Durham News

Durham council convenes for $11.25M incentives hearings

A 1950s postcard advertises a visit to the modern factory where L&M, Chesterfield and Lark cigarettes were made. Courtesy of Milo Pyne
A 1950s postcard advertises a visit to the modern factory where L&M, Chesterfield and Lark cigarettes were made. Courtesy of Milo Pyne Courtesy Milo Pyne

City Council members took care of 56 agenda items, including next year’s budget, last week at what was to be their last meeting before summer vacation.

It turned out, though, that there was some leftover business demanding decisions before July 1. So the council convenes one more time Wednesday for, among other items, public hearings on more than $11 million in economic development incentives.

The incentives, proposed by the city’s economic development office, involve two projects downtown:

▪  $6 million for renovating the former Liggett and Myers cigarette factory, now called the “Chesterfield Building,” at Main and Duke streets, with 765 parking spaces off-site;

▪ $5.25 million for building the “Durham Innovation District’s” first phase, including 271,000 square feet of office and laboratory space, on Morris Street.

Both incentives would be paid out over 15 years, starting after the projects are finished and generating tax revenue.

A $500,000 affordable-housing grant and new members for the Civilian Police Review Board complete the agenda.

Chesterfield

Built in the late 1940s and originally dubbed the “New Factory,” the former cigarette plant has been vacant since the Liggett and Myers tobacco company closed its Durham operations in 2000.

Blue Devil Ventures, which began the L&M complex’s redevelopment into West Village, planned a makeover for the factory. That company, founded by former Duke basketball stars Brian Davis and Christian Laettner, hit financial reverses.

Subsequent legal maneuvering stalled redevelopment until Wexford Science & Technology acquired the 360,000 square foot building in late 2013, paying $7.5 million.

Plans are, according to city economic development Director Kevin Dick’s agenda memo (nando.com/1eb), for a $91 million capital investment to put 153,000 square feet of lab space, 78,000 square feet of offices, 42,000 square feet of “research and development innovation space” and 11,000 square feet of ground-floor retail into the factory building.

Wexford, which created the project subsidiary Wexford Chesterfield Parking LLC, also plans a parking deck and 221-space surface lot just to the south, across the N.C. Railroad corridor and future light-rail line. The city estimates that Chesterfield tenants will create 710 permanent jobs, with 560 temporary jobs created by construction, with work beginning this year and finished in 2016.

Incentive payments of $400,000 per year would begin in 2018, taking about 70 percent of the additional tax revenue the city projects the renovation to generate.

Innovation District

Longfellow Real Estate Partners of Boston and Measurement Inc. of Durham announced last fall that they planned to develop a 1.7-million square foot science/technology “Innovation District” on 15 acres between Duke Street and Durham Central Park.

Their $87-million first phase consists of 126,000 square feet of laboratory space and 145,000 square feet of offices, an 820-space parking deck and a public park along Morris Street near Measurement’s Imperial Building. According to Dick, Longfellow also intends to pitch in $8.3 million worth of improvements to public property such as streets and sidewalks near its project.

Construction is expected to start in 2016 and bring up to 780 temporary jobs, with 850 permanent jobs created in the finished product. Incentive payments of $350,000 would start in 2020, assuming a 2018 completion and opening, like the Chesterfield proposal taking up about 70 percent of the new tax income Dick’s office projects the city will realize from the development.

Deal points include Longfellow’s making at least half its parking deck available for public use on nights and weekends. Both agreements require the developers and their general contractors to “make good faith efforts” to do business with Durham companies during construction.

In other business, the council has to decide on a $500,000 grant (nando.com/1ee) that Development Ventures Inc., a Durham Housing Authority subsidiary, is asking to cover “transactional liquidity and net worth requirements” in tax-credit financing for affordable-housing projects.

Money would come from the city’s half-cent property tax dedicated to affordable housing.

The council also has to vote on City Manager Tom Bonfield’s nominations for four seats on the Police Review Board (nando.com/1ed) whose current occupants’ terms expire June 30. Nominees are Jeffrey S. Clark, Stephen E. Kraus, DeWarren K. Langley and Cynthia L. Wells.

Wise: 919-641-5895

What’s next

The Durham City Council meets at 5 p.m. Wednesday in the City Hall council chamber. The meeting is open to the public, with public comment opportunity on economic incentive proposals for Wexford Chesterfield Parking LLC and Longfellow Real Estate Partners LLC. The agenda is available at nando.com/1ec.

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