The Real Estate Report (August 2008)

Volume 3, Issue 8

August, 2008

	The Real Estate Report Local Government News Impacting the Real Estate Industry

Events Orange County Development Briefing The Greater Chapel Hill Association of REALTORS, in partnership with the Chapel Hill-Carrboro and Hillsborough/Orange County Chambers of Commerce, and the Home Builders Association of Durham, Orange, and Chatham Counties is pleased to present the second annual Orange County Development Briefing on Tuesday, September 23, 2008. The Briefing will be held from 8 to 10 a.m. at the Friday Center across from Meadowmont. Planners and economic developers from Chapel Hill, Carrboro, Hillsborough and Orange County will present detailed information about new residential and commercial development as well as recent policy changes that will affect future development in Orange County. This event sold out quickly last year, so reserve your spot now by clicking here or calling 967-7075. Registration is $30 for members and $40 for nonmembers and includes breakfast. Schools Carrboro High School Names New Principal At the end of July, the Chapel Hill-Carrboro City School Board named Kelly Batten, currently the assistant principal of Leesville Road High School in Wake County, as principal of Carrboro High School. This announcement came a few weeks after the Board received the resignation of Jeff Thomas. Batten has served as assistant principal at Leesville Road for six years and prior to that was a high school social studies teacher at Sanderson High School, also in Wake County. For the full story, click here. ABC Results Released On August 7, the North Carolina State Department of Public Instruction released the ABC growth results for the Chapel Hill-Carrboro City School District. Thirteen of the district’s schools attained “high-growth”, up from twelve last year, while four schools met “expected growth”. Growth is a measurement of how much students have improved from one year to the next, with high growth being the highest designation of improvement. The thirteen high-growth schools were Chapel Hill High School, Carrboro High School, Scroggs Elementary, Estes Hills Elementary, Culbreth Middle, Carrboro Elementary, McDougle Middle School, Smith Middle School, Glenwood Elementary, Phillips Middle, Ephesus Elementary, Seawell Elementary and Rashkis Elementary. The expected growth schools were McDougle Elementary, Frank Porter Graham Elementary, the Hospital School and East Chapel Hill High School. The “School of Excellence” and “School of Distinction” awards should be forthcoming. For the full story, click here. Orange County Eastgate Shopping Center Prepares for New Stores Eastgate Shopping Center, located near the intersection of Franklin Street and Fordham Boulevard, is preparing for four new stores set to open between late summer and winter. Starbucks is likely to open in late 2008 as will Performance Bicycle. Massage Envy, a membership based clinic, is scheduled to open later this month. The final store, Carmine’s, is a locally-owned Italian restaurant that uses a combination of local produce and products imported from Italy. Carmine’s will open in the former Sal’s location in September. From the Chapel Hill Herald Report Lays Out Process for Glen Lennox NCD A report put together by Chapel Hill Planning Director JB Culpepper and Senior Planner Rae Buckley outlines the process for the Glen Lennox Neighborhood Conservation District in anticipation of an August 19 Planning Board meeting. Phase One of the process is meant to help residents understand what an NCD can and cannot accomplish. If more than 51 percent of the residents in the area believe the NCD is the right step after Phase One, the actual ordinance will begin to be drafted. Upon completion, the Town Council will hold a public hearing and vote on the district. In all most NCD processes take about a year or two to complete. For the full story, click here. Southern Community Park Nearly Finished Southern Community Park, located south of Southern Village and west of 15-501, has been under construction for one year and is 90 percent finished according to the Town of Chapel Hill. The park is 72 acres and will feature three athletic/soccer fields, two basketball courts, an inline hockey court, a two-acre dog park, a meadow area, trails, a play area, and a disk golf course. The project is being funded by Orange County, Chapel Hill, and a North Carolina Parks and Recreation Trust Fund grant. The park is set to open this fall, though three of the athletic fields won’t open until sometime in 2009 as the turf has not fully grown in. From the Chapel Hill eNews OWASA Passes Rate Increase On June 26, the OWASA Board of Directors adopted FY 2008 and 2009 operating and capital budgets and approved a combined increase of 17 percent in monthly water and sewer rates. The increase comes as a result of decreasing water consumption due to conservation efforts and will affect business and residential consumers alike; revenue from new development connection fees is also expected to drop. For the typical residential customer using 5,000 gallons of water per month, the monthly bill will rise from $58.18 to $68.24. As part of the increase, businesses will also be faced with a water rate surcharge that will occur during Stage 1 and 2 water restrictions. There will be a 15 percent increase in water rates during Stage 1 and a 25 percent increase during Stage 2. For more information, click here. Orange County Comprehensive Plan Update The Orange County Comprehensive Plan, which is the guiding document of development in this county, is currently undergoing an update for the first time in twenty-five years. The Greater Chapel Hill Association of REALTORS, as a member of the Orange County Comprehensive Plan Coalition, has played a key role in influencing the contents of this plan and the update process. You can also weigh-in on the plan contents by speaking at the County Commissioners meeting on August 25. You can email the planning board your comments at this address and you can view the draft Comprehensive Plan here. The Comprehensive Plan is a critical document that will guide the development of the County over the next 20 years, please take some time to express your views on what you want to see Orange County become. Violent Crime Down in Chapel Hill According to Police Chief Brian Curran, Chief of the Chapel Hill Police Department, spoke to the Friends of Downtown at their monthly meeting about safety in downtown Chapel Hill. Last fiscal year (July 2007-June 2008) has had a number of violent crimes, including Eve Carson, but according to Curran, violent crime was actually down last year compared to numbers from FY 2006-2007. Non-residential break-ins, such as schools and businesses, are also down 35 percent over the same period of time. At the same time, residential break-ins have increased by 34 percent and robberies by 11 percent. For the full story, click here and here. Wallace Deck Can Support Kidzu A study recently completed says the Wallace parking deck could support a 10,000 to 12,000 square foot building, as it was originally designed to do. Kidzu has been working with the Town Council to examine the deck as a possible location for the booming children’s museum currently located on Franklin Street. Construction for the space would run about $2 million. Kidzu is also considering a possible location in Carrboro. For the full story, click here. Carolina North Fiscal Impact Study Released Tischler-Bise, a consulting firm hired to estimate the fiscal impacts of UNC’s Carolina North campus, unveiled a draft report before local elected officials at a June 26 meeting. The draft report looks at the direct and indirect impacts of the project on Chapel Hill, Carrboro and Orange County. Looking at just the direct impacts for Chapel Hill, the consultants say the town will take on an additional $35 million in costs over the next 20 years to provide schools, fire protection and garbage pickup and gain $18 million through the estimated 8,600 new jobs created at the campus. For Orange County and Carrboro, the direct benefits are estimated at a net $26 million and $3.5 million, respectively. If the indirect impacts are included, Chapel Hill receives another $19 million in net benefits. Many of the elected officials present were skeptical of the figures saying they did not agree with the model and assumptions or that more new jobs—and housing associated with those jobs—would be a benefit. For the full story, click here. Second Quarter Office/Retail Figures Released by Grubb and Ellis Grubb and Ellis released their retail and office market figures for the second quarter recently. In the Chapel Hill office market, Smith Breeden vacated 50,000 square feet at the Europa Center, though 13,000 square feet was backfilled by Community First Financial Group. In Southern Village, the John Edwards campaign also vacated nearly 16,000 square feet. The relocations caused Chapel Hill’s office vacancy to rise 16 percent; current asking rent for Class A office space is $22.94. In the Orange County retail market, vacancy totaled 5.27 percent and there was negative net absorption over the past quarter. Around 60,000 square feet of retail is under construction, most of which is located in mixed use projects throughout the County. To provide a relative size comparison, retail project Buckhorn Village, which is scheduled to be voted on by the Commissioners in September, is over 1 million square feet. From Grubb and Ellis Research Carrboro Limits Towing Fees On Thursday, July 31, the Carrboro Board of Aldermen voted unanimously to limit towing fees in town. The fee structure is similar to Chapel Hill’s, limiting companies to $100 for towing, $20 a day for vehicle storage and $50 for unhooking a vehicle from a tow truck. The policy comes on the heels of a dispute between Tar Heel Cos., manager of Abbey Court Condominiums in Carrboro and its residents that involved only giving parking stickers to vehicles that passed a strict visual inspection. For the full story, click here. Local Housing Market Bucks Trend Despite existing home sales in the Triangle dropping more than a third in June, Orange County sales of existing homes has recently bucked this trend by slowly rising since January. Even in Orange County, however, sales have decreased by a significant margin since this time a year ago.The number of days a home in Orange County spends on the market has dropped by 8.5 percent compared to June of last year, however – from 82 days to 75 days – suggesting that while fewer houses are selling, houses are moving off the market more quickly. The “real news,” according to Mark Zimmerman, Vice President of the Greater Chapel Hill Realtors Association, is that prices in Orange County are holding up while local housing markets across the country are seeing up to 25-percent price reductions. From the Chapel Hill Herald The Triangle New Chatham GIS Website Unveiled Chatham County has revamped its website for a new Geographic Information Systems software. The GIS website will remain the same (www.chathamgis.com), and is still accessible from the County’s homepage at www.chathamnc.org. The primary advantage of the new software is an interactive map of the county where the user can see easements, boundaries, water resources, aerial photos, and census information, among other data. According to GIS Specialist Jeremy Poss, using free “OpenSource software” saved the county anywhere from $20,000 to $40,000 in software costs and annual fees. For the full story, click here. Uniboard to Create 104 Jobs in Chatham County Uniboard Canada, a laminate flooring company, has plans to buy and add to a wood paneling plant in the town of Moncure. A $140 million expansion and addition to the current ATC Panels-owned facility will bring 104 jobs to the area over the next 3 years. The average salary of the new works will be $45,303 plus benefits, significantly higher than the County average of $29,588 plus benefits. Uniboard received a $250,000 grant from the One North Carolina economic development fund. Chatham County has also offered to refund as much as 80 percent of Uniboard’s property taxes over a five-year period, granted they meet investment and job goals. For the full story, click here. Triangle Office Market Figures Released Colliers Pinkard released second quarter figures for the Triangle office market. Overall, the market slowed slightly in the second quarter as vacancy rates climbed from 13.7 to 14.4 percent over last quarter. Rental rates also rose from $19.40 in the first quarter to $19.60, which Colliers Pinkard attributed to increased development costs and aggressive investment underwriting. Going forward, Collier Pinkard forecasts that office vacancy will rise slightly in the coming quarter due to slowing net absorption. Overall, though, the Triangle market should remain strong due to a projected 2 percent employment growth and continued migration to the area. From Colliers Pinkard Market Report State New Study Suggests Most Subprime Loans Went to Wealthier Buyers ComplianceTech, an Arlington, Virginia based consulting firm, recently published a new survey that shows more than two-thirds of high-rate mortgages issues in 2006 went to middle and upper income borrowers. Further, more than 55 percent of those loans went to white borrowers—from 2004 to 2006, white borrowers had more subprime loans than all minorities combined. In 2006, upper-income borrowers accounted for 39.37 percent of subprime loans, followed by 27.55 percent for middle-income, 20.99 percent for moderate-income, and 7.57 percent for low-income borrowers. For the full story, click here. Green Building Council to Modify LEED Standards The U.S. Green Building Council is changing its Leadership in Energy and Environmental Design (LEED) program, the certification process for green buildings. A 30 day online public comment period ended last month. New changes will be rolled out as LEED 2009 in January. Over LEED’s 8 year history, the USGBC has changed the way people look at building. There are over 10,000 buildings waiting to be certified. LEED certifies the following construction categories: New construction, existing buildings, commercial interiors, core, and shell, retail, schools, health care, and homes. LEED certifications take a look at the entire building process from start to finish while taking a whole-building approach to sustainability once the project is complete. Points are awarded in categories including water savings and energy efficiency; points will earn a building certification. The LEED 2009 changes will tackle criticism that it is too rigid and costly, and for awarding a single point to both additions that are cheap and easy as well as to serious time and money investments (you earn one point for having a bike rack, and one point for installing a costly new efficient HVAC system, for example). Ashley Katz, USGBC spokesperson says that LEED 2009 will be “simpler and more elegant and committed to continuous improvement.” For the full story, click here. Amtrak to add Third Charlotte-Raleigh Train Governor Mike Easley’s office announced Wednesday that Amtrak will add a third passenger train to its service between Raleigh and Charlotte. Increased ridership due to the recent spate in gas prices has prompted the addition of a mid-day run. Ridership on the current Charlotte-Raleigh was up 22 percent between October 2007 and April 2008. The Governor’s office said that the $3 million needed to operate the new route will come from the federal government for the next three years. The new train should be operational within a year. For the full story, click here. The Real Estate Report is produced monthly by the Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of Realtors

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