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Raleigh may void deal for another downtown project

Posted August 29, 2008

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— City Manager Russell Allen, who twice this summer failed to convince the City Council to void a contract with a developer over one proposed downtown tower, has recommended that the city's contract for another downtown project be terminated.

The council is expected to decide Tuesday whether to end the city's deal with Raleigh lawyer Ted Reynolds for The Hillsborough, a 23-story mix of retail shops, a hotel and condominiums at the corner of Dawson and Hillsborough streets.

The city's inspections office was formerly housed on the site, but its building was torn down last fall to make way for the $65 million tower, which is expected to include 17,500 square feet of retail space, a 136-room hotel and 26 condos on the top floors.

Under the terms of his agreement with the city, Reynolds was supposed to have the financing for The Hillsborough lined up by Aug. 1. He and his partners told city officials in a recent meeting that they need another investor for the hotel portion of the project and that they expect to have the financing in place by December.

The City Council rejected Allen's previous recommendations to terminate Empire Properties' contract to build The Lafayette, a 22-story tower at the corner of Lenoir and Salisbury streets. Like Reynolds, the developer didn't have its financing in place to meet a city deadline, and it later balked at paying for street improvements up front.

The council voted to give Empire until November to arrange financing and agreed to let it pay for street improvements later.

Also Tuesday, the council is expected to vote on plans for The Edison a complex of four towers planned for a downtown block bounded by Wilmington, Martin, Blount and Davie streets. The two 38-story towers and two 29-story towers would include retail space, offices and high-rise condominiums.


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  • DontLikeTheSocialistObama Sep 1, 2008

    The downtown Raleigh real estate bubble is getting ready to burst.

  • districtcadvocate Aug 29, 2008

    Meeker has done many things but he did not hire Russell Allen. Paul Coble hired Russell.

    I agree, that Ted Reynolds should be given some time to get the financing in place. It is not like he and his son have not built some outstanding buildings in Downtown Raleigh.

    I think the real problem is that the city needs to convert as much of downtown Raleigh into some serious revenue producing real estate else the we are going to have to face some serious financial shortfalls. We need to new revenue and this economic downtown is messing up our timing and somebody is going to be left holding the financial bag of tricks. Who do you reckon that will be? LOL ;)

  • downtownbrown Aug 29, 2008

    Just another symptom of being one of the worst planned cities in America.

  • Longshanks Aug 29, 2008

    The Council won't even let the City Planner do his job, and I'm afraid he's right about this one AND the LaFayette. Raleigh just won't handle all of this boom right now in the middle of this financial crunch that's affecting everyone. And the council isn't even thinking about the infrastructure (roads, etc.) by letting them "postpone" the improvements. Stupid if you ask me.

    Also, people, check your darn spelling and grammar. We can't take you seriously if you can't even form a correct sentence. It's just a little advice.

  • NCSULandscaper Aug 29, 2008

    the hurricanes will just fill the fake river back up when all of the water supplies dry up

  • foetine Aug 29, 2008

    I'm smelling another Nortel Bubble burst about to hit this town.

  • wakemom Aug 29, 2008

    Mmmm, artificial river! Cool idea except for hurricanes...

    shoot hadnt thought about that

  • ezLikeSundayMorning Aug 29, 2008

    I don't think it is unreasonable to give them more time considering the current economic situation. Is there someone elses that wants to develop if this group can't? I don't think downtown Raleigh can support all this development.

  • WRALblows Aug 29, 2008

    This downtown building frenzy ridiculous. I'd love to see Raleigh boom as much as all the Charlotte/Atlanta metropolis wannabe's but who's going to occupy all this space? Not sure if anyone's noticed but there is a ton of empty commercial property and residential condos all over downtown right now. And several that are failing... Sure they sold - as rentals - and now sit unoccupied. Could that possibly be why they can't find enough investors? Course not, economic viability makes too much sense.

  • jaredg Aug 29, 2008

    seems like there is a lot of grow on the horizon. i just hope we have the infrastructure to support it.