Economy doesn't hinder North Hills expansion
Posted December 29, 2008 3:04 p.m. EST
Updated March 9, 2009 5:11 p.m. EDT
Raleigh, N.C. — Despite the sluggish economy, tight credit and a lack of city financing, the North Hills expansion continues to move forward, with the opening of a luxury hotel and construction proceeding on apartments and office and retail space.
The 50-acre project on the east side of Six Forks Road at the Interstate 440 Beltline eventually will total about $1 billion in investment by developer John Kane and his partners.
The 10-story Renaissance Raleigh Hotel quietly opened last Friday and will have its official opening next week. The hotel, which is operated by Marriott, offers 235 rooms and suites, a 5,000-square-foot ballroom and 8,000 square feet of meeting space.
The Captrust Tower, a 17-story, mixed-use office tower being developed in partnership with Duke Realty, is under construction, as are a two-story Harris Teeter supermarket, other retail space, 409 apartments and dozens of condominiums and townhouses. Work on other residential units and a retirement community is expected to begin in the coming months.
"We were fortunate with the two projects behind us that we got financing before the financing market shut down," Kane said, referring to the office tower and supermarket.
About three-fourths of the retail space is already leased, and tenants have been lined up for 40 percent of the space in the office tower, he said.
Still, the changing economy has altered Kane's plans for the complement to his successful North Hills mixed-use project across Six Forks Road from his new development. He recently submitted plans to city officials requesting more apartments at North Hills East because of the slow market in residential real estate sales.
The initial plans for the North Hills expansion called for 1,800 residential units, and a Kane spokeswoman said the request for more apartments would add to that number and not replace condominiums or other units.
"We see the 50 acres on the east side of Six Forks Road just being more density, more urban than what we've done to date," Kane said. "We're going to go vertical with things versus spreading out."
That stance is in marked contrast to Kane's statements last year, when the city rejected his request for $75 million in public financing for a parking deck. Mayor Charles Meeker and other officials said the tax-increment financing Kane wanted should be reserved for blighted areas in need of development, not a thriving area like North Hills.
At the time, Kane said the lack of taxpayer support would lead to more surface parking at North Hills, making it more like "a typical strip mall" than a primary piece of an area planners have started to call Raleigh's Midtown.
"We're doing our thing, (and I don't mind) if people want to call us Midtown," he said. "I think the city needs density in certain pods, and I think that's what we're doing."
Ken Atkins, executive director of Wake Economic Development, said North Hills is succeeding where other developments have stalled because "it's the right product at the right time.
"You've got housing – not only rental housing – retail, jobs, even a retirement community. It's a whole microcosm of what you see happening in larger communities," Atkins said.