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The Journal Gazette

  • Photos by Dan Rooney | The Journal Gazette A canal runs through the American Tobacco Campus in Durham, N.C. The site where cigarettes used to be made has been converted to a vibrant center for business, retail and living.

  • Casey Steinbacher, former head of the Durham Chamber of Commerce, lives in a loft on the American Tobacco Campus.

  • Photos by Dan Rooney | The Journal Gazette American Tobacco Campus preserved abandoned brick buildings where workers once dried tobacco and rolled popular cigarette brands.

  • The Cage hosts basketball games, roller derby matches and ice skating.

Sunday, May 14, 2017 1:00 am

What GE site could become

At redone tobacco campus, the future is burning bright

SHERRY SLATER | The Journal Gazette

At a glance

Growth in downtown Durham almost exploded after the American Tobacco Co. campus was renovated, economic development officials say.

The following are some of the ways they measured the change from 1993, before the new Durham Bulls Athletic Park opened, to 2015, the most recent data available:

Employees – before: 3,800; after: 16,500

Business – before: 180; after: 500

Residential units – before: 112; after: 1,700

Residents – before: 160; after: 2,500

Annual visitors – before: 1.1 million; after: 3 million

Office space – before: 1 million square feet at 70 percent occupancy; after: 3 million square feet at 93 percent occupancy

DURHAM, N.C. – Roaches, rats and SWAT training teams were the only ones crawling through American Tobacco Co.'s abandoned brick buildings 20 years ago. 

Now, the 14-acre site where workers once rolled Lucky Strike cigarettes is home to bankers, lawyers, advertising executives and IT experts. Tucked between their offices are a documentary movie theater, the local NPR station and a few restaurants.

The $200 million American Tobacco Campus renovation is widely considered a rousing success and the model for what could happen in Fort Wayne with the former General Electric campus. Officials announced in February that Cross Street Partners, a Baltimore firm, was chosen to develop the 31-acre local campus. The project is estimated at $300 million.

Details of who will occupy the space and how it will be used are still sketchy. Joshua Parker, Cross Street Partners' lead operating partner, said it depends on who is willing to sign on the dotted line.

Parker will play host this week when Greater Fort Wayne Inc. takes 40 local business leaders and elected officials to Durham. When they arrive at ATC, they'll find a beautiful, safe, clean campus that is the pride of Durham. They will also find a development that hasn't fully matured into the vision proposed for Fort Wayne.

Converting more than 1 million square feet of crumbling buildings into in-demand office, retail, residential and educational space takes time, Durham officials say. Although mixed-use is the goal, ATC's developers had to rely on commitments from commercial tenants to secure loans necessary for construction.

The result is a development that's heavy on offices, light on housing and even lighter on retailers. For now, anyway.

ATC proponents say the campus is constantly evolving.

If you build it

The nearby Durham Bulls Athletic Park, which opened in 1995, sparked the American Tobacco campus' renaissance.

But building the $16 million brick baseball stadium wasn't a slam dunk … so to speak.

The ballpark was controversial, said Casey Steinbacher, who led Durham's chamber of commerce from 2007 to 2015, before launching a consulting firm.

At the time, the Bulls were a Single-A team playing in the old stadium featured in the 1988 film “Bull Durham,” which starred Kevin Costner, Susan Sarandon and Tim Robbins.

Jim Goodmon, who owns the team, wanted to create a regional sports park near the Raleigh airport, a 20-minute drive from Durham. The threat of losing the team spawned a movement to keep the Bulls in Durham. But the county referendum to build a new stadium was soundly defeated.

“Durham is a very politically active community. If they don't like something, they let you know it,” Steinbacher said.

Supported by Mayor Bill Bell, city council members pursued another route to pay for a new local stadium, one that didn't require public approval. Some paid for the move by losing their council seats at the next election.

“It takes 'Bull' leadership,” Steinbacher said, using a word found nearly everywhere in Durham. “It takes a lot of courage when citizens aren't necessarily buying into the vision.”

The baseball stadium was designed by the same architects who drew the blueprints for the widely admired Camden Yards in Baltimore and Jacobs Field in Cleveland. It was so well received that the city expanded seating capacity to 10,000 for the 1998 season, the same year the team joined the Triple-A International League.

But even as fans streamed into the newly built stadium, they didn't dare cross the street, much less hang out before or after games. 

That eyesore, surrounded by razor-wire-topped fence, was the deserted American Tobacco campus.

Duke comes through

When no one stepped forward to renovate the industrial campus by the early 2000s, Goodmon tackled the project. The venture was documented in a short locally produced film titled “Because No One Else Would.”

It's not as if Capitol Broadcasting's CEO didn't have enough to do, but the entrepreneur saw so much lost potential when baseball fans arrived right at game time and left the area immediately afterward.

But before banks and other investors would commit to the project, developers had to prove it was viable. That meant getting prospective commercial tenants to sign leases.

Duke University came through, committing to 150,000 square feet of office space. The number is now 220,000 square feet of the 600,000-square-foot total, said Michael Schoenfeld, Duke's vice president for public affairs and government relations.

The private institution continues to operate its financial services, corporate education, government relations, general counsel, alumni association, and information technology and real estate offices at ATC.

“ATC has been the catalyst for the remarkable transformation of Durham over the past decade,” Schoenfeld said in an email. “It went from being a void in the middle of the city to a place thatevery visitor has to see, that hundreds of people come to every day for work, and many thousands more for baseball games, concerts and burgers.”

“Making ATC succeed was important for the city and important for Duke,” he said. “Not only did it provide a vibrant, safe and convenient location for employees, it allowed us to dedicate the scarce space on campus to academic programs that really needed to be there.”

ATC, which opened in 2004, has 1.3 million square feet of rentable space. For comparison, Fort Wayne's GE campus has 1.2 million square feet within 17 buildings.

Leasing growth tends to come in stages. First come commercial tenants, Steinbacher said. At ATC, those have included Burt's Bees corporate headquarters.

Office workers create demand for sandwich shops and fast casual restaurants where they can pop in for lunch. Then come after-hours attractions.

ATC's grounds are covered by green lawns, shade trees, blooming flowers and water flowing through a man-made canal. The result is a soothing atmosphere for stressed workers and a draw for families wanting to spend time around nature. 

The campus welcomed a theater, art galleries, a fitness center and the kinds of restaurants where people want to linger.

After people started spending both work and leisure time there, some wanted to live there, too, Steinbacher said.

ATC's 80 residential units each include exposed brick walls, industrial fixtures and modern appliances. Existing building features were incorporated into each unique floor plan.

“I call it the adult dorm,” Steinbacher said of the atmosphere created by her baby boomer-aged neighbors.

Few hiccups

Goodmon's bet paid off.

Not only has the redevelopment won numerous local and regional awards for preservation and creative financing, just last month, Vogue magazine mentioned ATC prominently when it named Durham as North Carolina's hippest city.

The campus has evolved in response to how residents use it, said Parker, the developer heading the former GE campus project. The Durham native worked on development projects near the ATC campus, where his Cross Street partner, Bill ­Struever, was a major player.

“It's not just one-and-done with this stuff,” Parker said while walking through the campus.

Additions have included American Underground, a successful business incubator and co-working space that began in a basement on the campus and has expanded into five buildings in downtown Durham.

Despite the accolades, ATC hasn't been without hiccups.

Steinbacher warns that officials need to plan for keeping real estate prices affordable for ATC workers.

“We're just looking at that now. Don't be late on that,” she said, directing the advice to local GE campus developers.

Decatur firm Biggs Development, headed by Kevan Biggs, and Indianapolis firm Greenstreet Limited are partnering with Cross Street on the GE project. Weigand Construction, a local firm with vast experience in tackling major projects, was named construction manager last week.

It might be hard to imagine that cost of living will become a problem here, Steinbacher said, but Durham officials thought the same thing.

Shelly Green, president and CEO of the Durham Convention & Visitors Bureau, would like to see more shops and restaurants at ATC. Of more than 1 million square feet, only 50,000 is occupied by retailers.

Just one problem, she said.

“I don't know that anyone who works there is willing to move out,” Green said of the office tenants. “They like it there.”

ATC's developers also failed to anticipate how popular the campus would become when it comes to parking, Steinbacher said. They didn't plan enough spaces to accommodate more than 4,000 workers and scores of visitors.

“The biggest lesson Durham learned was don't be afraid to be bold,” she said, adding that Midwest cities such as Fort Wayne tend to be humble, afraid to think boldly.

A third parking garage opened recently on the campus' northwest corner. The Goodmons own ATC, but the city paid for the parking garages to make it more easily accessible to residents.

“Public-private partnership is a big deal for us,” she said. “The acceleration really took off when Durham quit playing defense and started playing offense.”

'Night and day'

Like the ballpark, the Durham Performing Arts Center was controversial, Steinbacher said. 

The tension centered on whether to build the facility using city money. Critics also asked who would manage it.

The center opened in 2008. It is owned by the city but managed by The Nederlander Organization, which also manages Broadway venues and theaters in London, Los Angeles and Chicago, among other cities.

The contractor's significant ties in the theatrical world allows it to book first-run shows in Durham, Steinbacher said. The 2017-18 season includes “Les Misérables,” “Phantom of the Opera” and “School of Rock.” The following year, Tony-award-winning blockbuster “Hamilton” is on the schedule. 

The Durham Performing Arts Center, which hosts more than 200 per­for­mances a year, places in the top five theaters in the U.S. as tracked by multiple industry-leading trade magazines with annual attendance or more than 400,000, according to its website.

The facility has generated more than $1 million in annual profit, which is shared by Nederlander and the city, Steinbacher said.

Those local investments in the stadium and performing arts center have created a vibrant community that now attracts outside dollars, she said.

Steinbacher recommended that Fort Wayne officials be “nimble and quick” in dealing with zoning and permitting requests to avoid project delays.

“We've struggle through it, and the city has gotten a lot better at it,” she said. “As you can see, we've got construction going on everywhere right now.”

The changes, including a downtown highrise under construction, were startling to Nicole Thompson. She was a college intern working in downtown Durham during the early 1990s, before the ballpark and performing arts center opened.

Thompson is amazed by how much the area has grown during her 25-year absence, which ended just two months ago when she became president and CEO of Downtown Durham Inc.

“It's night and day,” she said.

“When I was here, you didn't cross the railroad tracks,” she recalled. “There was nothing to see on the other side of the railroad tracks. Now, there's a pull over there.”

“Over there” is American Tobacco campus and all the development that has sprung up around it, including Aloft Hotel, Durham Performing Arts Center, NanaSteak and numerous other restaurants and offices.

Even the downtown areas that were populated on work days were a ghost town at night and on weekends, Thompson said.

Other additions are a weekly farmers market, three boutique hotels, microbreweries, a culinary arts center, specialty shops and a gourmet ice cream parlor.

“It's really exciting what has happened,” she said. “Everyone wants to be part of it.”

sslater@jg.net