Builder proposes 38-story tower

It would be tallest in central Raleigh

RALEIGH -- The Triangle may get its tallest -- and greenest -- downtown skyscraper yet.

Cary developer Gregg Sandreuter and Cherokee Investment Partners of Raleigh want to build a 38-story, eco-friendly mix of shops, hotel rooms and residences in Raleigh's reviving downtown.

It's part of a two-tower plan called Edison. The second tower would rise 24 stories. If approved by city planners, it would be the latest step in the city's efforts to turn a 9-to-5 government town into a hub of 24-7 activity.

"It's the next progression to Raleigh's urban renaissance," Sandreuter said. "It's an indication of how the Triangle is growing from a small community to a world-class region."

Since 2002, plans for an estimated $2.5 billion in private and public projects -- including RBC Plaza, a new convention center and the conversion of Fayetteville Street from a pedestrian mall to a main street -- have been hatched in the city center.

Edison is the latest sign the development is pushing east.

Sandreuter is to submit plans to the city today. The project, planned on the block bounded by Wilmington, Blount, Martin and Davie streets, is just east of the 33-story RBC Plaza being built on Fayetteville Street.

And just as it took RBC Centura Bank to make that tower a go, Edison will need a corporate headquarters before it is a reality.

Sandreuter and city officials think it will be the city's best bet for downtown's next corporate headquarters because it would offer a 500,000-square-foot block of offices -- almost twice what competitors are planning combined.

Big chunks of space are key to economic developers, as a city's ability to attract companies is directly related to how much available office space it has.

"If you don't have any space available, then you could be driving large companies -- corporate headquarters -- to other cities that have the space," said Jessica Brock, a broker at Spectrum Properties, which manages leasing at Wachovia Capitol Center, one of downtown's biggest office buildings.

Downtown Durham found that out last year, when the American Institute of Certified Public Accountants couldn't find sufficient space for 400 jobs it was moving from New Jersey. The organization chose offices on the county's outskirts near Chapel Hill.

Edison's developers also want the project to meet rigorous standards of the U.S. Green Building Council's Leadership in Energy and Environmental Design, or LEED, rating system. If successful, it could be Raleigh's first green skyscraper.

The green-building council established the system in 2000 to promote energy-efficient construction. Developers earn points by incorporating features such as systems that save water and electricity and reduce the need for heating and air conditioning.

The project would take up the balance of 3.6 acres owned by Progress Energy. The block is now cleared for development. A few low-rise buildings, including Clyde Cooper's Barbecue on Davie Street, will stay put.

Edison would wrap around a planned 1,242-space parking deck, designed to serve RBC Plaza. Plans to be filed today are expected to show the tallest tower at 34 stories. But Sandreuter said that updated plans will include 38 stories.

The developers hope to begin building in 2009 and wrap up in 2012, if they get their corporate tenant. But there are other hurdles, too. They hope to get building approval from the city in October. Then they have to buy the land from Progress. They also need a hotel partner, which may be easier to find as demand for downtown hotel rooms rises.

Residential demand is also growing, but it could pose a dilemma. The number of condos in Raleigh's core is expected to double to nearly 1,000 within two years. By 2011, there could be more than 2,000. Rising interest rates could sap demand. Apartments might be a tough sell, too. Rising construction costs could force rents far above what people expect to pay in Raleigh.

There's no telling how much demand there will be five years from now. But Sandreuter is confident there will be enough. And the city is confident the project will succeed, barring any fiascoes.

"Of all the developers, he's the one who has gotten the most done on schedule," Mayor Charles Meeker said.

Among Sandreuter's projects:

* The Dawson on Morgan, a 66-unit condominium project completed in 2005, where all but three units are sold.

* West, a 170-unit condo project near Glenwood South, where he says sales are ahead of expectations.

Edison would be his biggest development yet. It won't be as big as the Soleil Center, a 43-story condo-hotel project planned in northwestern Raleigh. And it won't touch Charlotte, where at least four towers rise 40 stories or more.

That's fine by Sandreuter.

"Having the tallest building is an ego-driven goal," he said. "That's not Edison."