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Open a Public Hearing and Consider a Glen Lennox Performance Incentive Agreement.
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Staff:
Department:
Dwight Bassett, Economic Development Officer
Manager's Office
Overview: In early 2018, Grubb Properties approached the Town seeking a Performance Incentive Agreement to encourage the development of office space in the next phase of development at Glen Lennox. After the Council approved the Glen Lennox Development Agreement in 2014, Grubb Properties began implementing the adopted community vision. With a strong economy, rising construction prices, and a weak office market in Chapel Hill after the previous economic downturn, it is difficult for Grubb to secure the financial commitment to bring the office product out of the ground without pre-leasing a minimum of 50% of the planned office space. To date, Grubb has not been able to achieve that 50% pre-lease target, delaying the start of construction. The Chapel Hill office market needs new product coming out of the ground on a regular basis for the Town to begin to compete regionally.
Recommendation(s):
That the Council open the public hearing, receive comments, and authorize the Incentive Agreement with Grubb Properties for a $2.2 million based on Council's previous authorization to proceed with draft agreement in March 2019 and conversations with the Council Committee on Economic Sustainability in April, September, December of 2018, February of 2019.
Key Issues:
* Chapel Hill needs office space for job creation and tax base growth.
* After the 2008 economic downturn, Chapel Hill lost its office market and did not build any new office space from 2010 to 2017.
* Chapel Hill has a 10% Class A vacancy which generally serves as a signal that new product needs to be built to serve the needs of growing companies. We believe that the market is ready to support new office space and companies.
* If the first building is built at 100,000 SF, we believe that we could see it support up to 400 jobs. This tota...
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