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Durham taps Boston developer to revamp former police HQ
Triangle Business Journal
A rendering of The Fallon Company’s proposed redevelopment of the former Durham Police Department Headquarters property
By Caleb Harshberger – Staff Writer, Triangle Business JournalNov 6, 2019, 1:59pm EST
Durham City Council has chosen a Boston-based company to begin negotiations with the city for the proposed sale and redevelopment of Durham’s former police headquarters.
After considering additional revisions to two competing proposals, the City Council voted unanimously on Monday to begin talks with The Fallon Company, which also has offices in Raleigh, to purchase and revamp the property at 505 West Chapel Hill St.
The decision came a month after city staff initially recommended Fallon before granting a request from a competing firm — Washington, D.C.-based Akridge — to accept revised petitions, briefly extending the proposal element for the project.
The Fallon Company plans include 339,500 square feet of commercial space and 300 residential units with 80 designated for affordable housing. As with its original proposal, the design preserves the historic police headquarters building with plans to renovate it into office space. The company is offering $9.25 million for the property, with 95 percent of that paid within 30 days of reaching a development agreement and plan with the city.
“We’re proud of the proposal we initially submitted to the city as we think it offers the best opportunity to deliver Durham’s objectives based on strong positive feedback from all constituents and stakeholders,” says Zac Vuncannon, managing director of The Fallon Company.
Akridge, meanwhile, offered more residential space — 420 units, 90 of which were designated affordable housing — and less commercial space — 232,000 square feet.
Akridge offered $11.25 million for the property.
At Monday’s meeting, city staff reaffirmed Fallon as their recommendation. The staff found Fallon’s proposal to be preferable in its design, delivery of mixed-use space, financial deal structure and generation of ongoing tax revenue.
During the meeting, representatives from both firms presented their plans to council.
Akridge went first, with company representatives emphasizing their proposed higher purchase price and the larger amount of residential space and affordable housing units included in their plan. The company argued that Fallon’s two-phase plan created more risk, and representatives attacked elements of the staff recommendation criteria as subjective and questionable.
The Fallon Company, meanwhile, rejected claims that its proposal included added risk, pointing out that the company is offering 95 percent of the purchase price upon the finalization of an agreement.
The company also pointed to its long history of projects across the country and emphasized its reputation as a trustworthy developer who invests its own money long term in the cities it enters.
The company’s partnering firm, WinnCompanies, also emphasized its history in developing and operating affordable housing communities across the country.
The council voted 6-0 to move forward with The Fallon Company.
Council members praised the quality of both firms and their proposals, though pointed to Fallon’s up-front financial investment and the significant additional commercial space in tipping the scales in its favor.
If Fallon and Durham ultimately fail to come to an agreement, the city will have the right to pursue an agreement with Akridge.
The building for the former police headquarters first opened in the 1950s, when it housed the Home Security Life Insurance Company. The department relocated to East Main Street last winter.
In 2017, the city began to consider what to do with the property, ultimately deciding to seek a developer who would buy the land and develop it into a mixed-use urban development complete with affordable housing.
Durham wants a revived Fayette Place, but it’s not part of Tuesday’s housing bond – The News & Observer
Despite a fervent request from Durham Congregations, Associations and Neighborhoods, Mayor Steve Schewel stood by the city’s decision not to include the redevelopment of Fayette Place in the funding from the $95 million Durham affordable housing bond.
However, the mayor agreed during a meeting with CAN members Wednesday night to join community members in a planning process for the long-vacant, former public housing community site that now sits behind a chain-link fence in the historically black Hayti district.
Wednesday’s meeting at First Chronicles Community Church came just days ahead of Tuesday’s election, when the bond referendum will appear on the Durham ballot.TOP ARTICLES 00:15 / 00:30NASA astronaut Christina Koch thanks Raleigh cityleaders from outer space
It followed an Oct. 19 meeting where the mayor previously told Durham CAN members he could not commit to including Fayette Place in the bond referendum.
At Wednesday’s meeting, Schewel, mayoral candidate Sylvester William, Durham Housing Authority CEO Anthony Scott and Durham City Council members Mark-Anthony Middleton and Charlie Reece all vowed to support creating a planning process for Fayette Place in the next four to six months.
“I completely understand the pain and the anger surrounding the history of Hayti and the lack of redevelopment in Fayette Place,” Schewel said.
The mayor said the city’s decision not to fund Fayette Place directly in the bond referendum is tied to the city’s Five-Year Affordable Housing Investment Program, which emphasizes aged public housing units in central Durham. Fayette Place is included in the plan, but other housing units like J.J Henderson Housing Center and Oldham Towers that are closer to transportation routes get higher priority.
Schewel said funding from private investments is also harder to obtain for Fayette Place, where the city and DHA hope to eventually have 130 new housing units and a grocery store.
“There’s no piece of public policy that was ever meant to address everything at one time,” Councilman Middleton said. “There was no conscious effort to leave Fayette Place out.”
City Council candidate Joshua Gunn was unable to attend the meeting but said in an interview that he would have publicly committed support for Fayette Place and that funding for it should have been explicitly included in the bond referendum.
“We would definitely have loved to hear that Fayette Place became the priority and connected to the bond,” said the Rev. Herbert R. Davis, co-chair of the Durham CAN strategy team. “But hearing from the mayor that he did not think that was feasible … we came up with the decision to make the ask that we would be getting together within six months to make it a priority.”
Davis said it was an attempt “to negotiate something that could still get us in the right direction.”
In 2017, the City Council authorized the DHA to spend $4.2 million to buy back the Fayette Place property from Campus Apartments, a private company that bought it in 2007 to build student and affordable housing. That housing was never built.
COSTS AND CONCERNS
The bond is part of the city’s larger $160 million five-year plan to address affordable housing., reduce homelessness and stabilize neighborhoods.
If passed, the $95 million bond would cost the owner of a $230,000 house about $37 a year, or the equivalent of 1.6 cents per $100 of assessed property value, over the next 20 years, according to the city.
The Greater Durham Chamber of Commerce, Downtown Durham Inc., the Durham People’s Alliance, the Durham Committee on the Affairs of Black People, Friends of Durham and the Sierra Club have all endorsed the bond. The Friends of Durham, citing spending on the now failed Durham-Orange light rail project, backed the bond with conditions.
“In light of the fact that our community has nothing to show for the $150 million in tax dollars spent on the light rail project, the Friends of Durham has significant concerns regarding how the funds in the proposed Affordable Housing Bond will be allocated, how spending will be tracked, and how the community will be able to hold management and elected officials accountable,” Chairwoman Shelia Huggins said.
Among the group’s conditions are the creation of a diverse oversight board with housing, real estate and construction experts; the development of a regular reporting plan, including a annual scorecard and deadlines; and the development of a plan to help residents return to their previous housing locations.
Schewel said at a meeting Saturday that the bond plan will include a City Council-appointed implementation committee that will have construction and finance experts, as well as DHA residents.
Every day, 20 people move to Durham, Schewel said, and those moving here have an average income $10,000 higher than those who live here now. This disparity is driving the price of housing up, forcing out many people of color who have been in and near the center city their whole lives, he said.
“We can’t allow Durham to become a Disney version of itself,” Schewel said. “We have to make sure that Durham is a place that remains diverse. If we pass the housing bond, that won’t solve the whole problem. … But it will take a big bite out of the affordability apple.”