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Investigation into Liberty Warehouse resumes

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Eight months have passed since the roof of the historic Liberty Warehouse partially collapsed during a heavy rain last spring. But this week, when city planners inspect the property, located on the edge of Durham Central Park, they'll still see mold creeping up some walls and a tarp-covered hole in the roof of the 1940s-era building, which used to house tobacco auctions.

Shortly after the collapse, Planning Director Steve Medlin began a "demolition by neglect" investigation, but suspended it to allow Greenfire Development, which owns the building, to make the necessary repairs by the end of last year.

Greenfire, which has acquired more than 25 downtown properties in the past decade, has spent $105,000 on repairs since the incident, a spokesman said. But the work isn't done.

"To my knowledge, they did not do any repairs to the portion of the building where the roof collapsed," Medlin said.

Medlin has now resumed the investigation into whether the owners neglected the building to the point that its roof gave way. In the coming week, he is expected to set a new deadline for Greenfire to complete repairs on the warehouse, which comprises two connected buildings at 611 and 613 Rigsbee Ave. If Greenfire fails to make repairs by the deadline, the company could face penalties for neglect of the 250,000-square-foot warehouse, which is valued at about $2 million, according to county tax records.

Greenfire representatives say a rainwater drainage system failed when the roof caved in during the storm last May. Several former tenants of the warehouse say they reported water leaks and rotting and damaged beams long before the incident, and that Greenfire failed to act. After the collapse and subsequent inspections, the city condemned the building, displacing several artists and nonprofit arts groups.

While the community awaits the restoration of the warehouse, it is largely empty. The façade of the building facing Foster Street has been stripped down to a pale wash of paint, and wide windows show off sprawling, vacant spaces, most still unusable.

"Everything at this point isn't permanently fixed," said Shelley McPhatter of BridgePoint Construction Services, one of Greenfire's contractors. "But we have a temporary solution with an engineer giving us more permanent solutions."

The contractor and other representatives for Greenfire spoke at a recent public meeting, where city planners gathered evidence of damage to the designated city landmark.

At the meeting, former tenants of the Liberty Warehouse and preservationists were among those pushing for more timely repairs.

Bob Ashley, executive director of Preservation Durham, said the organization appreciated the work the company had done on the property, but that "the deterioration has in fact, I think, had a detrimental effect in threatening the historic landmark."

Although many of the artists and businesses relocated near downtown, the absence of those tenants next to Durham Central Park contributes to the "loss of a vibrant fabric of craftspeople," said Andrew Preiss, a metal sculptor who rented space there. "The fact that Greenfire chose to disregard repeated requests to fix the building has now created a wasteland downtown in what used to be a vibrant and exciting area," he told city officials.

The planners will compile the public input and other evidence into a report for Medlin, who will decide by Feb. 15 whether the property meets the definition of demolition by neglect, as outlined in a city ordinance. If it does meet the definition, Greenfire would get a new deadline to make repairs. If the company misses the new deadline, it could face civil penalties of $500 a day. The city also could elect to make the repairs to save the structure and place a lien on the property for the cost. If found at fault, Greenfire could appeal.

The city would take civil action only if the company misses those new deadlines, Medlin said. The goal isn't to fine Greenfire, he said—it's just to get the building fixed.

Economically, it doesn't make sense to replace the two-acre roof for more than $1 million when the company has long-term plans to totally redevelop the site, said Greenfire Managing Partner Paul Smith.

So the company has applied to Durham's Historic Preservation Commission for permission to engineer a work-around—modifying the flow of rainwater around the hole in the roof to avoid further damage, but leaving the hole and deferring additional roof repairs until the redevelopment is under way, Smith said. The developers need the commission's approval because Liberty Warehouse is a historic landmark. Smith said the hearing is set for March.

Smith said he's currently working on the long-term plans for Liberty with input from local leaders, business people and the stewards of Durham Central Park. Greenfire has already hosted one meeting with stakeholders to envision the future of the buildings.

But if Medlin rules that the building is being neglected, Greenfire could be forced to permanently repair the hole instead of erecting a temporary solution until they're ready to rebuild the whole property.

Another alternative, Medlin said, is that Greenfire could apply to have Liberty Warehouse's designation as a historic landmark removed. The company would no longer be eligible for any tax credits for owning a historic property—but the property also would no longer be subject to the same regulations and scrutiny.

The prolonged troubles at Liberty Warehouse have stirred broader questions and criticism of how Greenfire manages its historic buildings, most of which were dilapidated when the company bought them.

The publicity has also prompted scrutiny of Greenfire's large-scale redevelopment plans: They include the renovation of the former SunTrust building into a boutique hotel, the redevelopment of an adjacent Main Street site that used to house a Woolworth's store, and a newly announced venture to build 88 apartments on an acre just north of the American Tobacco campus. In recent years, the company has completed smaller redevelopment projects, including the mixed-use Kress building and Baldwin Lofts downtown.

Smith said he is eager to move forward on the company's other high-profile sites, particularly the former Woolworth's department store at Main and Parrish streets. As for the former SunTrust tower, a defining characteristic of the city's skyline, Smith says Greenfire is still planning a boutique hotel for the site.

The company filed construction permits for the hotel last summer, meeting a deadline that made Greenfire eligible for $4.2 million in public incentives and financing. Greenfire must complete construction on the hotel by July 2013 for the company to remain eligible for the incentives, said Kevin Dick, director of Durham's Office of Economic and Workforce Development. To his knowledge, Greenfire hasn't started any construction on the project since filing for initial permits last July, Dick said.

Greenfire is developing partnerships for both the hotel and the former Woolworth's site, Smith said. He declined to say whether the company is entertaining offers to sell the SunTrust building, but said Greenfire has always been open to discussions on the sale of its properties, especially the few holdings that aren't critical to the company's "overarching strategy."

The company sold one of its buildings near historic Five Points last year, a property at 108 Morris St. slated to become a restaurant.

"Obviously, we don't want to hold up any possible development opportunities downtown," Smith said.

Intern Tiara M. Hodges contributed to this report.

Disclosure: The Independent Weekly rents space at the Liberty Warehouse for newspaper storage.

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