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.”
BY JOE JOHNSONJULY 16, 2019 04:00 PM, UPDATED JULY 16, 2019 08:09
An experiment that’s been years in the making soon will transform land in downtown Durham into 82 affordable apartments.
City leaders, local investors and affordable-housing advocates broke ground Tuesday morning on the Willard Street Apartments.
The mixed-use development, which initially was called the Jackson-Pettigrew project, will rise on unused city-owned property next to the Durham Station Transportation Center on Pettigrew Street.
It’s a first-of-its-kind partnership in affordable housing that city leaders hope to replicate, said Mayor Steve Schewel. Planning for it began under former Mayor Bill Bell.
The apartment complex will fill a 1.25 acre, L-shaped piece of land the city obtained when it bought property for the Durham Station more than a decade ago.
The six-story building, which includes a two-level parking deck, four floors of apartments and commercial space, will face Willard Street. A future second phase could face Jackson Street.
The Willard Street Apartments will be Durham’s attempt to keep downtown affordable for some residents, Schewel said.
“As a city and as a community, we’re putting a stake in the ground,” Schewel said. “We are making it clear that we are committed to ensuring Durham remains a community for people of all incomes and backgrounds.”
The development was envisioned more than five years ago when Durham CAN (Congregations, Associations and Neighborhoods) and others began asking for an inventory city-owned properties in walking distance of bus stops where affordable housing could be built. Willard Street was the location chosen for the first development.
Making the Willard Street Apartments mixed-use made it more attractive to Durham CAN’s Herbert Davis, senior pastor at Nehemiah Christian Church downtown.
“A development like this doesn’t have the stigma of other public housing,” he said. “We need more affordable housing in Durham, and this moves us in that direction.”
But it also made the development more difficult to finance, said Self-Help Credit Union Vice-President Tucker Bartlett. Self-Help is undertaking the ownership of the commercial space in the development, he said.
“An apartment building has straight-forward financing,” he said. “A development like this creates a more complex financing plan, but we were able to make it happen. We had to be innovative.”
Part of that was financing the commercial and residential separately, he said.
The Willard Street Apartments will cost about $21 million, project leaders say.
The city is donating the land for the development, which has an appraised value of $2.8 million, and will chip in an additional $3.6 million, The News & Observer previously reported. Duke University and the A.J. Fletcher Foundation committed to providing a $2.5 million to $3 million grant toward the project. The city also received tax credits, which are expected to create $9 million worth of equity toward the total development cost.
The U.S. Department of Housing and Urban Development describes the tax credit as “the most important resource for creating affordable housing in the United States today.”
The one- and two-bedroom apartments will be available for people who earn 60% or less of the area median income, or AMI, which for Durham is $28,313 for one person, $32,363 for two people and $40,425 for a four-person household. Twenty-one units will be offered to people making up to 30% of the AMI.
Durham County is following the city’s lead. It intends to construct affordable housing on two county-owned parking lots. County leaders announced their partnership with private developers to construct 355 affordable housing buildings on the 300 and 500 blocks of East Main Street. Construction could begin in late 2020 with completion about two years later.
Nearly a third of all households in Durham County spend more than 30% of their income on housing and utilities, according to the N.C. Housing Coalition. Among renters, it’s almost half.
Construction on the Willard Street Apartments will last about 18 months, with completion expected by the end of 2020, project leaders said.
The News & Observer ~ Durham County seeks affordable housing downtown. Here’s what’s coming to Main Street.
BY JOE JOHNSONJULY 11, 2019 12:53 PM,
Dionne Nelson has spent her career building affordable and mixed-income communities, she says.
On Monday, the Durham County commissioners picked Nelson’s firm, Charlotte-based Laurel Street Residential Living, to turn two county-owned parking lots in downtown Durham into mixed-used developments with hundreds of affordable-housing units.
“The growth of Durham and in many respects, the transformation of Durham is very attractive,” said Nelson, the company’s president and chief executive officer.
“There seems to be great alignment and support around affordable- and mixed-income housing,” she said. “And I think that’s a rare attribute for us to find in a city.”
The project comes amid a downtown housing boom.
Years ago surface parking lots typically became parking decks to meet growing demand. Today people want to live, work, shop and park, if they have a car, in one place. The county’s plans for the parking lots in the 300 and 500 blocks of East Main Street reflect this trend.
“I think what happened in Durham is the commissioners realized they had an opportunity to think about it differently,” Nelson said. “And they were willing to do that. So that makes it exciting and different. I think the transformation of East Main is a rare opportunity that has the potential to really change the downtown dynamic.”
Commissioners Chairwoman Wendy Jacobs agreed.
“This is a monumental project for Durham County and our community because we’ve never done anything like this before,” she said.
rel Street has built 26 communities with affordable homes in Charlotte, Greensboro, High Point, Salisbury and Winston-Salem as well as in Rome, Georgia, and Richmond, Virginia, said company vice president Lee Cochran.
Nelson started the company in 2011 after working at Crosland where she oversaw affordable-housing development and operations.
Commissioners Heidi Carter and James Hill said they were impressed by the diversity of Nelson’s company.
“The diversity is really inspiring, and that’s what we want to be fostering,” Carter said. “We excited about working with an African American, female-owned business.”
Nearly a third of all households in Durham County spend more than 30% of their income on housing and utilities, according to the N.C. Housing Coalition. Among renters, it’s almost half.
Jacobs said she expects public employees like first responders, librarians and social workers as well as those who use housing vouchers to live in the East Main Street project.
The affordable units will be offered to people who make up to 80% of the area median income, which for Durham is $37,750 for one person, $43,150 for two people and $53,900 for a four-person household. Units also will be offered to people making up to 30% and 60% of the AMI.
Housing advocates like Durham CAN (Congregations, Associations and Neighborhoods) have pushed city and county leaders for years to use downtown land for affordable housing.
About seven months ago, commissioners voted to make affordable housing part of the East Main Street properties’ redevelopment plan. Then came retail.
The proposals presented by the three companies vying for the partnership agreement with the county all included a retail element.
MORE THAN PLANNED
The county had approved including 277 affordable units in a total 437 apartments slated for the paring lot sites, The News & Observer previously reported. But Laurel Street’s plan calls for 305 affordable units in two buildings, as well as 250 market-rate apartments in another building at 500 E. Main St., developed by ZOM Living.
Cochran said they added the extra apartments by reconfiguring the units around three sides of the parking garage at the 300 building rather than having them only on two sides. This building will have 105 affordable units. Another building on the 500 block will contain 200 affordable units.
All the units will meet the size requirements prescribed for affordable housing to get the tax credits and financing for the development, he said.
Studio apartments will be 609 square feet with rents ranging from $609 to $1,071. One bedrooms will be 666 square feet with rents ranging $735 to $1,143.
Two bedrooms will be 918 square feet with rents ranging from $859 to $1,368. Three bedrooms will be 1,248 square feet with rents ranging from $1,176 to $1,578, the proposal says.
County Manager Wendell Davis will negotiate a memorandum of understanding with Laurel Street.
The company already plans a possible grocery store and daycare. A forum in August will ask the public what else should be in the project.
“This is a wonderful opportunity if we can get it right,” Commissioner Ellen Reckhow said. “It will activate Main Street and score a home run for us.”
Planning will continue for the next year with construction tentatively set to begin in late 2020, according to county staff.
|Published Monday, July 1, 2019|
by Freda Freeman, Correspondent
DURHAM – Standing in front of the old police headquarters on West Chapel Hill Street, residents implored city officials to use the site for affordable housing. They asked city leaders to help make downtown “socially, culturally, and economically diverse.”
Members of more than 30 churches, community organizations, and neighborhoods associated with Durham CAN (Congregations, Associations and Neighborhoods) urged the city to build at least 80 units of affordable housing on the city-owned property, which is considered a gateway to downtown.
The press conference was held on Thursday because Friday was the deadline for developers to submit proposals to the City Council for the redevelopment of the four-acre site. Also, Durham County Commissioners are in the process of interviewing developers for the development of 300 and 500 East Main Street.
Kicking off the rally, Herbert Reynolds Davis, pastor of Nehemiah Church, said: “Not only can our governments demand a certain number of affordable housing units at each of these sites, they can make sure the developers contracted have the best interest of the community. This means making the properties affordable to families for as long as possible, making sure they invest in amenities such as child care, contract women/minorities, as well as hiring local residents, or even returning citizens, all while paying a living wage of at least $15 per hour.”
Davis added that it is important for the developers to work closely with the Durham Housing Authority to ensure housing for residents at or below 30 percent of the area median income. The federal Department of Housing and Urban Development defines housing as affordable if the rent is 30 percent or less of a tenant’s income. Davis also said development of the properties should align with the massive redevelopment of public housing that the DHA will undertake over the next 10 years.
Wilbert Pipkin, 67, said he spent 36 years of his life in and out of prison. He said each time he was released, he never received any help reentering society. Now a member of the Religious Coalition for a Nonviolent Durham, Pipkin said he was there to speak for affordable housing, a livable wage, and jobs for people of color, including those with criminal records.
“When we come out of prison, they don’t give us a shot at it at all. That’s why we keep going back and forth,” he said. “I want to do something that can help the people. I want to do something that can help the prisoners. We need to do something that will enable our community to truly be a community for all people.”
Bertha Bradley, who grew up in the West End, said the main reason she has a place to live is because of affordable housing owned by the Durham Community Land Trust. However, she said other longtime residents have been forced out of their homes because of gentrification and Durham’s failure to address the affordable housing crisis.
“Yes, it is a crisis and a shame that in a city like ours, the poor are unwelcomed. Progress should not come at such a great expense that it fails to consider real people and real community,” Bradley said. “It’s important to people like me that this project, here at the police station, be able to have at least 80 affordable housing units. Affordable housing is a crisis that needs a solution.”
The Rev. Tanya Johnson, of Abundant Hope Christian Church, recalled growing up in Durham, but said now she feels more like a tourist than a resident. “We don’t recognize this Durham as we are being farther pushed out. What I found out is we can spend our money downtown, they will accept our money, but won’t let us live downtown, so I say to the mayor, to the City Council, please keep your promises where people of color can work, have transportation, eat, laugh, and, at the end of the night, walk home like everybody else that’s living downtown,” she said.
Cullen McKenney, of Duke Memorial United Methodist Church, said when his congregants look across the street at the site, they want to see a building that reflects all of Durham.
“We want this land to reflect the values that we are proud of as a community. We want this land, this gateway into the heart of Durham, to reflect values like diversity and equity,” he said.
The Rev. Jonah Kendall, of Saint Philip’s Episcopal Church, said he and neighboring churches have been working with Durham CAN to ensure the 300 and 500 blocks of East Main Street be used for at least 300 units of affordable housing. Kendall asked the commissioners to choose a developer that not only has experience developing large projects but one that will invest in Durham and its residents. He also asked that the developers work with the DHA to reserve some of the units for residents with housing subsidy vouchers.
County Commissioner Wendy Jacobs assured the residents that their concerns had been heard.
“What we heard from everyone was No. 1, affordable housing; No. 2, activate East Main Street; No. 3, to have a day care center; and No. 4, opportunities for minority and local businesses. That is what we put in our RFQ (Request for Quote). What we’re hearing is 300 minimum affordable units down to 20 percent AMI; partnering with groups like Urban Ministries to provide supportive and transitional housing; and a pipeline for jobs for people who need them the most, including returning citizens who want to work,” she said.
The County Commissioners received proposals from 65 developers across the country to develop the Main Street properties. The commissioners narrowed the field down to three and will begin meeting with them next week to hear their proposals.