The city's prime downtown parcel at 505 W. Chapel Hill St. has sat vacant for eight years, ever since Durham Police relocated and left behind a 4-acre site that includes a 1920s-era building the city has struggled to redevelop. The latest attempt, a deal with the Peebles Corporation, collapsed in June 2025 after the developer's request for city financial support climbed from $61 million to $78 million in less than a year.
Durham is now pursuing a new path, using the federal Low-Income Housing Tax Credit program to finance redevelopment rather than a direct city subsidy.
- Both options staff is considering would include 80 affordable housing units, matching the lower end of what a community working group previously recommended.
- That working group called for roughly 80 affordable and 55 market-rate units, and asked that the original 1920s building be preserved. Neither recommendation has been formally adopted.
- City staff has a deadline of July to bring developer options forward for council review.
The LIHTC route shifts the financing burden away from the city, but whether it can support the full mix of uses the community envisioned, including the market-rate units and historic preservation, remains unresolved. The July deadline is the next concrete moment to see how much of that vision survives.