Town leaders reject proposed 12-story building at 157 East Rosemary Street


By Adam Powell

Current building at 157 E. Rosemary. Photo courtesy of Town of Chapel Hill.

At the Wednesday, November 29 business meeting of the Chapel Hill Town Council, the council voted to deny an application for a rezoning request that would have allowed for a 12-story high-end residential building with 3,000 square feet of ground-floor retail space and below-ground parking on the site of the former Bub O’Malley’s pub.

The rezoning request was submitted and presented to the council by Ballentine Associates, PA on behalf of T.J. Capital II LLC, which went under contract earlier this year to purchase the property at 157 East Rosemary Street from its current owners, Pallouras Enterprises, LLC.

Pallouras sought to sell the 0.31-acre property to T.J. Capital II LLC. The new purchasers first had to seek approval from Chapel Hill officials for its desired project – a 12-story residential condominium rising up on the site with 56 dwelling units, including 14 designated as affordable housing.

Twenty-seven units were designed to be two-bedroom units, with 10 one-bedroom units, four three-bedroom units, and a single four-bedroom unit. The affordable housing units included eight two-bedroom units, five one-bedroom units, and one three-bedroom unit.

Rendering of 157 E. Rosemary St. Rendering courtesy of Town of Chapel Hill.

The designs called for a top-level roof height of 150 feet – above the town’s current downtown ordinance for building heights – and a total height of 157 feet.

For such a height, the developers requested a variance from the town that the council was unwilling to provide.

“This project brings dense, diverse, and high-quality housing options to our downtown, with 25 percent of the proposed units qualifying as much-needed affordable housing,” wrote the applicant in the presentation to the council. “A rezoning to R-CP-CZD (residential – community priority – conditional zoning district) with the associated height modification is requested as a means to provide the economics needed to enable the developer to provide this level of affordable housing.”

Had the project been approved, upon completion it would have become the tallest building in downtown Chapel Hill – even taller than the Life Sciences Building, approved in the same meeting, which calls for 140 feet of approved elevation.

The two-story building at 157 East Rosemary Street was known for decades as the popular Bub O’Malley’s Pub on its upstairs level, with numerous bars and other types of businesses inhabiting the ground-floor space over the years.

That ground-floor space is currently being utilized by a new venture, known as The Gathering Place. Opened in early 2022, The Gathering Place has become a popular new spot for locals to hang out for a variety of activities, including drinking, socializing, and gaming.

Numerous individuals came to the council meeting to speak on behalf of The Gathering Place, including the current ownership as well as employees and patrons of the establishment.

All were in agreement that the loss of The Gathering Place would be a bigger loss to downtown Chapel Hill than the gain of a new residential/retail complex.

“I’m in awe of the power you wield this evening, and it is not lost on me,” said Josh Goodsell, owner of The Gathering Place. “You know the lives you are probably going to change tonight. I know I don’t have much leverage in this situation. But I just wanted to come up here – I’d be remiss if I didn’t tell you what was currently existing at 157 East Rosemary. It is a bit of a weird community of fun-loving people who have gotten to love the old ugly building that is there currently.”

“We are a year-round business we started last year. We’re slated to do like $1.5 million this year. And if we’re able to stay there, we will continue to open businesses in that building and generate more revenue for the city. I think that’s about all I have to say,” Goodsell added.

“Throughout our short time being open, what has struck me most powerfully is the community that we’ve built there from day one,” added Michelle Locker, Goodsell’s fiancee and a staff member at The Gathering Place. “People have come in very excited about the unique space that we provide – something that area has been missing. I’ve heard from many of our regulars about what it means to them that The Gathering Place exists. Yes, we’re a business and a profitable and productive one. But we’re also a welcoming, safe space that has been embraced by a very unique community and a very large community.”

One of the neighbors of the site, UNC’s Phi Mu sorority, also addressed concerns with the project. Multiple current students who live in the Phi Mu house, along with the organization’s alumni advisor, addressed their issues with the proposed rezoning.

“I can assure you that based on my reading (of Chapel Hill’s development ordinances) the proposed development does not align with the town’s clearly-articulated vision for development on the north side of East Rosemary,” said Phi Mu alumni advisor Monica McCarty. “The proposed development sits at the threshold of the National Historic District and is bounded on the north and the east by the Franklin/Rosemary Historic District. The new zoning requires lower heights and an increased setback when compared to the current zoning.”

“We believe the applicant needs to provide an appropriate buffer on the proposed development site,” McCarty continued. “And what we saw tonight does not meet that. And we don’t agree with the applicant’s idea that we should be responsible for modifying our home or planting trees in an area that will not sustain their growth. The contemplated 157 feet is nearly 75 percent taller than current zoning permits, and over 10 percent higher than the approved wet lab (the new Life Sciences Building) across Rosemary Street.”

Town leaders ultimately agreed with the public speakers that the proposed development did not conform to existing standards, or the town’s long-term development goals. Outgoing council member and mayor-elect Jessica Anderson motioned to deny the rezoning request. Paris Miller-Foushee seconded Anderson’s motion to deny the rezoning application, and the motion was approved by a 7-1 vote.

“I recognize the need for more housing downtown,” council member Amy Ryan stated. “If you moved this a couple blocks down Rosemary on the south side of the street, [it would] be a big thumbs up for me. But I’m feeling like this is the wrong building for this place. You’re requiring so many variances across the board, from height to affordable housing. I think the amendments and the variances suggested for this project are way over the line necessary.”

“I think it’s a great building. And I would love to have the 56 units and I would love to have the 14 [affordable housing] units,” added council member Michael Parker, taking part in his final business meeting as a member of the Chapel Hill Town Council. “But I think that 12 stories in that particular spot is just too much. I just really struggle with 12 stories in that particular location.”

“I’ve struggled with this one,” added Anderson. “I will say I do feel that we do need to expect that this building is going to redevelop. And I really do like this building. I just think the transition is not right here. I hope that when this building is redeveloped, that we can help make sure that The Gathering Place doesn’t go away. I think we have successfully relocated other businesses. And I think the town is here to help when those things happen. I don’t want to imply that I think nothing should be here, or that housing shouldn’t be here. I think it should. But I think we also all have to be ready to be welcoming and accommodating of new neighbors downtown, because that’s what we need.”

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