Anyone who has ever lived in Chapel Hill has their own version of Franklin Street. It’s the college-town thoroughfare they played in—bars they frequented, shops they bought University of North Carolina gear from, burger joints, record stores, seamstresses, head shops, and other small businesses they once loved. It’s Sutton’s and the Varsity and He’s Not Here and memories folded into the cracked sidewalk and aging brick.
The Franklin Street of today, of course, is a bit different: The storefronts are the same, but new businesses serve new residents. Some are shells of Franklin Streets past, with “FOR LEASE” signs in their windows and rings of dirt where neon lettering used to be. Some of these storefronts have been vacated due to COVID-19, but others have been empty for longer.
The current version of Franklin Street needs a resurrection.
Enter Rosemary Street.
The East Rosemary Street Redevelopment Project, a partnership between the town’s planning department and Charlotte-based Grubb Properties, could change downtown Chapel Hill drastically in the coming years. It could also be the catalyst that launches the town into the 21st century, evolving it into an innovation hub on par with Raleigh and Durham.
The three-phase project has already started. In February, the town blocked off the lower half of the Rosemary-Columbia parking lot to begin work on the CVS Plaza building (or the NationsBank building, depending on your personal Franklin Street). The renovations began months ago, but the final steps will include giving the property new windows, a new HVAC system, and new electrical systems for continued use as office space.
The second and third phases are when the tangible changes really kick in. Dwight Bassett, Chapel Hill’s economic development officer, says that the construction of a 1,100-space, seven-story parking deck will begin in May or June, and is expected to be completed in 2022. As the deck is built, Grubb Properties will try to get the final piece of the project puzzle approved: a 200,000-square-foot office building with two floors of lab space that could create 800 new jobs and generate almost $1.3 million in tax revenue for Chapel Hill.
The project could also mean that the college town will finally find a way to keep its college graduates around—that’s the hope, at least.
“We have a lot of college kids, and a lot of seniors,” Mayor Pam Hemminger says. “Then we get families, because they come here for the good K-12 school system. But we’re missing the young people who graduate from school; we’re missing the people who don’t want to pay those kinds of taxes, who don’t have kids.”
Raleigh and Durham are regarded as two of the best cities for young professionals in the country. Chapel Hill is not. Hemminger says that while some companies may have opened up shop there because they were already considered “business cities,” previous town governments told commercial developers to stay out. It made a lasting impression on developers.
“We actually said we weren’t interested in businesses before,” Hemminger says. “Then we said, ‘We have a long process, and it doesn’t actually yield a better outcome, and if you’re not willing to go through our process, then you’re not really committed.”
These platitudes are tied to downtown as much as the pizza places and fan stores are. In 2010, the INDY chronicled the town’s plan to revitalize Franklin, Rosemary, and their side streets after they were decimated by the Recession; this plan looked similar to the proposals in a plan from 2001.
Go back another decade, and a 1991 study of the area seems to mark the moment when downtown Chapel Hill became frozen in time: The town’s objective back then was to minimize commercial zonings in favor of residential and office spaces that would preserve Chapel Hill’s “village concept.” This led to today’s Rosemary Street, which is awash with small parking lots and student apartments instead of an auxiliary business district.
This planning concept also meant that recent college graduates, as well as working-class residents, would be largely unable to live in town. The town was suburbanized; its property taxes increased. Hemminger says that now, Chapel Hill is more than 80 percent residential.
Despite a long-strained relationship between students and townsfolk, Chapel Hill’s large student population—most of them dependents with little to no income of their own—may be why the federal government decided to declare the 100 block of East Rosemary Street an Opportunity Zone in 2018. Opportunity Zones mean investors get tax breaks for building in low-income areas with room for potential economic growth. The Opportunity Zone in Chapel Hill runs as far north as Estes Drive, and includes parts of East Franklin Street and Martin Luther King Boulevard.
Only 252 Opportunity Zones have been designated in North Carolina, and this is the only one in Orange County. While the county has one of the highest median household incomes in the state, Hemminger suspects that college student income may have given them a chance in the selection process.
For Grubb Properties, this was the only way to make a profit on the CVS building, which it bought in 2019.
“We looked at the CVS building, Rosemary building, before it was for sale,” Joe Dye, the executive vice president of Grubb, told the INDY. “It was very expensive, and it requires a lot of capital for investment.”
The real estate group already had a footing in the town: Founder Bob Grubb bought Glen Lennox, a mixed-use community just east of UNC’s campus, in the 1980s. Since then, the owners have held onto the property, and are currently renovating and rebuilding in the neighborhood.
“He loves Chapel Hill,” Hemminger says of Clay Grubb, the CEO of Grubb Properties and Bob’s son. “He wanted to do something interesting here. And because there’s an Opportunity Zone, it allows him to do it.”
Aside from the eventual office spaces and tax revenue, Chapel Hill also gets the opportunity to tackle another famed quirk: its parking problem.
The East Rosemary Street parking deck that connects to the CVS building is poorly lit and underutilized. Dye says there wasn’t much Grubb could do except tear it down and rebuild.
The parking deck will likely be completed in 2022, but the town’s skyline won’t change much. Bassett says it’ll only appear to be one story taller than the current structure. The new and improved deck will add between 200 and 300 spaces to downtown, including 80 electric vehicle charging stations. The university is also working to invest in the East Rosemary Street deck. It will buy 100 parking spaces for the Office of Undergraduate Admissions, which will move its operations from Jackson Hall to downtown, another change that would alter Franklin Street’s appearance and foot traffic.
Gordon Merklein, the associate vice chancellor of real estate operations at UNC, says the school hasn’t made any firm commitments, but “is committed to working with developers on attracting research companies and startups to the area.”
The final office building will replace the Wallace Deck, owned by the Town. Chapel Hill and Grubb Properties plan to trade parcels, so the Town can gain control of the new East Rosemary Street parking deck. Per the Opportunity Zone requirements, Grubb Properties will own and lease the space for 10 years before the company can sell it to someone else.
The building has not been approved by the Chapel Hill Town Council, but Bassett suspects that plans will be finalized by the end of this year. Hemminger says she has been surprised at how little pushback the project has received; the mayor received what she characterized as positive feedback from the Chapel Hill Historic District Commission following an informal presentation. Bike users were worried about inviting more cars, but a single parking deck means fewer confused out-of-town drivers circling downtown. And churches needn’t worry: Parking in the new deck will still be free on Sundays, just as it is now.
Change to our personal versions of Franklin Street is hard to face, but it’s happening now, after years of idling. And Franklin Street’s “village” feel—the iconic short buildings that hold memories for thousands of alumni who visit every year—isn’t going away.
“We’re putting a lot of energy into downtown, because we truly do believe it’s the backbone,” Hemminger says. “It needs to be the place people want to be—whether they’re coming to visit, whether they live here, whether they work here.”
Follow Digital Content Manager Sara Pequeño on Twitter or send an email to spequeno@indyweek.com.
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