Downtown Raleigh's Future

[ctl]

Wow. Did anyone really think that the expansion of downtown Raleigh would be monotonically upwards, without any reversals or glitches? I hope not. Ups and downs are a fact of life in the business world. If you think of the RTP/RDU area, there have been many reversals... Nortel's bankruptcy and the closing of the American Airlines hub are two of the largest ones, but there have been many others. More recently, Sony Ericsson evaporated into thin air here. In fact the history of RTP is a series of business closures and move-outs, slightly offset by a series of move-ins and expansions to produce an overall positive growth rate -- as long as you measure it in five-year intervals.

RedHat isn't immune; they could be bought too. Look, in the business world everything is for sale if the price is high enough. The downtown business community knows how the game is played, and so does the Mayor. They just have to re-double their effort and find new businesses. That's what RTP is constantly doing.

The City was essentially powerless in the RBC decision (as well as the Progress-Duke deal); no action by the Mayor or Council could have changed the outcome. Why not? Because RBC's acquisition of Centura in Rocky Mount was just a dumb idea all along -- which RBC tactfully now admits. Relocating the HQ into downtown Raleigh didn't change the unfortunate fundamentals.

It ain't any better in Charlotte, where the shots are now called from California or New York.

Edited June 22, 2011 by ctl

[Jones_]

Jones I can't believe that you're saying this. You're totally glossing over the bigger issues.The lose of these three companies is no small deal. It's not only about the lose of jobs. I'm sure that these new owners will have no allegiance to Raleigh.

After all of the effort that Raleigh put into luring Centura from Rocky Mount, the city should have at least put in an equal amount of effort to keep it there after investing so much in that bank. It's like investing in a 401K plan for 20 years and then having it taken away from you in a divorce settlement.

I think that what concerns me the most is the city's attitude towards all of this.

Downtown's eggs are in the government basket and all the lawyers etc that are an outgrowth of them. The three firms "leaving" are leaving on paper only and were only icing on the cake. I am not sure I know what the City directly gave RBC other than a lately developed a downtown corporate posture of providing parking decks, partnering for the convention center and doing improvements projects like opening Fayetteville Street and cleaning up the bus station and Moore Square. However all these things will survive on their own merit, especially given that actual personnel loss from these moves will be like 5%-10% at most. Downtown will be just fine as long as the foundation that brought these companies here in the first place remains intact...namely the City's willingness to provide for downtown (Meeker leaving opens up the possibility this could change). What can the City possibly do at this point regarding those leaving? Any plea risks coming off as a whiny childish "hmmph" that says our leaders don't understand that quite simply, these things happen. The best response would be to thank those who brought them here in the first place (corporate side), pledge support for the operations that remain, and trumpet the strong foundation available to other firms looking to move.

[RALNATIVE]

What can the City possibly do at this point regarding those leaving? Any plea risks coming off as a whiny childish "hmmph" that says our leaders don't understand that quite simply, these things happen. The best response would be to thank those who brought them here in the first place (corporate side), pledge support for the operations that remain, and trumpet the strong foundation available to other firms looking to move.

My statement about leadership was not a reference to any one particular event, such as these recent acquisitions, but more a general statement about the overall quality of Raleigh's leadship. Again, i'm not just speaking about political leaders, but also civic and business leaders. Let's face it, the environment that has been created in Raleigh is not pro-business. Sure there is alot of local support for all of the mom and pops that seem to propagate like weeds, but when you look at big business it's a different picture. Yes, mom and pops are great, but they don't come close to providing the economic engine that a growing city the size of Raleigh needs. For example, look at the relationship that Coca-Cola and Atlanta or General Motors and Detroit or even Bank of America and Charlotte have. If those companies tried to leave those cities or were targets for acquisition, it wouldn't happen without some kind of an attempt to keep those companies in place (that's what leaders do btw). It can be argued that those companies have helped to make those cities into the global business centers in their respective industries, and it didn't happen overnight. Those companies have deep roots in those cities.

You indicate that the lose of these companies was merely a paper only situation and will have little impact on downtown...well I disagree. You may not see any substantial impact in the short-term, but I guarantee you that over the long-term this will not be a positive for Raleigh. When it comes to big business, it seems that the local citizens are more than willing to stand up and say crap like "not in my backyard" or "stay out of my pockets", but whenever there's a downturn in the economy and companies go under or slow down hiring, these same folks are the first ones yelling "we need jobs." Well unfortunately, the mom and pops are not in a position to offer the types of jobs that these whiners seek.

Edited June 22, 2011 by RALNATIVE

[mjcatl2]

Raleigh is not pro-business

It would seem that the opposite is true. It's just that the Triangle's business is inherently not downtown oriented. Additionally, the city losing a banking HQ is business being business and has nothing to do with the locale. RBC was going to sell. One can look to it as a positive in that their tower will still stand and would not have been built otherwise - eventually that office space will get absorbed etc.

[15895]

It would seem that the opposite is true. It's just that the Triangle's business is inherently not downtown oriented. Additionally, the city losing a banking HQ is business being business and has nothing to do with the locale. RBC was going to sell. One can look to it as a positive in that their tower will still stand and would not have been built otherwise - eventually that office space will get absorbed etc.

And this thread is all about downtown. And I assume RALNative is referring to civic leaders being not so pro-business when it comes to downtown.

Charlotte city leaders, for example, usually focus on nothing but making uptown Charlotte the epicenter of the region where all the action goes on blah blah blah. I think that is the leadership RALNative is saying that Raleigh leaders should try to replicate sorta.

Edited June 22, 2011 by AirNostrumMAD

[mjcatl2]

And this thread is all about downtown.

Yes it is, but that doesn't change the relevancy of my point.

[Jones_]

My statement about leadership was not a reference to any one particular event, such as these recent acquisitions, but more a general statement about the overall quality of Raleigh's leadship. Again, i'm not just speaking about political leaders, but also civic and business leaders. Let's face it, the environment that has been created in Raleigh is not pro-business. Sure there is alot of local support for all of the mom and pops that seem to propagate like weeds, but when you look at big business it's a different picture. Yes, mom and pops are great, but they don't come close to providing the economic engine that a growing city the size of Raleigh needs. For example, look at the relationship that Coca-Cola and Atlanta or General Motors and Detroit or even Bank of America and Charlotte have. If those companies tried to leave those cities or were targets for acquisition, it wouldn't happen without some kind of an attempt to keep those companies in place (that's what leaders do btw). It can be argued that those companies have helped to make those cities into the global business centers in their respective industries, and it didn't happen overnight. Those companies have deep roots in those cities.

You indicate that the lose of these companies was merely a paper only situation and will have little impact on downtown...well I disagree. You may not see any substantial impact in the short-term, but I guarantee you that over the long-term this will not be a positive for Raleigh. When it comes to big business, it seems that the local citizens are more than willing to stand up and say crap like "not in my backyard" or "stay out of my pockets", but whenever there's a downturn in the economy and companies go under or slow down hiring, these same folks are the first ones yelling "we need jobs." Well unfortunately, the mom and pops are not in a position to offer the types of jobs that these whiners seek.

Its true we are very different at this point than Atlanta or Charlotte. I suppose my thoughts are tied to this not affecting Raleigh in a downward way. I do understand that we are not tied to a single large company and hence we don't grow in that big corporate way. I tend to be ok with that since the loss of the single huge growth engine is catastrophic (as you point out). We are very diverse, and or private sector engines, while all out in RTP, are numerous and cross many sectors. Lots of those younger employees still live downtown. Net result, is that I remain happy with our downtown and its prospects, though I concede it is not a big city end result I push for personally.

[Urbanity]

As a Charlotte resident I don't usually post in Triangle or Triad areas, but the recent hits to Raleigh and some of the sentiments expressed in this thread have made me want to just give some observations which I hope none would mind.

I think where the downtown goes so goes the city so it will always be. True, downtowns rise and fall, but if you look at the cycle of most cities - it has always been the downtown area that is the symbol, heart, and true indicator of what a city is all about as far as culture, beliefs and priorities.

There is no debate that Raleigh took some hard hits the last couple of months just as there is no debate that Raleigh is far from doomed.

I do agree with the sentiments of another who stated that financial services as a major part of Raleigh's economy is probably unlikely to rise again to such a significant level. But personally I do not feel that is necessarily a bad thing.

What Raleigh (not the Triangle) has strengths in is Government and Education. I don't see them going away. There are other sectors, no doubt, but don't underestimate the two mentioned.

As a fellow resident of North Carolina I wish only the best for the Capital City!

Edited June 26, 2011 by Urbanity

[Jones_]

"I think where the downtown goes so goes the city so it will always be. True, downtowns rise and fall, but if you look at the cycle of most cities - it has always been the downtown area that is the symbol, heart, and true indicator of what a city is all about as far as culture, beliefs and priorities."

Except in the 60's 70's and 80's when flight from downtowns was epidemic and "urban renewal" meant kicking out residents so the builders of towers that functioned only from 9-5, M-F could have cheap land and controlled access highways to and from them. Whether it was the northern cities where the net population was negative of the southern ones where it was increasing, downtowns were shat on, while city prestige rested on things like suburban sports arenas (Charlotte Coliseum) and decentralized office parks (RTP).

I do hope that prestige has permanently returned to the condition of the downtown.

[Gard]

Well apparently the popularity of apartments in downtown hasn't been affected by the RBC/Progress takeovers...lots of projects it appears are in the works!

http://www.newsobserver.com/2011/06/30/1310903/apartment-boom-rocks-downtown.html

[Euphorius]

It's nice to see that the developers have realized that there isn't an abundance of people who can afford or are willing to pay $1,500 a month in rent. I wonder just how much cheaper the units at St. Mary Square will be than what is currently available.

[Jones_]

They forgot to mention Seaboard.

[kermit]

Today's Business Journal is reporting that the Red Hat HQ will move into the Progress Energy Building downtown. Finally some good news for Raleigh.

http://www.bizjournals.com/triangle/news/2011/08/25/red-hat-to-move-hq-to-progress-energy.html?ed=2011-08-25&s=article_du&ana=e_du_pap

[Gard]

Looks like the Red Hat move to downtown could be delayed, given the unexpected snag that the Duke-Progress deal hit with federal regulators. There is the possibility now that the merger could fail all-together, as the government has given Progress and Duke quite a substantial list of issues they must resolve to the government's liking , some of which could effectively wipe out any benefit shareholders of either company would get from the merger. On top of that, they have a mere 60 days to figure it all out and resolve all concerns of the government.

http://blogs.newsobserver.com/business/red-hat-remains-focused-on-downtown-move

http://www.newsobserver.com/2011/10/02/1533954/merger-plans-trouble-feds.html#storylink=misearch

[Gard]

The Progress-Energy and Duke Energy merger have once again been rejected by Federal Regulators, guaranteeing that it won't get done this year and throwing the whole merger in doubt. Any further modifications to the deal are likely to require a whole new round of hearings with the NC Utilities Commission, throwing the merger even further behind schedule. http://www.newsobserver.com/2011/12/15/1712048/duke-progress-merger-denied-again.html

On other news, Martin Marietta has made a hostile bid for Vulcan Materials. According to the CEO, the combined company would be HQ'ed in Raleigh and be the largest in its industry in North America. This would also turn them into another Fortune 500 for Raleigh. Could a downtown HQ be in their future potentially?...

http://www.bizjournals.com/triangle/news/2011/12/12/martin-marietta-launches-hostile-bid.html

[NCMike1981]

_{I wonder how this will affect the whole "Red Hat moving into the old Progress Energy building" scenario....looks like a few things are in limbo at the moment}

[Gard]

Fifth-Third Bank has announced that they are planning an aggressive push into the Triangle and that they are going to be locating a regional HQ in downtown Raleigh:

http://www.bizjournals.com/triangle/print-edition/2012/03/09/fifth-third-plots-strong-growth-plans.html

[DPK]

Fifth-Third Bank has announced that they are planning an aggressive push into the Triangle and that they are going to be locating a regional HQ in downtown Raleigh:

http://www.bizjourna...owth-plans.html

Could this be a catalyst for getting another tower (like Charter Square) off the ground? I like the potential.

[RaleighRob]

^Well I definitely like your optimism.

Though I would be surprised if they wanted something that big here.

First building that came to my mind is that 7 story office building on Fayetteville street that's been sitting empty between Exchange Plaza and Market Plaza. It could use some minor work but otherwise it's a good solid building. (Would be kinda convenient for them, too...they could entertain business clients next door at the Mint whenever they wanted to.)

[Jones_]

Well Rob, I had kind of forgotten about the old Wachovia building sitting there. It makes decent sense to do that....Wells is stuck with that long term ground lease now and I am sure would love to have someone help them with that. Who knows...if I were Fifth Third I might even try to get them to do a whole facelift on it...glass it...similar transformation to the mid-rise tower in north hills that First Union currently is in.

[kermit]

Sounds like O2 fitness is moving its HQ to downtown Raleigh

http://www.bizjournals.com/triangle/blog/2012/09/o2-fitness-looking-to-move-hq-to.html?ana=e_du_pap&s=article_du&ed=2012-09-07

[DanRNC]

This is exactly what Raleigh should be doing.

 

http://wraltechwire.com/former-wachovia-building-could-be-raleigh-s-new-tech-hub/12008990/

[DanRNC]

^May warrant a topic by itself as well.

[Green_man]

I figured it was about time for a good summary post for what we could expect for 2013:

 

Should finish construction:

• 927 West Morgan
• St Marys Square
• 425 North Boylan
• Citrix HQ
• Justice Building
• NC Bar HQ
• SECU tower

Should (hopefully) start construction:

• Skyhouse
• Link Apartments
• L Apartments
• 227 Fayetteville St (major renovation)
• Union Station
• Renovation of Clarion Hotel
• Gramercy??
• Residence Inn?

And what look-a-head post would be complete without a wish list?:

• Charter Square announces progress and begins construction on the towers.
• N&O announces the consolidation of their offices into a new building with smaller footprint on their block and the moving of printing facilities just south of downtown -- opening up most of the block for a major redevelopment.
• Something, anything happens in Blount Street Commons.
• NCSU announces a new Urban Planning graduate program to be located in a new building downtown
• City of Raleigh announces official plans for Capital Blvd corridor and begins engineering work.
• An upscale hotel chain announces plans for a new building downtown (hopefully part of a mixed-use & tall development)
• City of Raleigh announces new (although scaled-back) plans for Lightner Facility.

[ctl]

Don't think the new Amtrak station will start construction this year -- the architect won't move that fast. Clearscapes wasn't officially chosen until mid-December. It is a complex project and the plans will undergo a lot of scrutiny by many stakeholders (the city, NCDOT, Amtrak, the two freight railroads, etc). 

 

As for the N&O, given their very tight financial circumstances, I can't imagine they would move -- unless someone pays big bucks for their current site, and that seems very unlikely. The N&O bought new printing machinery not that many years ago. The machinery is so large and complex that it would take at least a week, if not several weeks, to disassemble it, move it across town, and reassemble it to resume production. During that time the N&O would have to be printed somewhere else, and that's expensive too. Can't see it happening. 

 

Lightner won't be floated again until after the city completes the Critical Public Safety Center, and that will take several years.