Events Orange County Development Briefing—September 22 With the real estate industry changing so rapidly, it is more important now than ever to have good up-to-date information about the local market. On Tuesday, September 22, the Greater Chapel Hill Association of Realtors, in partnership with the Chapel Hill-Carrboro Chamber of Commerce and the Home Builders Association of Durham, Orange, and Chatham Counties is pleased to present the third annual Orange County Development Briefing from 8-10am at the Friday Center. Commercial and residential real estate professionals, along with planners and economic developers will present the latest trends about the regional and local markets as well as the status of approved projects in Orange County and its municipalities.
Seats at this event sell quickly; you can register now by clicking here. Registration is $30 and includes a full breakfast. A special thank you to our sponsors Bagwell Holt Smith Jones and Crowson, P.A., Chapel Hill Downtown Partnership, the Greater Chapel Hill Association of Realtors, Red Door Company and Piedmont Electric Membership Corporation.
New Development
Construction Costs Help 140 West Franklin Prices Ram Real Estate of Palm Beach Gardens, Fla. recently announced it is dropping prices on its new 140 West Franklin Street project in Chapel Hill. The move comes as Ram is seeing construction bids come in at 30 percent below original estimates. The result is that a one-bedroom condo unit formerly priced at $300,000 will now be priced at less than $200,000. Similarly, three-bedroom and penthouse units that were listed at $650,000 will now start at $500,000. Amenities in the project will remain the same despite the drop in price. Real estate experts say the biggest reason for the drop in construction costs is in labor savings. Of 140 West’s 140 units, 15 buyers have reservations for the units and another 15 have signed contracts. For the full story from the Triangle Business Journal, click here.
University Square Project Update
At a recent Community Leadership Collaboration Meeting hosted by the Foundation for a Sustainable Community community leaders heard an update from UNC Real Estate Executive Gordon Merklein on the University Square project. Merklein shared the results of a recent market study for the site and the timeline for completion of the project. The market study results are below. Merklin believes a concept plan could be available in 2010 and that approval would happen between 2011 and 2012. UNC plans for lots of public involvement in the process and is very interested in a civic building, such as the Ackland Art Museum, relocating to the redeveloped site.
Use
Current
Potential
Retail
40,000 sq ft
90,000-120,000 sq ft
Office
74,000
200,000-300,000
Residential
0
300-500 units
Student Housing
1,100 beds
700-1,200 beds
Parking
900 spaces
1,200 spaces
From staff notes
300 East Main Construction to Begin Soon The first phase of new construction on Carrboro’s 300 East Main Street project will begin soon. The first phase is expected to take 12 to 18 months to complete and will feature a 5-story hotel and commercial real estate to be opened early 2011. Construction will begin by taking down the empty building that housed Performance Bicycle and a few residential homes behind it. The $15 million estimated cost for phase one will be provided by the current owner, Main Street Properties, and the hotel partners. The entire project will take up to 5 to 7 years to complete and will cost an estimated $60 million, including the hotel, real estate space and parking deck. For the full story from 1360 WCHL, click here.
Retirement Community Begins Construction in Hillsborough Construction of a four-story Duke Wellness Center and retirement community off of US Highway 70 in Hillsborough is set to begin. Corbinton Commons, as it is called, caused some controversy among neighbors initially as the project will be four stories in height. Most of the neighbor concerns were assuaged by developers adding banking and buffers between the project and surrounding neighborhoods. The developers will also construct a turn lane on US 70. For the full story from the Herald Sun, click here.
Major Durham Shopping Center Approved In order to keep about $2.7 million in sales and property taxes in Durham County instead of Wake, Durham City Council approved a 71-acre shopping center site located off U.S. 70 in Bethesda. The 431,052 square feet of retail space will join the Brightleaf at the Park neighborhood near the fork where U.S. 70, Sherron Road, South Miami Boulevard and Mineral Springs Road come together. The new shopping center would create an estimated 742 jobs and developers have pledged to conduct $2.4 million worth of nearby road improvements. For the full story from the Herald Sun, click here.
Schools
Orange County Teacher Positions have Better Outlook Chapel Hill-Carrboro and Orange County Public Schools will be making less teacher and teacher assistant cuts than originally estimated, even with a $3.3 million budget reduction. Almost all 100 teachers and 40 teacher assistants in Chapel Hill-Carrboro Schools, and about half of the 28 teachers and 21 teacher assistants in Orange County who were in job limbo will be able to return to work this fall. The state, suffering a $225 million cut in K-12 education funds as a whole, will still have to increase classroom sizes and cut many teacher positions to balance the budget. Further cuts will appear in funds for textbooks, remedial instruction, staff development and transportation, among others. For the full story from the Chapel Hill News, click here.
Orange County
Arts Co-op Moving Forward A potential artist co-op on East Franklin Street is moving forward and will begin accepting applications for prosepctive members. According to Chapel Hill Economic Development Officer Dwight Bassett, the co-op, which will locate in the former Rite-Aid location, aims to have about 25 full-time artists participate and would include a gallery to showcase members' artwork. At this point, it is unlikely that the space would include room for a studio. Gordon Jameson, a painter and member of the co-op's leadership team says, "We want it to be a jewel on the street. It will change the look and feel of downtown." Co-op leaders hope the gallery will open this fall. For the full story from the Chapel Hill News, click here.
Foy Considers 2010 Senate RaceChapel Hill Mayor Kevin Foy recently met with political consultants and supporters to discuss the idea of running for Richard Burr’s senate seat in 2010. Foy, who steps down from his mayoral position in December after four consecutive town council terms and eight years as mayor, would not confirm his decision to run in the state election. At this point Foy would be joining three other of senate candidates including Chapel Hill attorney Kenneth Lewis, former state Senator Calvin Cunningham, and N.C. Secretary of State Elaine Marshall. For the full story from the Herald Sun, click here. Bill Strom Leaves Vacancy on Town CouncilChapel Hill Town Councilman Bill Strom resigned from his position Saturday, August 1 three weeks after a deadline that would have allowed voters to fill his vacant position for the fall. Once Strom’s house sold in June, rumors have circled about his resignation from the council but were not confirmed until the end of July. Instead of voters finding a replacement for his seat, the Council will make an appointment. Strom served 2-1/2 terms, working with Ram Development Co. on the 140 West Franklin project and Carolina North development patterns, and served on the Rogers Road Small Area Planning Task Force. For the full story from the News and Observer, click here.
Carrboro Alderman Herrera Resigns With five months left in his term, Carrboro Alderman John Herrera resigned on August 20. According to town clerk Sarah Williamson, Herrera moved out of Carrboro. Herrera recently expressed frustration about the pace of government decision making and a desire to spend more time with his family. Herrera was one of the first Hispanic immigrants elected to office and was founder of the Latino Community Credit Union. The Carrboro Board of Aldermen is on summer break and has not decided what to do with Herrera’s resignation. For the full story from the Chapel Hill News, click here.
Two Candidates will use Public Funds for CampaignOnly two of out of 12 municipal Chapel Hill candidates have decided to finance their campaigns through the newly-created public funding option. Mayoral candidate Mark Kleinschmidt and council candidate Penny Rich are the only two to receive public funds this election period. Public funding grants council candidates up to $3,000 and mayoral candidates up to $9,000, after raising a set amount themselves. Candidates must also promise to cap fund raising. Public funding aims to hinder the money chase that occurs in many political campaigns, and level the playing field of candidates with modest means. Many argue that money has not had a corrupting influence in town politics. For the full story from The Herald Sun, click here.
Kidzu Continues with Relocation PlansKidzu, a children’s museum on East Franklin Street, continues making plans to move from its current location to the top of the town-owned Wallace parking deck on Rosemary Street. The move would expand the museum to more than 15,000 square feet, about four times the size of the current museum. Mayor Kevin Foy recently responded to a letter sent by the chairman of the museum’s board of directors, Jonathon Mills, explaining that the town was still committed to reviewing a formal contract for the move in September. According to the drafted contract, new museum construction would cost a few million dollars. Kidzu is planning a major fundraising campaign to pay for the construction costs after the contract is finalized. For the full story from the Chapel Hill News, click here.
Elizabeth Edwards Opens Furniture Store Elizabeth Edwards furniture store, The Red Window, opened last Saturday on West Rosemary Street. The furniture store has similar styles to that of her mother’s store, The Red Door, which she operated in Japan. Former Senator John Edwards was on hand for the grand opening. For audio commentary from 1360 WCHL, click here. County to Open New Soccer Complex On Tuesday, August 25, Orange County Commissioners and the Orange County Parks and Recreation Department will hold a grand opening for the Eurosport Soccer Complex. The new complex includes five full-size soccer fields, one practice field, a paved walking track, a shade shelter and a concession stand. The Eurosport Soccer Complex is located at 4701 West Ten Road in Efland and was built with money from a 2001 County bond, along with a US Soccer Foundation grant. Members of the UNC women’s soccer team and the Carolina Rail Hawks will be on hand at the opening for a meet and greet. For the full story from the Orange County News, click here.
Travel Spending Rises in Orange County The Chapel Hill/Orange County Visitors Bureau recently announced that spending by domestic U.S. travelers totaled $152.22 million in Orange County during 2008. That equals a 3.2 percent increase over 2007 figures and ranks Orange County 24th out of North Carolina’s 100 counties in travel expenditures. The figures were released as part of the 2008 Economic Impact of Travel on North Carolina Counties study, compiled by the US Travel Association. “The higher spending was the result of increased same-day and overnight travel to Orange County,” said Laurie Paolicelli, Chapel Hill/Orange County Visitors Bureau Executive Director. "Overall visitation is up especially from a day trip perspective. The economy has people traveling closer to home so we are targeting the state and Virginia and focusing on visitors within a 150-mile radius. Based on this, we are seeing more people at special events, seasonal shopping and one-day bus excursions."Across North Carolina, domestic visitors spent a record $16.8 billion, an increase of 2.1 percent in 2008.
State tax revenue generated in Orange County totaled $8.09 million. Some $3.14 million in local taxes were generated from travel-related businesses. These taxes totaling $11.23 million represent an $87 tax saving to each county resident. From a Chapel Hill/Orange County Visitors Bureau Press Release
The Triangle Chatham County May Adjust Impact FeesThe Chatham County Board of Commissioners will be discussing a possible increase of school impact fees at a public hearing scheduled for September 21 in Pittsboro. The Chatham County impact fee, charged to new homes to help pay for town growth and school construction, may vary depending on the size of the housing unit. For a single-family unit the impact fee may increase from $3500 to as much as $8,507, but if the commissioners decided to charge fees based on the number of bedrooms, the single-family units would range from $3,264 to $14,404. Multifamily unit fees would stay constant at $2,484. For the full story from the News and Observer, click here.
Durham Athletic Park Reopens The Durham Athletic Park, former home of the Durham Bulls and backdrop to the “Bull Durham” movie, reopened on August 15 to much fanfare. The city of Durham and the Minor League Baseball Association partnered to refurbish the ballpark, using a 2005 $5 million city bond to fund the work. The result of the work is a completely renovated field, new seats and bleachers, and fresh paint everywhere. The ball park will now host the NC Central baseball team home games and the Minor League Association will use it to train staff on field maintenance. The field will also host the beer and blues festivals. For the full story from the News and Observer, click here.
Durham Superintendent Receives Award Durham Public Schools superintendent Carl Harris was awarded Central Carolina Regional Superintendent of the Year, in a 15 school-district race including Chapel Hill-Carrboro, Orange and Wake Counties. Harris was nominated by his peers in a meeting recently and will now be eligible for the North Carolina Superintendent award. Before serving as Durham superintendent, Harris worked as Franklin County schools superintendent. For the full story from the News and Observer, click here.
Durham Construction Figures ImprovingBuilding permits in Durham have risen from the abyss in March but still show a significant decrease from last year’s figures. Permits issued for the construction of new homes have increased 34.4 percent from fiscal year 2007-08 to fiscal year 2008-09. Simultaneously, permits for additions have improved both in residential and commercial real estate. Permits rose by 12 percent for residential projects and 15 percent for commercial projects compared to last year. Lending has also improved a bit from the winter when capital was barely trickling, though Triangle home builders are concerned that the November expiration of the $8,000 new home tax credit will slow down demand for homes. For the full story from The Herald Sun, click here.
Office Building Approved for Downtown Durham Durham’s Historic Preservation Commission unanimously approved Greenfire Development’s plans for a nine-story office building that will face Main, Parrish and Corcoran Streets in downtown Durham. Approval from the preservation commission was required since the 150,000-square foot building will be located in Durham’s historic district. Greenfire explained that they already have prospective tenants and will need to finish construction in two years. The nine-story building will consist of two lower levels that will blend in with the surrounding store fronts, one intermediate level and six remaining levels for office space on top. Eddie Belk, a commission member who has worked on rehabilitating several downtown buildings, gave enthusiastic approval of the project. For the full story from The News and Observer, click here.
July Real Estate Sales Best YetA July report from the Triangle Multiple Listing Service Inc reported that sales of new and existing homes in that month were the highest they have been in 2009. The report shows that year over year the July figures are still down but experts think the data point to a thaw in the market. Overall, 2,337 homes were sold in July down by 8.5 from July of 2008 but still an improvement from the 21 percent year-over-year drop in June. The median sales prices in the Triangle declined 1.8 percent in July from $190,000 to $186,500. The Triangle region, according to the MLS is Orange, Durham, Wake and Johnston Counties. For the full story from the Triangle Business Journal, click here.
NC’s First Toll Road will Begin ConstructionThe contract for 16 miles of Triangle Expressway (Interstate 540) in southern Durham and western Wake counties was awarded recently, granting North Carolina its first toll road. The $1 billion project came to fruition thanks to the effort and support from the Turnpike Authority, North Carolina Department of Transportation, area MPOs, local elected officials, chambers of commerce, the Research Triangle Foundation of North Carolina and others. Sections of the road will open in 2011 and 2012 and consist of a six-lane, controlled-access road that should save commuters approximately 20 minutes per full trip, whether traveling from Orange to Wake County or vice versa.Compiled from a Regional Transportation Alliance report
Grubb and Ellis Triangle Real Estate Figures Real estate firm Grubb and Ellis released office and retail market figures for the second quarter of 2009. According to the report, vacancy continues to rise in the office market and was at 19.6 percent at the end of July. In Chapel Hill, 113,000 square feet of office space is under construction at locations such as East 54. Vacancy in the Chapel Hill submarket is at 16.3 percent which is one of the lowest vacancy rates among the Triangle office submarkets. The average asking rent for Class A space in Chapel Hill has also declined to $21.91 per square foot which puts the town in a very competitive position with other Triangle communities. On the retail side, vacancy in the Triangle rose to 8.7 percent which is the fifth consecutive quarterly rise and highest rate on record. Orange County had over 20,000 square feet in positive absorption. Overall, Grubb and Ellis forecast for continued unemployment rate—and vacancy—increases for the Triangle heading into 2010. Information collected from Grubb & Ellis Second Quarter 2009 Report Stateand Nation State Budget Gains ApprovalThe North Carolina state budget was recently approved and includes a $19 billion spending plan, lay-offs for 700 state employees, less community services for the mentally ill and a higher sales tax. Governor Perdue signed the plan but with reservations about the lack of taxes to protect services such as education. The taxes provided for in the budget will raise $990 million, but would have been $200 million more with Perdue’s proposed tax hikes. Residents will now pay an extra penny on sales taxes state-wide and wealthier residents will pay a surcharge on their income tax payments. State-wide, school officials will also have to figure a way to cut $225 million from their budget. For the full story from the News and Observer, click here.
Job Market Remains SoftA recent report by Money Magazine, with data from the Bureau of Labor Statistics, shows that nationally, the pace of layoffs slowed from March to May. According to the report, March layoffs were 1.9 percent of total employed but by May, that figure dropped to 1.7 percent. Unfortunately, hiring has not yet picked up. In April, new hires comprised only 3.1 percent of total employed and that number remained at 3 percent for May, showing that companies are reluctant to take on new staff. Economists are increasingly concerned that if the job market does not stabilize and improve, the nation could dip back into a further recession. From Money Magazine National Report Determines 3.46 M Jobs LostAll five of North Carolina’s markets covered in a report by the U.S. Bureau of Labor Statistics experienced job losses from midpoint 2008 to midpoint 2009. Out of the five NC markets, Charlotte suffered worst, losing 53,000 jobs from the middle of 2008 to the middle of 2009. Raleigh lost more than 15,000 jobs and Durham lost 9,000. Out of the 100 labor markets covered in the report, 98 lost over 1,000 jobs, leaving only Baton Rouge, La. with a 500 job gain, and McAllen-Edinburg, Texas with a 300 job gain. For the full story from the Triangle Business Journal, click here.
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