Durham’s Historic Tobacco Buildings Ignite Bull City’s Growth for the Second Time

Posted on: October 8th, 2010 by National Trust for Historic Preservation 2 Comments

Written by Erica Stewart

The Lucky Strike smokestack and water tower, added to the campus in 1930, lend the American Tobacco complex a one-of-a-kind distinction. (Photo: Flickr user abbyladybug, via Creative Commons.)

The Lucky Strike smokestack and water tower, added to the campus in 1930, lend the American Tobacco complex a one-of-a-kind distinction. (Photo: Flickr user abbyladybug, via Creative Commons.)

This week’s journey through NTCIC’s ten years of historic tax credit investing runs through the city of Durham, North Carolina, a city that has been dominated by the tobacco industry—either by its boom or its bust—for over 140 years. Although now known as “the City of Medicine,” there is no mistaking Durham’s association with tobacco.Downtown is still dominated physically by the multitude of magnificent brick warehouses constructed during its run as the “Bull City” (stemming from the Durham Bull tobacco manufacturing company).

After a long period of prosperity, many of the properties became vacant or underutilized, victimized by mid-twentieth century suburban population shifts and the decline of the tobacco industry.  No longer driving the city’s growth, the brick buildings actually stymied Durham’s emergence from the economic slump of the latter twentieth century. The properties were so vast in size and number and so poorly cared for, and downtown so bleak that few commercial developers -–and even fewer conventional bankers—trusted their potential.

NTCIC was one of those brave believers, partnering with Bank of America to provide $13 million in tax credit equity to help finance the rehabilitation of the American Tobacco campus into a mix of new uses.  The 13-acre complex, totaling approximately one million square feet, was abandoned at the south end of downtown in 1987. As the former center of Durham’s identity and its primary employer, the fate of the American Tobacco district and the health of downtown Durham were inextricably linked. Today those thick brick walls are humming again, recast as the home to top-notch office space (among them Duke University’s corporate education school, a North Carolina NPR affiliate, advertising firms, software companies and smaller businesses and nonprofits), five restaurants, a YMCA and a 2,800-seat new performing arts center.

Rehabbed American Tobacco storefronts. (Photo: Flickr user abbyladybug, via Creative Commons.)

Rehabbed American Tobacco storefronts. (Photo: Flickr user abbyladybug, via Creative Commons.)

This transformation is the largely thanks to the vision and dogged determination of the Capital Broadcasting Corporation (CBC), the owner of the Durham Bulls minor-league franchise which occupies a ballpark immediately adjacent to the complex. CBC acquired the campus in 2002 and, after failing to convince conventional bankers, secured $13 million in equity from NTCIC and $40 million from a community-based lending institution located across the train tracks from the project site. CBC launched the first phase of the project in 2004.

The numbers are staggering: Phase I rehabilitated five of the historic properties into 500,000 square feet of Class A office space, a few restaurants, and a new water feature, the Old Bull River, which courses through the center of the campus. The $85 million Phase II continued the rehabilitation of the remaining historic buildings, including some of the very oldest tobacco warehouses and factories in the United States.  It also created the Old Bull Apartments and a handful of condos.  The $67 million Phase III (new construction only) produced the $44 million Durham Performing Arts Center and will eventually yield 380 residential units, additional commercial office space and 40,000 square feet of retail and restaurants.

Equally impressive is the economic impact of the American Tobacco project. Phase I brought 3,450 jobs to the campus, and Phase II, more than 2,200. Property values are estimated to have risen more than 30% after each phase, increasing city revenues.  The project has had a tremendous catalytic effect as well. Data shows that the pace of downtown development increased substantially following the opening of American Tobacco. For example, during the site’s 17-year period of vacancy (1987-2003), less than one significant development project, on average, was completed downtown each year. In the five years following the completion of Phase I, 16 major projects were completed downtown, averaging more than three per year.

These spin-off projects include Scientific Properties’ Venable Center project, also financed in part by NTCIC, which rehabilitates the former Golden Belt Manufacturing Complex on the eastern side of downtown. This facility was where pouches for Bull Durham loose leaf tobacco were manufactured, and later, paper cartons for cigarettes. The historic complex was abandoned and designated a brownfields site in 2000. Today, thanks in no small part to the towering example of the American Tobacco project, the Venable Center offers 35 artist studios at below-market rents, an art gallery, 37 affordable loft apartments, office space, a live music venue and ground floor retail.

The real bottom line, which shouldn’t be lost in the tally of impressive figures and square footage, is that now downtown Durham is a lively, vibrant, interesting place to be, at all times of day or night. And best of all, the American Tobacco project was able to change people’s assumptions about what they thought downtown to be, what it could be, without allowing its rich architectural heritage and history to go up in smoke.

Erica Stewart is the outreach coordinator for the National Trust for Historic Preservation’s community revitalization department.

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National Trust for Historic Preservation

National Trust for Historic Preservation

The National Trust for Historic Preservation, a privately funded non-profit organization, works to save America's historic places.

Revitalization

2 Responses

  1. Megan Brett

    October 12, 2010

    My family moved to Durham when I was two, and stayed for the next 16 years. Our church was downtown, and there was always talk of revitalizing downtown. The Arts Council building and the Carolina Theatre’s revival helped, but this really wonderful re-use of the tobacco buildings all came about after I left town. When I went back and saw how vibrant downtown is, compared to the slow crumble of my youth, I was thrilled. Hooray for everyone involved in the American Tobacco project!

  2. Glenn Perkins

    October 12, 2010

    Preservation NC just finished up our annual conference in Durham where we had tremendous field sessions at American Tobacco and Golden Belt. The latter, incidentally, is the largest LEED rehab project in the Southeast. Projects like this succeed in Durham due in part to North Carolina’s tax credit incentives (up to 40%) for certified rehabilitation of mills and industrial buildings. We have just extended this credit, which has stimulated hundreds of millions of dollars in investment in our state.