RALEIGH – Though the developers and backers of the proposed $2.2 billion Downtown South project faced unanimous opposition in the approval of the group’s application from the Raleigh Planning Commission at last week’s meeting the final decision on the project may hinge on a December 15 public hearing in front of the Raleigh City Council.

In advance of that public hearing, the developers of the approximately 135-acre project on three parcels of land near the intersection of South Saunders Street, South Wilmington Street, and Interstate 40, held a virtual press briefing on Monday that, in the words of a spokesperson for the project, sought to address the vision and opportunity alongside new partners who have become involved in the project.

“I want to be the guy that I needed when I was a young kid,” said James Montague, president of F7 International Development, a recently-announced partner involved in Downtown South.  “This project gives us the opportunity to introduce young folks to this type of project and the work that it takes to make it happen.”

The Downtown South group also recently added BLWall Consulting and Raleigh Raised Development LLC as partners in the project.  All are minoirty-owned companies.

“We specialize in public policy and community engagement,”  said Bridget Wall-Lennon, owner of BLWall Consulting.  “I’m here to ensure that we have an aggressive outreach to minority-owned business and the historical businesses in the community.”  Wall-Lennon shared that her firm and the developers have a plan to engage with local minority-owned businesses and will make efforts to ensure that there are retail spaces for those entrepreneurs and business owners.

The new partnerships come, in part, as a means to counter claims by a group of religious leaders called ONE Wake that the project, in its current form, would do more harm than good.ONE Wake that the project, in its current form, would do more harm than good.

ONE Wake is calling for 300 affordable units in the first phase of the project, rather than the 100 Kane proposes.

It also wants a guarantee that workers on the project will be paid a $20/hour minimum wage.

“Excited about the opportunity to work on this project, which I know will bring so many economic development opportunities for businesses, individuals, and families in south Raleigh,” said Wall-Lennon.

Raleigh Raised Development, whose partners include LeVelle Moton, NC Central University Head Basketball Coach, Clarence Mann, manager of Vistabution, a minority-owned general contracting business, and Terrell Midgett, the co-owner of Management Professionals, a facilities and maintenance company in Raleigh, was announced in a press release on Dec. 7.  According to the statement, Raleigh Raised Development “developed as a result of growing up in the Southeast Raleigh Black community and the desire to shine light on the under-representation of the Black community in local development efforts.”

“I want to do something,” said Moton in today’s press briefing.  “I want to help create generational wealth in our minority communities.”

Downtown South project backers to unveil new push, add more minority partners

“We got involved because the people at the table weren’t necessarily a part of the community,” said Moton.  “But they do understand, and we partnered with Kane and Steve Malik because we want to leave a historic impact for our community, which has been slighted historically.

“Nothing is going to change until we have ownership of something,” added Moton. “Now this has the chance to be the southern gateway to the city and the chance to be one of the largest projects for the city,” said Malik, which the development group says is a stated objective of the City of Raleigh.

A gateway to Raleigh

“The site’s location at the gateway to the city and along Raleigh’s acclaimed Greenway trail create an opportunity for reinvestment and revitalization,” reads the group’s proposed project overview and summary, which is available online.  “We propose to build a mixed- income, multi-use district that extends Downtown, invests in a historically underdeveloped area of Raleigh and provides the area with a community hub of which the whole city can be proud.”

WRAL TechWire imagge

Levelle Moton pledges support for outreach in Downtown South project during Monday’s virtual press conference.

The impact of the massive project on local neighborhoods has been a sore spot since developer John Kane and partners including NC Football Club owner Steve Malik first announced the project last year.

“We appreciate the Planning Commission for their extensive review of the Downtown South rezoning case. We agree with the Planning Commission’s view that this project can do so much more, and believe the way to accomplish that is through a Tax Increment Grant,” Bonner Gaylord, who is part of the Kane Realty team, told WRAL TechWire after the Raleigh Planning Commission meeting last week. Gaylord is a former Raleigh City Council member.

The developers have proposed the use of a Tax Increment Grant, an economic development technique that has been used by the City of Charlotte to advance public-private partnerships.

“TIGs are provided on a reimbursement basis only, and the project must demonstrate its benefit to the general public,” reads the City of Charlotte’s Economic Development webpage.  “Examples of reimbursable improvements through a TIG include, but are not limited to, new public infrastructure such as roads, streetscapes, and parking decks.”

The back story

Downtown South developers submitted a Memorandum of Understanding to the Raleigh City Council in October 2020, which outlined the proposed additional benefits that developers say would confer to the district “for the betterment of all.”

If approved, should the development move forward, the adoption of a Tax Increment Grant would freeze property taxes for the development at their pre-development levels, with the future growth in tax value over and above the current levels granted back to the project to fund agreed-upon community benefits for a span of 30 years.

The developers say that these benefits would include “substantial housing affordability, health facilities and partnerships, incubation spaces for area businesses, educational partnership and workforce development programming, supporting minority and women-owned businesses, integrated wellness assets and enhanced Greenway trail systems, and an entertainment and sports venue.”

The project is conditioned on a set of zoning principles and agreements, including zoning condition #17, which reads in full:

“No certificate of occupancy shall be issued for any structure that would result in occupancy of more than 999 dwelling units on the subject property after the effective date of these conditions, except where the following requirements relating to affordable housing are met: 10% of the units on the subject site at the time qualify as affordable for households earning 80% area median income or less for a period of no less than 5 years from the date of issuance of a certificate of occupancy for the existing units.

The rent and income limits will follow the Affordable Housing Standards determined annually by the City of Raleigh Housing & Neighborhoods Department. An Affordable Housing Deed Restriction in a form approved by the City, and which identifies the affordable housing option chosen by the property owner, shall be filed and recorded in the property’s chain of title by the property owner in the Wake County Register of Deeds prior to the project receiving a certificate of occupancy.”

ONE Wake contends that the proposal doesn’t go far enough with regard to affordable housing and in a publicly-accessible statement, counter-proposed that developers add an additional 200 units to their plans, capping rents no higher than $1,300/month, and remain affordable as benchmarked to 60 percent of adjusted median income for a minimum of 15 years.

Developers say that even though the rezoning commitment references 80 percent adjusted median income, the majority of the residential units in the proposed development would “target households earning an average of 60% AMI utilizing the LITHC programs” with 15 percent of the units held for 30% AMI, 25 percent of the units held for 50% AMI, 30 percent of the units held for 60% AMI, and 30 percent of the units held for 80% AMI.

“There will be no displacement on this site,” said Gaylord.  “The gentrification component, the secondary effects that we all recognize is that with investment, investment follows.”

In answering questions regarding the development, Gaylord presented the option as a binary one: either the city leaves this section of the region as it is, or the area is developed.  He proposed an educational outreach program to ensure homeowners are aware of their options as it pertains to taxation and potential transfer of property through a real estate sale, should that be a choice they wish to make.

“We want the benefits to confer to all of Raleigh,” Malik added.

Deadlines near

The Downtown South project rezoning request initially appeared on the Planning Commission’s October 13 consent agenda for referral to Committee of the Whole.  The case appeared on the October 22 Committee of the Whole agenda, but was not discussed.  The case has subsequently been discussed during a series of meetings on October 23, October 29, November 5, and November 19.  It was again discussed on December 8.

The deadline for Planning Commission action is January 11, 2021, and the developers state that rezoning approval is “necessary by the end of 2020 in order for the project, and the benefits it will bring to the community, to move forward” in the project overview and summary.  On today’s press briefing, Gaylord indicated that the proposal for Downtown South was now in the hands of the Raleigh City Council.