Small Businesses Booted for Delayed Development

As developers snag property in DTR, small businesses are being displaced. 

Let us take you back in time. … It’s 2022, and Tidal Real Estate Partners just snatched up a Warehouse District plot in one of the then-most expensive real estate deals in the city. The 1.3-acre corner property at South Harrington and West Davie streets (think the now-relocated Raleigh Founded, Circa 1888 dive, etc.), is zoned for 40 stories, and the NY-based firm promises big plans for later the same year. 

Hype built, businesses uprooted—and for what? Fast-forward, and the buildings sit untouched. The only difference: a mostly vacant block, rumors, renderings and unanswered questions. Not the first or last developer to overcommit and underdeliver, it’s becoming a common phenomenon around Raleigh. 

Nearby, Goodnights Comedy Club’s famed move was spurred by the purchase and demolition of its former digs on Morgan Street. The lot still sits empty, and although property owner/real estate firm Childress Klein maintains the original plans for a multifamily development are still stable, the project is on pause thanks to rampant construction costs. 

“Cost has moderated a bit, but recent urban multifamily deliveries have hurt occupancies and depressed rental rates,” Childress Klein Partner Randy Bates tells RM. “We will look to start construction as soon as the supply issues turn around.” 

In an ideal world for developers, other local apartment buildings will fill, rent prices will rise and construction costs will fall. But, Bates says, they can’t predict when that will happen—although they hope it’s this year.

Despite receiving the boot, Brad Grossman, COO of Helium Comedy—the operator behind Goodnights—told RM although displacement was difficult, the end result was favorable, and the developers were supportive in helping the club find the best path forward. “Business has been positive, and it allowed us to reinvent our space,” he affirms.

Adding to the list, Legends’ OG home—where the nightclub currently resides before moving down the street—was purchased by CityPlat in 2020. Now on a long-term pause, the project initially called for a 30-story mixed-use tower. In the interim, insider sources tell RM that new food and beverage concepts are likely headed to the Warehouse District site after Legends moves later this year.

Instead of waiting for the inevitable, MMA gym Gracie Raleigh chose to uproot shortly after Tidal secured the Warehouse District plot in 2022. While the developer didn’t outright force out businesses—Circa 1888 still occupies the Davie Street dead end—they raised rent and shifted tenants to month-to-month leases amid uncertainty around construction plans. 

“I didn’t feel safe with the month-to-month terms because it can take three or four months just to find a space, and then another six to go through permitting,” Gracie owner Brandon Garner tells RM. The construction timeline was murky then—and years later, little clarity has emerged (Tidal did not respond to our request for comment).

Just a few blocks away, the beloved Berkeley Cafe served up sandwiches and live music in its West Martin Street digs for over 40 years, until the One Nash Square condominium project prompted the restaurant to revise plans in late 2023. Now, Berkeley sits close by on South Dawson—while the original site sits untouched and Berkeley’s OG three-story building still stands. Laura Strelau, a broker with Urban Triangle Realty, says the condo project is set to break ground at the end of this year. 

For businesses, new ownership brings uncertainty at best, panic at worst. For developers, the math has to work—and until it does, some of Raleigh’s most valuable blocks sit frozen in limbo, all cracked concrete, empty storefronts and faded promises.

Despite this, most businesses don’t hold grudges. “This is a natural cycle of growth, and developers aren’t to blame for the demise of small businesses or anything,” emphasizes Garner. But for now, in some of Raleigh’s fastest-growing corridors, the future remains stuck in demo mode.

*Tidal did not respond to a request to comment.

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