These downtown properties are a formidable bargaining chip. How should Raleigh use them?

As Raleigh’s property values rise, city-owned land downtown has become an increasingly powerful tool for whatever purpose – or set of purposes – city leaders decide to use it.

So, last year, the council asked planners and consultants to examine those properties’ hidden potential. Released this summer, the resulting report focused on about a dozen sites totaling 18.4 acres, many of them currently vacant or in use as municipal buildings or parking lots. The report recommends suitable new uses for each.

Redeveloping these sites by selling them to private developers could boost their value and the city’s tax revenue. The immediate proceeds from some of the sites recommended for sale, which are together valued at about $30 million, could also help fund the construction of a new city government complex that would consolidate most of Raleigh’s municipal workers at a single property. Last year, city staff estimated the cost of one such proposal at more than $165 million.

Advocates and analysts have suggested using at least some of this city-owned land for new affordable housing. At-large city council candidate Stacy Miller has made “land-banking” the crux of his affordable housing platform, and expanding public property acquisition is a key part of a 20-year affordable housing plan under review by the Wake County Board of Commissioners.

Proponents of this strategy say Raleigh would have the rare opportunity to build cheap housing in an area with easy access to transit and social services – a choice that wouldn’t make sense for private developers purchasing the properties at market value and seeking to make a profit.

The council and Mayor Nancy McFarlane have named affordable housing a chief priority, but McFarlane has said it’s sometimes better to sell city property and use the proceeds to fund affordable housing elsewhere.

“Certainly all these properties, from that standpoint, could benefit affordable housing if we decided to recycle the revenue into affordable housing projects,” Raleigh Planning Director Ken Bowers said Tuesday.

Land used for affordable housing wouldn’t bring in as much tax revenue as more upscale, market-driven development. Keeping some prime downtown real estate vacant and under city control could help Raleigh lure large corporate relocations and grease the skids for other desirable projects.

Ultimately, real estate consultants HR&A and city planning staff recommended a variety of uses for the city’s holdings based on their size, location and surrounding properties.

Bowers said the study had identified one of the parcels as clearly suitable for affordable housing development. In a work session Tuesday, he told the council that a city block of Raleigh-owned property along South Bloodworth Street between Martin and Hargett streets could accomodate a “fairly sizable” multi-family complex.

“The block is large enough that if the council wants an affordable housing project on this block, that could be achieved regardless of the interests of the nearby owners,” Bowers said. “But there’s a mission-driven tenant (the Raleigh Rescue Mission) near the site ... that would likely be supportive of affordable housing nearby.”

Councilwoman Kay Crowder responded to Bowers’ suggestion with a call to proceed cautiously before committing any of the city’s land to a particular use.

“We should open the door for conversation,” she said. “If we don’t have the conversations, we won’t know what opportunities may exist.”

“We should have a conversation – hopefully one that leads to housing,” Councilman Corey Branch added.

“Let’s not go there yet,” Crowder said.

The council also discussed the future of some of the city’s most valuable land, a pair of parking lots just north of Memorial Hall at the south end of Fayetteville Street. One or both of the square parcels could be used to bargain for a major corporate relocation. The land’s zoning – for buildings up to 40 stories – means that a buyer would have the potential to reshape the Raleigh skyline.

A council vote is needed before any city property can be put on the market or sold.

This story was originally published September 20, 2017 at 2:57 PM with the headline "These downtown properties are a formidable bargaining chip. How should Raleigh use them?."