A North Carolina native wants to turn a decaying Southeast Raleigh warehouse into an affordable housing community for artists, but City Councilors want more time to consider a partnership.
Vann Joines, who has developed similar projects in New Orleans, wants to purchase the Stone’s Warehouse complex on the block bounded by East Davie Street, East Cabarrus Street, East Street and Chavis Way and redevelop it into a live-work affordable housing community geared toward artists.
Joines and his business partner Rex Todd, of The Landmark Group, want to purchase the city-owned property for $350,000, well below the 2008 appraisal price of $2.4 million.
The property is next to a greenway and a historic overlay district, and parts of it are designated as historic landmarks.
The Rex Health Senior Center is the only operational part of the complex and would remain a part of the redevelopment. The rest of the warehouse needs extensive rehabilitation.
The $7.5 million project would house about 64 one-bedroom rental apartments that would include private or shared studio space.
“If we want to keep and retain the talent that we educate and that we invested in, we need to find new ways in which young creative folks can see through a much longer and much more prosperous future in Raleigh,” Joines said.
While residents would have to meet affordable housing income requirements, anyone — artist or not — could apply to live there. The community itself would likely prove to be self-selecting because the units would be designed for creative types.
The city has long encouraged redevelopment of the building, issuing a Request for Proposal in 2008. The asking price was $1.2 million because of the affordable housing requirement.
The city didn’t receive any viable proposals, and the property continued to degrade during the economic downturn.
A sticking point in this new proposal is that the city did not issue an RFP; Joines and his group want to purchase the property privately.
Legally, the city can enter into a private sale agreement with a buyer. Staff with the city’s community development department recommend going through another RFP process so that other interested developers can weigh in on the site.
In order to qualify for North Carolina affordable housing tax credits, Joines must enter into a purchase agreement with the city before Jan. 25, 2013. But neither the developers nor the city would know whether such funding was approved until the spring.
Community Development Director Michelle Grant said the state normally doesn’t favor redevelopment projects when considering affordable housing tax credits. The point system used for approval is heavily geared toward suburban-type developments. Urban projects are generally considered only after redevelopment in the area has been done.
Joines said the city could back out of the deal at any time.
To complicate matters even more, in order to do this sort of development, the city would have to rezone the property.
If the city were to release an RFP, it would delay redevelopment another year.
Gregg Warren of DHIC, a nonprofit organization that builds affordable housing, said he wants to see this property redeveloped. DHIC didn’t respond to the 2008 RFP because the city required that funding be secured at the time of the application.
The organization has remained interested in the property.
Warren said he isn’t against the project, but wants to see the city release an RFP to allow all developers to submit proposals.
“I hope we can make something happen in this area,” said South Central CAC Chair Danny Coleman. “It needs it.”
Coleman said the investors he’s spoken to are concerned about safety issues in the neighborhood. The project could encourage more redevelopment in the area.
Members of the Budget and Economic Development committee were split on whether to release an RFP or enter into a private agreement.
Councilors Thomas Crowder and Randy Stagner wanted to consider an RFP process, while Mayor Nancy McFarlane encouraged moving forward with the proposal. Councilor Eugene Weeks also supported the project.
Holding the vote for two weeks would result in waiting an additional month before the full Council could discuss a decision. This would put extra stress on city staff to prepare for the rezoning process.
However, the city doesn’t need to follow the same rezoning schedule as private developers.
Committee members opted to report the split vote out, but have the city attorney’s office provide more information to the full Council. The city attorney will draw up a prospective agreement to give Councilors a better idea about the agreement terms.
The next Council meeting will take place at 1 p.m. Tuesday, Dec. 4 at City Hall, 222 Hargett. St.