Behind the deal: How Wake Forest's transformative $150M project came together
Starting later this year, northwest Winston-Salem will get a makeover thanks to Wake Forest University.
A rendering shows the plan for the first phase of The Grounds, a mixed-use development near Wake Forest University by Front Street Capital and Carter.
Front Street Capital / Carter
Starting later this year, northwest Winston-Salem will get a makeover thanks to Wake Forest University.
As Triad Business Journal reported on Sept. 10, a $150 million mixed-use development is poised to emerge on the 100 acres bounded by Whitaker Park, Wake Forest and the Boston-Thurmond neighborhood. It's a setting where, for now, Allegacy Federal Credit Union, the Lawrence Joel Veterans Memorial Coliseum, David Couch Ballpark and the Winston-Salem Fairgrounds look out of place among a sea of cracked and empty parkings lots.
Wake Forest, the owner of that land, enlisted Winston-Salem’s Front Street Capital and Atlanta real estate development firm Carter, in partnership with the city, to create The Grounds. Plans for the development have been in full swing for two years, but the Wake Forest-championed project originated more than a decade ago. And while The Grounds' blueprint has been coming to fruition, Wake Forest has been mapping out a concurrent and significant capital improvement worth several hundred million dollars to its Reynolda campus.
The first phase of The Grounds will bring together four major components: infrastructure and greenways to make the area pedestrian-friendly; a 100,000-square-foot office building for the university; a 240-unit residential community; and a 40,000-square-foot retail village designed for local restaurants and shops. A later part of Phase 1 will include a hospitality component with potential for a hotel or condo hotel.
“By creating a dynamic place that blends residential, commercial, athletic stadiums and welcoming public gathering spaces, we are reimagining the university’s role as a community partner,” said Wake Forest President Susan Wente.
The area already hosts more than 260 event days per year with more than 750,000 patrons at events like Wake Forest sports, the Carolina Classic Fair, Winston-Salem Thunderbirds games, the ATP Winston-Salem Open and other concerts and shows.
The goal now is for this area to be “busy 365 days a year, so that non-game-days are lively for students, faculty, staff and for the community,” said Coleman Team, president and managing partner of Front Street.
A map shows where The Grounds, a new mixed-use development, will offer its retail village, office building and multifamily community among Wake Forest University's sporting venues.
Front Street Capital / Carter
The Grounds by the numbers
$150 million investment
100 acres
40,000-square-foot retail village
240-unit residential community
100,000-square-foot office building for Wake Forest University
$35 million grant allocated by North Carolina for infrastructure work
After breaking ground in December, Front Street and Carter expect to complete the infrastructure work, office building and retail village by the end of summer 2026, with the multifamily housing community coming a year later.
The developers have selected national architecture firm Nelson to serve as The Grounds’ master planner and architect. Nelson, founded in 1977 and headquartered in Minneapolis with 15 other offices around the country, has a track record of designing mixed-use projects, including Atlanta's The Battery, the country's first mixed-use development anchored by a professional sports stadium.
How the deal came together
Adam Parker, vice president at Carter, said work on The Grounds has been going on for more than two years, when the university put out a call for proposals.
Parker, a Winston-Salem native, and Team, a Lexington native, knew each other from their days as classmates at Wake Forest. Getting their two companies together on a response only made more sense: Carter’s background is in mixed-use, master-planned projects near athletic stadiums, while Front Street Capital is a prominent developer in the city and state, Parker noted. The two firms were formally awarded the project last August.
Adam Parker, Vice President at Carter
Coleman Team, president and managing partner of Front Street Capital
But the history of this project goes even further back.
Nearly two decades ago, Wake Forest University said it would redevelop 67 acres along Deacon Boulevard in a similar mixed-used project. At the time – February 2008 – the university had already invested more $25 million, mostly accruing 50 acres with plans to buy 17 more.
Several restaurants and former music venues in the area, now owned by the university, had been demolished in August 2010. But in the aftermath of The Great Recession, Wake Forest said it was waiting for the economy to improve to begin new construction.
New construction never began as the university focused its efforts on $625 million worth of capital projects on campus.
Today, Wake Forest owns 178 acres in the area, including its athletic facilities.
Parker credits Wake Forest’s President Susan Wente, Athletics Director John Currie and Chief Financial Officer Jacqueline Travisano for pushing this project.
“This part of town hasn’t seen very much development since ... R.J. Reynolds left what is now Whitaker Park,” he said. “To make a move like this, to put this land into use, to attract private investment, takes bold and visionary leadership on Wake Forest’s part.”
And the university has said that the timing was right to restart the project because it was able to attract a strong development team.
Carter
Headquarters: Atlanta, Georgia
Founded: 1958
Employees: 21 full-time
Experience: More than $1 billion in active development, with ongoing and completed mixed-use projects like The Banks (Cincinnati), Summerhill (Atlanta), Atlantic Station (Atlanta), Foundry Lofts (Ann Arbor, Michigan), Lake Wire (Lakeland, Florida) and City Springs (Sandy Springs, Georgia)
Front Street Capital
Headquarters: Winston-Salem, North Carolina
Founded: 1984
Employees: 16 full-time
Experience: More than $900 million in assets, including projects like Bailey South (Winston-Salem), 400 Bellemeade (Greensboro), Union Cross Industrial Center (Winston-Salem) and land assemblage of I-85 Commercial Center (Davidson County) and Lexington Industrial Park (Lexington)
Spurring “hundreds of millions” in new taxable development
The Grounds could attract several hundred million dollars in new taxable development on land that is not currently taxable, as it is owned by the nonprofit university, Team told the Winston-Salem City Council in early 2024.
Team told TBJ that the vertical construction that will be completed and owned by Front Street and Carter will be taxable real estate. Wake Forest will continue to own the land and will lease it to the developers in a long-term ground lease agreement, he explained. Front Street and Carter deferred to the university on exactly how long the lease will be but said it would be decades. The university did not respond by deadline to questions about the expected development structure.
“The fact that this is a long-term ground lease signifies the partnership between Carter, Front Street and Wake Forest. When we go to build, it will be done in conjunction with the university, whereas, traditionally, when Carter or Front Street would buy dirt, we’d build whatever we want,” Parker explained.
Except for the office building that is being built for Wake Forest, there will be separate ownership groups by Carter and Front Street for the project’s different components, Team said.
Team confirmed that Front Street and Carter will finance the project through debt and equity, as well as the $35 million grant from the state. He added that there will be a “unique funding source” for the office building but did not disclose more information.
“This is a unique combination of financing in a capital market climate where it’s really hard to get deals financed,” Parker said.
Team added that Wake Forest will also benefit financially from The Grounds as it will receive ongoing lease payments on the land that has not previously produced income.
And it isn’t just the financial aspect that highlights the public-private partnership. For Team and Parker, it’s about the potential social impact it will have on the community.
“For something like this to be successful, it has to be a Winston-Salem project, not just a Wake Forest project,” Team said.
Unlocking the Wake Forest campus
Although it’s not a Wake Forest project, The Grounds is set to complement and aid the redevelopment that the university is planning on its main campus.
A new near-term campus space plan aims to create 35% more academic space and 50% more student gathering and dining space, including the addition of 60 more offices and 20 more specialized teaching and research spaces.
“Three years of careful planning and research have positioned us to launch the most significant renewal of the Reynolda Campus core academic spaces since the university moved to Winston-Salem in 1956,” President Susan Wente wrote in a Sept. 10 letter to the campus community.
Wake Forest President Susan R. Wente poses in her office in Reynolda Hall on Thursday, August 26, 2021.
Launching this fall, the near-term campus space plan will occur concurrently with The Grounds and take shape over the next three to five years, the university wrote on its planning website.
Wente wrote that the university anticipates investing “hundreds of millions of dollars over the next seven years." It has invested more than $2.5 million over the last two summers in refreshing 43 classrooms and learning spaces, CFO Jacqueline Travisano said in a university announcement.
With 3.68 million gross square feet, Wake Forest's campus currently comprises of 1.3 million academic square feet, 1.2 million of support and administrative square feet (including its athletic facilities) and 1.09 million on-campus residential square feet.
The Grounds will “support” the university’s efforts to create more academic and student space, Wente wrote. In part, this is because Wake Forest will move several non-student-facing departments to the new office building: advancement, marketing and communications, finance, human resources, information systems and legal. Wake Forest did not respond to questions about how many employees work in those departments.
Work on campus will begin this winter, as Wake Forest moves its offices of advancement and marketing and communications to the University Corporate Center. Off-campus, this 500,000-square-foot office building on Reynolds Boulevard was donated to the university by R.J. Reynolds in 1987. Along with companies Pepsi and Alight, the UCC is home to Wake Forest’s information systems and finance departments and radio station WFDD.
This move frees up Alumni Hall to be turned into an academic building, where the departments of philosophy, education and computer science and the entrepreneurship program will be housed, according to a university announcement. Travisano told TBJ that a contractor has not been selected for the Alumni Hall renovations; in years past, Blum Construction has completed significant work for the university.
Alumni Hall could be ready as early as summer 2026. Wake Forest said it would only move academic departments during summer or winter breaks to avoid disruptions; these units could move into Alumni Hall as early as summer 2026.
The university is also proposing to turn its student center into an academic space, build a new student center and demolish academic building Tribble Hall for new construction.
Wake Forest will also begin new campus master plan work this fall, as its last master plan was updated prior to the pandemic in 2019 by architectural firm Ayers Saint Gross.
Still unknown are plans and timing for the 17 acres Wake Forest purchased for $10 million from the Winston-Salem First Church on Polo Road in 2019. The university did not respond to questions about that land, but its 2019 campus master plan suggests the property be used for upperclassmen housing, non-student-facing administrative services or athletics and recreation.
By: Lillian Johnson – Reporter, Triad Business Journal