North Hills East

[thewhister]

I know this project has been "dormant" until the TIF issue is dealt with, but I was surfing, and noticed the Kane website has attempted to make it's case for TIFs at North Hills East. It's an interesting read, and I'm sure the TIF guidance the City Manger is developing will make a great debate...

On a somewhat related note, I''m amazed the Renaissance Hotel at North Hills hasn't broken ground yet.

[dmccall]

No public hearing yet. I think the temporary fencing is a risk management move on Kane's part.

I spoke to a City Councilor early in December about NHE (about 1.5weeks after its unveiling) and he/she mentioned that "it's going to be BIG. He's talking about public financing...the works for this thing." Sounds like the TIFs were going to be leveraged from the start.

[dmccall]

Signs are up tonight about a public hearing, however! It says to call 516-2626 for more info.

The N. Raleigh Observer had a story today about how Marlowe Builders just bought the last of 3 houses behind the First Citizens tower (formerly BTI) for about $450,000 each (1,587 sq feet). They are the ones who built the good-looking tudor townhomes on Wade near Oberlin.

[serapis]

Update.

Kane buys hotel for North Hills project

[dmccall]

Glad to see this surface, although I thought he had closed the deal on every property there. We right at the 1 year point since the initial announcement of NHE.

[Jones_]

wanted to run with the apartment ratings post in the Nash thread.....The Alexan looks nice, but the report is quite an eye opener. Construction quality has been on my mind a bit lately since my own buildings had some problems. Lucky for us our developer was under city scrutiny for the Hudson so most of our requests were met....I have concerns about Palladium Plaza too, sound insulation, bad concrete pours....many of us rail on EIFS and there appears to plenty of good reason to demand more for our money whether it be North Hills, the new Marriott etc.....and as always, I will plug again why keeping our oldest buildings is so important....they were built to last.....a friend of mine is renovating a turn of the century house in Franklinton...I asked him what it would cost to say, build the Heck Andrews house from scratch...he estimated 3 millionish dollars (no land in that number). A house of similar size made of modern materials goes for like 1-1.5 million land included. Granted Heck Andrews has had rehab done...it has shown it has more than intrinsic value but has real property value as well.

[DanRNC]

There was a story on the news tonight about this project which mentioned Meeker didn't support the TIF idea but proposed Raleigh fund construction of a pedestrian bridge similar to the I-440 bridge and said he would like to see the number of parking spaces reduced at NHE.

[ChiefJoJo]

Kanes buys more property for NH East... this time, 4200 Six Forks Rd, which is right next to the on ramp for 440.

Also, there is an article on TIF financing. The debate will continue tomorrow, but I don't think Meeker, Crowder, Stephenson, and West will budge on the criteria. I think the conservative approach is the way to go here. Kane should pay his own way.

An excerpt from that article:

Both Isley and Kane say Meeker doesn't support the project because he doesn't like North Hills.

"I think this entire issue has been driven by Charles' distrust or dislike of John Kane's project," Isley said. "Because of this animus against one particular project, we're really going to shut ourselves out of having a policy."

Meeker said that's not so. "North Hills has been a great success, and I am hopeful that North Hills East will do as well," he said.

Meeker is a solidly pro-business mayor, but he's not stupid. Just because he supports reviving DT (which had laid in tumbleweeds for 30 years and the public investment has or will soon more than pay for itself with private investment), doesn't mean he's anti-North Hills. Besides, he makes a good point that N.Hills is thriving on it's own and I commend him (&Crowder, West, Stephenson) for not being held over a barrel by a developer. This is all politics folks. I'm waiting for the "Meeker only supports downtown!" cries from Kane, etc.

[Jones_]

The convenience of stances.....Isley is anti-tax everything until Meeker finally is anti-tax on something...then its whoa no, we have to upport a bold visionary developer! What a pure political ass.....the convention center is as pro-business of a tax funded project as you will ever see but the anti-taxers never supported it....

[ChiefJoJo]

The convenience of stances.....Isley is anti-tax everything until Meeker finally is anti-tax on something...then its whoa no, we have to upport a bold visionary developer! What a pure political ass.....the convention center is as pro-business of a tax funded project as you will ever see but the anti-taxers never supported it....

[dmccall]

Just to play devil's advocate on this:

How is the city's funding a parking to revitalize a decayed area of town called N. Hills East (St. Alban's drive and Six forks to be exact) different than the city's funding of massive streetscape and traffic changes on Hillsborough St.? Both, mind you, are public expenditures to improve private business climate in areas where the private sector has thus far not been able to survive.

I do think that Isley's kind of backed himself in a political corner here. He doesn't seem to favor investment into Hillsborough Street and its diverse bunch of private enterprises while he supports government funding help of a single developer.

Personally, I think that if this TIF proposal is such a "deal" (in terms of long term return), why aren't the many nearby aggresive banks eager to help fund it? Let's not kid ourselves, this TIF concept was really for truly blighted areas - stuff like the dog food plant in SE Raleigh, where not even a half-hearted development, much less a really really nice 1st rate one, would be approved.

I think that there are many votes in the past to which Isley can point and show where Meeker didn't show support for North Hills. (especially the original plan A and the existing development, as well as the tallish buildings proposed for the Exxon and Firestone locations right on top of Six Forks). However, before the latest vote, the one allowing up to 30 stories in the NHE plan, Meeker clearly stated that he is impressed with what John Kane has done with "North Hills West". Meeker voted for this insanely generous design leeway while Crowder voted against it. Do keep in mind, though, that Isley has been around Meeker a lot more than any of us have. Meeker isn't afraid to voice his opinions one on one - he is a politician and is quite aware when cameras are on.

[plus2]

The difference between Hillsborough St and NH East is that redevelopment would never happen on Hillsborough St without public investment. Hillsborough St is a collection of small businesses and neighborhoods. None of them have the capital to pull of a large scale redevelopment and NC State is not in the developer business.

NH East on the other hand will be redeveloped by John Kane, just like NH West was. His demand for TIF is nothing more than a money grab. He was banking on good will from the original NH development to carry the day for him, and the $75 million he would save from the TIF parking deck would simply sweeten the deal for his financial backers.

Whether he follows through on his threat of surface parking and a lower quality developement remains to be seen. But he would be foolish not to make NH East at least as attractive as NH West.

In the end the city of Raleigh cannot let a developer blackmail them into cash handouts or we will see every developer try it regardless of need. See Soliel's bickering as proof.

TIFs need to be used sparingly and only in the case when redevelopment would be impossible without it.

[Jones_]

Meeker makes an excellent point that Kane and Isley miss and that is increaes in tax base go towards a multitude of things, schools, roads, parks (I know Kane has green space), police and fire....to allocate all the gain towards parking deck debt does not reflect how tax gains are really used. I am not totally certain if the hypothetical numbers lay it out like this or not though. I am sure Kane will now argue something to the effect that if the city wants good mixed-use developments it must subsidize them where it is hard for them to work ('burbs).....my answer to that is that the city can force its mixed use hand at the planning table and should only be subsidizing low income efforts (NH is certainly not for the low income) or city-wide venues like Arenas, RCC, PE Center etc. imo.

[ChiefJoJo]

In addition to what plus2 and Jones posted Hillsborough St is also different in two major ways...

(1) It's a historic commercial district whose backbone (the street itself) has existed for 200 years and has been in decline for roughly 15-20. I wouldn't go so far as to say it's blighted, but it's certainly on the cusp in some locations. Certainly, there is no inclination that anything will happen there without some city intervention--and oh, BTW, there is actually a safety proble on the street itself.

North Hills East is next to the $150M NH West ( to Kane for doing that project), so the values for the land to the east are already sky high compared to what they were a few years ago. My parents, their neighbors and some of the lucky sellers on Camelot Drive can attest to the rising values in their neighborhood--also where I grew up (see I'm not a homer ). At the worst, the land Kane is looking at is underused, not blighted or even in need for public subsidy in any stretch of the imagination (there are a couple of fairly new office bldgs back on St Albans Dr for example).

(2) Hillsborough St's investment will be a fraction of the investment for a parking deck at NHE, and I don't think the city is proposing a TIF for that area.

The irony of Kane's request is that he contends that he had to pay so much for the properties that he can't afford to build what he wants (mid & highrises & all the necessary parking) and not recoup his investment without charging exorbitant rents ($30/sf) the market won't bare in that location, yet his own NHW is in large part the reason for the increased property values. Who made him pay 3-4 times the market value for 1950s-era ranch homes anyway?

Why would a city use a TIF for a project that it won't even own or have a stake in? To me that's redicuous. At least DT when the city builds a deck, it will eventually recoup the cost w/parking fees and it benefits lots of divergent businesses, homes, and public interests. It's so funny that it all comes down to free parking. You see, Kane is implying that he's going to roll the parking deck costs into his building rents--that's why he claims he cannot afford it. If it's such a no-brainer, let Kane have the banks pay for the decks, charge the tenants for parking to pay back the bank, and then he can afford to reduce his office rents and do his project. If the bank won't pay for the parking, then reduce the size of the project.

Meeker clearly stated that he is impressed with what John Kane has done with "North Hills West". Meeker voted for this insanely generous design leeway while Crowder voted against it.

[Jones_]

Another note on Hillsborough St vs. Vs. NHE.....the Hst project is essentially street maintenance to the extreme...NHE is construction of an entirely new structure, and of course that is where the order of magnitude difference in cost comes from. I have been trying to wrap my brain around some sort of objective criteria or at least some philosophicaly broad basis for when to apply TIFs so that politic chest beating does not enter into it (wouldn't all things gov't be nice if this were possible )....I am too tired to take a stab right now but was wondering if anyone else wanted to?

Edit: I was also too tired to notice your list Jojo...very good start....

[bullcity76]

where there is a clear public interest, and the proposal should meet high standards:

• developer submit a financing plan that meets minimum criteria and keep open books

• provides affordable housing (say 5-10% of total residential units)

• provides a significant amount (15-20% land area) of open space and/or space for public services (shools, police, etc)

• meet minimum criteria for LEED (green building) certification

• meet a high standard of excellence in architectural style and urban form

• is mixed use in nature

• receives overwhelming neighborhood support

To be honest, i think that's fair if the city is to take on additional and higher risk debt.

[DwnTwnRaleighGuy]

Wasn't this supposed to go before the city coucil today? Or is supposed to be an evening meeting?

[DanRNC]

The decision on this has been shelved. I would imagine there is last minute wrangling to keep this alive.

N&O Story

[bullcity76]

That was the best decision for all involved. That gives the staff enough time to come up with TIF districts and guidelines that will prevent it from becoming a free for all.

[ChiefJoJo]

BTB's latest entry on TIFs.

[ChiefJoJo]

Kane to break ground on The Lassiter this summer. Also mentions he has broken ground on The Ramblewood at the SW corner of 440/Six Forks.

The Lassiter will have 49-units.

[DanRNC]

There is an article stating that Duke Realty may partner with Kane on this project.

Article

[ChiefJoJo]

From the article:

Officials with Duke Realty's Morrisville office are in serious talks with North Hills developer John Kane to build the first 18-story office tower within Kane's proposed North Hills East project on Six Forks Road.

The $60 million building would be constructed at the site of an abandoned Bennigan's restaurant and would have a parking deck on the lower levels to accommodate tenants of Class A office space on the upper floors.

Kane has estimated that development of North Hills East would top $800 million at build-out if it finds public financing for the $75 million parking garage. If no public funds are approved for the parking garage, Kane has said building development would be limited to about $140 million in office, retail and residential inventory, because more land would be dedicated to surface parking.

Kane has spent about $28 million in the acquisition of the 45 acres for North Hills East at the northeast corner of Six Forks Road and the Interstate 440 Beltline and across from the North Hills retail and entertainment complex.

Zoning for the property allows for buildings as tall as 365 feet, or about 35 stories high.

If you recall, Duke wanted to get into the Site 1 selection process, but missed the deadline, and was rebuffed by the city in favor of TMC Partners.

I can deal with 18-stories at North Hills, not 35 stories!

[carynative]

Do they honestly expect anything at 35 stories in that vicinity.. That's crazy in my opinion. 18 would be interesting, and highly visible too. Isn't that area set a little higher than other parts of the city?

[Jones_]

Maybe Duke is thumbing their nose at downtown after the site 1 rebuf....maybe they want to pony up the $$ for Kanes parking deck too. The collection of activity at 440/Six Forks is really starting to overwhelm the roads there....and I thought it was overwhelmed in the early 90's. Planners, while I am sure happy to see density accross the city is going to have to address the fact that the road network, in its disconnected state with a handful of large capacity avenues, managed to support the low density sprawl it was built for, but won't be able to support high density downtown-like development.....