Indy Week: Shaw University Plans to Develop Its Campus to Bring In More Revenue and Grow
Updated: Mar 31
The historically Black college has been a part of the fabric of downtown Raleigh for more than 150 years. Plans to rezone and renovate its campus with the help of outside developers—first presented to the Planning Commission in mid-February—sparked protest from historic building preservationists in surrounding neighborhoods as well as some alumni.
While many Shaw graduates showed up in support of the rezoning during a February 14 meeting of the Planning Commission, others opposed it, arguing it would be bad for Raleigh residents, bad for historic neighborhoods, and bad for Shaw, especially if the plan is mismanaged by a board of trustees that has come under fire for unethical practices in the past.
“As a graduate, I am obviously concerned about how this rezoning can directly impact my alma mater … but as a resident, I also have some major concerns,” said Kesha Monk, a 1995 grad who collected 1,200 signatures on a petition opposing the rezoning. “Things like affordable housing, negative impact on the environment such as flooding, and of course the height requirements that are clearly defined in policy.”
Despite these protests, redevelopment may be the only way for Shaw to stabilize its finances and ultimately grow as a university. In an effort to get city approval, university leaders revised their rezoning request, adding protections for historic buildings and stricter height limits. On February 28, the Planning Commission voted 7-1 in favor of the rezoning, recommending it for approval by the city council, which will hear the case on April 4.
The rezoning battle
Shaw University’s proposed rezoning would allow the university to build up to 30 stories in the heart of campus, up to 20 stories south of Martin Luther King Jr. Boulevard, and up to 12 stories around Lenoir Street, on the outskirts of campus. That’s a big change from the previously allowed height of 12 stories in the heart of campus and three to five stories on the outskirts.
The bigger issue, however, is what will happen to six historic buildings the university owns. Four of the buildings—Estey Hall, Tupper Memorial Hall, Leonard Hall (or Leonard Medical School), and Tyler Hall (or Leonard Medical Hospital)—are well protected. These are on-campus buildings that the university has preserved for decades and will continue to preserve, per the requirements of the rezoning proposal.
While some are worried the university will tear these buildings down, “that’s not true at all,” says Kevin Sullivan, Shaw University’s vice president for real estate and strategic development. “In fact, we just got over $2 million in federal grants to help preserve them.”
Much of the outcry has come over the two other buildings, the Rogers-Bagley-Daniels-Pegues House and the Charles Frazier House, both of which the university plans to relocate. These two buildings are located north of Shaw’s main campus inside the Prince Hall Historic Overlay District, a residential neighborhood that prizes its historic status.
The existence of the historic district would usually prevent buildings within its borders from being moved, but the university is asking for an exception. And that’s nothing new. Shaw objected to the boundaries of the district back when it was first created in 2012, says Sullivan.
“Shaw is on record as opposing that its property come into the Prince Hall Historical Overlay District … [because] it limits our ability to redevelop our property,” Sullivan says. “And we’re not looking to tear [these houses] down. We just want to move them. But that’s apparently not good enough for some folks.”
The “folks” in question are members of the Raleigh Historic Development Commission (RHDC), which voted 9-2 against Shaw’s proposed rezoning. Late in its discussions with Shaw, the RHDC introduced a list of conditions they wanted the university to meet, including expanding the historic district to include Estey Hall. Shaw said no.
“Essentially, they really didn’t give Shaw many options,” Sullivan says. “With all due respect to the Raleigh Historic Development Commission, their mission is to preserve, and so they don’t like anything that changes that. Shaw asking to be removed from a district it never wanted to be in, in the first place, is the antithesis of what they stand for.”
At the heart of this conflict is the fact that Shaw wants to grow, while others want it to stay the same. If you ask Sullivan, he’ll tell you that this rezoning is simply the next step in the university’s 157-year evolution. College campuses, by their nature, continually change. Many alumni agree.
“In Estey Hall, in the corridor when you walk in … there is an elongated portrait of students from 1912. Beyond it, there are two landscaped buildings,” said the Rev. Lamont Johnson, a Shaw divinity professor and 2008 graduate, during the February 14 Planning Commission meeting.
“Before the rest of the buildings came, the students and staff were there. Whatever the transition is, it is about our students. It is my hope that you will vote favorably so that we can continue educating and empowering predominantly, but not exclusively, African American students.”
Keeping the university (financially) alive
Shaw’s redevelopment project started as a way to avert the financial crisis the university was facing in 2018, when it ended the year with a budget deficit of $4.4 million, according to tax returns. It was the second year in a row the university ran a multimillion-dollar budget deficit, and it was in severe financial straits.
In 2019, experts advised Shaw to sell some of the land outside of its core campus, where just half an acre was valued at close to $500,000. Since then, property values have climbed even more, thanks to the college’s location at the edge of downtown Raleigh. But at the same time, Shaw’s finances have recovered somewhat, due in part to the federal government’s forgiveness of $22 million of debt in 2021, part of a COVID relief package, the Triangle Business Journal reported.
Today, university leaders want to use the value of Shaw’s land to further improve its financial position. If the university’s rezoning request gets final approval from the city council, Shaw will move forward with its plan to lease land to developers, who can then build on or near the university’s campus.
The strategy is one that colleges across the nation are using, including the renowned HBCU Howard University in Washington, DC. By leasing land to developers, the college gets a steady stream of money that is not tied to tuition. Developers make regular rent payments, and if interest rates go down and they refinance, the university gets a portion of that money too.
“Every time there’s a cash flow … Shaw gets a piece of it,” Sullivan says. “So there’s constant cash flow coming back to university because the need is constant. It’s not once, it’s over time.”
Shaw could then use the money to build new on-campus facilities or grow the university in other ways, like hiring new faculty. At Howard, multifamily housing near campus helped fund a new research center and STEM facility, according to a spokeswoman for Hayat Brown, the advisory firm that worked with Howard and is now working with Shaw.
Ultimately, development of the university’s campus is necessary “for Shaw University to continue to do what it has been dedicated to do[ing] for 157 years,” said President Paulette Dillard during the February 28 Planning Commission meeting. “This opportunity for development of the campus takes the pressure off a university that is tuition-dependent.”
People who oppose Shaw’s rezoning proposal have said it risks destroying local Black history. They’ve said they support Shaw and in the next breath argued against the university’s plans. But the bottom line is, if Shaw doesn’t change, North Carolina’s oldest HBCU could close for good. And the city would lose a place that educates, uplifts, and supports today’s Black citizens.
Return on investment
Shaw’s redevelopment plan isn’t just about boosting its budget. Partnering with private developers will also allow Shaw to make much-needed updates to an aging campus, Sullivan says. And those updates—things like a new life sciences center or student residential hall—will make the university more attractive to students and faculty in the long run.
“The return [on investment] isn’t just financial,” Sullivan says. “It’s the amenities. The return is bringing energy and people saying, ‘Hey, there’s some really cool stuff happening at Shaw.’”
Essentially, instead of raising millions of dollars to renovate or construct new buildings that are needed on campus, developers pay for the construction themselves. Shaw could then ask for free or discounted access to the new facilities in exchange for deferred rent.
One popular construction model for projects like this is a mixed-use building, which has amenities like grocery stores, restaurants, or shops on the ground floor and housing on the upper floors. Sullivan talks about potentially building a new urgent care facility.
Shaw already has a small on-campus clinic, but by partnering with developers, “we could have access to a much more comprehensive urgent care facility,” Sullivan says. “Shaw doesn’t have to pay for that amenity, but it helps our students. And then maybe it serves the neighborhood as well.”
Small private universities like Shaw especially benefit from this model, since they are entirely dependent on tuition dollars and don’t receive state money, according to Sullivan. With smaller graduating classes, alumni donations might also be more scarce than at larger private universities.
“Our tuition covers the heat and the lights and the salaries, but we would have to raise [it] tremendously in order to start building brand-new buildings,” says Sullivan.
“A lot of schools, they do it through fundraising, and fundraising is part of it, but it’s not going to change the dial for us in the near future. We’ve got this real estate … which we already own. All we’re trying to do at this point is figure out how we can utilize it in the best fashion in order to get a return [on investment].”
Since Shaw owns the land, it has the final say in what is built. But construction plans are shaped by months of complex negotiations between developers, who want to recoup their investment and ideally make a profit, and the university, which wants to build things that benefit the school and its students.
At the moment, the university hasn’t shared any solid plans for what might be built on Shaw’s campus. Still, Shaw has outlined certain goals. “Key campus needs” include a new library, student center, and academic hall, according to the university’s website. Developers have shown interest in building hotels, apartments, mixed-use buildings, and even athletic or entertainment facilities, says Sullivan.
Ultimately, it comes down to what they can agree on. If the rezoning is approved by city council, the university will then start creating its Campus Master Plan, with input from students, staff, alumni, and community members, according to its website. The plan will show, in detail, what the university plans to do with its land.
Follow Staff Writer Jasmine Gallup on Twitter or send an email to email@example.com. This article was oringally published in Indy Week.