Demolition will begin soon on Raleigh’s Velvet Cloak Inn

The Velvet Cloak Inn’s days are numbered.

Next week construction crews will begin tearing down the inn, a fixture on Hillsborough Street for more than five decades. It will be replaced by a 150-unit student housing complex that will accommodate about 500 people.

Atlanta-based developer Peak Campus bought the property, which is next to the Alexander Family YMCA, in the spring for more than $5.5 million. Peak manages more than 90 developments across the United States, including six in North Carolina.

For some, the demise of the Velvet Cloak Inn is yet another sign of change in Raleigh, which has seen much growth and redevelopment near downtown.

In its prime, the New Orleans-style inn hosted politicians, celebrities, artists and people visiting N.C. State University, including Bob Dylan. It once featured a heated indoor pool, a nightclub and a restaurant. For a time, the space served as former Gov. Pat McCrory’s gubernatorial campaign headquarters.

“It was the place to be,” said Louis LeBrun, who had his wedding reception at the Velvet Cloak in 1984. “It was always elegant. It was classy without being too glitzy.”

The site’s proximity to N.C. State, Cameron Village and downtown makes it appealing, Jeff Githens, Peak’s president of development, said in an email.

The new complex, set to open in the summer of 2018, will feature two-, three- and four-bedroom units, a parking deck and pool, he said.

Demand for student housing has dictated much of the development along the Hillsborough Street corridor. Valentine Commons, a 10-story complex on Hillsborough and Dixie Trail, and Retreat at Raleigh, a student housing community on Oakdale Drive, opened in 2012.

Less than two miles away, a 249-unit community opened in 2013 on West Morgan and Hillsborough streets. Last year, Kane Realty opened Stanhope Center, a 882-bed student housing complex, at 3001 Hillsborough.

Local developers Dewitt Carolinas and Blue Sky Services hope to build a five-story building with apartments and retail space at 2812 Hillsborough. In the fall, Blue Sky opened 105 Friendly Drive, which has apartments and retail space across the street.

James Wesley “Willie” York, a N.C. State University alumnus who developed Cameron Village, built the Velvet Cloak Inn in 1963.

Sir Walter Raleigh’s supposed gallantry inspired the inn’s name: According to an unconfirmed tale, he spread his velvet cloak over a mud puddle so Queen Elizabeth could cross unharmed.

Ownership of the inn changed hands several times before it was bought by Raleigh developer David Smoot in 2004 for about $3.2 million. Smoot refurbished it and planned to sell about half of the inn’s more than 130 hotel rooms as condominiums.

However, there were signs that the inn had fallen into disrepair. In 2008, city inspectors closed the motel and temporarily evacuated residents after discovering safety issues, including a non-functioning sprinkler system.

Last summer, Louis LeBrun and his wife, Jennifer, returned to Raleigh from their home in Florida to visit family. They drove down Hillsborough Street, reminiscing about their wedding, and noticed that the Velvet Cloak was closed.

“We miss it,” LeBrun said. “It’s a part of our life, and that’s hard to move on from.”

This story was originally published January 4, 2017 at 2:12 PM with the headline "Demolition will begin soon on Raleigh’s Velvet Cloak Inn."