Affordable housing is back in the mix for major uptown development - but how much?
New affordable housing options are back on the table for the ambitious Seventh and Tryon development uptown, Mecklenburg County officials said Tuesday.
The project is seen as a major catalyst for revitalizing the northern edge of uptown, where development has lagged behind other parts of the center city.
If the project is approved, the county and Bank of America would sell 3.1 acres to a private development group, led by Virginia-based Metropolitan Partnership, for a total of $21.5 million. The goal is to create a mix of offices, multifamily residences, retail and parking.
After a dispute that emerged earlier this year threatened to derail the project, county commissioners on Tuesday heard three options on how to spend a portion of the money from the land sale.
In doing so, county officials reignited a central debate: Should public money be used to create more units in less expensive areas? Or build fewer units in uptown, where land and construction is more expensive? Some commissioners say the number of uptown units would be so small that the effort is largely symbolic.
That includes one proposal that would put 36 affordable units within the development of more than 300.
But several commissioners balked at the small numbers, given the immense need for affordable housing. City reports in recent years have estimated Charlotte has a deficit of 24,000 to 34,000 affordable housing units.
“If we’re making this kind of public investment, the public’s got to see more,” Commissioner Trevor Fuller said. “Otherwise affordable housing is just another pretty word we use that we don’t even mean when push comes to shove.”
Commissioners are expected to sign an updated memorandum of understanding in June, which includes plans for affordable housing.
Earlier this year, county officials said it was too expensive to build affordable housing on the site and offered a plan to give proceeds from selling land to the developer for affordable housing projects already underway in other parts of the city.
“What you’re seeing here tonight is our best effort to bring a project forward that we believe is actually executable in the near term,” County Manager Dena Dioro said.
Where will housing money go?
Bank of America already has committed $4.2 million, about half the proceeds from selling its land, to fund up to 207 units in affordable housing projects already underway outside of uptown. The money would close funding gaps to make units available faster.
That leaves commissioners to decide how to spend $14.5 million, which comes from the rest of the land sales and $3 million committed by the developer for affordable housing.
County officials presented the commissioners three options, two of which would put affordable units in or adjacent to the Seventh and Tryon development.
The first would use the $14.5 million to build 36 affordable units on site, including 12 for households earning 30% of the area median income, or $23,700 for a family of four.
The second option would bring Inlivian, formerly the Charlotte Housing Authority, back into the mix. Inlivian, which owns land originally included in the Seventh and Tryon project, left the landowners group after disagreements with other landowners about whether the housing authority would sell its land outright or lease it back to the master developer.
County officials and others involved in the project, including Bank of America, planned to move forward without Inlivian or its land, and have previously said the now-smaller footprint would make affordable housing too expensive on site.
County officials offered no details about how Inlivian would be involved under option two.
The third choice, similar to a proposal Seventh and Tryon leaders outlined to The Observer earlier this year, would direct all money from the land sale — $18.7 million — to affordable housing projects outside of uptown already underway.
If all of the money went to outside projects, it would increase the possible units spread across several developments to more than 700, rather than the 200 Bank of America has committed to with its $4.2 million.
Commissioners can also choose to direct money to a combination of the three options.
Several commissioners balked at spending so much on so few units within the project.
“The best we can tell the public that we got out of it for affordable housing are 36 units? I am not sure people would think we tried hard enough,” Fuller said, noting the large public investment.
Fuller advocated for working with Inlivian to produce affordable housing on the adjacent lot.
Commissioner Susan Harden said it’s important that there is affordable housing uptown even if it’s more expensive, so that the city’s core is not just for the wealthy.
“Sometimes justice is expensive, but those 36 units mean something and say something to what we value in uptown Charlotte,” she said. Because Bank of America has committed some of its land proceeds for projects elsewhere, Harden said, funding affordable units within Seventh and Tryon achieves both goals.
Several commissioners have asked for Inlivian to brief the board on its proposal before taking a vote on the MOU.
Inlivian CEO Fulton Meachem said his organization would be ready to present to the county about its plans for mixed-income housing development on its land soon. He declined to give specifics about how much money Inlivian might seek from the county or the number of affordable units, but said it would be more than 36.
“That has always been our plan, to create environments for people from kind of all walks of life to live, work and play (together),” he said. “Not these isolations of either poverty or prosperity.”
Economic impact
The development would include a 450,000 square-foot office tower, a 160,000-square foot mixed-use building, multifamily residences, retail and above and below ground parking. The underground parking would be a major cost to taxpayers: $25 million through city and county tax increment grants. Including an additional $2 to $5 million from the city, public investment would total up to $30 million.
That investment proposal has drawn criticism from affordable housing advocates, who point to the fact that the county says it is too expensive to build affordable housing, but the private developer is getting $25 million in public funds to build parking.
Amid the economic damage caused by COVID-19, the project will create space for a major employer and bring thousands of jobs, according to Mecklenburg officials.
The county estimates construction will create between 1,200 and 1,500 jobs, while the office building will have capacity for 4,000 workers. The project will also add approximately $4.1 million in new property tax every year, and an estimated $674,000 in new local sales tax revenue annually. Those infusions of cash would come as city and county budgets are taking a hit from the coronavirus.
The Observer has reported that the feud over affordable housing threatened negotiations between Metropolitan and a potential anchor tenant. A source with first-hand knowledge of the deal previously told the Observer that Truist, the bank formed from the merger of BB&T and SunTrust, was considering the site. Meetings from a Charlotte-Mecklenburg Library’s real estate committee meeting last year reveal officials talked about the merger as “pivotal” for the Seventh and Tryon developer.
The bank chose Hearst Tower to house its new headquarters last year, so it’s unclear where any negotiations may stand.
This work was made possible in part by grant funding from Report for America/GroundTruth Project and the Foundation For The Carolinas.
This story was originally published May 20, 2020 at 12:10 PM.
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