The 203 development project could offer Carrboro entrepreneurial rental space

The Carrboro Town Council could add entrepreneurial rental space to The 203 Project, a step some council members said could help bolster Carrboro's long-term economic viability.

The project is a joint plan between Orange County and the town to construct a nearly 50,000 square feet building and parking deck on a Town-owned parking lot. Besides a county library and skills development center, the building will provide offices for Carrboro Recreation & Parks, WCOM Radio and other tenants. Town staff members have estimated that the project will cost Carrboro about $12 million.

The council approved the project's redesign on Feb. 11 after a yearlong pause and continues to debate what the building will include. Council member Susan Romaine said the council will know more about the project’s redesign this summer.

She suggested incorporating entrepreneurial space in The 203 Project as part of a floor or as an additional fourth floor during a January council meeting. 

“It would make a bold statement that Carrboro is a welcoming place for young entrepreneurs, and we support, nurture, and prioritize a vibrant downtown business community,” she said.

Additional shared workspace, or co-working space, could also allow businesses to partner with and seek inspiration from each other, Romaine said.

“There’s no substitute for those kinds of conversations that people end up having with one another about things that they’re working on, or vendors that they’re using or cost savings that they’ve been able to accrue,” she said.

Several other town representatives have expressed interest in exploring the potential for entrepreneurial space in the 203 building, but Council Member Jacquelyn Gist said the idea is too risky.

She said building additional rental space could leave the town vulnerable to an economic downturn because Carrboro’s commercial property market is unstable. Properties can spend months on the market, which she said could force the Town to pay the mortgage for that space without bringing in any rent for it.

“That would end up costing us money that the taxpayers didn’t really decide that they wanted,” Gist said. “People want a library, but they didn’t say, ‘While you’re at it, go ahead and become a landlord.’”

But Romaine said space could be a critical long-term investment in Carrboro’s growing small business community because it could help Carrboro broaden its commercial tax base. 

The Town only collects about 10 percent of its total property tax revenues from businesses, according to the 2019 State of the Community report from the Chamber for a Greater Chapel Hill-Carrboro.

Because Carrboro’s commercial tax base is so narrow, Romaine said that most of the tax burden falls on homeowners and renters, which makes Carrboro less affordable for low- and middle-income families.

Nathan Milian manages five commercial buildings in Carrboro, including Carr Mill Mall. He said adding entrepreneurial rental space wouldn’t diversify Carrboro’s tax base because tenants wouldn’t pay property tax for renting space in a government-owned building. 

“I agree with them 100 percent," he said. "That needs to be done, but putting commercial space in this building does not satisfy that.”

He also said he doesn’t want the Town to add entrepreneurial rental space to the 203 building.

“My objection is using property that’s currently being used to support the existing businesses downtown, taking that away and then building competition for them on top of that,” he said. “It’s a double whammy. Not only are they taking parking away, they’re creating more of a need for parking from private enterprise.”

The 203 Project will replace a parking lot, which contains 88 spaces plus about a dozen on-street spaces around the lot. Romaine said the project also includes a parking deck, but it wouldn’t be available for public parking during daytime hours.

“All of the properties I manage thankfully have sufficient parking for our use, but we just don’t have extra to share,” Milian said. “That’s kind of the situation everywhere downtown.”

Romaine said she recognizes the town needs to offer additional parking if they add entrepreneurial space to the project. Annette Stone, Carrboro’s economic and community development director, and Mayor Lydia Lavelle have been negotiating with several property owners to lease existing parking lots around town during and after construction. The Town is also conducting another downtown parking study to better understand downtown parking needs.

Romaine said she agreed with Milian that adding entrepreneurial space to the project alone wouldn’t address Carrboro’s narrow commercial tax base, but she said it’d be a start.

“I’d love to see Carrboro encourage more homegrown entrepreneurship,” Romaine said. “And The 203 Project is the perfect place to start.”

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