The Hillsborough (Reynolds Tower)

[ChiefJoJo]

We inquired about leasing some of the spaces in that lot ($44/month is a steal downtown), but whoever manages it would only take month-to-month arrangements, nothing long term.

Raleigh municipal deck is the cheapest deck parking around downtown and they have a 6 month waiting list for spaces.

[DwnTwnRaleighGuy]

Scrapping the deal and starting over would take well over a year--not a good option.

[ncwebguy]

An extension appears to only delay the inevitable -- the Reynolds won't get the necessary financing on their own (credit market won't improve for at least a year, if not longer), and won't take on deep pocket investors, since they would have done that deal by now to make the April 1 deadline to close on 301 and start construction.

Meanwhile, a vital link between the CBD and the west side of downtown (Warehouse District, Glenwood South) and across the street from the forthcoming Campbell Law School across Dawson is held hostage. The Reynolds have pretty drawings of what they want to put there, but don't have the resources to pull it off. They have had about seven years since acquiring 309 Hillsborough from the city (keepign out potential competitive developers in the process) and have done nothing. I think the city made a mistake in accepting the "let us finish Quorum" excuse, creating another deadline they failed to meet. Should they be rewarded for this behavior? I don't think so.

[Jones_]

i still think part of the problem is Quorum has so many unsold units. Whether its the lack of liquidity from this or the stench of a bad business plan, The Hillsborough is sure to find a tough go of it on either count.

[ChiefJoJo]

N&O's coverage. The issue is referred to the BED committee for discussion. The article says reynolds hopes to have financing ready to enable a winter construction start date.

[Transplant]

N&O's coverage. The issue is referred to the BED committee for discussion. The article says reynolds hopes to have financing ready to enable a winter construction start date.

[ChiefJoJo]

The following was on the council agenda today as recommended from committee:

2. 301 and 309 Hillsborough Street Development Agreement

The Committee recommends establishing a deadline of August 2008 for the completion of project financing negotiation and securing commitment relating to the development agreement with the Reynolds Company at 301 and 309 Hillsborough Street with the understanding if the commitments are not finalized by that date reversion of the property to the City according to the original agreement will take place. A proposed Contract Amendment is in the agenda packet.

I am not sure if the full council followed the recommendation nor not.

[rooster8]

The economy isn't like to improve in such a short time frame. Is it really possible that they can securing financing before then?

[Transplant]

The following was on the council agenda today as recommended from committee:

2. 301 and 309 Hillsborough Street Development Agreement

The Committee recommends establishing a deadline of August 2008 for the completion of project financing negotiation and securing commitment relating to the development agreement with the Reynolds Company at 301 and 309 Hillsborough Street with the understanding if the commitments are not finalized by that date reversion of the property to the City according to the original agreement will take place. A proposed Contract Amendment is in the agenda packet.

I am not sure if the full council followed the recommendation nor not.

[Subway Scoundrel]

Excellent. I would like to have seen the Reynolds' get this up, but they have not been able to deliver. Hopefully the city can put this out for bid and secure a financially secure company that can come in and start very quickly. Starting late this year should put the building delivery around 2011, which would provide good spacing with other projects coming online.

[Jones_]

There is obvious demand for the hotel component, the residential might be a drag. They don't seem to making any attempt to presell any which is teh normal practice I see taking place in order to secure residential financing.

[JeffC]

The financing thing is overblown. Soundly managed, reputable developers have no problems. Paper this week had something on area developers getting financing which I believe noted that Kane just got financing for North Hills East...see this article

key quote:

"Kane's track record at North Hills helped the financing effort, said Mark Fisher, a senior vice president at CB Richard Ellis Capital Markets, which arranged some of the financing. "Kane has completed a tremendous amount of development in the area, essentially creating Midtown Raleigh," he said in a statement."

The sooner the city ditches Reynolds (whom I am convinced got some "home cooking" from the last council) and moves forward with someone who has the resources to move this project forward, the better.

[Gard]

Anyone know if Kane has built towers before?...

[JeffC]

Anyone know if Kane has built towers before?...

[Gard]

^^^

Hmm..your right...sorry, I had a bit of a memory lapse there, been a long and crazy day . Anyways, I bet Kane could do something great with the property and in a much shorter time than Reynolds has spent just "looking for funding."

[serapis]

Does anyone know the progress of this project? Is Reynolds doing anything to get this thing going? I pray we don't have another surface lot DT.

[JeffC]

Does anyone know the progress of this project? Is Reynolds doing anything to get this thing going? I pray we don't have another surface lot DT.

[ChiefJoJo]

Unfortunately, if Reynolds cannot secure financing by the end of August, and the city temporarily paves it for parking, we will all lose out. Reynolds owns the mid-block parcel at 309 Hillsborough, so even if the city pursued an RPF development process of the city-owned 301 parcel, it's use would be somewhat restricted by the fact that the developer would not have the adjacent land on which to build. Instead of having a nice building go up within a year, we'd have a surface lot and an RPF process resulting in something being built a few years down the road--not a pleasant thought. BTW, as far as Kane and NHE go, probably not the best comparison, as most of his projects there are either office (has an anchor tenant), retail, or apartments. Actually, Kane's Lassiter project--with some very pricey condos--still hasn't broken ground after considerable time in development/marketing. The biggest trouble in the credit market seems to be homes/condos, and those are a significant portion of The Hillsborough.

I don't know all the details, but it seems to me that the city has bent over backwards to make this deal work, while the Reynolds' have dragged their feet repeatedly, and made poor decisions on the building plan (no office, office, no office). While they have delivered The Quorum and the David Reynolds bldg on Jones St, The Hillsborough has been a complete debacle. If Reynolds blows it again, if the city has any credibility left, it must move on with a new plan for the site.

[Gard]

Yeah I really hate to see the project fail, but I am also frustrated with Reynolds and think its time to kill the deal. I'd like to see them bring Cherokee or maybe Kane in for the site.

[RaleighRob]

^Cherokee, sure. Or perhaps Empire or others. Not Kane. He'll try to hijack the whole thing so he can get a TIF tax benefit or something. No thanks.

[Subway Scoundrel]

Yeah I really hate to see the project fail, but I am also frustrated with Reynolds and think its time to kill the deal. I'd like to see them bring Cherokee or maybe Kane in for the site.

[tjoad]

From today's N&O Lafayette article, there is a brief mention of the Reynolds' progress:

Reynolds could face the same fate as Empire if it doesn't meet its deadline to get financing by the end of the month.

The company is negotiating financing with Regions Bank of Birmingham, Ala., and is on schedule, partner David Reynolds said.

"We're making great progress," he said. "We're almost there."

[DPK]

The company is negotiating financing with Regions Bank of Birmingham, Ala., and is on schedule, partner David Reynolds said.

"We're making great progress," he said. "We're almost there."

[Jones_]

But Hatem said, I and believe him based on the lack of any new announcements, that its not like people are lining up to develop this site or any other site downtown. Blame it on the investors who bought up mortgage backed securities that were shaky. Nobody is willing to back anything that is remotely shaky now, and it takes really firm commitments either from buyers or builder equity before a lender will come up with theirs.

[dmccall]

So when the Soleil guys are stalled, while trying to address overwhelming demand for high-end hotel space in the Crabtree area, everyone rolls their eyes and calls them stupid. When the downtown projects are in the SAME position, yet with no proven hotel demand, we should give them more time and cry rivers for them because they are victims of greedy people's overzealous investing a few years ago.