Raleigh could approve Kane Realty’s downtown tower project Tuesday

After two months of negotiations, city leaders seem poised to approve a $150 million mixed-use tower project in the warehouse district that will change downtown Raleigh’s skyline.

The Raleigh City Council on Tuesday is expected to consider a request by Kane Realty to rezone 2.5 acres between South West Street and South Harrington Street, allowing the company to build a 17-story commercial tower and nine-story residential building.

The proposal, referred to as the Dillon project, would include 200,000 to 300,000 square feet of office space, 250 residential units and 15,000 to 20,000 square feet of retail. It has garnered attention from Raleigh residents and the development community because Kane’s is the first major request from a developer to build a tower in the warehouse district.

Kane Realty, known for resurrecting the North Hills shopping center, received pushback from residents and developers in June when it first presented its plans to the city council.

Councilwoman Kay Crowder was the most vocal. She called on the company to include more retail space on its West Street façade because it will face the Union Station transit hub, which is expected to open one block from Kane’s site in 2017.

Crowder also insisted that the company preserve the “Dillon Supply Co. Steel and Pipe Products” sign on the warehouse that currently occupies the site. Kane’s initial proposal would have allowed the company to replace the sign if it was damaged during construction.

Kane submitted a revised proposal in early August that council members have expressed support for. It calls for more retail entrances on West Street, prohibits certain building materials and promises to preserve the Dillon Supply sign.

The proposal also will prohibit bars and nightclubs as tenants at the request of some area residents who are concerned about night-time noise.

Crowder, the presumed swing vote, said last month that she felt comfortable with Kane’s revised proposal. On Monday, Mayor Nancy McFarlane said she supports the project and hasn’t heard concerns from other council members.

“I have not heard any problems,” McFarlane said.

Kane Realty CEO John Kane wrote in an email that the company feels good about its chances.

If approved, Kane’s project is also expected to provide much-needed parking in the district.

Also Tuesday, the council is expected to set an Oct. 7 public hearing on a city staff proposal to buy between 250 and 350 of the more than 850 parking spaces in the parking deck that Kane plans to build as a part of the Dillon project. The spaces would be available to the public.

At the agreed price of $32,000 per space, the city could spend $8.1 million to $11.3 million on parking in Kane’s deck depending on how many spaces fit in the deck.

“The final deck has not been designed, so we don’t know how many spaces we’ll get just yet,” said Jim Greene, Raleigh’s assistant city manager for economic development.

The proposal reserves 300 spaces for tenants of Kane’s residential building and 75 for those using Union Station. Others will be open to the public during events and when they’re not booked on monthly contracts, which would be available to the public on a first-come, first-served basis.

The city would make an initial payment of $2.5 million to Kane for the spaces by Oct. 31 if the council approves the deal.

This story was originally published August 31, 2015 at 6:47 PM with the headline "Raleigh could approve Kane Realty’s downtown tower project Tuesday."