WINSTON SALEM DOWNTOWN CONDOS

He was just an intern at R.J. Reynolds Tobacco two years ago when he decided an old soon-to-be-developed warehouse on the eastern edge of downtown would be his family's new home. He bought into the Piedmont Leaf Lofts before he even got a job offer from R.J. Reynolds or consulted with his wife, Chevara Orrin.

Luckily for him, he got a marketing position at Reynolds and won Orrin's approval. The couple moved from their five-bedroom home in suburban Atlanta into the Leaf Lofts with their 13-year-old son about two months ago, and Orrin couldn't be happier.

"Every day, I sit around at the office and think about how much I can't wait to get home," says Orrin, an athletics and advancement fundraiser at Winston-Salem State University who also owns an art gallery at the Piedmont Leaf Lofts. "The brick walls, the wood floors - I just love spending time there."

She isn't the only one. The building, which welcomed its first tenants this spring, has 53 condominiums, and all are spoken for. What's more, the Piedmont Leaf Lofts are just one of many new residential developments dotting the city.

According to the Downtown Winston-Salem Partnership, Inc. (DWSP), the number of downtown housing units has grown from about 400 in 2000 to more than 700 units this year. Anyone who has spent time downtown in the past year knows more are on the way. DWSP figures show 209 units were under construction as of September, and another 387 were on the drawing board.

"About five years ago, there was still speculation as to whether housing would work at all downtown," says Jason Thiel, president of the DWSP. "Now, it's grown to the point where there's a legitimate housing submarket in the city. We're absorbing 150 to 200 units a year, and I expect that to continue."

Ideal circumstances

The Nissen Building was the bellwether for the boom. Renovated into a rental apartment building last year, the former high-rise office complex filled up quickly, proving there was a market for city living in Winston-Salem.

Meanwhile, the city had plenty of capacity. Not only did a number of old, abandoned warehouses, factory buildings and office buildings beg for renovation, there was also plenty of land. Thomas H. Fowler of Fowler Investment owns the six acres of real estate on Fourth Street between Broad Street and Brookstown Avenue where the first phase of West End Village now stands.

His father assembled the property in the late 1940s for his car dealership, Modern Chevrolet, which has since moved to University Parkway.

"We had known for a number of years that we wanted to do something with the property," Fowler says. "When the proposed Unity Place deal came and went, then we looked for something else to do."

Unity Place was a proposed $60 million project that included a new headquarters for Krispy Kreme Doughnuts Inc., a multiplex movie theater, restaurants, and townhouses. The deal fell through last year, when Krispy Kreme ran into financial difficulties and the N.C. School of the Arts faced questions from the state auditor over its role in the proposed project.

Fowler quickly attracted Charlotte-based residential development firm Boulevard Centro to help turn the land into a planned neighborhood. West End Village currently consists of a building at Fourth and Broad with fifty units and a complex of three three-story units. Each building was at least half sold before construction began in the summer of 2005.

"We'll let market drive the development and meet the demand that's there," says Fowler. "I know there's an opinion that there's potential for much more residential growth downtown. We have a second phase already designed and ready for presales. It has more than fifty additional units. And we may be a year out from starting a third phase."

Chadwick Davis, president of East Coast Capital, Inc., is developing the Gateway residential project on forty-six acres near Old Salem. He says that in an average U.S. city, about three percent of the population lives downtown.

"There are 1.2 million people in the Triad," says Davis. "Even by a conservative estimate, we shouldn't be close to satisfying that three percent average here." Other developers share his and Fowler's optimism. There's plenty of demand for downtown housing right now, they say, and the promise of much more.

Choosing the downtown lifestyle

Even though its tenants rent, The Nissen Building gave developers an idea of at least one demographic group who might buy downtown residential properties.

Luissa Alba moved into The Nissen Building in February. The thirty-year-old South Florida native relocated to Winston-Salem after getting a job with The Woodbine Agency, an advertising firm on nearby Cherry Street. Once she got the job, she researched apartments on the Web and went to see several prospects in the suburbs before settling on The Nissen.

"I lived in New York, and having everything close by is wonderful," she says. "I also knew The Nissen had a lot of young professionals who were moving in. Most people who are there are from out of state. They're from all over the place."

The observation gives credence to author Richard Florida's assertion in his 2002 book, The Rise of the Creative Class, that an emerging social class, freed by technology, is no longer tethered to corporate headquarters. They can telecommute and live wherever they please.

Davis says many of the units in the Gateway building have been claimed by telecommuters. One of the first questions he fields is about wireless Internet access. "They like technology because it allows them to work from home, but I think it also causes them to feel disconnected from the world around them," says Davis. "They want to be around other people, and they embrace the idea of diversity in their neighborhood."

They find plenty of diversity downtown. In fact, it's easier to say who isn't moving there (families with small children) than pinpointing who is. Orrin lists her neighbors in the Piedmont Leaf Lofts and, in the process, gives a good snapshot of the amalgam of people.

"We have three white, gay male couples and one other African-American couple," she says. "We have four visual artists and two attorneys. The age range in the building goes from the twenties on up."

"What they all have in common is they're making a lifestyle choice," Davis says. "When you're buying into one of these projects, it's a psychological thing. You're buying into the proximity to other people and the amenities around the property, whether they're here today or tomorrow."

Relative to larger cities such as Charlotte, few amenities exist in downtown Winston-Salem today. How many arrive in the next couple years may shape the way Winston-Salem will look in a decade.

Domino effect

As much as Orrin loves her space in the Piedmont Leaf Lofts, she is dissatisfied with what surrounds it. There isn't much. Her main issue is the neighborhood's lack of stores and services that factor into everyday life.

"For a dry cleaner, I still go all the way out on University, because I haven't been able to find one nearby," she says. "And for the grocery store, we get on the highway to get to the Harris Teeter on Knollwood."

A grocery store is the hot button. Being able to walk to places is a key selling point for downtown living, and a grocery store is the first neighborhood amenity many prospective buyers ask about. They're out of luck for now.

"But grocery stores are trying to figure out the urban template," insists Davis. "The problem is it's a volume business, and it's tougher for them to get the volume they need within that model."

There are other issues. Alba plans to buy her first home within the next six months and says she probably won't stay downtown. Most downtown properties are priced from $180,000 up, and she can't afford it.

"Building material costs have really increased in the last year or two, which makes it tough to put affordable housing in," says Greg White, a partner and vice president at Leonard Ryden Burr Real Estate. "You can do it, but people are going to sacrifice in the size of the unit they get. If they want $100,000 condos, will they be satisfied with five hundred or six hundred square feet?"

Another issue is entertainment. Alba says downtown is moving in the right direction, but not fast enough.

"The other day I had just come back from Atlanta on business," she says. "It was a gorgeous day, and I really wanted to sit outside and listen to live music. I was willing to get in my car and drive, but there was still nowhere to go. The number of activities for young professionals is very limited, and if you miss them you're on your own."

Alba's argument is a catch-22 for developers. Grocery stores, dry cleaners, and pharmacies follow residential growth. Yet, prospective residents hesitate to move anywhere without those businesses already there.

Winston-Salem, however, is incredibly convenient by car. Orrin may not be able to walk to a grocery store, but she admits that getting to Harris Teeter on Knollwood is not a great hassle.

"In this city, it's easier to get in a car and zoom out to Hanes Mall Boulevard and back than hiking it up to the Arts District," says Chris Chapman, president of the Chapman Company, which is developing the Trader's Row Condominium project on Trade Street between Fifth and Sixth streets.

In the meantime, ongoing residential growth will make downtown harder to ignore for retailers and service providers. From his work in Charlotte, David Furman, the principal at Boulevard Centro, has already seen what could happen after that.

"I think in ten years, all the derelict sites close to downtown will evolve into various components that will make up a vibrant center city," Furman says.

"Downtown is like the living room of the community, where you have things like special events and festivals. The livelier and more stable the downtown, the more it attracts businesses and people."

By Chris Gigley

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