Developer has option to buy former cigarette factory
Developer Josh Parker of Durham is again working with Baltimore-based Wexford Science + Technology LLC to try to buy the former cigarette factory that remains empty and undeveloped at the corner of Main and Duke streets.
The building’s owner has an agreement with the limited liability company Wexford Durham Chesterfield LLC that grants the company option to buy the building through June 25. The two companies entered into the agreement Feb. 25, according to a Durham County Register of Deeds filing.
Parker, who said he’s working with Wexford on the project, is one of several developers who have attempted the building’s redevelopment. He has previously had the building under contract as well.
“All I can say is it’s a very complicated deal and a complicated building,” Parker said Monday. “Anyone who knows Durham knows there’s a lot of opportunity in this area, so we’re trying to put something together.”
Previously, an Ohio-based firm was trying to buy the building. In an interview last year, Robert Flanigan, vice president for the Cleveland-based investment bank Brown Gibbons Lang & Co., said the firm was in a 60-day due diligence period to allow for the investigation of the property before a possible sale.
In an email sent Friday, Wendy Neal, vice president of marketing for Brown Gibbons Lang & Co., declined comment.
Bill Kalkhof, president of the downtown-focused economic development group Downtown Durham Inc., said there are two key challenges for the building.
One is finding an anchor tenant whose commitment to lease space would allow a developer to “take the project to the bank and get financing.”
The second challenge, according to Kalkhof, is parking.
“There’s a lack of public parking in that entire area of the Warehouse District and Brightleaf,” Kalkhof said.
He advocated for the completion of the project.
“The building is going to continue to deteriorate over time, and it sits in such a prominent position and a good geographic location in downtown that it just cries out for a deal to get done,” he said. “There (have) been a lot of attempts at this one, and none successful.”
The building at 701 W. Main St. was where the Liggett Group made cigarettes before the company moved its manufacturing out of downtown Durham.
It originally was slated to be part of the West Village redevelopment of former tobacco buildings by a project team that included former Duke University basketball stars Christian Laettner and Brian Davis.
But the building was deeded in lieu of foreclosure to the company Select Capital Management after a default on a $10 million loan, according to previous reports in The Herald-Sun and court documents.
Several development teams then looked to buy the building from Select Capital in order to redevelop the property, according to previous reports in The Herald-Sun.
Parker was looking to use recovery bonds to finance the building’s redevelopment, but he said a wrench was thrown in his plans when Select Capital Management was named in a lawsuit brought by the U.S. Securities and Exchange Commission alleging securities fraud. Select Capital and a related firm, Select Asset Management, were named in the suit.
That suit resulted in the freezing of Select Capital Management’s assets, but the property was released and transferred to a Minnesota limited liability company, as directed by Taylor Funding LLC. Taylor Funding had provided the majority of the funding for the loan served by Select Capital Management, according to previous reports.