Reynolds Building changes hands

With the handing off of a key, the building at 51 East Fourth Street, which was formerly the headquarters of RJ Reynolds Tobacco company, in downtown Winston-Salem is now official.

A press conference was held Friday morning in the building’s main lobby where Reynolds President Andrew Gilchrist, Mayor Allen Joines, PMC Property Group president Ron Caplan, and Kimpton Hotel & Restaurant Group CIO Joe Long addressed the media on plans for the project, which will include a 175-room boutique hotel, full service restaurant/bar and luxury apartment units on the upper floors. PMC and Kimpton purchased the building on May 22 for $7.8 million.

“They’re giving this grand old lady an extraordinary new life,” Joines proclaimed to an excited crowd.

Caplan said he anticipates a total investment of $60 million and said construction will begin sometime in the next 30 days, with the project being completed by the fall of 2015. The first phase of the project will be the demolition of some of the building’s aging interior structures.

“We’re going to have to get everything else out of here that would be in the way of reconfiguring the building for a hotel and multifamily (apartments),” Caplan said.

He said PMC was attracted to Winston-Salem due to the amount of business already downtown, and the potential for the building to play a major role in furthering development.

“From a pure development standpoint, this will be the central part of the community for years to come and therefore makes it a good building in terms of what we do.” he said.

“This is about as vibrant and progressive a state as their is on the east coast.”

In addition, Long cited the building’s upkeep as a factor in determining the building’s suitability for a hotel.

“We know we’re not going to poke into a wall and find a hornet’s next like you see in some of our other properties,” he said while adding that Kimpton has been involved in about 15 adaptive reuse projects since the company was formed in 1981.

“There has never been a building in as pristine condition, as well cared for as this one,” he said.

This is the second project that PMC and Kimpton have teamed up on, with the first being the conversion of a historic building  in Pittsburgh into a hotel last year.

“When we started to sit down and talk about the possible opportunity of building things together, we found that we were alike,” Caplan said of the two companies.


Reynolds President Andrew Gilchrist hands the building’s key to Kimpton CIO Joe Long (center) and PMC president Ron Caplan (left).

Community Discusses Station Plans

Community leaders met Tuesday night in the Ishi Pentecostal Temple in Winston-Salem to discuss plans for the city’s historic Union Station building located at 300 South Martin Luther King Jr. Drive, currently home to Davis Garage. The building, which is on the National Register of Historic Places, dates back to 1926 when it served three railroads that connected many major cities in the state. During the 1940s as many as 18 trains and 500 passengers per day came through Union Station, but it closed in 1970 with the decline of passenger rail service.

The city has partnered with the architectural and interior design firm Walter Robbs to find a way to utilize the space. There are currently plans to extend a few local bus lines to the station when it is finished, but not all of the space would be used for transportation. Firm vice president Rence Callahan said they have met with city leaders as well as faculty from Winston-Salem State University about the potential for economic development in the area.

“This building is a fabulous piece of architecture, and when it’s restored it could be the showpiece of East Winston,” Callahan said at the meeting while emphasizing that it would not replace the main bus station downtown.

He said the building is in good condition, and most of the work needed to be done would be restorative. Each floor is 12,000 square feet.

At the meeting, residents in attendance tossed around a variety of ideas which included turning the building into a museum to preserve the history of the station, using it as a business center for meetings and using it for commercial development in an effort to bring more businesses to the area surrounding the university.

Marva Reid, a member of the Winston-Salem Neighborhood Alliance, said she has been involved with the restoration project since 2006, when the city discovered they would receive federal funding. She has fond memories of the days when trains ran in and out of Winston-Salem.

“Being a little girl, I remember coming to the station, using the station,” she said. “We used to always drop my mother off because she used to go to seminars out of town. But I remembered the activity, just to see people come and go and sitting down waitng for the next connection. But the place is just beautiful.”

Reid said she hopes at some point passenger trains will once again roll through Winston-Salem. Amtrak currently serves Greensboro and High Point.

Callahan said he found the dialogue insightful and after a few more similar community meetings, the next step in the process will for the firm to test out the ideas proposed and see which ones are realistic.

“It’s the creative process of synthesizing all those ideas into a series of different approaches and then getting feedback, and then at the end of the day we take that feedback and synthesize it into the final concept,” he said.


City Council Passes Budget

The Winston-Salem City Council passed its more than $500 million budget for Fiscal Year 2014-2015 at its meeting Monday night after several weeks of discussion. Here are some of the highlights.

  • A one-cent property tax increase to account for the loss of software tax revenue next year in addition to tax increases of 4.5 and 6.7 percent for water and sewer services respectively.
  • Increases in merit pay of city of employees at rates between 1.5 and 3 percent based on performance ratings. The council also set the minimum wage at $10.10 per hour.
  • The elimination of the West End Trolley, which is projected to save $116,000. That money will be transferred into the public transit fund.
  • The purchase of five new boom trucks for brush collection at a cost of $145,000.

Many of the adjustments in the budget from previous years come in response to changes made by the General Assembly to North Carolina’s tax structure last year. House Bill 998 eliminated the software tax and restricted business privilege license taxes to businesses with a physical location. Council member Robert Clark said given the circumstances he thinks changes to this year’s budget are relatively minor.

“We’re pretty much doing the same things we do year to year with a few exceptions,” he said.

The merit pay adjustments come in response to a study conducted by the city of Winston-Salem which compared its pay structure to that of similar-sized cities in the state.

“I don’t believe the city of Winston Salem can take a stand on poverty if our employees aren’t being page minimum wage,” said council member Derwin Montgomery. He said he wants to see more citizen engagement and hopes the city can further its dialogue with state representatives.

Council member Jeff MacIntosh said he thinks the budget is sustainable despite the loss of some revenues.

“If we can avoid some weather shots, I don’t think we’re going to take it on the chin,” he said, while emphasizing that the political climate in Raleigh could create further challenges for the city in 2015 and that economic development will be crucial to the city’s ability to raise revenue going forward.

“If we’re going to have more money to work with, it’s got to come from the business sector. It can’t come from hardworking people.”


Status Of Highway Projects Uncertain

At one point it appeared the Interstate 40 business improvement project would see construction begin as soon as 2016, but a new system of prioritization implemented by the North Carolina Department of Transportation last year has complicated things.

In an email from Southwest Ward Council Member Dan Besse last month, he said the project had been dropped from the DOT’s list of funded projects.

“That puts in jeopardy years of planning and public input work on a project which had been scheduled to start in 2016,” he wrote. “The city, other local governments, and business and community leaders will be working to address this problem, including the possibility of getting the project into the DOT regional funding priorities.”

The project, estimated to cost the DOT over $63 million, aims to repave stretches of a 1.2-mile stretch of business 40 between Fourth and Church streets in downtown Winston-Salem. It also involves the replacement of two bridges on 40 business, nine bridges which extend over the interstate, and improving entrance and exit ramps. The highway was constructed in 1957 and was the main route through Winston-Salem until 1992, when a new bypass was built for I-40.

Last year, the General Assembly passed House Bill 817, which put in place a scoring system for determining which transportation projects should receive funding. Scores are based on factors such as accessibility, cost, congestion and safety. Each project receives three scores; division needs, regional impact, and statewide mobility. The 40 business project received a statewide mobility score of 38 out of 100, a regional impact score of 33 out of 70, and a division needs score of 26 out of 50.

Besse said under the new system, none of Forsyth County’s major highway construction projects have been prioritized, calling the formulas set in place “black boxes.”

“It made no sense to me. It made no sense to any of our local analysts,” he said.

“When you see results like that, it’s clear there’s some major bugs in the system.”

DOT project development engineer Michael Penney said he recognizes the importance of the project but is unsure of its timetable since plans are being reviewed.

“We’re still working toward a 2016 construction schedule,” he said while noting that the DOT would have a better idea of where the project stood by mid-August after the 90-day public comment period has passed.

Another project that has experienced delays is the extension of Interstate 74 around Winston-Salem, known as the Winston-Salem Northern Beltway. Chamber of Commerce president Gayle Anderson said plans have been in place since 1987, but were pushed back because the DOT did not properly conduct its environmental study, which lead to lawsuits from business owners that lasted over 10 years.

She said the DOT’s current funding model for highway construction is ineffective because the strategic plan ranks the I-74 project as one of its top 10 projects but the funding plan ranks it near the bottom of a list of 1500.

The construction of the highway is expected to create 33,000 jobs and bring in around $2 million.

Anderson said she thinks the project ought to be funded by the NC Mobility Fund, which the General Assembly created in 2010 to fund statewide projects such as the I-85 Corridor Improvement Project.

“It should be taken out of the formula so that it doesn’t penalize other projects that need to be done,” she said.

“To bump us down into the regional category is a joke because there’s not as much money to fund the road.”

Winston-Salem leaders discuss anticipated revenue losses

The Winston-Salem City Council is searching for answers when it comes to meeting the city’s needs for services in the face of changes to the state’s tax structure.

Council members are concerned about a potential loss of $1.8 million in revenue from stormwater fees as a result of legislation from the General Assembly being considered for Fiscal Year ’15-’16. The fees are used to fund Winston-Salem’s seasonal leaf collection progam, which councilwoman Denise Adams says could become jeopardized down the road.

“Somone decided, or felt, or saw that the stormwater funds were being used inappropriately, and what it has done is caused a ripple that money can no longer be used discretionarily by the cities,” she said at Monday’s finance committee meeting.

Adams, along with council members Dan Besse, Jeff MacIntosh, Robert Clark, and Mayor Allen Joines were in Raleigh last Wednesday where they met with the Forsyth County delegation of the legislature. They articulated their concerns about the effect newly adopted state laws may have on the city’s ability to raise funds. Among these consequences is a $400,000 decrease in revenue from taxes on business privilege licenses. Next year, only businesses with a physical location within Winston-Salem will have to pay the tax. The following year the tax will be repealed entirely, which is expected to lead to an additional loss of $2.6 million.

Adams says she does not know if last week’s legislative meeting will produce tangible results, but thinks it was necessary in sending a message.

“We may not get everything we want, and everything we ask for, but this gives you face time where you’re actually communicating with your representatives, the needs of the citizen,” she said. “If you don’t do that then they won’t know what you want.”