County Endorses Plans for New North Hills Development
Posted July 23, 2007 3:26 p.m. EDT
Updated July 23, 2007 9:29 p.m. EDT
Raleigh, N.C. — The Wake County Board of Commissioners on Monday voted unanimously in favor of endorsing an $800 million mixed-use development at the intersection of Six Forks Road and Interstate 440 in Raleigh.
The board's approval would make Kane Realty's development a public-private partnership that developer John Kane argued would mean a larger tax base that would benefit both the city and county.
But according to the county's project development financing policy, the project has to have the city's financial backing before county commissioners approve the plan.
Last year, city leaders approved Kane's plan, which entails demolishing several buildings on 45 acres across Six Forks Road from the current North Hills development.
But the City Council declined Kane's request for the city to issue tax-increment financing, or TIF, in which the city borrows $75 million for a public parking garage. TIF loans are paid back with increased taxes generated by the project involved.
Kane's new plan, however, calls for what he said is a synthetic-like TIF request that poses no risk to either the city or the county. Under this type of financing, he said, the developer borrows the money and is responsible for paying it back.
In return, however, the developer would be limited to paying only 75 percent of expected taxes for the next 20 years, which is more than what would be paid if the property was left to be developed at the expected market value of $125 million.
Kane said the developer would be taking all the risk by borrowing the money privately to pay for public improvements and paying back the debt only after the project generates the anticipated tax revenue.
Kane said the city and county would receive $550 million in additional revenue that could fund 15 to 20 new elementary schools. It would also create 2,700 permanent jobs.
Even without public backing, Kane said, he could still proceed with the project but that it would not be as big.
With the public's support, he reiterated before the board, the project could be worth as much as $792 million.
Kane's original proposal for North Hills East included 1,800 residential units, 1.3 million square feet of office space, 850 hotel rooms, more than 500,000 square feet of retail space and a 300-unit retirement community.
Kane said he plans to go back to the City Council with his latest proposal and that he hopes he can soon be added to its agenda.
Raleigh Mayor Charles Meeker, however, told WRAL Monday afternoon he "thought the City Council was done with this project," adding he doesn't think it is appropriate for the public to become involved in areas already slated for development.