Gentrification in Durham: The ‘it’ city’s downtown rise hasn’t led to a black-owned boom

The historic North Carolina Mutual Life Insurance building on Parrish Street was the center of downtown Durham’s historic Black Wall Street. Founded 120 years ago by the city’s African American leaders, it was a symbol of black economic prosperity and where W.E.B. DuBois visited before writing his essay about “Upbuilding Black Durham” in the early 20th century.

The building looks much like it did a century ago, but the rest of downtown Durham looks much different.

The Institute, previously The Institute of Minority Economic Development, owns the building now. They bought it from Mechanics & Farmers Bank, another African American historic powerhouse, in 2000. M&F, which is the second oldest minority-owned bank in the U.S., leases ground floor space.

Farad Ali is CEO of the Institute. From his offices on the sixth floor, windows look out on downtown of 2018. City Hall out one window. The former Jack Tar Hotel, which is now Unscripted, out another. And facing Parrish Street, the city’s new skyscraper, One City Center.

“We own the history. We own the building,” said Ali. “The intent was to keep it minority-owned.”

He said he’s “blessed and honored to be the leader of an organization that has the spirit of Black Wall Street.”

Farad Ali is CEO of The Institute, previously The Institute of Minority Economic Development, which now owns the North Carolina Mutual Life Insurance building in downtown Durham, NC. He has faith in Durham’s ability to close the minority wealth gap so the city’s citizens can reach a “shared prosperity.” Julia Wall jwall@newsobserver.com

Construction cranes have peppered the city skyline in the past few years since revitalization took hold. But some are concerned that the prosperity of new Durham is not shared by everyone or reflective of the city’s legacy, especially Black Wall Street. It is not reflective of the city’s population, either. Durham is 40 percent African American.

This past summer, City Council member Mark-Anthony Middleton hosted a forum at his church about the new Black Wall Street, which Middleton wants to be on every corner in Durham, not just Parrish Street downtown.

But less than 4 percent of businesses downtown — and across Durham — are minority-owned, Ali said. And right now, there isn’t a big plan to change it. Not from the city, anyway.

But other downtown players have ideas and projects in the works.

‘Gentrification is revitalization with tradeoff’

New York City Parks Commissioner Mitchell Silver is the former chief planner of Raleigh, and plans to retire there. But since he left, what he’s hearing about Durham is different than Raleigh.

“I’m hearing great things about Durham — more so than Raleigh the past few years — because Durham is becoming the ‘it’ city,” he said.

More than 20 people are moving to Durham every day, and the city is grappling with how to deal with that growth. County taxes increased this year, but city taxes didn’t because of all the tax income from new development, primarily downtown.

Silver thinks there is very little difference between gentrification and revitalization of a city.

“Gentrification is revitalization with tradeoff. There is displacement,” he said. People are demanding to live in the Triangle, and that sends a ripple through the real estate market, Silver said.

Zena Howard is a principal in Perkins + Will architectural firm. At a Downtown Durham Inc. event in September, she talked about four projects her firm was working on that showed how to be inclusive by design.

Nicole Thompson, head of Downtown Durham Inc., asked Howard how Durham can keep its culture as it grows.

“Everywhere I go I talk about Durham, everyone says to me, ‘My God, how that city is changing,’” Howard said. Preserving identity is fundamental in making great spaces, she said. That’s why they’ve used community input in designing projects like the town common in Greenville, N.C.; Hogan’s Alley in Vancouver, Canada; Brooklyn Village in Charlotte and Destination Crenshaw in South Central Los Angeles that preserve cultural identity, she said.

Gabriel Eng-Goetz is founder of the Runaway clothing brand, which has a lot of T-shirts, hats and other merchandise that celebrate the Bull City. Their store is on Main Street and is one of the few minority-owned businesses there. Runaway is the brand behind “Durm.”

“There’s definitely concerns with any city undergoing drastic growth and changes. Runaway really is emblematic of the arts and what the city has to offer maybe as a platform,” Eng-Goetz said. Now they promote Durham as a creative mecca in the South, he said. As the city changes, “we need to keep downtown Durham accessible as well as diverse.”

“I think the fact that people are downtown spending money whether it be on dining, retail, entertainment — there are also tons of start-ups. I think it’s tremendous. It’s definitely better than an abandoned downtown like we had before. What concerns me is the amount of outside investment who don’t understand what came before,” Eng-Goetz said.

He said Runaway’s winter clothing line will celebrate people and neighborhoods. They want to educate customers about the legacy of Black Wall Street and “to preserve that history so it doesn’t get washed away in all the money coming.”

Mutual District

NC Mutual’s second downtown home also became a landmark building. On West Chapel Hill Street, its signs on top of the building are visible in the city’s skyline and from the Durham Freeway. Up the hill from historic Black Wall Street, it too is a symbol of black economic power. NC Mutual sold the building a few years ago but still has 50 employees working in leased space there. The building is now called the Tower at Mutual Plaza and is undergoing a transformation that developer Carl Webb hopes extends beyond architecture.

The Tower at Mutual Plaza has about 400 people working in it. Along with NC Mutual, others in the building are Duke University, DukeHealth, Perkins + Will, GoTriangle and the U.S. Department of Veterans Affairs. And by early 2019, a new co-working space will open called Provident 1898, which is the original name of NC Mutual. That will bring another 150 workers to the building. There will also be 16,000 square feet of retail space on the ground floor.

An integral part of the Durham skyline is NC MutualÕs second downtown building. The building is a landmark and a historic reminder of black economic power. It was sold several years ago and is now called the Tower at Mutual Plaza, but about 50 employees of NC Mutual still work there. Julia Wall jwall@newsobserver.com

Webb, one of the Tower at Mutual Plaza’s investors, imagines a Mutual District the same way downtowns have a Warehouse District. And he hopes that will mean more minority-owned businesses, too.

“I think it’s a sad commentary on a city that doesn’t have a racial majority to preach a lot of the ideas of diversity and inclusion and have such a low number of black-owned businesses downtown,” Webb said. “There’s no time I can remember in recent history that we’ve done so poorly with minority-owned businesses in downtown.”

The Mutual District that Webb wants to see would celebrate the legacy of African American business in Durham. It is next to a proposed light rail stop, he said, and the Willard Street Apartments project and the to-be-redeveloped old police headquarters.

The Provident 1898 co-working space at the tower will build on NC Mutual’s history and the history of black entrepreneurs in Durham, by design.

“If you’re working in a creative environment where your history and contributions have been elevated, you see where you fit in the new South,” he said.

Pre-revitalization, in 2004, just 5 percent of downtown businesses were minority-owned. That’s 42 of 824 businesses at the time. As the city center was redeveloped, instead of increasing, that number dropped. Just 3.5 percent of downtown businesses were minority-owned a decade later. That’s 39 minority-owned businesses of 1,116. This year looked better, with a growing number of minority-owned businesses, including start-ups.

Thompson said that it’s harder to track minority business ownership demographics after a change in state law, but that there are many more in 2018, including dozens at American Underground, the start-up hub. Wanting to attract and retain diverse business ownership as it grows is not exclusive to Durham.

“This is not a concern just unique to Durham, not just unique to downtown. All communities that are growing are dealing with this,” she said. “We’re not unique, not behind, not doing a poor job — nor leading the band,” Thompson said.

Downtown Durham Inc.’s master plan says that downtown has “gone through a dramatic transition over the past 20 years and we need to ensure we protect and nurture the racial and economic diversity and vitality that has attracted so much of the national attention and development to downtown. Downtown must be deliberate in our actions to ensure we are bringing a wide variety of investments, affordable housing and businesses catering to our diverse community.”

Ali is a former City Council member who now chairs the RDU Airport Authority. He also ran unsuccessfully for mayor in 2017, though he was endorsed by outgoing Mayor Bill Bell. Bell is African American. The current mayor, Steve Schewel, is white. The council makeup before the 2017 was majority African American, with four members, and still is. They are all progressives and support Schewel’s goal of shared prosperity.

Ali and The Institute completed a minority business survey of business owners, stakeholders and advocates, with recommendations, weeks ago, commissioned by Downtown Durham Inc. But DDI is not ready to share it with the public yet, Thompson said. She said the board is still discussing it.

“While minority business ownership is slightly higher in downtown, the low number of minority businesses overall is a countywide issue, and as such should be addressed holistically,” said Matt Gladdek, Downtown Durham Inc.’s policy and planning director.

Henry McKoy, former N.C. Department of Commerce official who now teaches at N.C. Central University, said he has seen the conversation around business diversity and inclusion go up and down over the years. When it’s wavering, there’s not a lot of investment nurturing it in schools, community college and partnerships so that entrepreneurs are ready when the calls goes out, he said.

“Say you wanted a high-end restaurant in downtown Durham, and you say, hey it’d be great to have diverse folks do that. ... Are you putting in an effort [to get them]?” McKoy asked.

“You can use incentives for a road that you want to get to,” he said.

Ali thinks that while Durham has diversity, it also has economic inequality.

“That’s why I ran for office. There’s no government economic development on black Durham,” Ali said. He thinks it’s more complex than offering incentives.

“It’s taking government/private/public prosperity for the whole community,” he said.

Ali says every public policy decision should ask “Where’s the economic justice in this? How are we increasing their wealth? Or decreasing their wealth?”

County leaders have asked The Institute to help with getting women and minority-owned businesses as ground floor restaurants in the newly opened Durham County Administration Building II, which is the renovated old courthouse on East Main Street.

Ali said that downtown is whiter than it used to be.

“Minority businesses are less than 4 percent of downtown. … Affordability is an issue, parking is an issue. Cost is an issue,” Ali said.

He said that Durham wants the compliments about black, white, Asian and LGBT diversity. But economic equity is about sharing in the cake, not just the crumbs, he said.

Ali said that revitalization and gentrification share qualities, but have different results.

Who owns the land?

The dominant landowner in downtown Durham is government. About a quarter of downtown belongs to the city, county, schools and the public housing authority.

The city plans to use some of its land to address one of the consequences of revitalization: a lack of affordable housing.

Willard Street Apartments, formerly called the Jackson/Pettigrew affordable housing project, will receive a 9 percent low income housing tax credit needed to make the project a reality. That project should break ground in 2019 and will be a stone’s throw from the bus station and eventual light rail station, too.

And the county is considering affordable housing for two blocks it owns on the east end of downtown on the 300 and 500 blocks.

The JJ Henderson public housing site is next on Durham leaders’ list for that 9 percent low income housing tax credit. It’s a competitive credit, so there’s no guarantee Durham will get one, and if it does, it will only be once a year. So the Durham Housing Authority and Durham elected officials agreed that the housing authority would be asking for that in 2019.

JJ Henderson’s current building will be renovated, and a new building will be built on the site if/when DHA gets that tax credit. DHA CEO Anthony Scott said last year that he wanted Fayette Place to be redeveloped first, because it is vacant. Fayette Place is the site of the old Fayetteville Street public housing complex that was knocked down. Now it’s just an empty block of sidewalks to nowhere surrounded by a fence. With no residents to displace and proximity to downtown, it seems the easiest place for the housing authority’s first mixed-use, mixed-income project. But JJ Henderson was a better bet for the chance at that low-income housing tax credit, Scott said.

Silver, the urban planner, thinks that over time housing prices will stabilize. “As you start to build more inventory, prices go down because of supply,” he said. New housing developments are being built in downtown and also far from downtown, including in East Durham close to the Wake County line and in South Durham. And the joint city-county planning department has ideas about less restrictive zoning so more housing can be built in Durham.

There is also the soon-to-be-vacated Durham Police Department headquarters on West Chapel Hill Street, now that the new headquarters is open on East Main Street. The City Council decided that they don’t want to develop affordable housing there themselves, but the request for proposals include affordable housing. In other words, selling the property to a developer is contingent on that land having some affordable housing on it.

Mayor Schewel said there’s no question that there’s a lot of feeling in the African American community that it’s much harder for African American businesses downtown than it is for white businesses.

“It is a problem,” he said. “We need to be really supporting the creation and viability of African American businesses, and women and minority-owned, too.”

Durham has not kept pace with its reputation as the home of black capitalism, Schewel said, and it needs to change that. He said the city has a great affordable housing plan, transit plan and solid waste and recycling plan.

“If you ask me, ‘Does the city the have an economic development plan that really gives the vision of where we want to go?’ I would say you know, we don’t,” he said.

Schewel said the city’s Office for Economic and Workforce Development is working on a plan that the council should see in early 2019. The mayor wants the city’s economic development plan to be a vision beyond downtown, with key elements to develop and nourish African American and minority-owned businesses.

“We need a new vision,” he said. “It is a priority.”

Webb has been involved in downtown Durham for a long time, previously with Greenfire Development. He thinks everyone shares in the responsibility of creating opportunities for diverse investment, and he doesn’t think enough private investment is by black-owned firms. Webb, who is African American, owns a small percent of One City Center, the skyscraper so often mentioned as a sign of downtown change. He also is an owner of the Hill Building at 21c Hotel.

Webb remembers a “ghost town” downtown in 2006, before revitalization.

“I think a lot of what has happened has been outstanding ... to see how far we’ve come now, even though we have some challenges for creating opportunities for the black and minority business community, we are still light years [from downtown before],” he said.

Yet minority ownership, when considering all outside investors, needs to be a priority, Webb said.

“If we have a homogenous kind of shiny new downtown, without having those indigenous grassroots local that made Durham what it is — if they’re out of the equation, then what makes Durham special?” Webb said.

But he doesn’t think it’s too late.

“It feels like Durham downtown is done. It is not. People are moving in every day, and they buy goods and services,” Webb said. “I’m really optimistic about millennials and Generation Zs.”

Dawn Baumgartner Vaughan: 919-419-6563, @dawnbvaughan
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