No Affordable Housing Tax Credits Kills Davie Street Development

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A controversial affordable housing community in East Raleigh is off the table, but the city is putting the property up for grabs.

The original developer for the Stone’s Warehouse property on East Davie and South East streets was not able to acquire the state tax credits it needed to build a 49-unit affordable housing project. The contract between Vann Joines, the Landmark Group and the city has been terminated and the property will go out for bid.

In January, the city entered into a controversial 99-year lease with Joines, Landmark and the Historic Preservation Foundation of N.C. Developers intended to turn Stone’s Warehouse into an affordable housing community that would be marketed to artists.

Although the project was awarded affordable housing funds by the city, the project hinged on low-income housing tax credits from the state.

A developer plans to lease this warehouse from the city to create apartments.

A developer plans to lease this warehouse from the city to create apartments.

While the developers applied for state funding, the city agreed to rezone the land in order for the project to be built on the property. Developers zoned it Planned Development District, or PDD, in order to put strict construction and design requirements in place.

Now that the original developer is no longer in the picture, the question for members of the Budget and Economic Development committee this week became whether the city should rezone the property before putting it out for bid, or let the winner do it.

PDDs come with strict design and construction requirements that the new developer would have to follow unless it was rezoned again.

“There are several options that would give the developer some flexibility,” said Planning Director Mitchell Silver.

Councilor and committee member Randy Stagner asked if there is an advantage to doing the rezoning before the request for proposal is released.

“There is no advantage whether we do it up front or someone else does it,” Silver said. “The time factor is about the same.”

Silver said that changing the zoning might make the property a little more attractive to a potential bidder, but those interested in the area will see the value regardless of the zoning.

Because the Community Development Block Grant funding is tied to the project, Community Development Director Michele Grant said that the next developer would be required to build affordable housing.

If the developer doesn’t wish to build affordable housing, a public hearing would need to be held to waive the requirement. The developer would then buy out the existing city funding and the money would go back into the community development program.

New Home for Exploris Middle School?
Raleigh business mogul Greg Hatem of Empire Properties said that he’s been in discussions with the staff at Exploris Middle School to relocate the school back to the downtown area.

The charter school was once located on Moore Square, but is now on Hillsborough Street.

Hatem said school officials want to eventually expand to include kindergarten through 12th grade and the Stone’s Warehouse property is the only suitable downtown location. He said they’ve looked at other properties outside of downtown and outside of Raleigh, but they would like to come back to the Moore Square area.

“They’ve been such a great partner for the community over the past few years,” Hatem said.

Exploris would like to be in its new building a year from now, he said.

Next Steps
Not seeing a need for an upfront rezoning, committee members voted to release the request for proposal with the original zoning designation and a desire to use the property for an affordable housing project.

The full Council will vote on the issue at its meeting next Tuesday.

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