RALEIGH – Downtown South developers have taken another significant step toward turning their vision into reality and say groundbreaking could take place later this year. But Raleigh Mayor Mary-Ann Baldwin is keeping a very close eye on the project.
“This could probably be the greatest redevelopment in the history of Raleigh, if done right,” Baldwin told WRAL TechWire in an interview. “It will take about 25 years to build out, it will not be something that will happen overnight, as evidenced by what we’ve seen at North Hills, which has been a 16 year process and is still ongoing.”
Developers are making big progress.
On New Year’s Eve, Kane Realty and TradeMark Properties along with North Carolina Football Club owner Steve Malik announced the closing of the real estate transaction involving the final parcel of land that will become a part of the proposed Downtown South District. The settlement of the transaction comes two weeks after a rezoning request for the proposed $2 billion development was approved by the Raleigh City Council on December 15, 2020.
The total land acquired for the project is approximately 135 acres, with the final parcel of land including 44.76 acres east of S. Saunders Street and north of Interstate 30 along Penmarc Drive and Water Works Street.
“This final announcement for the year is a significant moment for the district and the city as we move one step closer towards delivering critical infrastructure and community benefits to a widely underdeveloped area in Raleigh,” said Malik, a partner in the project. “This parcel of land has the potential to shape South Raleigh for generations to come.”
According to developers, the property currently remains largely undeveloped and contains a mix of warehouses and small office buildings, and it will serve as the core of the Downtown South District. This parcel will be developed first, following the community engagement process the developers plan to roll out in 2021, while simultaneously pursuing a tax increment grant (TIG) from the City of Raleigh.
“We’ll begin discussing and negotiating with City officials on the tax increment grant and continue engaging with local stakeholders through ongoing meetings and the public meetings we agreed to as a part of the rezoning requirements,” said Bonner Gaylord, managing director of operations for Kane Realty, in an interview with WRAL Tech Wire. “We still hope to break ground on Phase 1 of the project in late 2021 assuming everything goes to plan.”
Though the property is located in an opportunity zone, said Gaylord, the development group is not currently pursuing additional investors. They are, however, still seeking additional partnerships, said Gaylord, “and if any arise that are connected to the opportunity zone then we’ll evaluate the opportunity and overall fit for this project and the community.”
An opportunity zone offers qualified investors certain tax benefits when they invest unrealized capital gains into these areas.
The development group added three black-owned firms as partners in early December 2020 ahead of a Planning Commission meeting to discuss the project and the December 15 City Council Meeting.
“We continue to hear from both our partners and community members about the need for additional affordable and mixed-income housing,” said Gaylord, who is also a former member of the Raleigh City Council. “Our goal is to make sure we can include a substantial amount of housing affordability through the issuance of a TIG.”
A Tax Increment Grant, or TIG, is an economic development technique that has been used by the City of Charlotte to advance public-private partnerships.