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Shopping Centers Today -> March 2003
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STEPHENS BRINGS VAST PROJECT HOME TO NORTH CAROLINA
BY DEBRA HAZEL
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Phillip E. Stephens isn’t just coming home to Apex, N.C. — he’s helping to rebuild it, with plans to develop more than 3 million square feet of mixed-use space there.
Stephens, the president and CEO of Atlanta-based Stephens Property Group, is working on Apex Town Square, a mixed-use project that will include retail, office, hotels and residential space.
Apex Town Square, which Stephens says could take a decade to complete, will sit on a 350-acre site in the southwest quadrant of the intersection of N.C. 55 and U.S. 1, in what may be the last undeveloped area in metro Raleigh. Most recently, the area has seen the development of Triangle Town Center, a 1.2 million-square-foot super-regional built by The Richard E. Jacobs Group, and The Rouse Co.’s 1.3 million-square-foot Streets at Southpoint hybrid mall.
The area is very familiar to Stephens, who is the former chairman and CEO of Compass Retail, which Lend Lease Real Estate bought in 1997 as part of its acquisition of Equitable Real Estate Investment Management.
“I grew up 10 miles south of the site, in Fuquay-Varina,” he recalled.
A number of nonretail developers had tried for years to build on the former industrial site, mostly envisioning residential development for the rapidly expanding city, but couldn’t get the permits. Shopping center developers, meanwhile, overlooked the tract entirely, he said.
“But the town of Apex had been very interested in a mixed-use development,” Stephens said. “They liked the village style — the fact it isn’t enclosed and [blends] different uses.”
The plan calls for 1.2 million square feet of retail, 750,000 square feet of office space, two hotels totaling 500 rooms, 520 apartments and 60 town houses. The retail will include department stores, one or two big-box retailers, some large-format merchants, midlevel fashion specialty stores, a multiscreen cinema and several restaurants.
The project is being developed along New Urbanist lines, combining living, working and recreational activities to minimize auto usage. Tenants will be arranged in an open-air village layout featuring a town square with a landscaped public garden.
“By combining the opportunity to work, shop, live and have fun, this project will represent the best of so-called smart-growth planning,” Stephens said. “Apex is strategically located to serve as a model for the very best planning techniques available in contemporary high-quality property development today.”
Apex is part of the Research Triangle Park, the 7,000-acre campus in the state’s Piedmont region nestled between Durham’s Duke University, the University of North Carolina at Chapel Hill and Raleigh’s North Carolina State University, home to more than 100 companies engaged in research and development. There are approximately 200,000 people in the trade area. According to the Apex Chamber of Commerce, by 2006 the population within a five-mile radius of the project could grow to 121,000, up from 97,000 in 2001. City officials predict that the population of the town itself will double over the next eight to 10 years from the current 26,100. Even though the tech sector has cooled, the area hospitals and universities have helped the local economy weather the downturn.
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| Apex Town Square will sit on a 350-acre site in what may be metro Raleigh’s last undeveloped area. |
“It’s explosive growth down here,” Stephens said. “The Research Triangle area has had next to no unemployment — 2 to 3 percent for Raleigh is high.” As a result, in 2001 average household income was $65,917 within a one-mile radius of the town and $84,863 within five miles.
“By 2010 this is going to be a very large, better-income community,” he said.
Stephens took over the site in March 2002. The project required some rezoning, and approvals were given in November. Getting the approvals wasn’t difficult because the enterprise dovetails nicely with an April 2002 plan the town drew up to find an appropriate use for the property.
“Everyone was looking to change the character of the land,” said Dianne Khin, the town’s senior planner. “We wanted to put in retail, a major employment center with office and research facilities, and some residential.”
The town’s elected representatives are supportive, too.
“We are pleased,” said Mayor Keith H. Weatherly, when the city approved the rezoning. “This project appears to fit with our recently developed smart-growth criteria for high-quality, mixed-use development. We have been hoping that Apex could produce an exciting ‘New Urbanism’ community that would provide a high quality of life for its residents and perhaps offer an interesting destination for the rest of the Triangle.”
But though Stephens now has his zoning in place, along with a contract to acquire the land from local private owners (for an undisclosed sum), he must wait for roads and other infrastructure to be built to service the project. An extension of the N.C. 55 Bypass has been approved but has yet to be funded, and a new section of Interstate 540 that would pass near the property is several years from completion. In addition, Jessie Drive will be extended west on 55 to meet the bypass extension.
Stephens expects development to begin next year and continue over a period of five to 10 years. The order of development has yet to be determined, but office development (currently overbuilt in the market) is likely to come later. Stephens may even sell part of the multifamily component in time, he said. Meanwhile, the project yields him one additional benefit: the chance to reconnect with his roots.
“I stay with my mother when I go there, and I love it there,” Stephens said. “It’s home for me.”
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