Tuesday, June 07, 2011

“Too Big To Fail”– Durham Lessons From The Last Recession

There is much more irony than just what was noted last month in Bull City Rising as Durham-bred Greenfire Development struggled with a collapsed roof while Downtown’s showcase American Tobacco filed future development plans on an area encompassed by its other developments and adjacent to the City-built Durham Performing Arts Center (DPAC.)

Ten years and two months ago, the economy entered an earlier, although much less dramatic recession threatening the adaptive-reuse viability of American Tobacco’s abandoned factory buildings that had once produced Lucky Strike cigarettes.

While fully redeemed today by the vision and drive and genius that created the American Tobacco Complex, these same out-of-town developers labored back then under still-fresh Durham memories of a time a decade earlier when they had done everything possible to move the beloved Durham Bulls first out of Downtown Durham and then to another county and city altogether, in a well-thought out plan and for what they sincerely believed were good reasons.

Redemption began almost immediately after a threatened lawsuit by hotels and restaurants put funding for the Raleigh facilities at risk and determined Durham elected officials led by Chuck Grubb immediately engaged the developers in collaboration, resulting in the City’s construction in Downtown of the Durham Bulls Athletic Park and igniting the developer’s interest in the real estate opportunities anchored by the incredible public facility.

Other than the early-adoption, adaptive-reuse that became Brightleaf Square, there may be no more pivotal moment in the revitalization of Downtown Durham, period.

Less than a decade after that failed attempt and approximately a decade ago now, the developers were seeking tens and tens of millions of dollars in additional Durham taxpayer support for facilities related to the project in the midst of that former recession and above and beyond the historic preservation tax credits they would receive.

In stark contrast to what seems like a current lack of empathy, maybe even a little “kick ‘em while they’re down” inflexibility, being shown to Greenfire, American Tobacco development, a decade ago was deemed by many, to use a contemporary phrase, as “too big to fail,” and as we know now, mistakenly viewed by some as the panacea for revitalization of all of Downtown Durham, something that yet burdens still-pending and currently recession-thwarted Greenfire’s redevelopment of the much more complicated City Center District.

As the ever-evolving requests of American Tobacco developers were discussed a decade ago, Durham found itself caught between city managers and economic development directors and with a new county manager coming up to speed. So the burden for bridging the gaps and making sure American Tobacco became a reality fell on then Mayor Nick Tennyson with support from then Commission Chair MaryAnn Black.

Tennyson was facing a tough re-election battle at the time, eventually against, in what is now another irony, current Mayor Bill Bell, who raised serious and thoughtful questions about the huge project during the campaign, but has earned well-deserved credit since for spearheading it to completion.

In addition to the then four year-old Durham Bulls Athletic Park, to meet requirements for financing, especially during a recession, the developers requested several new publicly funded parking decks to be used by tenants. Then, suddenly, the fate of the huge project seemed hinged again to a proposal by the developers for an adjacent publicly-funded 5,000 to 6,000 seat performance venue.

The venue would be certain not to compete for parking with the developers’ tenants during the day but came with the hidden cost of relocating the DATA maintenance yard; and after the developers rejected the idea of self-financing it with a tax on admissions, they proposed instead that the majority of funding come from an increase to the special tax on rates at 60 commercial lodging properties, which had been pioneered a decade earlier to self-fund community/destination marketing organizations.

It wasn’t lost on the hotels that this proposal by the developer might be payback for threatening the lawsuit that ultimately prevented the Bulls from being moved to Raleigh; and it took a tremendous effort to convince these small businesses to look beyond both the seeming unfairness of the request and some desperation-lobbying and to focus instead on the long term interests of the community.

It wasn’t the lobbying that ensured this huge project, now requiring hundreds of millions of dollars, both public and privately financed, to became a reality but the steady, even-handed determination of then Mayor Nick Tennyson backed by other city and county officials.

He narrowly went down to defeat that fall by 366 votes, as his challenger then Commissioner Bill Bell and former City Councilman Chuck Grubb had nearly a decade earlier after respectively merging the schools and saving the Durham Bulls.

Leadership and political courage often seem to not only go unrewarded but are so often punished.

In the end, the success of the project also came down to not only the vision and flawless execution of the developers but the crucial and selfless decisions by organizations such as Duke University and the Tourism Development Authority (TDA), the governing board of the Durham Convention & Visitors Bureau.

Duke committed to relocate employees based in other parts of Durham to be an anchor tenant in the development critical to financing huge projects like this and as it has quietly done for nearly every other adaptive-reuse project in Durham.

The TDA sacrificed being more fully funded for yet another three or four decades that would have in turn yielded even more millions of dollars for the community in would-be visitor-centric economic and cultural development and millions more leveraged as additional local tax revenues when, as only it could do, the Authority asked the legislature to waive public policy and permit funding of what became a much smaller than proposed but extremely successful theater, DPAC.

Everyone should be proud of what the American Tobacco Complex has become not only because of the ongoing toil and genius of the developers in honoring commitments, but because so many with little or nothing to gain personally, who rarely if ever get credit, overlooked the myriad of issues that that would have made it easy to say “no” during that earlier recession and instead made sacrifices to be sure it became reality.

Always generous and philanthropic, in my opinion, the developers of American Tobacco never ask for or seek the adulation which they are rightfully and universally given but are sure to share credit, especially with the City and County. But nonetheless, adulation and redemption often have a way of rewriting or erasing valuable historical context.

Context that today, under significantly more difficult and complex circumstances, may likewise warrant devoting the same Durham measures that were extended a decade ago to a Raleigh developer such as leadership, perseverance, sacrifice, advocacy and even redemption only this time to equally worthy and locally born and bred Greenfire Development as it strives to complete the most challenging aspects of revitalizing the district at this community’s physical heart.

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