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BED-Minutes-20110614

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					              BUDGET AND ECONOMIC DEVELOPMENT COMMITTEE


The Budget and Economic Development Committee of the City of Raleigh met in regular session
on Tuesday, June 14, 2011, at 11:00 a.m. in Room 305 of the Raleigh Municipal Building,
222 West Hargett Street, Avery C. Upchurch Government Complex, Raleigh, North Carolina,
with the following present:

       Committee                                                     Staff

Mayor Meeker, Presiding                              City Manager Russell Allen
Mary-Ann Baldwin (LATE ARRIVAL)                      City Attorney Tom McCormick
Thomas G. Crowder
Nancy McFarlane

Mayor Meeker called the meeting to order at 11:00 a.m. All Committee members were present
except Ms. Baldwin, whose arrival is noted later in these minutes.

Mayor Meeker announced that Items II (#09-31 Mordecai Park – Appraisal of Spring Hill Lots)
and III (#09-32 – Mordecai Park – Artifacts – Appraisal/Ownership) would be discussed in
closed session, as they were similar to acquisition of property.

South State Street – Lots for Sale

The following report wasMayor Meeker stated this item, involving the sale of eight City-owned
lots on the west side of the 1100 block of South State Street, had been discussed previously and
held in Committee for the possible receipt of further input and consideration. City Manager
Russell Allen told the Committee members that staff had no further information, and they were
ready to move forward with the private sale of these properties to Builders of Hope.

Mr. Crowder moved to recommend approval of the sale of the South State Street lots as outlined
by Administration in a report dated April 6, 2011. (Clerk's Note: See April 12, 2011 BED
Committee minutes for the report text.) The motion was seconded by Ms. McFarlane and
approval was unanimous, 4-0 (Ms. Baldwin absent but not excused).

Item #09-36 – Creative Communities Southwest Raleigh Proposal

Mr. Crowder introduced this item, which was referred to the Budget and Economic Development
Committee during the June 7, 2011 City Council meeting. He said it involved an existing
partnership between the City of Raleigh and North Carolina State University (NCSU), and
representatives from the University were present today to discuss it. Mr. Crowder read portions
of an article in today's News and Observer regarding the purpose of this project and smart grid
innovation. He thought President Obama's visit to Raleigh was timely, in that the visit allowed
federal leaders hear from local business entrepreneurs. Mr. Crowder said Southwest Raleigh was
fortunate in that years ago, Governor Hunt and other prior governors focused on smart economy,
and part of their vision was the creation of NCSU's Centennial Campus. Southwest Raleigh
possesses unique assets relative to smart economy, although some brokers for residential and
commercial real estate look at them as liabilities instead of assets. This proposed initiative takes
                                                        Budget and Economic Development Committee
                                                        June 14, 2011



the existing facilities and opportunities and educates the public regarding the stimulus of
innovation.

Marvin Malecha, Dean of the NCSU College of Design, said he had discussed the Centennial
Campus with the Director of Development yesterday, including activities, increase in square
footage, and the need to bring housing onto Centennial Campus and extend it into the
community. NCSU and Southwest Raleigh, their connection to other parts of the City, the
commitment of the college, and other energies are coming together. Community projects are
currently developing as separate entities instead of holistically. An interdisciplinary team is
needed in order to move forward with holistic development. Development of arts in the Triangle
area stimulates creativity and innovation, and there are amazing opportunities in the City of
Raleigh. Dean Malecha Cognitive referenced two books: "Cognitive Surplus: Creativity and
Generosity in a Connected Age" and "Advantage: How American Innovation Can Overcome the
Asian Challenge." The theme of the Southwest Raleigh study is how to take advantage of
creativity and collaboration, and opportunities for an aggressive and enlightened community,
making Raleigh a place to come and live and participate in a creative environment. The study
will help stakeholders determine the strategies to link these opportunities, such as transportation,
housing, and real estate. Dean Malecha said that Charles Leffler, NCSU's Vice Chancellor for
Finance and Business, has already committed to making a financial contribution to the study. In
the College of Design, there is major commitment toward development, and a belief in strong
education connected to the land grant. He introduced Dr. Chelen Pasalar, Assistant Dean for
Research and Education (College of Design), and Arthur Rice, Associate Dean for Graduate
Studies and International Programs (College of Design).

Dr. Pasalar reported the College of Design made good progress this summer working on the
multi-disciplinary process they are proposing. They are embarking on the participatory aspect,
i.e., engaging people virtually and face-to-face. The College is looking forward to the
opportunity to work on this project.

Dean Malecha pointed out that candidates for masters' degrees and Ph.D.s will participate in the
project. Dean Rice explained that is something NCSU does fairly regularly to involve graduate
students in community projects. They just finished such a project with Rex Hospital. Students
studying in the areas of architecture, landscape architecture, urban design, and industrial design
students will provide a diversity of ideas generated to solve problems. Dean Malecha noted
everything from branding and graphic design to architectural solutions and street furniture will
be studied. The School of Design has an open attitude with regard to partnerships and partnering
with local business people when necessary. Their track record on this is very good, and they
have worked on projects across the entire state. Dean Malecha stressed that they do not compete
with local businesses; they identify projects that can lead to work for local design professionals.
The realm in which they operate is goal setting, strategy setting and pre-programming.

Mayor Meeker asked if the two-year time estimate for the project could be compressed a bit.
Dean Malecha said he did not think so, because incremental goals are set to produce incremental
outcomes along the way. Some methods will take time to percolate throughout the community.
MS. BALDWIN ARRIVED AT 11:17 A.M. (after adjourning the Law and Public Safety
Committee meeting, which she chairs).

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                                                        Budget and Economic Development Committee
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Dr. Pasalar explained there is opportunity here to have access to community members as much as
possible. Within such a large scope, it is important to do that diligently. With the Hillsborough
Street improvement efforts, it took almost 18 months to communicate with stakeholders in the
area. In their experience with this type of project, it is important to spend time communicating
with the public and key stakeholders, and the timeline they drafted for this project depends
heavily on that. Mr. Crowder reminded everyone that improving Hillsborough Street was a 10-
year process. This two-year effort is looking to have a definite outcome but not looking for
future funding, and he believes two years is a reasonable time period.

Ms. McFarlane expressed her appreciation to all who worked on this. She said the only
comment she received when talking about the project to her constituents was that some people
took offense to the way it was titled and presented, because they felt it indicated they were not
creative. The title seems to give the idea that this is a university focus and name. Dean Malecha
understood, but said he does not see this as a university project. Creativity is not owned by any
one business or neighborhood. For example, the people who established Research Triangle Park
probably would not call themselves artists, but they were among the most creative people in
North Carolina during their time. The stimulus for the word "creativity" pertains to the variety
of institutions in the region. Mr. Crowder pointed out that the title has been changed from
"Economic Development Analysis and Strategies for Amplifying the Capital City's 'Creative
District,' Southwest Raleigh" to "Amplifying Southwest Raleigh Through Branding and
Economic Development Strategies." Dean Malecha said he understands the Web site in the
neighborhood still contains the old title, but NCSU did not write that Web site.

Ms. Baldwin disclosed for the record that she does consulting work for NCSU, but has discussed
that with City Attorney Tom McCormick, who said there is not a conflict of interest. She said
when she was involved in the youth initiative in Southeast Raleigh, they worked with a group
who came forward with a proposal over $40,000. They were told they had to issue a Request for
Proposals for that work. Ms. Baldwin asked if this proposal meets all legal requirements. City
Attorney McCormick replied this is a service contract and there are no public bidding
requirements under state law. It is Council's policy is to seek proposals for service contracts, but
Council can waive that policy. Mr. Crowder noted this is a partnership, and NCSU has a
financial stake in it.

Ms. Baldwin asked what tangible outcomes are expected to come out of this study. Dr. Pasalar
replied that the project will happen in phases. The first phase is about an inventory of the area,
which will allow NCSU to accumulate and map information regarding changes in community
demographics, demand for public services, economic profiles and classes, quality of
employment, and other trends. They want to understand the socioeconomic values that exist in
the area. In terms of outcome, the first phase will provide information regarding what we have
in the area and what can be prioritized. The second and third phases involve reaching out to
stakeholders. Those results will allow the College of Design to understand the existing
perceptions and expectations of community members. The third and fourth phases will be about
conceptualizing the bigger vision that will unify the individual clusters that exist in Southwest
Raleigh and trying to represent the economic opportunities that can be pursued.



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                                                        Budget and Economic Development Committee
                                                        June 14, 2011



Dean Malecha said they hope to identify four or five major projects that can be identified and
pursued, such as transportation in the region, a strategy to change the volatility in the real estate
area between ownership and rentals, or a City outgrowth of Centennial Campus where a region
of the City becomes an exploratory campus for entrepreneurs. Mr. Crowder said the point of this
is to get the stakeholders together. He has been meeting privately with business owners in the
area and fairgrounds personnel. The first phase will bring these partnerships together and will
result in what the strategies need to be. This study will produce data, demographic information,
job numbers, etc. for a true economic development strategy for Southwest Raleigh and the City
as a whole.

Ms. Baldwin noted the Council had recently allocated $1 million in a bond for an economic
development strategy for Hillsborough Street. She asked if there is any overlap in that funding
and if it could be used as a resource to pay for this study. City Manager Allen reminded
everyone the Council had already appropriated $150,000 in the current budget for the study, and
that funding will be rolled over for the next two years. It is his understanding that the $1 million
is for the next phase of improvements to Hillsborough Street. Ms. Baldwin said some people
disagree as to whether that should be the case. Constituents have asked her why Southwest
Raleigh has been selected for a study, and what about the rest of the City. She is concerned that
there appears to be public perception that there is a lot of competition for funding and the study
is pitting district against district. She asked how this study fits into the City's overall economic
development strategy, and whether there are any in-house resources to help with a study of this
nature.

Planning Director Mitchell Silver stated that staff is strengthening in-house capacity for
economic development. The Council already approved the memorandum of agreement for this
partnership because all the economic development resources and organizations have basically
been centralized throughout the City. To study one area specifically, it is necessary to reach out
to the partnership. The Comprehensive Plan contains an entire chapter on economic
development, and there is language in that section about advancing the creative community
concept. Staff tried to focus on clusters, not districts, where economic development is more
place-based and not just creative districts per se. They will work with NCSU to look at
economic development strategy and avoid "policy creep." He will have to see if this proposal is
in line with the Comprehensive Plan to see if it needs to be added to the Comprehensive Plan
focus. If this goes forward, the City will want very close collaboration with NCSU to stay
consist with the Comprehensive Plan and economic development strategy.

Mr. Crowder pointed out that the City continues to fund the Southeast Raleigh Assembly, and he
does not think the looking periodically at areas that need economic development infusion will pit
districts against each other. He would like to hear from other supporters of this proposal.

Ms. Baldwin said she had asked for a report on the façade program at the last Committee
meeting. She is struggling with the $150,000 budget and said the City needs immediate
assistance for businesses for economic development, such as small business loans. She also
questions why economic development is not being looked at more holistically throughout the
City.



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                                                        Budget and Economic Development Committee
                                                        June 14, 2011



George Chapman, a resident and small business owner in Southwest Raleigh, stated he has been
involved in other economic development plans and strategies for the City of Raleigh. He
believes there is a lot of parallel between this Southwest Raleigh proposal, the liveable streets
plan for Downtown Raleigh, and the 18 months of development of a charrette for Hillsborough
Street. There is a clear understanding in the community that all is not well, and there are
neighborhoods are on the decline in Southwest Raleigh. There is a perception in the real estate
community that there is a lack of opportunity for investment and a lack of security for
investment, and that the City should give some attention to that. Mr. Chapman said during the
Hillsborough Street improvements process, the community developed 35 goals, objectives and
projects to enhance the community, but settled on three, including the redesign of the street. The
first phase of the street redesign took 10 years. What drove Hillsborough Street was the feeling,
on the part of both NCSU and the community, that the community was not a fitting setting for
economic growth and development. NCSU saw increasing difficulty in hiring staff and
attracting students because of the conditions on Hillsborough Street. During the Liveable Streets
Plan process, 138 strategies were identified originally, and those 138 were condensed to "Five in
Five" (five projects in five years). Mr. Chapman sees the first year of this proposed process
resulting in the identification of a handful of specific, concrete projects that will begin to change
the nature of Southwest Raleigh so it continues to be a place of innovation and creativity that
will draw the type of economic investment that was discussed this morning.

Planning Director Silver stated that staff welcomes the opportunity to look at the scope of work
and to working with NCSU to see how to move forward. Liveable Streets Part 2 will be scoped
out this fall and plans will be encompassing Downtown South. The Comprehensive Plan has a
strategy for target areas. All of this work will be synergistic, connecting to Hillsborough Street
and Centennial Campus. Mr. Silver said it is important to make sure the City's economic
development strategy is in alignment with these proposals.

Councilman Weeks, who was in the audience, stated this is the same thing that is going in on
Southeast Raleigh. He said the City needs to get Shaw University and St. Augustine's College
involved in this type of work as well. Planning Director Silver told him the City has planning
sessions set up for both schools, the Planning Department is working with the Community
Development Department on an aggressive redevelopment strategy, and staff is also going to
start conversations with the RCAC. Departments are working together to start moving those
projects forward.

Councilman Stephenson, who was in the audience, said he does not see this project as anything
more than a pilot project. It is a great idea to bring these kinds of university resources together.
He said the Southeast Raleigh Youth Initiative was an excellent opportunity for a lot of diverse
community supporters and institutions to come together for an interdisciplinary pilot program.
Mr. Stephenson said this is a great opportunity to do a pilot program, take what is learned, and
replicate it around the City of Raleigh. He thinks this project will be mutually supportive with
the City of Raleigh's overall economic development plans.

Jason Hibbets, 2140 Ramsgate Street, Raleigh, NC 27603-2657 – Mr. Hibbets stated he is
editor for www.SouthwestRaleigh.com. That Web site highlights some of the assets, history and
events of Southwest Raleigh. Mr. Hibbets' employer, Red Hat, believes this economic

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                                                        Budget and Economic Development Committee
                                                        June 14, 2011



development project is important. The company's Executive Vice President participated in
roundtable discussions yesterday, and stated that like many companies, Red Hat depends on
educational resources to help them prepare their work so they can compete globally.
Mr. Hibbets supports this proposal.

Ms. Baldwin said that Red Hat is looking at its brand. The City of Raleigh does not have a
brand, and this proposal indicates Raleigh is taking funding to create a brand for one section of
the City. She suggested that the brand should be a city brand. Ms. Baldwin stated that
Mr. Stephenson framed his point of view very nicely. The Youth Initiative she was involved
with was a Wake County initiative, not just a City of Raleigh initiative. She pointed out that
broad bases of support are needed.

Mayor Meeker reiterated that funding is in place for this proposal and asked if there was a
motion for approval. Mr. Crowder moved to recommend approval of the Creative Communities
Southwest Raleigh Proposal, and Mayor Meeker seconded the motion.

Ms. McFarlane asked the proposal could be funded for one year in next year's budget, and mayor
Meeker replied that since the full funding has already been appropriated, he prefers to keep the
funding as is. Ms. McFarlane asked if the Council could receive periodic updates on the project,
and without objection, Mayor Meeker stated that would be a friendly amendment to the motion.
The motion carried by a vote of 3-1, with Ms. Baldwin voting in the negative.

Item #09-33 – On-Street Parking Fees/Construction Activities

Mayor Meeker Mayor presented this item, pointing out that the original proposal charged for any
use of a street. The new ordinance addresses charging for construction/demolition projects that
will take longer than 14 calendar days. City Manager Russell Allen explained the City is
currently charging a daily fee for use of allocated and permitted street space, but there is nothing
in the City Code that addresses this practice.

Mr. Crowder opined that these are heavy rates for long-term parking. With fit-ups and
renovations of buildings downtown going on for two or three weeks at a time, different trades are
coming in and out to work on those projects. If the City charges above its parking deck rate, it
becomes onerous on economic development downtown. City Manager Allen pointed out this is
prime public property from which the City has the opportunity to generate revenue. Mayor
Meeker added that the rate proposed in the ordinance is still less than the hourly rate for on-street
parking.

Mayor Meeker made a motion to recommend approval of the ordinance amendment that will
require a fee for reservation of on-street parking spaces for construction/demolition projects that
will take longer than 14 calendar days to complete. His motion was seconded by
Ms. McFarlane. A roll call vote resulted in a tie of 2-2, with Ms. Baldwin and Mr. Crowder
voting in the negative. Mayor Meeker ruled this item will be reported out with no
recommendation.




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                                                    Budget and Economic Development Committee
                                                    June 14, 2011



CLOSED SESSION

Mayor Meeker announced a motion is in order to enter closed session pursuant to NCGS
Sections 143-318.11(a)(3) and (5) for the purpose of discussing Item #09-31 (Mordecai Park –
Appraisal of Spring Hill Lots) and Item #09-32 (Mordecai Park – Artifacts –
Appraisal/Ownership), and instructing City staff concerning negotiation for properties in the
following areas:

       a.     South Wilmington Street
       b.     Boyer Street
       c.     Martin Street

Mr. Crowder moved approval of the motion as read. His motion was seconded by Mayor
Meeker and carried by unanimous vote of 4-0. The Committee entered closed session at
11:47 a.m. (Clerk's Note: Closed session is recorded in a separate set of minutes.)



Leslie H. Eldredge
Deputy City Clerk




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