Land sale for new downtown Raleigh Marriott approved

ccampbell@newsobserver.comJanuary 31, 2014 

  • Developer pitches ‘entrepreneurs’ village’

    Also at Tuesday’s council committee meeting, downtown developer Gordon Smith sought to buy a cluster of city-owned lots along South Bloodworth Street, on the south end of downtown.

    His goal for the site: an “entrepreneurs’ village” where fledgling business owners could live and work around a small park with pingpong, shuffleboard and other “things that entrepreneurs like,” Smith said.

    Smith already owns several properties in the area. “It’s kind of unique to have the city and one land owner to have this much land to do something worthwhile,” he said, adding that he wants to partner with a business incubator like HQ Raleigh on the project.

    The council will decide whether to sell the land to Smith next month.

— A City Council committee on Tuesday approved a $1.73 million deal for a new Marriott Residence Inn Hotel next to the Raleigh Convention Center.

Raleigh has owned the lot along South Salisbury Street for years, and city leaders have eagerly sought a hotel to serve convention center guests and attract larger events to the venue, which opened in 2008. The full City Council is expected to sign off on the lot sale next Tuesday, paving the way for Raleigh-based Summit Hospitality Group to start construction on the 11-story, 150-room hotel.

“It’s a need from the convention center perspective, as well as the general economic development of downtown,” said Perry James, the city’s chief financial officer, who oversaw the negotiations with Summit.

Council members voiced support for the plan but had one question: “I’m curious why it took two years,” Mayor Nancy McFarlane said.

Plans to sell the property to Summit were first announced in April 2012, after another hotel deal for the site fell through. Before city leaders picked Summit, developer Greg Hatem’s Empire Properties had contracted with the city to build The Lafayette, a mix of offices, condominiums and hotel rooms. But that plan was scrapped after efforts to obtain financing collided with development deadlines from the city.

James said he took over negotiations with Summit when he became interim city manager last July. “Part of that effort was deciding what the right lease or purchase plan was,” he said, adding that Summit preferred buying the land but the city wanted to ensure its use as a hotel. “Some of the agreements took time to deal with from a legal standpoint.”

Summit has also been working closely with the city’s appearance commission, and the contract calls for the designs to heed the commission’s recommendations. Those requirements include outdoor cafe space, “retail ready” ground-floor spaces, rooftop facilities and public art.

“The ability to influence the design is a higher probability than it would normally have been” with a private landowner, said Grant Meacci, who heads the Raleigh Urban Design Center.

The new hotel will expand the walking-distance hotel options for convention crowds, center director Roger Krupa has said. When the center was first envisioned, plans called for 1,000 hotel rooms within walking distance. The Marriott Residence Inn will bring downtown closer to that figure, but about 100 or so more rooms are needed to attract bigger conventions, Krupa said.

With the economic downturn, Fayetteville Street hasn’t expanded beyond its two core hotels, the Sheraton and the existing Marriott.

“I think this is a project we need to go ahead and move forward with,” Councilman Eugene Weeks said. “This is in the right direction for us.”

Campbell: 919-829-4802; Twitter: @RaleighReporter

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