Raleigh's City Plaza facing trouble

July 1, 2008 5:23:22 PM PDT
It's been hailed as Raleigh's version of "Times Square" and the "Capital City's living room", but now there's more trouble for the City Plaza project. It's already months behind, and costs keep escalating. During Tuesday's Raleigh City Council meeting, council members may use drastic legal means to take the property over from its owner just to start making progress.

"People keep dragging their heels, and that's frustrating," City Councilman Rodger Koopman tells Eyewitness News.

The land on which the City Plaza is to sit - at the end of the 400-block of Fayetteville Street - is not owned by the city of Raleigh. It is owned by an Atlanta-based investor group named The Simpson Organization. City officials tell Eyewitness News that they have been trying to negotiate a lease with The Simpson Organization for a year, but the talks have broken down. Raleigh City Manager Russell Allen is recommending the city council take the step of "condemning" the land. Condemning the property would allow the city to be able to use it as it sees fit for the benefit of the public good.

"It basically means that the city exercises its ability to do eminent domain, to take back a piece of land," Koopman says.

Raleigh leaders say the step is necessary because the project is already well behind schedule, and construction costs have gone up sharply while the negotiations have continued. The plaza project, which is supposed to include four shopping pavilions, water features, fancy light stands and two-way vehicular traffic had an initial price tag of about $12.5 million. It is now closer to $14.8 million, Raleigh officials say.

"I think we should be frustrated with the other party because $2.5 million is a lot of money," Koopman says. The "other party" he refers to is The Simpson Organization.

Late Monday afternoon, the president of The Simpson Organization responded to the council's condemnation consideration. In an email sent to city council members, the city manager, city attorney and others, Boyd Simpson writes, "We have always been ardent and open supporters of the City Plaza project and remain so. The condemnation of our property interests is neither necessary nor wise. It will delay the project, increase its costs, and reduce its quality."

Read response #1 from property owner | Read response #2 from property owner

Simpson contends that his organization has never sought financial compensation for the project and argues that it would be detrimental to all parties to begin condemnation proceedings against the land in question on Fayetteville Street. "We have no incentive to delay the project and any claim to the contrary is without merit and untrue," Simpson writes.

Simpson is hopeful he will have a chance to speak to the council before it makes its decision tomorrow.

The plaza was supposed to be completed this September in conjunction with Raleigh's new convention center and a downtown Marriott hotel. Both of those projects are either on or ahead of schedule. At best, construction on City Plaza would begin this fall with completion in the summer of 2009.

"This is part of the center city, it's right there near the convention center, the hotel, and it's something the council simply needs to take care of," Mayor Charles Meeker said. Meeker will abstain from any action taking regarding condemnation at Tuesday's city council meeting, as The Simpson Organization is represented by a lawyer in the firm where Meeker works.

Other council members reached by Eyewitness News appear ready to go ahead with the condemnation action. Such action could throw a few elements of the project up in the air. The Simpson Organization had earlier agreed to design, construct and fund the four pavilions that are a centerpiece of the City Plaza; it is unclear what will happen to them should the condemnation go forward.

"The city is hopeful that the whole plaza will be built, including the kiosks by the landowner," Meeker says.

It is also unclear what will happen to an underground parking deck connector. The Simpson Organization owns a parking deck located beneath the City Plaza space. Initial plans called for that deck to be connected to a convention center parking facility. Plans for that are likely to be disrupted.

  "Members of Council, Ladies and Gentlemen,

Attached above is a letter delivered to Russell Allen, City Manager at 11:33 this morning in connection with the proposal by the City to proceed with condemnation of our property interests.

I urge you to read the letter and take the facts thereof into consideration in your deliberations on this matter. We have offered to speak directly with the City Council in open session but have no response from Mr. Allen in that regard. As noted in our letter, we will be present at the meeting to address any questions which members may wish to address to us, unless our attendance is prohibited by the City or the the City Manager. Our legal counsel has been informed by the City Manager that your meeting will be in closed session and that we will not be allowed to address you. If you wish to hear from us we will be available.

We have always been ardent and open supporters of the City Plaza project and remain so. The condemnation of our property interests is neither necessary nor wise. It will delay the project, increase its costs, and reduce its quality. The physical, legal and practical interfaces between City Plaza and our property present challenging and complex technical issues which will not be efficiently dealt with in a condemnation context. We have never sought any compensation for the substantial use of our private property in the context of the public project, but rather have continually offered to make investments exceeding 1 million dollars in the betterment of the project. The council has previously approved, on a unanimous basis, the project design which was consensually developed by the City and TSO, as well as other stakeholders. We, as well as the City have invested considerable time and money in the creation of the project. If condemnation proceeds we will be entitled to compensation, the full protection of our property rights and will have no incentive to make investments to better the project. Common sense suggests that such a result would not be in anyone's interest. We have no incentive to delay the project and any claim to the contrary is without merit and untrue.

We have, as noted in the attached letter, offered the City an irrevocable license which will allow it to proceed immediately with construction but, as of this hour, have not received any responsive comments from the City Manager or City Attorney. We have also delivered to the City a copy of the City Plaza agreement executed by us. We have received no comments from the City to this most recent draft. We remain committed to the negotiation of a consensual resolution and urge the City to maintain the same posture. We are available at any time to meet with members of the City in this regard. The beginning of a condemnation process is not productive to the conduct of consensual negotiations, and should be avoided.

It is in the best interest of the City of Raleigh, the private parties involved, and the public that an unnecessary adversarial condemnation process be avoided. We would appreciate your support in this view. The progress of the City requires careful and thoughtful interface with its citizens and property owners and we are fully committed to an open, transparent approach to these matters.

I am available at the telephone number below should anyone wish to speak with me directly about the matter. I can also be reached on my cell phone at 404 992 4096.

Sincerely,

TSO Fayetteville, LLC

A. Boyd Simpson, President
The Simpson Organization Inc.


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