With Rising Rents and Recent Closures, Can the City of Durham Act Quickly Enough to Save Downtown’s Local Businesses?

There’s an old joke about an economist stranded on a desert island. Asked to imagine her escape, she says, “First, assume a rowboat.”

Right or wrong, there’s a belief among Durham’s downtown small business owners that the city government is making a similarly optimistic assumption about them: that there’s a rowboat, even as many find themselves underwater.

Indeed, some longtime Durham restaurants have been sinking. 

According to Downtown Durham Inc. (DDI), downtown added 21 new merchants last year while 17 moved out or closed; several more have announced their closures or plans to relocate since then, including Cuban restaurant COPA, which opened in 2018 on West Main Street and had its final days last week after filing for bankruptcy. Fullsteam announced it’s leaving its Rigsbee Street taproom after 13 years, Beyu Caffe and 321 Coffee recently shuttered, and mainstays Pompieri and Dos Perros made waves when they closed last year. For months, bar and restaurant owners have taken to city council chambers, and social media, to bring attention to issues they face: rising food prices, security concerns, and the cost of parking for both employees and diners.

“Without a renewed commitment from our local leadership, the downtown we all love and are so proud of will cease to exist,” said Nicole Thompson, DDI president and CEO, in an impassioned presentation to the Durham City Council in May. “The uniqueness and authenticity that has always been so important to Durham will die.”

But it’s a complex problem that touches on both the built environment and original design of downtown, and includes the cultural changes resulting from the COVID-19 pandemic as well as a perceived need to enhance downtown amenities to draw in more tourists and foot traffic. City leaders say they’re working on it and expect to have the money to revitalize the area, but it will take time. As new development subsumes the fractured downtown core, some worry that what once made the city vibrant and unique—its independent local business community—will disappear beneath the waves.

The death and life of cities

In her 1961 work The Death and Life of Great American Cities, urban theorist Jane Jacobs wrote about four indispensable conditions necessary to “generate exuberant diversity” in an urban environment: short blocks, buildings that “vary in age and condition,” districts that serve multiple purposes, and a “sufficiently dense concentration of people” to bring it all to life.

Easy to say but hard to do, and the existing structure of many midsized U.S. cities is not conducive to creating these conditions. Durham is no exception.

“It’s made for cars,” says Andrew Whittemore, associate professor at UNC-Chapel Hill’s Department of City and Regional Planning, about Durham’s current downtown. “It’s not made for pedestrians, for a strolling experience or an organic shopping day out. It’s made for moving through it with your vehicle.”

Scott Page, whose Philadelphia-based firm Interface Studio DDI hired to help develop a blueprint for downtown, concurs. 

“We spent many years designing our downtowns to get people in and out as quickly as possible,” Page says. “That’s not how we should be thinking of it. We want people to come and stay and wander and explore.”

Once downtowns have a critical mass of around 10,000 residents they need to embrace the idea of becoming a neighborhood, says Page. 

“Then there’s more people on the street and more customers to support retail,” he says. “Durham has that. Now it’s starting to think about how things are connected.”

Whittemore says before downtown Durham can draw in more development and residents, leaders need to fully rethink how people interact with the streetscape.  

“For decades the only thing driving thinking in the public realm was how are people going to get here and park,” he says. “What’s missing is the street redesign, getting rid of the downtown loop and the couplets [two streets running in parallel in opposite directions]. That’s thinking from 50 years ago that was very misguided.” 

The uncoupling

There are ideas out there to fix the streets, according to Carl Rist, an at-large member of the Durham City Council who is in his first term. 

“That’s definitely a priority,” Rist says, adding that the city is on a three-year plan to convert Roxboro and Mangum Streets to two-way streets. “That will be traffic calming and make them more accessible to pedestrians.”

Rist acknowledges the broader interest from residents and business owners for the council to take an active role.  

“There was the sense that the previous council felt that downtown was in great shape,” Rist says. “The folks on this council are concerned about [its] vitality.”

Durham mayor Leonardo Williams has a personal stake in the success of downtown through his ownership of two restaurants, Zweli’s on Main Street and Ekhaya at the American Tobacco Campus. 

“As a small business owner I feel what [DDI] is saying,” Williams says. But there’s a problem. 

“We don’t have enough destination drivers [downtown]. We have DPAC, the Durham Bulls, the Carolina Theatre,” he says, but more is needed. And he’s thinking big.

“We have to redesign what our inner city looks like and consider capital projects that can bolster it,” he says. “Give me a hotel, 500 rooms, build a few other hotels, a convention center with 200,000 square feet where I can fit 4,000 people, and then let the Durham culture do its job.”

Office to residential

Urbanists cite the COVID lockdowns and the emergent work-from-home culture as the reason for declining foot traffic in cities. But those excuses are starting to wear thin, at least in Durham. If more people are living downtown and working from home, they’re still downtown and working, whether they’re in a traditional office or not. These new residents are to some extent replacing the absent office workers. 

In 2019, there were 22,607 employees working in the downtown district and 4,331 residents. Four years later, the number of workers dropped to 19,524 while the number of residents rose to 5,802, according to DDI. 

“Work from home is also work from the coffee shop,” says UNC’s Whittemore. 

These residents need places to shop. They need the opportunity to round a block and find something interesting, as Jacobs suggested. But now, even as more people are moving into downtown Durham, many businesses are moving out. 

Not surprisingly, given the high vacancy rate and “work from anywhere” ethos, new office construction has been anemic. No new space came online in 2023, according to DDI. A total of 829,000 square feet of new space has been announced, per the organization’s “2024 State of Downtown Durham” report. For perspective, there are about 4.6 million square feet of office space currently in the city center. Duke University, the city’s biggest tenant, has approximately 1 million square feet in and around downtown but plans to scale back. Overall office occupancy stood at 87 percent. Nationally, the rate was about 82 percent, according to a July report from data provider CommercialEdge.

Residential construction, on the other hand, has been robust, with 5,418 units completed by the end of 2023, including 868 in the last year. That’s up from 2,521 units in 2018; another 4,091 units are announced or under way, by DDI’s count. The number of residents in and adjacent to downtown is expected to grow apace, from the current 9,000 or so to more than 19,000 over the next few years.

To support this population, there were 264 shops, restaurants, bars, and service businesses located downtown in 2023. 

The Durham food scene is a major attraction for both residents and visitors, and the challenges these establishments face are worrisome. Storefront retail is another issue. Nationally, there are signs of a retail recovery. The Wall Street Journal recently reported that more stores opened than closed last year, citing data from Coresight Research. The rate of available space fell to 4.8 percent, the lowest level in 18 years, according to another real estate firm, CBRE. But locally, recovery has been weaker.

“We need to improve the density of street level businesses and think about what the mix is,” says Susan Amey, chief executive of the Durham Convention and Visitors Bureau. “We need policies that encourage the development of those businesses, to make it a place that people want to be.”

The challenge is to get the growing downtown population to interact more consistently with the city, says DDI’s Thompson.

“We [DDI] are really trying to focus on the people who live downtown,” she says. “We have a lot of restaurants, bars. We’re working hard on retail.”

Pedestrian traffic has begun to recover from its post-COVID lows. In 2019, there were 3.6 million office worker visits to downtown, according to DDI. That number fell to 1.9 million in 2022. Last year, it rose to 2.5 million. In June of last year, DDI launched the “It’s Your Neighborhood” program to introduce residents to local businesses, in part through a newsletter sent to residents in the 27701 zip code highlighting local businesses. 

“We are intentionally getting in front of residents,” Thompson says. “Part of our initiative is to get into the lobbies and draw the people down and introduce them [to local business owners].”

Not designed for walking

Downtown Durham was never designed for the new live-and-work world.

“You have a lot of small households [downtown] that are wealthy, and you didn’t have that 100 years ago,” says Whittemore.

“People are attracted to other people,” says Nina Martin, an associate professor in the Department of Geography and Environment at UNC-CH who relocated to the Triangle from Chicago. “It becomes a kind of virtuous circle.” 

Conversely, fewer people on the sidewalks tends to beget even fewer people, draining the city of energy and making those who are out feel less safe.

Many of Durham’s recent arrivals are fleeing high-cost coastal cities in search of a more livable, midsized urban environment, according to Martin.

“They see Durham as a place that still has an authentic feel,” she says of newcomers. 

That mostly rings true. Fully 70 percent of the city’s street-level businesses were started in Durham. Of those, 32 percent are minority owned, and 40 percent are women owned, according to DDI.

But all the new residential development threatens that early authenticity.

“A lot of [the new construction] does feel very cookie-cutter, the kind of development that could be anywhere,” Martin adds. 

“People are worried that the city is losing its soul. Now is the time to take stock and come up with a vision for what is going to make Durham continue to feel unique and feel authentic”—something “that has some sense of history, a sense of place, that reflects values that aren’t just corporate values,” she says.  

We have plans

Discover Durham recently unveiled its 20-year master plan, while DDI expects to release its own blueprint sometime next year.

“We have a lot of plans,” Thompson says. “We need to sit down and decide what’s the priority?”

One challenge: significant proposals will require public-private partnerships. Fortunately, there is a history of those in Durham.

“[The city] has always been supportive of our work,” Thompson says. “We’d love to explore other ways we can take that partnership further around the part of better public spaces.”

Martin notes that some cities have programs to encourage business formation via working with landlords to make rents more affordable. 

“The city needs to do something much more concerted to help attract retailers and find affordable spaces and to show them that there are people living downtown, that there is demand,” she says.

“We’ve heard loud and clear from downtown businesses that they are facing a crisis,” says council member Rist. “We need to build consensus to take action. It’s a conversation we’re having. It needs to happen sooner rather than later.”

To the street design issue, Thompson says, “It’s not an easy solution, but it’s doable.

“[Now, the streetscape is] preventing more pedestrian-friendly development from happening,” she says. 

One problem: the city does not own all the roads in question, meaning the state, which owns most of the largest roads, will have to get involved and lend its support. 

Getting that support can be challenging, says Rist, as the city’s vision for the roads can differ from the state’s. But while that complicates matters, he believes it’s not insurmountable. 

“If we had a plan for taking them over and maintaining them, the state would be happy to turn them over to us,” he says.

In an odd confluence, both aging baby boomers and younger generations are drawn to “walkable” cities. 

“The younger generation is much less likely to own a car, and their age when they buy a car is later,” UNC’s Martin says. “They don’t want a car-oriented lifestyle.”

Downtown Durham is not especially big. It is less than a mile walking from DPAC on the city’s south side to Motorco and the old ballpark on the north. From Brightleaf Square to Golden Belt is 1.5 miles. But the transit is complicated by railroad tracks, Main and Chapel Hill Streets, and the downtown loop, among other obstacles. 

Pockets of vibrancy are spread all around the urban core, but linking these spaces in a compelling way remains a major challenge.

Here again, there are plans, including a potential redesign of the Durham Freeway. 

“There is engagement process on this idea of ‘How do we rethink [NC] 147?’” says Rist, who notes that the city has invested in a consultant to consider potential strategies. “There are federal dollars on the table for rethinking these freeways that went through communities and tore communities apart as they did in Durham. Other cities are ahead of us on that, but we’re trying to catch up. It’s a long-term fix.”

Mayor Williams is leaning heavily on his convention center plan. Various ideas are under consideration. One of the more ambitious, of which Discover Durham is a champion, includes 186,000 square feet of meeting space, nearly six times that of the current center. A new hotel to accommodate all these presumed convention goers is also on the table. The price of this new center is estimated to be about $315 million excluding the land; the hotel would add another $225 million.

“Durham is the third largest city in the state, but we have the smallest convention center of any midsized city,” says Williams. “Rocky Mount has a larger convention center. We have to do better.”

The facility would potentially bring in as many as 4,000 people for events who, presumably, will be out shopping and eating every day, adding money to the local economy. It would create a revenue opportunity for the city via occupancy and sales taxes. 

With these revenue sources, Williams says, “you can do things like better support affordable housing and build other assets” that don’t directly generate revenue but “create a better quality of life” for everybody. 

One project that does appear to have steam is the Durham Rail Trail. If built, it will connect downtown to areas north and east along a former Norfolk Southern rail bed.

This, too, has been on the board for a while, but Rist says it is now closer to completion.

“As long as we pass this year’s budget and next year’s, we have the funds to do the rail trail,” he says. 

The terminus at Durham Station is envisioned as a “destination.”

Get in the boat

There is general agreement that the city is approaching an inflection point. 

Among DDI’s recommendations, as Thompson outlined at the May city council meeting: make employee parking cheaper and more accessible, establish policies around construction that allow contiguous businesses to continue to operate unimpeded, provide more support for outdoor dining, and reestablish the building and retail improvement grants that the city used a decade ago to encourage downtown development. 

But those are looking increasingly like table stakes.

“Downtown’s success was founded on public/private partnerships, strategic investment, and supportive policies created by visionary public leaders,” Thompson told the council. 

“That investment is worth too much—downtown is worth too much—to let it falter based on the mistaken belief that ‘downtown is done.’ A vibrant, successful downtown that is the primary economic engine of a thriving city does not happen accidentally or on autopilot.”

In other words, time to start rowing.

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