News & Observer: Anglican church to buy Peace Street parcel
Post date: Jul 21, 2010 3:53:34 AM
BY DAVID BRACKEN - STAFF WRITER
A Raleigh church is poised to buy a prime piece of land in a 21-acre downtown mixed-use development that has been stalled because of the credit crunch.
Holy Trinity Church, a 5-year-old congregation that rents space in St. David's School Chapel just north of downtown, plans to build a church on a 1.5-acre parcel that fronts Peace Street and is part of the Blount Street Commons project.
The church is also buying the Jordan House, a 4,965-square-foot, late Queen Anne-style home at Blount and Peace streets. Holy Trinity plans to renovate the house and turn it into church offices.
The seller is LNR Commercial Property Group, the Florida developer that the state chose five years ago to redevelop a six-block area of parking lots and offices just north of the governor's mansion.
The Anglican church has the property under contract and hopes to close by late summer or early fall, said George DeLoache, Holy Trinity's senior warden. Construction of the first phase of the new church is expected to begin next year.
Holy Trinity approached LNR about buying the land around the beginning of the year, DeLoache said. The church's real estate committee is led by North Hills developer John Kane.
LNR declined to comment on the status of Blount Street Commons or the sale to Holy Trinity.
A church is not part of the current master plan for Blount Street Commons, which is expected to include as much as 110,000 square feet of shops and up to 495 condominiums.
The land Holy Trinity is buying, directly across from Peace College, is designated as urban lofts on the project's master plan.
A slumping housing market and tight credit markets have slowed progress at Blount Street Commons, where only a handful of homes have been built. The development also includes the renovation of 25 homes, some of them historic.
One builder that LNR sold land to, Vanguard Homes, ran into financial trouble and recently changed its bankruptcy filing from Chapter 11 to Chapter 7, meaning it is closing and liquidating its assets.
Vanguard completed 10 of the 24 units it planned to build. Eight of them have sold, according to Wake County property records.
Live Oak Homes, the homebuilding arm of local developer GreenHawk, has a contract to buy Vanguard's remaining land and the two unsold units for $1.165 million, according to bankruptcy filings. That sale requires the approval of the bankruptcy trustee overseeing Vanguard's case.
Modifying the plan
When LNR broke ground on Blount Street Commons in June 2008, officials hailed it as crucial to Raleigh's efforts to turn a 9-to-5 government town into a magnet for people who want to live, dine, shop and do business around the clock.
Locating a church in the development won't require the property to be rezoned. But city planners are likely to scrutinize how a large parking area will be incorporated into a development that is supposed to bring higher density to downtown.
The site is also adjacent to a historic district, meaning the Raleigh Historic Districts Commission will need to review Holy Trinity's plans.
Craig Briner, GreenHawk's president, said a sizable church should complement the other aspects of Blount Street Commons.
"In the larger scheme of a mixed-use project, a church can be a very good use," Briner said. "Maybe not as active as you want but still pretty active."
For churches that are able to, now is a great time to buy real estate as there is far less competition from private developers.
Most banks have strict guidelines when it comes to lending churches money because they don't want to be put in an awkward position if the loan goes bad.
The Summit Church, a fast-growing Baptist congregation in Durham, recently paid $9.5million for 23 acres near the intersection of Miami Boulevard and Alexander Drive. Summit financed its purchase through the sale of bonds.
DeLoache said Holy Trinity is paying cash for the land and the Jordan House. The church, which has about 360 adult members, will borrow any additional money it needs for the renovation of the Jordan House and the construction of the church.
DeLoache declined to disclose the sale price, but said LNR did not give Holy Trinity a discount because it is a church. He said the church's congregation wanted to be downtown to be a part of the area's revitalization.
"We think Blount Street Commons is going to be a fantastic opportunity," he said. "We're excited that a bunch of folks will be moving downtown, and we'll be right in the middle of them."