North Hills East

[ChiefJoJo]

It seems the John Kane is leveraging his success at North Hills West to lure the city into building him a parking deck for N Hills East to the tune of 5500 spaces and $75M, according to the Indy's Bob Geary.

Kane's pitch: He'll build a real urban village, to the tune of nearly $700 million of new stuff, but only if the city puts up $75 million, which is the cost--he says--of parking decks with almost 5,500 spaces.

With this kind of financing--elsewhere called tax-increment financing, or TIF--Raleigh and Wake County would issue bonds and pay them off with the increased property tax revenues they get from the project.

It's supposed to be used, however, in cases where development--or redevelopment--is impossible "but for" the public subsidy. That's why Kane, in colorful notebooks handed out to city officials last week, says that he can't afford to put in the parking decks himself, and "but for" the city building them, he'll either have to sell the land or else build in "typical suburban style--complete with sprawl and fields of asphalt for parking."

Coincidentally, city leaders who traveled to Minneapolis-St. Paul recently on the annual Chamber of Commerce trip to see what other folks do, were warned by St. Paul Mayor Chris Coleman that TIF is like "crack cocaine"--as soon as you give it to one developer, every developer starts to treat it like an entitlement, and says they can't possibly make money without it.

I personally think it's dangerous to go down the road ("slippery slope") to start paying for developer's projects, even if they seem like good ones. Kane should be able to revise his project so he can pay for the decks he needs instead of attempting to extort money from the city. I'd grew up right down the street from N Hills East, and I want to see Kane's plans go fwd, but not at the city's expense.

Thoughts?

[carynative]

its a mighty fine line of balancing a huge economic development project that will bring a lot of good for the city with the whole guilt trip-- "if you don't pay, i won't build it and the city will loose out game." I don't personally pay raleigh taxes, but I used to and wouldn't want them gambling on a project like this, despite the enormous success of NH west. You never know when the economy is going south, we sure didn't on the ngiht of Sept. 10 2001.

[thewhister]

It seems the John Kane is leveraging his success at North Hills West to lure the city into building him a parking deck for N Hills East to the tune of 5500 spaces and $75M, according to the Indy's Bob Geary.

Kane's pitch: He'll build a real urban village, to the tune of nearly $700 million of new stuff, but only if the city puts up $75 million, which is the cost--he says--of parking decks with almost 5,500 spaces.

With this kind of financing--elsewhere called tax-increment financing, or TIF--Raleigh and Wake County would issue bonds and pay them off with the increased property tax revenues they get from the project.

It's supposed to be used, however, in cases where development--or redevelopment--is impossible "but for" the public subsidy. That's why Kane, in colorful notebooks handed out to city officials last week, says that he can't afford to put in the parking decks himself, and "but for" the city building them, he'll either have to sell the land or else build in "typical suburban style--complete with sprawl and fields of asphalt for parking."

Kane should get a change in land use to Transit Oriented Development and get relief on parking requirements as stipulated in zoning requirements....location is not good for the Regional Rail line but maybe future transit planning for the city - these "lifestyle centers" are magnets for people and it would be beneficial if transit would be encouraged.....if, and when, there would be Light Rail or Bus Rapid Transit in the city. Then there would be more Real Estate for rent than for parking.

This also goes to show the "real" cost of free parking that we are used to.....someone pays the consumer or the municipality. Was not the American Tobacco District in Durham the same way? Durham had to build a parking deck to make the project feasable.

I don't know if I had mentioned this before on this forum....but I thought recently if the burden of parking fell to the municipal government would we have better development patterns? Then the point of TIF would benefit all developers...and maybe our quality of life in general.

[thewhister]

Maybe this is a better plan. From the Portland Hearld.

[ChiefJoJo]

This isn't exactly North Hills East, but I noticed Kane has cleared the land along Ramblewood Drive for "Ramblewood," located just southwest of SixForks/440.

Kane Residential will soon present Ramblewood, a neighborhood of townhomes and stacked flats. With traditional brick exteriors, thoughtfully designed interiors and landscaped green spaces, Ramblewood will offer a simpler lifestyle within a sophisticated and intimate environment. Positioned on nearly twenty acres, Ramblewood will be nestled among established neighborhoods, and is still located less than a quarter mile from the vibrant streetscape of Midtown.

[c_harmons]

Not a scary threat.

The City can just deny his strip mall site plan.

[thewhister]

And so it hits the N&O.

[ChiefJoJo]

... and WRAL.

[Transplant]

Whats the feeling here about a developer asking the city for something like Mr. Kane is?

Personally, I feel that the city should build any parking deck that will help facilitate further development. Beyond that, not much else.

Of course, a decent mass transit plan would reduce the need for such parking structures (or at least the size)..... I wonder which the City of Raleigh would spend money on first. A light rail costing $40Mil/mile would run 4 miles to DT, about twice the cost of the parking deck. But, it would increase property values for the entire stretch of the run.....something to noodle out.

[bullcity76]

So can North Hills be considered a redevelopment project? Would the creation of Community Improvement Districts (specified by the City) reduce the cries of other developers for assistance? Should there be local standards set for qualifications for TIF money?

I ask these questions because I am still wavering whether or not I support all forms TIF utilization. I think having CID's along with locally-defined standards will "de-politicize" the whole process. The money would be targeted to city-defined target areas and the city for could reap benefits beyond tax dollars such as affordable housing, water management improvements, etc.

[dmccall]

It's definitely the subject for great debate. On one hand, that area is certainly blighted and needs help for sure. He should be held accountable for accomodating a mass transit plan that doesn't exist. However, Kane's threat of a cheap, Home Depot-anchored, yucky strip shopping center is sleazy.

It's not like North Hills is a perfect project. The mostly-empty Alexan is a disaster and his assumption that he could go tall right up at Six Forks instead of back above Target was an enormous, missed opportunity. He needs to be extremely careful here as he is putting all of his clout on the line with this move. I'd love to see him handle this well and continue a new urbanist concept eastward all the way to Atlantic Avenue.

[only]

Personally, I feel that the city should build any parking deck that will help facilitate further development. Beyond that, not much else.

How do you mean, "not much else"? Aren't you agreeing with Kane in all his requests?

Of course, a decent mass transit plan would reduce the need for such parking structures (or at least the size)..... I wonder which the City of Raleigh would spend money on first. A light rail costing $40Mil/mile would run 4 miles to DT, about twice the cost of the parking deck. But, it would increase property values for the entire stretch of the run.....something to noodle out.

No, it wouldn't. It doesn't even address the primary consideration -- getting people to and from the shopping center. There are only a couple of thousand people living downtown. Most of the NH shoppers live north and west of the development. You might have a valid argument for a well-developed bus service in the surrounding neighborhoods -- but ultimately, it faces similar problems.

You're not moving people from any one place to any other single place. You're gathering them up at a very low density over a very large area at very irregular intervals and depositing them in one place. That's not a problem that fixed-route transportation systems address very well. If the ultimate goal is to reduce automobile roadmiles at a reasonable cost, the city would be better off buying $70m worth of bicycles and passing them out to whoever wanted one.

As for the blighting criticisms, don't forget that the area is blighted because Kane has been squatting on the properties for several years. He's had a couple of high-profile purchases in recent months, but he's owned most of it for much longer than that. Rather than seeking tenants (whose leases could complicate his construction schedule) and putting money into maintaining the properties (on a building you're going to tear down sooner or later), he sat on them until all of the aquisitions were complete.

[plus2]

How much is the entire North Hills East going to cost? Saying that he can't afford the parking deck seems pretty lame considering the amounts that are going into the rest of the development. This looks like a blatant cash grab to me...and the threatening suburban style development is sleazy.

[Transplant]

"not much else" -> Build any parking deck (and keep it under city ownership) using the TIF until a valid (FULL SCALE) Mass transit plan is in place. If any developer asks for a loan to build a walmart citing TIF, don't loan them the money.

Mass transit linking the NH area to others would reduce the need for so much parking. By 2010, supposedly, there will be 10k people living in DT, and there isn't much shopping there. A LR or BRT to NH would be good. Additionally the BRT/LR, would encourage developmentalong the way. Yes, it won't eliminate the need for parking decks, but it should reduce the need. And how about if the BRT/LR went up Six Forks??? lots of areas along the way ripe for redevelopment.

Its time for Raleigh leaders to think outside their tiny little box. The deck next to southend in raleigh was part of the catalyst for the entire glenwood south area.... why not use that same idea in other areas.

[hoobo]

TIFs have been used in Virginia for a while now. Virginia Beach has three of them that I'm aware of. One is for the Sandbridge neighborhood so that property owners there shoulder the expense for their own beach replenishment. That's a good use because it keeps that cost off the rest of the city's property owners. The second is at Lynnhaven Mall. They City paid for the parking deck during that mall's expansion/renovation a few years back. Not many people know about that TIF. The third and most related to North Hills East is the TIF in the Pembroke CBD. Revenues from that TIF help pay for the parking garages and infrastructure which the city built at the VB Town Center. The TIF was needed to keep the garages free. There were intitial complaints about public subsidies, but now, the only thing people are complaining about is the traffic. The project is a hit.

TIFs can be designed to cover only that project's property or to include surrounding areas. For North Hills East, it looks like Kane is asking for the City to pay for the garage with a TIF around his property only including North Hills. His development is shouldering the increase in property taxes. Essentially, he or whoever eventually owns the property will pay for the garage over the life of the bond. But right now, no bank is going to loan him money to build a $75 million garage with free parking. Well, unless that bank is run by wiseguys.

[Transplant]

If Raleigh builds this for NH East, Look for others to ask for decks too. The city will need to set up criteria for using TIFs for decks.

[only]

"not much else" -> Build any parking deck (and keep it under city ownership) using the TIF until a valid (FULL SCALE) Mass transit plan is in place. If any developer asks for a loan to build a walmart citing TIF, don't loan them the money.

Ah, the slippery slope. So if it's a "new urbanist" Wal-Mart with a parking deck and a pedestrian retail core, would that be okay? What if the "new urbanist" part is really just window-dressing and not seriously-executed? Still okay to give them tif money? Because, let's be honest, this is YOUR money we're talking about here. It's mine, too. The argument that future property taxes will offset the cost of the bond is tenuous at best. It's really just legal plunder. The taxes that would have gone to the public till are otherwise being spent financing a privately-owned parking garage.

Mass transit linking the NH area to others would reduce the need for so much parking. By 2010, supposedly, there will be 10k people living in DT, and there isn't much shopping there.

Oh really? See, in *my* future city, there was a highly developed commercial/retail district downtown, but no people. They all moved to Zebulon to live in newly-constructed Eastern-Bloc style housing, and shuttled to the commercial core on a fusion-powered monorail.

It doesn't matter, since it's all conjecture anyway, and it avoids the (more important) questions of suitability that were presented earlier. These arguments lack a seriousness about the problems facing modern cities or an applied understanding of those realities.

[bullcity76]

Revenues from that TIF help pay for the parking garages and infrastructure which the city built at the VB Town Center. The TIF was needed to keep the garages free. There were intitial complaints about public subsidies, but now, the only thing people are complaining about is the traffic. The project is a hit.

TIFs can be designed to cover only that project's property or to include surrounding areas. For North Hills East, it looks like Kane is asking for the City to pay for the garage with a TIF around his property only including North Hills. His development is shouldering the increase in property taxes. Essentially, he or whoever eventually owns the property will pay for the garage over the life of the bond. But right now, no bank is going to loan him money to build a $75 million garage with free parking. Well, unless that bank is run by wiseguys.

A North Hills CID should be created to address tranportation/pedestrian issues in the area. The surrounding properties will also increase in value with the development of North Hills East. You also don't want those 5000 (or so) cars moving to often within the North Hills area, so there needs to be a shuttle system between properties. The city should do all it can to make this a semi-urban, easy-to-navigate area. But the City has a chance to make Kane's plan beneficial for the whole North Hills area.

[Transplant]

...let's be honest, this is YOUR money we're talking about here. It's mine, too. The argument that future property taxes will offset the cost of the bond is tenuous at best. It's really just legal plunder. The taxes that would have gone to the public till are otherwise being spent financing a privately-owned parking garage.

I believe my statement was that I supported a CITY OWNED garage.

If the city is unwilling to build parking decks, and if the city is unwilling to build a better public transit system, the city will see more suburban growth for years to come.

The arguement is for additional taxes, so no parking garage means no development, means no new additional taxes. So, we'd be where we are. Now, I agree that the city would need to safeguard itself from building a 5k deck for something that doesn't come to fruition.

[ncwebguy]

It is already off the front page, but the N&O had a meeting with John Kane about NH East.

The elephant in the room that no one has noticed so far is the neighborhood wide decline created by the neglect of the old, indoor North Hills Mall. In less than 25 years, it went from the area's first indoor mall to a retailing footnote.

Now he wants to be rewarded for putting the last nail in the coffin for the area, temporarily lowering his property value and taking the surrounding areas down with him? Kane had no problem with the slashed payrolls and tax revenue due to the slow decay of NHM. He also benefitted from the decay by dragging down the value of the property across Six Forks and 440. The blight was created by one person/company, not city neglect.

Not only has Kane already been rewarded for his decay, but now wants to double his pleasure by getting the city to build him a parking deck that will be paid with tax revenue that would have been there all along if North Hills tried to compete with that other mall down the road.

Also, how can Soleil make the numbers work but North Hills East can not? If it is not economically feasable, then put the Home Depot there. Is the cost of the deck being spread out to the office, retail, hotel, condos, apartments, etc., or is it all allocated to the office piece to create the $30/sq ft./year price tag? Rebuilding part of the "core" North Hills deck *and* the "hidden" deck for the Alexan wasn't a cost issue, but this one is?

Will the Alexan, the Lassiter, the Cardinal, and Ramblewood do well with a big box strip mall nearby? Not likely, so why pretend that is an option?

[hoobo]

Just some more fuel for the fire. Here's the link to a pdf describing how the TIF in Virginia Beach's CBD works.

Virginia Beach CBD TIF

Just a note: unlike North Hills, the Virginia Beach Town Center was a massive wooded lot not a dilapidated shopping center and mall. However, the area surrounding TC was falling into disrepair. Now investment is pouring in to tear down old shopping centers and low-rise offices and replace them with new urban developments. Some will likely ask for public financing, but we have yet to see that. So far the 40 year-old mall has been renovated and received several new national retailers. An old shopping center who's only remaining store is Office Max is being torn down to make room for a retail/resdential project consisting of several mid-rise buildings and a couple high-rises.

[Subway Scoundrel]

Of course June has come and gone, and there is absolutely no activity on the site. I don't know of any new news, though.

I drive by it at least twice a day and I look over every time and see the "gap." NHs would look so much better with something there.

I guess Kane is building this and leasing it? Or some hotel group is building it? I don't remember. I think it shows how tight business cases are, how investors come and go and maybe how much a $75M "funky financing" can make a deal or not make one? (I say this because I think I read someone state that $75M was not much in the whole concept of NHs). I just don't think Kane has that much capital laying around.

Anyway, as far as the parking deck..........I am trying to stay out of this argument as I don't like the fact of the city financing parking lots, yet......I want an urban NHs and more urban development..........and the big one is my home value will increase dramatically if NHs-East is built.

[pack-man]

The city paid and built the deck that Progress II is sitting on. I think Kane is trying to do the same thing.

[DwnTwnRaleighGuy]

The city paid and built the deck that Progress II is sitting on. I think Kane is trying to do the same thing.

I may be wrong but I think that the difference is that the Progress Energy deck charges for parking and the Kane deck wouldn't.

[thewhister]

Article from the N&O yesterday.

Seems the bigger question is what is the price of parking? Pay when you use it or indirectly via absorbed by the cost of goods and services.

Even with the success of North Hills, there is still a lot pf parking there - the lot down by Target and the old deck by Penny's. So there is an overdemand.

Now it is true, from the article, that Kane needs to disclose more information about how the magic number of 5,400 parking spaces have been determined (probably via occupancy classification) Now Kane could hire a parking consultant and give his project further evaluation and maybe reduce the amount of parking required based upon retail and business habits.

Plus if he cannot develope the North Hills East plan as is, then why would he propose it in the first place? If he cannot do it than what is plan B? and what will it look like?

Another question. If roads are a public benefit and financed by the public, shouldn't parking be a public benefit and financed by the public? If this is the case, then should there be other "public improvements" like transit (that is suppost to be for the "public" benefit - and not just for the "car deficient" citizens of our area) also that commercial developments needs to consider. Bus transit is important too.