Duke expanded its footprint in Durham by purchasing part of the West Village development in an attempt to finalize a long-term revitalization project.
In early January, Duke bought the Powerhouse Building on Fuller Street from the financially troubled Blue Devil Ventures for $2.275 million. This purchase is the latest step for Duke in a years-long expansion into Durham, said Scott Selig, associate vice president for capital assets and real estate for Duke.
“In 2005 we had 70,000 square feet downtown,” Selig said. “Now we have 770,000. We are expanding downtown as part of a conscious effort to develop [the area].”
Blue Devil Ventures is a real estate company whose partners include former Duke basketball players Christian Laettner, Trinity ’92 and Brian Davis, Trinity ’92. Financial issues exacerbated by the recent economic downturn led the partners to owe several million dollars to other investors. Davis and Laettner both played professional basketball together for the Minnesota Timberwolves. Selig noted that there are no present plans for filling Powerhouse because of the nebulous timeline of the transactions with Blue Devil Ventures. Complications among the sellers delayed the process, which lasted more than 18 months.
“We weren’t sure if and when the deal was going to close,” he said. Now that the deal has finally been cleared, a few weeks’ worth of the planning process are underway and a decision of what will fill the building should be made in the coming months.
Selig said Duke does not expect to buy any other buildings in West Village now that Blue Devil Ventures has sold the last of their property in the area, but added that the University is constantly in session about leasing or renewing. Other buildings owned by Blue Devil Ventures in West Village have been acquired by Federal Capital Partners. A private real estate investment company operating out of Chevy Chase, Md., FCP manages over $769 million of discretionary capital throughout the eastern seaboard, including many properties in the North Carolina Triangle Area.
In January 2012, FCP made its first official purchase of “Phase One” West Village space for $35.25 million. In August of the same year, another $5 million purchase was made to expand FCP’s ownership. These two phases total 453 apartments, 111,000 square feet of commercial space and two parking lots with potential for development.
“We are just starting on one of those developments,” said Karen Widmayer, media spokesperson for FCP. “There is a phase three in the works.”
This third phase entails building 196 new apartments off of West Morgan Street on two parking lots adjacent to the existing West Village buildings, Widmayer said. A site plan was submitted for review to the Durham City-County Planning Department in November.
Selig explained that he believed Duke’s ongoing expansion into Durham, including the West Village purchase, will improve relations between the city and University.
“This will allow… Duke and the city to learn how valuable they are to each other,” Selig said. “Downtown is a gem that Duke can help to polish. These goals are alive in revitalization.”
He also noted that revitalizing downtown Durham is in the interests not only of Durham as a community but also Duke as a center of intellect and innovation.
“We want to attract the best and brightest faculty, staff and students and give them someplace to go, something to do. Helping to revitalize downtown Durham to make it more interesting will attract the best and brightest,” Selig said.
Casey Steinbacher, CEO and president of the Greater Durham Chamber of Commerce, said the location of Duke’s new Powerhouse building is especially important because it is central to downtown. Furthermore, West Village can contribute to the revitalization of the city through its offering of residential spaces, commercial offices and retail, intertwining various aspects of city life in a rare way.
“It is attracting more and more of the young professional talent that Durham needs—to live, work and learn all in one,” Steinbacher said. “The more we can create these ‘cool’ kind of places, the more attractive it is to the young professionals and the companies that hire them.”
West Village renewed
Steinbacher explained that because Blue Devil Ventures—a key part of the original community revival strategy—has sold their property to those in a position to finish all of the restorations, the years-long project to improve the quality of life and economic value of West Village will probably be completed soon.
“The new ownership will take a look at finishing it up and adding new pieces to it,” Steinbacher said. “I suspect that with everything that is going on it will be accomplished in 12-36 months.”
She said the only major roadblocks in moving forward with revitalizing West Village have been financial, due to the erratic economy.
“Especially in the investment market, sometimes these things start and stop,” she said. “That’s really the only issue and the community has embraced it.”
FCP declined to comment on the nature of their relationship with Blue Devil Ventures.
Steinbacher also noted that she does not believe that renovations have reduced the historical value of the West Village buildings, which can be traced back to the 18th century. She said Durham in particular is a prime example of where historical preservation and modernization can coexist successfully, in part because of Duke’s policies when owning or renting buildings.
“These are the kinds of projects that Durham needs,” Steinbacher said. “These projects and many others are going to change the landscape in Durham even more than it has [changed] in the past five years.”