Chapel Hill pays the price of keeping the village green.

• Author: Collins, Mike

Back in the late '60s, Joni Mitchell lamented: "They paved paradise/And put up a parking lot." Around Chaptel Hill, known to the faithful as the Souther Part of Heaven, there were plenty who didn't want that to happen.

For example, when NCNB announced it was building an office tower on Franklin Street more than 20 years ago, protesters hit the sidewalks, carrying helium-filled balloons on 90-foot strings to show how high the structure would tower over the main drag of North Carolina's quintessential college town.

People threatened to pull their money out of the bank, which backed off -- literally -- from its original plan. Though the rear of the building would rise 90 feet over Rosemary Street, the front went up only 45 feet on Franklin. The town passed an ordinance in 1971 capping downtown buildings at 45 feet. Ten years later, the oridnance was changed to allow "stair-stepped" buildings, which can go up another foot for every foot back from Franklin, to a maximum of 44 feet. Downtown buildings not on Franklin can reach 67 feet.

But it's the '90s now, and economics is forcing Chapel Hill to drop its ivory-tower approach to retail development.

"It isn't that we have been anti-growth so much as we have always been concerned about the 'right' kind of development," says Roger Waldon, the town's planning director. "But reality is forcing us to change our attitudes about what is 'right,' and with that change will come a change in perception."

Twenty years ago, Chapel Hill had one strip center and one mall within a half-mile of each other on the east side of town.

Now, shopping centers are at all five entrances, and a 600,000-square-foot office, retail and commercial development, Chapel Hill North, is planned for the intersection of N.C. 86 and Interstate 40.

Even so, you won't find any shopping centers desperate for tenants in Chapel Hill, where the population grew by a third, from about 26,000 to 39,000, from 1970 to 1990. "The key to the changes for us, like for many cities, is taxes," Waldon says." As we continue to grow, the costs of services go up. Given the choice of raising the needed funds by raising property taxes or encouraging development, most people prefer the latter."

An example of how upscale retial is changing downtown is Fowler's Food Store, the 16,000-square-foot landmark on West Franklin Street. Once the only grocery store downtown, Fowler's was a short drive or walk for Chapel Hill natives and the students, faculty and staff...