Local News

Raleigh Growth Hurt by Mortgage, Credit Crisis

Posted March 28, 2008 7:57 p.m. EDT
Updated March 29, 2008 7:09 a.m. EDT

— Growth in Raleigh is taking a hit amid the credit and mortgage crisis, but officials are optimistic for long-term development downtown.

David Reynolds, a Raleigh developer, said his next major project is a 23-story hotel and condo project on the corner of Dawson and Hillsborough streets. Construction was scheduled to begin next month, but has been placed on hold.

“I divide the world into things in my control and things outside of my control, and right now, the whole credit situation is firmly outside my control,” Reynolds said.

Reynolds believes Raleigh is somewhat insulated from the major downturn felt in other cities, but even here, lenders are changing requirements on projects to which they have already committed.

“I’ve never seen such over-reaction,” Reynolds said.

Developers of the Lafayette Hotel in downtown Raleigh recently announced a delay, as well as for a major condo project at North Hills off Six Forks Road in north Raleigh.

Paul Reimel, of the Downtown Raleigh Alliance, said he is nonetheless optimistic about Raleigh’s long-term outlook.

“Downtown is experiencing a great revitalization. There [is] over $2 billion worth of investment planned over the next couple of years,” Reimel said.

Reynolds said he expects the credit crunch to delay his project by about a year.