Downtown Manager wants Empire off Downtown Deal

Once again, Raleigh's city manager is requesting that Empire Properties be removed as the developer for the Lafayette project. Russell Allen, city manager, is asking the City Council to reopen bidding for the development on a half-acre, city-owned site bordering Salisbury, Lenoir and South streets. If the council agrees with Allen, this will end the deal between the city and Empire Properties for the project, known as the Lafayette.

Last month, Allen asked that bidding for the site be reopened because Empire Proprieties had yet to get financing for the deal. The council ruled against the city manager by extending the deadline to Nov. 1 for Empire to find the money needed.

That extension included a provision where Empire Properties would share the cost to widen Salisbury Street, work that is being done as part of the Lafayette deal. Greg Hatem, CEO of Empire Properties has refused to sign the extensions under these terms, stating that he should pay for his portion of the street project once he purchases the land. Empire's share of the road widening would be approximately $50,000. He currently has the option to purchase the Lafayette property from the city for $1.44 million.

Hatem, like many developers has found it difficult of late to raise money for large projects considering the economy and the credit crunch. The developer has suggested that he may scale back the project, which is originally designed to be a 22-story tower with condominiums, retail and a hotel.