|Volume 4, Issue 6
The Real Estate Report
Local Government News Impacting the Real Estate Industry
Council Approves Carolina North
Orange County Approves Budget, Saves Libraries
The 2009-10 budget of $177.6 million, approved by the Board of Orange County Commissioners, channeled $436,870 to keep the Cedar Grove and Carrboro branch libraries functioning for the coming year. The budget, passed without dissent, contained a lower ad valorem property tax rate than last year, in order to counteract the 23 percent increase in Orange County property values. Property tax was set at the revenue-neutral rate of 85.8 cents per $100 of assessed property value. The Chapel Hill-Carrboro City School District tax rate was also revenue-neutral at 18.84 cents per $100 of assessed valuation. In order to have the money to keep the libraries open, the budget included a few personnel changes including the implementation of a 12-month hiring freeze, effective July 1, for all vacant positions in 2009-10. For the full story from The Herald Sun, click here.
Chapel Hill was given the “Most Livable” small city in America award for 2009, praising Mayor Kevin Foy, specifically, for the birth of the fare-free transit system set up in 2001. More than 200 cities competed to win the award that was sponsored by the U.S. Conference of Mayors and Waste Management. Criteria for the award focused on mayoral leadership, creativity and innovation and impact on city residents. Chapel Hill has the second largest transit system in North Carolina behind Charlotte, and has raised rider participation by 103 percent, from 3 million in 2001 to 7 million in 2009. The system is different from other cities’ because free fare for transportation is open to all community residents, not just students and faculty of the local university. Charleston, South Carolina was awarded the “Most Livable” large city in the country for 2009. For the full press release from the U.S. Conference of Mayors, click here.
Chapel Hill Tax Rate Decrease Approved
The Town Council unanimously approved a tax rate reduction of 15 percent, lowering the 2009-10 rate from 58 to 49.4 cents per $100 of assessed property value. The reduced tax rate means that for properties that saw an average increase in value during the county’s revaluation, property owners will pay the same in city taxes as they did last year. The countywide tax rate and Chapel Hill-Carrboro city schools district tax must be factored in as well. They are expected to be at most 86 cents and 20 cents per $100, respectively. The town was able to cut the 58-cent tax rate due to $2.5 million collected through cost saving initiatives implemented last fall. For the full story from The News and Observer, click here.
Chapel Hill Mayoral Picture Shifting
Chapel Hill Mayor Kevin Foy will not be running for a fifth term, explaining he has reached the goals he set when initially elected in 2001. Current Town Councilmen Mark Kleinschmidt and Matt Czajkowski have shown interest in replacing Foy, and Czajkowski has already confirmed his intentions publicly. He announced on 1360 WCHL that he aims to bring “balance, practicality, and common sense” to the position. Augustus Cho, a former chairman of the Orange County Republican party, stated he would also be running for mayor in the Democratic strong hold. Foy said in a statement released May 28 that he is “confident that Chapel Hill will continue to be a great place to live, work, and go to school.” Foy did not say what his plans were for the future. For the full story from The Herald Sun, click here. To hear an interview with Matt Czajkowksi on 1360 WCHL, click here.
Carrboro Alderman Candidates Coming Forward
Carrboro Alderman John Herrera announced that he will not be seeking re-election for the Carrboro Board of Alderman, and supported the selection of community activist Sammy Slade. Herrera was elected to the board in 2001 and 2005, but has decided to focus more on his family having been recently remarried. Herrera backed 34-year-old candidate Slade, claiming his part-Latino background would bring diversity to the board. Randee Haven-O’Donnell said she is planning on running for her seat again in the November election, and Jacquelyn Gist has announced she will do the same. For the full story from The Herald Sun, click here.
140 West Project at a Stand Still
Similar to many commercial real estate companies, Ram Development Company’s plans for 140 West Franklin may not be followed through with as originally planned. Designed to bring together the east and west sides of downtown, 140 West Franklin would have consisted of 140 condominiums, ground-floor shops and a public plaza. Currently, Ram is trying to find enough pre-sales to continue with its plans, but with the current real estate barriers plans have halted for a while. It has become even harder for developers to borrow money these days as well because lenders want much of the property to be pre-sold or pre-leased. For the full article from The News and Observer, click here.
New Orange County Manager
Chapel Hill Retail Market Analysis Released
Dwight Bassett, Chapel Hill’s economic development officer, recently presented the results of a retail market analysis for the town at Morehead Planetarium. The study analyzes the retail market by sector to determine how well current retail offerings meet the demand of Chapel Hill consumers. The study found Chapel Hill’s market has an oversupply of restaurants, highlighting the fact that Chapel Hill draws consumers from out of market to dine in town. Conversely, department stores, electronics and men’s clothing were all retail categories that are undersupplied in town. Bassett estimates that 234,000 square feet of department stores are needed in the community to meet local consumer demands. Other sectors that are undersupplied are automobile dealers, warehouse clubs and superstores, gas stations and women’s clothing. For the full analysis, click here.
Pozen Extends Lease Until 2015
The drug company Pozen, located in The Exchange at Meadowmont in Chapel Hill, extended its original lease set to end in 2010, to carry on to September 2015. For Pozen’s 17,000 square feet of space, rent will increase from $24.21 per square foot to $26.73, a total lease value of about $2.87 million. With the new lease Pozen will also receive some new perks including the first offer right on available space on the third and fourth floors of The Exchange. Pozen will also receive over $50,000 to use toward property improvements and refurbishments. Pozen has worked with GlaxoSmithKline and AstraZeneca on different drugs in recent years. For the full article from the Triangle Business Journal, click here.
Varsity and Chelsea Theaters to Be Sold
The owner of the Varsity Theater, who announced recently his plans to sell the small Chapel Hill attraction, has also decided to put Chelsea Theater, of Timberlyne plaza, on the market. Bruce Stone said selling the two theaters would be “a package deal,” and showed much confidence in finding a buyer. Chelsea Theater is popular with the residents of Carol Woods retirement community and attracts fans of independent films. Stone said as long as the new owner continues to show a “reasonably intelligent film,” the theater will attract customers. For the full story from The News and Observer, click here.
Hospitality Improves Orange County Economy
Pease to Run for Council
Gene Pease announced he will be running for a position on the Chapel Hill Town Council when the filing period opens July 6, having prior experience in numerous town committees and serving as CEO of several businesses. With 20 years of experience in budgeting through difficult economic cycles, Pease has also served on the OWASA board, Chapel Hill Planning Board and Chapel Hill Public Library Building committee among others. He said he is ready to face the challenges set by “uncertain, yet exciting times.” He will be joined by Penny Rich and incumbents Ed Harrison, Jim Merritt and Laurin Easthom for council. Councilmen Mark Kleinschmidt and Matt Czajkowski will be running for mayor accompanied by the chairman of the town Transportation Advisory Board, August Cho. For the full article in The News and Observer, click here.
Durham Budget Decreases from Last Year
Patterson Place of Durham Starts Phase Two
A bill created to implement pollution clean-up from neighborhoods and commercial developments surrounding Jordan Lake, moved closer to Governor Perdue’s desk after senators approved compromise legislation 47-0. State Sen. Floyd McKissick, a Democrat from Durham, praised the initiative while Sen. David Hoyle, a Democrat from Gaston, worried about the impacts on the N.C. Department of Transportation. For the full article from The Herald Sun, click here.
The Raleigh-Cary metropolitan area suffered more from “job sprawl” than the Durham area according to a new report done by the Brookings Institute. The study used ZIP codes from the nation’s 98 largest cities from 1998 to 2006 and analyzed job numbers as they varied in distance from central business districts. Thirty percent of Raleigh-Cary jobs were over ten miles from the center of downtown Raleigh, while less than 17 percent of Durham area jobs were over ten miles from Durham’s center. From 1998 to 2006 Raleigh experienced a 3.5 percentage point increase, and Durham saw a 0.7 percentage point drop in jobs over 10 miles from the center of business. Job sprawl effects can include boosting energy consumption, increasing commuting times and isolating low-income and minority workers from employment in outlying areas, said the study’s author, Elizabeth Kneebone. For the full article from the Triangle Business Journal, click here.
Perdue Proposes Tax Increase
Fed Reports North Carolina Improvements
North Carolina is showing signs of economic improvement with higher orders and shipments in manufacturing and price increases in the real estate market, a Federal Reserve report stated recently. The report, called The Beige Book, is a compilation of business condition evaluations from the country’s 12 district banks of the Federal Reserve. The fifth district, made up of most of West Virginia, North and South Carolina, Washington, D.C., Virginia and Maryland, has been making improvements overall. The report noted that North Carolina, specifically, had seen more foot traffic and higher revenues in many grocery stores in recent weeks. Memorial Day traffic had increased slightly since last year, the wedding industry remained strong, and Raleigh was expecting an increase in the demand for manufacturing workers by July. The report did show that retail revenue had declined, and high vacancy rates remain. For the full story from the Triangle Business Journal, click here.
Consumer Confidence-and Inflation-Continues to Rise