Business

Raleigh sells 1.2-acre downtown site for $6.3M

One of the most coveted properties in downtown Raleigh no longer belongs to the city government.

The Raleigh City Council on Tuesday voted 7-1 to sell the 1.2-acre property at 301 Hillsborough Street to The Lundy Group, a Raleigh-based development firm, for $6.3 million. The site is currently used as a parking lot for Campbell University Law School.

The move ended a public auction that the council launched four months ago in a split vote. Five members wanted to sell the lot to the highest bidder, and three wanted to retain control over development of the property, specifically to lure a grocery store to downtown.

Only councilman Bonner Gaylord opposed the sale on Tuesday, saying he did so only to be consistent. In July, he voted against launching the auction.

“I’m really excited about the project,” Gaylord said Tuesday.

The city’s vote marks the second major downtown Raleigh land sale announced in as many days and the third since July, when a hotel developer bought the .57-acre Enterprise Rent-A-Car site next to the Raleigh Convention Center for $4.05 million.

On Monday, The News & Observer agreed to sell its 3-acre headquarters at 215 South McDowell Street to the “Above the Fold” development group for $20.2 million.

Buyers of the two properties, located less than half a mile from each other, will likely bring dramatic change to the heart of downtown Raleigh. Both are zoned for buildings up to 20 stories tall.

The N&O project will include a hotel and a separate building with retail, news operations and apartments, developers said.

Meanwhile, the Lundy Group wants to build a tower with retail on the ground floor, offices in the middle and apartments or condos on top, according to company founder Jim Baker. He couldn’t be reached for comment after the council’s vote Tuesday.

Lundy beat out five other developers in the auction process, which drew interest from developers in Florida and Texas. Sitting on the corner of Hillsborough and North Dawson streets, 301 Hillsborough is within walking distance of the State Capitol, Glenwood Avenue and Fayetteville Street.

Downtown lacks grocery options, so council members Russ Stephenson and Kay Crowder in July sought to require the buyer of the Hillsborough lot to build a grocery store.

Crowder supported the sale of the property Tuesday, saying the time for adding conditions had passed. She plans to continue advocating for a grocery store otherwise.

“Until we get a market, we won’t have the urban living experience that we should have,” Crowder said.

Paul A. Specht: 919-829-4870, @AndySpecht

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