Politics & Government

Developer’s tax rebates move forward without affordable housing

Pappas Properties plans to build retail, office, housing, a hotel, and parking deck on land the Charlotte Regional Realtor Association owns next to Pearl Street Park, in part with the help of a $4.4 million subsidy from local governments.
Pappas Properties plans to build retail, office, housing, a hotel, and parking deck on land the Charlotte Regional Realtor Association owns next to Pearl Street Park, in part with the help of a $4.4 million subsidy from local governments. jsimmons@charlotteobserver.com

A Charlotte City Council committee voted Thursday 5-0 in favor of a plan to give $4.4 million in property tax rebates to a developer for a mixed-use project in midtown, even though at least one council member had misgivings that they didn’t require the site to have affordable housing.

The full council will vote Nov. 14 on the proposal, which would reimburse Pappas Properties for roads the developer would build inside and adjacent to the hotel, shops, offices and apartments.

The tax rebates are controversial in part because other developers often have to pay for similar infrastructure themselves. In addition, council members didn’t ask Pappas Properties to include low-income housing as part of the development.

For years, council members have had ambitious goals to build more affordable housing, especially in affluent areas of the city. The site – adjacent to Pearl Street Park near Interstate 277 and Dilworth – would be an ideal location.

After the Keith Scott shooting in September, council members said they wanted to build low-income housing even faster.

Democrat Vi Lyles, the mayor pro tem, said council members and city staff had been working on the project for too long to make a change and ask for affordable housing.

“I hope there will be opportunities to move in a different direction (in the future),” she said. “I believe in keeping commitments. It would be easy to say if I knew what I knew today, but it’s not fair when you are working with people to say because of yesterday I will change everything I have worked on.”

The council’s economic development committee had been discussing the proposal for 18 months but Thursday was its first vote.

Democratic council member Patsy Kinsey is not a committee member, but she attended Thursday’s meeting because the site is in her district. She opposes the tax rebates, and said there is no reason council members couldn’t have asked for more time.

“There is always another vote,” she said.

Kinsey added: “I think we’re giving up too much and getting too little in return.”

The four other council members who voted for the tax rebate proposal were Democrats LaWana Mayfield, James Mitchell and Julie Eiselt, and Republican Ed Driggs.

When a developer asks for a rezoning, council members sometimes ask whether affordable housing could be included. For instance, council members this year approved a rezoning for a new residential development near SouthPark mall when the developer agreed to set aside 55 apartments as affordable housing for those making less than 80 percent of the area’s median income.

Council members, however, can’t require a developer to include affordable housing as part of a quid pro quo for a rezoning. That’s illegal.

But with the Pappas Properties Pearl Park project, there was no rezoning. The city, Mecklenburg County and the developer were negotiating about how much in property taxes should be granted back to the builder.

In exchange for the $4.4 million, Pappas Properties would extend Pearl Park Way from Kenilworth Avenue to Dilworth, which has long been a city goal. The developer would also build Berkeley Avenue inside the development.

Much of the road infrastructure is critical for the project to move forward, though a portion of Pearl Park Way wouldn’t need to be built.

In many other projects across the city, developers have had to pay for similar construction themselves.

The developer would also make improvements to Pearl Park, in addition to new streetscape and lighting on roads nearby.

Steve Harrison: 704-358-5160, @Sharrison_Obs

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