Blount Street project delayed

RALEIGH — Plans to redevelop 21 acres near the Governor’s Mansion are being delayed as tight lending makes it hard for developers to build and sell homes.

State officials said Tuesday that they had amended an agreement with LNR Property, the Miami Beach, Fla., company that in 2005 was tapped to redevelop state-owned parking lots and offices covering blocks bounded by Peace Street to the north, Lane Street to the south, Person Street to the east and Wilmington Street to the west.

The project, called Blount Street Commons, involves renovating 25 homes, some of them historic, and adding shops and up to 495 condominiums, townhouses and single-family homes.

LNR agreed to buy the property in four phases. But progress has been slowed as risk-averse lenders have tightened standards, making it harder for consumers to buy homes. LNR, which closed on the first two phases, asked the state for a contract extension on the last two.

As part of the extension agreement, the state retains the Hawkins Hartness house, which has served as offices for the Lieutenant Governor. The state also will be able to use parking areas on LNR land, and continue to use offices in several buildings, avoiding rental expense — saving up to $2.3 million, according to the Internal Auditing Section of the Office of State Budget and Management.