Yesterday the Raleigh City Council unanimously approved a memorandum of understanding (MOU) regarding
development of a 1,050-space parking deck that would support the
33-story RBC Plaza, a mixed-used tower that will be constructed
downtown at the corner of Fayetteville, Martin and Wilmington streets.

The actual terms of the agreement seem a little convoluted:

  • A development agreement will be negotiated within
    five months and subject to approval by the City Council, Highwoods
    Properties and Progress Energy;
  • Progress Energy will donate the land for the parking deck to the City;
  • Highwoods Properties will design, construct and finance the deck at a preliminary budget estimate of $13,504 per space;
  • Upon completion, the parking deck will be subject
    to a condominium regime with Highwoods Properties retaining 528 spaces
    and the City retaining the remaining 522 spaces. The parking deck will
    have 8,000 square feet of ground-level retail on East Martin Street;
    and,
  • Progress Energy or an assignee could purchase
    blocks of the City?s parking spaces at the imbedded cost plus any
    operating losses.

Let me see if I’ve got it straight.  Progress Energy will donate land to the city.  Highwoods Properties will finance the project.  The city will then retain 522 parking spaces that it might sell back to Progress Energy.  This makes no sense!  Why is the city involved at all?  They seem to be an unnecessary middleman between Highwoods and Progress Energy.