In the latest sign of the post-recession apartment boom occurring downtown, a Triangle developer has added high-rise, for-rent residences to plans for a project called the Edison.
The glass-and-steel tower will make a bold addition to Raleigh’s skyline, Gregg Sandreuter told a City Council committee last week.
“It’s a pretty exciting project if he can pull it off,” City Manager Russell Allen told council members.
The high-rise apartments represent the latest proposed element of the Edison, which has been scaled back since its inception in the mid-2000s. The project near Moore Square once was envisioned as four towers with space for corporate offices and a hotel.
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Sandreuter now proposes a six-story mix of apartments and shops on the southern portion, where a 24-story office tower was part of the original plan.
The turmoil in the residential housing market has led to increased demand for apartments.
Downtown, in particular, has benefited from an influx of people who want to live near restaurants, parks and galleries.
Beginning late this year, downtown could see more than 600 new apartments finished within a matter of months, from the 140-unit St. Mary’s Square in Glenwood South to a 249-unit project just west of West Morgan and Hillsborough streets.
Mitch Silver, Raleigh’s planning director, is not surprised by the flurry of activity. Nationally, rental is the sweet spot in the market, and Silver says downtown Raleigh is poised for more growth in this sector.
“We now have a combination of young professionals, empty-nesters and people wanting different lifestyle choices,” he said. “You’re seeing that critical mass arrive.”
As for the risk of too many apartments, Silver said: “The market would not be lending if it did not have confidence. I think we can keep it up at this pace.”
Construction on the initial phase of the Edison would begin by October 2013 and be complete by March 2015, according to an agreement with the city.
Sandreuter said he’s working with a corporate partner on financing and hopes to submit a site plan in the next two to three months.
At 20 to 22 stories high with ground-level retail, the 320-unit high-rise would anchor the northeastern corner of the Edison development, situated on a downtown block bordered by Blount, Davis, Wilmington and Martin streets.
By comparison, the nearby PNC Plaza tower is 33 stories.
“We’re working our best to fast-track the project,” Sandreuter said.
Urban market a possibility
A grocery store would be a welcome addition, said City Councilman Randy Stagner. Downtown advocates have long pleaded for a grocery within walking distance, calling it a key step in the revival of downtown.
Past attempts have not found success. Capital City Grocery opened in Seaboard Station in October 2006 and closed in November 2008.
More recently, Market Restaurant owner Chad McIntyre said he hopes to add a food market to his business plan when he relocates the restaurant to Person Street Plaza this year. The bodega-style store would focus on meat, dairy products and fresh produce from local farmers, McIntyre said.
Sandreuter said he would be willing to offer rent-free space to a grocery. But conversations with Harris Teeter and other chain grocers suggest the market is not ready. A small urban market might be realistic in the short-term, he said.
“All grocers that I know of, who have looked at downtown, say we just don’t have enough people yet,” he said. “We just don’t have the demographics to support it.”
About 5,000 people currently live downtown, according to the Downtown Raleigh Alliance. That figure rises to 10,000 to 15,000 in a one-mile radius. The apartment projects now in the pipeline will bring 2,000 to 2,500 more residents over the next five years, Silver said.
Parking deck is key
A parking deal with Raleigh is key to getting the Edison project off the ground.
Sandreuter worked out a rent-to-own deal with Raleigh officials for part of the 1,224-space Blount Street parking deck that divides the block on which Edison would be built. Highwoods Properties built the deck in 2008 to support the RBC Plaza.
Sandreuter previously agreed to lease 300 spaces and give the city $8.3 million over 20 years, after which the developer would own the spaces.
To accommodate the proposed high-rise, Sandreuter now proposes a similar rent-to-own deal for the remaining 396 spaces. The City Council will vote Tuesday on the agreement.
The city would be able to collect parking fees from the spaces in the Blount Street deck during hours when many residents are at work, which would help Raleigh generate income to deal with its parking-revenue deficit.