Developer Josh Parker, the subject of our May cover story, has been outbid on the Chesterfield Building, the former cigarette factory at the corner of Main and Duke that he's been trying to acquire for years.
BGL Real Estate Advisers out of Cleveland swooped in with the winning offer over Parker's TBL Group. BGL is the same company that assisted Federal Capital Partners in obtaining a controlling stake in West Village Phase II last week.
The Chesterfield is held by Minnesota-based Northland Securities. Northland officials now are in the "due diligence" period with BGL to work toward finalizing the deal. Robert Flanigan of BGL says that could take a while.
"We hope to reach a closing in the next several months, but I would note that it is still early in the process and difficult to predict specific timelines at this point," Flanigan said.
He didn't go into specifics about what BGL might want to do with the 360,000-square-foot building but said, "We feel that the general Durham commercial market has benefited from continued positive momentum, and The Chesterfield specifically will benefit further with the new institutional ownership and stabilization of the rest of the West Village."
Neither Parker nor BGL would discuss specific dollar figures for the record.
"From what I understand, we got outbid, but we still like that building and my partner still likes Durham," Parker said, referring to Wexford Science & Technology, a national developer of research parks. "We're looking at other opportunities in Durham. If it's not that building, maybe it's somewhere else."
Parker's initial plan several years ago was to turn the 64-year-old building into a residential development with ground-floor retail and restaurants. He secured financing for that but the then-owner of the building, Select Capital Management, was indicted for fraud by the SEC before a deal could be reached, and the feds seized the building.
Parker has been trying to repackage a deal with a new strategy: turning the building into primarily lab space for large research companies who'd rather be downtown than at RTP.
He says he'll continue to monitor the negotiations between BGL and Northland. He's not giving up on the Chesterfield yet.
Bill Kalkhof, president of Downtown Durham Inc., says BGL met with the city manager and other senior city officials a few months ago.
"We knew of their interest," Kalkhof said, adding, "We've been working with Josh for years on this, and one day we really hope he gains control of the building and develops it."