Bidding is expected to begin this week on a highly-coveted downtown property owned by the City of Raleigh.
The Raleigh City Council on Tuesday will consider accepting a $3.08 million offer for properties at 301 Hillsborough Street and 320 W. Morgan Street, which the city put up for sale more than a year ago.
The Lundy Group, a Raleigh-based developer, made the offer in February 2014. The review process took months because city staff requested to rezone the properties, which the council did in May.
The 1.2-acre site is currently a surface parking lot for Campbell University Law School.
The city’s acceptance of The Lundy Group’s bid doesn’t guarantee a transaction.
By law, the city must advertise its acceptance of the bid in local media. Once it does, interested parties have a 10-day period to submit higher offers for the land. The city can then accept another offer, so long as it’s a certain percentage higher than the previous bid.
Raleigh can continue accepting bids and re-advertising the properties for 10-day periods as long as developers continue to submit higher bids.
The process could go on weeks or months, said Jim Greene, assistant city manager for economic development.
“There has been a lot of interest on this property,” said Greene, who declined to identify interested parties.
The city could advertise the bid by the end of the week if the council accepts it on Tuesday, he added.
By accepting Lundy’s offer, “We’re honoring the first bid on the property,” he said.
Lundy wants to build a tower with “residential over commercial over retail with some structured parking,” said Jim Baker, the company’s founder.
Lundy’s general plans fit within the current zoning, he said.
The properties are zoned as DX-20, which allows for an array of uses – apartments, retail, hotels, office space, a grocery store – and buildings as tall as 20 stories. Other details of the Lundy plan, such as the building’s height, depend on how much the company ends up spending on the land, Baker said.
“It would be absolutely wonderful to end up at our initial offer,” Baker said. “I have no idea what to expect. We’re going to just have to enjoy the process.”
The tax value of the land is $3 million.
“I fully expect there to be bids that exceed that,” Greene said.
The city acquired the land from Reynolds Co. in 2009 after the developer’s plans for a combination condominium, office and retail building stalled following the financial crisis.