From the April 25, 2003 print edition

Downtown attraction

Demand strong as more W-S developers add dwellings

Matt Harrington The Business Journal

WINSTON-SALEM -- Raymond Serrano remembers his first view of downtown living in Winston-Salem.

"It was a muddy mess," he said of the first stages of developer Beau Dancy's Mill at Tar Branch project at the corner of South Marshall and Wachovia streets. "But I walked in and looked at the beams and thought, 'This could work.'"

Serrano and his wife Chris Spizzo-Serrano moved in 2000 from midtown Manhattan to Winston-Salem, where both now are on the faculty of the N.C. School of the Arts. They're an example of a growing number of people who are choosing to live in the renovated buildings being turned into condos and town homes in the center city.

The Serranos live in a 2,700-square-foot loft, complete with a pair of one-car garages and a patio. "We're near a park, near Old Salem -- we've got the best of everything," he says.

Winston-Salem, where downtown revitalization has seen its share of new offices buildings, including One West Fourth Street and Century Plaza, is focusing now on luring a critical mass of people downtown by turning to residential projects.

Dancy's Mill at Tar Branch and Tar Branch Towers are part of that trend, which also includes the renovation of the 16-story Nissen building into condos, Albert Hall, the former Charles building, Piedmont Leaf Lofts, Brookstown Flats, the residential component of Unity Place and the Goler Depot Street redevelopment. Those projects represent more than 400 residential units.

"All the projects have sold like crazy," said Michael Ryden, director of classic and historic properties at Graham & Boles Properties in Winston-Salem. Ryden was the listing agent for Albert Hall and the Charles building lofts, among other projects.

"I still get phone calls every day concerning downtown living," he said. "When they come up for resale, they sell very quickly -- within a month's time. If we had all the projects (that are planned) on the market right now, we could probably sell them all."

Ryden's idea that there is pent-up demand for downtown living is echoed by Dancy, whose first development on South Marshall Street, Tanner's Park, which sits just south of the central business district, sold its 80 town homes, while the Mill at Tar Branch has one of its 30 units left for sale. The third development, Tar Branch Towers, has had 10 of 24 units reserved, despite the fact that construction is really just beginning on the project.

"People are coming out of the woodwork who want to live in downtown," he said. "We've pretty much seen a steady influx of purchasers. The economy's not great right now, but because we have such a niche market, people have stepped forward."

The most high profile of the Tar Branch Towers sales was to the School of the Arts, which purchased 5,600 square feet for the chancellor's home, including space to entertain guests.

"Both the location and condominium layout offer good solutions for the school's current needs," said school trustee J.D. Wilson, who led the search for a chancellor's residence.

Critical mass downtown?

As more residential projects come to fruition in downtown Winston-Salem, observers wonder when a critical mass of density will be reached to make downtown more of a full-service neighborhood with activity around the clock.

Plenty of restaurants have opened in the last few months, and Dancy just signed an "established restaurant in Winston-Salem" to occupy 5,000 square feet at Tar Branch Towers. Architect Rence Callahan, a partner with Walter Robbs Callahan & Pierce in Winston-Salem and a downtown advocate, has worked with Dancy on his projects. He said that while moving people back into downtown is a great start, more is needed for a genuine revitalization.

"It's somewhat of a pipe dream to assume that a few more residential projects will fill the streets with people," he said. Downtown residents "are consumers just like everyone else. They've got disposable incomes and they've got cars. They make the same choices as to how they spend their money as everyone else does.

"They'll still go to Hanes Mall Boulevard and to Thruway (shopping center). Getting people to live in downtown is great, but it isn't going to be the driver that fills up the sidewalks."

Lyons Gray, president of the Downtown Winston-Salem Partnership, said he thinks that there needs to be at least 400 residential units occupied to bring a variety of services back downtown, including grocery stores.

"Unity Place is talking about doing as many as 60 units instead of 36 (as originally planned)," Gray said. "If we can get the Nissen building 80 percent occupied, along with some other projects, we may have that number.

"There's a lot of energy and a lot of interest. Hopefully that translates into real action, and I think that it will. But I hope people won't expect it to happen overnight."

Callahan compared the progress that downtown Winston-Salem has made to the city's West End neighborhood, where he's lived for the last 25 years.

"It's taken a number of years for the West End to transition from a low-end rental community that had only a few owners to what is now a fairly viable residential area," he said.

Owner occupied

An advantage that downtown has is that nearly all of the residential projects are for-sale properties, with only the Nissen building proposed as rental properties.

"People are looking more to purchase than to rent," said Ryden, the real estate agent with Graham and Boles. "Having owner-occupied properties gets people invested in downtown."

Gray said the city is doing its part to get developers to invest in downtown as well, offering incentive programs for those who want to build residential dwellings.

It's similar to what Downtown Greensboro Inc. has done with its residential incentive fund, which has helped spur residential development in the Gate City.

A challenge facing Winston-Salem, Callahan said, is continuing to find buildings that can be renovated into residential space.

"You have to increase density and use high-density construction," he said. "But the first challenge is finding an appropriate old building that lends itself to residential conversion. We don't have acres and acres of old warehouse buildings. We have a few and they're scattered about."

A wild card in the equation is the Pepper building at the corner of Fourth and Liberty streets. Developer John Elkington abandoned redevelopment of the building in 2001, and sources said a partnership is now looking at it for residential uses.

The Serranos, who live in one of Dancy's developments, are looking forward to having more neighbors.

"We've bonded with all our neighbors," Chris Spizzo-Serrano said, "and we're excited about the revitalization of downtown."

Reach Matt Harrington at (336) 370-2918 or mharrington@bizjournals.com.