UNC may fill 'gap' on street

Foundation to buy University Square

CHAPEL HILL -- University Square sometimes gets knocked for being one of Franklin Street's "missing teeth," a gap in the line of streetside shops that stretches from Henderson Street to Merritt Mill Road.

The six-story office complex just west of Columbia Street has its ground-floor retail: a late-night burger joint, a Chinese buffet, an eyeglass shop. But it's separated from the sidewalk by an asphalt parking lot and a short brick wall.

That may change, now that the UNC-Chapel Hill Foundation has announced a plan to purchase University Square and Granville Towers, with the expressed purpose of revitalizing Franklin Street.

Chancellor James Moeser said the university has no specific plans for the 12-acre site, other than possible parking decks at some date.

Moeser said university leaders will seek public comment. Chapel Hill Mayor Kevin Foy gave some after a news conference Friday afternoon.

"I don't think anything's off the table," Foy said. "But as a rule, up-to-the-sidewalk retail along Franklin Street is probably what would be preferable."

Foy pointed out that the property is directly across the street from 140 W. Franklin St., a municipal parking lot where the town and a private developer are planning an $80 million mixed-use project, including a public plaza.

Roger Perry, chairman of the foundation's board and a prominent local developer, said any major changes are several years off. The group must first gather public opinion and wait for current leases to expire. "Certainly, over time, this is a magnificent opportunity for some kind of redevelopment," Perry said.

The foundation, the university's fundraising arm that manages the endowment, plans to pay $45.75 million for the three Granville dormitory towers and University Square complex by July 1, 2009. Because the foundation is a private entity, the property will remain on Chapel Hill's tax rolls, to the tune of almost $870,000 a year.

"This will not become a property of the state," Moeser said. "That's how we can ensure we keep it in the tax base of the town."

Moeser said the private ownership will also make it easier for the university to partner with the town and private developers to rehabilitate the site.

"The vitality of Franklin Street and our downtown is critically important to our university," he said. "I think in all of our minds is a revitalized Franklin Street, including additional parking on Franklin Street, which is the most critical issue."

Once a school site

University Square and Granville Towers were developed in the late 1960s and early 1970s on the site of the former Chapel Hill High School. The late entrepreneur Frank Kenan, a major university benefactor, bought the complex in 1973.

US/GT, LLC, owned by the Kenan family trust, took ownership in 2001, a few years after Kenan's death. US/GT now will sell it to the university.

"That was always Frank Kenan's wish for this property," Moeser said.

"This is historic in the sense that there are really very, very few properties that change hands in downtown Chapel Hill," said John Graham, executive vice president of Thomas, Linderman, Graham, which manages University Square.