SILER CITY — In a bid to stir ongoing downtown revitalization and attract more residents, the town has partnered with UNC School of Government’s Development Finance Initiative to investigate potential renovation of three downtown locations.
The town’s initiative began in 2018 when it was awarded $300,000 in two EPA Brownfield grants “to address abandoned, idle or underutilized properties in our community,” according to the town’s website. “... Many of these properties have environmental uncertainties that can be assessed using these grant monies.”
DFI was hired using part of the grant money at the end of last year to evaluate contamination at three downtown locations and determine “a feasible reuse strategy for the sites,” said DFI Senior Project Manager Eric Thomas, who presented the group’s findings in a board of commissioners meeting last week.
The UNC non-profit was founded about 10 years ago, Thomas said, to advise local governments on how they can engage in public-private real estate development projects.
“Local governments would come to the school of government,” he said, “and say, ‘Hey, we were approached by a developer to renovate this mill that we own in our downtown core. Can we do it?’”
In time, after fielding questions from municipalities across the state, UNC established DFI for the express purpose of assisting towns such as Siler City to rejuvenate local real estate properties.
“It’s essentially to provide expertise in real estate development and public-private partnerships to local governments,” Thomas said, “to help them answer that, ‘Should we do this? Does it make financial sense?’”
As per Siler City’s commission, DFI was tasked with evaluating three downtown locations: Boling Chair, adjacent to the railroad tracks between Dogwood Ave. and Chatham Ave.; Siler City Mill, near the intersection of Third Street and Chatham Avenue; and the Pilgrims Pride property at the intersection of Chatham Avenue and Fayetteville Avenue.
Each had advantages, but the Siler City Mill offered the most realistic opportunity for development in the near future.
“We feel it has the most potential,” Thomas said.
DFI coupled its feasability study with downtown market analysis to evaluate the town’s current demand for expansion. Over the next five years, they estimate that Siler City will need 6,000 to 8,500 square feet in additional downtown office space — a limited demand, especially as the pandemic has emphasized work-from-home programs which could persist in the post-COVID world.
Retail demand was higher, Thomas said, but average rent cost per square foot only comes to $11.57.
“These lower rents could pose a challenge as we’re thinking about new development and the costs of new development,” he said.
The real potential is in multifamily residential development. DFI estimates that 60 to 70 new units will be necessary in the next five years to meet growing demand for downtown living space.
Unlike office and retail space — which are typically priced beneath average standards — downtown units are already outperforming the surrounding market.
“We see this as a tremendous opportunity,” Thomas said. “We hear from the developers and brokers downtown that the demand for residential spaces — there’s a waiting list for the limited product that currently exists. So, if there’s a waiting list to get in, there might be more demand ... moving forward.”
Of the three Brownfield sites in the study, the 1.7-acre Siler City Mill most closely matched projected residential demand. The site would ideally host two three-story buildings, Thomas said, with a 16,000-square-foot footprint between them and 42,000 square feet of residential space. An 88-space parking lot would also fit onsite. With limited environmental contamination and remediation costs, the entire project would cost an estimated $7.9 million dollars.
The commissioners and town staff hoped future development will help to facilitate the town’s big-picture goals: promoting downtown “as an active, attractive community that accommodates multiple uses such as the arts, small business and residential,” according to the Town of Siler City Downtown Master Plan of 2013.
“We want to not just be doing site assessments and putting that information on a shelf,” said Town Planner Jack Meadows, “but see if we can turn these properties into being repurposed — reused for a better use.”
The town doesn’t own any of the three sites under consideration, so its next step would be to investigate acquisition.
“You could acquire an option for the property — that would be working with the current property owner to acquire an option,” Thomas said, “or, just gain full site control over the property.”
If the town elects to pursue the Siler City Mill, it would also need to rezone the parcel, which is currently zoned for light industrial use.
“The rezoning would essentially unlock that ability to do a mixed use development that’s more in line with your downtown development goals,” Thomas said.
His presentation effectively concluded DFI’s project, but Thomas encouraged the board to consider employing the group’s services again to facilitate next steps in the process.
“It’s a lot of information to digest,” said Commissioner Bill Haiges, “and so, I think taking some of this information back and thinking about it and bringing it back at our next board meeting to look at what we should look at as options would be my recommendation.”
Other board members agreed with Haiges’ evaluation and the matter was tabled for future discussion.
Reporter D. Lars Dolder can be reached at dldolder@chathamnr.com and on Twitter @dldolder.