Hillsborough Street, NC State’s historic social and economic hub, continues to evolve and expand, but pockets of undeveloped land raise questions about the future of the corridor.
Among the most visible is the site at 2510 Hillsborough St., a skeletal frame of a project stalled years ago. The site, located next to Target, was originally purchased by a developer in 2014 for $535,000. It gained approval for a seven-story apartment unit, but the project stalled and the bank foreclosed the property in 2021 at a value of $3.2 million.
CityPlat, a Raleigh and Charlotte-based real estate firm, bought the property months later for $1.25 million.
Pat Moore, a co-founder of CityPlat, said he acknowledges the challenges in redeveloping the site.
“We downscaled the original design,” Moore said. “… For one reason or another, it was the cost of construction to build that out, it was just too expensive at the time.”
The site was rezoned in 2022 for a mixed-use two-story building including a restaurant, bar and retail.
Moore cited rising construction costs, challenging interest rates and the complexities of renovating an existing structure as major hurdles. The company is currently exploring its options, including partnering with another developer or potentially selling the property to a developer with greater resources.
“Costs, just everything — construction costs, interest rates have changed, trying to take what was built and modify it to an extent,” Moore said. “A lot of times, renovating a building is a lot of times way more expensive than building something from scratch. So we’re trying to figure out exactly how to maximize that opportunity. And materials costs and labor costs have gone through the roof even since COVID hit. I mean, everything’s gone sky-high.”
Moore said due to these reasons, CityPlat has no current plans to develop any of its sites.
“Our company kind of changed directions in the midst of the project,” Moore said. “So we would definitely sell it, but if a suitor doesn’t come along, we’re going to develop it.”
CityPlat also owns 3415 and 3413 Hillsborough St.; the former site of Arby’s and an empty, overgrown plot, respectively.
CityPlat bought 3415 Hillsborough St. for $2.5 million in 2022, as the final piece of land for a proposed mixed-use development for over 275 apartments. In a press release, CityPlat said construction was set to begin in three years, but Moore said that goal is no longer feasible.
Moore said the company recently obtained rezoning approval for vertical development at the former Arby’s site, but CityPlat has no plans to redevelop the property at the moment. Currently, Cali Burgers is housed in the former Arby’s location.
“We’re not ready to go vertical,” Moore said. “You don’t want to necessarily lose the income of the property before you’re ready to go vertical with it.”
Moore said there seems to be an endless supply of hoops to jump through to get a project off the ground on Hillsborough Street, including friction with local municipalities and individual inspectors on top of already overwhelming costs.
“There’s so many issues,” Moore said. “It takes experience and it takes money. That’s it. The more you do it, the better you get at it. But that’s the bottom line, and that’s why the barrier of entry is so, so high. It’s because of the amount of money you have to raise to get into it. And it’s just the product of a growing area, essentially, there’s no small projects anymore. Everything’s millions now.”
The only active construction on the corridor is Core Spaces’ Hub on Campus at 1707 Hillsborough St. The apartment complex will be Hillsborough’s largest, planning for 661 units and up to 2,000 beds.
Core Spaces, headquartered in Chicago, has developed 29 “Hub on Campus” properties near campuses across the country.
Core Spaces declined to respond to Technician’s request for an interview.
Another prominent undeveloped site is located at 3414, 3412 and 3402 Hillsborough St., next to Snoopy’s Hot Dogs & More.
The city rejected a rezoning request for the property in 2015, which would have allowed for a five-story apartment building and parking deck named Meredith Heights.
The site was sold to Jim Zanoni of FMW Real Estate, a Charlotte-based developer, in 2016. Wake County lists the land’s current value at $7.95 million. It is currently zoned as a three-story mixed-use office building, but the site remains a barren plot with tree stumps.
Zanoni has acquired and developed multiple properties on Hillsborough Street in recent years, including 2604 Hillsborough St., the “Live on Hillsborough” apartments next to the old Wells Fargo bank and on Dan Allen Drive, 1301 Hillsborough Apartments and a number of other properties on Park Avenue and Ashe Avenue.
Zanoni has not responded to emails from Technician.
Jeff Murison, president and CEO of Live It Up! Hillsborough Street, a community improvement organization dedicated to the upkeep of Hillsborough Street, said the situation of vacant lots isn’t ideal, but a solution has not been found amid this period of historically high costs.
“A great solution has not developed yet, and so they’re continuing to explore options,” Murison said. “And it is unfortunate, it’s an eyesore on the street. A one percent completed property is not ideal.”
Murison said it’s important to note that Raleigh isn’t the only city facing this problem.
“Throughout the corridor, the last few years have been very challenging for financing, for new construction, real estate and market,” Murison said. “ … This is not Raleigh — this is happening all over the country, to have staff stalled while they wait for the market conditions to change.”
Jonathan Lambert-Melton, an at-large member of the Raleigh City Council, said vacant properties on lively streets such as Hillsborough can interrupt the cohesion and overall personality of the area.
“When you’re walking down Hillsborough Street and you walk past that empty spot next to Target, it’s sort of an abrupt disruption to the otherwise very vibrant and pedestrian-friendly street,” Melton said. “Too many sites like that on Hillsborough Street or downtown, they start to add up, and they start to lend themselves to a sense of their place, not being safe, a place not being invested in.”
Despite these challenges, Melton emphasized the importance of supporting small and larger developments in a balanced manner.
“I think they’re complimentary,” Melton said. “If you’re out and about now, you notice that all of these areas are growing together. Village District has become denser, more apartments, a hotel is being built. Hillsborough Street is becoming denser.”
To address the affordability crisis and rising construction costs, Melton supports initiatives like zoning reform and incentives for affordable housing.
“We need to continue to support these zoning reforms and not attempt to go backwards just because sometimes change is scary,” Melton said.
Additionally, Melton said he advocates for mixed-use developments along transit corridors, which can help reduce costs and promote sustainability.
In terms of future plans for the corridor, Melton said he sees it becoming part of a larger urban fabric connected to downtown Raleigh.
“We need to make areas like Hillsborough Street, like downtown, like midtown, North Hills, we need to support them; we need to make them a priority,” Melton said. “They need to be vibrant and safe and thriving, because that’s where we get our tax money, and that’s how we are able to provide all the necessary city services while keeping your taxes low at your home.”
