Chapel Hill copes with sticker shock

Mayor Kevin Foy says it might be necessary to scale back the plans for downtown projects

CHAPEL HILL -- The town might have to scale back its ambitious plans for public-private mixed-use developments downtown.

The team negotiating with Ram Development Co. on proposed business and residential condominium towers on two municipal parking sites will meet in a closed session today. Mayor Pro Tem Bill Strom said the committee might not make a recommendation to the Town Council until November or later.

The town has been struggling to re-envision the project since early summer, when Ram pegged the project's cost at about $100 million -- $20 million more than the town anticipated.

Mayor Kevin Foy said Wednesday that the town might need to abandon part of the plan, which calls for shops, offices and residential condominiums on what are now Parking Lot No. 5 on Church Street and the Wallace Deck at Henderson and Rosemary streets.

"The original scope of the project had the Wallace Deck as part of it, and that may not be part of it in the final project," Foy said.

Town leaders are being cautious as they try to shield taxpayers from risk. They had initially pledged $500,000 to build underground parking for the project at Lot 5, but they say the price tag has nearly doubled since they signed a memorandum of understanding with Ram last fall.

At the same time, some of them feel a sense of urgency because rising construction costs could price them out of a deal they say would help to revitalize downtown.

"We estimate at this point that every month of delay has seen about a $2 million escalation of costs," Strom said. "In my opinion, it's time to bring something forward that we can all rally around and support, if at all possible."

This afternoon, the negotiating team, which includes Town Council members Cam Hill and Sally Greene, will discuss scenarios that Ram submitted earlier this month. The town has declined to release the scenarios, citing the confidentiality of business negotiations.

"I think we all are anxious to get it back in front of the council and back in front of the public," Strom said. "We've ripped this thing apart. We've put it back together, and I maintain that there's a deal there.

"We're being careful, and it might be that we need another round of conversations," Strom said. "I'm optimistic that this is going to be in front of the council this fall."