Former Police HQ Development

It's not really an issue of funding on the city's part, per se. As I understand it, the city put out a bid to developers to come up with proposals for the site. Each developer's proposal includes an offer to buy the land from the city for a certain amount. The offers made by both developers in their proposals was lower than what the city feels the land is worth.

Time may or may not reduce development costs -- cost escalation right now is insane due to supply chain and labor issues; this is a problem on every single project I'm working on right now. But the other variable is that a developer could come along with a more ambitious proposal, i.e. they could propose something denser that involves more potential profit from the development, which would allow them to offer the city more money for the land. Personally, I think this is unlikely, as both proposals were already pretty ambitious with density. It really does seem like the city is shooting itself in the foot here, as it's really likely that these developers won't go after the project a third time. Going after a project like this involves a ton of time and money.

Completely agree. Just watched to the session. They seem frustrated but seemed unwilling to adjust their priorities. I understand the desire to get it right but it is not surprising to me, given current uncertainties, that the bids were lower than they wanted. Clearly they need to either want less commercial, less preservation or less affordable housing to get a better bid but there was little discussion (outside of less preservation) in terms of actual comprises. So unclear to me whether taking more time will actually make things better. hope so!

Agree with what you all are saying. I think this is the nail in the coffin for the old building honestly. It’s clear that the investment to renovate it is significant and it’s only going to continue to deteriorate while this process plays out again.

They blamed the reduced financial return on “market uncertainty” which I don’t understand or agree with. These two groups both stepped up and delivered sizable projects that broadly met every other criteria including significant commercial space.

Hindsight obviously 20/20 but they really should have pushed to figure out a deal with Fallon the first time around. Likely the only way they are able to get a higher offer at this point is to allow a developer to scrap the Small building and I suspect that would be replaced with even more luxury high rise residential which is clearly not going to be in short supply downtown.

Man looked back at a few older posts in this thread and the original project that Fallon proposed could be under construction right now. So disappointing. Okay rant over.

Yep.  The other frustrating thing is the council talked a lot about this specific space, but IMO they are dramatically undervaluing/underestimating how a project like this would affect development adjacent to these properties. The area adjacent to the co-op is ripe for more housing as well but I suspect that is years off now as well

https://www.heraldsun.com/news/business/real-estate-news/article268583382.html

Some additional discussion on the future of the old police HQ. Frankly I think it’s enormously shortsighted to believe that there won’t be a significant amount of demand for commercial space downtown in the future. This absolutely impacts our ability to recruit companies here. Overreacting to the current vacancy rate for commercial space downtown at the tail end of the pandemic is not representative of where this market will be long term.

I haven't read any articles on people to returning to the office - what are the current trends?

From my own personal experience, hardly anyone goes into our RTP office - maybe more folks than six months ago, but not nearly close to pre-pandemic level. I plan on being primarily remote myself, with an occasional visit to the office as needed, so my office is sitting empty 98 or 99 percent of the time I'd guess.

I guess my point is that it feels like the demand for office space is less stable than the demand for housing, but I don't know if that can be backed up with any data.

Looks like they at least got a few RFQ responses in for the third go round on this. Akridge responded again. It looks like 2 of the respondents are purely residential developers. Think the ground lease approach makes sense here, hope they get something done this time.

Anyone have any insight on the proposals for this round?
Deadline to provide was March 15th and the city page has been updated but don't see the proposals published like last time.
https://www.durhamnc.gov/2999/505-W-Chapel-Hill-St

"On March 15, 2024, the city received five (5) proposals from three different development teams which included three (3) proposals for the base scenario and two (2) for the alternative scenario. One development team submitted a proposal for just the base scenario, and the other two development teams submitted proposals for the base and alternative scenarios"

FYI the actual RFP responses have now been uploaded. Three respondents: Akridge, Conifer and Peebles. The Akridge proposal was kind of a zero for me…just a collection of low-to-mid rise residential (including conversion of the Small building) with a little bit of retail. Conifer and Peebles both had more ambitious proposals. Peebles probably looked a bit more interesting to me from a visual and site layout perspective and contemplates a conversion of the Small building to a boutique hotel a la Unscripted which I think would be cool. Admittedly haven’t dived into the details much but financing still very much and issue and from what I read all 3 projects envisioned the City stepping up in a more substantial way.

At first glance, the Peebles proposal looks the most ambitious/densest, but it also has the fewest affordable units. Does anyone have a sense of how the financials look on each of these proposals? I'm curious to see how this shakes out. Getting more momentum for density and an active streetscape in that part of town would be great. The current non-use of the parcel is huge eyesore and lost opportunity. Heck, any of these developments might even get Fields to sell the underutilized and poorly maintained properties up the street on Gregson. Wouldn't that be a thing!