May 03--This rendering shows the conceptual design for a new development at 66-70 Main St. in Durham. The project would yield an underground parking garage, hotel, student housing and new facility for UNH's InterOperability Laboratory. (Renderings by Sora Development)

DURHAM -- A major redevelopment project is in the works for downtown Durham that would replace a vacant fraternity house with commercial space, a hotel and a high-tech laboratory.

A private developer is in talks with Durham and the University of New Hampshire to transform properties at 66-70 Main St. into a new mixed-use development.

The proposal calls for UNH to become the "anchor tenant." The school would relocate its InterOperability Laboratory into a new "venture/tech village" at the site. The proposal also includes an underground parking garage, as well as office space, retail shops and private student housing.

Durham Town Administrator Todd Selig said the current design carries a price tag in the range of $60 million to $70 million. Durham would potentially help raise in excess of $10 million to secure the capital for the project by requesting state and federal grants and offering tax breaks through its downtown tax increment financing (TIF) district.

The university system's Board of Trustees will vote today to authorize negotiations with Sora Development of Towson, Md., which is spearheading the effort.

UNH would not provide any capital for the project, but would instead agree to lease space in the new facilities. The partnership would also involve working with the town of Durham to secure grant funding and other assistance to help pay for the project.

Durham took one of its first steps to line up state and federal dollars on Thursday, submitting a request to the New Hampshire Community Development Finance Authority for a $1.2 million grant.

"It's going to be exceptional if they can pull it off," said Joseph Berwanger, a representative of Gamma Theta Corporation, the alumni group that owns the dormant fraternity house at 66 Main St.

Gamma Theta is negotiating a deal to sell the property. In exchange, the fraternity would be relocated to a university-owned property on Garrison Road.

The parking garage would be constructed by the developer under a "lease-to-own" arrangement with the town. The developer would build and finance the entire redevelopment, and the town would enter into a long-term lease arrangement for parking -- perhaps for 20 or 30 years. At the end, the Durham would acquire the fee interest in the parking structure with the developer continuing to own anything above that, according to Selig.

The town would also provide the developer with a parcel that currently houses a 22-space parking lot reserved for permit holders.

Tim Elliott, the developer representing Sora, has already negotiated an option to purchase the People's United Bank property at 70 Main St., according to Selig.

Elliott has also secured an agreement that prevents the town of Durham from marketing the town-owned parcels involved in the project for a limited time. The agreement, which does not include the terms of the sale price, is in effect through July 2013.

The Durham Town Council would ultimately have to vote to sell or lease one or both of the Pettee Brook parking lots for the project to move forward.

Selig said the town is still negotiating its involvement in the redevelopment. Aspects under negotiation include sale price for town-owned parcels, the possibility of using TIF redevelopment subsidies and another incentive that allows communities to waive the additional taxes created as a result of redevelopment for a finite period.

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