“It took about one hundred conversations to negotiate the deal,” said Gordon Merklein, the executive director for real estate at University of North Carolina at Chapel Hill. He compared negotiating this deal and other deals to dating. “If the ‘first date’ goes well then you progress to a ‘second date’ and if that goes well then there are many more, sometimes hundreds,” he said. During the “dates”, they worked through issues like who would pay for the “town square” in the middle of the development because by not building on this part of the site, the developer would lose leasable area, but Gordon’s team felt it was necessary for the quality of the development. Like dates, he explained, some meetings were jovial, some meetings were tense, some dramatic, and I sure quite a few were boring, but in the end they negotiated a deal that benefited both parties.
The deal described above is for the “pseudo” public-private partnership (PPP) Carolina Square development. I say “psuedo” because the “public” part of the partnership is the Chapel Hill Foundation Real Estate Holdings, Inc., a subsidiary of the University of North Carolina Chapel Hill Foundation Inc., which is funded by private funds, but is considered public since they represent the interests of UNC. Continue reading