123 West Franklin could bring grocer

Mar. 31, 2013 @ 04:41 PM

Construction work on the University Square redevelopment project is still about a year off.

But when it begins, blueprints for the project will show a 14,000-square-foot retail footprint that the developer hopes one day will be occupied by a small grocer.

Over the years, a grocery store for downtown has inspired passionate conversations, and it’s something advocates say is sorely needed to serve UNC students and the growing number of residents who choose to live downtown.

“I think the reason it hasn’t happened before is because we didn’t really have a critical mass of people living downtown,” said Mayor Mark Kleinschmidt.

But that’s changing.

The number of people living downtown will be boosted when University Square, now known as 123 West Franklin, adds 300 apartments to a growing downtown mix of residential units that will include 140 luxury condos across the street at the 140 West mixed-use development project.

The town also has approved student housing projects downtown and is considering others.

Also, the Granville Towers Residence Halls will remain intact on the 123 West Franklin site, providing hundreds of potential student customers just a short walk from a grocery store.

“The changing demographics with more people living downtown makes this appealing,” said Gordon Merklein, executive director of Real Estate development for UNC. “It’s an opportunity to capture that market share.”

Merklein, in an interview shortly after he gave the UNC Board of Trustees an update on the project last week, stressed that no grocer has yet been identified to fill the space, even though it’s being designed to accommodate one.

“If a grocery store doesn’t come, what we will do is subdivide the space into three or four smaller stores,” Merklein said.

The redevelopment project is billed as a transformative mix of retail, housing and office space.

The property is owned by the Chapel Hill Foundation Real Estate Holdings and is being leased and developed by Atlanta-based developer Cousins Properties.

The project got a big nod from the Town Council in February when the council granted the developer a rezoning and special use permits to allow it to move forward.

In addition to 300 apartments, the project will boast 210,000 square feet of office space and 75,000 square feet of space for retail and restaurants.

The redevelopment will cost between $75 million and $100 million, with plans calling for five existing buildings to be razed and replaced with three taller buildings.

About 50 percent of the tenants will be UNC-related entities.

Meg McGurk, executive director of the Chapel Hill Downtown Partnership, told the council in February that the benefits of having a major mixed-use project downtown will be enormous.

“It’s the complete package we’ve wanted for downtown,” McGurk said.

Kleinschmidt said he’s heard rumors that other developers are interested in building a grocery store downtown, which has not had one since Fowler’s closed in the 1990s.

He said the diversity of retail offerings downtown will improve with the arrival of more people living downtown.

“Without people living here, you’re not going to get that diversity,” Kleinschmidt said. “There’s some evidence that we’re on our way.”