In a shocking turn of events at Monday’s Durham City Council meeting, Sterling Bay, owners of the Heritage Square shopping center in the historic Hayti neighborhood, opted to withdraw their application to rezone the property after three years of intense negotiating and community engagement with residents and stakeholders.
The council voted 5-2 in favor of accepting the withdrawal, with councilors Nate Baker and DeDreana Freeman voting no. Sterling Bay could still build on the land without rezoning it, or come back to council with a new rezoning request in six months.
Sterling Bay purchased the 10-acre parcel in 2022. The company planned to build a massive life sciences facility, hundreds of apartments, and retail space on the site estimated to produce $190 million in annual economic impact with 1,500 new jobs at an average salary of $80,000, according to Jamie Schwedler, an attorney with Parker & Poe who represented the project on behalf of Sterling Bay.
But opponents said that local residents wouldn’t be the ones who benefitted from the promised growth and that the planned complex, with the tallest building at 10 stories, would tower over the surrounding neighborhood. Residents pushed the developer to include more benefits to locals, including scholarships to area colleges and other monetary donations, conference space for community use, and concessions to a nearby church.
Opponents also fear what could become of the site if Sterling Bay wins a rezoning—and the ability to build higher—but forgoes its redevelopment plans and instead sells the property off for maximum profit.
When Sterling Bay first purchased the property, the group intended to build on the site “by right”—a process that doesn’t require city council approval. But after a preliminary site evaluation, the developers discovered they wouldn’t be able to build the project’s parking garage underground as they had intended due to bedrock. Building higher triggered the need for a rezoning, which the developers requested in 2024, putting the project at the mercy of the city council, and giving the Hayti community leverage to negotiate additional community benefits.
The specifics of the proposal have morphed several times through months of intense negotiations between various factions of the Hayti community and Sterling Bay. At its core, the project included a 10-story office building, two eight-story life science facilities, 27,000 square feet of retail space, and roughly 400 residential units. The project would have been completed in multiple phases over the next few years.
The Heritage Square rezoning was originally slated for a vote on June 16, but the applicant requested a continuance to conduct more community engagement. The case came back before Durham City Council on Monday night. Nearly a hundred people showed up to represent their faction of the opposition party. A tense energy hung in the air as residents awaited the fate of Heritage Square.
After a public hearing on the rezoning opened, Schwedler shared a detailed 16-minute recap of the events preceding last night’s vote, receiving snickers and jeers from the audience. But her closing statement caught the entire chamber by surprise.
“We stand by what we tried to do for the Hayti community and the process that we led, it was genuine,” said Schwedler. “It’s not like any you’ve seen before, and I stand by the integrity. We mourn the loss of what could have been had this community been willing to accept millions of dollars for its young students and its Black entrepreneurs and the opportunity they could have afforded on the corridor. The reality is that denial does not help the people of Hayti, but neither does two hours of public discourse when it’s clear that the writing is on the wall.”
Schwelder, on behalf of Sterling Bay, requested to withdraw the proposal.
Gasps, whispers, and murmurs echoed throughout the packed chambers at City Hall. Mayor Leonardo Williams had to repeatedly ask for order in the chamber to quell the audience’s fervent response to Schwedler’s announcement.
Some council members felt that the drove of community members who showed up to the meeting should be allowed to speak rather than hold their peace. Councilor Freeman made the case—with an upvote from Councilor Chelsea Cook—that the multitude of ideas that residents shared through the engagement process for Heritage Square about how community development should work was worth placing in the public record through a public hearing for future consideration.
“There was a lot said in the town hall meetings, and I’d hate for council not to hear those points,” Freeman said. “They had a very specific request about how the development should happen, how a developer coming in should be like a neighbor, making sure that the developer was in partnership with the community. This will come back at some point, whether in a different format or different owners.”
With nearly 40 public speaker cards on the dias, and another development case still on the docket, other councilors offered to hear the community out at a later date, and move forward with the vote to withdraw the Heritage Square application. Mayor Pro Tem Mark-Anthony Middleton said without a project to oppose, hosting a public hearing was moot.
“What are they speaking in opposition to?” Middleton asked. “If the applicant has withdrawn their case, there’s nothing to uphold. While we may lament and be upset about not being able to speak tonight, what is the ultimate victory we were looking for? This withdrawal is a reflection of the efficacy of your organizing. They have raised the white flag. They have yielded.”
Over the last three years, Sterling Bay hosted over 53 “stakeholder” meetings with a collection of political action committees, educational institutions, government entities, and neighborhood associations, steadily compiling a list of potential community proffers. Several community meetings have been held at St. Mark AME Zion Church on Roxboro Street, which sits adjacent to Heritage Square.
At a meeting on July 24 hosted at St. Mark, Sterling Bay laid out explicit community benefits they were willing to meet. A number of folks questioned how the developers would be held accountable for these proffers. There are few avenues for the Hayti community or the city council to do so, but Sterling Bay had agreed to commit to several proffers via a land covenant, which allow a landowner to legally bind requirements to the deed of a property:
- Creating a $55,000 scholarship to North Carolina Central University (NCCU) and $55,000 scholarship fund to Durham Tech with a request that both institutions give priority to students from the Hayti community
- A $55,000 donation to the Hayti Promise Community Development Corporation, serving as the first private donation to this organization, which has $10 million in American Rescue Plan Act funds for community improvement projects
- Providing 5,000 square feet of affordable retail for local businesses at a 50 percent discount from market rent (approximately an $800,000 rent subsidy over a ten-year term)
- Providing parking for St. Mark at 100 spaces on Sundays, plus four events per year, and 200 spaces for Hayti Heritage Center, plus eight events per year
- Evaluating diversion of Heritage Square stormwater away from St. Mark’s property, if allowed by the City and NCDOT
- Providing 2,500 square feet of conference space free to the community, including to NCCU and Durham Tech for their real estate and workforce development programs, among others
- Creating guidelines and pre-blasting surveys for St. Mark, as well as posting money to an escrow account in the event blasting causes direct injury to the church site
- Committing to a community process for historical signage to honor the Hayti community
- Providing a one-acre outdoor public gathering space
- Intention to include at least 15 percent minority and women-owned business participation in the project over the full buildout
Before voting to accept Sterling Bay’s withdrawal Monday night, Williams urged community leaders to pull together a planning meeting to create a vision for Heritage Square and the Fayetteville Street Corridor. In 2024, Durham City Council granted $10 million, some of which came from American Rescue Plan Act funding, to Hayti Promise Community Development Corporation, an initiative that grew out of the Hayti Heritage Center and was spearheaded by Angela Lee, the center’s previous director, to jumpstart revitalization efforts for the Fayetteville Street Corridor Project.
“I’m so curious, if not this, then what?” Williams said. “It can’t be all no and then don’t respond with something; we gotta have something. I don’t want to drive down to NCCU and continue to see the same thing. I want this to be one of the most vibrant neighborhoods in the city of Durham, and right now, I don’t know what that looks like.”
In this call to action, Williams specifically named Anita Scott Neville, director of Hayti Reborn, a nonprofit organization founded in 2021 with ambitions to revitalize the historic community through economic investment, and the lead organizing force behind opposition to the Sterling Bay rezoning. Neville, a lifelong resident of Hayti with extensive experience in public service and community organizing, has been front and center throughout the negotiations, speaking at city meetings, community engagement sessions, and local forums.
“The greatest harm that has resulted from this whole process has been the blatant disregard for the value of this acreage to the preservation of Hayti and for the sovereignty and resolve of its citizens to resist gentrification, invasion, and erasure of our community,” Neville said at the April 8 planning commission meeting in which the commission voted 10-0 against Sterling Bay’s proposal.
Longtime residents of the neighborhood have waited decades for substantial reinvestment in Hayti. Some feel they have been burned too many times by the false promise of urban renewal to trust the intentions of outside developers, and worry that the ripple effects of large projects like the one proposed by Sterling Bay would cause additional harm.
“When you bring in large developments, it changes the community, and it changes rapidly,” Larry Hester told the INDY in 2022. “People aren’t looking at what the effects are, and how quickly these effects will take place.”
Hester, along with his wife Denise, are longtime owners of the neighboring Phoenix Square and Phoenix Crossing shopping centers on Fayetteville Street. Redevelopment at Heritage Square would likely increase the property values of nearby homes and businesses like the Hesters’, forcing them to raise rents on tenants who are 90 percent Black.
“Durham is responsible for the destruction of Hayti and has a duty to rebuild,” Hester said.
Although the developers have estimated almost $200 million in economic impact, Hayti residents have little faith that the high-salary life science jobs created will be accessible to neighbors and that the financial boon will help restore a community that was ravaged by urban renewal initiatives in the mid 1900s that demolished homes and severed Hayti’s connectivity, crippling an economic engine once known as “Black Wall Street.”
Henry McKoy, a professor and economic development expert who recently served in the Biden administration as the director of the Office of State and Community Energy Programs, founded Hayti Reborn with the belief that the once-flourishing Hayti neighborhood could be rejuvenated through strategic investment and a comprehensive plan that prioritized residents’ input. (Heritage Square isn’t the only development that Hayti Reborn has been contending with in the neighborhood. In 2022, the Durham Housing Authority rejected a plan, spearheaded by McKoy and Hayti Reborn, to build a multi-purpose project on the site formerly known as Fayette Place, a block away from Heritage Square.)
On June 13, Hayti Reborn held a “Spirit of Juneteenth” block party at Hayti Heritage Center that doubled as a community rallying cry to gather supporters to stand in opposition of the rezoning. Neville and many others were unsure then about the ultimate fate of Heritage Square.
“The developers will still own the land, the city council will still be the city council, but we the people will either bear the burden or the benefit of what happens at Heritage Square,” Neville told the INDY.
Three days later, the Durham city council elected to postpone the vote on Heritage Square until last night, after the council returned from summer break.
Now, it’s unclear what the next step is. Residents and city officials will have to go back to the drawing board to create a vision for Heritage Square that is sustainable and drives the economic impact Hayti residents have long sought from the district.
Heritage Square has struggled to maintain its viability since being built in 1985. The shopping center was funded through a variety of sources including private real-estate companies, city loans, 23 individual investors and a coalition of black churches and community groups, according to a 2006 article from the News & Observer. During the 1990s, the City of Durham relocated its Housing and Community Development Department offices into Heritage Square to prop up the operation.
Andy Rothschild, owner of real estate firm Scientific Properties, purchased the property in 2006 with a bold vision to revitalize the shopping center by reconnecting the district with Durham’s “Black Wall Street” on Parrish Street and building services and amenities, like retail spaces, an outdoor basketball court, and a performance stage, that the Hayti residents could get behind.
Those plans never materialized. Rothschild moved to New York City two years later, and Heritage Square remained sparse for decades.
Recently, the shopping center was notably home to Food World, an international grocery store stocked with a unique and eclectic variety of goods, and Pelican’s SnoBalls, a shaved ice shop. Both stores closed in 2023, a final death knell in this version of the Heritage Square shopping center experiment. The property has been vacant since.
Durham is struggling to reimagine the portfolio of outdated malls and shopping centers that anchor many downtown neighborhoods—Northgate Mall, Shoppes at Lakewood, Wellons Village, and Heritage Square—which all have the potential to transform the communities they reside in, but how do you decide when an imperfect project is better than a concrete wasteland?
“It’s not like we want that parking lot sitting empty. It’s not like we want the Northgate parking lot sitting empty, either. But I think with the way Durham is growing, we need to be smarter about developing and urbanizing truly in the best way that we can,” Councilor Baker told the INDY about Heritage Square in June.
What will actually get built on the site now that Sterling Bay’s proposal is off the table, at least for the foreseeable future? The developers could sit on the land or sell it to another group that, as Schwedler suggested, might be less amendable to Hayti’s requests. Could North Carolina Central University, a tentpole in the Hayti community, take ownership of the project, given their desire to expand the campus?
McKoy says that some folks believe this withdrawal by Sterling Bay is merely a tactic to delay until after upcoming elections for Durham’s mayoral seat and three council seats. Should incumbents up for reelection this fall make it back to the dais with their seats secured, an affirmative vote for a controversial development project becomes less politically threatening. Last night’s “win” might be more like a rain delay, leaving the players to finish what they started at a later date.
But McKoy has faith that, in the meantime, an earnest collaboration between city officials and community leaders could yield results that satisfy Hayti residents. He sees the small area plan approach that was deployed in Walltown for Northgate Mall’s possible redevelopment as a worthy blueprint for how Heritage Square could move forward.
“Time is not neutral,” McKoy says, recalling the teachings of Martin Luther King Jr. “It can be used for the good, or can be used for the bad. It can be used constructively, or we can use it unconstructively. So it’s on our charge to use that time constructively and figure out what we need.”
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