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The Lafayette (Site 4)


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From the council agenda for tomorrow:

1. City Site 4 Development Agreement - The Lafayette

On June 20, 2006, the Council approved a Memorandum of Understanding (MOU) with Empire Properties to develop a 0.51 acre tract immediately adjacent to the new Convention Center. A Development Agreement has been prepared based on this MOU and is included in the agenda packet that will result in the purchase of this property by Empire Properties for $1.44 Million, and for the development of a mixed-use hotel, restaurant, retail, condominium project connected to the Performing Arts Center parking deck. One area of dispute remains, which the developer may wish to address at the meeting.

Recommendation:

Approve the Development Agreement as drafted with Empire Properties for the construction of a mixed-use project on Site #4 in accordance with the Memorandum of Understanding.

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From the council agenda for tomorrow:

1. City Site 4 Development Agreement - The Lafayette

On June 20, 2006, the Council approved a Memorandum of Understanding (MOU) with Empire Properties to develop a 0.51 acre tract immediately adjacent to the new Convention Center. A Development Agreement has been prepared based on this MOU and is included in the agenda packet that will result in the purchase of this property by Empire Properties for $1.44 Million, and for the development of a mixed-use hotel, restaurant, retail, condominium project connected to the Performing Arts Center parking deck. One area of dispute remains, which the developer may wish to address at the meeting.

Recommendation:

Approve the Development Agreement as drafted with Empire Properties for the construction of a mixed-use project on Site #4 in accordance with the Memorandum of Understanding.

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Yeah, the meeting was at 1pm yesterday (council meets 1st and third tuesdays of each month) and they discussed the air rights issue. Empire would get an easement over the adjacent deck to preserve their views.

The disagreement was over remediation of the site. There are 2 underground storage tanks and the City Manager wants to sell the site "as is" with Empire wanting the city to pay for the removal of the tanks--anyway that's about right. Empire was concerned they'd be taking a big risk to their schedule and budget as it could take several months to get the tanks out and they don't want to hold up the project anymore. Empire hasn't done 100% designs yet so they don't know how much excavation they'll need to do and that affects the risk and impact the tank removal could have.

In typical Meeker fashion, he proposed a compromise where the geotech engineers would determine the upper and lower end costs for remediation of the site and pick the middle number and subtract that cost from the updated property appraisal and work out something so that the city could expedite the removal of the tanks prior to the sale (keeping it on schedule). Meeker emphasized how important this bldg will be--along with RBC, Reynolds, and Site 1--to the city's skyline, and we need to keep it on track.

So if the new property appraisal comes in at $1.7M (now $1.44M) and remediation estimates are $100k to $300k, they'd pick $200k and subtract that from $1.7M... so Empire would pay the city $1.5M and that would be it.

This is the type of thing Meeker excels at and it may be a small item, but he impresses me at times with his ability to keep things going and make deals. Maybe he's not a bold, forward thinking visionary, but he has done alot of good for the city and Downtown Raleigh.

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I hope the underground tanks can be removed before the sale, regardless of who pays for it. It would be bad to delay construction of the Lafayette to deal with this.

The Lafayette as important (if not moreso) to the south end/civic center area at *street level* than the skyline. It adds more hotel rooms and residences to the area, and sets the tone for the development of sites 2 and 3. It can also indirectly encourage redevelopment of the land south of South street/west of Salisbury and the McDonalds NE Wilmington/South corner.

I know they want to put the African American Culture Center near the Pope House, but it feels like it would be more appropriate to be closer to Shaw, if not on Shaw Campus. I've rarely seen the field on the SW Wilmington/South corner used. Something complimentary to campus and the theater district would be good for the space.

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I'm really not sure what the AACC is all about. That said, I'd like to see the AACC moved to where 'Site 2' is marked above. As an important social piece of the city, and potential tourist draw, why not put it in a regal spot. That would allow the current site to be used for some large building.

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A museum could be *part* of site 2 or 3, like Greenfire's proposed Black Wall Street museum in Durham. But with that location, the building should be at least 10-12 stories of vertical mixed use. The city could still offer to be home to the CIAA and its hall of fame. It could work as part of this, or the HoF and offices could be part of the football stadium complex.

As for the land attributed to "Empire Properties" on East Cabarrus, the Wake County real estate site lists St. Ambrose Episcopal Church (.26 acres, $186,566 property value), Alley Three LLC (.12 acres, $52,270), Horse Nose Villa LLC (.09 ac, $39,200) and Lincoln Theater (.15 ac plus building, $258,238) as owners. These valuations seem a bit low, considering their proximity to F Street and the south end.

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Raleigh and Empire Properties moved past the remediation "standoff" and agreed to a development agreement. :thumbsup:

The development is anticipated to be complete in the spring of 2009. To accommodate parking for the mixed-use project, Empire Properties is proposing a long-term lease with the City for 275 parking spaces in the Performing Arts Center parking deck. A connection will be constructed between the mixed-use project and the parking deck.

The development agreement approved by the council includes amendments concerning property appraisal and environmental remediation issues.

Russell Allen mentioned the city will move on the remediation to keep this project on track.

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I hope remediation goes easily. Two years seems like a while for the Layfayette, since RBC Plaza's construction will only be 18 months?

The "Empire's plate is full" concerns are valid, but new construction is almost always faster than rennovations.

That being said, their current projects include:

- Wilmington/Hargett area -- several projects including Heilgh/Levine, Raleigh Furniture, and the Ladies Shop/Brass Grill corner.

- Former Dollar Zone on F Street

- Ice house near Bloodworth/Davie

- Wake County parking deck/office/retail at McDowell/Davie.

and other projects I don't know about.

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^ Empire also owns the Raleigh Bonded Warehouse on Capital Blvd, the old Bain Water Treatment Plant in S Ral, will own the 209 Davie project, and may have some inside deal on the site next to the AACC site and Lincoln Theatre.

Yes, they have a lot on their plate, but you as long as they have good people under contract (architects in NY, engineers, marketing firms, etc) on Lafayette, you'd think given the marketplace and success of the new RCC, it's a slam dunk project.

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