Raleigh Report

Raleigh faces questions as Union Station comes together

Raleigh Union Station, a $90 million transportation hub the city is building on the west side of downtown, will finished and in use in January 2018.
Raleigh Union Station, a $90 million transportation hub the city is building on the west side of downtown, will finished and in use in January 2018.

The city plans to finish construction on Union Station a year from now, and the downtown transportation hub will be operational in January 2018.

In the meantime, Raleigh leaders have a lot of details to hammer out.

How should they market the 12,700 square feet of office space? Should the city pay a little extra to install grease traps and other amenities to attract restaurants? How much advertising should the city allow in the space?

Raleigh City Councilman Corey Branch said he likes the clean look of RDU International Airport.

“The last thing I would want ... is walk in and see all these ads and boards,” Branch said.

Raleigh staff updated the council Tuesday on the construction of Union Station, a $90 million project the city is helping to build on Martin Street. The station will feature trains and buses.

Construction is between 35 percent and 40 percent complete, said Rich Kelly, engineering services director.

Hurricane Matthew flooded some of the excavation ditches, Kelly said, but work crews drained it in about three days. Kelly said he expects work crews to finish underground work within the next month.

City leaders need to approve a strategy for pursuing tenants, said David Eatman, Raleigh’s transit administrator. Union Station will have about 4,000 square feet of space to rent for retail or office use on its main level, 6,000 square feet on its lower level and 2,700 square feet on its upper level.

Raleigh staff advised the council to hire a leasing agent through the government’s request-for-proposals process. But before it does, the council needs to put in writing what kind of businesses it wants to recruit and determine how much money – if any – the agent can use to lure potential tenants.

Staff suggested giving the leasing agent a $425,000 budget for potentially helping desired tenants, Eatman said. For example, if a restaurant owner is interested in one of the Union Station spaces but doesn’t have enough money to build the required grease traps, the city could use some of the $425,000 to help pay for that cost, Eatman said.

“We would like this to be part of the lease-agent package that we put on the street,” he said. “There has been interest (in the rental space) already.”

Raleigh has already paid about $10 million more than expected for the project. The council last year raised its budget to $54.7 million from about $44 million to adjust to the rising cost of construction materials like steel and concrete. The rest of the project is being paid for by state and federal funds.

Councilwoman Kay Crowder said she’s uncomfortable subsidizing some businesses but not others.

“I think we’ve been down this road before. We called it The Mint and it cost us $1 million,” Crowder said, referencing the city’s decision years ago to enhance its space on Fayetteville Street where Bolt Bistro is located. The Mint later closed.

The council didn’t make any decisions on the leasing agent’s contract or on how it wants to allow advertisements in the station. Members are expected to take up the issue again sometime next month.

The sooner the council decides what it wants in the spaces, the better, Eatman said.

“It’s a lot cheaper to (accommodate business’ infrastructure needs) during the initial construction of the building,” he said.

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