News & Observer | newsobserver.com | Council weighs Durham project

Published: Mar 17, 2008 12:30 AM
Modified: Mar 17, 2008 05:10 AM

Council weighs Durham project

Greenfire outlines downtown plans

 

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IF YOU GO

WHAT: Durham City Council meeting

WHEN: 7 p.m. Monday

WHERE: 101 City Hall Plaza

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DURHAM - City leaders and Greenfire Development still will be a long way from the altar, even if council members approve a preliminary agreement tonight for a massive downtown project.

Dubbed a "deal points" agreement, the nonbinding outline lays out the basic framework for the private-public partnership. Approval would launch negotiations on the final development agreement between the city and Greenfire, tentatively scheduled to come back for a council vote in late summer.

Think of the "deal points" document as a suitor asking for a first date, said Councilman Farad Ali.

"The deal points are, 'Can I go out with your daughter?'" Ali said.

"And the guy looks at you and says, 'You look good, you sound nice, you come from a nice family, so you can talk with my daughter.' But that's all it is."

Greenfire's proposal would add a hotel, office tower, retail space and hundreds of residential units worth $284 million to downtown.

In exchange, the city would agree to pay Greenfire $20 million in incentives over the next 17 years, plus an estimated $8.3 million to rebuild the Chapel Hill Street parking deck.

The incentives are performance-based, meaning that if Greenfire doesn't complete a project as promised, it doesn't get any money.

Mayor Bill Bell said earlier this month he thinks there are enough votes to approve the deal points tonight.

But Councilman Eugene Brown said he's on the fence.

He's still not convinced that Greenfire has the financial strength to pull off a project of this magnitude. Brown said he wonders why the project has to be so large -- and so do other developers who have approached him, he said.

The proposed deal encompasses a bundle of seven separate projects, to be completed in phases over the next seven years.

"We cannot afford to fail," Brown said. "We really need to make sure who are we getting in bed with, who's under the covers and why it's such a massive undertaking. Why can't it be broken out?"

Alan Delisle, the city's economic development director who helped shepherd closed-door talks with Greenfire for more than a year before the proposal was made public last month, attempted to answer that question in a memo to the council.

He pointed to other downtown public-private partnerships like the American Tobacco campus and the West Village apartments, which have widely been deemed successes.

They could have been smaller, Delisle conceded. "But would they be as successful?" he wrote.

"The project's components are all intertwined. If one part is 'off,' the project doesn't work -- much like missing ingredients for a cake recipe."

Delisle champions the deal as a good one for city taxpayers. The city investment would be offset, he projects, by increased property tax revenues as well as increased sales taxes.

Councilwoman Diane Catotti said she feels some degree of comfort that the city would be protected financially in a deal with Greenfire.

"Alan has said dead-on they've got to have their financing lined up. or they won't receive the incentives," she said.

But she acknowledges that could change if Greenfire hits a snag and comes back for more money in later years.

"I don't like it when they come back and try to change things," Catotti said.

Ali said he'll look for a specific "secondary strategy" to be included in the final agreement that would outline a course of action if Greenfire fails to deliver.

Despite some sharp questions, several on the council say they like the overall concept of the proposal and what it could do to continue revitalizing downtown.

"This deal needs to happen," Ali said. "But we want to make sure we can tell the public, if we make this investment, we did our homework."

matt.dees@newsobserver.com or (919) 956-2433

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