Durham commissioners green-light Jack Tar incentive talks
County Commissioners have given officials the OK to negotiate a business-incentive contract with a company that wants to build a 26-story skyscraper downtown and renovate the former Jack Tar Motel.
The unanimous vote allows talks to proceed on the assumption the county will split the cost of an incentive package 50-50 with the city government, and that it will net Austin Lawrence Partners $6 million in present-day, inflation-adjusted dollars.
Both assumptions had been in doubt following a public briefing of the commissioners earlier this month, but officials say they’re now on board.
“I understand better why we have to step up on this project and support it at the 50-percent level given the numbers and the fact that the city really couldn’t go any higher with the numbers the way they were,” Commissioner Ellen Reckhow said.
She added that she’d conferred with the would-be developers and with county staffers in the “past week or so” to secure answers to her questions. Other commissioners credited county Finance Director George Quick, a former banker, with helping smooth the way.
Austin Lawrence has been pursuing the skyscraper idea for a while now. The project is ticketed for a partially-vacant parcel at the corner of Parrish and Corcoran Streets that once hosted a Woolworth’s store.
The firm’s interest in the Jack Tar is relatively new, coming because it needs parking to serve the skyscraper and the old motel has a 250-space parking deck.
The would-be developers have said they’d like to renovate the motel proper, fitting out the Corcoran Street building with 74 guest rooms, a rooftop lounge and 14,000 square feet of retail space.
They figure on spending about $5 million to buy the property, and another $12 million on renovations.
The skyscraper, meanwhile, would cost another $73.5 million. The proposed incentives would cover both buildings, and as usual amount to a give-back by the city and county of some of the new tax revenues they expect the development to generate.
Because Austin Lawrence is looking for an inflation offset, the deal will cost the two governments nearly $8 million in actual cash.
Reckhow at the earlier briefing had questioned the size of the package and the need for a 50-50 split with the city.
But city officials argued they couldn’t pick up a bigger share, as their government will receive only about 43 percent of the combined project’s estimated $1.4 million in annual tax revenue.
In negotiating the deal, county administrators say they’ll try to see to it there’s “a reasonable amount” of public, hourly parking in the Jack Tar deck.
They intend to ask for the right to examine the developer’s audited financial statements, and, as is normal in Durham incentive deals, will tie payments to a list of “minimum necessary investments” by Austin Lawrence to ensure delivery of a completed project.
Interim County Manager Lee Worsley said the staff also will press Austin Lawrence to seek historic-preservation tax credits for the Jack Tar, in the hope of lowering the cost of the local incentive package.
The added points are about “making sure the proper checks and balances are in place to make sure we’re being good stewards of the county’s resources in this project,” Commissioner Wendy Jacobs said.