Clayton is growing but don’t call it a bedroom community for Raleigh

For an unassuming municipal building, Town Hall has been at the center of Clayton’s history both physically and figuratively in its 90-some years. It has served as a council chambers, police station, fire station, courtroom, jail, staff offices and library — mostly all at once.

Largely abandoned since 2002, the red brick landmark has been pressed back into service, this time to help shepherd a downtown revitalization in a fast-growing town. Its latest incarnation? Apartments for millennials.

Millennial is a convenient marketing label, but developers throughout the region have been selling smaller houses and apartments as ideal for first-time buyers or renters and for the retired who don’t have to make room for families. In this case, the one-bedroom and loft units will range from about 500 to 800 square feet.

Designed by Raleigh firm Maurer Architecture, the plan is for exposed brick interiors, refinished hardwood floors, high ceilings and the latest appliances. The two-story building is just one block from Main Street.

“I think old-school development in Clayton is going to have to step up,” said Reid Smith, who runs the largest single-family detached home building company in Johnston County. “Things are changing. We’re trying to do our best to change with it.”

Clayton’s downtown has been growing steadily. Town planners and developers say modest financial incentives started a decade ago gradually gained momentum and helped create an inviting atmosphere to draw businesses downtown and to retain a small-town charm that has made Clayton more than just a bedroom community for commuters to Raleigh.

“That’s what a lot of people think,” Smith said. “We’re very blessed to have jobs being created in Clayton with Caterpillar, Novo Nordisk, an industrial district, downtown. We have 120 employees on Main Street. There are a lot of jobs in Clayton. We’ve explained that a piece of real estate is only where a job goes to sleep. Real estate and homes follow jobs.”

Save or tear down?

As downtown developed, no one was sure what to do with the vacant Town Hall on East Second Street. Some said turn it into a museum or a historical monument. Others said tear it down and turn it into a parking lot.

“It was a money pit,” said Smith, whose father Fred developed the Hedingham and Riverwood golf communities among others.

In June 2016, the town solicited proposals for how to save the building and only received a single response: from CommunitySmith, a firm that specializes in downtown revivals and is based in Clayton.

CommunitySmith’s managing partner Holton Wilkerson looked at the building with its gray jail cells and fire engine bays and saw the future. Wilkerson had begun compiling a series of successful public-private partnerships that used state historic tax credits to help launch community revitalization projects in Greenville and Wilson.

“We always look for what is missing downtown,” he said.

CommunitySmith is not related to the Smith family of developers, but Wilkerson began working with Reid Smith on the Town Hall project. He showed Smith how the Town Hall building could be rehabilitated into the emerging downtown and generate revenue.

Smith and others had just renovated another downtown building with a history: a car dealership from the 1920s that had become a wholesale paper goods distributor in the 1980s. The Paper Co. building, as it’s still referred to in town, now houses the offices of Smith’s company, One27 Homes, along with his wife’s real estate firm, Jaclyn Smith Properties; a real estate tech company called Dakno Real Estate Marketing that relocated from Raleigh; and a nonprofit charitable organization called OneCompassion.

Wilkerson offered Smith advice on facade and downtown improvement grants that might be available to renovate the old Town Hall building.

Wilkerson, who used to work for Empire Properties in Raleigh, and others were instrumental in convincing the General Assembly to reinstate historic tax credits in 2015. Wilkerson argued that the program had helped rid communities of blight, improved property values, and provided employment. The program provides 15 to 20 percent of the cost of improvements to income-producing property if developers meet certain standards.

The men soon had the support of town officials. Eventually, a deal was struck in which the town agreed to sell the property, which had been appraised at more than $360,000, to CommunitySmith for $1.

The town also agreed to lease a parking lot for tenants at market rate. It will reimburse the owners for the cost of sewer and water fees, underground electric service installation and building permits. State historic tax credits of 15 percent will apply.

In return, the developer must invest more than $1 million and complete the project by a deadline imposed by the town. Wilkerson says the Town Hall project will likely amount to between $1.5 and $1.8 million.

Wilkerson says major renovations often presents surprises, not always good ones, but this time they got lucky. The ceiling in the rear of the building was higher than anticipated, 18 feet, so they were able to create four loft units there.

And so was born The Lofts at Clayton Town Hall.

“It’s just another chapter in the building,” Wilkerson said.

Modest incentives spurred downtown

Clayton had started out slowly with its first incentives: a modest 50 percent matching grant of up to $5,000 for business owners to spruce up their windows, awnings, doors and signs. That started the ball rolling, says David DeYoung, former Clayton planning director who now runs the town’s economic development office.

“Having the community buy into the improved look of our downtown was key,” DeYoung said. “As things got nicer- and nicer-looking it got contagious, like shaming your neighbor into painting or replacing windows. That hit at the right time and the right place with the right ideas to maintain our historical look and feel. Downtown feels like a quaint downtown with a special coffee shop not a Starbucks, stores but not chains.”

Butch Lawter, who served on the Town Council for 14 years, said at a recent symposium community leaders made a commitment to breathe life into downtown, beginning with improving town-owned property. “We invested in a gravel parking lot whose main feature was Friday night fights,” he said. It is now a park and town gathering spot for community events and a farmer’s market.

The town is trying out for the first time a 10-year-old incentive program with Johnston County on the Paper Co. building renovation: a rebate on a sliding scale based on the difference between before construction and post-construction appraised tax value. Over five years, the rebates range in decreasing order from 100 to 25 percent.

Qualifying businesses must be committed to contribute to downtown quality through attractive facades, increasing residential units, building maintenance, and adding stores and restaurants.

What do newcomers want?

Real estate agent and downtown Clayton native James Lipscomb said at the same symposium on downtown development that the previous day he went to Mannings, a local restaurant, and only recognized two customers.

“I said to myself, ‘OK, where are these people from? What do they want?’ ” Lipscomb said. “You can’t say just because something didn’t work 10 years ago that it won’t work today and it won’t work for the next 10 years. You really have to put yourself outside the box and say what does the community need today?”

The question is pressing: Clayton is among the 10 fastest growing towns in the state, joining six others in the Triangle. Its population has gone up 31.4 percent over seven years and is now at more than 21,000.

Growth is not only occurring downtown. Novo Nordisk’s $1.8 billion insulin manufacturing facility there is under construction on 92 acres of former cornfield. It’s the largest single manufacturing investment in state history, and is expected to create 700 new jobs, and is scheduled to be operational in 2020.

The Lofts at Clayton Town Hall are expected to be ready for tenants next year.

This spring, CommunitySmith and One27Commercial added a coffee, beer and wine shop, Boulevard West, to the paper company building just in time for Clayton to host the annual meeting of a state program designed to promote rural towns and downtowns. The building, with its exposed interior brick and beams, open working spaces and glass conference rooms with almost 90 people working in it, was honored for its innovation.

The town chipped in $10,000 in facade money toward the $1.8 million project.

Smith said it has been rewarding to watch his hometown change in its quiet, unassuming way.

“It definitely nice to see momentum take place in the town where you grew up, and each year better and more exciting,” Smith said. “It’s definitely something special. Apex, Cary, Holly Springs all get the glitz and glamor, but we’re proud of what we’re doing in Clayton.”

This story was originally published July 18, 2018 at 3:24 PM.