Chapel Hill has an economic development public-private partnership that is increasing private investment in the core downtown, improving the Town’s parking system operations and laying the groundwork for additional private investment.
The Town entered into an arrangement with Grubb Properties whereby
- Grubb and the Town work together to assemble onto a single site an existing Town parking deck that needed a lot of work and an adjoining privately-owned surface parking lot.
- The Town builds a big modern, bells-and-whistles parking deck on that site.
- At the same time, the University agrees to lease spaces in the new deck to support new University development downtown, thereby giving the Town an added revenue base for the parking system.
- Grubb buys from the Town another needy Town parking deck (the Wallace Deck, on the corner of Henderson and Rosemary Streets).
- When the new deck is finished, Grubb will tear down the Wallace Deck and build an integrated office and “wet lab” development with adjoining Grubb properties. Grubb was attracted to the area in part because it lies within an Opportunity Zone.
When all is done,
- The Town will replace two parking decks that each needed a lot of work with one bigger, newer, easier-to-manage and maintain deck.
- The Town will get millions of dollars in new tax base and new high-paying jobs.
- The presence of the new deck has already spurred additional private development in the core downtown, and may free the Town to turn other downtown surface parking into additional private development opportunities
The new deck is expensive – the Town borrowed about $40 million in 2021 to build the project, and there’s probably more expense ahead to cover site problems and other costs that extensive due diligence didn’t turn up. But the Town determined the overall package of benefits more than outweighed the costs. So, while parking alone is rarely the answer, parking can be part of an overall strategy for downtown redevelopment and finding a way to leverage private investment.
You can find more information on the Town’s website page for the project.
We were very pleased to have worked for Chapel Hill both in structuring the initial partnership agreements and then as bond counsel on the Town’s financing. We think there are many broadly applicable takeaways from how this project came together, even if you can’t borrow $40 million and don’t need 1,100 parking spaces downtown. Send us a message if you want to talk about this.
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