Politics & Government

Should public spend $4.7 million to aid Midtown development?

Pappas Properties has asked the city and county for $4.7 million in exchange for the developer making improvements to a nearby park, building roads, and moving water and sewer lines. The street to the left is Kenilworth Avenue. The street in front of the development would Pearl Park Way, and would be built as part of the project.
Pappas Properties has asked the city and county for $4.7 million in exchange for the developer making improvements to a nearby park, building roads, and moving water and sewer lines. The street to the left is Kenilworth Avenue. The street in front of the development would Pearl Park Way, and would be built as part of the project.

When developers build three massive projects off Providence Road near Interstate 485, they will pay for millions of dollars of roads, sidewalks, bike trails and open space themselves.

Just 10 miles away, the responsibility for some of that infrastructure could fall to taxpayers.

Pappas Properties has proposed building new offices, apartments, retail and a hotel in Midtown, on the site of the Greater Charlotte Regional Realtors Association building. It has asked the city and county for $4.7 million in exchange for building roads, amenities for pedestrians and upgrades to nearby Pearl Street Park.

As part of the request, Pappas Properties wants the city to turn over a portion of a public street, Greenwood Cliff Drive, so it can build on top of it. Because there are water and sewer lines under the drive, the developer has asked the city to pay for the cost of moving the lines, which would cost $251,000.

City and county staffers have given the Pappas Properties idea a preliminary endorsement, though elected officials haven’t made a final decision.

Developer Peter A. Pappas said the projects would benefit the public.

“The opportunity was there to address the transportation needs of the area,” he said. “That’s really the genesis of the request. Providing more connectivity – not only for our project – but for the other real estate in the area, it would be beneficial.”

Request raises questions

Should tax dollars be used to help develop valuable property that’s adjacent to one of the city’s most affluent neighborhoods – Dilworth – and near the fast-gentrifying Cherry?

And should Pappas Properties pay for at least part of the street improvements and to move the water and sewer lines?

Peter Zeiler, the county’s economic director, acknowledged that many of the improvements will help Pappas Properties market the project.

But he said it’s a “win-win-win” for the private sector, the city and the county.

He said Pappas Properties would build the infrastructure and then be paid back only when their development begins paying property taxes. He said it’s a risk for the developer.

The proposal

The Charlotte Regional Realtor Association site is 5.2 acres, on the edge of Interstate 277 in between Dilworth and Cherry.

Pappas Properties wants to build a hotel and office building on the property along Kenilworth Avenue. Behind that, there would be retail, apartments and a parking deck. At the back of the site would be a second office building.

Here is some of what the $4.7 million would buy:

▪ Pappas Properties wants to extend Pearl Park Way for $1.9 million alongside the development and then to Baxter Street. The city’s area plan for Cherry calls for that extension in the future.

Having Pearl Park Way extend to Baxter Street isn’t essential for the development.

But it would improve access to the property, and the city said the new street could include “on-street parking,” which would make it easier for shoppers to reach stores.

▪  The project would abandon Greenwood Cliff Drive, which the city owns, to make way for the offices, apartments and retail. But closing the street would require moving the existing water and sewer lines that run underneath it. Pappas Properties has proposed to be reimbursed $251,000 for that.

▪ Another street improvement is to build a segment of Berkeley Avenue from the new Pearl Park Way inside the development in between an office building and apartments.

The proposed $360,000 segment of Berkeley Avenue couldn’t connect to Dilworth because there are single-family homes in the way. The city said it would still provide some connectivity, though much of the traffic would be for people inside the development.

Pappas Properties also would add pedestrian lighting and create a small greenway along the new Pearl Park Way.

▪  Pappas Properties would also improve Pearl Street Park, with new grass, lighting, parking and landscaping.

The county said it would like to improve the park, but it isn’t on a long-range plan.

Transportation benefit

Pat Mumford, the city’s director of Neighborhood and Business Services, said the city is interested in funding the improvements because it can help improve transportation in the area.

Mumford characterizes the work as “off-site improvements.”

“That’s what’s intriguing to the city and county,” he said. “It makes for a more complete development.”

One part of the proposal – the Berkeley Avenue extension – would run inside the boundary of the property. The extension of Pearl Park Way would technically be off of the development’s property line, though it would adjoin it. Other improvements would be inside the property’s boundary.

“Some of the improvements are more in favor of the city and the county,” Mumford said. “Some are a little more equal (between public and developer) when you get to the heart of the development.”

When asked whether the city and county have considered only paying for a part of the $4.7 million, Mumford said “that’s more of a policy decision for the elected officials.”

“We have analyzed what the developer has brought us,” he said.

Other developments

The city and county have made similar deals, including an agreement to pay the Bissell Companies $11 million in exchange for a new bridge over Interstate 485 and other road improvements in Ballantyne. Bissell did the work recently as it expanded its office park.

The city and county are also paying back the developer of the southwest Charlotte outlet mall $6.5 million for road improvements.

The city also subsidized another Pappas project, the Metropolitan development nearby. That project revitalized Midtown.

But it’s also not standard practice.

In south Charlotte, Crosland and Childress Klein are building Waverly on 90 acres off Providence Road. That project will extend Ardey Kell Road into the development. It will also have many of streetscape amenities that are being proposed at the Pappas Properties project in Midtown.

Just north of Waverly, Crescent is proposing to build another mixed-use development. As part of the project, the developer would add turn lanes to Providence Road and extend Golf Links Drive.

Across Providence Road, Lincoln Harris is planning to build on 194 acres at Golf Links Drive. The developer is building roads inside the development and making improvements to Providence Road and Ardrey Kell Road.

In each case, the Providence Road developers are paying for the infrastructure themselves.

It should be noted that each of the developments needed rezonings approved by the City Council. That gave the city leverage to require the developers to make on-site and off-site improvements – without taxpayer money.

Who has the leverage in the Pappas Properties proposal?

Pappas said Friday he already has the zoning in place to build his development. He also said he doesn’t need any of the infrastructure improvements for the project to move forward.

Mumford said the city’s goals is to bring density to the area and that the existing infrastructure won’t support a project as large as the Pappas Properties proposal.

Though council members don’t have to approve a rezoning for the project, they do have to approve a request to abandon Greenwood Cliff Drive – a taxpayer-owned street. That request could come before council later this year.

Steve Harrison: 704-358-5160, @Sharrison_Obs

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