Urban Revitalization at the Golden Belt Complex
Throughout the late 19th and much of the 20th century, downtown Durham was a vibrant manufacturing center engaged in the tobacco and textile industries. As these industries declined in the 1960s so too did the vitality of downtown Durham. Steady disinvestment lead to physical deterioration, made worse by the industrial waste left behind as a legacy of the area’s manufacturing history. The eastern edge of downtown now hosts a HOPE VI redevelopment area, a CDFI Fund designated Hot Zone and a Brownfield Redevelopment area with more than 35 percent of the population living in poverty, and an area unemployment rate that is 3.19 times the national average.
Self-Help Ventures Fund was approached to help finance the rehabilitation of the Golden Belt Manufacturing Company complex. Golden Belt was a textile factory that produced pouches for Bull Durham loose leaf tobacco and then paper cartons when cigarettes came into vogue. When tobacco moved out, the demand for ancillary services disappeared and the Golden Belt complex was donated to the Durham Housing Authority (DHA). DHA
provided space for the Center for Employment Training’s operations and sought partners to redevelop the larger facility. After a series of dead ends, the DHA put the majority of the facility on the market in 2004 and Scientific Properties, LLC, a North Carolina-based real estate and development company, purchased the property in 2006. Scientific Properties approached Self-Help with a plan to convert the historic site into a mixed use commercial, arts, and residential space, and a $12 million loan request.
Self-Help recognized the project’s potential to anchor the area’s revitalization, but was hesitant to commit $12 million of its remaining NMTC allocation. To stretch its remaining allocation, Self-Help worked with Wachovia to share the loan by borrowing a portion of Wachovia’s NMTC allocation. Self-Help made an $8.15 million loan from its third round allocation and secured $3.85 million from Wachovia’s NMTC allocation to re-lend to Scientific Properties, together reaching the $12 million necessary to make the project viable.
Self-Help Ventures Fund provided a loan with a 7 year term, amortizing over 25 years with an initial 18 month interest only period. The interest rate, blended between Self-Help’s and Wachovia’s NMTC debt products, is fixed at 5.4%, more than 250 basis points below Self-Help’s standard rate. The CDE also offered loan fees that were 90 basis points below standard.
Two previous owners of the Golden Belt complex had tried to revitalize the site but were unable to secure the financing needed for such a significant and costly renovation in a low income community that is perceived by conventional lenders as a high risk market. The $12 million below market rate loan offered by Self-Help Ventures Fund and Wachovia, combined with $10 million in NMTC-enhanced state and federal historic tax credit equity allowed the project developers to ensure affordable rents and leases for the community.
The Golden Belt complex created 140 construction jobs and more than 400 permanent jobs in the downtown corridor by putting six warehouses back into use. The project team utilized environmentally friendly design features and the complex is the largest, all-historic, Gold-certified campus in the Southeast and one of only three LEED-certified options for large office/retail space in the Triangle.
Golden Belt provides affordable commercial and office space for local businesses and non-profit organizations that serve community residents, including the Center for Employment Training. The project includes artist studios at below market rents, an art gallery, affordable loft apartments, office space, a live music venue and ground floor retail space. The development generates essential foot traffic in the area and contributes to other development efforts in the neighborhood.
