Durham taps Boston developer to revamp former police HQ

Triangle Business Journal
https://www.bizjournals.com/triangle/news/2019/11/06/durham-taps-bostondeveloper-to-revamp-former.html

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.