Shopping centers, housing subdivisions and office parks sprouting along the Triangle's proposed commuter rail system won't be jeopardized by funding problems that are threatening to halt the trains.
But about 200 acres owned by the Triangle Transit Authority will be affected, leaving in doubt other potential high-density projects. Among the potential casualties: Raleigh's warehouse district, seen as a key piece of downtown redevelopment.
"You've got all this property in limbo along the corridor," said John Bruckel, who is developing a $40 million condominium project overlooking the warehouse district station site. "These are prime pieces of property that have been held hostage while the TTA figures out what it's going to do."
The TTA bought the land for stations it had planned along the 28-mile corridor between Raleigh and Durham. But support for the project appears to be eroding.
U.S. Sens. Elizabeth Dole and Richard Burr warned last week that the project probably would not meet requirements for federal funding.
Paul Vespermann, TTA manager of transit corridor planning and development, said the agency still plans to develop the station sites beginning in 2007.
"We don't think funding has ended," Vespermann said. "We're not ready to say the project has ended. We believe this is a hiccup."
But Raleigh Mayor Charles Meeker said development of the land around the stations will get pushed back.
"It will slow down around the stations because people will be uncertain how much to invest or whether to invest," Meeker said. "They will likely not be able to do their development until they know they can proceed with the train system."
Site in limbo
The TTA bought about 3 acres for each station, but some sites are larger, such as the 6.14-acre former Dillon Supply in the warehouse district. Developers have long salivated over the property, which could be converted into hundreds of condos and have thousands of square feet of retail space.
Because the tract is so large, it has been seen as the key to further development in the district. Now, development of the property is on hold, indefinitely. So is building on some surrounding tracts.
Developer Greg Hatem owns 1 acre -- enough for about 60 condos -- on Hargett Street near the Dillon warehouse, but he is waiting to see what the TTA will do before making his plans.
The former Dillon property "is the largest chunk of land to be redeveloped in the warehouse district," Hatem said. "It wouldn't be in our best interest to redevelop our property until we have a clear understanding what TTA plans."
Still, many who invested in properties along the rail lines say they aren't concerned about the TTA's funding predicament. Many made bets on properties they thought had value even without rail.
"Urban redevelopment has more to do with people's interest in being located nearby the things they're interested in," said Ron Gibson, part owner in a warehouse near a proposed stop in North Raleigh.
Bruckel, for example, is building a 94-unit condo project off Boylan Avenue to meet demand for housing in downtown Raleigh.
Raleigh developer Jim Anthony also said he thinks the TTA's future won't affect many sites along the corridor. "In some cases, there won't be any stopping high density development," Anthony said.
But projects surrounding the proposed rail stations will be scaled back until something happens with the TTA, Anthony said.
A plus, but not crucial
It might be a different story for developers near suburban stops.
"Is high-density going to work in a suburban area where there's no rail stop? I think the answer is no," Anthony said.
That would probably include property that Anthony recently bought. He and a partner paid $1.75 million for a warehouse in Durham near a rail site. The sale was a bargain, and Anthony said he would have bought the building even had the TTA not planned a rail station nearby. But the prospect of rail made the property more enticing.
"There's no question that we were looking into the future, say 15, 20 years, asking: 'What's the neighborhood going to look like if TTA is running?' " Anthony said. "I think that site would have had higher and better use being adjacent to the stop.
"If these hub sites don't develop because of TTA, then that definitely will slow development at these hub sites," Anthony said. "I don't think there's any reason to be building high-density in a green field."
But some are doing just that.
Cary developer Craig Davis and his partners have begun building 75 condominiums and town houses on land next to the proposed Triangle Metro Center stop in Research Triangle Park.
On one 175-acre parcel, Davis and his partners plan to build up to 2,500 homes and 395,000 square feet of shops and offices. Davis plans to build up to 1.4 million square feet of offices and shops on a 25-acre tract next to it.
"We've always said that it would be nice to have it there, but the real demand and need is there for residential and mixed-use communities inside the park," Davis said. "The TTA was a terrific positive, and if it didn't happen, it wasn't earth-shattering. It was never built around that. It was just an asset to it."
Davis is optimistic that the rail will still come. "Everybody's been so worried about TTA more than they should be," he said. "Eventually, it's going to happen. In what form? Nobody knows as of right now. But we as a city have to have some form of mass transit."