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BCR's Daily Fishwrap Report for August 6, 2009

Hampton Inn & Suites moving forward on Northgate's eastern edge

Plans for a hotel at I-85 and Duke Street, on the eastern boundary of property controlled by the owners of Northgate Mall, are moving forward.

The mall's legal entity recently sold off a 2.7 acre parcel to Daly Seven, a Danville, Va.-based developer of chain hotels franchised from brands like Hilton and Marriott. Daly Seven plans a Hampton Inn & Suites on the site. (A former Hampton Inn at Hillandale and I-85 became a Comfort Inn in the recent past.)

The H-S notes that the developer and Northgate has been working with the Northgate Park Neighborhood Association on the plans; publicly-available minutes from the Trinity Park Neighborhood Association also suggest some level of interest in the project by the 'hood bordering the site to the south.

It's the second land sale this year for Northgate, which in February granted a deed for what appears to be the Bank of America outparcel. Tax records suggest a $540k sales price for the BoA parcel, and a $1.3 million sales price for the Hampton Inn site.

Although travel is down in Durham, driven by a decline in business travel that the DCVB has suggested is systemic, hotels keep popping up.

From the Kings Daughters Inn opening on Buchanan earlier this spring, to Greenfire's deal with Interstate Hotels and the incentives released this week for a 150 room boutique hotel downtown, to the opening of Hotel Indigo near RTP in a few weeks, there's a lot happening on the hospitality front. And that's to say nothing of a proposed hotel at Main St. near Ninth, and the perhaps-stalled Courtyard by Marriott planned for the old McPherson Hospital near Brightleaf Square.


Reyn Bowman

Every part of the tourism sector in Durham is in expansion including hotels. The majority of Durham's tourism is leisure and leisure is what is projected to drive recovery nationwide. Now is a good time as financing frees up to build and then merge into supply as recovery quickens.

With hotels alone, the Durham tourism sector will soon have another 9 properties and increase to more than 8,800 guest rooms overall.


Whats going on with the mostly empty outdoor part of Northgate Mall. I hope some good things go in there.


Great! With all the new rooms maybe we'll get the downtown convention center expansion moving again, attracting even more and bigger meetings, other than the occaisional barmitzvah.

Some golf pro company that made custom clubs gave the outdoor parcel a chance last year, but it fell apart due to lack of customers. Northgate unfortunately has developed an image as the "wrong" mall to go to in Durham, so they have to be careful who they're marketing to. I always thought that space would make a good Gold's Gym or something like it.


I don't really understand the negative stereotype of Northgate..some people call it the "ghetto" mall. Its a totally nice just doesnt have a great selection of stores right now. And if you go there on weekends its pretty busy. It could totally be a successful mall with a few store changes.

Also, the greek place in the food court is amazing for mall food!

Michael Bacon

GreenLantern -- and expansion of the downtown convention center is good for what reason? At a time when business travel is imploding, convention travel is cratering even beyond that, publicly financed convention centers are struggling to break even all over the country, the Durham "convention" center remains an painful eyesore on downtown's streetscapes, a city-hired consultant's report clearly said that downtowns are not good locations for convention centers, and expanding it would require the demolition of historic properties?

If we're going to do anything to it, push it over. If we have to chase the convention travel boondoggle, at least have the decency to go build it out at Southpoint. (The consultant's report clearly stated that convention travelers prefer homogeneous environments like malls and/or theme parks, but that convention travelers spend less locally than entertainment and recreational travelers.)


Let's see...The Raleigh Convention Center is booked up even in this recession, it's located downtown, there are plenty of hotel rooms, plenty of parking, and it's big enough to attract enough business to pay for itself. The economy is already recovering, and with more hotels being built in Durham, it justfies a modest convention center expansion. Nothing like Raleigh, but big enough to attract the right clientele for a city our size.

You want to add to the suburban sprawl by building a new one at Southpoint, far away from proposed transit, and taking up valuable land in a watershed?

Convention travelers will spend money if business owners offer them something to spend it on other than the corner convenience store. I'd rather see them spend money downtown than at Southpoint, just as we're getting the critical mass of restaurants inside the loop. Having said that, Durham needs other things to do downtown that just eat.


Northgate is a great mall. I didn't mean to give the impression I was afraid to shop there. In fact, it's much more convenient than going to Southpoint or Brier Creek. The cinema is great, as is the food court and the shopping is everything I need, if I can't find it at Walmart or Target. It's not a ghetto mall, but Southpoint, as many South Durham, Cary, and Chapel Hill shoppers will tell you, feels and looks safer. Form your own conclusions as to why. Maybe it's just the stores, or layout, or parking, but it always seems on the verge of struggling.

Todd P.

The Durham Civic Center is nothing but a series of Marriott Ballrooms. The vast majority of their business consists of weddings, parties, and meetings sponsored by local government. The idea of expanding it is crazy.

Starting over from scratch would be a far better idea, except that the business travel market is in the toilet and is unlikely to recover for a long long time.


I'm disappointed to see the sale of the BOA outlot because it would seem to preclude a North Hills style reinvention of the mall property. I think a redevelopment of the Club Boulevard frontage as a mixed-use transition (rather than a vacant "buffer" of grass) between the mall and the residential areas on the south side of the street would be very successful.

Buildings similar in form to Ninth Street North, or to the condos at Duke and Club or Trinity Heights with ground floor retail and second floor residential or office suites could be built right up on the sidewalk with service or garage access from the rear where the grade slopes off. This type of overhaul would obviously cost a tremendous amount of money, and would require support from my Trinity Park neighbors, but I think it would be Northgate's best shot at attracting new retail tenants and encouraging foot and bicycle traffic.

Also, we want our neighborhood grocery store back. Trader Joes, where are you?


Hey I'm all about progress and this seems to be progress to me. This would be the closest hotel from the I-85/70 junction. Just makes sense to me.


GREAT ideas, RWE!


I'd love to redevelop the buffer on the north side of Club, or even better to build affordable multifamily on my side of Club (I own the parcels at Club and Norton). However, it will never fly with my neighbors on upper Norton or the TPNA.

A North Hills style redevelopment would have been perfect (though not in this debt climate), or even better a Cameron Village setup since this is the best outcome for "in town" malls IMO. However, the sale of these parcels and the drought in the commercial MBS market means there is no way this is going to happen, unless the Rand/Bowman family sells out.

In my hometown of Baton Rouge the new 'neighborhood' Walmarts have started popping up, and they are slaughtering the grocery chains like they did in Kansas City and the other early adopter cities. Northgate is too close to Costco to get a TJs, but I'd happily stop driving up to the Sprawl-Mart on Glen School Rd. if I could have a decent grocery store within walking distance, be it a 'Small-Mart' or one of those new Tesco grocery concept stores. When they start to build these in NC, you can kiss Food Lion and their bleached meat goodbye.

My family owns several decaying and mostly vacant shopping centres that had one or two holdout downmarket tenants (mexican buffet, nail salon, pawn shop, etc.). When Walmart started sniffing around, they wouldn't accept a reasonable buyout of their lease so that the entire shopping center could be razed and turned into a success story, such as the Walmart that was erected after the Jackson Ave. housing projects were demolished (it is truly a sight to behold, if you've ever seen the hood depicted in 'Dead Man Walking' now replaced by affordable new semi-detached houses).

The net result? The tenants' refusal to vacate and allow Walmart to take over the whole block brought a continuing slow decline similar to what happened on the former Kmart site on Roxboro (which has been saved only by the arrival of Compare Foods). Now even the mexican buffet has closed, and the most likely future will be a sea of 10,000 sq. ft. concrete slabs, or as a giant writeoff / tax shelter if we donate it to the city for green space or a flea market.

I'll be at Northgate's 50th birthday party next year, and I hope someone such as Simon / CBL comes with a buyout offer. The problem with family owned businesses is that when they get to the scale of Northgate Associates, they start to make economic decisions that are made in a vacuum relative to their publicly owned competitors. This is *why* there aren't any family owned shopping centers anymore -- wealthy families in America tend to go from rags to riches to rags in about three generations (75 years) unless they bring in new blood.

Michael Bacon

GreenLantern -- give the Raleigh Center 5 years, and I can almost guarantee it will be struggling for business.

All I can say is, read the city-paid consultant's report. Except for the conclusion, which ignores the findings section completely, it's an excellent report. Convention travelers are very clear that they're not into diverse, funky environments. They want somewhere safe and full of chain restaurants. Why we'd want to put that downtown, at the expense of the Penny's Furniture building, is beyond me.

Furthermore, convention centers are not nearly as conducive to sprawl as the kind of development that's at SouthPoint. Convention travelers often don't have cars and want to just get to their location, then do a little shopping on the side. Hey, come to think of it, maybe we could build one at Northgate.


I really hope the hotel helps Northgate Mall. I live within easy walking distance of the mall and would really like to see it revitalized. I am so sick of everyone considering it the "ghetto" mall. Just because the mall contains shoppers and stores that appeal to a more diverse population than Southpoint does not mean it is an unsafe mall.

The best idea I have for bolstering the struggling Northgate Mall would be to turn it into an outlet mall. As an outlet mall, the offerings would be different enough from Southpoint to encourage shoppers to frequent both. In addition, during these tough economic times, shopping at an outlet mall could be much more appealing to Durham residents than trying to find anything reasonably priced at Anthropologie or Nordstrom's. Of course, Old Navy didn't manage to hang on so who knows if it would work. Just an idea...



Looks like they've finally cleared the lot! Now if only I can convince my parents to abandon the Washington Duke.

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