Austin group bids $5.1M for city-owned downtown site

Bidding for a city-owned property in downtown Raleigh has risen $2 million since the Raleigh council put it up for sale this summer.

The council in July launched a public auction for 1.2 acres it owns at 301 Hillsborough Street that now serves as a surface parking lot for Campbell University Law School.

The most recent bidding window ended with Texas-based Aspen Heights submitting a high bid of $5.14 million. The Austin company made the top offer in three of the four bidding windows.

The city valued the property at about $3 million and bidding for the site started with a $3.1 offer from The Lundy Group, a Raleigh-based developer.

As part of the process, interested parties can submit offers for the site in recurring 10-day bidding windows until the city fails to receive a new high bid.

Aspen Heights is known for apartments and student housing, but it’s unclear what it wants to build on the Hillsborough Street site. Company representatives haven’t responded to multiple calls and emails.

A group of five developers is also pursuing the property. Bidding during the most recent window broke down this way:

▪  Blue Heron Real Estate of Chapel Hill, $5 million

▪  The Lundy Group of Raleigh, $4.91million

▪  Hamilton Merritt of Cary, $4.9 million

▪  Kane Realty of Raleigh, $4.85 million

▪  Grubb Ventures of Raleigh and Stiles Corp. of Fort Lauderdale, Fl., $4.85 million

The next bidding window closes on Oct. 1. Bidding will continue as long as developers submit offers that are at least 5 percent higher than the published bid – meaning bidders would have to offer about $5.4 million in the next window.

Most of the developers have declined to disclose their intentions for the site or couldn’t be reached.

Lundy’s founder has said the group wants to build a tower with retail, commercial and residential space. The city council earlier this year rezoned the property to allow for a 20-story building.

Kane Realty hasn’t settled on firm plans, founder John Kane said.

This story was originally published September 23, 2015 at 12:29 PM with the headline "Austin group bids $5.1M for city-owned downtown site."