By Todd Cohen
The A.J. Fletcher Foundation in Raleigh has purchased the 16-acre American Tobacco complex in downtown Durham for $4.75 million.
The $50 million-asset foundation will lease the property for at least 50 years to American Campus, a unit of Capitol Broadcasting Co. in Raleigh that is developing one million square feet of former factory space on the complex for retail, office and residential uses.
To finance the purchase, the foundation sold other fixed-income assets.
“In addition to furthering our recent interest in preservation and urban revitalization, American Tobacco will provide us with a better return than we had had previously,” says Tom McGuire, the foundation’s executive director.
The foundation, which is closely tied to Capitol Broadcasting and publishes the Philanthropy Journal, purchased the property from ABD Associates Limited Partnership, an investment group that bought it in 1988 from American Tobacco Co., which had closed the plant a year earlier.
The foundation now has invested more than $9 million in recent years in projects in downtown Durham and Raleigh.
Investments in downtown Raleigh include:
* $2 million contributed help build the $14 million Fletcher Opera Theater, part of the BTI Center for the Performing Arts.
* $1.3 million to help buy and renovate the 1874 Briggs Hardware building on Fayetteville Street Mall, a four-story building on the National Register of Historic Places. The building houses the foundation and several other nonprofits and generates roughly $60,000 a year in revenue for the foundation.
* $1.1 million to buy and renovate the former Boylan-Pearce department-store buildng, adjacent to the Briggs Building. When completed later this year, the Boylan-Pearce building will be used for office, retail and possibly institutional uses.
The foundation suspended its regular grantmaking cycles last year in the face of its downtown investments and commitment to contribute $10 million over 10 years to the N.C. School of the Arts in Winston-Salem.
Half of that contribution will support the school’s operation of the A.J. Fletcher Opera Institute, formerly the National Opera Company operated by the foundation, and the other half will create an endowment.
In addition to operating the institute, the School of the Arts agreed to contribute $5 million over 10 years to its operation, and another $5 million to its endowment.
The foundation’s cost of operating the opera company in recent years had totaled $800,000 to $1 million a year.
McGuire says the foundation, which made roughly $2 million a year in discretionary grants before suspending its funding cycles, expects to begin accepting grant applications again this fall.
Those grants likely will focus on — but not be limited to – helping nonprofits strengthen their internal operations and development.
The Fletcher Foundation owns more than 83 percent of Capitol Holding Co., the privately-held parent of Capitol Broadcasting, which owns WRAL-TV, the Durham Bulls and more than a dozen other communications and sports subsidiaries.
Jim Goodmon, president and CEO of Capitol Broadcasting, also is president of the Fletcher Foundation. Both entities were created by his grandfather, A.J. Fletcher.