Wednesday, May 22, 2024

Chapel Hill leaders jockey to make Franklin Street a dynamic space

Franklin Street, Chapel Hill: A famous avenue where students and residents meet, greet and rush after winning national championships. Some believe it should remain a classic college town, while others argue that the streetscape adjoining the UNC campus should evolve into an “innovation hub.” Instead of either coming to fruition, Franklin is evolving into a strip of shuttered windows and chain restaurants.

Public relations professor Lois Boynton can attest to this regression. She joined the UNC Chapel Hill faculty in 2001 and began eating lunch regularly at Spanky’s, a venerable restaurant on Franklin Street known for the caricatures of famous UNC athletes that adorned its walls. She got to know the staff and was periodically invited to employee events.

When Spanky’s closed in March 2018 after 41 years of business, “I was kinda lost,” she says. “They were so supportive when I went through cancer treatment. It was a sad day.” Lula’s lasted two years before becoming a COVID-19 victim. Raising Cane’s, a fast-growing fried-chicken chain based in Louisiana, was expected to open at the prime location, but has been delayed.

Like main thoroughfares of college towns across the country, Franklin Street experiences its ups and downs. Retailers and restaurants struggle when students leave for the summer. Chapel Hill became a town after the university was opened to students in 1795. This highly dependent relationship exists both in the town’s origins  and its future. It’s a common struggle nationally, with many universities and towns struggling to understand their mutual reliance.

Franklin Street is a jewel of Chapel Hill, home to 60,000-plus residents.

Now, the town, The Downtown Partnership community development organization and the university have devised a strategic plan they hope will attract enough consumers on a consistent basis to return Franklin Street to its former glory.

Five large developments have been approved along Franklin Street and the parallel Rosemary Street, including a high-rise apartment building, parking decks, a wet lab, office space and an innovation hub. These developments focus on three main objectives: revitalizing downtown, creating a better “front door” for UNC and increasing jobs and tax revenue.

“Chapel Hill’s peers, places like Boulder (Colorado), Madison (Wisconsin) and Ann Arbor (Michigan), are ahead in attracting industry that provides collaboration opportunities for faculty and internships for students,” says Rod Stevens, a development consultant specializing in urban revitalization. “Chapel Hill won’t be able to compete for talent if it doesn’t bring industry up the hill.”

Charlotte developer Clay Grubb, who has been working on mixed-use real estate projects in Chapel Hill for many years, alluded to the downfall in an interview last year with the Carolina Alumni Review. “The last 10 years have not been good to Franklin Street,” he says. “Everyone has flocked to Durham and Pittsboro and Raleigh.”

Today, downtown Franklin Street has plenty of unoccupied properties. After 48 years of business, Ye Old Waffle Shoppe closed in 2021, another pandemic victim. The Library, a popular bar for students, shut down in June 2021. “We are being forced to close our doors to make room for a national brand,” it announced via Instagram. The location remains vacant two years later.

Some legacies remain. Sutton’s Drug Store still serves from its food counter, UNC students collect the infamous blue cups and drink draft beer at He’s Not Here, and Shrunken Head Boutique sells UNC paraphernalia, most notably the “Beat Dook” T-shirt. Still, many businesses haven’t been able to survive the high rent and hefty tenant improvement costs.

“Rent is high, there’s no debating that,” says Dwight Bassett, director of economic development in Chapel Hill and a town staff member for 16 years. Expensive acreage is a key factor. “The land value in downtown is unprecedented. Before the pandemic, an acre in Chapel Hill was around $4 to $5 million. Now we are looking at $6 to $8 million per acre.”

This summer, the town launched a grant program funded by the American Rescue Plan Act to aid existing downtown businesses affected by the continued redevelopment of Rosemary and Franklin Streets.

Jeri Lynn, interim executive director at the Downtown Partnership, identified another obstacle. “These are 100-year-old buildings with 100-year-old pipes and 100-year-old walls. Imagine finding out those pipes are rusty,” she says. “What mom-and-pop shop can afford those costs?”

They can’t, which leaves openings for larger, well-capitalized operators such as Raising Cane’s, which has more than 700 locations. 

The chain paid $3.87 million in December 2021 for its prime spot at the intersection of Franklin and Columbia Avenue. No opening date has been announced, but “2024” has been spray painted on wooden signs outside the building.

The retail space adjacent to Cane’s is being leased for $31 per square foot by Riddle Commercial Properties of Fayetteville. The building has been empty since 2019.

In June 2022, the town and university concluded that the district’s prosperity relies on catering to consumers beyond the 29,500 students attending UNC. Though grants and subsidies are a temporary fix, a permanent solution lies in a year-round consumer base. “We are looking for a 12-month economy instead of a nine-month economy,” says Lynn.

Grubb Properties is working on multiple projects to build this year-round consumer base, including renovations of two older buildings on Franklin and Rosemary streets.  On Aug. 1, it opened an “Innovation Hub” at 136 E. Franklin Street that is anchored on the first two levels by Innovate Carolina, a UNC Chapel Hill affiliated innovation, entrepreneurship, and economic network. It includes co-working space for startups, Grubb spokesperson Emily Ethridge says. Across the street, Biolabs, a Durham-based life science lab, has signed a 23,000-square-foot lease at Grubb’s 137 E. Franklin Street.

Innovate Carolina says it has spawned nearly 450 startups connected to research or entrepreneurship at UNC over the last 10 years, with total employment topping 12,000. About 1,000 employees of those concerns remain in Orange County, prompting leaders to find new ways to retain fast-growing companies.

“Right now, faculty members and students are working on start-ups that require lab space … and they are leaving to go to Research Triangle Park,” says Sheryl Waddell, director of economic development and innovation hubs at Innovate Carolina. “We are looking to provide students and faculty more opportunity.”

While UNC Chapel Hill receives more federal research dollars than Duke University, the oldest U.S. land-grant university doesn’t have similar facilities such as those available in Durham’s downtown district or at N.C. State University’s Centennial Campus in Raleigh. Chapel Hill’s Innovation Hub hopes to address that problem.

Though Biolabs and Innovate Carolina are the only official tenants, officials are seeking Microsoft, Cisco, Google and other blue-chip companies as prospective tenants due to their regional presence and recruitment of UNC graduates. 

“UNC creates these amazing students,” says Waddell. “We have amazing innovation coming out of the university, but after four years they leave. Wouldn’t it be great if we could give them an opportunity to stay and flourish in Chapel Hill.”

Adding a six-story, 1,000-space parking deck near Grubb’s Innovation Hub is a key part of the plan to accelerate growth. Though approved in 2021, the deck has faced major delays because of bedrock problems and is now more than $10 million over its initial $48 million budget.

The town is working on the deck with Ballentine Associates, a Chapel Hill-based planning and engineering firm, with hopes of completing the project in April, says Michael Carew, Chapel Hill parking operations administrator.

“I was dismayed as we all were at the amount of money that we’ve overrun, but I really don’t think we have any other choice,” City Council member Adam Searing told The (Raleigh) News & Observer. “We’ve got to finish it.”

Next door at 150 E. Rosemary Street is another Grubb Properties project. The plan is to demolish a small parking deck and add more than 228,000 square feet of office and wet lab space used by biotech researchers. While upper floors will be lab space, plans call for two floors of retail and restaurants and underground parking.

UNC ranks as the seventh-best medical research institution in the nation, according to U.S. News and World Report. It receives more than $1.6 billion for research annually, mainly from federal grants. Grubb views its projects as ”an organic extension of campus,” Ethridge says, “making Chapel Hill more accessible and vibrant year round.”

Development consultant Stevens applauds the moves to overhaul downtown Franklin Street. “The real advantage will come by adding a jolt of energy during the day, the ability to sit at Carolina Coffee [Shop] and hear people in the next booth talking about how to solve real-world problems of fundamental importance.”

Other developers share Grubb Properties’ optimism for downtown Chapel Hill’s potential, including Longfellow, a Boston-based developer that owns significant property in Research Triangle Park and downtown Durham. Longfellow paid $7.5 million for five lots on West Franklin Street in November 2022. The property houses local businesses such as Bella Nail Salon, Chimney Indian Kitchen and Purple Bowl.

Longfellow is proposing the Chapel Hill Life Sciences Center, which would include a nine-story, 320,000-square-foot building, the town’s tallest structure, along with lab space, offices and some retail options. The town approved the conditional zoning permit in June, but Longfellow hadn’t started construction as of mid-September.

Franklin Street is an important attraction for people making their initial visit to Chapel Hill. “The university wants to make sure its front door is the best it can be,” says Bassett. 

The new “front door” is named the Porthole Alley project and will include a renovated admissions office and visitors center on Franklin Street, across from the Varsity Theatre. The development, which is entering its design phase, is sponsored by the UNC Foundation, a university affiliate that owns most of the block stretching from the Top of the Hill Restaurant and Brewery to the Carolina Coffee Shop.

“Downtown is where the town and the university meet. The university has a long history of investing in downtown,” says Stephanie Berrier, a marketing and communications director at the foundation.

The university previously operated a store for the Ackland Art Museum under the Top of the Hill, but it was replaced by Midici Italian Kitchen, which shut its doors in 2019. Other fan favorites that are long gone include Bski’s and Pepper’s Pizza, which in 2013 closed after 25 years.

Boynton would just like a reliable place where she can become friends with the servers. She sometimes visits other restaurants on the street, “but I haven’t found a home base
like Spanky’s.”

Developers, city officials and university administrators hope that home base is part of this Franklin Street renaissance.

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