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Duke Goes Downtown

University has been a quiet but key player in renaissance

Viewed from the N.C. Mutual building, the area around ATC shows signs of downtown's renaissance.

The top of the CCB/SunTrust Building provides one of the best vantage points for a 360-degree look at downtown Durham. It's a view that has changed dramatically over the past decade, with close to 30 projects involving more than $650 million in private and public funding.

"My guess is two-thirds of what you see is either under construction or is a recently finished project," said Duke University Executive Vice President Tallman Trask.

In the shadow of these large projects are a number of new small shops moving into formerly closed downtown offices along Parrish, Main and other downtown streets. There's optimism among city officials that all this adds up to a downtown renaissance that will secure the city's economic base for the coming decades.

Behind this effort, Duke has been a quiet, but very important player.

"If Duke University had built a moat around the university and not been involved in downtown Durham, all of this would have looked quite different," said William A. Kalkhof, president of Downtown Durham Inc., the non-profit organization that promotes development in the area.

Alan DeLisle, assistant city manager for economic and work force development, agreed. "Duke has been an enormous partner in the revitalization. It wouldn't have happened without Duke," DeLisle said. "They were central to American Tobacco, West Village and the new performing arts center, not to mention other smaller leases in and around downtown."

Trask estimates that Duke has invested $75-$100 million, most of which involves leasing some 350,000 square feet of office space downtown.

Kalkhof said Duke's influence goes beyond its leased space. For several important downtown projects, Duke's investments came at a critical time and helped convince both investors and other potential leasers that the project was viable.

"In the economic development game, the first thing you need is a credit-worthy tenant," Kalkhof said. "That's what Duke has been for major projects. Their early presence in key projects encouraged others to invest."

Duke's presence can be found all along the triangular-shaped downtown region. To the north, the university was an anchor tenant in West Village, renting five offices in the renovated Liggett & Myers offices during the first year. Currently the university architect and capital assets office resides there accounting for 5,500 square feet. In addition, Duke is a 52,000 square-foot anchor tenant in the $148 million second phase of the renovation.

To the west, Duke leases 50,000 square feet of office space in Brightleaf Square, which underwent a $3 million renovation in 2004.

To the south, Duke is the largest tenant in the American Tobacco Campus (ATC) and the Diamond View office building with more than 240,000 square feet of space in those projects adjacent to the Durham Bulls Athletic Park. In addition, the university has committed $5.5 million toward the new $30 million performing arts center under construction nearby. Durham officials also assigned an additional $2 million for the theater's financing, which they received from Duke in exchange for the university having a degree of control over Anderson Street, a major north-south road through campus.

Duke's presence also has cultural benefits, DeLisle said. For example, students and faculty members at Duke's Center for Documentary Studies provide unique resources to promote the history of Black Wall Street, Hayti and downtown Durham in general.

"We've always thought that if we could get our colleges and to have more of a presence in downtown Durham, it will breathe new life into the area," DeLisle said. "And that has happened. The economic investment is critical and is fantastic, but it's more than that. Having Duke students and professors work with others to tell the story of Parrish Street, for example, is important to the area's revitalization."

As with the Duke-Durham Neighborhood Partnership, which connects the university with local nonprofits and residents in 12 neighborhoods close to campus, outreach in downtown Durham is based on the basic premise that helping Durham helps Duke, Trask said.

Ten years ago, with the tobacco companies pulling out of Durham, there were few partners Duke could work with downtown. At that time, Duke was on the periphery of conversations about downtown Durham, Trask said, but made the decision to get involved when a partner was available.

"What happened was Jim Goodmon stepped in," Trask said of the president and CEO of Capitol Broadcasting. "He came to us in 1997 about Diamond View, which he was building. It was the first time we saw the possibility of something significant happening there.

"Six, seven years after Diamond View got built, then other projects started appearing. We realized there was a window here that we had to move on because if we didn't, we might not get another chance."

atc

The medical center made the first move, putting its alumni and development operations in Diamond View. A few years later, Goodmon returned with plans to renovate the American Tobacco Campus (ATC). Duke moved the Office of Information Technology to ATC and several financial and administrative offices soon followed.

"A truly important step was when Thurston Morton decided to move the Duke Management Company (DUMAC) to ATC," Trask said. DUMAC manages Duke University's $5.9 billion endowment. "We wanted to send the message that if you want to talk to Duke about investments, you have to come to downtown Durham."

At about the same time, Duke partnered with alumni Christian Laettner and Brian Davis of Blue Devil Ventures on the West Village project. When Blue Devil Ventures continued with phase two of the project, Duke again stepped up.

"This time, we're in as an anchor tenant on the large research building at Duke and Main," Trask said. "We thought this was going to be the most difficult building to do. We believed if Duke put forward some money early for it, Blue Devil Ventures could then find the financing for the rest of it."

The effort has had its challenges, Trask said. When Duke offices first moved into Diamond View and ATC, employees complained about the distance to the Duke campus and asked about the lack of amenities in the area. As a plethora of restaurants have moved into the area, those questions have been answered.

More is to come with the opening of the performing arts center. And Trask said as the university continues to grow, it will continue to look for additional downtown office space.

"We've made a strategic decision to look for office space in the downtown area," he said, noting that "Making a Difference," Duke's new strategic plan, lists assisting Durham as a top priority. "The whole idea is that Duke isn't going anywhere. The quality of life and activity in Durham matters to us, and we're going to find ways to support it."