In today’s 1:00pm meeting, the Raleigh City Council will review Ted and David Reynolds’ offer to purchase and contract for 301 Hillsborough Street ( agenda: pdf ). The team had planned a mixed-use tower, “ The Hillsborough ” standing around 25 stories, however depreciating real estate has caused a financing shortfall. (The News & Observer’s article today explains this well.)

The council will be deciding whether they should offer the Reynolds an extension, or retract the offer and wait until the real estate markets grow again. It appears that no parties involved are interested in proceeding. Mayor Meeker said, “I’m inclined that we should take the property back and then review the situation when the economy improves.” (way to say it with gusto).  David Reynolds said,”…only a fool would get something started right now. There’s just so much uncertainty.”

Likely what will happen is the project will be retracted, the lot will sit fenced in, and the site will the subject of a new Request For Proposals in a couple of years. In the meantime, the possibility that the City of Raleigh will reconsider the site’s future is very real. The city currently has planned to replace its police headquarters with a highrise local governement complex. The long term goal is to replace the current city hall and police headquarters, but the future value of the land on which the current facilities sit is not to be ignored. Land adjacent to one of Raleigh’s two downtown parks would be exceedingly more valuable than land on Hillsborough Street across from…the round Clarion. Keep an eye on this one!

News of The Hillsborough’s demise both gets filed in City Manager Russell Allen’s “See I Told You So” file, and casts much uncertainty on another of the city’s properties, the planned Lafayette hotel, adjacent to the Convention Center Marriott. This story, too, is one worth watching.