Gov. Pat McCrory’s administration announced Tuesday that it plans to make 43 acres in West Raleigh available for development, a move that could jump-start revitalization efforts in an area of the city that has long been considered ripe for higher-density growth.
The property, just off Wade Avenue, sits across Blue Ridge Road from the N.C. Museum of Art and just down the street from Rex Hospital. Now home to a textbook warehouse and the state Motor Pool facility, the land has the potential to become the type of pedestrian-friendly project that boosters say is needed along the Blue Ridge corridor.
“We think it can be transformative in terms of developing the corridor,” said Stuart Levin, president of the Blue Ridge Corridor Alliance, a nonprofit that has worked with the city to create a plan for the area.
The state is seeking a developer to sign a 99-year ground lease for the property. Both residential and commercial developers are likely to express interest in the land, although some may shy away because of the state’s decision to lease the property. A ground lease gives a tenant the right to develop the land, but at the end of the lease, the state has the right to take back the land and any improvements.
Still, the state should have no shortage of bidders, said Andy Andrews, CEO of Raleigh-based Dominion Realty Partners.
“Good projects are hard to find,” said Andrews, whose company recently opened an office building near PNC Arena and plans to build two more. “It’s a good location, and with long-term ground leases, you can still make the numbers work.”
The decision to lease the property – and not sell it outright – is consistent with how the state has handled other state-owned land, particularly property in Raleigh, said State Budget Director Lee Roberts.
“It’s hard to know what the state’s needs will be 100 years from now, and once you sell it, it’s gone forever,” Roberts said. “We feel like this is a good balance between monetizing the property, seeking its highest and best use, but providing an option for the state way down the road.”
Roberts said the need for the motor pool facility is expected to diminish as the state moves to privatize a portion of that service, while the state can store its excess textbooks elsewhere.
The leasing of the Blue Ridge land is part of Project Phoenix, an initiative by the McCrory administration to evaluate state-owned assets across North Carolina and see if they can be put to better use.
“This asset in particular, given its location and the path of development in that area, seemed to be one that is ripe for being returned to more effective use,” Roberts said. “If we can return money to the taxpayers while at the same time helping revitalize an important corridor in West Raleigh, then it’s a win-win.”
The money from the lease will go into the state’s general fund.
For more than 15 years, developers have been talking about West Raleigh’s potential to become a lively entertainment district with restaurants, stores, office buildings as well as apartments and townhouses. But while some piecemeal development has taken place, the vision has remained elusive, in part because the state has owned a number of key tracts.
Millions of people visit West Raleigh every year to attend events at the N.C. Museum of Art, PNC Arena and Carter-Finley Stadium, but the area’s suburban, car-centric development pattern means few linger before or after those events.
The city completed a planning study for the Blue Ridge Road District, which stretches roughly 2 miles from Western Boulevard to Edwards Mill Road, in 2012. That plan envisions a mix of office, residential and a small amount of retail on the state’s 43-acre parcel.
Roberts said the state is open to leasing the entire parcel to one developer or reaching agreements with multiple developers.
“We’re not being prescriptive about what the highest and best use is,” he said.
Although the state typically just lists a property for sale or lease to gauge interest, in this case it may hire a broker to handle the process.
“For a site this high-profile and of such great potential interest, we might use a broker off the bat,” Roberts said.