Raleigh Observer Plans New Downtown Headquarters

Jun. 3--RALEIGH -- The News & Observer Publishing Co. is moving forward with plans to build a new downtown headquarters, triggering a chain of events that could radically alter a city block by 2010.

The company next week plans to request proposals from developers who would bid to:

* Build 135,000 square feet of offices on the 3.56-acre site of the newspaper's 50-year-old headquarters at 215 S. McDowell St.

* Demolish the existing headquarters -- a smattering of buildings on a block bounded by McDowell, Martin, Hargett and Salisbury streets, but not including the company's Martin Street production plant.

* Build a parking deck with between 400 and 700 spaces, for the company's 700 downtown employees.

* Buy the remaining property to build a mix of shops, condominiums or offices.

One scenario, a six-story office building with a separate parking deck, could leave about half an acre to develop. Another, an 11-story tower with offices over parking, could yield about 1.3 acres. Either would begin by 2008.

It would be another boost for downtown, where at least $1.5 billion is being spent on public and private projects such as a convention center, high-rise hotel and opening of Fayetteville Street Mall to a vehicular traffic.

The newspaper weighed moving to the suburbs, which could have saved it millions of dollars in construction costs.

"Downtowns are the heart and soul of any community," publisher Orage Quarles III said. "And I feel like that's where we need to be."

Raleigh's downtown rebirth likely will boost the profile of the property. The company thinks developers will be able to use its proximity to Nash Square as a perk to lure, say, condominium buyers.

The N&O's offices would cost $28 million and allow the company to consolidate all its divisions under one roof. The news department, for instance, is on three and a half floors in one building and rents space in another.

It would be the second part of a $55 million, two-phase expansion. The company, which plans to keep its printing downtown until at least 2015, expects to finish moving inserting operations -- about 65 full- and part-time employees and the machines that insert advertisements into newspapers -- to Garner by August.

The newspaper expects to request proposals from RAM Development of Palm Beach Gardens, Fla., Empire Properties of Raleigh, Spectrum Properties of Charlotte, Reynolds Cos. of Raleigh, Capital Associates of Cary and Struever Bros. Eccles & Rouse of Baltimore.

Proposals would be due next month, and the company expects to choose one by mid-August.

(News & Observer, The (Raleigh, NC) (KRT) -- 06/05/06)