Orange County

Consultants see half-billion dollar potential in Durham, Orange light-rail stations

The Durham-Orange light rail system, shown here in a rendering of a proposed downtown Durham station, would run 17.7 miles from UNC Hospitals in Chapel Hill to Duke and N.C. Central universities in Durham.
The Durham-Orange light rail system, shown here in a rendering of a proposed downtown Durham station, would run 17.7 miles from UNC Hospitals in Chapel Hill to Duke and N.C. Central universities in Durham. Submitted

The jobs, affordable housing and other community benefits Chapel Hill gains from the Durham-Orange light-rail project will depend on local decisions made now, say town and GoTriangle staff members.

“Our approach here in Chapel Hill is that if this transit investment is made, we want to make sure that we have a chance to maximize the benefits for the community,” said Ben Hitchings, the town’s director of planning and development services.

Hitchings and GoTriangle planner Patrick McDonough detailed one scenario for one of Chapel Hill’s planned stations — with buildings up to 15 stories tall and a mix of business and recreation uses — to the Chapel Hill Town Council and the Orange County Board of Commissioners on Wednesday night . They gave a similar presentation to the Durham and Orange county commissioners in June.

The $2.47 billion Durham-Orange Light-Tail Transit line would run from UNC Hospitals in Chapel Hill to N.C. Central University in Durham. Its 18 stations would link riders with future bus and rail routes across the Triangle.

The stations are expected to drive economic growth and provide or pay for community needs. Town officials have been working with GoTriangle, Gateway Planning consultants and the public since 2016, funded by a $2.1 million federal station development grant.

Regional transit map.jpg
A map shows how the Durham-Orange light rail, the Durham-Wake commuter rail, and Chapel Hill and Wake County bus-rapid transit projects would link together to form a regional transit network. John Hodges-Copple Durham-Chapel Hill-Carrboro Metropolitan Planning Organization

‘A thousand possible futures’

The Gateway and Patterson Place stations, which hug Interstate 40 near the U.S. 15-501 intersection, will be key to attracting jobs and companies, officials have said.

Nearly 300 acres were identified as having redevelopment potential at both stations and at UNC Health Care’s nearby Eastowne Office Park. Development there could create roughly $484 million in new property tax value over the next 40 years, financial estimates show.

Although the Gateway Station area — between the old Blue Cross and Blue Shield building and I-40 — is in Chapel Hill, only a portion is in Orange County. However, it’s still the county’s best opportunity for economic development, because five other planned Chapel Hill stations have limited land, are already developed or are owned by UNC.

The remaining 12 stations are located in Durham County, and a 13th station in downtown Durham is under consideration.

A Gateway Station concept plan presented Wednesday featured a compact, pedestrian friendly, mix of housing, businesses and recreational opportunities. The core included 10- to 15-story buildings, with four- and five-story residential and mixed-use buildings farther back from the highway, and shorter townhomes closer to Old Durham Road.

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That plan would bring an estimated $59 million in new property tax value to Orange County by 2057, said McDonough, GoTriangle’s manager of planning and transit-oriented development. At existing tax rates, the development would bring in just over $932,000 a year for Orange County, Chapel Hill and the city schools.

The portion of Gateway Station that lies in Durham County could generate an additional $130 million in new property tax value, he said. That would bring another $948,740 in annual tax revenues to Chapel Hill and the city schools, plus nearly $1.8 million to Durham County.

The same benefit could be achieved with shorter but more densely constructed buildings, McDonough said.

“There are a thousand possible futures at all stations,” McDonough said. “This is an attempt to capture one of them based on some of the things heard from the community and also based on market demand.”

Commissioner Earl McKee pointed out that $59 million is roughly the property tax value of a Wegmans grocery store or the factory that Japanese candy maker Morinaga built near Mebane.

The Gateway Station tax estimates are conservative, McDonough said.

More development

The consultants also estimated the potential property tax impact of Eastowne Office Park and Patterson Place Station:

Eastowne: The first phase of UNC Health Care’s redevelopment was approved recently. The rest of the 48-acre medical park expansion is still in the planning stages, including a possible bridge or crossing connecting pedestrians to the Gateway Station area.

Consultants estimated redeveloping Eastowne as a privately owned campus could create $47 million in new Orange County property value, or roughly $743,000 each year in county, town and school district tax revenues under current rates.

However, UNC properties are considered publicly owned land and not taxable. Mayor Pam Hemminger said the town would negotiate any future property taxes with UNC, whose officials have agreed to payments, including at Eastowne.

Patterson Place: This station area, including the shopping center and adjacent land, offers Durham city and county roughly 153 acres for potential redevelopment, consultants said.

The resulting neighborhood could have a huge effect on Durham’s tax base, at an estimated $248 million in new property value over the next 40 years. That amounts to nearly $3.4 million a year in new tax revenues, using current Durham county and city tax rates.

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Chapel Hill already is incorporating ideals of transit-oriented development — growth within walking distance of public transportation — into its planning. The ongoing Charting Our Future project will influence decisions about the town’s growth through 2049.

The county commissioners, who have repeatedly pressed GoTriangle for a voice in station developments, asked to keep the conversation going with Chapel Hill.

“Certainly we know that it’s your jurisdiction and your zoning, but [we want to be] at the table with you helping and advising to make sure that what we signed on the dotted line happens,” Commissioner Penny Rich said. “It’s the county that’s risking the money, and we know that economic development is one of the ways that we can make this really successful, especially for affordable housing and money for schools.”

Paying for light rail

The Durham-Orange Light-Rail Transit Project is in the final stages of engineering and could be submitted to the Federal Transit Administration later this year. If a federal grant is approved, construction could begin in 2020, with the service launching in 2028.

The federal government is expected to cover up to half of the light-rail line’s $2.47 billion construction cost. Another $190 million, or 7.7 percent, could come from the state, and private donations are being sought for just over $102 million.

Durham and Orange counties would pick up the remaining $945.5 million in local costs — $796 million from Durham and $149.5 million from Orange — plus an estimated $847 million to $908 million in interest on debt.

GoTriangle is paying the local costs with proceeds from a half-cent transit sales tax and car rental and registration fees.

The final cost of any debt would depend on several factors, including interest rates and when the debt is issued, GoTriangle spokesman Mike Charbonneau said.

Tammy Grubb: 919-829-8926