Downtown South developers want Raleigh’s help to pay for stadium, affordable housing
Developers of the proposed Downtown South development want the property rezoned before they guarantee community benefits like affordable housing.
And they say they will need the City of Raleigh’s help to pay for those benefits.
Plans to rezone all 145-plus acres about a mile and a half south of of downtown Raleigh were submitted earlier this year and the city’s Planning Commission is reviewing the rezoning application now.
Pitched by North Hills developer John Kane, of Kane Realty Corp., and Steve Malik, owner of the North Carolina Courage and North Carolina FC, the Downtown South development would be one of the largest in the city.
On Tuesday, Bonner Gaylord, managing director of operations for Kane Realty, asked city leaders to consider a tax increment grant to cover the costs of providing community benefits like affordable housing, green stormwater infrastructure, workforce development programming, and the sports and entertainment venue itself.
A new process
Neither Raleigh nor Wake County has used a tax increment grant before though other North Carolina cities, including Charlotte, have.
If the developers and the local governments come to an agreement, the community benefits like the sports venue and affordable housing would be built by the developers and included in the project from the start. The development would increase the value of the property, which would normally result in more property tax revenue for local governments. Under a tax increment grant, the city would receive the same amount of property taxes it currently receives, and the increase the developers would normally pay would go back to the developers to cover the cost of the community benefits.
Additional community benefits in the draft agreement proposed by Kane include parks and greenways, transportation and infrastructure improvements, public art and cultural attractions, educational partnerships and health facilities.
If the Downtown South developers don’t receive this grant, the project will likely not happen, Gaylord said.
“We started this whole thing with an entertainment and sports venue creating an entertainment district,” he said. “Without that entertainment and sports venue, everything else withers away. So the (grant) is necessary to do the project we envision and it’s necessary for the community to receive the community benefits (they) are asking for. So it’s in our best interest and it’s really necessary for us to have that (grant) to fulfill the vision of the project.”
Kane and Malik originally sought tourism money from Raleigh and Wake County to cover the cost of the stadium, but that tourism money will be in short supply due to the COVID-19 pandemic. That money, Gaylord said, is “pretty much off the table.”
Raleigh Mayor Mary-Ann Baldwin asked city staff to outline how that the grant process would work and to report back in two weeks. She asked the council to create a community engagement committee to work with the developers about the type of benefits that could be included.
“They will have the opportunity to work with Kane and bring their concerns to the table and also solutions to some of the issues,” she said. “We’ve heard them. Stormwater is a huge concern. Gentrification. Affordable housing. And there are a number of others. Connections to transportation and whatnot. All of that will be done in a very transparent way.”
Rezoning request
If the rezoning is approved it would allow up to 38 million square feet of new mixed-use development — more than the 32 million square feet currently in all of downtown. The developers have said it would include office space, housing, hotels, shops, bars and restaurants in addition to the open-air soccer and entertainment stadium.
Some of the land has already been purchased while the rest is scheduled to be bought by the end of the year.
“We really need to know whether this rezoning is viable before closing on the land,” said Gaylord, who is a former Raleigh City Council member. “So we do have a time frame here that is limited because of that closing.”
While there are some conditions offered in the rezoning process, some community members have asked that community benefit guarantees be included.
“Really, what the city is pondering here is two questions. One question — Is this land-use reasonable and in the public interest and consistent with the comprehensive plan? That is, by state mandate, that is the question on the table with the rezoning,” Gaylord said.
This project, he said, “clearly” checks all those boxes.
“The subsequent question is, (Is the grant) the right tool to use in a district like this with a project of this magnitude?” he said. “It’s two questions that the city needs to answer.”
He said he recognizes people’s concerns about approving the rezoning first and the community benefits after.
“In any process like this where we are trying to get somewhere together, it is going to require some trust,” Gaylord said in an interview with The News & Observer. “We know that trust is derived through transparency and engagement.”
“That is why we are committed to transparency and engagement throughout the process and we believe this is the right thing for our community and we’re excited to have the conversations with folks who may be questioning and wondering our true intentions,” he said. “Those are absolutely part of our plan to continue to have those robust discussions.”
The city’s Planning Commission meetings are set for 4 p.m. Oct. 22; 3:30 p.m. Oct. 23; and 4 p.m. Oct. 29. People can watch the Planning Commission meetings on the city’s website and YouTube channel. And people can sign up to speak by emailing ira.mabel@raleighnc.gov.
Community concerns
St. Ambrose Episcopal Church sits less than a mile downstream of the planned Downtown South site. After a heavy rain, The Rev. Jemonde Taylor can mark how much higher the water has risen in just the eight years since he’s led the church. The fear of a flood leaves him restless.
“That is what keeps me up at night,” he said. “That the church will no longer exist physically. The 400 faithful parishioners will exist but we will flood.”
He expressed those fears during the first meeting of ONE Wake — a new organization consisting of faith groups and nonprofits. He called on Kane and Baldwin to work with the community and ONE Wake as this development continues.
“We know there will be environmental impacts,” Taylor said in an interview with The N&O. “We also know there will be a community impact. Rochester Heights, a historically black neighborhood that is on the historic registry, will be impacted. Gentrification is happening. We think this development will increase the rate of gentrification and displacement of people who have lived in that neighborhood.”
The development is planned near and around the South Saunders Street and Interstate-40 interchange.
Carmen Cauthen, who held a virtual meeting to inform community members about the project, said the rezoning was moving too fast without enough input.
“This is the biggest project the city has ever seen,” Cauthen said. “It’s going to affect the whole city. So they need to be reaching out to everybody.”
The other Kane developments haven’t been affordable, she said, adding this area has seen significant property value increases and displacement, and Downtown South will likely make it worse.
“I love my community. I do whatever I can to support the community,” she said. “And a lot of times people don’t know how to follow the process. And at this point, this process seems to be going really fast. And the community still needs to be heard.”
This story was originally published October 21, 2020 at 3:13 PM.
