developers or the circle of local elites.)

That could be due to the much greater familiarity of Durhamites, now, with Greenfire's ambitious downtown plans; or, perhaps to the fact that this session received relatively little public attention in advance, in contrast to the well-advertised City Council hearing. (Last night's discussion was a presentation only; thirteen days from now, the BOCC will hold a public hearing on the matter.)

In the end, the commissioners unanimously sung the praises of the incentive package at hand for Greenfire, for whom partnerships from city and county leaders have been the most obvious snag in moving forward.

And the County Commission appears likely to go along with a deal to support the developer, though on what is literally the back end of the project. While the City Council was confident in the protection afforded by its deal points' structure -- which provided incentives incrementally as projects completed, not in advance -- the County government's plan holds any government participation until the very last project in the build-out effort.

As proposed (and as discussed in today's H-S and N&O), the County would partner with Greenfire on the redevelopment of the Church/Parrish lot, a city-owned parcel that's typically been phased at the end of this round of construction for Greenfire.

The County would spend up to $7.54 million (but no more) towards a simple parking deck on the site, while Greenfire would build a privately-financed wrapper containing residential above ground-floor retail.

The image at right shows a conceptual idea only of what the design might look like (but is far from a final design.) The parking deck would contain 320 spaces, two-thirds of which would be leased from the County by Greenfire as parking for its projects, particularly the Woolworth site office tower.

Should the deck's cost exceed the County's contribution -- and as that nets out to $23,500 per parking space in today's nominal dollars, so it's certainly possible -- Greenfire is on the tab for the rest.

A linchpin to the deal, however, is that the County won't spend any of this money until Greenfire has completed almost all the other projects in its second development phase.

That includes rebuilding the E. Chapel Hill St. city-owned parking deck with a residential/retail wrapper; constructing the large residential building proposed for the Corcoran St. parking lot; and building the quarter-million sq. ft. office tower on the Woolworth site downtown.

Oh, and renovating 77,000 sq. ft. of commercial space among eight smaller downtown sites, too.

Notably absent from the list: the boutique hotel proposed for the Hill Building at Main and Corcoran. Commenters at BCR, as well as some BCR sources, have hinted for weeks that the developer's deal with Lifestyle Hospitality has hit a rough spot or been cancelled.

Lifestyle referred all questions on the matter to Greenfire; Greenfire principal Michael Lemanski, on the other hand, asserted that the developer was moving forward with boutique hotel plans but did not respond to a question as to whether Lifestyle remained a partner.

(Greenfire is likely to go back to the city for finalization of its spring deal points early in 2009; we'll see if the hotel continues to appear in its phased efforts.)

In order to qualify for the County's deck assistance, under these deal points the developer has to get the Woolworth building and E. Chapel Hill St. parking deck in service by Nov. and May 2012 respectively; the smaller spaces by Nov. 2013; and the Corcoran lot by Nov. 2014.

We asked Lemanski after last night's presentation about one of the thorny items in the proposal: Greenfire needs the deck at Church/Parrish to provide parking for its Woolworth site tower, and would have a hard time getting that tower leased up without ample spaces, yet the County won't be starting the deck until the tower is built. Lemanski noted that Greenfire's deal with the City allows it to shuffle among various parking decks and lots downtown during the phased construction process, meaning Woolworth site tenants would likely be parking somewhere else for a while during the work period.

The question of public-private partnerships on parking structures was a toughie earlier this year in the debate over the new Justice Center deck at Dillard and Roxboro, with county officials then noting that it was difficult to put these efforts together under legal strictures. The proposed deal with Greenfire solves this by subdividing the Church/Parrish lot (after acquisition from the city) into separate parcels for the deck and wrapper structures.

The wrapper itself would have 188,000 sq. ft. of residential space and almost 11,000 sq. ft. for retail. Greenfire would need to have solid financing lined up for the deck and all regulatory approvals to move the deal forward.

Coupled with the City's existing incentives, the County's participation brings the total public sector investment in at just below $20 million for the $300 million-plus investment. And last night's message from County leaders was clear: Go on, we're right behind you.

As in, we're right behind you all the way with your plans for downtown revitalization.

And also as in, we're right behind you, investing our dollars after you invest yours.

The real crucible for Greenfire's plan, we suspect, is going to be the availability of debt and equity to support the projects in the first place. Given the horrendous market for raising funds and capital these days, the real challenge in this whole deal will be seeing the credit markets improve enough over the coming months and years to be able to complete all the projects on schedule in the coming 4-5 years -- always a tough task, and never more so than in today's marketplace.

Comments

[Joshua Allen]

I wish Greenfire all the luck in the world. I hope they can continue the momentum of other downtown developers and revitalize the central core of downtown. This is so exciting! I've been waiting for such redevelopment ever since I arrived in Durham 10 years ago. It sounds like the City and the County are making wise decisions with respect to supporting the Greenfire. Our community will gain new jobs and new respect once this is in place.

[jenj]

Greenfire needs to get whoever is doing their renderings to put some more racial diversity into the mix...

[eah919]

Just curious: anyone know who the architect is? In all of the stories I have read about Greenfire's various projects, I don't ever remember reading what architect is involved or where they're from.

This will be another great step forward in re-constructing the downtown streetscape. Exciting.

[Keep Durham Different!]

The market may indeed be horrible for commercial paper (look at GE's short term financing woes), but much less so for commercial real estate ventures. And for muni bonds -- the impending tax hike has kept demand high. All of which underscores the importance of Durham keeping its debt low. Raleigh seems to have fewer problems raising money.

As an urbanist and a real estate investor, I'm excited to see this go forward. As a taxpayer, not so much. Why didn't they just sell the parking deck to GF? I don't know why the city/county is in the parking biz at all, as I think they should be setting a good example by encouraging mass transit. Surely they have enough muscle/money to lease back any spaces they need.

I guess you can make the argument that development incentives are better spent downtown than in creating more surburban sprawl, but that's pretty weak. Especially when the county is just going to knock down more historic buildings to create parking lots (see Gary's coverage at http://endangereddurham.blogspot.com/2008/11/green-building-by-durham-county.html).

Whatever, I'm happy that this will take some pressure off The Scrap Exchange.

[Retro Grouch]

some good news about what look like impending Greenfire moves but....

How many tens of millions of dollars of city and county budgets are going to be thrown at parking deck after parking deck, before they fix the got dam loop!

and the one way higway thoroughfares ...

These are a MUCH bigger problems, for downtowners, nearby residents, and out of town visitors in having downtown be a viable epicenter of activity than a supposed paranoia over a supposed lack of parking.

I bet in 40 years from now they'll still be talking about funding a feasibility study for the loop, and what to do with the one way state roads and by then these parking decks will be crumbling like stale crackers over potholed roads that still don't have bike lanes or bi-directional traffic.

[Frank Hyman]

@ R.G.

Man, you are such a grouch ! :-)

Frank Hyman

[Bill Kalkhof]

In terms of the Loop ----

DDI advocated for, and was successful, in having the City allocate money for a study of changing the Loop in this year's budget. The City has begun the process of studying the Loop conversion by contracting with Kimley-Horn. After Kimley-Horn does its preliminary technical and auto count research, the process will be opened to the public for suggestions.

The process to move from simply talking (or "ranting") about change to actually making it happen is to:

1. Plan for the desired change in the Downtown Master Plan (done)
2. Find the money to begin the process to study the change (done)
3. Delegate the task to appropriate staff and consultants to manage the process and study (done)
4. Invite the public to gather its suggestions and recommendations (to be done)
5. Decide on a plan and its cost (to be done)
6. Find the money to implement the plan (to be done --- in the case of the Loop, probably a bond referendum item)
7. Advocate to get this project to the front of the list of "projects that need to be done" (to be done)
8. Begin construction (to be done)

[jp]

I'm also curious as to who the architect is...