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The City Council is scheduled to meet Thursday to discuss Progress Energy's proposed office tower.

RALEIGH, N.C. - The downtown revitalization efforts of North Carolina's capital city recently took an important step forward.

At the end of August, Progress Energy Inc., the Raleigh parent of Progress Energy Florida of St. Petersburg, began moving employees into a new 19-story office tower directly across from the utility's headquarters on S Wilmington Street.

"It is a big investment at the right time," says Raleigh Mayor Charles Meeker.

Progress Florida is hoping to build an office tower of its own in St. Petersburg. Like the Raleigh project, it too is expected to be a mixture of office and commercial space that would consolidate scattered office facilities under one roof and save the company money over the long run.

The St. Petersburg City Council is scheduled to meet 3 p.m. Thursday to discuss Progress' proposal. The meeting will be held at City Hall, 175 Fifth St. N.

Although the two projects aren't identical, Progress' Raleigh building offers a frame of reference with which to view their proposal for St. Petersburg.

Progress has played a leading role in the rehabilitation and conversion of the historic Grove Arcade building in Asheville, N.C., into residential, retail and office space. And, the company is developing office and commercial space at its new eastern Carolina regional offices in Wilmington, N.C.

All are part of Progress' strategy of being an integral part of downtown redevelopment efforts. It is a strategy that's driven by enlightened self-interest, says Tom Trocheck, Progress' director of land management.

Consolidate office space into a new building with a long-term lease and you save lots of money on rental costs and cut down on the time and energy spent attending offsite meetings.

Make your home base a more attractive environment to live and work and it is easier to recruit top-quality employees.

And, of course, revitalized city centers, whether it's Ashville, Raleigh or St. Petersburg, could translate into greater electricity sales for Progress.

"Our customer is the community and we want to be involved in that community," Trocheck says.

Most of the projects have been cooperative efforts with local economic development officials, who pitch in various forms of financial assistance. In Raleigh, the city agreed to subsidize the parking garage that is part of the building.

"We're looking to be a piece of the puzzle, we don't want to be the only piece," Trocheck says.

Progress' building plans in St. Petersburg face a bigger challenge in getting off the ground than in Raleigh. While Progress owned the land where its new Raleigh office building was constructed, the city of St. Petersburg owns the Florida International Museum, the site where Progress Florida is hoping to build an office tower, condominiums and a hotel. Moreover, the utility has had to contend initially with other competing bids to develop the museum site.

And St. Petersburg's revitalization has been under way for years, anchored by the construction of condominium towers and the success of the BayWalk shopping and entertainment complex.

"We're no longer a city that has to go out and beg for development," St. Petersburg City Council member Virginia Littrell said in June about Progress Florida's initial building proposal.

Downtown Raleigh, by contrast, is at an earlier stage in its hoped-for rebirth. But after years of frustrating delays, economic development plans are advancing from the drawing board to reality. A crucial catalyst has been the city's largest corporate citizen: Progress.

"They started the whole downtown push from the private side," says Dan Douglas, a senior city planner and director of Raleigh's Urban Design Center. "They got everyone excited and thinking about possibilities."

Progress' new building will be known as Two Progress Plaza. The location includes 366,000 square feet of office space, which will house about 1,100 Progress employees currently scattered around six locations in downtown and in nearby suburbs. The building will include 20,000 square feet of retail space, 60 to 70 condominiums and 1,064 parking spaces that will be shared with the city.

Progress' investment in the building is a relatively modest $100-million, most of which stemmed from the value of the land. The utility brought in a developer to oversee construction and secured the project's viability by signing a long-term lease. But it doesn't own the building. Instead, the landlord will be J.P. Morgan Trust. Progress owns property on an adjacent block of S Wilmington Street, which could be the site of future development.

Downtown Raleigh is an area rife with contradictions. It is the heart of the largest city in the Raleigh-Durham-Chapel Hill metropolitan area. But morning rush-hour traffic is mostly outbound toward nearby Research Triangle Park.

The downtown area boasts significant cultural resources such as the BTI Center for the Performing Arts and the state museums of art, history and natural sciences. Yet the downtown branch of the Wake County Public Library is a tiny, 2,800-square-foot afterthought with so few books that it's called an "Electronic Information Center," after the bank of PCs that provide public Internet access.

And while downtown Raleigh is home to Fortune 250 company Progress, the regional offices of Wachovia Bank and BB&T, and North Carolina's largest law firms, the rest of downtown is composed of a motley assortment of state and county office buildings, restaurants, cheap clothing stores, pawn shops and a few businesses selling brand-name merchandise. More than half of the retail space on the Fayetteville Street Mall, a pedestrian zone that runs straight down the middle of downtown, is vacant.

But things are changing. One block north from Progress is the former site of a Hudson Belk department store, which is being converted into condominiums, parking and retail space.

The city is preparing to open up Fayetteville Street to motor traffic, which planners hope will help make it more accessible to visitors. And a new convention center is in the works.

But there's a lot of work to be done before the resurrection of downtown Raleigh is complete. For instance, Progress has yet to find a single commercial tenant at its new building.

Progress' Trocheck concedes that, "We are not retail developers by any stretch." But he remains optimistic.

"We're trying to make it a win-win to anyone we bring downtown," he says.

Mayor Meeker strikes a similarly positive tone.

"It's the first major project we've had in downtown and it has set the trend for additional downtown development," Meeker says of Two Progress Plaza. "We're in the front end of a renaissance here."

Information from Times files was used in this report. Louis Hau can be reached at 813 226-3404 or hau@sptimes.com