Northgate Redevelopment Speculation

Dave, that certainly seems like a strong possibility that they just want to sidestep the conversation altogether. Also think it may be some truth/some spin but we are certainly in a radically different cost environment than when they acquired the property 4 years ago (or even a few months ago as far as rates are concerned). When you’re using other people’s money those things do matter and I do certainly think it’s possible in part that the numbers just didn’t work.

Oh I definitely agree with Dave that it is maybe even probable that they were scared off. I also agree we are at a stalemate.

And clearly the experience with the police station doesn't give me a lot of confidence in the city's ability to manage large sites.

That said, I think site is at least as important as the police station. I am not sure the way forward but would love to hear suggestions

Probably more important than the police station site in my mind because of the potential it has to unlock the parts of Durham north of 85.

Anyways I think it’s highly likely this rezoning request is denied. As far as other ideas, I certainly don’t have any. Like bulletfedora my confidence in the city leadership is pretty low. There was a lot of emphasis on parking minimums during the discussion last night — maybe start by eliminating those? Lots of folks want to do that already and Raleigh and other cities have already done it. Then push them to at least do residential on, say, the portion of the site where the Sears Auto building is which is designated as a parking lot in the proposal.

Not sure if they would still be open to it but they originally (way back) wanted to go to 6 stories for the residential but city council wasn’t receptive. Maybe proactively go back to them and offer that as an option if they commit to certain amount of affordable housing and other concessions.

I don’t know, very tough situation without a lot of obvious good options.

After having seen the presentation last night, I have little confidence in this developer coming up with what could be a truly transformational project. I'm also not sure this is something the city needs to own - they just need to be more clear on what would be allowed through a rezoning. And while surrounding neighborhoods should get input, they should not get a veto over the process.

The best solution would probably be for some other developer to buy the property and go all in on creating a mixed use, mixed income project that starts from the ground up. Keeping the skeleton of a 1960's/70's/80's auto-centered shopping mall is nuts.

You can certainly fault the approach they are taking here but the capability of this group isn’t the issue. They are basically doing in Charlotte exactly what we want them to do here. So whether it’s a question of cost, return, zoning, relationships with city leadership, etc their capacity and resources aren’t really the issue. Which kind of makes the whole thing more frustrating honestly.

https://reimagined.projectballantyne.com/ballantyne-reimagined/

I suppose I will take the opportunity here to share that I am involved in a proposed text amendment change that would, among other things, eliminate parking minimum mandates in Durham (Raleigh recently did this as well).

Our first open call meeting is:

August 30th
7pm
1305 W Club Blvd
(come in through the main entrance on W Club)

You can also read the full text amendment proposal here: bit.ly/DurhamSCAD. It's long, but it is a tracked changes document and it would be amazing to have folks read through it and bring comments and questions to the meeting.

I think we should ask them about this -- why not something like Ballantyne in the next public forum.

Ballantyne looks like RTP, which is not the right approach here imo.

I also agree that at least part of the cause for the underwhelming new development plan was the pushback from the city on affordable housing. (For the record, I believe the city acted appropriately.) I distinctly remember a bit of back and forth between Mayor Schewel and Northwood. And honestly, if those assumptions are true and this is the kind of direction a developer wants to take (potentially out of spite), then we don't need developers of that ilk doing business here.

If this were proposed for RTP, I wouldn't care at all, but for such a critical location in the city, this new development plan is a huge loss for the community. Frankly, I don't want developers who aren't considering that level of impact (i.e., how it helps shape the community, city, and county as a whole) to be involved in such large projects.

I got an email that they are having an in person public meeting to “discuss the latest news on this project” next Thursday at 6PM at the mall. It didn’t elaborate at all as to whether they are still pursuing the same plan that was previously shared in August. Does not look like there is a virtual option. I will try to attend if my schedule allows.

SemiCharredLife — I think the community association was the bigger issue than the city during the initial round of discussions. As I recall, the first phase of the project could have been built as they envisioned without any rezoning request so the city basically gave their input but didn’t have much leverage otherwise. The sticking point was that they wanted to build some taller buildings in the second phase which would have involved rezoning. The community association published a letter urging the city to reject any future rezoning request and even went as far as to say they should proactively seek to rezone the site so that the project couldn’t be built. Believe the letter is linked somewhere in this thread.

I respect the good intentions of the community association and appreciate that they want input but the demands they have made are extreme. Their position has essentially been “you should build the project we want” based on a very small sample of input from the local community. When Northgate was thriving it was a destination and gathering point for people across the region. The opportunity to reimagine what that looks like in the future should be viewed through the same lens. I hope that will happen because this could be a vital connection point between the city and north Durham and beyond.

Man well I went by the community meeting and this project is such a cluster. At this point I’m highly skeptical that Northwood will ever redevelop the site. It’s just the same non-constructive commentary from the community about affordable housing. Literally that’s what every single question was about. City leadership is totally absent from the conversation. They would do well to try and sell the site IMO though I can’t imagine somebody else would want to jump in after observing the circus. Just a terribly disappointing situation all around.

Thanks for the info. Using "not enough affordable housing" to kill any possibility of affordable housing is wrong. NIMBY tactics are so sneaky.

At this point, the strategy might be to sit on it and wait for the new zoning map (2 to 3 years away... Maybe)

Then just do a project that is allowed by the new zoning.  I think the comp plan has it listed as an area for transit oriented development. I imagine housing and density will be allowed.

Sure thing Dave. Sorry I don’t have anything more tangible to share but the meeting went off the rails right away. Not sure what their path forward looks like here. Don’t think there’s a snowball’s chance in you know where that the city council approves the rezoning request given the public sentiment. Guess we go back to waiting.

Well no action in this case is a positive in my book. The previous plan to redevelop into a life-sciences campus without retail or residential was unacceptable. Despite the public opposition being unreasonble at points, I do hope pressure remains to demand something better here. And if they're not ambitious or capable enough to deliver, don't do anything. I'd rather wait a few more years than see this site wasted on single use office for the next generation.

Looks like they’re starting to clear land at Club & Duke. Could it be the start of this mentioned Rosewalk project?

Dave @ Building Bull City wrote

I suppose I will take the opportunity here to share that I am involved in a proposed text amendment change that would, among other things, eliminate parking minimum mandates in Durham (Raleigh recently did this as well).

How fares the removal of parking minimums? Does it seem likely to happen?

I don't profess to know anything about politics, so I don't have a % likelihood.

Right now, a lot is up in the air. I'm not even sure at this point when it will go to vote.

"As funding slows, Triangle watches vacancy rate rise for life sciences space"
https://www.bizjournals.com/triangle/news/2023/11/03/raleigh-durham-flex-space-life-sciences-q3-2023.html

This article (it's a paid article, I know, sorry) feels particularly important for Northgate Redevelopment. The last update to this project felt like a half assed "I don't know what's going on this real estate right now, but life science feels hot." Life science office space has reached a point of oversaturation, and I can't imagine the Northgate developers would seriously be considering to implement their previous plan.

I would caveat this as a *temporary* point of over saturation. There’s every reason to believe that this region will continue to be a focal point for life science investment. The broader life science/pharma segment is particularly sensitive to market cycles because of how much capital is required, the speculative nature of investing in potential new therapies, high failure rates, etc. We went from a record 2021 in terms of capital raising, IPO volume and acquisitions to an environment where raising any kind of capital is extremely difficult and the IPO window is essentially nonexistent. Naturally companies both large and small have become much more conservative in response and are streamlining costs or tabling expansion plans where appropriate.

Regardless, I’m not expecting to see any movement on the plans for Northgate or any of the other planned large mixed use or commercial projects (Durham ID, Wexford, ATC expansion) until the interest rate environment moderates significantly. That probably means a year or more out based on current rate forecasts. Many still expect another rate hike before year end. Banks with the most significant CRE exposure are facing tremendous headwinds with potential impairment to their loan books, high rates, higher regulatory costs, extreme competition for deposits…the list goes on. Even if you have appetite to finance a project at a much higher rate there’s very little lending activity happening.

Edited to add: They never even filed a rezoning request like they indicated they were going to for the modified project.