Downtown Development in Fayetteville: A Way Forward

I’ve been writing critically about the downtown development project in Fayetteville for over two years. The purpose of this post is to pose a solution to an ongoing problem. I hope our city leaders take it seriously. If not, I hope they think of something.

Background

In 2017, the City of Fayetteville entered into a contract with several developers to construct a parking deck, offices, and a hotel downtown. The gist of it was this:

The developers would own land next to the new baseball stadium. The developers would build a parking deck on this land. Offices and a hotel would be constructed on top. Once completed, the city would buy the parking deck structure (at cost) and then lease most of the the spaces back to the developers.

FayBaseball

The carrot to the developers was government money.

The carrot to the city was economic development downtown. The city could finance the baseball stadium with the increased property tax revenues that were scheduled to come with the new development. This enabled the city to borrow money without putting a bond referendum on the ballot or raising taxes.

The contract between the city and the developers was amended five times, each time to the advantage of the developers. Often, the cost went up for the taxpayers. Other times, the completion date was pushed back.

Frozen

Construction never started on the hotel or offices above the deck. Then, covid hit.

“Similar to real estate development projects across the country, COVID-19 has paused these projects, particularly commercial ones like our office and hotel towers,” Jones added.

Jones said as of today, his company is not able to provide an updated timeline on when work on the office or hotel project will resume or its completion date.

https://www.fayobserver.com/story/news/politics/government/2020/07/07/construction-halts-on-fayetteville-office-and-hotel-project-on-top-of-hay-street-parking-garage/112289382/

Since the beginning, my major complaint with the project was that it was an expenditure of taxpayer dollars without a public purpose. Millions were to be spent to construct a parking facility that was going to be used primarily by private developers. There’s a legal argument to be made that this violates the North Carolina Constitution as well as the “Downtown Development Statute” which states “…the property interests of the local government shall be limited to facilities for a public purpose.”

Maybe that’s all moot now. It’s readily apparent that we aren’t going to get the development that was promised any time soon. Moreover, it’s highly unlikely that Hyatt will be constructing a new hotel on a parking deck owned by a municipality on land owned by a development company. This was a stretch in normal times. Times are now anything but normal.

We’re stuck.

A Path Forward

Municipalities have the power to acquire property through the use of eminent domain if the property is being taken for a legitimate public purpose. A municipality must pay the landowner the fair market value of the property in exchange.

The City of Fayetteville currently owns the baseball stadium land (parcel 460 below) as well as the sliver of land connecting the stadium to Hay Street.

Parcel (466) is the parking deck. The land is currently owned by Hay Street Development Pad, LLC. Fayetteville can “take” the land and the deck. The taxpayers will only have to pay the fair market value of the property as it sits today. Presumably, our city leaders would negotiate a price that is fair to taxpayers, not the developers. If no agreement can be reached, the matter can go before a jury to set the value.

Once acquired, the entire deck can be used by the general public. Residents of Prince Charles Apartments can lease spaces, just as any citizen can, for an agreed upon price. The city can lease out spaces to season ticket holders for baseball season and use the deck for other special events at the stadium.

This plan enables both sides to save face. It cuts to the reality that if we were going to get a hotel and offices, we would have already. Covid is an excuse at this point. Let’s call a spade a spade.

If it becomes economically feasible in a post-covid world to develop structures on top of the deck, the city can partner with anyone who is willing to honor its obligations and do so.

Right now, we’re getting nowhere.

One response

  1. Once I saw the crane come down without starting on the hotel and office building, I knew the project was in trouble. I had never seen that before. The correct size crane(one that you can add sections) would have in brought in initially to construct the project.

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