The Real Estate Report (September 2008)

September, 2008

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

Schools Orange County School SAT scores up from 2006-07 The Orange County Schools system’s recently released SAT (Scholastic Achievement Test) overall score was 1043, up 3 points from 2006-07. That figure is 36 points above the state average of 1007 and 26 points ahead of the national average of 1017. “Orange County Schools outperformed their state and national counterparts in all ethnic groups and gender groups,” says Superintendent Patrick Rhodes. “We tested 77.5 percent of all seniors. That’s the fourth highest percentage in the state.” Orange High School saw the biggest gain from its 2006-07 scores — 1039 versus 999 — a 40-point jump. The number of students who took the SAT was also up, from 161 to 126, which translated to 72.5 percent of the seniors, an 8.1 percent increase from 2006-2007. To see how Orange County and other North Carolina schools did, click here. To read the full story, click here. Board approves technology pilot program Two local schools are moving forward with a pilot program that will bring new educational technologies — including the iPod Touch — into the classroom. The Chapel Hill-Carrboro Board of Education approved an agreement Wednesday night with N.C. Virtual Public Schools, a state government organization that will test cutting-edge educational techniques at Culbreth Middle School and Scroggs Elementary School later this school year before possibly using them statewide. The agreement gives each school $30,000 to buy audio/video equipment and mobile technology devices such as the iPod Touch. To read the full story, click here. 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 In August, 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 Chamber and Partners Launch Marketing Brochure The Chapel Hill-Carrboro Chamber of Commerce, in partnership with economic developers at Orange County, the Towns of Chapel Hill and Carrboro, the Downtown Partnership, and the University, recently launched an Economic Development Marketing Brochure. The brochure is an electronic document touting Orange County’s assets and strengths to businesses interested in relocating or starting-up in the area. Given the large amount of office space coming online over the next few years, the brochure will be useful in promoting the ara and expanding the job and commercial tax base. If you would like to view a copy of the brochure or distribute it to clients, click here. Woodmont Will Move Forward The Chapel Hill Town Council voted September 8 to approve several measures that will allow the Woodmont development project off of N.C. Highway 54 to continue. The Council approved a rezoning application, a master land use plan application and a special use permit that the development needs to proceed. Representatives from Capital Associates in Cary, who are in charge of the development, presented materials and plans for the proposed 33-acre site that will house office space, condominiums and retail. For the full story, click here. No quarter-cent Increase to Orange County Sales Tax County commissioners decided that economic conditions would make a November 4 ballot initiative on increasing the local sales tax a tough sell “even in progressive Orange County.” The extra 0.25 cent was estimated to have raised an additional $1.8 million to $2.2 million for the county. Commissioners did make plans to discuss placing it on the ballot in November 2009. To read the full story, click here. Carrboro Approves New Mixed-use Project The Carrboro Board of Aldermen approved a rezoning and a conditional use permit that will allow developers to build a five-story mixed-use building on Brewer Lane. The building, to be called The Butler, is a five-story mixed-use building on the property behind the ArtsCenter Building. Urban Ventures LLC., plans for the building to contain 22,170 square feet of office space and 57 dwelling units. The developer worked with Orange Community Housing and Land Trust and came to an agreement to make a payment-in-lieu for four of the nine units. The other five units will be single bedroom units, which fulfills Carrboro’s affordable housing rules. It is estimated that the payment in lieu would be $90,000 to $100,000 per unit for the affordable housing. To read the full story, click here. Chapel Hill Planning Board Holds Glen Lennox NCD Information Session Last night, the Chapel Hill Planning Board held an information session aimed at giving residents of Glen Lennox and surrounding neighborhoods an overview of the Neighborhood Conservation District. Residents asked questions about who is able to participate in the process and whether existing homes would be grandfathered in under current zoning regulations if new restrictions are imposed. In addition to this information meeting, Glen Lennox neighbors and residents and representatives from Grubb Properties will also come together in a more informal setting in October to discuss plans for the area. For the full story, click here. Innovation Center Backers Urge Town to OK Permit Members of the business, technology and academic communities lobbied the Chapel Hill Town Council to approve the Special Use Permit for the Innovation Center at a recent Council meeting, citing economic development considerations and research opportunities. “I think the Innovation Center would make a big difference for companies like us,” Ginger Rothrock said. Ms. Rothrock’s company, Liquidia, relocated to Morrisville after it expanded its operation to 35 employees and needed to find space beyond UNC-Chapel Hill lab space. Shelton Earp, director of UNC’s Lineberger Comprehensive Cancer Center, said that major pharmaceutical companies are moving away from the development side of the industry, leaving an unmet need that academics are willing and eager to fill. The Innovation Center would help such researchers stay in town and develop their ideas into businesses. To read the full story, click here. Chapel Hill Creates Sustainability Office Town Manager Roger Stancil has announced the creation of the Office of Sustainability at the Town of Chapel Hill to address growing challenges associated with issues such as energy efficiency, environmental protection and social justice. The Office of Sustainability will be staffed by John Richardson, the Town’s long range and sustainability planner who joined the Town staff in fall 2007. From Chapel Hill eNews County Reaches Highest Unemployment Rate in 18 years The unemployment rate in Orange County reached its highest point in 18 years in July, reflecting economic trends across the state, according to the Employment Security Commission of North Carolina. Orange’s 5.1 percent rate is the seventh lowest among the state’s 100 counties, but still higher than the previous county high of 5.0 percent in June 2003. Unemployment rates in neighboring Durham, Wake and Chatham counties rose as well. To read the full story, click here. Mayor Solicits Public on Library Expansion The Chapel Hill Town Council recently heard a staff and library board-approved plan to close the Chapel Hill Public Library for 14 months during expansion construction and move the town library to an undetermined temporary location. This plan is an effort to help the Town Council make a decision regarding the issuance of $16 million in bonds for improvements of the library. A more thorough report on the project will be given in October as the Council gets closer to a decision on whether to issue the bonds or not. Issuance of the bonds, approved by a November 2003 referendum, will lead to higher taxes. At the September 8 Council meeting, Mayor Foy asked the public for feedback as to whether the library expansion was an appropriate use for increased tax dollars. For the full story, click here. Courtyard May Face Foreclosure Wachovia Bank is trying to foreclose on The Courtyard on West Franklin Street and sell it, a move that would wrest the small retail and office center from its owner. The bank filed a request late last month for a foreclosure hearing in Orange County Superior Court, saying Spencer C. Young Investments was not making payments on $2.63 million it had borrowed in 2005 to buy the property. For the full story, click here. 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 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 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 The Triangle City of Durham Opposes Federal Foreign-Animal-Disease Research Lab The Durham City Council approved a resolution to oppose building the National Bio and Agro-Defense Facility in Butner. The Durham City Council joined several area boards that have come out against building the high-security civilian research lab in Granville County. Other foes include the Durham County Board of Commissioners, the Raleigh City Council and the Butner Town Commission. NBAF is backed by some state government, academic, agriculture and biotechnology officials who believe the project could be a boon to the state and is needed to improve the nation’s defenses against biological terrorism. To read 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 Federal Grant Will Aid New Energy-efficient State Building Code North Carolina has won a federal grant to develop and implement an innovative energy-efficient state code for building, construction and renovation that will save consumers up to $40 million annually on utility bills. The grant will be used to develop a new set of requirements for building construction to make homes and offices more energy efficient and to provide training and technical assistance to improve compliance with codes. For the full story, click here. 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. The Real Estate Report is produced by The Chapel Hill Chamber of Commerce and the Greater Chapel Hill Association of REALTORS.

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