Mysterious acquisition

Yeah, I'm going to have to hear a lot more about his before I buy that it's helping the town. In fact, it feels more like UNC is eating our downtown.

Will there be new development at University Square? Will it continue to be housing & retail? How will it interface with the redevelopment of Lot 5 across the street? And of course: how will the UNC make up for the lost tax revenue? In 2007, the owners (US GT LLC) paid $868,279.23 to Chapel Hill and Orange County.

This is just the kind of back-room deal that the Chancellor and Mayor seem to think  constitute healthy town-gown realtions. I don't get that.

The permanent link to the press release Linda mentions is here. It sayeth:

Friday, June 13, 2008
The University of North Carolina at Chapel Hill Foundation will purchase the University Square-Granville Towers complex in downtown Chapel Hill.

After the sale, the UNC-Chapel Hill foundation plans no immediate changes in the current property use mix of retail, office, parking and UNC student housing.

But with input from the Town of Chapel Hill and community, University leaders say the sale could enhance the property’s commercial presence in the downtown business district. The deal will not affect the local property tax base since the UNC-Chapel Hill foundation will keep paying taxes – the 2007 total bill exceeds $868,279 – to support local governments and the city schools.

University and Town leaders announced the acquisition today at a joint news conference at the Chapel Hill Town Hall.

Chancellor James Moeser, right, announces at a news conference Friday (June 13) that the University of North Carolina at Chapel Hill Foundation will purchase the University Square-Granville Towers complex in downtown Chapel Hill. With input from the Town of Chapel Hill and community, University leaders say the sale could enhance the property’s commercial presence in the downtown business district. At left is Chapel Hill Mayor Kevin Foy, who also participated in the briefing.

“The University Square-Granville Towers complex is a sound strategic investment for the University with great potential for playing a larger role in downtown revitalization,” said Chancellor James Moeser. “We want to explore all options for using the property to meet the University’s needs, while also benefitting downtown Chapel Hill.”

Chapel Hill Mayor Kevin Foy said the eventual redevelopment of the
complex marks another important milestone in the Town's efforts to create a sustainable, vibrant downtown core.

“Thanks to a wise arrangement that will protect and potentially expand our tax base, the UNC-Chapel Hill foundation has responded well to the Town's economic development goals," Foy said. “We are pleased with the opportunity to work together toward a master plan that will guide the future long-term use of the complex.”

The University will seek ideas from Town leaders and citizens, said Roger Perry, chair of the UNC-Chapel Hill foundation’s Board of Directors, chair of the University’s Board of Trustees and president of East West Partners in Chapel Hill.

“The portion of the property on Franklin Street should always be used for commercial purposes in its current form, but with an eye toward redevelopment in the future,” Perry said.

A limited liability company affiliated with the Kenan family owns the University Square-Granville Towers complex. The UNC-Chapel Hill foundation will purchase the 12-acre tract and the existing buildings – three student residence halls and two office towers – for $45.75 million from US/GT, LLC, the limited liability company. The closing date for the sale will occur no later than July 1, 2009.

The UNC-Chapel Hill foundation intends to finance the purchase over a long term, said Dr. Richard Mann, vice chancellor for finance and administration. That approach has several advantages including preserving flexibility for possible future partnerships for redevelopment.

A long timetable also provides the community with an assurance that the UNC-Chapel Hill foundation has no plans to transfer ownership to the University, a state entity not subject to property taxes, he said.

“From a property tax perspective, this acquisition will have zero impact for the foreseeable future,” Mann said. “We’re also interested in seeing Franklin Street prosper and intend to keep playing a role in those discussions.”

About 80 percent of the current office space in the University Square office towers is leased to the University and the UNC Health Care System. Granville Towers, which is managed by a Memphis-based firm, can accommodate more than 1,300 UNC students with housing and dining services.

After closing the purchase, the UNC-Chapel Hill foundation will honor current leases and contracts for retail and office space in University Square, as well as executed leases for Granville Towers. The University’s Department of Housing will oversee management of UNC student housing in Granville Towers. Based on information including community input, the University plans to create a master plan for future long-term, just as it has on main campus for projects such as the arts common.

Development of the University Square complex began with the start of Granville Towers in 1965 when the property was owned by Northwestern Mutual Life Insurance Co. and continued in phases over the next eight years. Frank Kenan acquired the property in the early 1970s.

A Kenan family member, speaking on behalf of the family, said, “University Square was a special property to Frank Kenan. He went to work at his office there for 25 years. He loved the connection to the University and student life through the dorms at Granville Towers as much as he loved the small businesses that thrive at University Square. He felt the property had the most intrinsic value to the University because it is 12 acres adjacent to the campus and in the heart of the Town. He was committed to offer the property to the University first and foremost if he ever sold it. After 12 years, his family decided to execute his intentions.”

UNC contact: Mike McFarland, (919) 962-8593
Property owner contact: William P. Aycock II, attorney at law in Greensboro, (336) 370-8803
Town of Chapel Hill contact: Catherine Lazorko, (919) 969-5055

- http://uncnews.unc.edu/news/campus-and-community/
unc-chapel-hill-foundation-to-acquire-university-square-granville-towers.html