The city is poised to sell a 1.2-acre property in the heart of downtown for $6.3 million, likely boosting nearby real estate values and potentially changing Raleigh’s skyline.
A public auction for 301 Hillsborough Street that the City Council launched in July ended Thursday after Raleigh failed to receive an offer higher than the $6.3 million bid recently submitted by The Lundy Group of Raleigh.
Bidding for the property began in July at $3.1 million, the amount that The Lundy Group submitted to launch the process. Competing bids from a number of different developers drove the price higher in subsequent weeks.
The final bid is scheduled to go before the council during its meeting Tuesday for a vote to complete the sale, said James Sauls, Raleigh’s economic development director.
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Three of the council’s eight members opposed the auction, saying they wished to require a grocery store there. But a majority launched the sale process, and some reiterated their support Friday.
Changing course now would hurt the city’s reputation, Councilwoman Mary-Ann Baldwin said.
“When you start the process, you need to commit to it. If you don’t, it sends a really bad message to the development community that you can’t be trusted,” Baldwin said, adding that the city got much higher offers than she expected.
The property, which currently serves as a surface parking lot for Campbell University Law School, was valued at $3.1 million by the city.
The council could use money from the sale to build affordable housing or offer retail incentives, Baldwin said, referring to uses for the site suggested by other council members.
The property drew interest from a total of seven developers, including companies based in Florida and Texas. They were attracted both to the site’s location and zoning, which allows for buildings up to 20 stories tall and a variety of development.
Sitting on the corner of Hillsborough and North Dawson streets, it is within walking distance of the State Capitol, Glenwood Avenue and Fayetteville Street.
The Lundy Group wants to build a tower with retail at street level, commercial in the middle and apartments or condos on top, its president Jim Baker has said.
Baker wasn’t available Friday to provide further details.
“We are excited over the opportunity,” he said in a short email.
Other property owners should be excited by the pending deal, too, said Moss Withers, a broker with NAI Carolantic Realty in Raleigh.
The sale, which comes out to $122 a foot, increases the value of other property in the area, he said.
“It’s a significant play,” Withers said. “Anybody that’s out there dabbing the waters for selling, I think this will give them confidence they need.”
The city’s sale to Lundy would be one of two major transactions within the Dawson-McDowell Street corridor in recent months. In July, a hotel developer bought the .57-acre Enterprise Rent-A-Car site next to the Raleigh Convention Center for $4.05 million.