Durham council favors $3.97M incentive for motel, tower downtown

03/20/2014 12:34 PM

02/15/2015 10:43 AM

The City Council gave the go-ahead on a $3.97 million incentive for a proposed 26-story building at the former Woolworth’s site and a former downtown motel’s renovation.

“The city would basically get a development that we consider very catalytic for the downtown,” said Kevin Dick, the city’s economic development director, told the council Monday night.

In February, the Durham County commissioners authorized county administrators to negotiate a similar deal with Colorado developer Austin Lawrence Partners.

Austin Lawrence announced its “City Center” tower project last year, It would house a mix of office, retail and residential space and incorporate several historic Parrish Street facades into what will be Durham’s tallest building. Deal points require the company to retain original brickwork some other architectural features of the facades.

Subsequently, the company bought the former Jack Tar Motel half a block away facing CCB Plaza. Plans are to remodel it as a 74-room boutique hotel with 14,000 square feet of ground-floor retail space, and use 210 of the 260 spaces in its parking garage for the hotel and City Center.

Total project cost is estimated at $85 million. The council’s unanimous vote Monday authorizes the city manager to negotiate a contract, which will be subject to council approval after a public hearing, probably in April, Dick said.

Under the proposal, the city would net an estimated $4.3 million after paying the incentive from increased tax revenue over 15 years.

Incentive payments would not start until the project construction is done, and continue for 15 years as long as the motel remains in business and the tower maintains an occupancy rate high enough to “ensure long-term, minimum job creation,” according to Dick’s memo on the deal points.

City administrators project the City Center and hotel to produce 250 construction jobs, 500 office jobs, 75 retail jobs and 10 hotel jobs with benefits. However, when questioned by Councilman Steve Schewel, Dick said those could include “a heavy number” of existing jobs relocating from other locations in town.

Schewel and Mayor Pro Tem Cora Cole-McFadden also wanted more specifics on Austin Lawrence’s plans to contract with local and minority-owned firms and include minority employees.

“We hope they will be ambitious for the hiring of minority employees,” Schewel said.

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