Chapel Hill brings office buildings and jobs to Glen Lennox
A Charlotte developer got $2.2 million in performance-based town incentives Wednesday night to help launch construction on the first of several office buildings planned for the Glen Lennox neighborhood on N.C. 54.
The partnership will give Grubb Properties the opportunity to bring more commercial taxes, jobs and community benefits to Chapel Hill more quickly, Mayor Pam Hemminger said.
“In theory, I think we would like it to work that we didn’t have to incentivize, but we have a track record,” Hemminger said. ”We haven’t had any office buildings; nothing else we tried has worked. In order to move forward, this is what the developer said it would take to be able to get them out of the ground, because it is very risky and speculative when you’re building office in our community.”
Grubb Properties CEO Clay Grubb has said the challenge is signing enough tenants to get the first building off the ground. Pre-leasing the space would help secure bank financing, he said, amid rising costs, tariffs and interest rates.
The Town Council approved the incentive by an 7-1 vote Wednesday. It will return most of the new town property taxes that Grubb Properties generates by developing 488,000 square feet of offices over five years.
The project has the potential to create 1,952 jobs and $122 million in assessed property value, said Dwight Bassett, the town’s economic development officer.
Construction could start on the first, 103,000-square-foot office building this year. Up to 10 percent ground-floor retail also is possible.
Grubb Properties will be required to make annual reports to the council, and if it doesn’t meet its goals in a given year, it doesn’t get an incentive that year. The five-year agreement is based on incentive guidelines that the Town Council approved last year.
The redevelopment of the 1950s-era shops and apartments east of UNC’s campus will create 3 million square feet of shops, offices, apartments and a hotel on 70 acres. The first phase — 215 apartments, a clubhouse and a parking deck — is being built now.