Durham may cut ties with developer of old police HQ
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The former police headquarters at 505 W. Chapel Hill St. Photo: Zachery Eanes/Axios
Plans to redevelop the former police headquarters in downtown Durham may have fallen through once again.
Why it matters: The four-acre property, which has sat vacant since 2018, is one of the last remaining large tracts of land downtown that the city has control over.
- The city has hoped to leverage that ownership into encouraging affordable housing there via a partnership with a private developer.
Driving the news: For the second time in four years, the city could cancel an agreement with a developer to take over the property, at 505 W. Chapel Hill St.
- An agenda for this week's city council work session revealed that city staff recommended Durham end its negotiations with The Peebles Corp. to redevelop the property after the city picked the firm just last year.
- In 2021, an agreement with The Fallon Corp. also fell apart.
What happened: The city and Peebles — a Miami firm that has been part of a complicated public-private partnership in Charlotte — have been locked in negotiations for months, according to city documents, with the two parties going back and forth on how much affordable housing would be included and how the city would subsidize construction.
- Between August of last year and March 2025, the project's costs increased by 34%, and Peebles' request for city support rose from $61 million to $78 million, according to city documents. (Peebles has not yet responded to a request for comment.)
- Peebles' plans for the property changed as well, transitioning from one residential building to two apartment buildings (one designated for affordable housing) while also turning the existing police building into a hotel and adding a five-story lab building.
Between the lines: During these negotiations, however, the market for apartments in downtown Durham was swiftly changing, as thousands of new units were delivered.
- The large increase of new apartments in downtown, higher interest rates and rising construction costs have lowered expected rent growth and made financing harder for Peebles, according to the city.
- Already, four other planned private projects have been paused in downtown, the city noted, including the second phase of the GeerHouse development, Capitol Broadcasting's expansion of the American Tobacco Campus, the redevelopment of the Downtown YMCA and an expansion of the Durham Center.
What's next: The dissolution of the agreement would mean Durham will once again be back at the drawing board for the old police headquarters many years after it began planning for its transformation.
The city is considering several next steps including:
- Demolishing the vacant headquarters building and waiting until the financial markets are more favorable to find a new development partner.
- Prepping the property for future development and providing some form of city programming to active the property in the interim.
- Downsizing its ambitions for the project and finding a different developer or using the property as a parking lot and open space.
What they're saying: Durham Mayor Leonardo Williams said he doesn't know yet how the council will proceed but he wants to ensure property doesn't remain an eyesore.
- He told Axios he would like the city to invest in the property until the market becomes more attractive for a partnership with a developer.
- "It is currently an eyesore, and there are so many amazing things that we can do," he added. "One example is a beautiful, open green space and park that has an amphitheater that could bring our community together around the arts."