North Hills' final phase to begin due to bank's backing

Developer John Kane is using loans from RBC Centura and three community banks as he continues to pay prices that began reaching skyward once news of his 45-acre North Hills East project was digested by property owners.

Leading the financing for the $24.2 million that Kane Realty Co. has spent to acquire 43.5 acres is RBC Centura with a loan of $16.75 million. Deed of trust records show that three small banks pitched in a total of $5 million. Those banks are Southern Community Bank & Trust in Winston-Salem, Bank of Granite in Hickory and Capstone Bank in Raleigh.

Kane is now close to his land goal that he needs to build a $700 million extension to his North Hills project, which could dramatically change the skyline of North Raleigh. The new extenstion could be as much as 35 stories, which would make it by far the tallest building in North Raleigh.

Last month, Kane Realty agreed to purchase an 84-room Comfort Inn on Six Forks at the inflated price of $4.5 million, which has a tax value of $1.8 million. Now, the last remaining purchases for his sizable development are the old Bennigan's restaurant and a couple of small office buildings. Wake County tax records shows that Kane has paid an average of $556,658/acre for this development, far above the going rate.

Steven W. Nelson, a local Realtor with Keller Williams noted that these inflated prices may increase the value of the land dramatically over the next few years, but warns, it will not be near the value of what Kane is paying. "Unless he personally plans to purchase your residence to include into North Hills, you will not get the premium that he is paying currently. This is the price he has to pay for buying the land in stages instead of purchasing it all before he began to redevelop the area. Once people saw what he was doing with North Hills, it became nearly impossible for him to buy land at market value."

Nelson added that he couldn't blame the local homeowners who attempted to earn the greatest return from their home investments. "If the Waverly Place in Cary decides to build a similar enviroment as North Hills, then you can expect that the area directly surrounding Waverly will see the same returns", Nelson added. "However, he doesn't expect that development to be able to capitalize as North Hills has due to location. North Hills has one of the greatest locations for a development of its kind. It is close to the beltline which means that people from all over the Triangle can get to it in relatively short time, depending on the time of the day and peak traffic times.

Nelson went on to say that he feels that it is about time that the area that Kane Realty is purchasing for additions to North Hills be updated and redeveloped. This area has been stagnate in its growth potential and its relatively difficulty in accessibility. Being that the land is adjacent to a major thoroughfare without proper stop lights to make the ease of vehicle access, it has been dying a slow death. With this new development, I am sure that new traffic lights will be installed to allow for vehicles to get in and out more efficiently.