Over a year ago, Raleigh's Capitol Broadcasting Corporation enthralled the Durham City Council with plans to transform the vacant American Tobacco factory from an eyesore into a thriving downtown center filled with shops, restaurants, apartments, office space and a concert hall. But construction has yet to start on the project.
Capitol, the owner of the Durham Bulls and WRAL-TV, plans to spend over $161 million on the American Tobacco Historic District, which will lie adjacent to the Durham Bulls Athletic Park.
But before Capitol will invest the money to begin construction, it must find one or two major tenants to commit to a substantial amount of office space, ensuring the project's financial security.
"[We're] talking to larger corporations, getting them to expand," said Peter Anlyan, general manager of Capitol's Durham real estate. He added that Capitol is primarily courting tenants in the Research Triangle Park area, with special focus on biotechnology companies.
Anlyan noted that several promising companies have shown interest, and it will be 60 to 90 days before Capitol receives their answer. Duke University is currently the only major tenant, with a commitment to lease between 100,000 and 120,000 square feet of space, primarily for administrative offices and academic departments.
Bill Kalkhof, the head of Downtown Durham Inc.-a private group aiming for downtown revitalization-has been working closely with Capitol and the city on American Tobacco. Kalkhof said that because of the downturn in the economy, Capital's original plan to begin construction this past summer was overly optimistic.
Despite these troubles, Kalkhof said Capitol remains as dedicated as ever to American Tobacco. "The best measure of excitement and optimism about a project is the developer, Capitol Broadcasting: Are they still putting a lot of time and money into the project? And they are," he said.
The city council also remains optimistic about the potential revitalization of downtown. Council member Dan Hill said that he expects American Tobacco to provide 4,500 new jobs and to convert downtown "from a downtrodden, tough place to an energized center."
"[This could be] the biggest thing to happen to Durham since Duke was founded," he said.
Council member Lewis Cheek stressed the need for patience with the project.
"I don't view time as having gone by without work as of great significance," he said. "With that sort of undertaking, a year is not that significant a period of time.... The huge amounts of money required to start construction mean Capitol is best off taking it slowly."
Still, Hill said the council is eager for the revitalization that American Tobacco promises for downtown. "There is frustration because we want it to happen so much," he said.
American Tobacco will use 1.4 million square feet of total space, but Anlyan said Capitol needs to sell only 150,000 more square feet of offices before cleaning and renovation can begin. And planning and designing the structure is nearly finished.
Once the major tenants commit, Anlyan said, the shops and restaurants will fill in with relative ease.
In support of the project, Durham has promised $37 million to construct parking decks. Council members said this will require a property tax increase of one cent per $100 to take effect when Capitol is well underway with construction.
Council member Erick Larson has advocated a strict hands-off policy with American Tobacco, stressing that Durham will not spend any money until Capitol progresses with the project.
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