Two steps forward and one step back in downtown revitalization

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by Jordan Green

An innovative transportation project is set to launch in Winston-Salem as developers begin the final renovation in the historic RJ Reynolds Tobacco Co. campus. But a daycare that is considered essential to redevelopment of downtown continues to struggle, forcing the city to bail it out yet again.

Winston-Salem City Council will sign off on a list of projects and financing plans for the Business 40 renovation on Oct. 26, and hear a request for financial assistance to complete the renovation of the historic RJ Reynolds campus in downtown next month. Meanwhile, the city is also taking rearguard action to save a daycare as part of a strategy to attract more families with children to downtown.

With all but one member of city council present, the finance committee recommended approval of resolutions authorizing the city manager to enter into agreements with the Creative Corridors Coalition and the state Department of Transportation to incorporate enhancements into the renovation of the downtown expressway.

The plan includes two iconic pedestrian bridges at Green Street and the Strollway, and retaining walls along the expressway with embedded brick and LED lighting. The complex financing plan for the $9.3 million project includes private funds raised by Creative Corridors for the two pedestrian bridges, designed by Donald McDonald and Walter Hood; municipal bond funds approved by voters last November to pay for enhancements on the retaining wall and lighting; and federal matching funds to pay for a multi-use path along the expressway.

Councilman Robert Clark, who chairs the finance committee, said the council learned last month that the state budget cut funding for the project, forcing the city to scale back plans for the multi-use path.

“We’re not putting in the entire path because we don’t have the money, but we’re doing the things we can’t go back and do later,” he said.

Deputy Transportation Director Connie James said the city will seek state approval to build a tunnel under Peters Creek Parkway and build new bridges long enough to accommodate both vehicular and foot traffic as part of the scaled-back plans for the path. She added that the city might be able to build a limited portion of the path from Peters Creek Parkway to the Green Street Bridge near BB&T Park. Other portions of the path will have to wait.

Council members Dan Besse and Molly Leight revisited a public disagreement about whether municipal bond funds should be used to complete the multi-use path. With plans for the path to eventually link downtown to Baptist Hospital, the project would be a boon to Besse’s constituents in the Southwest Ward. Meanwhile, Leight’s constituents in the South Ward have more of a vested interest in the pedestrian bridges that will cross Business 40 and link Old Salem, Brookstown and West Salem to downtown.

“It’s a completely legitimate use, in my view, to use some of the bond funds for the multi-use path,” Besse said.

Leight weighed in: “Dan and I disagreed about this. I thought the bond funds were for aesthetic improvements, and I object to using those funds otherwise.”

James said a contractor will be hired to begin work on the Business 40 renovation in July 2016, with work on Peters Creek Parkway commencing soon afterwards and concluding in 2018.

The committee also received a heads-up about an anticipated request for financial assistance to renovate the Bailey Power Plant, which once generated energy for the original RJ Reynolds Tobacco Co. campus. Graydon Pleasants with Wake Forest Innovation Quarter and William Partin with Wexford Science+Technology appeared before council to describe the project. The two companies, which are developing the innovation quarter in partnership with each other, are requesting $3 million from the city, and another $3 million from Forsyth County. The cavernous facility faces Bailey Park from the west, and upon completion will house restaurants, office space, a science lab and an unspecified entertainment venue, according to a memo prepared by Assistant City Manager Derwick Paige. The memo also references “potentially a minority business accelerator.”

When the project is complete, the city estimates that the buildings would be valued at $82 million, and generate $463,300 per year in new city property taxes. Under the deal, the city would make payments to the developers over the next 10 years.

Partin said the viability of the project depends on approval of the incentives by the end of the year for the developers to qualify for federal historic tax credits. Partin said the timing has to do with a historic designation by the National Parks Service, which requires that redevelopment of the district — also including BioTech Place at [email protected] — must take place within a five-year window.

Mayor Pro Tem Vivian Burke, who represents the Northeast Ward, congratulated the developers.

“You’re doing an excellent job, and when people partner with us I feel like we need to do things for them to help us move forward,” she said. “You’ve given life in that area.”

Councilman Derwin Montgomery, who represents the East Ward, also applauded the project, albeit conditionally.

“There has to be something that integrates the broader community in the park, and how that happens, whether it’s job opportunities, whether it’s them working with contracts that exist there, whether it’s just understanding that in the future there exists the opportunity for them to work in this community,” he said. “We bill it as a place for people to ‘live, work and play,’ but it’s not a place for everybody to live, work and play.”

While the city is moving ahead with continued development of the innovation quarter and the imminent renovation of Business 40, one element of their strategic plan for downtown is faltering. The city sold property across the street from the innovation quarter to the nonprofit Northwest Child Development Centers in 2011, and forgave $158,750 in debt as part of a strategy to attract families with children to downtown. The nonprofit does business under the trade name Mudpies, and also operates a second downtown daycare on North Poplar Street near Restaurant Row.

In 2013 and 2014, the city authorized additional loans totaling $483,300 to help keep the daycare afloat. The nonprofit’s debt to the city has always been subordinated to lender BB&T, but the agreement stipulates that the property would revert to the city if it ceased to be used for a public purpose. The nonprofit is seeking a new loan from BB&T to finance equipment, and as a condition of the loan the bank wants the city to relinquish reversionary rights, which secure the loan by collateralizing the property.

The finance committee went into closed session for about a half an hour to discuss the request. When they came back out into open session, Clark said the discussion proved the aphorism “that you don’t want to see how legislation or sausage is made.”

The committee unanimously approved a motion to remove the city’s reversionary clause from the deed in exchange for $200,000, far less than the estimated value of the property according to county tax records. The item will come up for a vote by the full council on Oct. 26.

“It is the city’s desire that this organization prosper and go forward,” Clark said. “We feel like the downtown, particularly with all the revitalization that has happened, that a quality daycare is essential to the success of downtown.”