American Tobacco Development Project Featured in N&O

American Tobacco Development Project Featured in N&O

Story from the News and Observer Web Site: March 31, 2000

American Tobacco vision wows Durham council


By J. ANDREW CURLISS and BARBARA BARRETT
News and Observer Staff Writers


An artist’s rendering of a cityscape in the proposed American Tobacco complex of offices, shops hotels and restaurants just south of Durham’s Downtown Loop.

DURHAM — The city’s dream of transforming a mammoth, sagging cigarette factory at the heart of downtown into a bustling Triangle destination won enthusiastic support Thursday from the City Council. One by one, council members stood behind efforts to fix up the American Tobacco complex, known for its Lucky Strike smokestack, and to create offices, shops, restaurants and hotel rooms where pockmarked buildings now stand behind barbed-wire fences. And council members didn’t balk at a cost of $37 million or more to Durham’s taxpayers.

City leaders say the $200 million project would invigorate downtown while steering growth away from South Durham and the gridlocked fringes of Research Triangle Park. It would create 4,400 jobs across many skill levels, according to city figures.

Already, the city says, the project has attracted wide interest from other businesses and developers, including the nation’s largest concert conglomerate, which is exploring whether to put a 5,000-seat theater for the performing arts next door. Another firm is looking at whether a skating rink would work there, too, officials said. If it all happens, the project would boost downtown employment by 50 percent and stimulate plans for turning the struggling core into a center with entertainment, civic and arts districts.

The American Tobacco project would make mostly office space out of the red-brick buildings near Durham Bulls Athletic Park, but would include restaurants and shops, and at least one new office building on a nearby city-owned parcel.

The main developer is Capitol Broadcasting Co., owner of the Bulls baseball team and WRAL-TV. To get the project completed, Capitol executives asked the council Thursday to agree to a framework in which taxpayers would commit to spend as much as one-fourth of the estimated $160 million private development cost, most of that for public parking decks near the complex. That would let Capitol spend the millions needed to turn the aging factory buildings into top office space — but with assistance that keeps the rents at market rates.

Both the City Council and the county Board of Commissioners will be asked to pay for at least two parking decks and to provide as much as $4 million for job creation. The council voiced support Thursday morning for the deal’s framework, which included a promise that no garage will go up unless enough tenants sign contracts to start renovations. The council is scheduled to cast a vote Monday and could decide about the project’s firm details — including spending taxpayer dollars for the decks — as soon as May 1.

The commissioners, who have not talked publicly together about the project, are scheduled to vote on the framework April 10. But Thursday was the council’s day to glimpse the grand vision. The council took in an hourlong presentation about what could evolve at the site, with photos and slides that took the council members back to Durham’s early days, when tobacco was king and American Tobacco employed thousands. Many nodded at the pictures of smoke-belching stacks and talked of the old days when factory workers filled the complex and Durham’s downtown hummed. The slides flashed forward to the factory today: Trees grow through warehouse roofs, and windows dangle from their frames.

Then, Capitol’s attorney, Mike Hill, showed colorful drawings of what the project could look like. They show red-brick offices that frame grassy plazas and courtyards. The project would connect to a proposed transportation center with bus service and a regional rail stop. “This can happen,” Hill told the council members. “Keep saying that to yourself: This can happen. This can happen.”

When it was their turn, the 11 council members present all said they support the concept. None questioned it at length. There has been no formal opposition. “This is like true love — it doesn’t happen every day,” Mayor Nick Tennyson said. “This is true love. … And this will bring a transforming experience for our city.”

Council member Brenda Burnette likened it to a “beautiful piece of pie.” Colleague Dan Hill said he was ready to leap out of his seat at the sight of the slides and a new downtown. “This is the centerpiece of change for the city,” council member Floyd McKissick Jr. said. City Manager Lamont Ewell said Durham is on the “precipice” of a monumental change.

The factory is four miles north of RTP on the Durham Freeway, at the city’s front step. Duke University, one of the region’s largest private employers, is two miles up the road and has committed to occupy a fifth of the planned office space. For those reasons alone, Capitol executives and city officials say the project stands a terrific chance. Hill wouldn’t say whether other tenants are lined up but acknowledged that RTP firms are the main employers he hopes will anchor the project.

“What this does is take those firms from expanding around the park and giving them a great option not very far away,” Hill said. The Triangle has low office vacancy rates already, and American Tobacco can fill that market, said Eric Karnes, an expert on the region’s real-estate market and chairman of Karnes Research. “There isn’t very much office space in the Triangle to begin with,” he said. “And all the office buildings are new.”

The American Tobacco complex offers something found nowhere else in the Triangle: historic warehouses similar to those being renovated in Louisville, Ky., and Denver, he said. And it offers the unusual spaces desired by a growing number of entrepreneurs and start-ups. No other town has Durham’s crop of massive tobacco warehouses, Karnes said. No other office complex has such large chunks of open office space.

A successful renovation could benefit the whole Triangle, he said, adding that he doubted the project would create competition with downtowns such as Raleigh’s. “I don’t think what happens in downtown Durham has any effect on downtown Raleigh,” he said. “I don’t like the parochialism.”

The complex could even have some effect on redeveloping other areas of downtown Durham, Karnes said. Small companies interested in vacant space elsewhere might consider whether their employees would want to visit the restaurants and shops at American Tobacco. And, Karnes added, it tells employers that they aren’t alone in moving to downtown Durham. It could even show potential developers of the Liggett & Myers cigarette factory what can be done with Durham’s largest warehouses, he said.

Liggett is scheduled to begin moving its operations to Alamance County in April. “Something like American Tobacco would be another real big feather in Durham’s cap,” he said. The city says the project would be a big splash — the biggest yet — in a long battle to bring back Durham’s downtown More than a decade ago, the city and county dedicated taxpayer money for a civic center, hotel, office tower and parking deck. That spawned private investment nearby, such as other efforts to renovate old tobacco warehouses — notably the shops and restaurants at Brightleaf Square and the apartments of Blue Devil Ventures’ West Village.

The city is realigning downtown streets to make them friendlier and has adopted a policy to encourage investment and job training in the city’s core. “Everything is really starting to come together,” said Bill Kalkhof, head of Downtown Durham Inc. “But this — boy, this is the one that really pulls it all together.”

News and Observer staff writer J. Andrew Curliss can be reached at 956-2405 or acurliss@nando.com

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