A new affordable housing community geared toward low-income artists might be coming to downtown Raleigh — as long as developers can get state tax credits.
City Councilors Tuesday agreed to lease the Stone’s Warehouse property on Davie and East streets to a developer who plans on redeveloping the property as an affordable artist community.
Developers can’t mandate that only artists live on property, but the 49-unit community will have shared and private studio space, which would encourage that type of renter. Renters would have to meet strict income requirements in order to be approved for a lease.
Preservation North Carolina and Landmark Asset Services have teamed up to enter into a 99-year lease with the city. The city will lease the property for an initial payment of $121,154 with a yearly rent of $25,308 for the life of the lease with a 2 percent interest rate.
In total, the city will receive more than $2.6 million for the property.
“We do believe that the terms of the lease are competitive,” said City Manager Russell Allen.
Initially, the development team wanted to purchase the property for $350,000, well below the 2008 appraisal price of $2.4 million.
A December appraisal listed the property at $1.2 million, excluding the Rex Healthcare facility also on the site.
“I think this is a much better deal for the city than what was originally proposed,” Councilor Mary-Ann Baldwin said of the initial figure. “I would be willing now to support it.”
The Rex facility will remain and won’t be included in the development plan. Rex will continue to lease its space from the city. The center will remain open during construction, but city staff is still ironing out the details.
The developers will apply for state tax credits as part of their funding plan, but won’t know if they are approved until September. The lease option will be open until next year to allow for that funding process to take place.
Community Development Director Michele Grant said the city will receive some preliminary information in May that will give staff some indication of approval or denial.
If the developers don’t receive the tax credits they need, the lease option terminates and the property will go through a formal Request for Proposal process.
Typically, in redevelopment cases like this, the city will release an RFP that would allow any developer to submit plans for the property. In this case, a private developer approached the city about redeveloping the property.
“I still have concerns with the lack of process and the shutting out of our traditional partners,” said Councilor Thomas Crowder. “That still gives me heartburn.”
Crowder was the only councilor who voted against the lease.
Members of the public are invited learn about the plans Jan. 10 during a community meeting at Martin Street Baptist Church.
The city must rezone the property in order for the community to be built. The public will be able to comment on the city-initiated rezoning at a public hearing on Feb. 5 at 6:30 p.m. at City Hall, 222 E. Hargett St.