Rescue Mission selling big lot

One of the largest undeveloped pieces of land near downtown Raleigh is back on the market.

The Raleigh Rescue Mission is selling a nearly eight-acre parcel on New Bern Avenue where it once hoped to build a campus with housing, a dining hall and a clinic.

The decision to sell is a belated acknowledgement that the project, which had been opposed in the courts by neighbors, had little hope of ever being approved.

"It just wasn't going to happen," said Lynn Daniell, the mission's executive director.

Now the mission is hoping to raise cash for future projects by selling the land, which it bought in 2005 for $1 million.

The list price is $1.95 million, a figure that may be optimistic given current market conditions.

Very little vacant land in the Triangle is changing hands. Bank lending remains tight, and demand for new commercial and residential projects has greatly diminished.

The mission's property at the corner of Swain Street has a couple of things going for it: It's along a busy artery that is close to downtown, and it is zoned to allow both commercial and residential development.

The downside of that location is that the land's proximity to the Oakwood, College Park and Idlewild neighborhoods means any redevelopment plan would be closely scrutinized.

In the mission's case, neighbors objected to placing more social services in an area that already had its fair share.

The mission has received one offer on the property, and two other potential buyers have expressed interest. Those interested have included churches and developers, said Peter Pace, a broker with York Commercial.

"I've been pleasantly surprised because, as you know, the land market is not particularly great right now," he said.

It says much about the state of the property market that a church may offer the Rescue Mission the best return on its investment.

With most developers sitting on the sidelines, churches and other nonprofits are able to look at property that in a better market would be unaffordable. That's particularly true in downtown Raleigh, where a number of proposed projects remain stalled because of the credit crunch.

Holy Trinity Church, a 5-year-old congregation, has put a 1.5-acre parcel along Peace Street under contract that is part of the Blount Street Commons mixed-use project.

"It's actually a great time for churches to buy if they can come up with the money, because there's a big haircut on values," Pace said.

As for the Rescue Mission, it would love to take advantage of depressed property values and buy another site. Despite a $3 million expansion of its main downtown building several years ago, the mission needs more room and more beds to meet the demand for its services.

That demand will only increase when the SalvationArmy relocates from downtown to a larger facility on Capital Boulevard.

The challenge, Daniell said, is finding property that is zoned properly and where a homeless shelter won't cause neighbors to cry foul.

"We get compliments from everybody downtown, it's just that [they say], 'We'd rather you be somewhere else,'" he said.