East Rosemary Redevelopment Update

James Cates

GUEST COLUMN

By Mayor Pam Hemminger

On Sept. 30, the town council voted to move forward on a project to construct a new parking deck on East Rosemary Street as part of an overall strategy for economic development in downtown (What A New Parking Deck Will Mean for Chapel Hill).

There are many moving pieces to this project, so for those who have not been following closely, I wanted to provide some basic information, as well as updates on where we are in the process and answers to a few of the questions we have received from members of the public:

Where does the project stand now?

In early October, the town Manager signed the Economic Development Agreement (EDA) with Grubb Properties and, subsequently, a 30-day due diligence process has gotten underway for the parking deck. During this time, the town will have the opportunity to take a deeper look into technical details such as rock borings from the site and more detailed construction plans.

Simultaneously, the town is continuing to work on the design and construction plans for the deck.

What are the next steps for the proposed 200,000+ square foot commercial office/wet lab space?

As part of the EDA, Grubb Properties is proposing to construct a 200,000+ square foot commercial office building with wet lab space on the current Wallace Deck site. According to state law, the town cannot require Grubb Properties to build the building; however, because the town benefits most from this project if the building is completed in a timely manner, the EDA requires that Grubb Properties “will act with all diligence to complete the land use entitlement process for the New Office Building by November 30, 2021.”

The first step in this process, submittal of a concept plan to our planning department, must be complete by the end of November 2020, and we understand that Grubb Properties is on track to meet this deadline. The concept plan will then be reviewed by the Community Design Commission (CDC) before coming to council early next year, and the rest of the approval process will proceed according to town regulations, with a vote on the rezoning and final plans expected to be voted on by November 2021.

In the event that the building is not constructed, provisions have been spelled out in the EDA to allow the town to repurchase the property so we can explore other redevelopment options.

How much tax revenue is the new office building expected to generate?

Upon completion, the building is expected to be valued at $80 million and would bring in $1,290,000 in local property taxes annually, broken out as follows:

  • Town taxes $435,000
  • County taxes $694,000
  • CHCCS taxes $161,000

The project would also contribute $56,000 in Downtown Service District taxes.

Why is the town agreeing to a temporary lease of the Wallace Deck and what has been agreed to?

Currently, the town owns and manages a number of parking lots in our downtown. This includes the Wallace Deck, which averaged $636,000 in annual revenue between 2015 and 2019.

As part of our negotiations, the town and Grubb Properties agreed that it would be in the best interest for all parties if the town continued to manage parking during the one-year transition. As a result, after Grubb owns the property, the town has agreed to lease the deck from them for $30,000 a month ($360,000 annually).

In exchange, we will keep all of the revenues we collect. To ensure the best outcomes for the town, we have worked with a parking management consultant and will be implementing new leasing strategies and increasing hourly pricing. With these in place we expect to realize an increase in parking revenues over previous years.

The lease can be extended for up to four years. Should this happen, the town would manage the deck with net revenues split 60/40 between Grubb and the town after all expenses are paid.

What green features are being integrated into the new parking deck project?

There are a number of green features being planned for the deck and adjacent areas including:

  • A living wall on the east and north side, facing the neighborhoods
  • 20 EV charging stations with the ability to expand to 80
  • Engineering and conduit to support roof-top solar arrays
  • A new public greenspace between Rosemary and Franklin next to Lot 2
  • Bike storage and pedestrian improvements to support multi-modal safety and connections
  • Street trees along East Rosemary

We will also be utilizing green construction practices such as recycling the concrete from the demolished decks.

Design and traffic updates

On Nov. 6, the council received an update on the traffic impact analysis for the new deck and office building. Although we will be seeing more cars in the area, a combination of road improvements, including a signalized intersection at North Street and North Columbia Street/MLK, will keep traffic flows in acceptable ranges throughout the area.

Also, during that meeting, we talked with Perkins & Will, the architecture firm, about the design of the deck including its external appearance and some of the green aspects of the project such as solar, EV charging stations and streetscaping. Meeting materials and a video of those presentations can be found on the town website here.

As we move forward, the town’s construction management team will continue to provide regular updates on the project to the council and the public. Also, the town will continue to update information on the East Rosemary Redevelopment Project webpage which includes a list of Frequently Asked Questions.

We appreciate the community’s ongoing interest in this project and encourage you to stay informed by tuning in to the next update in December and sending questions to mayorandcouncil@townofchapelhill.org.

Pam Hemminger is the mayor of Chapel Hill.

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