Chapel Hill Real Estate

The Real Estate Report (November 2009)

2009-11-27T11:54:00.000-05:00

Volume 4, Issue 11

November, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

New Development

Chapel Hill Projects to Increase Retail by 13%
Three new downtown real estate projects, Greenbridge, 140 West Franklin, and University Square, will increase retail space in the downtown by 13 percent. Currently, downtown has about one million square feet of retail space. After construction is finished on the projects, another 126,000 to 136,000 square feet will be added. Town leaders and downtown business owners hope the addition of new retail brings in new shoppers from Durham and Raleigh. The developers of the three projects have not announced what new businesses will open in the retail space to date. For the full story from The Daily Tar Heel, click here.

Track Development in Chapel Hill
The Town of Chapel Hill has created a new Web site that allows the public to review current development activity online. The new web pages are the result of a collaborative effort among Town staff members, including planning, economic development, public works, engineering and information technology. Next steps for the group include providing recommendations and implementing improvements to the development review process. A development activity interactive map will also be coming soon. Click here to view the development Web page.

Town Council Approves Larger Kidzu
Kidzu Children’s Museum will be expanding at a new location—on top of the Wallace Parking Deck in downtown Chapel Hill. The move will have a major impact on the museum’s exhibit space adding 9,000 more square feet. The Chapel Hill Town Council’s approval to grant Kidzu a 99-year lease for $99 for the use of the property made the expansion possible. Many believe the growth of the Children’s Museum will help increase foot traffic on Franklin Street and give Chapel Hill a necessary youthful energy. For the full story from The News & Observer, click here.

Goddard School Wins Approval
The Goddard School, a daycare facility that is part of the Winmore development in Carrboro, won approval on November 17 from the Board of Aldermen. There were several minor changes needed in order to approve the school, which had been delayed the past few months. Changes included the slant of the roof and parking spaces; the developer worked with the planning board to make the improvements and received unanimous approval from the Aldermen. For the full story from WCHL 1360AM, click here.

Schools

Chapel Hill- Carrboro City School Board Results
(Vote for 3)

Candidate	Percent	Votes
Michelle Brownstein	27.62	6,991
Susana Dancy	11.29	2,858
Joe Green	16.27	4,117
MaryAnne Gucciardi	14.8	3,746
Christine Lee	12.32	3,118
Gregory McElveen	17.26	4,367

From NC State Board of Elections

Orange County

Election Results

Chapel Hill Mayor's Race (Vote for 1)

Candidates	Percent	Votes
Augustus Cho	2.69	231
Matt Czajkowski	47.4	4,070
Mark Kleinschmidt	48.63	4,176
Kevin Wolff	1.15	99

Chapel Hill Council Race (Vote for 4)

Candidates	Percent	Votes
Jon Dehart	11	3,071
Laurin Easthom	14.53	4,056
Ed Harrison	14.66	4,093
Jim Merritt	11.99	3,348
Gene Pease	13.66	3,815
Matt Pohlman	12.94	3,612
Will Raymond	5.42	1,514
Penny Rich	15.41	4,302

Carrboro Mayor's Race (Vote for 1)

Candidates	Percent	Votes
Amanda Ashley	7.48	173
Mark Chilton	72.07	1,667
Brian Voyce	19.5	451

Carrboro Alderman Race (Vote for 3)

Candidate	Percent	Votes
Sharon Cook	14.86	906
Jacquelyn Gist	24.85	1,515
Randee Haven-O'Donnell	23.93	1,489
Tim Peck	11.46	699
Sammy Slade	24.13	1,471

From the NC State Board of Elections

Political Mailings Claimed by Cam Hill
Former Chapel Hill town councilman Cam Hill admitted hat he sent out a mailer during the mayoral elections with negative comments about Matt Czajkowski and encouraging voters to support Mark Kleinschmidt, but claims he has good reason for not initially identifying himself. Hill says he did not want it to look like he was bitter toward Czajkowski for beating him out in a council election two years ago. Mailings of these kind are considered part of campaign expenses and a public record, but Mayor-elect Mark Kleinschmidt denies any knowledge of its creation and distribution. For the full story from The News & Observer, click here.

Council Weighs Strom Appointment
One of the first orders of business for the newly Chapel Hill Town Council is to determine who will fill former Councilmember Bill Strom's vacant seat. Some residents are petitioning the Council to appoint to the fifth place finisher, Matt Pohlman, as they view it as the most democratic move. However, Chapel Hill-Carrboro NAACP president Michelle Cotton Laws has submitted letters to Mayor Foy and the Council endorsing the two black applicants, Donna Bell and Aaron Shah. The letter outlines several points about the recent election, stating that a “racially homogenous” council does not reflect a broader Chapel Hill community. For the full story from the Daily Tar Heel, click here.

Commissioners Discuss Economic Development
At their annual retreat last week, Orange County Commissioners discussed economic development extensively and examined ways to increase County revenue in the face of increased expenses and decreasing sales tax collections. Commissioners were hit with some stark figures: the County tax base is growing at half the rate of ten years ago, sales tax collections have declined by more than ten percent, too small a fund balance and too much debt. According to new county manager Frank Clifton, property taxes generated $130.6 million or 73.5 percent of the County's general fund budget. Sales tax revenue was $16.9 million or about 9.5 percent of the general fund budget. Last year, the County cut $5.4 million from its budget and manager Clifton warned it could continue this year. Clifton and economic developer Brad Broadwell also spoke with Commissioners about the need for incentives, class B office space, and business incubators. We need to move "from things we don't want to things we do want. We can become more pro-development oriented," said Clifton. For the full story from the Chapel Hill News, click here.

Board of Aldermen Approve Parking Lot
Last week, the Carrboro Board of Aldermen approved a plan to lease the lot on Greensboro Street across from GlassHalFull and next to Open Eye Cafe for parking. Currently, the lot is a makeshift parking lot that was going to be developed in the Roberson Square project. But with the economy going south, the Roberson Square project has stalled. The 90 space lot will be leased for $7,500 per month for the next two years. The Aldermen also expressed a desire to see the lot open before the holiday season.

From the Carrboro Citizen

Irish Pub to Open on Franklin Street
Kildare’s Irish Pub is planning to open one of its pubs on Franklin Street on December 10, moving into the space left behind by Buffalo Wild Wings. Kildare’s pubs are decorated with Irish relics and styled after a combination of five different pubs such as the Cottage pub, Victorian pub and Shop pub. The pub will offer two different bars, one in front and one in back, with 50 beers on tap. For the full story from The Herald Sun, click here.

Bookstore Set to Open near Foster's
This month, a new independent bookstore will open in Chapel Hill next to the Foster's Market on Martin Luther King Blvd. The store, called Flyleaf Books, is being opened by three former employees of McIntyre Books in Fearrington Village and will open in the former Ladies Fitness location. The store will have about 5,000 square feet of space and feature new and used books, children's literature and book-related events such as author readings, book club meetings and open mic nights. For the full story from the Chapel Hill News, click here.

Orange County Homes Sales See Major Rise
After terrible sales in October of last year, Orange County saw significant increases in residential sales this year. Ninety-one homes sold in October this year compared to 62 homes the year before--that's a 47 percent increase. In terms of total dollar volume of homes sold, October of 2009 posted a $28.3 million figure, up 43 percent from the year prior. The gains in Orange County were by far the largest; Durham County was second with a 28 percent increase in number of homes sold. "We’ve hit the floor, and at least we know how low we can go – hopefully -- and operate our business off of that,” Stacey Anfindsen, real estate analyst, says. For the full story from the Triangle Business Journal, click here.

New Shops and Renovations Coming to UMall
University Mall in Chapel Hill is undergoing some significant changes in the coming months that will enhance it as a commercial center in town. The mall will welcome eight new businesses over the next few months including Night Gallery, featuring vintage furnishings and garden antiques, the Virginia Gail Collection, a retail store and design studio focusing on luxury bed linens, throws, and furniture, the North Carolina Hammock Company, a purveyor of high quality hammocks, Izabelle's Closet, a women's casual and resort wear store, Southern Charm, an arts and craft co-op with over 30 local artisans, the Manana, featuring the work of craftspeople from the US and around the world, Day-by-Day Calendar, a kiosk that offers calendars for 2010, and Soft and Sleepy Sheets, a kiosk offering high quality bed linens. In addition, the mall will be upgrading various parts of its facade and entryways. For the full story from the Chapel Hill News, click here.

The Triangle
Pittsboro Extends Moratorium Another 2 Years Pittsboro has again extended its development moratorium for two years due to the town’s sewer capabilities, according to Town Manager Bill Terry.The wastewater treatment plant has a state-approved pump that is designed to handle 750,000 gallons of sewage, while officials argue the plant can really only handle about 370,000 gallons. Even with the moratorium in place, Chatham County’s population continues to grow, increasing roughly by 27 percent since 2000, similar to much of the Triangle. For the full story from The News & Observer, click here. Durham Crime Statistics Released
Third quarter crime statistics for Durham were released last week and violent crime continued to drop but burglaries rose. For the first nine months of the year, violent crime (robberies and aggravated assault) dropped 13 percent. Burglaries rose across the city, likely as a result of the recession. In January burglaries were at 278, 387 in July and 379 in August. The clearance rate, or the number of cases in which an arrest is made, is down in 2009 from 45 percent last year to 29 percent this year for violent crime. And down from 22 percent to 20 percent in property crime. For the full story from the News and Observer, click here.

DPS Superintendent Accepts Washington Post
After serving as Durham Public School Superintendent since July 2006, Carl E. Harris has accepted a position within the U.S. Department of Education that will begin at the start of 2010. Dr. Harris has served North Carolina school systems since 1999, having also worked in Franklin County Schools for five years prior to his move to Durham. During his time with DPS, Dr. Harris has opened six new schools, decreased the dropout rate and increased participation in Advanced Placement courses, among other achievements. Dr. Harris will be taking the position of Deputy Assistant Secretary of Education for Policy and Strategic Initiatives within the federal department. For the full story from The News & Observer, click here.

Hurd Fills Durham Superintendent Spot Hank Hurd will serve as Durham County’s interim superintendent starting January 1, replacing outgoing Carl Harris, and ending his term with the new superintendent appointment in the summer of 2010. Hurd, 56, has worked with Durham Public Schools for seven years as COO and served in the N.C. Department of Public Instruction and at Harnett County Schools. With Harris abruptly taking a position in the U.S. Department of Education, Hurd was appointed with the intention of having as “little disruption” as possible. State and national associations will aid school board members with next year’s appointment. For the full story from The News & Observer, click here. Durham County Faces Gloomy Financial Future Durham County Manager Mike Ruffin predicts the only way out of falling revenues and increasing deficits for the coming fiscal year is a property-tax increase of roughly 4 cents. Ruffin estimates the county will face a $4.37 million increase in debt service costs for 2010-2011 and a drop in revenue from the current year by $9.8 million. Unwelcomed by county commissioners, Ruffin proposed increasing the 70.81-cent tax per $100 property valuation to a 75.53-cent cap. For the full story from The News & Observer, click here. Durham City Manager Says no to Tax Hike In spite of Durham County Manager Mike Ruffin’s estimated tax hike for the coming fiscal year, City Manager Tom Bonfield has announced he does not believe there will be a need for city property tax hikes this year. Bonfield explained the city has not started their budgeting process for 2010-2011 and will not until the fiscal year’s first quarter report comes out later this month. Bonfield also hopes to introduce a 3-year budgeting process and have it completed by the end of 2009. For the full story from The News & Observer, click here.
Raleigh Examining Annexing Three Neighborhoods
At a meeting last week, Raleigh city councilors voted to start incorporating three neighborhoods into Raleigh. The residential areas are Woodlawn Drive and James Street in northeast Raleigh; another residential area in Sumerset Acres off of Trawick Road; and a small parcel of land off Broad Street in northeast Raleigh. The total area would add 350 acres,123 homes, and 307 people to Raleigh. The vote triggers a a process to hold public hearings on the annexation and will not formally begin proceedings until January 19. For the full story from the News and Observer, click here.

Commercial Market Stabilizing
According to a new report by Grubb and Ellis, the office and retail markets are beginning to stabilize in the Triangle. After two quarters of record-breaking negative absorption, the Triangle office market held steady at 19.6 percent vacancy with rents remaining the same. In the retail market, the Triangle experienced another strong quarter of absorption as vacant spaces were backfilled by big box stores. Overall, the report predicts that rent rates in the office market will decline more steeply and that the retail market will see a rise in vacancy in 2010. On the positive side, Grubb and Ellis believe the long term demographic patterns in the Triangle will make it an appealing place new retailers as the recovery unfolds.
From Grubb an Ellis 3Q Reports

Residential Market Showing Varied Improvements The Triangle housing market is showing some improvements and many think it’s because of the first-time homebuyer tax credit. The median prices for homes sold in Durham and Orange Counties increased by 2.3 and 4.4 percent respectively from last year this time. However, Wake County saw a decline in homes sold (11.1 percent) and median price (8.5 percent). Orange County sold 8.8 percent more homes in the third quarter and Durham County saw a major spike in homes priced $120,000 to $180,000. Carl Van Horn, a senior analyst for MORE, said the improvements in the sale of residential lots may be the most promising sign, “Builders can purchase the lots and build a home that is competitive against the resale market now. That is going to be key for the new homes market." For the full story from The Herald Sun, click here.

State and Nation
GDP Growth May Signal End of Recession
The nation’s gross domestic product has hit its highest growth rate since the third quarter in 2007 at 3.5 percent, leading economists to believe the Great Recession has ended. The actual month the recession ended won’t be known until the National Bureau of Economic Research released their data, which is generally several months after the fact. These numbers are definitely a good sign for commercial real estate and will increase the job growth rate, but without governmental programs such as “cash for clunkers” and tax rebates for first-time-homebuyers next year, experts say the economy’s newfound strength will be put to the test.
Report by Robert Bach of Grubb & Ellis

Real Estate Report (October 2009)

2009-10-27T11:47:00.000-04:00

Volume 4, Issue 10

October, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

New Development

Track Development in Chapel Hill
The Town of Chapel Hill has created a new Web site that allows the public to review current development activity online. The new web pages are the result of a collaborative effort among Town staff members, including planning, economic development, public works, engineering and information technology. Next steps for the group include providing recommendations and implementing improvements to the development review process. A development activity interactive map will also be coming soon. Click here to view the development Web page.

University Square Begins Public Outreach
Gordon Merklein, a top UNC real estate leader, and other members of the newly assembled University Square project team held an outreach meeting on Thursday, October 15. The purpose of the meeting was to hear from the public about what would be useful in the redeveloped property. Participants said a grocery store, civic space, parking deck, and inexpensive office space were among the most needed. Lead architect David Manfredi said the development team would balance meeting the needs of local residents in the redevelopment while also creating a space that draws visitors from out of town. The University Foundation, owner of the property, hopes to submit a concept plan to the Town Council in the Spring of 2010.
From Staff Notes

UNC Receives Early Approval for Hillsborough Hospital

UNC Hospitals received approval from the state for work on a new 68-bed hospital that would be located in Hillsborough and cost about $227 million. UNC Healthcare held a meeting to vote on the purchase of 83 acres of land just north of Interstate 40 at N.C. 86 recently from the Stratford Group. Construction of the hospital would not be complete until 2014 and approval still needs to come from the Town of Hillsborough. For the full story from the Triangle Business Journal, click here.

Winmore Facility Delayed Again
Representatives of the Goddard School asked the Carrboro Board of Aldermen to delay their public hearing on Tuesday, October 6. The Goddard School is a childcare facility to be constructed at the Winmore development in Carrboro. Approval of minor modifications to the conditional use permit was delayed after a September 24 raised more questions than answers about the project. Goddard School representatives asked for more time in order to meet with the Carrboro Planning Board and resolve some of the issues. The public hearing will now take place on November 17. For the full story from the Carrboro Citizen, click here.

East 54 Project to Open Soon
The East 54 project off of NC-54 near Finley Golf Course is scheduled to open within a month. Twenty condominium units have been sold and another 51 units that have a 10 percent deposit on them. The project also includes a retail and office component which will welcome Kerr Drug, Deluxe Cleaners, Citrine Salon, and a Charles Schwab. Another 11 businesses could also open by the end of this year, including Neo Nails and Chickadees Children’s Store. The second phase of the project will be completed in June of 2010. For the full story from the Daily Tar Heel, click here.

Phase I Begins for U-Mall
University Mall will begin Phase I of its multi-phase redevelopment this fall and will be shaped based on suggestions and comments collected from the mall’s Facebook page and focus group discussions. The mall’s new design will incorporate a wider variety of brands and merchandise to entice more Chapel Hill and Triangle residents to shop. Phase I will include the refurbishment of the mall’s interior such as changing the floors, lights, millwork and furnishings.
From Chapel Hill Economic Development Office

IFC Shelter Submits Concept Plan
The Chapel Hill Town Council saw an early plan for a new homeless shelter at the corner of Homestead and Martin Luther King Blvd last Monday. Inter-Faith Council Executive Director Chris Moran reviewed the plan which includes a health care clinic and 50 beds as part of a 16,000 sq ft space. Residents near the proposed facility spoke against the project citing concerns over safety. The current shelter is located at the corner of Columbia and Rosemary Streets and has been there for 24 years. The new shelter would be located on land given to IFC as pat of a one dollar per year lease. For the full story from the Carrboro Citizen, click here.

Schools

District Leaders Forgo Bonuses
Chapel Hill-Carrboro City Schools Superintendent Neil Pedersen, along with other administrators, will not receive a bonus this year event though their contract may specify it. Superintendent Pedersen will forgo about $12,000 in bonus money as he felt it was not right for him to receive a bonus when teachers had not received a pay increase or bonus for their work. For full coverage from 1360 WCHL, click here.

Orange County

Chapel Hill Awarded Stimulus Money
To date, the Town of Chapel Hill has been awarded $9.4 million in Federal Stimulus money for a variety of projects throughout town. The money is being used to fund improvements to street conditions with traffic calming devices, pedestrian islands and in-street pedestrian lighting as well as eight new buses. Renovations will also take place on 15 public housing neighborhoods in town. The stimulus money comes with a variety of requirements including that the Town hire a certain number of minority contractors. If those conditions cannot be met, the Town will forfeit the money back to the Federal government. For the full story from the Daily Tar Heel, click here.

Wolff Sends Mixed Signals
Kevin Wolff, candidate for Chapel Hill mayor, announced in mid-October at a WCHL forum that he was dropping out of the race. Wolff cited that he and fellow candidate Matt Czajkowski were fighting over similar voters and not likely to help each other. However, last Thursday, Wolff's wife Mary, submitted a letter to Chapel Hill voters urging them to vote for Wolff. Wolff, while declaring he is not running for office, has not submitted the necessary paperwork to remove his name from the ballot. The deadline has passed for him to submit the paperwork, though he could write a letter to the Orange County Board of Elections stating he has withdrawn from the race in which case votes for him would not be counted. For the full story from the Herald-Sun, click here.

Czajkowski Leads in Campaign Funds
Chapel Hill mayoral candidate Matt Czajkowski has collected and spent more campaign funds than any three of his components combined, with almost $17,400 in donations and more than $9,300 in expenses. Current Councilman and mayoral candidate Mark Kleinschmidt, under the “voter-owned” program, has $15,000 to spend campaigning unless another candidate spends more than $21,000, in which case he will be allotted $4,000 more. Challenger Kevin Wolfe has raised about $200 and loaned himself around $10,000. Fellow challenger Augustus Cho also has raised about $200 and loaned himself $3,000. For the full story from Chapel Hill News, click here.

Chamber Hosts Candidate Forums, Releases Voter Guide
The Chapel Hill-Carrboro Chamber co-hosted election forums for Carrboro and Chapel Hill candidates on October 7 and 8. Candidates were asked questions ranging from how he or she would play a leadership role in recruiting new businesses to the community to what should occur with the waste transfer station. WCHL, The Daily Tar Heel, and EmPOWERment, Inc partnered with the Chamber to produce the forum. Click here to view the Chamber's comprehensive Web site, including commentary about each candidate.

Creative Class Working Group Forming
Chapel Hill Economic Development Officer Dwight Bassett is forming a creative class working group. This group would be charged with looking into ways to retain and grow this socio-economic group. Many cities around the country have formed similar groups to move agendas forward with initiatives to retain and grow this population. If you have interest in serving on this group email economicdevelopment@townofchapelhill.org with Creative Class in the subject line.

Architect Selected for University Square The UNC-Chapel Hill Foundation Real Estate Holdings and Cousins Properties have chosen an architect for the redevelopment of University Square. Cousins and UNC chose Elkus Manfredi Architects, a firm from Boston, to design the project. Manfredi has designed projects for similar campus settings, such as Ohio State, and will work on designs for the project into the spring of 2010. Construction most likely will not begin for another three years. For the full story from The News and Observer, click here.

Twelve Apply for Bill Strom's Seat
The Chapel Hill Town Council will have twelve people to select from when filling former councilman Bill Strom’s vacant seat. The last day to apply for the seat was October 12 and four new people applied. All challengers in the council election—Penny Rich, Will Raymond, Matt Pohlman, Gene Pease, and Jon DeHart—have applied but no incumbent did.

There is a major schism in the Council over when to fill the seat. Councilman Matt Czajkowski is in favor of appointing the fifth place finisher from the election and the Council has received a petition requesting such action. But Mayor Kevin Foy strongly opposes such a move and believes the current Council should select the replacement. In any case, the Council is scheduled to discuss this issue on November 9 and appoint someone if he or she receives at least five votes. If that does not happen, applications will be considered at the Council meeting the following week. For the full story from the Daily Tar Heel, click here. To view the candidate applications, click here.

Varsity Theatre to Reopen
The Varsity Theatre in downtown Chapel Hill is set to reopen at the end of November after having been closed for the past few months. The theatre will open under new management and sell tickets to newly released and classic movies for $3. The new owners, who have declined public comment, will undertake some renovations to the 80-year old theatre including an updated concession area and children's birthday party space. For the full story from the Daily Tar Heel, click here.

Bookstore Set to Open near Foster's
By mid-November, a new independent bookstore will open in Chapel Hill next to the Foster's Market on Martin Luther King Blvd. The store, called Flyleaf Books, is being opened by three former employees of McIntyre Books in Fearrington Village and will open in the former Ladies Fitness location. The store will have about 5,000 square feet of space and feature new and used books, children's literature and book-related events such as author readings, book club meetings and open mic nights. For the full story from the Chapel Hill News, click here.

Orange County Hires Manager
The Orange County Board of Commissioners permanently filled the county manager’s seat, appointing Frank W. Clifton Jr. who has been interim manager since June 15. Clifton has served as county and city manager in North Carolina, Tennessee and Florida. He earned his bachelor’s degree in management and finance from the University of South Florida, and a master’s degree in city management from East Tennessee State University. He also progressed through the City-County Government Administration Program at UNC’s School of Government. For the full story from The News and Observer, click here.

The Triangle
Outlet Mall Moving Forward in Mebane
Just a few miles from the proposed Buckhorn Village mall in Orange County, Tanger Factory Outlets recently purchased 52 acres along I-40 and plans to build 317,000 sq ft center. Construction on the mall is scheduled to finish in late 2010 and the mall will include familiar names such as Banana Republic, J. Crew, and Nike. Leaders estimate the project will cost about $60 million to build. For the full story from the Triangle Business Journal, click here.

New Infrastructure Planned for Apex
Apex, in the midst of a declining economy, continues with plans for a $300 million waste-water treatment facility that will cover 50 acres of land and will also serve Morrisville. Apex’s population is growing fast, from 5,000 residents in the mid-1990s to over 35,000 today, and its infrastructure is in a constant need of maintenance. The waste-water treatment facility has been in the works for seven years and is now 18 months behind schedule due to permitting. Through its three years of construction, the project will cost Apex about $70 million in funds. For the full story from the Triangle Business Journal, click here.

Durham County Approves $1.2m in Incentives
Durham County Commissioners approved a $1.2 million incentive to lure EMC Corporation’s new $280 million research center and 280 jobs. EMC develops information storage technology and is considering sites along the east coast. In addition to the County, the City of Durham also approved a $1 million incentive. The EMC jobs are expected to pay between $60,000 and $70,000. Approximately 20 percent of EMC’s current RTP employees live in Durham. For the full story from the News and Observer, click here.
Durham Council Candidates Debate

Chapel Hill and Durham City Council elections are continuing to heat up as November 3 approaches. Durham candidates sparred recently at a forum sponsored by The League of Women Voters of Durham, Orange and Chatham Counties. The major topics discussed concerned Durham tax rates, decisions on spending, and crime and violence prevention. Steven Williams, Durham mayoral candidate, argued that Durham pays the highest taxes in the Triangle and yet receives the lowest in returns. Although he was not alone in criticizing city spending, his highest-Triangle-tax claim was not fully supported by figures from the N.C. Department of Revenue. Bill Bell, mayoral incumbent, explained that he thought his government had accomplished balancing the citizen’s priorities.

Donald Hughes, running against incumbent Cora Cola-McFadden for Ward I, sat alone on his claims that raising approved water-rates was detrimental for Durham. Matt Drew, for Ward II, discussed how the current crime prevention policies were counterproductive and criticized recent business-incentive deals made by the city. Allan Polak for Ward III, suggested a zero-tolerance policing strategy while Mike Woodard, incumbent for Ward III, explained that a social work and policing mix is what the city needs to curb crime. For the full story from The Herald Sun, click here.

Durham Unemployment Stays Steady
Unemployment rate figures for September, released recently, show that while other areas of the Triangle saw declines in the number of unemployed, Durham's figure remained the same as August. Durham's unemployment rate for September was eight percent, the same as it was in August. Orange County, by comparison declined from 6.8 percent in August to 6.3 percent in September. For the full story from the Herald Sun, click here.

Southeast Raleigh Constructs Transit Center
The City of Raleigh will begin building a new transit operation center that will cost about $21 million in federal stimulus funds, and be located on a 23-acre plot off of Poole Road in Southeast Raleigh. Brasfield & Gorrie, based in Alabama, has been hired to oversee the project. Construction of the administrative building, maintenance facility and bus-washing station, comprising the operation center, should be completed by 2011. For the full story from The News and Observer, click here.

State and Nation
September Sales Figures Show Slight Gain
Data from the International Council of Shopping Centers and Goldman Sachs show September retail sales grew 0.1 percent from the previous month. The modest increase was the first gain in retail spending since August of 2008. Experts say consumers are mostly staying on the sidelines but that they are drawn to spend when there are major discounts and rebates such as the "Cash for Clunkers" program. "The data supports the view that the recovery is unfolding, but it is slow and uneven," said Michael P. Niemira, chief economist at the council. For the full story from the News and Observer, click here.

In other retail news, the News and Observer reports uneven sales figures for a variety of retail stores across different sectors. To view sales figures for some national retail chains, click here.

The Real Estate Report (September 2009)

2009-09-24T01:16:00.000-04:00

Volume 4, Issue 9

September, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

New Development

Winmore Day Care Center Delayed
Approval of a day care facility at the Winmore Development in Carrboro was delayed last week. Concerns were raised by members of the Board of Aldermen and near-by residents about the traffic impacts of the project. It is estimated that parents of up to 156 children would descend on the development twice a day for pick-up and drop-off. The 10,000 square foot facility, to be called the Goddard School, would charge about $1,300 per month for infant services and slightly less for older children. For the full story from the Daily Tar Heel, click here.

Architect Selected for University Square
The UNC-Chapel Hill Foundation Real Estate Holdings and Cousins Properties have chosen an architect for the redevelopment of University Square. Cousins and UNC chose Elkus Manfredi Architects, a firm from Boston, to design the project. Manfredi has designed projects for similar campus settings, such as Ohio State, and will work on designs for the project into the spring of 2010. Construction most likely will not begin for another three years. For the full story from The News and Observer, click here.

Pittsboro May have Big-Box Retailer
A big-box retailer may be coming to the intersection of Hwy. 15-501 and Russet Run in a 43-acre shopping center already approved in Pittsboro. Ricky Spoon, of Ricky Spoon Builders, has not said what big-box store he has in mind, but a more detailed agreement should come out in the next 60 to 90 days. Spoon is the developer of Bellemont Station where Lowe’s, Carolina Brewery, McDonald’s and other businesses are located. The new shopping center will probably include a grocery store, pharmacy, sporting goods store and clothing stores.
From The Chatham News

Schools

Chapel Hill-Carrboro Schools Release 2009 Benchmarks
The Chapel Hill-Carrboro City School District released its 2009 "report card" figures for the district's five year strategic plan. The 2009 figures are being compared to 2008, which was the benchmark year and is being used as a starting year for comparison. The Report Cards track four key areas: growth, proficiency, the completion of important courses, and the graduation rate. Scores above 100 mean the benchmark was exceeded, less than 100 mean it was not achieved. For 2009, the district's overall score was 99.7 percent for all students. For economically disadvantaged students, the overall score was 96.9 percent. For Latino students, the overall score was 102.5 percent. For African American students, the overall score was 101 percent. For the full story from the Chapel Hill-Carrboro City Schools, click here.

Orange County

Town Considering Dawson Hall
The Chapel Hill Town Council is considering the purchase of Dawson Hall, a 70,000 square-foot office building located off Weaver Dairy Road, in order to help the public library and the police department. Currently owned by Southern Village developer D.R.Bryan, the building has not been occupied since it was built a few years ago. The town plans to use the building at first to hold books from the public library to speed its renovation. After the library is completed Dawson Hall would become the police department’s permanent location.
From the News and Observer

Chamber Election Coverage Gearing Up
The Chapel Hill-Carrboro Chamber of Commerce is holding two community forums with Chapel Hill and Carrboro mayoral and council candidates. On Wednesday, October 7, from 6:30-9:00pm, the Chamber will hold a forum with Chapel Hill candidates at the Lincoln Center. On Thursday, October 8, from 6:30-8:30pm at Carrboro Town Hall, the Chamber will hold a forum with Carrboro candidates. All interested individuals are welcome to attend. In mid-October, the Chamber will compile information from the forums and in-person interviews and provide a comprehensive guide to the elections via an elections Web site. Visit www.carolinachamber.org/elections in mid-October for more information.

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.

Alderman's Vacancy to be Filled in November
The Carrboro Board of Aldermen decided to leave former Alderman John Herrera’s vacant seat open until elections in November. Mayor Mark Chilton proposed that Herrera's seat be filled by the highest non-incumbent vote-getter in the November election. Until Herrera's seat is filled, Alderman Randee Haven O’Donnell is responsible for completing Herrera’s obligations to the board. With his move to Holly Spring and his announcement about not running for re-election, Herrera’s vacancy came as no surprise. For the full story from The Carrboro Citizen, click here.

NRG Forum Results
Neighbors for Responsible Growth recently held a forum with Chapel Hill Town Council candidates about future growth in the community and how to keep it "green." Incumbents Jim Merritt, Ed Harrison and Laurin Easthom were joined at the forum by challengers Gene Pease, Matt Pohlman, Will Raymond, and Penny Rich. Many of the responses focused on transportation issues including expanding bike and pedestrian mobility and bringing a light rail system to the Triangle and Chapel Hill. To view the full coverage from the Daily Tar Heel, click here.

Varsity Theater Space Finds Prospects
The Chapel Hill Downtown Partnership is discussing the possibility of changing the recently-closed Varsity Theater into either a non-profit community arts venue or an arts film theater. UNC Professor Greg Gangi recommended the idea of opening an arts film theater similar to the Nickelodeon in Columbia, S.C.--a successful business since 1979. Gangi is pushing to make the decision about to use the Varsity quickly before the space is converted into another use. However, with both the town and University short on funds, it may be difficult for either entity to move forward in a significant way. For the full story from The Daily Tar Heel, click here.

University Mall Undergoing Renovations
Madison Marquette, owner of University Mall and Rams Plaza, is undertaking a multi-million dollar renovation of the mall that is scheduled to wrap up before November. The renovations will brighten the mall, add more seating in the center court, and allow more arts and cultural events to be hosted there in the future. Construction will take place around mall hours. While Madison is beginning the renovation work, it is also launching a campaign to bring national clothing retailer American Apparel to the mall. The overall vision is for the mall to have a strong mix of local, regional and national retailers. For the full story from the Herald Sun, click here.

Restoration Begins on Historic Hillsborough Inn
Hillsborough’s The Colonial Inn, erected in 1838 on West King Street in the downtown, will be receiving multiple structural improvements in the next seven months thanks to an order set up by the town’s planning director, Margaret Hauth. Inn owner Francis Henry is required to make 12 specific repairs each with a deadline and $100 fine per day if they are not completed. The changes are coming about as a result of a complaint filed by resident Joe Rees who cited the town’s 2007 ordinance regarding building stability and appearance. For the full story from The Chapel Hill News, click here.

Grant Starts Hillsborough Park
The North Carolina Parks and Recreation Authority granted $500,000 to go towards developing Fairview Park, a joint project by Orange County and the Town of Hillsborough. The award came from the N.C. Parks and Recreation Trust Fund and was one of 21 awarded from an allotted $8.4 million. Fairview Park will be located in Hillsborough and will provide a variety of facilities including basketball courts, a baseball field, volleyball court, playground and hiking trails. The grant will be matched dollar-for-dollar with county bond funds, and construction should begin next month.

Parking Alternatives Considered for Hillsborough
I n order to begin discussing possible solutions to the most crucial downtown parking problems, Hillsborough town staff is working with several businesses to hand out surveys. From September 28 to October 9, these surveys will be available during regular business hours in Tupelo’s and Cup a Joe, along with other locations later on. While the surveys are collected and reviewed, a study of traffic patterns downtown will also be conducted. The findings should be ready to present in November. For the full story from News of Orange, click here.

The Triangle

MLS Figures Mixed
The Triangle Multiple Listing Service reports that 1,957 homes sold in August, which was down about 16 percent from July and 11 percent from August of 2008. While volume was down, sales prices are trending well. The average sale price in August was $230,415, up a bit from July's average sale price of $229,532. The August average sale price was still down 7.2 percent from the year prior. The median sale price was around $187,000, a 5.3 percent decline from a year ago. Home tours for houses priced at less than $250,000 spiked in August--likely because of the $8,000 first-time home buyers credit. For the full story from the Triangle Business Journal, click here.

Home Appraisals Dropping
Appraisals marked lower than the asking price of homes in Durham and surrounding areas have become a recent trend, an unfortunate consequence of the derailed real estate market. As a result, lenders are a bit more nervous about making the loan to the buyer. One home sold by Phoenix Realty in Durham, for example, was appraised at $20,000, or 12 percent, less than the asking price. A board member of the N.C. Professional Appraisers Coalition said that increasing number of foreclosures and the depressed housing market may be the main cause in these variations. For the full story from The Herald Sun, click here

Brookings Report Says Triangle Economy Improving
A recent report by the Brookings Institute cites that parts of the Triangle's economy are improving, though indicators such as unemployment and foreclosure rates continue to lag. The report says the Raleigh-Cary metro area saw its Gross Metropolitan Product (GMP) increase by 0.3 percent over its first quarter figures. This is a good sign that businesses are continuing to increase production. Housing prices in Raleigh also rose 1.1 percent over last year compared to a 1.7 percent decrease nationwide. Figures such as unemployment, though, continue to remain bleak. Unemployment is a lagging indicator, though, and won't likely pick up for a few more months or year. For the full story from the Triangle Business Journal, click here.

Triangle Ranks High in Residents with Degrees

The US Census Bureau's new American Community Survey shows that the Raleigh-Durham area, which consists of Chatham, Durham, Franklin, Harnett, Johnston, Orange, Person and Wake counties, has the third highest number of residents with at least a four year degree at 40 percent. The Triangle ranks behind the Washington-Baltimore-Northern Virginia at 42 percent and San Jose-San Francisco-Oakland at 41 percent.

Raleigh-Durham is well ahead of other areas of North Carolina. Asheville was second in the state with 28.4 percent followed by Charlotte at 27.6. Among Triangle communities, Cary leads the way with almost 65 percent of residents older than 25 having a four year degree. Filtering the data according to professional or doctoral degrees, the Triangle drops to sixth in the nation. For the full story from the Triangle Business Journal, click here.

State and Nation

Falling Rates Leading to More Mortgage Applications
The Mortgage Bankers Association reports that mortgage applications are up as interest rates continue to drop. The Mortgage Bankers Association index of applications rose to 668.5 at the end of last week, its highest level since May. Refinancing remains the bulk of applications at about 64 percent. MBA's index confirms this statistic citing that home purchase applications rose 5.6 percent and refinances 17.4 percent. For the full story from the Triangle Business Journal, click here.

Census Data Points to Improvements in NC
Census data released this month show some improvements to quality of life in North Carolina but state officials remain "cautiously optimistic." Data show the number of North Carolinians without health insurance decreased from 2007 to 2008 (from 16.4 percent to 15.4). Data also show that the percentage of people living in poverty declined from 15.5 percent in 2007 to 13.9 percent in 2008. Some believe the improvement in health insurance coverage is the result of government efforts to insure newly unemployed who may not have had insurance through work. For the full story from the News and Observer, click here.

The Real Estate Report is produced monthly by the Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of Realtors

The Real Estate Report (August 2009)

2009-08-27T09:50:00.000-04:00

Volume 4, Issue 8

August, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

Quick Links

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 Race Chapel 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 Council Chapel 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 Campaign Only 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 Plans Kidzu, 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 Fees The 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 Improving Building 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 Yet A 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 Construction The 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

State and Nation
State Budget Gains Approval The 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 Soft A 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 Lost All 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.

The Real Estate Report (June 2009)

2009-06-25T23:38:00.000-04:00

Volume 4, Issue 6

June, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

Quick Links

New Development

Orange County

The Triangle

State and Nation

New Development

Council Approves Carolina North
The Chapel Hill town council unanimously approved 3 million square feet that will make up Carolina North, a satellite campus north of UNC-Chapel Hill. Of the project’s 600 total acres, 133 are accounted for in a 20-year development agreement and will be located near Martin Luther King Boulevard and Estes Drive. The university eventually plans on increasing the total square feet of Carolina North by 2 million on an additional 100 acres. The development agreement also includes building a new Law School facility, for which construction would be delayed another couple of years. Chancellor Holden Thorpe said the approval “was an important step,” and a spokeswoman for Neighbors for Responsible Growth, Janet Smith, praised the council for incorporating many of the group’s suggestions. For the full article from The News and Observer, click here.

Orange County

Orange County Approves Budget, Saves Libraries
The 2009-10 budget of $177.6 million, approved by the Board of Orange County Commissioners, channeled $436,870 to keep the Cedar Grove and Carrboro branch libraries functioning for the coming year. The budget, passed without dissent, contained a lower ad valorem property tax rate than last year, in order to counteract the 23 percent increase in Orange County property values. Property tax was set at the revenue-neutral rate of 85.8 cents per $100 of assessed property value. The Chapel Hill-Carrboro City School District tax rate was also revenue-neutral at 18.84 cents per $100 of assessed valuation. In order to have the money to keep the libraries open, the budget included a few personnel changes including the implementation of a 12-month hiring freeze, effective July 1, for all vacant positions in 2009-10. For the full story from The Herald Sun, click here.

Chapel Hill Awarded "Most Livable" City

Chapel Hill was given the “Most Livable” small city in America award for 2009, praising Mayor Kevin Foy, specifically, for the birth of the fare-free transit system set up in 2001. More than 200 cities competed to win the award that was sponsored by the U.S. Conference of Mayors and Waste Management. Criteria for the award focused on mayoral leadership, creativity and innovation and impact on city residents. Chapel Hill has the second largest transit system in North Carolina behind Charlotte, and has raised rider participation by 103 percent, from 3 million in 2001 to 7 million in 2009. The system is different from other cities’ because free fare for transportation is open to all community residents, not just students and faculty of the local university. Charleston, South Carolina was awarded the “Most Livable” large city in the country for 2009. For the full press release from the U.S. Conference of Mayors, click here.

Chapel Hill Tax Rate Decrease Approved

The Town Council unanimously approved a tax rate reduction of 15 percent, lowering the 2009-10 rate from 58 to 49.4 cents per $100 of assessed property value. The reduced tax rate means that for properties that saw an average increase in value during the county’s revaluation, property owners will pay the same in city taxes as they did last year. The countywide tax rate and Chapel Hill-Carrboro city schools district tax must be factored in as well. They are expected to be at most 86 cents and 20 cents per $100, respectively. The town was able to cut the 58-cent tax rate due to $2.5 million collected through cost saving initiatives implemented last fall. For the full story from The News and Observer, click here.

Chapel Hill Mayoral Picture Shifting

Chapel Hill Mayor Kevin Foy will not be running for a fifth term, explaining he has reached the goals he set when initially elected in 2001. Current Town Councilmen Mark Kleinschmidt and Matt Czajkowski have shown interest in replacing Foy, and Czajkowski has already confirmed his intentions publicly. He announced on 1360 WCHL that he aims to bring “balance, practicality, and common sense” to the position. Augustus Cho, a former chairman of the Orange County Republican party, stated he would also be running for mayor in the Democratic strong hold. Foy said in a statement released May 28 that he is “confident that Chapel Hill will continue to be a great place to live, work, and go to school.” Foy did not say what his plans were for the future. For the full story from The Herald Sun, click here. To hear an interview with Matt Czajkowksi on 1360 WCHL, click here.

Carrboro Alderman Candidates Coming Forward

Carrboro Alderman John Herrera announced that he will not be seeking re-election for the Carrboro Board of Alderman, and supported the selection of community activist Sammy Slade. Herrera was elected to the board in 2001 and 2005, but has decided to focus more on his family having been recently remarried. Herrera backed 34-year-old candidate Slade, claiming his part-Latino background would bring diversity to the board. Randee Haven-O’Donnell said she is planning on running for her seat again in the November election, and Jacquelyn Gist has announced she will do the same. For the full story from The Herald Sun, click here.

140 West Project at a Stand Still

Similar to many commercial real estate companies, Ram Development Company’s plans for 140 West Franklin may not be followed through with as originally planned. Designed to bring together the east and west sides of downtown, 140 West Franklin would have consisted of 140 condominiums, ground-floor shops and a public plaza. Currently, Ram is trying to find enough pre-sales to continue with its plans, but with the current real estate barriers plans have halted for a while. It has become even harder for developers to borrow money these days as well because lenders want much of the property to be pre-sold or pre-leased. For the full article from The News and Observer, click here.

New Orange County Manager
Frank W. Clifton, Jr. replaced Laura Blackmon as the interim Orange County Manager June 15. Clifton’s responsibilities include directing day-to-day local government operations, working with the Board of County Commissioners, county departments and the public. He has previously worked as County Manager of Onslow and Cabarrus County, NC, and City Manager of Casselbury, FL, and City of Bristol, TN. After earning a bachelor’s degree in Management and Finance and a master’s in City Management, he furthered his education at the School of Government at UNC-Chapel Hill. Concerning his new position, Clifton stated, “Orange County offers a wonderful quality of life” and “political stability.”
From Orange County Press Release

Chapel Hill Retail Market Analysis Released

Dwight Bassett, Chapel Hill’s economic development officer, recently presented the results of a retail market analysis for the town at Morehead Planetarium. The study analyzes the retail market by sector to determine how well current retail offerings meet the demand of Chapel Hill consumers. The study found Chapel Hill’s market has an oversupply of restaurants, highlighting the fact that Chapel Hill draws consumers from out of market to dine in town. Conversely, department stores, electronics and men’s clothing were all retail categories that are undersupplied in town. Bassett estimates that 234,000 square feet of department stores are needed in the community to meet local consumer demands. Other sectors that are undersupplied are automobile dealers, warehouse clubs and superstores, gas stations and women’s clothing. For the full analysis, click here.

Pozen Extends Lease Until 2015

The drug company Pozen, located in The Exchange at Meadowmont in Chapel Hill, extended its original lease set to end in 2010, to carry on to September 2015. For Pozen’s 17,000 square feet of space, rent will increase from $24.21 per square foot to $26.73, a total lease value of about $2.87 million. With the new lease Pozen will also receive some new perks including the first offer right on available space on the third and fourth floors of The Exchange. Pozen will also receive over $50,000 to use toward property improvements and refurbishments. Pozen has worked with GlaxoSmithKline and AstraZeneca on different drugs in recent years. For the full article from the Triangle Business Journal, click here.

Varsity and Chelsea Theaters to Be Sold

The owner of the Varsity Theater, who announced recently his plans to sell the small Chapel Hill attraction, has also decided to put Chelsea Theater, of Timberlyne plaza, on the market. Bruce Stone said selling the two theaters would be “a package deal,” and showed much confidence in finding a buyer. Chelsea Theater is popular with the residents of Carol Woods retirement community and attracts fans of independent films. Stone said as long as the new owner continues to show a “reasonably intelligent film,” the theater will attract customers. For the full story from The News and Observer, click here.

Hospitality Improves Orange County Economy
Last year, visitors spent $147.55 million in Orange County and provided $10.85 million in local and state sales taxes, according to a Hospitality Market Overview from the Chapel Hill/Orange County Visitors Bureau. Tourism in Chapel Hill and Orange County overall also provided $85 worth of tax savings per resident and created approximately 1,740 jobs for the region. Visitor spending has been on a steady increase since 2002, and increased by about $10 million from $137.61 million in 2006. The report confirmed that a booming tourism market boosts employment, saves taxes for local residents, and helps governments diversify their tax base.
>From Chapel Hill/Orange County Hospitality Market Overview, March 2009

Pease to Run for Council

Gene Pease announced he will be running for a position on the Chapel Hill Town Council when the filing period opens July 6, having prior experience in numerous town committees and serving as CEO of several businesses. With 20 years of experience in budgeting through difficult economic cycles, Pease has also served on the OWASA board, Chapel Hill Planning Board and Chapel Hill Public Library Building committee among others. He said he is ready to face the challenges set by “uncertain, yet exciting times.” He will be joined by Penny Rich and incumbents Ed Harrison, Jim Merritt and Laurin Easthom for council. Councilmen Mark Kleinschmidt and Matt Czajkowski will be running for mayor accompanied by the chairman of the town Transportation Advisory Board, August Cho. For the full article in The News and Observer, click here.

The Triangle

Durham Budget Decreases from Last Year
Durham County commissioners approved the 2009-10 budget at $839 million, a 6.2 percent decrease from last year’s budget, but with a larger general fund than in 2008-09. The general fund will increase to $710 million due to more “pass through” federal and state money for specific uses. County revenues for 2008-09 were under what was expected by $18 million, and even less revenue is predicted for the coming year. Public schools have a $2.9 million funding cut in the 2009-10 budget, which posed a problem earlier this month but has since been resolved. Durham’s property-tax rate will be held at 70.81 cents per $100 of assessed property value. For the full article from The News and Observer, click here.

Patterson Place of Durham Starts Phase Two
Patterson Place, a mixed-use development located at the intersection of U.S. 15-501 and Interstate-40 in Durham, has found the anchor tenants and financing necessary to move on to its second stage of development. Duke Medicine and AT&T are among the early tenants occupying 31,000 and 5,000-square-feet of property, respectively. CMC Hotels of Cary bought a hotel site in the development and plan to open a 130-square-feet Springhill Suites hotel by Marriot in January. BB&T is providing about $17.4 million in project financing for Patterson Place, Brasfield & Gorrie is the construction contractor and LS3P is the architect for the project. Phase one ended in 2004 and the development was completely filled by the end 2008, according to the Triangle Business Journal’s quarterly space survey. For the full article from the Triangle Business Journal, click here.

Jordan Lake Bill Pushes Forward

A bill created to implement pollution clean-up from neighborhoods and commercial developments surrounding Jordan Lake, moved closer to Governor Perdue’s desk after senators approved compromise legislation 47-0. State Sen. Floyd McKissick, a Democrat from Durham, praised the initiative while Sen. David Hoyle, a Democrat from Gaston, worried about the impacts on the N.C. Department of Transportation. For the full article from The Herald Sun, click here.

Stimulus Money Given to NCDOT
Approximately $103 million in federal stimulus money has been awarded to the North Carolina Department of Transportation, $7.7 million of which will be given to the Triangle, Governor Perdue’s office explained. The $103 million will go to 17 projects covering 21 counties in the state. Projects in the Triangle include resurfacing and shoulder reconstruction on 3.8 miles of I-540, resurfacing 11 miles of I-40 west of Morgan Road in Johnston County, and resurfacing 23.2 miles of U.S. 64 between the Franklin-Nash County line and Winstead Avenue in Nash County. Although the money granted to N.C. was approximately 25 percent less than what NCDOT had estimated, the Federal Highway Administration predicts that every $1 million spent on transportation will create about 30 jobs. For the full story from the Triangle Business Journal, click here.

Raleigh Jobs Sprawl

The Raleigh-Cary metropolitan area suffered more from “job sprawl” than the Durham area according to a new report done by the Brookings Institute. The study used ZIP codes from the nation’s 98 largest cities from 1998 to 2006 and analyzed job numbers as they varied in distance from central business districts. Thirty percent of Raleigh-Cary jobs were over ten miles from the center of downtown Raleigh, while less than 17 percent of Durham area jobs were over ten miles from Durham’s center. From 1998 to 2006 Raleigh experienced a 3.5 percentage point increase, and Durham saw a 0.7 percentage point drop in jobs over 10 miles from the center of business. Job sprawl effects can include boosting energy consumption, increasing commuting times and isolating low-income and minority workers from employment in outlying areas, said the study’s author, Elizabeth Kneebone. For the full article from the Triangle Business Journal, click here.

State and Nation

Perdue Proposes Tax Increase
Governor Beverly Perdue proposed an increase in state taxes from $750 million the House approved to as much as $1.5 billion, in order to keep more teachers employed and to restrain enlarging classrooms. Perdue said that heavy budget cuts would close the gap on the state’s $4.7 billion budget deficit but did not specify what additional taxes she would impose. In the past Perdue has approved of higher taxes on cigarettes, beer, wine and alcohol. Republicans called the proposed tax increase “irresponsible” and “job destroying.” Even Perdue’s political allies were surprised by her stance in a state with a double digit unemployment rate. For the full story from The News and Observer, click here.

Fed Reports North Carolina Improvements

North Carolina is showing signs of economic improvement with higher orders and shipments in manufacturing and price increases in the real estate market, a Federal Reserve report stated recently. The report, called The Beige Book, is a compilation of business condition evaluations from the country’s 12 district banks of the Federal Reserve. The fifth district, made up of most of West Virginia, North and South Carolina, Washington, D.C., Virginia and Maryland, has been making improvements overall. The report noted that North Carolina, specifically, had seen more foot traffic and higher revenues in many grocery stores in recent weeks. Memorial Day traffic had increased slightly since last year, the wedding industry remained strong, and Raleigh was expecting an increase in the demand for manufacturing workers by July. The report did show that retail revenue had declined, and high vacancy rates remain. For the full story from the Triangle Business Journal, click here.

Consumer Confidence-and Inflation-Continues to Rise
The Reuters poll announced that the country’s consumer confidence rose from 68.7 in May to 69.0 in June, the highest rating in nine months. It still remains below the level experienced in September 2008 when Lehman Brothers filed for liquidation and is lower than the 69.5 economists had expected for June. The five-year inflation outlook has increased from May’s 2.9 percent to 3.1 percent this month, the highest rating since February of this year. Import prices have risen more than expected as well, which can increase inflation. For the full story from the New York Times, click here.

The Real Estate Report (May 2009)

2009-05-26T10:47:00.001-04:00

May, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

New Development

Traffic Analysis Detailed for Carolina North

By the year 2025 Carolina North will double the amount of traffic in Chapel Hill, mainly on Martin Luther King Jr. Boulevard, according to a draft of a traffic impact analysis released earlier in May. Vanasse Hangen Brustlin Inc., the consultants for the analysis, explained that vehicle, park and ride, transit, pedestrian, bike and others would increase from 40,000 to 80,000. The study does point out that MLK Jr Blvd will see a major increase in traffic regardless of whether the project is built and that the traffic improvements made by Carolina North will make the flow of traffic much better than if the project is not built. For the full story from The Herald Sun, click here.

Carrboro Subdivision Denied

Colleton Crossing, a development proposed for Reynard Road between Fox Meadow and Highlands, was unanimously denied by the Carrboro Board of Alderman on May 21. The project was designed to be a 39-dwelling subdivision on 31.6 acres of land. Residents were not supportive of the project due to concerns over traffic. For the full story from The Carrboro Citizen, click here.

Schools

Northside Elementary Construction in Question

According to Orange County’s Budget Director, with Orange County nearing its 15 percent debt limit it is unlikely that there will be money available to build Northside Elementary 11 as planned for 2011. County Commissioners approved construction of the school, between McMasters and Caldwell Street, last year but current economic circumstances have put budget spending on hold. The Board of Commissioners will continue to meet the rest of the month to discuss options. For the full story from 1360 WCHL, click here.

Orange County

OWASA Requests Higher Water Rates

Orange Water and Sewer Authority (OWASA) is calling for a 9.75 percent rate increase, raising the water bill of a typical, 5,000 gallons per month residence from $68.24 to $74.92. The rising prices of chemicals that clean wastewater are driving up costs. The public hearing to discuss rate increases will be May 28 at 7 p.m. in the Chapel Hill Town Hall and will also be televised on local cable channel 18. For the full story from the Chapel Hill News, click here.

Property Tax Rate Decrease Proposed for Chapel Hill

Chapel Hill’s Town Manager Roger Stancil is calling for a property tax rate reduction of 14 percent from last year, lowering the current rate of 58 cents per $100 of assessed property value to 49.7-cents. The proposal would include no job layoffs or furloughs and no salary increases for town employees. Stancil says that last year when the economy began to plummet the Council started taking money saving measurements that were so effective that Chapel Hill has room to reduce property taxes. Approximately $20 million will be delayed in taxpayer-authorized borrowing so as to not increase an already heavy debt burden. For the full story from The News and Observer, click here.

Carrboro Proposes Budget

Carrboro Town Manager Steve Stewart unveiled a 2010 budget proposal on May 12 that includes a property tax rate decrease from 68.63 to 58.94 cents per $100 valuation. The rate is considered revenue neutral meaning Carrboro will not see any increase in revenue despite increases in property valuations. Stewart said that because of the economic decline over the past months his proposal is a “conservative and very safe” route to take. The Aldermen were pleased to see the proposal include a revenue-neutral tax rate while maintaining services. A public hearing for the recommended budget will be held May 26 at 7 p.m. at Carrboro Town Hall. For the full story from the Carrboro Citizen, click here.

Community Visioning Task Force Seated

After the Town Council voted to expand the Community Visioning Task Force earlier this month, it voted to seat the Task Force on May 18. Several seats were designated for various segments of the community including business and university. Glen Greenstreet of Greenstreet Builders will be the business community representative, Gordon Merklein for UNC-Chapel Hill, and Etta Pisano will represent UNC Health Care. Civil engineer Bruce Ballentine will also be on the Task Force, which is charged with examining Chapel Hill’s comprehensive plan and making recommendations for how it can manage future economic growth.

From Staff reports

Orange County and MLS Figures

According to the Triangle Multiple Listing Service 57 homes were sold in Orange County in April representing a 48 percent decrease from that month last year. April’s inventory for sale represented a 6.5 month supply, up from 5.9 a year ago while the median price fell 11 percent to $258,000. Overall, Triangle statistics for the past few months are trending better. For instance, 1,628 homes were sold in the Triangle in April, which is the highest monthly total in the past six months. Supply for the Triangle is also dipping from 14.9 months in November to 7.5 months in April. For the full story from Triangle Business Journal, click here.

Orange County Manager Proposes Closing Libraries

Orange County Manager Laura Blackmon’s budget proposal, given May 19, may close Carrboro Branch and Cedar Grove Libraries and decrease school funding by $3.1 million. In order to reflect this year’s property revaluation, Blackmon proposed a budget of approximately $177.6 million. This three percent budget decrease from last year would be reached by decreasing the tax rate from 99.8 cents per $100 assessed property to a “revenue neutral” 85.8 cents per $100. With the closure of the libraries, Blackmon suggested transferring staff to the new main county library opening in Hillsborough in the fall. At least one commissioner, former-Carrboro Mayor Mike Nelson, opposed Blackmon’s proposal to close the libraries. The county must adopt the budget on or before its final meeting of the fiscal year on June 16. For the full story from the News and Observer, click here.

New Plans for University Square of Chapel Hill

University Square, located on Franklin Street in downtown Chapel Hill, is likely to be replaced with a mixed-use development, according to plans developed by UNC-Chapel Hill. The redevelopment would be on a site including Granville Towers, which currently houses 1,300 students. Last year the university’s support foundation reported it would purchase the property from an affiliation with the Kenan family for $45.75 million. The foundation will own the property while the university will handle management and development. The deal is scheduled to close July 1. For the full story from the New and Observer, click here.

Football Hikes Chapel Hill Economy

Chapel Hill and Orange County economies received $6.5 million plus $325,000 in local and state tax revenue from the crowds of the 2008 North Carolina-Notre Dame football game. Nathan Tomasini, of Virginia Commonwealth University’s Center for Sports Leadership, says this study also shows that of the football game attendees from North Carolina, 38.6% were from the Triangle and 45% of all attendees planned to attend all Carolina home games. Programs like “Touch Downtown Chapel Hill”, designed to entice fans to start early and stay late, focused on benefiting 100 restaurants and 50 specialty stores. The program will be continuing in 2009. For the full story from the Tourism Newsletter, click here.

The Triangle

Local Counties Ace Clean Air Report

Orange and Chatham counties rank among America’s cleanest for short term particle pollution along with two others in North Carolina, according to the American Lung Association. This annual report assigns a report card grade for counties across the country based upon three components—annual particle pollution, 24-hour particle pollution, and smog and ozone levels. Durham County received a passing C for 24 hour pollution but an F for ozone levels. Along with some of the cleanest counties, North Carolina’s Charlotte-Gastonia-Salisbury Metropolitan Statistical Area and Rowan County had two of the worst ozone levels in the country. For the full story from the Chapel Hill Herald, click here.

Jordan Lake Bill Moving Through State Legislature

A bill was recently passed by the House that would require Durham and surrounding communities to take responsibility for Jordan Lake’s cleanliness. The bill represents a compromise between the City of Durham, environmental groups and legislators over how best to improve water quality in Jordan Lake. The revamped bill will not require communities to develop catch basins or reduce impervious surface in already developed areas unless those areas are being redeveloped. The original bill that emerged from the NC Environment Management Commission required such efforts. Communities in Jordan Lake’s watershed will be required to begin planning public-education efforts in the coming months and if no water quality improvement occurs by 2014 new measures have to be identified. For the full story from the Herald-Sun, click here.

Chatham Alters Budget Spending

Next year’s Chatham County budget proposal includes a slash in merit based salary increases, a three percent decrease from current spending and a “revenue neutral” tax rate. Chatham recently underwent a property revaluation similar to Orange County and County Manager Charlie Horne is recommending that the property tax rate be reduced from 65.3 cents per $100 valuation to 60.32 cents. After excluding debt payments, County spending will actually be seven percent lower than previously due to departments cutting funding from some positions. Although these changes are painful to make, Horne says the county is in better shape than the state and most other local governments. For the full story from the Chapel Hill Herald, click here.

Chatham Passes Liquor by the Drink

Chatham businesses are now able to apply for liquor licenses after County residents voted 65 percent in the affirmative for a liquor by the drink referendum. Jeffrey Starkweather, one of the main proponents of the change, says that not only will business owners have the opportunity to acquire licenses, but that he is going to work with East West Partners to bring a new hotel to Powell Place. Without being able to offer liquor by the drink, a hotelier likely would not be interested in Chatham County. Opposition for the change came from people concerned with the rise in alcohol-related vehicular complications. For the full story from the Chapel Hill Herald, click here.

Durham City Manager makes Budget Proposals

City Manager Tom Bonfield proposed a 2009-10 fiscal year budget that would eliminate 35 jobs whose incumbents will either be laid off or forced to take on a different position on city staff. Bonfield’s budget will also cancel annual merit-based wage increases for all but fire personnel and sworn police officers. If passed, the cuts would be the first for Durham since 1996. Town Councilman Mike Woodard supports Bonfield’s proposal because the layoffs are not just positions at the bottom of “the city hierarchy.” Woodard explains that it is important to understand what these eliminations and cuts will mean “operationally and programmatically.” For the full story from The Herald-Sun, click here.

DPS Board Rejects County Budget, Proposes Tax Increase
On May 11, the Durham School Board voted to add $2.1 million to the superintendent’s budget, a decision opposing the county manager’s proposal for a $2.5 million budget cut. Instead of cutting 377 teacher and assistant positions, board member Stephen Martin’s new proposal would keep 33 teacher and 25 teacher assistant jobs. Martin also motioned for a 2-cent increase in property taxes to create $4.6 million, which would allow the county to meet its spending goals and keep a popular after school program, Encore!. Martin’s motioned for a tax and spending increase was unanimously approved. For the full story from The Herald-Sun, click here.

Grubb & Ellis Reports Triangle Market Trends

Triangle retail vacancy reached a new high, surpassing 8 percent, with 1.5 million square feet of vacancy in the first quarter 2009, according to Grubb & Ellis Research on retail market trends. Even though Orange County had a lower retail vacancy rate than Downtown Raleigh, Cary, and Central Durham at the end of March, Grubb & Ellis predict vacancy will continue to rise for the entire Triangle throughout the year. Research also shows that the leveling out of the unemployment rate in the Raleigh-Cary and Durham-Chapel Hill areas is due more to the increased discouragement of workers than of stabilization in the job market. For the full story from Grubb and Ellis, click here.

State and Nation

State Passes Smoke-Free Bill

A bill enforcing smoke-free restrictions in all North Carolina restaurants and bars was signed into law by Governor Bev Perdue recently. Supporters noted the 2006 Surgeon General Report that states no amount of second hand smoke is healthy and that putting employees of restaurants and bars at risk for health issues in exchange for a paycheck was unethical. Fines of up to $200 will be issued to establishments that do not enforce the new law along with $50 fines for smokers who do not abide. For the full story from The Herald-Sun, click here.

Minority Populations Growing Exponentially
According to a recent US Census Bureau report, North Carolina may be headed toward a future similar to the United States where Asian, Black, and Hispanic minorities outnumber the Caucasian population. In 2010 minorities are estimated to make up almost 33 percent of the state’s population. Presently, 45 percent of children in North Carolina under the age of 5 are minorities. The Hispanic population in North Carolina grew by 79 percent between 2000 and 2003, with Asians in second place growing by 48 percent, and Blacks by 13 percent. Census officials are now predicting that minorities will outnumber the Caucasian population in the U.S. by the year 2050. For the full story from the News & Observer, click here.

The Real Estate Report is produced monthly by the Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of Realtors

The Real Estate Report (April 2009)

2009-04-26T10:49:00.001-04:00

Volume 4, Issue 4

April, 2009

The Real Estate Report
Local Government News Impacting the Real Estate Industry

New Development

UNC Plans Hospital in Hillsborough
UNC Health Care has filed for permission to build a 68-bed hospital in the Waterstone Economic Development District just south of Hillsbrough. UNC Hospitals main campus has 725 beds at its main facility and is running close to capacity. The move to Hillsborough would help alleviate some traffic congestion on campus and expand the hospital's capacity to serve its patients.The project is estimated at $227 million. While the purchase of land by UNC would remove some land from the property tax rolls, the hospital could draw in new medical related businesses to the Waterstone Economic Development District that has been stagnant for some time. For the full story from the Triangle Business Journal, click here.

Plans for Hotel at Southern Village Dropped

DR Bryan, developer of Southern Village in Chapel Hill, dropped plans for a 90-100 room hotel originally planned for the central business district of that neighborhood. It was hoped that the hotel would bring new shoppers and customers to the village businesses but the plan ran into opposition from the neighbors. Instead of building the hotel, Bryan plans to aggressively market village businesses this summer and help capture greater sales from visitors to nearby Southern Community Park. For the full story from the News and Observer, click here.

Greenbridge Builders Propose Property Tax Freeze
Developers of the Greenbridge project in downtown Chapel Hill are proposing a property tax freeze for the Northside neighborhood, immediately adjacent to the Greenbridge project. Residents of Northside have said the project will raise their property tax rates and force them to leave. In response, developers have looked at projects in Indiana and Washington, D.C. that keep property taxes at a fixed rate even when property values go up. County officials have not expressed optimism that the freeze could be implemented, and even if it could, it would need to be passed by the State Legislature. For the full story from the Daily Tar Heel, click here.

Schools

East Principal Retiring

East Chapel Hill High School Principal Dave Thaden announced his retirement in mid-April. Thaden has served as principal for thirteen years and has worked in the Chapel Hill-Carrboro School district for another 17 years in various positions. Thaden cited health issues as part of the reason for his decision to step down. For the full story from the Carrboro Citizen, click here.

Schools Considering Major Cuts
The Chapel Hill-Carrboro City School Board is considering major cuts in the district's budget due to reductions in funds from Orange County and the State. Next year's budget incorporates $700,000 in budget cuts but according to Superintendent Neil Pedersen, it may need to be cut by $4 million. Cuts are targeted at arts, music, physical education, the world language program and teachers for the academically gifted. For the full story from 1360AM WCHL, click here.

Orange County

Transfer Tax Issue Resurfaces
Almost one year after voters smashed the transfer tax at the ballots, Orange County Commissioners voted on a resolution stating, "support for the ability of all local governments to apply impact fees and/or taxes and to implement real estate transfer fees and/or taxes." Should the State Legislature approve new revenue options for the County, including a transfer tax increase, the Commissioners could enact the fee without local voter approval. Commissioner Steve Yuhasz was the lone opposition to including the transfer tax in the Board's legislative priorities list. For the full story from the Chapel Hill Herald, click here.

Downtown Partnership Hires New Executive Director
The Chapel Hill Downtown Partnership has hired a new executive director to replace former director Liz Parham. Jim Norton, current president of Tulsa (OK) Downtown Unlimited, will start at the Partnership on June 1. Norton has served as president of Downtown Unlimited for nearly 20 years and chaired a statewide effort in Oklahoma to approve tax increment financing and advocated for residential development in the downtown. For the full story from the Daily Tar Heel, click here.

Unemployment Down in County
Orange County's March unemployment figures were down by 0.4 percent over February to 6.1 percent. The unemployment rate remains the lowest in the state. Overall, 84 counties saw a decline in unemployment rate in March, which is a great sign. Neighboring Durham County dropped from 8 percent to 7.7 and Chatham County moved from 8.6 to 7.9 percent during the same period. For more unemployment data from the North Carolina Employment Security Commission, click here.

Chapel Hill Town Council Adopts Improved Parking Regulations
At their meeting on Monday, March 16, the Chapel Hill Town Council adopted a number of important downtown parking policy changes including a "courtesy ticket" and improved parking signage. The changes were put forward by the Chapel Hill Downtown Partnership and were unanimously adopted by the Council in a 9-0 vote. Chapel Hill-Carrboro Chamber President Aaron Nelson spoke in support of the recommendations at the meeting. The new "courtesy ticket" will give first-time parking offenders a free warning ticket that tells visitors and patrons of downtown they've parked illegally or overstayed at a meter instead of issuing a financial penalty. The move is aimed at welcoming and encouraging visitors to come downtown.

Further, Town parking lots (Lots 2, 3, 4, 5) will be renamed to more geographic names giving people a better sense of their location and when combined with new, improved signage should make it easier to locate parking downtown. The Council also asked the Town Manager to review the impact of potentially making parking free in Town lots after 6pm and increasing on-street meter rates by $.25 per hour to offset the difference. Other changes include the following: developing a parking board to oversee policy and parking operations for the Town, move toward unified payment systems for all parking, evaluate event parking fees, work to add additional public parking using private lots, and begin planning for the future needs of parking.
>From Chapel Hill eNews

IFC and Carrboro Merchants Begin Dialogue
The Inter-Faith Council for Social Service is looking at a location in downtown Carrboro to potentially house a full-service food operation. The change in location comes as IFC is working to relocate its Community House, currently on West Rosemary Street, to a former Duke Energy building in northern Chapel Hill. The food service operations, also currently housed in the West Rosemary building, will need to remain in a downtown according to IFC's Board of Directors. IFC is eyeing its property at 110 W. Main Street where the food pantry is currently located but the relocation has local businesses concerned that panhandling and loitering will come with the relocation. That concern has prompted IFC director Chris Moran to start a dialogue with business owners in Carrboro about where the best location for a soup kitchen might be. For the full story from the Chapel Hill Herald, click here.

New LED Lights Installed in Downtown Chapel Hill
A new pilot program between the Town of Chapel Hill and Duke Energy launched last week when Duke installed light-emitting diodes, or LEDs, along part of East Franklin Street. The project is a 12-month program that is testing the performance of the lights, which are supposed to use less energy, burn brighter and last longer than traditional high-pressure sodium lights. The LEDs came from RTP company Cree and cost about eight times more than traditional lights. Chapel Hill is the first town in North Carolina to try the lights and will use data and information from the pilot to decide whether to use LEDs more broadly. Residents are encouraged to submit comments about the lights here. For the full story from the Chapel Hill Herald, click here.

County Economic Developer Working on Solar Cluster
Brad Broadwell, Orange County Economic Development Director, is moving forward with the creation of a solar technology cluster that would expand the commercial tax base and bring new jobs to the county. A cluster is a geographic concentration of similar businesses and their suppliers and supporting businesses. Broadwell is working with existing solar companies like MegaWatt Solar and Solar Tech South to boost their image in the region and is looking to tap into stimulus funds. Broadwell has approached the developers of Buckhorn Village about potentially creating a solar technology park in place of the originally planned retail project. For the full story from the Chapel Hill Herald, click here.

County Looking to Sell Surplus Buildings
In an attempt to generate some revenue, Orange County Commissioners agreed to put four properties up for sale. The properties are the Clerk of Court Annex, 112 N. Churton St., Hillsborough; the Graham Building, 118 N. Churton St., Hillsborough; the Homestead Community Center, Homestead Road, Chapel Hill; and the old ABC store, N.C. 49, Cedar Grove. The County will get appraisals on three of the properties before selling them. The appraisals are part of the standard devestiture process the county uses to sell buldings. The tax value of all of the buildings except for the ABC store was $850,000. For the full story from the Carrboro Citizen, click here.

Sustainable Community Visioning Task Force Receiving Applications
The Town of Chapel Hill is now receiving applications for the recently created Sustainable Community Visioning Task Force. The Task Force is the idea of Mayor Kevin Foy and is charged with making recommendations to the Council "regarding the design, timing, scale and appropriate location of higher density, mixed use" and "sustainable development along major transportation corridors in Chapel Hill." The Task Force will consist of 11 members, five citizens-at-large and six members from various town boards and commissions. If you are interested in applying to be a part of this important task force, click here.

The Triangle

Chatham Gearing Up for Mixed Drink Referendum

Supporters and opponents of mixed beverage sales in Chatham County are preparing for a show down at the ballot box on May 5. The vote will determine whether Chatham County will allow businesses to sell mix drinks, something supporters say would be an economic boon to the county. Supporters also point out that DWI arrests in dry communities such as Asheboro are higher than in Greensboro or High Point, which allow mixed drink sales. Opponents say the sale of mixed drinks will lead to more alcohol-related vehicular accidents. For the full story from the Herald Sun, click here.

More Development Eyed at Southpoint
WRS Realty Inc, a developer of Wal-Mart shopping centers, has made an offer of more than $20 million for a 55-acre plot of land near Southpoint Mall in Durham. The 55-acres are west of Fayetteville Road in the Kentington Heights neighborhood. While a deal has not yet been reached, Kentington residents have sought to sell their land for some time to a commercial developer. For the full story from the News and Observer, click here.

Local Option Sales Tax Clears House
The North Carolina House of Representatives approved House Bill 148, local option sales tax, on April 22. The bill would allow voters in all North Carolina counties to approve a sales tax increase for transit-projects. Specifically, it would allow voters in Forsyth, Guilford, Wake, Durham and Orange counties to approve a half cent sales tax increase and a $2 increase in car registration fees. Voters in the other 94 counties to approve a quarter cent sales tax increase. Mecklenburg County already won approval and used its half cent sales tax increase to fund an ambitious light rail project in its downtown. The next step for the bill is approval in the Senate. For the full story from the News and Observer, click here.

State and Nation

New Commercial Tenants Leasing Smaller Spaces
Robert Bach, Chief Economist with Grubb and Ellis, reported last month that real estate tenants nationwide are using less space per deal. Bach sites that the average industrial lease signed in the first quarter of 2009 was 22,974 sq ft, which is the lowest its been this decade. In the office category, the average lease signed was 12,808 sq ft which is 50 percent smaller than the quarterly average from 2000 to 2008. The report states three reasons for the reduction in square footage: 1) Tenants signing new leases may have recently laid off staff and are "right-sizing" their space, 2) Tenants may be less optimistic about future expansion plans and are less aggressive in the amount of space being leased, 3) Smaller companies are scooping up the good deals being offered by landlords while larger companies are waiting for the economy to improve.

From Grubb and Ellis "Weekly Market Insight"

The Real Estate Report is produced monthly by the Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of Realtors

Real Estate Report (March 2009)

2009-03-31T01:10:00.002-04:00

March, 2009

New Development

Carrboro Aldermen Approve Claremont

The Carrboro Board of Aldermen approved the fourth and fifth stages of the Claremont development in Carrboro. The project is located along Homestead Road and will include 27 townhomes and 69 single-family homes once built. The central issue in the approval of the project's final stages was the connection of the new development with the neighboring Wexford development. Wexford neighbors were deeply concerned about a road connection between the neighborhoods and the amount of new traffic it would create. The Carrboro Aldermen reached a compromise over the connection issue by requiring the Claremont developer to build a bike and pedestrian connection with a roadway sufficient enough for a firetruck. The roadway would be blocked by bollards and only used in case of emergency. For the full story from the Carrboro Citizen, click here.

Council Denies Aydan Court Project

At a Chapel Hill Town Council meeting last week, the Council voted unanimously against extending the R-SS-C development zone beyond downtown setting up a furious hearing with Aydan Court developer Carol Ann Zinn. The Aydan Court project followed the R-SS-C zoning discussion and needed the zone to be approved in order for the condominium and townhouse project to potentially be approved. Zinn aleged the Council was unfair in its process saying, "I think what you have done is outrageous. I think it's a discredit to the trust that we as citizens put in you for a fair process with integrity and transparency." Click here to hear Mayor Kevin Foy's response to Zinn on WCHL 1360AM. For the full story from the Chapel Hill Herald, click here.

Carolina North Fiscal Impact Study Finalized

Economic planning consultant TischlerBise released the fiscal impact study of the first (15-year) phase of development at Carolina North. The report shows that sales and property tax revenues would offset the costs incurred by local governments. The Town of Chapel Hill is the one jurisdiction that stands to lose somewhat in the project as the report shows a $12 million loss over 15 years, largely coming from a fire station that would need to be built in year 9. "This [report] says it shouldn't be terribly difficult to make this fiscally neutral," said Jack Evans, the Carolina North project's executive director. For the full story from the News and Observer, click here.

Schools

Schools Looking for Ways to Trim Budget

The Chapel Hill-Carrboro City School District is facing a budget shortfall of $875,000 for fiscal year 2009 and is looking at ways to close the gap. Superintendent Neil Pedersen submitted potential action steps that include reductions in non-personnel expenses in the central office and the loss of a reading teacher at East and Chapel Hill High. Other potential cuts include reductions in after school programs and media center specialists. Click here to hear a sound clip from School Board Chair Lisa Stuckey and for more information about this story from 1360AM WCHL.

CHCCS Releases Reading Results

Students in the Chapel Hill-Carrboro City Schools continue to outperform their counterparts across North Carolina in reading, despite a drop in reading test performance. This year, significant changes were made in the tests given to students in grades 3-8, including setting higher standards for attaining proficiency. As a result, 78.5 percent of CHCCS students posted proficiency in reading while in 2008, that number was 93.4 percent. The drop in scores in the Chapel Hill-Carrboro district is approximately one-half of the decline seen statewide. “In raising standards, we may make students better readers in the end, but the presentation of the results the first year with new standards can be demoralizing to students and staff," said Executive Director for Testing and Program Evaluation Diane Villwock. For the full story, click here.

Orange County

Chapel Hill Town Council Adopts Improved Parking Regulations

At their meeting on Monday, March 16, the Chapel Hill Town Council adopted a number of important downtown parking policy changes including a "courtesy ticket" and improved parking signage. The changes were put forward by the Chapel Hill Downtown Partnership and were unanimously adopted by the Council in a 9-0 vote. Chapel Hill-Carrboro Chamber President Aaron Nelson spoke in support of the recommendations at the meeting. The new "courtesy ticket" will give first-time parking offenders a free warning ticket that tells visitors and patrons of downtown they've parked illegally or overstayed at a meter instead of issuing a financial penalty. The move is aimed at welcoming and encouraging visitors to come downtown.

From Chapel Hill eNews

Orange County Manager Resigns

County Manager Laura Blackmon, the first female manager in Orange County, sent a letter to County employees on March 9 announcing her resignation. In the letter, Blackmon announced she and her husband are leaving to go to Tennessee and she will be resigning in June. Blackmon will have been manager for about two and a half years by that point and did not give specifics for her resignation in the letter. The resignation comes amidst an $8.7 million budget shortfall and citizen uprising over recent property revaluations. For the full story from the News and Observer, click here.

Planning Board to Bring New Petition Before Council
The Chapel Hill planning board submitted a new petition to the Town Council at the March 23 meeting regarding a Land Use Management Ordinance text amendment. Citizens and developers spoke against a past petition by the planning board saying it would force more commercial projects through the Special Use Permitting (SUP) process and add unnecessary delays to projects. The planning board responded by delaying the issue and and instead submitted a new petition that would allow redevelopment and renovation projects greater than 20,000 square feet in the downtown to be exempt from the SUP process so long as there are no exterior building changes or additions in square footage.

From Staff notes

Commissioners Say "Too Late" To Rescind Revaluations

In a work session last week, Orange County commissioners agreed it was too late to rescind the property revaluations that have alarmed thousands of property owners in the county. County Attorney Geoff Gledhill advised the commissioners that state law does not allow counties to rescind revaluations. Were the revaluation rescinded, commissioners pointed out that it could double the current $8.7 million budget shortfall and exacerbate major budget cuts. Regarding the impact of the increases, tax assessor John Smith said the majority of taxpayers would see a tax increase. Data from the county show that more than 250 households saw an increase of more than 100 percent in their home value. For the full story from the Chapel Hill Herald, click here.

Carrboro Merchants Launch WalkCarrboro.com

Jesse Kalisher, president of the Carrboro Merchants Association, has led a new effort to draw residents and tourists to 22 Carrboro businesses through a Web site called www.walkcarrboro.com. The Web site lists various Carrboro businesses and also includes a map helping people navigate the town and parking. Beyond the site, Kalisher printed 10,000 copies of the map, which was designed by Carrboro artist Richard Clout. For the full story from the Chapel Hill News, click here.

New LED Lights Installed in Downtown Chapel Hill

A new pilot program between the Town of Chapel Hill and Duke Energy launched last week when Duke installed light-emitting diodes, or LEDs, along part of East Franklin Street. The project is a 12-month program that is testing the performance of the lights, which are supposed to use less energy, burn brighter and last longer than traditional high-pressure sodium lights. The LEDs came from RTP company Cree and cost about eight times more than traditional lights. Chapel Hill is the first town in North Carolina to try the lights and will use data and information from the pilot to decide whether to use LEDs more broadly. Residents are encouraged to submit comments about the lights here. For the full story from the Chapel Hill Herald, click here.

Water Partnership Inches Closer

Orange County Commissioners moved closer to joining the Jordan Lake Regional Water Supply Partnership, electing to place a draft memorandum of understanding for the Partnership on an upcoming agenda. The Partnership brings together the cities of Durham and Cary, Chatham County, Orange County and the Orange Water and Sewer Authority to jointly address water supply planning, future allocation requests, and a possible future intake facility. Commissioners expressed some reservation that the City of Durham would act as the lead agency in the effort and that no elected officials would be part of the partnership management team. The Commissioners will vote on the draft memorandum on Tuesday night. For the full story from the Herald Sun, click here.

Sustainable Community Visioning Task Force Created

The Chapel Hill Town Council approved the creation of the Sustainable Community Visioning Task Force at a recent Council meeting. The Task Force is the idea of Mayor Kevin Foy and would be charged with making recommendations to the Council "regarding the design, timing, scale and appropriate location of higher density, mixed use" and "sustainable development along major transportation corridors in Chapel Hill." The Task Force will consist of 11 members, five citizens-at-large and six members from various town boards and commissions. At the Council meeting, members modified the committee somewhat agreeing that at least one spot be reserved for a businessperson. For the full story from the Chapel Hill Herald, click here.

County Facing Major Budget Shortfall

Orange County Government is facing an $8.7 million budget shortfall this year, which amounts to 5 percent of this years $183 million budget. The shortfall is equal to 6.2 cents on the county's property tax rate. County Manager Laura Blackmon has listed various ways to make up the shortfall including service reductions and school district funding. For the full story from the Chapel Hill News, click here.

The Triangle

Durham Sales Tax Figures Bring Relief
Durham Commissioners got a Christmas present in March as December sales tax figures came in 12 percent higher than 2007 figures. The increase was surprising given the November 2008 numbers were off by 20 percent compared to 2007. County Manager Mike Ruffin was pleased with the figures but cautioned that "one month does not make a trend." For the full story from the News and Observer, click here.

More Development Eyed at Southpoint

WRS Realty Inc, a developer of Wal-Mart shopping centers, has made an offer of more than $20 million for a 55-acre plot of land near Southpoint Mall in Durham. The 55-acres are west of Fayetteville Road in the Kentington Heights neighborhood. While a deal has not yet been reached, Kentington residents have sought to sell their land for some time to a commercial developer. For the full story from the News and Observer, click here.

Durham Crime Dropping in 2009
Crime figures for the first two months of 2009 were down considerably compared to that period of 2008. Violent crime, which includes murder, rape, robbery, and agravated assault, was down 36 percent. Property crime was down 1 percent. According to Police Chief Jose Lopez, police have worked hard to identify suspects in multiple robberies which likely has reduced the violent crime rate. For the full story from the News and Observer, click here.

Poll Shows Initial Support for Transit Sales Tax

A new poll released by the Regional Transportation Alliance, a Triangle business leadership group, cites some support for a regional transit system funded through a sales tax. The poll interviewed residents of Orange, Durham and Wake Counties and found that 53 percent of respondents would vote in favor of a half-cent sales tax increase for new and/or expanded public transportation. The same poll shows that 57 percent of residents would not support a property tax increase for public transportation. Interestingly, only 9 percent of those surveyed said regional transit should be a top priority for elected officials. Twenty-nine percent of residents said attracting more jobs to the area should be elected officials' top goal. For the full story from the Triangle Business Journal, click here.

Census Shows Raleigh Area is Fastest Growing

Census figures released last week show the Raleigh-Cary metropolitan area is the fastest growing area in the country. The Raleigh-Cary area includes Wake, Johnston and Franklin counties and grew by 4.3 percent from July 2007 to July 2008. The closest area in terms of growth is Austin, Texas which grew at a rate of 3.8 percent during the same period. The figures for Raleigh-Cary do mark a slowdown for the area from the previous two years when it great at a rate of 4.7 percent. The Durham-Chapel Hill metropolitan area did not crack the top ten but still grew at a steady rate of 2.5 percent. Durham, Orange, Chatham and Person counties make up that area. For the full story from the News and Observer, click here.

State and Nation

New Commercial Tenants Leasing Smaller Spaces
Robert Bach, Chief Economist with Grubb and Ellis, reported last week that real estate tenants nationwide are using less space per deal. Bach sites that the average industrial lease signed in the first quarter of 2009 was 22,974 sq ft, which is the lowest its been this decade. In the office category, the average lease signed was 12,808 sq ft which is 50 percent smaller than the quarterly average from 2000 to 2008. The report states three reasons for the reduction in square footage: 1) Tenants signing new leases may have recently laid off staff and are "right-sizing" their space, 2) Tenants may be less optimistic about future expansion plans and are less aggressive in the amount of space being leased, 3) Smaller companies are scooping up the good deals being offered by landlords while larger companies are waiting for the economy to improve.

From Grubb and Ellis "Weekly Market Insight"

MBA Estimates Major Increase in Originations

The Mortgage Bankers Association upped its expectations for 2009 saying the low interest rates and new federal programs will spur significant refinancing. MBA's original national estimate for 2009 originations was just shy of $2 trillion; its revised figure is $2.78 trillion. Should the numbers this year actually pan out, it would make 2009 the fourth-biggest mortgage year in history. For the full story from the Triangle Business Journal, click here.

Federal Action Helping Local Real Estate Market
Local real estate agents say they are seeing some positive signs after the Federal Reserve's purchase of more than $1 trillion in troubled mortgage debt and treasuries. Sammy Martin, one of the owners of Franklin Street Realty, says he's seen rates around 4.75 percent for a 30-year fixed rate mortgage and that there are 275 homes for sale in Chapel Hill that are less than $350,000. Martin says sales were really slow during January and February but that March figures are triple the amount seen in the previous two months. For the full story from 1360 WCHL, click here.

Real Estate Report (February 2009)

2009-02-23T23:20:00.004-05:00

Volume 4, Issue 2

February, 2009

Events

Chatham County Development Briefing—March 10
With the real estate industry changing so rapidly, it is vital to have good up-to-date information about the local market. On Tuesday, March 10 from 7:30-9:30 a.m., the Chapel Hill-Carrboro and Chatham Chambers of Commerce, Greater Chapel Hill Association of Realtors, and Home Builders Association of Durham, Orange and Chatham Counties will host the third annual Chatham County Development Briefing at the Governors Club. Attendees can expect to get the most-up-to-date information about the status of development projects in Chatham County, hear about the County’s new economic development plan, and recent policy changes that will affect future development. This is a must attend event for anyone interested in Chatham County real estate.

The briefing is presented by Osprey Marketing and Advertising and sponsored by Governors Club, Newland Communities, the Greater Chapel Hill Association of REALTORS, and Carolina Meadows.

Seats are $25 for members, $35 for nonmembers and includes a full breakfast. Last year’s event sold out quickly so please register soon at
www.carolinachamber.org/members/register.html or call 919-967-7075.

New Development

Innovation Center Approved
The first building of Carolina North, the Innovation Center, was unanimously approved by the Chapel Hill Town Council. The Innovation Center will take University research ideas and turn them into businesses. University officials were pressed by Town elected officials to commit to energy efficiency standards beyond what is currently recognized by the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE). Prior to the meeting, UNC committed to making the Innovation Center 20 percent more efficient than ASHRAE standards but eventually agreed to make it 25 percent more efficient. For the full story from the Herald Sun, click here.

Mixed Use Project Considered in Northern Chapel Hill
The Chapel Hill Town Council was presented with a potential development plan for a 13 acre parcel of land along Martin Luther King Jr. Drive near the intersection with Weaver Dairy Road Extension. The Altemeuller development, as it is called, would call for medium to high density mixed use including a hotel, office and retail space, and 110 townhomes. Bill Christian, developer of the property, is looking to target people making 120 percent of the area median income or about $60,000. You can listen to part of his presentation here. Del Snow, head of the Northern Area taskforce, expressed concern over the project that you can listen to here. For more on this story from 1360AM WCHL, click here.

Glen Lennox Plans Starting from Scratch
On Sunday, February 8, developers from Grubb Properties met with Glen Lennox residents for a facilitated discussion about future development at Glen Lennox. Residents in the area are seeking to become Chapel Hill’s seventh neighborhood conservation district and protect the neighborhood’s walkability and tree-lined streets. Grubb Properties, owner of Glen Lennox, says it has scrapped original plans for the site and is taking citizen feedback and comment into consideration as they form new plans for redevelopment. For the full story from the Chapel Hill News, click here.

Council Getting Pushback over East 54
According to an article in the Chapel Hill News, the Chapel Hill Town Council is getting a number of complaints from citizens over the magnitude of the East 54 development, located along Highway 54. “Virtually all the reaction I get to East 54 is negative”, says Council member Matt Czajkowski. However, many of the council members who voted in support of the project still believe it was the right decision and critically important to a future rail line that is projected to stop behind the development. Regarding a regional rail system, Council member Bill Strom says, “In order to get federal and state support for these projects, you have to have density organized in a way that promotes ridership.” In order to come to some agreement in the community over future development, Mayor Kevin Foy plans to unveil a plan for collecting input and defining locations for desired density at an upcoming Council meeting. For the full story from the Chapel Hill News, click here.

Schools

School District Reports Lowest Dropout Rate in State
The Chapel Hill-Carrboro City Schools have the lowest dropout rate in the state during 2007-2008. Fifty seven students, or 1.53 percent of students, dropped out of school last year, according to the District’s Web site. The rate is up slightly from 2006-2007 when only 41 students dropped for a rate of 1.12 percent. The most commonly cited reasons for leaving were attendance issues and a desire to attend a community college program. Recently, the District has made efforts to combat some of these problems by forming the Middle College program at Durham Tech. Middle College allows students to take high school and community college courses simultaneously. Drop outs were mostly even across the District’s three high schools and one middle school. For the full story from CHCCS, click here.

CHCCS Releases Reading Results
Students in the Chapel Hill-Carrboro City Schools continue to outperform their counterparts across North Carolina in reading, despite a drop in reading test performance. This year, significant changes were made in the tests given to students in grades 3-8, including setting higher standards for attaining proficiency. As a result, 78.5 percent of CHCCS students posted proficiency in reading while in 2008, that number was 93.4 percent. The drop in scores in the Chapel Hill-Carrboro district is approximately one-half of the decline seen statewide. “In raising standards, we may make students better readers in the end, but the presentation of the results the first year with new standards can be demoralizing to students and staff," said Executive Director for Testing and Program Evaluation Diane Villwock. For the full story, click here.

Orange County

Downtown Partnership Recommends Parking Tweaks
On February 11, the Chapel Hill Downtown Partnership Board developed a series of recommendations for the Town Council regarding parking downtown. The recommendations were based on a study by Rich & Associates and include initiating “courtesy tickets” for first-time offenders in the downtown and a 50 percent increase in on-street parking rates to 25 cents per 10 minutes. The increased rate is designed to encourage the use of parking decks which cost $1.30 per hour and would also boost revenues from $250,000 to $375,000. The courtesy ticket would mean a decrease in revenues for the town but would improve visitor perceptions about parking in the community. The recommendations will be presented at the Council meeting this evening. For the full story from the Herald Sun, click here.

Alderman Identify Priorities
The Carrboro Board of Aldermen brainstormed priorities for the coming year at its retreat early this month. The Board talked about increasing aid to nonprofits and controlling taxes, among other things. In terms of the budget, Mayor Mark Chilton said sales tax revenues in Carrboro were flat, which was a bright sign in this economy. The Mayor also said the Town would adjust its property tax rate down to ensure a revenue neutral rate after the latest property revaluation. Board members will review the priorities and ideas at a work session on March 10. For the full story from the Carrboro Citizen, click here.

Carrboro Merchants Launch WalkCarrboro.com
Jesse Kalisher, president of the Carrboro Merchants Association, has led a new effort to draw residents and tourists to 22 Carrboro businesses through a Web site called www.walkcarrboro.com. The Web site lists various Carrboro businesses and also includes a map helping people navigate the town and parking. Beyond the site, Kalisher printed 10,000 copies of the map, which was designed by Carrboro artist Richard Clout. For the full story from the Chapel Hill News, click here.

Foy Pushes for Regional Transit Funding
Chapel Hill Mayor Kevin Foy made a strong push for regional transit in his annual state of the town report on February 9. Mayor Foy said regional transit is needed “for our economic health in the future, for our environmental health in the future and, frankly, for our sanity in the future, because we can’t continue to get on Interstate 40 to get around.” The Mayor plugged the half cent sales tax and urged residents in the Triangle to get behind the tax in order to partially fund the system. The remaining funds would come from the Federal government. Mayor Foy also encouraged supporting local businesses and applauded the collaboration between Town and University officials during Halloween and the relocation of the homeless shelter. For the full story from the Carrboro Citizen, click here.

Planning Board Petitions Council over Site Plan Process
The Chapel Hill planning board brought a petition before the Town Council at a January 12 meeting regarding their concern over developers “subverting” the site plan approval process. Essentially, the planning board wants to tighten the requirements for developments that would be subject to the site plan approval process. Projects with a floor area of less than 20,000 square feet and that disturb less than 40,000 square feet of land are currently allowed to go through the site plan process and not be subject to Council approval. The planning board’s initial petition proposed cutting those figures in half, thus requiring more projects to go through the lengthier special use permitting process. The petition was referred to town staff for comment and the Chamber is working to set up a meeting with staff to provide input on what, if any, changes would occur.
From staff notes

Carrboro Seeking Feedback about Budget
Tomorrow night, the Town of Carrboro will hold a public hearing in which residents can voice items to include in the 2009-2010 budget. Town Manager Steve Stewart will present a draft budget on May 5 and the Town will again hold a public hearing on the budget on May 26. Residents can email comments to the Town Clerk at swilliamson@townofcarrboro.org and review budget materials at www.townofcarrboro.org/ms/budget.htm.
From the Carrboro Citizen

Water Partnership Inches Closer
Orange County Commissioners moved closer to joining the Jordan Lake Regional Water Supply Partnership, electing to place a draft memorandum of understanding for the Partnership on an upcoming agenda. The Partnership brings together the cities of Durham and Cary, Chatham County, Orange County and the Orange Water and Sewer Authority to jointly address water supply planning, future allocation requests, and a possible future intake facility. Commissioners expressed some reservation that the City of Durham would act as the lead agency in the effort and that no elected officials would be part of the partnership management team. The Commissioners will vote on the draft memorandum on Tuesday night. For the full story from the Herald Sun, click here.

Town Council Nixes Branch Library Expansion
At the February 9 Chapel Hill Town Council meeting, Council members voted 8-1 to continue with a $16 million expansion of the library on Estes Drive. Town Manager Roger Stancil asked the Council at the meeting whether it wanted to reconsider alternatives to the expansion but Council members felt now was not the time to consider a new library. The Chamber spoke in support of reconsidering a library in the downtown as it would bring more people into the downtown business district. For the full story form the News and Observer, click here.

The Triangle

Durham County School Funding Cut
Durham County Manager Mike Ruffin and School Superintendant Carl Harris reached an agreement at the end of January to cut $3 million in funding for Durham schools. The $3 million total is a three percent cut for the schools and is consistent with a three percent reduction in funding for noncounty agencies. The cuts at schools will not affect classrooms; the schools are expecting to use $2.7 million from uncommitted state lottery funds and another $400,000 earmarked for capital projects. For the full story from the News and Observer, click here.

Durham Transit Center Set to Open
After celebrating the opening of the Durham Performing Arts Center at the end of 2008, Durham is ready to celebrate the opening of its new Transit Center on Sunday. The station, a two-story, 10,000 square foot building, is a $17.6 million investment. City officials are working with Duke University to link buses between campus and the station. This summer, a new Amtrak station will open a few blocks from the transit station. For the full story from the News and Observer, click here.

Raleigh Home Prices Down
New data from real estate company Zillow show that Raleigh home prices dipped by 2.5 percent in the fourth quarter. Since a high of $209,204 in first quarter of 2008, median home values have dropped to $199,365 in the last quarter. Ten percent of all transactions in Raleigh were on foreclosed homes, compared to 20 percent nationwide. About 62 percent of homes in Raleigh have lost value this year according to Zillow. For the full story from the Triangle Business Journal, click here.

Office Market Report Released By Grubb and Ellis
The Triangle office market is behaving very differently according to a fourth quarter report by Grubb and Ellis. The report cites office vacancy at their highest levels since mid-2005, Class A rents flat, and 400,000 square feet of new space delivered with just 25 percent preleased. A bright spot in the report is the Chapel Hill submarket which saw vacancy decrease to 15.6 percent after UNC Dermatology leased 14,000 square feet in Southern Village. The outlook for 2009, on the whole, is not overly optimist with vacancy expected to increase. Grubb and Ellis seems optimistic that the vacancies will present opportunities for new entrepreneurs and relocating businesses lured by relatively low cost space.
From Grubb and Ellis Research 4Q 2008

State

Obama Outlines Home Foreclosure Plans
On Wednesday, President Barack Obama outlined his plans to stem the foreclosure of up to nine million homes. North Carolina has fared well compared to the rest of the nation and the Southeast in terms of foreclosures, though some 54,000 foreclosure proceedings were started in 2008. Obama’s $75 billion plan provides incentives to lenders to reduce interest rates on troubled home loans, according to Mark Pearce, North Carolina's deputy banking commissioner. Under the plan, the federal government will provide lenders with half of the interest income lost, as a result of lower interest rates. For the full story from the News and Observer, click here.

Retail Sales Up in January
After six consecutive months of decline, national retail sales increased by one percent in January. The Commerce Department reported that sales excluding automobiles rose 0.9 percent from December. It is too early to tell but the one percent rise could be signs of resilience among consumers; economists predicted a 0.8 percent decline in January. However, compared to January 2008, sales were still off by 9.7 percent. According to Julia Coronado, an economist with Barclays Bank, “Consumers had cut back so sharply over the previous quarter that there was some pent-up demand on the sidelines.” For the full story from the New York Times, click here.

State Incentives Program May be Revamped
State lawmakers recently authorized drafting legislation that would radically transform a longstanding business tax credit program and lower the corporate income tax. The William S. Lee tax credit program has been in existence for 13 years and a study published by UNC shows that during 2001-2006 companies receiving major incentives from the program disappointingly added jobs at the same or slower rate than the statewide average. A Joint House/Senate Incentives Committee has been examining the report and is now creating a new bill that would gut the program and pump more money into the Jobs Development Industrial Grant (JDIG) program which rewards employers based on the number of jobs they create. For the story from the Triangle Business Journal, click here.

The Real Estate Report is produced monthly by the Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of Realtors