A new neighbor for RDU: Chinatown

$130 million project to transform declining mall near airport

dbracken@newsobserver.comFebruary 5, 2012 

— For all the amenities the Triangle has to offer, there's one big-city attraction that remains conspicuously absent.

It's Chinatown.

Now a developer is planning to rectify that by attracting a collection of Chinese businesses to the most unlikely of places - a nearly deserted outlet mall across Interstate 40 from Raleigh-Durham International Airport.

The $130 million project, which calls for two parking decks, a five-star hotel and a cultural center to be built on-site, would turn the Prime Outlets mall near the airport into one of the most colorful and distinct structures in the state.

"You're going to know you're in Chinatown," said Mark Herman, CEO of Panda Properties Sino, the Durham company that has put the property under contract. "It's definitely taking lemons and turning them into lemonade."

A six-minute video promoting the project shows pieces of the mall morphing into Chinatown, complete with sloping roofs and upturned eaves. There's even talk of turning the mall's 90-foot central tower into a Chinese pagoda.

Financing such an ambitious project would be difficult even in good times, but Herman said his group has raised the necessary cash from investors in China and in North Carolina.

"We're not going to a bank," he said. "Banks aren't loaning money for this."

To understand how all this came about, you have to go back 2-1/2 years, when groups of entrepreneurs began meeting to discuss the need for a Chinese cultural center, or even a Chinatown, in the Triangle.

The Chinese-American community here has grown nearly 80 percent over the past decade and now stands at more than 15,000. The region is home to nearly half of the Chinese-Americans in the state, according to U.S. Census data.

That, combined with the numerous Chinese students and businesspeople who visit the region, creates a need for a central gathering place, said Lian Xie, president of the Carolina China Council.

The council works to increase economic, educational and cultural ties between the Carolinas and China. Xie has led a dozen delegations to China over the past two years and visited the country 11 times last year.

Much of the mainland China financial support for the project comes from Hunan Province, which has signed a letter of intent to become a sister state of North Carolina.

Xie said a co-developer on the Chinatown project is the chamber of commerce in Changsha, Hunan's capitalcity.

"They have thousands of members and would like to contribute both money and also set up businesses here," he said.

A mostly empty mall

In scouting locations for a possible Chinatown in the Triangle, local groups originally focused on the South Hill Mall in Cary, where the Grand Asia Market is. But Xie said the owner wasn't interested in selling.

That turned out not to be a problem with Prime Outlets, a retail center whose best days are a distant memory. When the mall opened in the early 1980s, it was among the first to offer goods at below retail prices in the Triangle.

These days it is mostly empty, home to a handful of retailers, churches, nonprofits and a few restaurants in the food court. With the recent closing of the Sak's Fifth Avenue store, about 60 percent of the mall's 192,000 square feet of retail space is vacant, according to Karnes Research.

The mall is owned by local real estate investors Govind Chandak and his son, Prateek, who paid $6.2 million for the property in 2006. Neither returned calls seeking comment.

Panda Properties Sino now has an office in the mall, with blueprints of its plans taped to the wall.

Herman, 57, got involved in the project after colleague Kevin Lee told him about it. Herman's other company, MSH Consultant Group, has designed, constructed and renovated numerous restaurants in the Triangle.

"He kind of made the case for it," Herman said of Lee.

That led Herman to accompany Xie on several trips to China last fall. Herman said he has commitments from businesses in China that would fill 60 percent of the mall.

"I'm working locally to fill the rest," he said.

The anchor tenant will be a Chinese grocery, while the food court will be turned into a place where people can experience authentic Chinese food, not the Americanized version found at most area restaurants, Herman said.

Herman wouldn't disclose the purchase price.

Panda expects to close on the property as early as April and to have the interior and exterior renovated by the fall with a grand opening slated for January 2013. The second phase, which includes the hotel, parking decks as well as a fitness center and a 50,000-square-foot cultural center, would be completed over several years.

Although Herman has sketches of what Chinatown will look like, Xie said all those involved in the project expect those to be refined before construction work begins.

"The easiest part right now is money," he said. "The hard part is to come up with a great idea that you can develop that's better than the known (Chinatowns)."

Xie said Chinatowns in cities such as New York, San Francisco and Washington, D.C., give the impression that China is a poor and dirty place.

"That's not what we want here," Xie said.

Party next weekend

As for Herman, he envisions Chinatown becoming an iconic destination that will be among the first things visitors see when they fly in and out of the Triangle.

On Saturday, Panda is hosting a party at the mall to celebrate the Chinese New Year and to let people discover North Carolina's future Chinatown. The governor has been invited.

"In 200 years, when I'm dead and buried in the ground, I want people to say that Raleigh-Durham airport is next to Chinatown," he said.

News researcher David Raynor contributed.

Bracken: 919-829-4548

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