At 505 W. Chapel Hill St. in Durham, overgrown grass splits cements, graffiti clings to signs, rust covers an outdoor staircase, and broken glass splinters windows.

The community has come to know the old Durham Police headquarters as an “eye sore.”

But after years of the prime property sitting vacant and slipping into disrepair, Durham City Council chose The Peebles Corporation to transform the old building and the more than four acres it sits on.

“I see the beauty it’s going to be after it’s finished,” James Montague, president and CEO of F& International Development said. “It’s going to be something that Durham needs.”

Montague is working with the Peebles Corporation to create shopping, lab spaces around the building, an art museum, offices and incubator space, which will be focused on women and minority entrepreneurs.

An integral part of the project is affordable housing. Developers allocated at least 92 units and 26 condos to be sold for between 30% and 60% of Durham’s area median income (AMI).

According to the U.S. Department of Housing and Urban Development, in 2024 30% of AMI for a single person in Durham was $22,250; for a household of four it was $31,750.

“I think affordable housing is important, not just in this location but nationally,” Montague said. “If we don’t build, who’s going to build it?”

Donahue Peebles III, executive vice president at the Peebles Corporation tells WRAL:

“It’s very rare that you get that opportunity to develop affordable housing in a high cost submarket with a high cost construction type. Very often, affordable housing is one or two stories, or sometimes it’s garden style and surface parks. Here we get a chance to take affordable housing, mix it alongside ultra Class A rentals and create a diverse community, from an income perspective. To me, that’s a really unique opportunity, and that aligns neatly with our corporate mission. We think that your zip code is a big determinant of your ultimate socioeconomic outcome. Putting affordable housing in high-resource zip codes has got to be a priority for developers across the country.”

Affordable housing is something community groups have been advocating for for the several years.

“I see this as an affordable housing windfall. I see this as a windfall for housing as a human right,” said Ann Rebeck, the lead coordinator for the Durham People’s Alliance.

“Downtown is supposed to be representative of everyone, but there’s not affordable housing for everyone,” said Ketty Thelemaque, the lead organizer for Durham CAN (Congregations Associations and Neighborhood). “We’re intentional about workforce housing, which is 60% AMI or lower. That’s the population that’s struggling to find housing.”

They want to developers to include more affordable housing units. Montague says they are still working to see if that’s a possibility.

“We understand developers need to make money and to have finances. We’re not blindly asking for units that we know will financially kill the project,” said Cynthia Williams, the co-chair of the Coalition for Affordable Housing & Transit.

Thelemaque said she has been vocal in her thoughts on how to use the building for years.

“It’s also the last city hold on property that the community can still have a say in on what we’d like to see here,” she said.

Developers say the challenge lies in creating a design that seamlessly blends contemporary elements with a nod to its historical significance.

The site is one of the highest vantage points in downtown Durham. The building is considered the first Miesian skyscraper in North Carolina and received an NC AIA award in 1959. The building served as the Durham Police Headquarters from 1991 to 2018.

“The adaptive reuse of the Milton Small building is something we’re excited about,” Peebles told WRAL News

“We’ve done adaptive restore structure hotels in the past … Those are some really fun assets, because the existing structure has some spaces that you wouldn’t necessarily construct, if you were building it from scratch. That requires you to make some really creative choices. In Washington, DC, we renovated an old bank building called the Riggs bank building into a hotel. On the ground floor, it had a big bank vault. We turned the vault area into additional seating for the restaurant. It was this cool addition to a public space that most folks had never really seen before. We kept a lot of the existing vault infrastructure; that’s just not something you get to do when you build a building from scratch,” he said.

Montague says the first phase of the project is expected to officially start construction in 2026. He says it will cost about $300 million and will be worth about $400 to 500 million when it’s complete.