Chapel Hill and UNC have a plan to boost town’s economy and bring businesses downtown
UNC and Chapel Hill town officials announced a new partnership Wednesday to spur innovation and entrepreneurship and keep homegrown businesses and research ventures in town for the long haul.
The Carolina Economic Development Strategy will build on several years of work to revitalize the downtown and boost economic development, Mayor Pam Hemminger said in a news release.
“In recent years, we have taken several bold business development steps to reinvigorate commercial office space and create infrastructure in our downtown that will bring more office workers and visitors here year-round,” Hemminger said. “I am excited about working with the University to take things to the next level so that our downtown is one of the best places to locate a business.”
The initiative will leverage the network of relationships that university officials already have with the business community, said Doug Rothwell, UNC’s executive-in-residence for economic development, will serve as co-chair with Hemminger of the new town-gown partnership.
Increased demand should encourage more developers to consider building office space in Chapel Hill, he told The News & Observer in a video interview Wednesday. While it could take a year or two to see real change, there is no reason to think that Chapel Hill can’t be as vibrant as other college towns, he said.
“What we’re trying to do at the university is basically work with everyone who has relationships with businesses, with research organizations, with contractors that they’re working with to say, ‘Hey, we’d like you to have a presence here. Let’s talk,’” Rothwell said.
They already have evaluated peer universities’ work on local innovation and startups, including Duke University’s Innovation and Entrepreneurship Initiative based on Morris Street in downtown Durham.
Duke’s hub works with university and health care partners, colleges and organizations and includes the Duke Angel Network, which has invested over $6 million in 16 companies affiliated with the university, I&E reported.
Last week, California-based tech giant Google announced it will lease space in Duke’s innovation hub while searching for a permanent home. The new Google Cloud engineering hub is expected to grow into one of the company’s top five U.S. engineering hubs, officials said, eventually providing more than 1,000 jobs in the Triangle.
Matt Gladdek, executive director of the Downtown Partnership, and other town leaders have advocated for years for working more closely with the university, in large part because it and UNC Health Care are the town’s biggest employers.
UNC already has two startup incubators in downtown Chapel Hill: the 1789 Venture Lab and the Launch Accelerator on West Rosemary Street, which started as a partnership with Chapel Hill and Orange County. The university also offers maker spaces and other entrepreneurial opportunities on campus.
“The image of Chapel Hill is shaped by a couple blocks downtown,” said Rothwell, who also will lead an Economic Development Council of university leaders appointed by Chancellor Kevin Guskiewicz. “If that isn’t as vibrant as it could be, that’s a cloud that hangs over the town and the university, and that’s why this work is so important.”
Rothwell previously served for 15 years as president and CEO of Business Leaders for Michigan. He now sits on the board of the Chapel Hill Downtown Partnership, which promotes economic growth, provides support services and creates arts and cultural opportunities.
A need for Chapel Hill office space
Nearly 800 UNC-affiliated startups have formed since 1958, raising about $17.6 billion in investment cash, according to UNC’s Innovation and Entrepreneurship Impact Dashboard.
The dashboard reports that 313 of those startups were founded in Orange County, and 193 still operate in the greater Chapel Hill area, employing over 3,000 people and earning more than $300 million in revenues last year.
Others have outgrown the available office space in Chapel Hill and Orange County, forcing them to look toward Durham, Raleigh and the Research Triangle Park. The town in recent years has taken steps to restart its office market and provide larger, flexible options.
UNC’s real-estate arm has played a role in that investment and also is involved in the innovation initiative, Rothwell said.
Chapel Hill Foundation Real Estate Holdings Inc., a not-for-profit corporation founded by the UNC-Chapel Hill Foundation, owns Carolina Square at 123 W. Franklin St. It also owns, in partnership with the university and the state, three buildings on the south side of East Franklin Street.
Those buildings, which lease space to Carolina Coffee Shop and Johnny T-Shirt, among others, are slated for redevelopment. The public planning process was delayed last year by the COVID-19 shutdown.
Downtown Chapel Hill projects
Two office projects backed by Charlotte-based Grubb Properties also are expected to boost downtown office space. One is a redevelopment of the former CVS building on East Franklin Street into an Innovation Hub. Talks are ongoing with UNC about leasing some of that space, which is being renovated using the federal Opportunity Zone tax program.
Grubb’s other project, now going through the town’s approval process, would replace the Wallace Parking Deck next to the CVS building with a new 250,000-square-foot office and research building with wet lab space.
The town traded the parking deck for the CVS parking deck that Grubb owned across the street and will demolish that deck at 125 E. Rosemary St. later this year to make way for a new 1,100-space public parking deck.
Grubb Properties also recently opened The Gwendolyn, a 106,000-square-foot office building in Chapel Hill’s Glen Lennox neighborhood. The town supported that project with a $2.2 million performance-based tax incentive to jumpstart office construction, which had lagged Wake and Durham counties following the 2008 recession.
The work is starting to show results, Hemminger said.
One of the first projects planned later this year would recruit student volunteers and organizations to improve the appearance and quality of landscaping in areas next to the campus. The university’s council also will begin to play an active role in recruiting new businesses and investment, in addition to planning with the town for the more distant future, Rothwell said.
Eventually, there could be a network of innovation hubs in different areas around town, such as in northern Chapel Hill, where the town established a light industry and office district in recent years. That district has landed one company so far, Carolina Donor Services.
While the town has changed since he attended UNC in the 1970s, Rothwell said, it’s still a small town with historic flavor. The problem is it hasn’t kept up with other parts of the Triangle, he said, noting the coronavirus pandemic probably “escalated the urgency.”
“It won’t happen if the university doesn’t help lead it, because they are the major institution in Chapel Hill,” Rothwell said. “Carolina and Chapel Hill are intertwined and if the university doesn’t do something like this, the town certainly can’t achieve its full potential.”
This story was originally published March 24, 2021 at 6:03 PM.
