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N.C. Mutual building sold
DURHAM -- The N.C.
Mutual Life Insurance Co. building -- long a proud symbol of
Durham's vibrant black business community -- has been sold to the
same Bull City developer who bought the landmark SunTrust building
earlier this year.
The
$11.4 million sale to Greenfire Development and investors
associated with the company comes 40 years after then-Vice
President Hubert Humphrey dedicated the 12-story N.C. Mutual
building on West Chapel Hill Street as "a symbol of that new and
better South" in a 1966 speech in Durham.
N.C.
Mutual will remain in the building as a tenant under a long-term
lease agreement, according to a news release about the sale.
While
Mutual CEO James Speed said in the release that the insurer was
"fortunate to capitalize" on the appreciation of downtown
properties in recent years, the building is valued at $17.8
million, according to Durham County tax records.
The 3.2
acres the building sits on has a tax value of $1.1 million,
according to records.
Neither
Speed nor Greenfire officials could be reached for comment
Thursday. But 108-year-old N.C. Mutual needs cash to boost its
reserves after more than four years of losses.
The
company recently was downgraded by A.M. Best because of its
dwindling surplus, which has dropped from $22 million at the end
of 2003 to $11 million as of Sept. 30, according to financial
records the company has filed with the state Department of
Insurance.
Shoring
up the company's surplus level wasn't mentioned in the release
announcing the sale.
"This
will allow us to deploy substantial assets to our core business
and fuel the growth of recent successes in the marketing of
individual life policies and wealth building," Speed said in the
release.
Mutual's
losses this year -- $2.9 million as of Sept. 30 -- are tied to the
company investing in building up its individual life business.
While
gaining new policies pays off for life insurance companies in the
long run, it does cost money initially because of commission and
marketing costs.
Following the losses, which total some $22 million since 2002, the
company cut its work force in November by 22 people -- 10 layoffs
and 12 early retirements. About 80 employees remain at the
downtown office; the company has fewer than 150 at all its
offices.
Still,
the firm is regarded as the oldest and largest black-owned life
insurance company in the country, with more than $12 billion of
insurance in force.
The
building's pending sale has been a rumor for weeks, but officials
with both Greenfire and Mutual denied a deal was being discussed.
The
secrecy surrounding the sale harkens back to when N.C. Mutual
itself bought the property, once occupied by the home of Benjamin
Duke, middle son of Washington Duke, the man who built a tobacco
empire in Durham.
Durham
historians have said Mutual used a middleman to buy the property
because of sensitivity about a black-owned firm in 1960, when
segregation still was strong, buying property owned by the Duke
family.
And in
fact N.C. Mutual bought the property from a Roy S. Thurman,
identified as a Washington, D.C. resident, according to the 1960
deed on file in Durham. The sale price: $1,000.
The deed
is for the same property "described in a deed from Mary Duke
Biddle to Duke University, dated June 23, 1938," according to the
one-page deed.
The
addition of the N.C. Mutual building to Greenfire's portfolio
brings the company's ownership of downtown properties to 21. Most
prominent is the 17-story SunTrust (formerly CCB) building, which
Greenfire bought for $4.1 million earlier this year.
The
company plans to convert the building to residential and office
use.
http://heraldsun.com/durham/4-801861.cfm
By JEFF ZIMMER : The Herald-Sun
jzimmer@heraldsun.com
Dec 21, 2006 : 11:38 pm ET |
