Life sciences REIT acquires Chesterfield tobacco warehouse in downtown Durham

dbracken@newsobserver.comDecember 31, 2013 

— A California real estate investment trust that specializes in life sciences properties has bought the Chesterfield building in downtown Durham for $7.5 million.

The acquisition by Wexford Science & Technology, a subsidiary of San Diego-based BioMed Realty Trust, ends more than four years of legal maneuvering and paves the way for the former Liggett & Myers Tobacco Co. warehouse to be redeveloped.

BioMed officials said plans for the building, as well as how quickly they move forward, would depend on the needs of future tenants.

“We can say that it’s going to be very tenant-driven,” said BioMed spokesman Rick Howe. “ ... We’re looking forward to putting together plans that will accentuate the property’s location and the historic nature of the building but also bring in the state-of-the-art kinds of systems and floor plans that we know tenants will be looking for.”

The 360,000-square-foot Chesterfield building opened around 1948; for decades the heavy machinery inside it was used to produce Chesterfield and L&M brand cigarettes. The building has sat empty since Liggett & Myers moved its operations to Mebane in 2000.

Former Duke basketball stars Christian Laettner’s and Brian Davis’ company, Blue Devil Ventures, planned to redevelop the Chesterfield as part of their successful West Village project.

But Laettner was forced to turn over the property to Select Capital Management in November 2009 to avoid foreclosure. Laettner had borrowed $10 million from Select Capital, which was later accused by the Securities and Exchange Commission of defrauding investors of more than $50 million through several schemes.

In 2011, a judge approved an order transferring ownership of the Chesterfield to a Minneapolis-based entity tied to Glen Taylor. Taylor is the majority owner of the Minnesota Timberwolves, the NBA team that drafted Laettner in 1992 and for whom he played his first three seasons in the league. Taylor took a 70 percent interest in a $10 million promissory note that Select Capital made to Laettner. The Chesterfield secured the loan.

For several years local developer Josh Parker’s group, Chesterfield Partners, attempted to line up funding to transform the tobacco warehouse into a mix of office, retail and apartments. Parker now works for Wexford, and Howe said he would be involved in the redevelopment of the Chesterfield going forward.

With its Chesterfield acquisition, BioMed now owns more than 1.2 million square feet of space in North Carolina. In the Triangle, the company owns the Patriot Science Center in Durham, the 3500 Paramount Parkway building in Morrisville and the 3000 Weston Parkway building in Cary.

“As a developer of research-based communities for prominent research universities and their health systems around the country, we consider the Durham market, and the Chesterfield Building, an ideal location to continue Wexford Science & Technology’s expansion,” said Daniel C. Cramer, Wexford’s senior vice president of development, in a statement.

Bracken: 919-829-4548; Twitter: @brackendavid

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