Wednesday, Mar. 17, 2010

Plan could give NCSU new neighbors

A Charlotte developer who has spent the past three years assembling property at the edge of downtown Raleigh is moving ahead with plans to transform an abandoned industrial area between N.C. State University and downtown into a mix of apartments, townhouses and shops.

In a rezoning request filed with the city of Raleigh this month, FMW Real Estate outlined plans to redevelop a 6.67-acre site just west of West Morgan and Hillsborough streets.

The $40 million first phase would include a five-story, 240-unit apartment building, 32 town houses on Ashe Street and 10,000 square feet of restaurant, retail and office space along Morgan Street, Wakefield Avenue and Tryon Street.

Jim Zanoni, who owns FMW with Walker Wells, said the company hopes to break ground by next spring.

The project is one of the most ambitious proposed in Raleigh since the recession began, and it would breathe life into an area that thousands drive past everyday but few people know exists.

"It hasn't had anything done to it for - what - 40 years," Zanoni said.

FMW still has two sizable obstacles to overcome: acquiring financing for the project and getting city approval.

But Zanoni and Wells have a strong track record in Charlotte, where they assembled more than 300,000 square feet of land in thecity's midtown. They were responsible for assembling the land for Charlotte's football stadium and basketball arena, and the five city blocks that make up Gateway Village.

The Raleigh project would be FMW's first foray into multifamily housing.

Asked why the company was making such a big bet in Raleigh, Zanoni noted the difference in the unemployment rate in Raleigh and in the Charlotte metro area. The Raleigh-Cary unemployment rate was 9.1 percent in December; the Charlotte metro area's was 12.2 percent.

"That differential is huge, and that is what attracted us to this site," Zanoni said. "We are between N.C. State and the downtown, which are two very stablesubmarkets."

Beginning in 2007, FMW paid about $10.5 million for four parcels. The largest piece, five acres, was sold to FMW by the Bolton family, which once operated a heating-and-air-conditioning company on the site.

FMW also owns property fronting Hillsborough Street, including the IHOP restaurant site. That site would be part of phase two of the redevelopment, and plans for that portion are not final, Zanoni said.

FMW is interested in acquiring more property, Zanoni said, but its current assemblage is large enough to move ahead with a mixed-use project.

FMW's proposal comes as Raleigh is in renovating along Hillsborough Street. The $9.9 million project is scheduled to be complete in September. The renovation includes adding a roundabout at the Hillsborough and Morgan street intersection and converting traffic on Morgan to two-way.

FMW is applying to have its site declared a pedestrian business overlay district, which would eliminate the need for rezoning and require the property to have a uniform streetscape and parking plan.

Announcing the plans now allows FMW's proposal to be included in a city-led study looking at what the best land uses for the area should be. The city's small area plan, is expected to be complete in May. A public hearing on FMW's request for an overlay district is likely to be held in July.

Arthur Gordon, owner of Irregardless Cafe on West Morgan Street, said he welcomes the jobs, pedestrian traffic, streetscape improvements and tax revenue that would come with FMW's project. When Irregardless opened 35 years, it was fronted by a dirt road, and Gordon has watched as the property behind his cafe fell into disrepair.

"I like to think of myself as the longest overnight success in the business. Any day now I'll have a real location," he said. "I know that there's always not-in-my-backyard type people, but we're not in anybody's backyard."

FMW is hoping that the topography of its site will prove an asset in blending the development with its surroundings. The low point of the property at the corner of Wakefield and Tryon is about 30 feet below Hillsborough and most of Morgan.

"The topography of the site lends well to a dense, urban, transit-friendly project, and yet from the Morgan-Hillsborough grade, you wouldn't know it," Zanoni said.

The project's apartments would be comparable to those offered nearby at 712 Tucker, a Crosland apartment building that opened in 2007, Zanoni said. The 171 Tucker units, within walking distance of Glenwood South and downtown Raleigh, have been popular with renters. All but two are occupied.