Hayti Business Leaders Worry About Impacts from Out-of-State Developers

When the Heritage Square shopping center was built along the southern crest of downtown Durham in 1985 by the nonprofit Hayti Development Corporation (HDC), with assistance from the City of Durham, the initiative represented an opportunity for city leaders to make good on the broken promises of urban renewal by developing one of the remaining land tracts from the urban renewal period more than a half century earlier.

It was a hopeful moment.

The HDC, according to a 2004 Herald-Sun newspaper story, “won broad support from the City Council and even garnered nationwide recognition.”

City officials assisted the now-inactive HDC with building the shopping center. What emerged after construction was a modest mix of national chains like Family Dollar, Subway, and Winn-Dixie grocery, along with a hodgepodge of locally grown enterprises that included a printing company and a fledgling hardware store that offered shares to neighborhood residents.

Some community leaders and residents envisioned the shopping center as a catalyst for the revitalization of Hayti. But the shopping center failed, even though the city rented office space there at above-market-rate prices. In 2006, the shopping center was sold to Andrew Rothschild, a Manhattan physician turned private developer who also owns property in Hayti’s original business district on East Pettigrew Street. Rothschild’s purchase of the shopping center was reported in the real estate section of The New York Times.

The Times noted that Rothschild gave up his medical practice in 2000 when he moved to Durham with his wife and founded Scientific Properties. By the time Rothschild purchased the 10-acre site where the shopping center sits, “only a handful of businesses” were open in the 70,000 square feet of retail space, the Times reported. The paper also noted that during Jim Crow, Durham had two downtowns: white folks did their business on Main Street, and Black people did the same on adjoining Parrish Street, which became known as “Black Wall Street.”

“In its place, Mr. Rothschild plans to build Heritage Square, a $130 million, six-block, multistory district that will reconnect underneath the freeway the streets between downtown and Hayti, where many people who worked on Parrish Street once lived,” the Times reported.

The impressive plans never came to pass. Today, only three businesses—neighborhood mainstay Pelican’s SnoBalls, a Food World grocery, and a Family Dollar—remain open at Heritage Square.

The dollar store just reopened this week following a series of break-ins last month, starting with the holiday weekend. Thick, rectangular sheets of plywood cover the doors after a thief broke the windows and stole alcohol, cigarettes, baby clothes, shirts, and white socks.

“We didn’t reorder tobacco and alcohol, so when he broke in the third time, he stole dog food,” said a store employee who wanted to remain anonymous.

Rothschild could not be reached for comment.

In late June, Sterling Bay, a Chicago-based development firm with deep pockets, announced a joint venture with another Chicago firm and a New York developer to purchase the declining commercial space that sits between the 600 block of Fayetteville Street and the 400 block of East Lakewood Avenue.

Sterling Bay did not respond to requests for comment from the INDY before press time.

Call it the replacement theory in reverse. Some longtime Hayti residents who are witnessing the ongoing developments contemplate a not-so-distant future in which they will have little if any say, no place to live, and no business to own in the Bull City’s most celebrated Black community, whose name was inspired by the Haitian Revolution.

During her first “State of the City” address, Mayor Elaine O’Neal said she was “struck by the fact that there are two Main Streets in Durham.”

The city’s first Black woman mayor said that “on one end of Main Street, you see the high-rises, the shops, and the amenities that illustrate the leaps toward prosperity that many in Durham have experienced over the last few years. On the other end of Main Street, you see a community that has not kept up with the prosperity.”

Larry Hester has co-owned the Phoenix Square and Phoenix Crossing shopping centers with his wife Denise for more than 30 years. Phoenix Square, with the city’s assistance, housed four businesses that were located in a nondescript area known as Tin City, where the now-closed Carolina Times sits on Old Fayetteville Street.

“Those businesses were supposed to be there [temporarily] for eight months,” Hester says. “They were there for 19 years.”

Hester says there are currently about 100 Black-owned businesses along the Hayti District’s Fayetteville Street corridor that stretches from NC 147 to Cornwallis Road.

The current number of businesses is a far cry from the nearly 500, along with 4,000 homes, that were razed during the ill-named urban renewal program more than a half century ago. Still, Hester says the current businesses along the corridor south of downtown make up the “the new Hayti.”

“It appears that it’s going to end up just like the old Hayti if the city doesn’t do more to ensure its survival,” Hester told the INDY this week.

But William “Bill” Bell, the city’s longest serving mayor, whose 17-year tenure began in 2001 and ended in 2017, thinks Hayti’s doomsday-sayers should slow their roll.

“Black people are there now,” Bell told the INDY this week. “I don’t see why we won’t be there in the future.”

Hester, who owned and operated shoe repair shops for years at malls in Durham and Chapel Hill before purchasing Phoenix Square in 1987, points to a couple of commercial and affordable housing developments announced this year that may push Black people out of the community.

In addition to the Chicago developer’s purchase of Heritage Square, Durham Housing Authority (DHA) officials announced in January that the agency had selected a partner from outside the community to spearhead a 770-unit affordable housing development in Fayette Place, a long-fallow 20-acre parcel of land in the heart of Hayti.

Henry McKoy—an NC Central University professor who spearheaded Hayti Reborn, which envisioned Fayette Place as the hub of a hybrid residential, business, and educational complex—warns that DHA’s approach to redeveloping Hayti will only reinforce the gentrification already taking place throughout the district.

Hester says he and other members of the area’s business community haven’t heard from Sterling Bay officials. Nor have local folk whose businesses would be most impacted by a new development in the Hayti District reviewed site plans or laid eyes on any community benefits agreements that would bolster the community for supporting the coming private development projects in the neighborhood.

In 2006, Hester opposed Rothschild’s proposed development of Heritage Square.

Hester caught flak in some quarters from critics who said his real motive for opposing the development in 2006 was the competition posed by the threat of a bigger, more modern retail outlet just across the street from the two shopping centers he owns with his wife. But Hester says his opposition was about the impacts such a mammoth development would have on the area’s traffic infrastructure, along with water and sewer.

“[Rothschild] had a one-million-square-foot project,” Hester explains. “The present project is supposed to cover two million square feet. So yeah, I’m concerned about the impact. If you look at the volume of traffic on Fayetteville Street at nine o’clock in the morning, the [city] planning department couldn’t determine if the intersections wouldn’t fail with the traffic volume two million square feet will entail.”

Hester adds that during urban renewal, authorities did not create water and sewer systems.

“Because there wasn’t any concern to bring Hayti back,” he says. “When we built Phoenix Square we got our water and sewer from Old Fayetteville Street. Where’s the water and sewer gonna come from, and does Durham have the capacity to do that for two million square feet?’

Fast-forward to today and Hester is once again concerned about the same issues, along with the tax impact Sterling Bay’s new multiuse development will have on the 40 businesses at the two shopping centers he owns.

“With the development of Heritage Square, the tax valuation will be dramatically bigger for us,” he explains. “That means small businesses will have to increase rent, and it may have a detrimental effect …. We are still here, but there are some impacts that may overtake us.”

Hester says the historic community would have been better positioned against the threat of gentrification and displacement if city leaders had adopted a master plan created by 200 Hayti property owners, who submitted the sweeping, 139-page document to city council members in August 2005.

“When we submitted the plan years ago, the idea behind it was to naturally grow in the area without a lot of pressure,” Hester explains. “So that when the pressure came, we would have been better positioned. The city has positioned us to have a tough road.”

Hester says city leaders “took a different direction.”

“They took the plan and improved every corridor [near downtown] except Fayetteville Street,” he says.

“I’m not sure if it was because they never wanted Hayti to come back, but that was the effect,” Hester says while pointing to improvements that took place along Driver Street, in Old North Durham, and in the West End.

Hester showed the INDY a late 2005 letter he had written to former city manager Patrick Baker that noted Bell, during a city council work session, said he “could not support [the plan] at this time.”

“[Bell] also remarked that the City did not have the funds to commit to the Fayetteville Street Plan before abruptly closing the meeting without allowing members of our group to respond,” Hester wrote to Baker.

Bell told the INDY this week that he does not recall city staffers recommending the funding of the Fayetteville Street group’s master plan. Bell added that while the group may have met with council members, they never met with him, nor was he aware of the meetings.

“You would think that if someone had wanted my thoughts, they would have asked to meet with me, especially since he implies that the project didn’t get funded because of me,” Bell says. “The decisions are up to the majority of the council, not the mayor alone.”

The Rolling Hills subdivision, a townhouse neighborhood developed by the Hesters, sat just across the street from Heritage Square on another prime parcel of real estate overlooking the city’s proudest attractions, including the American Tobacco Campus, the performing arts center, and the baseball stadium.

By 2009, the subdivision had deteriorated and became, in Bell’s words, “a ghetto hidden in plain sight.”

The city purchased the land and spearheaded the Lofts at Southside, a mixed-income community with a significant Black population that will be complemented soon by the city’s Southside Revitalization.

A casual drive through the shopping center parking lot today features an area riddled with forlorn, boarded-up storefronts, where some of the city’s most marginalized residents sleep in front of long-abandoned entrances of prime real estate.

At the beginning, middle, and end of the day, the quietly determined Hester says it’s all about that shared prosperity often touted by the city’s elected leaders.

“The Fayette Place developers are going to take that money home with them, out of the Hayti community. The Heritage Square developers are going to take that money home. All the money that should be turning over in our community is now going somewhere else,” Hester says. “We want Fayetteville Street to be a cultural destination. And with Durham being such a prosperous city, we want our people to spend their money in our community.” 

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Follow Durham Staff Writer Thomasi McDonald on Twitter or send an email to tmcdonald@indyweek.com.