Duke's Role in Durham Development: A Chat with Scott Selig

We all know the Bull City has seen explosive growth in recent years.  We all know that Duke University is the elephant in Durham’s room.  But how much of a driver is Duke?  How is it involved — or not involved — in the city’s development?  A conversation with Scott Selig, Duke’s Associate VP of Capital Assets, gave me a behind-the-scenes look at the story.

Scott started at Duke in 2001 and brought his experience in the private developer and real estate world. His initial role was to redevelop Duke’s Central Campus. Seventeen years later, the redevelopment of Central Campus still hasn’t happened. (although we may hear about renewed efforts for central campus soon.) Over the years, Scott transitioned to a role focused on off-campus real estate, primarily in downtown Durham.

Duke’s Strategy Encourages, Doesn’t Dictate

Duke has a unique real estate strategy. The university doesn’t take the lead on any development project. Instead, it works with private developers to encourage new projects and offers to pre-lease space from those developers. Duke makes the projects less risky and better able to get financing. Simply put, Scott works to make projects more attractive both to the developers and the financiers.

“I firmly believe that a university is often not the best developer,” Scott said.

Other institutions are interested in the development in their own cities and towns. Scott mentioned that Yale is buying buildings in downtown New Haven, CT and other institutions have a similar strategy. However, Scott feels that approach might stifle the identity of the city. Yale is dictating how the city grows and develops.

Conversely, Duke empowers Durham to grow without owning real estate. This approach invites other ideas into the mix and allows the city to develop with a more organic feel, maintaining the city’s unique identity. Scott wants to avoid imposing a Duke vision of what the Durham identity should be.

“Our job is to bring up the tide, not pick individual boats,” he said. The approach makes sense, but is certainly unique. Even Scott admitted, “Right now, I don’t know of another university that’s following this model.”

Duke’s Presence in Durham

So far, Duke has been involved with more than half a dozen development projects in downtown Durham and currently leases over 2.5 million square feet of office and multi-use space. Scott has worked on projects like the American Tobacco Campus, West End/The Durham Food Co-op, 9th Street, One City Center, and the Durham Innovation District.

I asked Scott what project he was most proud of. He mentioned the Carmichael Building, across from Durham School of the Arts, that has 115,000 square feet of high-end tech space. Few people know the story of the Carmichael building, but it appears to be one of the seeds of Duke’s downtown strategy. It was the first time Duke worked with a private developer and pre-leased space within. Scott said, “It helped bring life sciences downtown in a big way and helps people realize that we are a downtown of more than just restaurants and entertainment.”

Duke had a large role in the American Tobacco Campus development

What’s in it for Duke?

When I asked Scott why Duke is committed to helping revitalize Durham, he gave me a few answers. First, Duke is trying to attract the best researchers, faculty, and staff in the world. They are competing with top global institutions. A thriving Durham makes Duke a more attractive employer. Duke is also able to point to opportunities for start-ups that spin off from the university. Today, there is top-notch lab and office space downtown. Companies like Element Genomics have spun off from the university and have been able to thrive in Durham.

“We can now go to a recruit at MIT or Stanford and say, ‘hey, why don’t you come to Duke, do all your research here and we’ll give you some space in our commercialization center?’ You want to spin out a company? Great, we want the best and brightest,” he said.

Smiling, Scott added, “I want my kids to move here from Boston and New York.” Scott’s children came up in the Durham Public School system, and are now grown and scattered. Scott wants Durham to be an inviting place so they might consider moving back.

Personally, I think this is a fantastic motivation. It strikes me as very “Durham.” There is a great emphasis on community here in the Bull City. Even top-level professionals at the largest employer in town want to help build that community and prioritize personal connections over pure profit.

The Carmichael Building was one of the first instances of Duke's real estate strategy downtown

Just the End of the Beginning

At one point, Scott sat back and said, “We are at the end of the beginning.” He said that we have redeveloped many of the spaces downtown that just a decade or two ago were boarded up, empty, and sad. It’s about new construction now. What can Durham become going forward?

Throughout this Durham renaissance, Duke has been involved in just about every major project. Scott seemed most excited to tell me about the new 555 Mangum development. Duke didn’t have any involvement. Private developer Northwood Ravin did it, without Duke. Durham has its own momentum now. It doesn’t need the university to be involved in every single deal anymore.

What’s Happening Now: Northgate

At the beginning of the year, Duke bought the old Macy’s location in Northgate Mall. It’s 186k square feet, approximately a fifth of the size of American Tobacco Campus. The plan is for the building to be an off-campus clinic, but also to spur other development in the area.

Scott pointed to downtown Durham as “the hottest market maybe in the Southeast,” and the university as “the biggest employer, 30,000 people.” Northgate, then, is “literally the third point of a triangle.”

Still to Do

Scott sees the biggest shortcoming as the fact that Durham hasn’t yet attracted company headquarters to the downtown area:

“I’m not talking about huge companies,” he said. “I want to get corporate headquarters here for one specific reason, because I want the schools to get better. Corporations that base in the city tend to donate both time and money – time being more important than money. We don’t yet have that core of involved businesses whose senior leadership says, ‘ok, we’re gonna make changes.’

“We’ve had great commercial success. We have had unbelievable community success in pride of ownership. Everybody’s proud of Durham. We’ve not had that same pride of ownership in the schools. I think it’s coming, but it hasn’t yet caught on.”

Looking Ahead

Scott noted that residential buildings are having their moment in Durham. Duke doesn’t have much reason to get involved in residential real estate, but there will be a need for more office space in the near future. “When [the deal money] comes back to offices or things that Duke can help with, we will be involved,” he said.

Aside from projects like Macy’s and a hope to bring small company headquarters downtown, what is next for Durham? Scott referred again to 555 Mangum and the fact that the city is growing without Duke’s help.
He smiled and said, “The nice thing is, I don’t know.”

Thanks so much to Scott Selig and Sharon Muzika Adams for making this conversation possible!

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