Developer's plan crosses a hurdle

North Hills East gets Wake board's OK; now it's up to Raleigh

RALEIGH -- Wake commissioners pledged their unanimous support Monday for a developer's desire to use future tax revenue to help build an $800 million complex in North Raleigh, but the plan could still die with the City Council.

Kane Realty wants $75 million in public money to build parking decks for a massive project planned for 45 acres across Six Forks Road from the company's revamped North Hills. As proposed, North Hills East would include a 20-story office tower, shops and homes.

Developer John Kane told the county board he was prepared to move forward with a more modest $125 million plan for the site, but with public support he could build the grander $800 million complex.

"We can do another typical sprawl development like we've seen across Wake County, or we can do something extraordinary," said Kane, who has spent much of his career building just the sort of suburban developments he now derides.

"I do not want to build more of these obsolete strip centers," he said. "They are profitable, I can tell you that. But I don't think it's the right thing to do."

For much of the past year, Kane lobbied the Raleigh council for approval of a tax-increment financing proposal, often called a TIF for short, to raise money to build multiple parking decks at the new center.

TIFs use bonds to pay for new development that otherwise wouldn't occur, repaying the debt with future tax revenue from the project. Most cities that use TIFs employ the financing method to help spur redevelopment in low-income or blighted areas.

Since the North Hills East plan would require the city and county to forgo portions of future tax revenues, the measure would require approval from both local boards.

After months of debate, the City Council split 4-4 earlier this year on how to use TIFs, with Mayor Charles Meeker arguing that Kane doesn't need taxpayer help to afford the upscale project.

On Monday, Kane presented a reworked proposal to county commissioners that would use private loans instead of government bonds but would still rely on 75 percent of future tax revenue to repay the debt over the course of 20 years.

Kane said the city and county would be getting 25 percent of the tax revenue on a project at least four times more valuable -- meaning the money flowing into public coffers would be comparable to the income from a less ambitious project. And after 20 years, the city and county would receive the full revenue from the much larger project.

Kane's new plan adheres closely to a Project Development Financing Policy the county board approved in April, and the commissioners cheered the proposal Monday.

Even board Vice Chairman Paul Coble, who makes a point of opposing anything that involves increased taxes or spending, said he'd likely vote for Kane's plan if the developer can get the City Council's approval.

"What I like about this is that it's increasing tax revenue at the request of the taxpayer," Coble said. "How often do you get that?"

Raleigh Council member Philip Isley, who supported Kane's original TIF request, said Monday that he wanted to discuss this latest proposal with other council members before commenting.

Setting a precedent

Mayor Meeker said he also had not seen the revised proposal, though he got a call from Kane's representatives asking for a meeting next week. Meeker has said giving public financing to the North Hills East project would set a bad precedent for the city.

"I'm trying to keep an open mind about this," Meeker said. "It sounds rather similar to what we heard before."

Commissioners' Chairman Tony Gurley urged the City Council to take a look at the county's development financing policy and approve something similar, allowing Kane to proceed.

"There's no downside," Gurley said of the financing proposal. "But we can't do this on our own, and the city of Raleigh can't do it on their own either."