Development debate centers on Imperial site
Wednesday, June 1, 2016
The future of the Imperial Tobacco plant site on Atlantic Avenue, once the center of Greenville’s tobacco industry, has become the center of debate about what role the city should play in the redevelopment of the west Greenville and downtown districts.
The city has an option to purchase the property at $1.04 million, and that purchase was included in an initial spending plan for the 2016-17 fiscal year. During its May 9 meeting, the Greenville City Council voted 4-1 to cut the purchase in order to lower the proposed property tax rate in the upcoming budget. A public hearing on the budget has been scheduled for Monday.
City staff, local real estate developers and business owners in the downtown district have advocated for the purchase to be placed back in the budget, arguing that maintaining control of the property creates public-private partnerships, encourages private investment in the city and could help recruit businesses and create jobs in Greenville.
Staff members also say that the property’s value is expected to increase well above the purchase price, and turning it back over to the previous owner would cut the city out of substantial returns for its time and effort.
The city’s front porch
The plant was built in the early 1900s and was in use until 1978. Plans for restoring the structure were halted in April 2008 when a fire destroyed most of it.
As a result, the property was cited for multiple code violations. The owner of the property claimed financial hardship as the reason for failure to clean up the site. In 2012, the city applied for a $400,000 grant from the Environmental Protection Agency to remediate the site.
In order to qualify for the EPA grant, Greenville had to own the 6.08-acre property. The owner entered an agreement in which Greenville purchased the property for $1 and retained ownership until the cleanup was completed.
“A lot of people were reaching out to the city about the condition of the site,” Assistant City Manager Merrill Flood said. “They wanted to see that property cleaned up.”
Flood said it also was important to clean up the site because of its proximity to the 10th Street Connector, the $46 million project to provide a modern multi-lane connection between East Carolina University and the city’s medical district. When the project is completed, the Imperial site will be the visual gateway into Greenville’s downtown district.
“We realized that the Imperial site was the first thing people would see,” Flood said. “That’s the front porch of our center city ... it became a question of whether or not that was what we wanted show people.”
As part of the agreement with the owner, the city included an option to purchase the property for $1.04 million after the cleanup was completed.
“Our primary interest was the remediation of the site,” Flood said. ”But the City Council, in their wisdom, included an option to purchase the Imperial site because they saw its potential.”
“Get things started”
When Greenville adopted the Center City-West Greenville Revitalization Plan in 2006, Flood said city officials started redevelopment in the downtown district by initiating street, sidewalk and lighting improvements — as well as investing in projects like the Fourth Street Parking Deck, the 10th Street Connector and the upcoming Greenville Transportation Activity Center (GTAC).
“The private sector will not invest unless the city makes a commitment to revitalization,” Flood said. “A city has to spur the interest and get things started.”
Since revitalization efforts began in 2006, more than $100 million has been invested in downtown development projects. More than $60 million of that came from private investments. “We’re now seeing more private investment than public,” Flood said.
By 2019, an additional $385 million in development is scheduled to be completed. More than $80 million of the planned projects are being developed within two or three blocks of the Imperial site. Roger Johnson, manager of Greenville’s Office of Economic Development, said those figures do not include small businesses that have located in the district or renovations to existing businesses in the area.
“Those are just the major developments in the district,” Johnson said. “We are seeing how public-private partnerships can promote economic vitality.”
One aspect of the city’s revitalization plan is the transformation of the Dickinson Avenue corridor, where the Imperial site is located, which runs through Greenville’s historic warehouse district. The city hired urban design consultants Ayers Saint Gross to develop the Dickinson Avenue Corridor Plan, which transforms the deteriorating area into a mixed-use innovation district.
Innovation districts are a recent trend in urban planning that promotes mixed-use developments, which combine residential, office, commercial and recreational components. With sidewalk and lighting improvements, restaurants, shops, offices, some types of manufacturing, student and market-rate housing and even parks can be within walking distance for people living in an innovation district.
“That’s what revitalization is all about,” Flood said. “Finding new and better uses for these areas.”
The Dickinson Avenue Corridor Plan, which included the development of the Imperial site, generated interest in the business community about redevelopment opportunities along the 30-acre corridor.
One of those redevelopers is Brad Hufford, an owner of the Dickinson Avenue Public House. Hufford said the city’s urban design plan was a factor in the decision to open the restaurant at 703 Dickinson Ave.
“The Imperial site was important to us,” Hufford said, “as well as the physical improvements the city has made on Dickinson Avenue. A lot of effort has been put into the area, and it’s really becoming multi-functional.”
Jim Blount, owner of Blount Properties in Greenville, said designs for a $32 million residential development project on Dickinson Avenue and Reade Circle were based on the Dickinson Avenue Corridor Plan.
Blount is a local partner with Sidewalk Development, a real estate firm in Baltimore, planning to build a 40-unit market rate apartment complex, a 60-unit student housing project and 20,000 square feet of retail, restaurant and office space.
“That was kind of the Bible we used to develop our plans,” Blount said. “The plans from Ayers Saint Gross were well done, and I think the city has done a fantastic job of getting that corridor ready.”
Blount said the city’s commitment to providing better roads, sidewalks and lighting along the corridor have encouraged investment.
“The improvements along that corridor made that parcel on Dickinson Avenue and Reade Circle a home run site,” Blount said. “These public-private partnerships are a vital aspect of center city development.”
Flood said the city planned to use the Imperial site to promote additional mixed-use projects that are aligned with the Dickinson Avenue Corridor Plan.
“A city should guide growth, not control growth,” Flood said. “If Greenville retains ownership of the property, the city could be selective about what type of development will be constructed on the site.”
Johnson said the city also purchased about $360,000 of adjacent properties during the past two years, which would give the city about 9 acres of developable land if the Imperial site is purchased.
If the city purchases the Imperial site, staff has identified a number of potential uses for the property that include:
• Listing the property for sale on the open market;
• Using a portion of the property to market the city’s virtual building program;
• Entering into a public/private partnership with developers to build a three- to four-story mixed-use project.
“Purchasing the site gives the city options,” Johnson said.
Johnson said the city could use part of the property to develop public parking in order to promote small business investments in the area surrounding the Imperial site.
“A small business owner may not be able to acquire an adjacent lot to build a parking lot,” Johnson said. “The city could use part of the site for structured parking that would serve any number of small businesses in the area. That’s just one of the many ways the city can use the Imperial site to promote economic development in Uptown Greenville.”
If the city does not purchase the Imperial site after the cleanup of the site is completed, it is reverted back to the owner, Earl Wilson. If Wilson chooses to sell the property to a developer, the city would have no input on its construction on the Imperial site.
“The only limits would be in the zoning of the property,” Johnson said. ”If this is city-owned property, the citizens of Greenville can choose what goes there because it belongs to them.”
Another potential use for the Imperial site is the city’s Virtual Building program, which could be used as a marketing tool to recruit businesses to Greenville.
The program places a virtual spec building on a property that is ready for development. A prospective company can see how the building fits its requirements and allows for the design to be modified before any construction is started.
“If you construct the building first, you can’t make that many modifications,” Johnson said. ”\”With the virtual building, we can make adjustments to fit a company’s requirements.”
Once a design is complete, the building often can be constructed within 6-9 months, Johnson said.
“We would already have the pre-development site work completed, which saves time and costs,” Johnson said. “Pre-development costs, or ’soft costs,’ account for about 15 percent of the total construction cost. The fact that we have eliminated those costs would be an added incentive.”
Johnson said during the past six months, 58 companies looked at Greenville as a potential city in which to locate. Greenville was eliminated for consideration by 55 of those companies because the city did not have a building or an available property that met their requirements.
Johnson said the only city-owned property that could have met the requirements of those businesses is the Imperial site.
“Greenville cannot compete for these jobs unless we have a site that we can market,” Johnson said. “We have to have a product to market. If we lose this site ... we have no product.”
The deadline for the city to exercise its option to purchase the Imperial site is Dec. 31. If the purchase is not placed back into next year’s budget, the City Council could direct staff to purchase the property using Greenville’s general fund balance.
During the council’s May 23 meeting, City Manager Barbara Lipscomb reported that the city currently has about $4 million in excess fund balance that is available for the purchase.
Johnson said that if the City Council chooses not to use the site for a virtual building, or to develop through a public-private partnership, it still would have the option to sell the property on the real estate market. In 2012, the property had an estimated value of about $1.5 million.
Johnson said the property’s value will be “significantly higher” when it is reappraised after the cleanup is completed.
“Look at the amount of investments being made in the property around the Imperial site,” Johnson said. “If the City Council doesn’t want to keep the property, we can get it ready for development and put it on the market. The city has invested a lot of time cleaning up that site and getting it ready to be developed. It would be a shame for us not to see the project through until the end.”
Contact Shannon Keith at email@example.com and 329-9579.
History/Timeline of Imperial site
• The site on Atlantic Avenue was the location of the Imperial Tobacco Processing Plant, which was part of Imperial Tobacco Co., a British company founded in 1901.The company also had branches in Durham, Oxford and Wilson.
• Most of the structure was built in the early 1900s and was part of "Tobacco Town," which the area off Dickinson Avenue was called.
• According to research by historian Roger Kammerer, Imperial was the largest buyer of tobacco on the Greenville market for the export trade.
• The Imperial Tobacco Co. left Greenville in 1978, leaving behind the building (which covered about two city blocks).
• About 2006-07, local developers were interested in renovating the building for a mixed-use development project.
• In April 2008, a fire destroyed most of the structure.
• From 2008-12, the property was cited for multiple safety and code violations that included overgrown weeds, accumulation of debris, violations of the city’s non-residential structure code, occupation of the property by vagrants, and a number of violations of the North Carolina Fire Code. The property's owner, Earl Wilson, claimed financial hardship left him unable to cleanup the site.
• On Nov. 5, 2012, during a presentation to the City Council, staff said cleanup and development of this property was necessary to the continued revitalization of the downtown district.
• The Imperial Land Agreement was signed on Nov. 6, 2012. As part of the agreement, the city bought the property for $1. Once the city owned the property, it could qualify for a $400,000 brownfields cleanup grant from the EPA to clean up the site.
• According to the agreement, once clean up of the site is complete, the city has the option to purchase the site for $1.04 million or the property reverts back to the owner.
• On May 9, 2016, the City Council voted to take the purchase of the Imperial site out of the 2016-17 fiscal year budget.
• On-site remediation is scheduled to be completed by Aug. 31. The deadline to purchase the property is Dec. 31.