Proposed University Place redevelopment would bring new business and create jobs

University Place mall on South Estes Drive could soon be transformed into a walkable, pedestrian-focused town center. 

On May 19, the Chapel Hill Town Council will hold another public hearing regarding the redevelopment proposal, with a tentative voting date on June 9. 

The applicant, Ram Realty Advisors, bought the 43-acre property back in 2018. A portion of the project's phase one — which included creating two new exterior-facing storefronts adjacent to Bartaco and renovating the space outside of Hawkers — was completed last year.

Now, Ram Realty Advisors is asking the council to modify its special use permit so it can start construction and finish phase one, which would take about 15-18 months.  

Making the mall more pedestrian-focused

The proposal aims to convert much of the interior mall space into exterior-facing storefronts and will be executed in three phases. In the first phase, about 110,000 square feet — a little over a quarter of the property — of existing interior mall space will be demolished, including the former Southern Seasons location, Ashley Saulpaugh, regional director of investments in the Carolinas for Ram Realty Advisors, said.

About 50,000 square feet of new retail space will be built back, which will be surrounding a half-acre green space in the center of the mall. 

“The ultimate goal is to de-mall and to close the interior of the mall, because it's no longer leasable space and it's expensive to operate," Saulpaugh said. "It's dying for lack of a better word.” 

Saulpaugh said the pandemic exacerbated the decreased foot traffic that the interior of the mall was experiencing, and he said he doesn’t think it will come back. Because of this, existing tenants are leaving and there's no interest from new retailers, he said. 

As people rely more on e-commerce, the survival of in-person commercial retail relies on being “experiential” for customers, Saulpaugh said. By creating exterior-facing stores surrounding a pedestrian-focused, walkable green space, he said that would naturally bring more foot traffic to the mall. 

Saulpaugh said The Northside Shopping Center in Raleigh — which used to resemble University Place — underwent a similar redevelopment process that “turned it inside out” and transformed it into an exterior-facing plaza.

Meeting climate goals

The walkable green space will hold regular programming events like fitness classes. 20,000 square feet will be dedicated for entertainment purposes and concerts. The Chapel Hill Farmers' Market, which is currently held in the mall's parking lot, would also move to the green space.

Melissa McCullough, a member on the Chapel Hill Planning Commission, said she thinks the proposal is a good start to revitalizing a “dead” mall. McCullough said creating a green space for pedestrians is not only a revenue generator for surrounding businesses but also helps the Town reach its climate and revenue goals.

“In order for us to meet our greenhouse gas goals, we have got to make more efficient use of land per person," McCullough said. 

The project will also add 250 trees to the property.

More apartments, business space and hotels

The first phase will also include the construction of 250 multifamily apartment units in the parking lot adjacent to Silverspot cinema. Fifteen percent of these apartments are proposed to be designated as affordable for someone earning 80 percent of the average median income. 

Saulpaugh said there is a pent-up demand for more multifamily apartments in Chapel Hill, especially from people who work in Chapel Hill but have to commute in to work from outside the Town. This is the case for many residents in The Elliott Apartments, which Ram Realty acquired in 2016, he said.  

The mall’s current special use permit only allows for buildings up to three stories tall, and to build the apartments, Ram Realty is asking to modify the permit to allow for five-story buildings. 

Office and hotel space planned for the second and third phases of redevelopment would also likely be in the five-story range as well, Saulpaugh said. 

In addition, incubator retail suites for about eight startup businesses will be built in phase one, 20 percent of which will be dedicated to business owners from marginalized communities, Saulpaugh said. 

“One of the biggest hurdles to a start-up retail business is building out a space," he said. "It typically costs several $100,000 to build out a space and so this eliminates that upfront costs, and gives them an opportunity to get in there at little to no cost, and start a new business.”

Dwight Bassett, economic development officer for Chapel Hill, said the redevelopment plan is slated to create about 250 to 300 construction jobs, as well as 275 permanent jobs. The tax base of Orange County and Chapel Hill could increase by $1.2 million a year. 

If the Council decides to vote on the special use permit modification in June and then approves it, Saulpaugh said construction would start at the beginning of next year, which would put the grand opening around spring 2023. 

@AudreySelley

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