City Manager Urges Reopening Bids for Site 4
One of the main pieces to the Convention District redevelopment plan, Site 4 (.pdf file), has returned to the city’s microscope. The City currently has an agreement with Empire Properties for development of “Site 4″. The current plan calls for a 21-story, Stephen B. Jacobs-designed boutique hotel/condo project that would feature a rooftop restaurant and pool and an external glass elevator. The Lafayette was originally expected to open in 2009, however work still hasn’t begun due to financing troubles.
Empire Properties recently missed an April deadline extension to submit revised plans to the City of Raleigh. Now City Manager Russell Allen is calling for the removal of Empire as site developer and the opening of the site to a new bidding process. Allen claims that other companies have both expressed interest in developing the property, and requested reopening the parcel for public bids. Allen’s recommendations state:
That the City Council declare the Purchase, Sale and Development Agreement between the City of Raleigh and Empire Properties for the development of City Site #4, ratified March 7, 2007, and amended March 27, 2008 to be in default by the Developer, and direct the City Attorney to collect the Good Faith Deposit ($14,450) from the Escrow Agent as a reasonable liquidation, and upon receipt of the Good Faith Deposit that the City Council release the Developer of any further liability under the Agreement.
Authorize the City Manager to prepare and issue a Request for Proposals for the development of City Site #4, in general accordance with the mix of land uses and intensities included in the first RFP.
The topic is on the agenda for the Raleigh City Council’s meeting tomorrow at 1 pm. This should be interesting, folks. Empire’s president, Greg Hatem, is a close, personal friend of many on the City Council. Will the council grant Hatem, a proven renovation specialist, an additional extension on his project as they have to the Reynolds family (for their proposed tower on Hillsborough Street)? Will the city vote to stop losing money on a site going undeveloped for so many additional months (with no apparent end in site)?
No matter who ends up developing the property, the end result needs to be the addition of an architecturally significant, nice hotel in the Convention Center area.
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June 30th, 2008 at 7:00 pm
Fianlly! Give it to someone else. What a waste of time. This building should have opened in conjunction with the Convention Center. Another downtown Raleigh blunder.
Empire has always been a small town operation. This is prime property, this needs to go to an out-of-state developer with vision. Similar situation with “The Hudson” that should have been awarded to the MA. developer who wanted to build a 40 story high tech. building. Empire should not be allowed to participate in the bid (there is NO excuse for this)
July 1st, 2008 at 8:38 am
I’m not crazy about giving them an extension either, but then again it would be somewhat hypocritical of the council after all the extensions they gave Reynolds.
July 1st, 2008 at 9:40 am
This is a very delicate situation. I am not contributing anything new, but merely stating my views and sharing my feelings about this obstacle.
First of all, Greg Hatem’s turn from a low-rise to a high-rise developer came to me as a pleasant surprise, a few years ago. Lafayette was, IMHO, a fine proposition and well within our city’s vision - and mine. Anyone who proposes something like this for Site 4 deserves a big thank you. I am not a big fan of Greg’s over-protective strategy towards everything old - key word is “old”, not “historic”, as I believe in preserving the history of a place - but what he proposed for Site 4 was very good. If I recall the competing ideas correctly, I don’t remember anything of Lafayette’s scale.
Second, the city officials have bent over backwards for other projects, and even compromised on the Marriott Hotel, which to me is a POS project, at least in terms of exterior design and size. If you compromise on one project, you have to do the same for others. At this point in time, the city needs to establish strong guidelines and make sure developers stay on schedule. If not, pull out of the deal, ASAP.
This is a golden opportunity for the city officials to find a way to work around the problems, without killing any deals. It is very hard having to tell Empire Properties and Reynolds & Reynolds that we can’t work with them on two visions these developers spent a lot of time, money and energy preparing. Let’s face it, we should want local developers to succeed, not fail. At this point in time, the lending options have become too few, and even if the developers get financing the terms would not be good for them. Tough decisions to make, but I hope that one last extension will be offered. Just enough to give the developers the opportunity to get some decent terms on their loans.
Ideally, this is what I would like to see:
1) The city offers Empire Properties one more extension - Greg Hatem just got married, let him catch his breath. No option for scale-down should be offered, although the developer should be allowed to change the nature of the project (i.e. replace some, or all of the condos with hotel/office space).
2) Reynolds & Reynolds receive one last opportunity to come up with something solid, but not be allowed to scale down The Hillsborough.
3) City officials should proceed with issuing RFPs for Sites 2 and 3, before even taking any further action on Lafayette and The Hillsborough. Test the waters to see what the interest is like before pulling the plug on Site 4 and 301/309 Hillsborough. If there is no real interest - I don’t care what Russel Allen says at this point - then work a little more with what we have and don’t rush into bad decisions.
4) Should the city officials decide not to allow any further extensions, then I surely hope some good developers step up to the plate and present some nice alternatives. I would hate to see another Marriott Hotel fiasco… Enough with underutilized land.
Brad, I am glad you remember The Hudson case… BTW, the developer who proposed the 40-story tower was local, but the city offered the deal to the MA-based company that owned the 333 Corporate Plaza, which later sold it to a local developer. Their decision surprised me, but the developer with the 40-story vision was rumored to not be capable of actually delivering such a large building. He asked for two years prior to breaking ground, but the city wanted to get this deal going faster. Oh well, we’ll never know if they did the right thing back then, although I can say with certainty that a 40-story tower would have done a lot more for our skyline.
July 1st, 2008 at 2:04 pm
Empire Properties received an extension until November 1st, but it is the last one. Good news is, I just spoke to Greg briefly and this project seems to be getting back on track - assuming he didn’t say it just to make me happy
July 1st, 2008 at 3:56 pm
Hey Ernest - why in the name of all that is Raleigh are you not on City Council??? ALL your comments are soooooo right on (on all the blog sites) and your knowledge is unparalleled(sp?)! And I highly doubt I’m alone in thinking that
(I know, I know get a room … just had to say it mostly because I don’t want to see Ernest stop posting - he’s Jack Hagel on steroids)
July 1st, 2008 at 4:37 pm
Thanks Lew, but I am far from being qualified to deal with the matters of the city… As critical as I am of many council members every now and then, I have great respect for their background and ability to deal with serious matters. Personally, I am too passionate for a position in the city council. Thanks for the vote of confidence, though
Maybe some day, when I learn how to be more diplomatic.
On a more serious note, Raleigh needs people who are willing to voice their opinions. The problem we have in this city is perception. Several people and groups become too loud, too vocal, and when the city needs to hear from us we remain silent. I used to write emails in the past, but I have sort of given up. For one, even when they mess up, the city council members “redeem” themselves at the end. In this particular case (Site 4), they all did the right thing, IMHO.
July 1st, 2008 at 10:58 pm
[...] Ernest: Thanks Lew, but I am far from being qualified to deal with t… [...]