RALEIGH — The ongoing revitalization of downtown Raleigh has reignited a long-dormant apartment project near Moore Square that could transform an area largely overlooked by developers.
A Raleigh developer has filed plans to build 224 apartments on the 2-acre block bordered by Hargett, Martin, Bloodworth and East streets.
The property, which for years has been vacant except for a single house, once spurred a debate over affordable housing only to later become a glaring symbol of the real estate bust after its owner went bankrupt.
Called The Lincoln, the latest version of the project would drop a 321-space parking deck, a pool and hundreds of market-rate apartments into a largely residential area that until now has not experienced such large-scale investment.
I really think that a lot of the feedback that weve gotten is that the city and community are looking forward to market-rate housing in that area, said John Florian, president of The Florian Companies of Raleigh, one of three firms partnering to develop the project. And I think thats going to be a good thing for the community in general.
The development group, which also includes Hyde Street Holdings and Banner Apartments, expects to close on the land by the end of the summer.
The propertys owner is Gordon Smith III, a local developer and philanthropist who led the effort to build what is now the Marbles Kids Museum across from Moore Square. Smith moved all but one of the single-family homes from the block in 2007. Smiths plan to build several hundred apartments on the site initially raised concerns among surrounding residents who feared it would further diminish the affordable housing available in the area.
Smith was able to successfully rezone the property, but his company, The Wood Pile LLC, filed for Chapter 11 bankruptcy in early 2009 after the real estate market collapsed. Smiths company still owns 1.7 acres of parking lots and vacant land directly east of Moore Square that is up for sale.
Florian said his group has interest in possibly developing that property but no firm plans are in place.
The Lincoln project is likely to restart the debate over how best to redevelop the areas east of downtown without pushing out the lower-income residents who have traditionally called it home.
City officials, including Mayor Nancy McFarlane, have said the city needs to support efforts to improve the housing market in the area in order to make it easier to attract businesses. But some residents fear the increased density that will likely come from such efforts will make their neighborhoods both unaffordable and unrecognizable.
Lonnette Williams, president of the South Park-East Raleigh Neighborhood Association, expressed alarm when told about the scale of The Lincoln.
Oh my God. Are you kidding me? she said. On that little bitty property?
Williams said she worries about the traffic congestion that such a project would create. She fears lower-income people will soon have few options if they want to live close to downtown. She wishes more efforts were focused on rehabbing the existing stock of historic houses in the area.
But Williams acknowledges that even that wont ensure affordability. Many of the homes being rehabilitated just east of downtown are now selling for upward of $400,000 as proximity to downtown becomes more attractive.
Were getting what we want but at a cost, she said.
Among the areas of downtown that could benefit the most from The Lincoln project is nearby Moore Square, which city officials eventually hope to give a multimillion-dollar makeover. Just last fall, in an attempt to spur redevelopment around the square, the city paid $2.1 million for the Salvation Army building across Person Street.
Although the city hasnt yet figured out how to pay for the Moore Square redesign, Councilwoman Mary-Ann Baldwin said The Lincoln is the sort of project that would validate such an investment.
If youre going to sink $8 million to $10 million into a park, you want to see private development occur behind it, she said of the square. That would be one of the reasons for doing it.
The Lincoln is the second major apartment project to be proposed near Moore Square. Developers hope to build a 320-unit apartment high-rise on the southwest corner of Martin and Blount streets.
All told, there are now 1,202 apartment units under construction in the downtown area and more than 1,500 proposed, according to Karnes Research and the Triangle Apartment Association.
While those numbers are likely to raise concerns about whether supply will soon outstrip demand, Florian, like many developers, believes downtown is in the early stages of an extended rebirth.
I think downtown Raleigh is really going through a tremendous boom in its progression and its desirability, Florian said. So we really think there are a lot of drivers that are going to continue to drive demand for housing in downtown Raleigh right now. And over the long run its going to get better and better.