Jack Hagel reported in today's N&O that the Durham Centre, that albatross on the Durham skyline, has been sold by its out-of-state owners to Craig Davis Properties for a below-market rate of $19.2 million. That price, Hagel tells us, is about 45% below the norm for comparable Triangle buildings.
As we reported on here earlier this year, the Durham Centre's immediate problem is its lack of occupancy. The tower is rife with open spaces and a vacancy rate that accounts for almost half of the building's space. Hagel attributes this to competition from American Tobacco and credits its campus amenities as the reason why Ambacco can charge a market-premium rate and sit fully-occupied while Durham Centre is half-empty at a bargain rate.
The problem is indeed one of amenities, from a proximal perspective -- but the root cause of that problem goes to the very design of the tower.
The tower rises up over a poorly designed, hulking parking deck that brings a shine to automotive glory to the very edge of the sidewalk. Street level retail's not an option unless, as Michael has suggested, you find a way to slot in stores into the structure parking (no easy task.) Complicating matters, the deck's presence means you have to take an elevator or several flights of stairs just to get to the lobby of the building.
Translation: restaurants and shopping have a hard time in the Durham Centre because the rest of downtown can't get to them, and once you factor in the freeway frenzy of the downtown loop that separates the Centre from downtown, it's not so convenient or obvious for Centre office workers to leave the building for a quick stroll, either. Which makes it a far less attractive place to work than sites like Ambacco or West Village.
Trouble is, the Durham Centre was designed as an office tower that could loom over the gritty, declining city below, sheltered from the riff-raff of Liggett & Myers workers on their way to first-shift jobs. Office workers could drive their Chrysler LeBarons straight into the waiting parking deck, knowing that they would then ascend high above the city to write memos, talk on the phone, or whatever it is we did in the days before email and PowerPoint existed.
Only problem is, Durham's changed. The street is now where the action is and the late-80s megatower design is as out as MTV VJs. Durham's attracted a far more diverse and creative commercial worker base than in the days when a life insurance company had its headquarters there (the old People's Security firm.) And the tenants coming downtown today want a different experience than the Durham Centre can provide.
I'd note that Greenfire's own office tower plans, which keep having the number 2009 floated by them, would be smack in the middle of downtown, more easily accessible to fine dining, future retail, and the posh-hotel Lemanski's building in the old Hill/CCB/SunTrust building. That tower would be a part of the city, not set apart from it the way the Durham Centre is. (Personally, I suspect that the likely future for the We Want Oprah building, should it ever fall out of Ronnie Sturdivant's hands, is as structured parking to support the Greentower, a deck wrapped by retail/office/residential.
Can Craig Davis succeed with the Centre? Probably. The property's coming at a bargain price and, unlike the past owner, Davis is a locally owned firm with local connections. And with a track record of success to boot in Durham -- Davis Park at RTP, despite the cheezy TV commercials, has sold like gangbusters, not to mention Davis' success in commercial development in the Park.
It will be interesting to see if Davis manages to push the City along in the timetable for renovating the Durham Centre parking deck, which is actually managed by the city government, and for the also city-funded quarter-million dollar renovation to the Durham Centre plaza (transforming it into a "contemporary urban plaza and rooftop garden.") The funds for this work were approved in the 2005 general obligation bond. With Davis looking to pour $1 million of renovations into the building, you can bet he'll want the city to step up the timeline.
Dollars and decks aside, here's hoping that Davis' renovation work finds some way to help re-connect the Durham Centre with the downtown that its design turned its back on so many years ago. Because unlike the 1980s, downtown Durham's future lies inside the central downtown core, not above it -- and the faster a new owner realizes that, the sooner this property turns around.