The University is about to own another piece of Franklin Street – a big one. Through the UNC at Chapel Hill Foundation Inc., it will acquire the 12-acre site that contains University Square and Granville Towers.
The move gives UNC substantial money-making potential in terms of retail and presumably residential properties and, Chancellor James Moeser said, a built-in solution to the challenge of parking cars in the northwest quadrant of the campus, which includes performing and fine arts venues.
Though University officials say future plans for the site have not been decided, Moeser acknowledged that multi-level parking was in its future. The site currently has several acres of surface parking along with the University Square shops fronting on Franklin and the three nine-floor Granville towers in the background.
Asked if he could give specifics on planned uses, Moeser said, “We have some thoughts, but they are very preliminary thoughts.”
Moeser said UNC would honor current leases, some with several years to run, and for the foreseeable future would continue to operate Granville as a private residence for some 1,300 students. The University and UNC Health Care already lease about 80 percent of the office space in the five- and six-floor University Square buildings.
The foundation, which collects private donations and manages the University’s endowment, will create a subsidiary real estate corporation that will own the property. The foundation is private, which will keep the land on the tax rolls and enable UNC to work with the town and private developers in ways that it could not if the property were a state-owned entity. The private status also likely precludes putting academic units there, Moeser said.
The price tag is $45.75 million, and the foundation intends to finance the purchase over a long term, said Richard Mann, vice chancellor for finance and administration. A limited liability company affiliated with the Kenan family owns the building complex.
Frank Hawkins Kenan ’35, who oversaw the major expansions of the William R. Kenan Jr. Charitable Trust, had his office in University Square for 25 years. Moeser said it was “always Frank Kenan’s wish for the property” that it become part of the University.
The sale is set to close no later than July 1, 2009.
UNC and Chapel Hill officials are excited about the potential enhancement to the retail landscape, and any development likely would be upscale. An $80 million retail-and-condominium project has been in the works for a parking lot across Franklin Street.
In a statement, Moeser said, “This has an enormous potential to benefit downtown. The University Square-Granville Towers complex is a sound strategic investment for the University with great potential for playing a larger role in downtown revitalization. We want to explore all options for using the property to meet the University’s needs, while also benefiting downtown Chapel Hill.”
The University will seek ideas from town leaders and citizens, said Roger Perry ’71, chair of the foundation’s board of directors, chair of the University’s Board of Trustees and president of East West Partners, a development company in Chapel Hill.
“The portion of the property on Franklin Street should always be used for commercial purposes in its current form but with an eye toward redevelopment in the future,” Perry said.
Development of the University Square complex began with the start of Granville Towers in 1965, when the property was owned by Northwestern Mutual Life Insurance Co., and continued in phases over the next eight years. Frank Kenan acquired the property in the early 1970s.