McPherson developer hits key incentives deadline
The Raleigh company that wants to redevelop portions of the old McPherson Hospital building off West Main Street into an extended-stay hotel has met a key deadline needed to keep city and county incentives for the project.
The company was awarded a building permit for the project Dec. 30. The permit allows the company to meet a requirement for construction to begin by Jan. 1 that’s stipulated in the agreement with the city for more than $1.3 million in city incentives for the project, and with the county for $400,000.
Neither the city nor the county incentives will be paid out until after the hotel is finished, said Tim Osiecki, president of architecture and construction for project developer Concord Hospitality Enterprises Co.
The city and county incentives were important to the project because of the added cost of preserving the historic portions of the building and certain building elements negotiated for the hotel, Osiecki said.
Located off West Main Street at the edge of the Trinity Park neighborhood, the hospital building that remains on the site was first constructed in 1926.
What later became the N.C. Eye, Ear, Nose & Throat Hospital was renamed the N.C. Specialty Hospital, which moved in 2005 to North Roxboro Street.
The redevelopment project incorporates façades of the now-vacant old hospital into the hotel structure, which is proposed to be a 143-room Residence Inn by Marriott hotel.
The preservation of parts of the building and other design features increased the cost of the project, which is now estimated to be $29.5 million.
“Unfortunately, in order to a preserve the McPherson Hospital that’s still standing on site, combined with the design that the neighborhood was desirous of, it … actually added about $5 million of additional cost to this project over what it would have been,” Osiecki said.
Osiecki said that company officials are in negotiations with SunTrust Bank officials to be the lender for the project. He said they hope they’ll be able to close on the loan in February, and to begin construction in March.
Durham City Manager Tom Bonfield said the company has made the investment in the building permit, and he’s heard “nothing that would cause me to think they aren’t prepared to move forward.”
“Obviously this has been five, six years in the making in terms of getting this to this point for a variety of reasons,” he said. “Everybody is anxious to have that project started; it will be a really nice addition to that end of downtown, and (will) add to the hotel space available of the downtown area.”
Durham County Commissioner Ellen Reckhow said she was “pleased” to hear the company is moving forward on the project.
“That building has become an eye sore on a critical road in our community, so I think that forward progress is a very good thing.”