Office-retail only

Ellie Kinnaird’s voice was drowned out during her final years in the N.C. Senate by affluentNancy Oates colleagues who, having reached a high level of creature comfort, put in place policies that closed off that path to others. After several years of advocating for laws that made life better for residents in all socio-economic classes, Kinnaird found herself in recent years ignored and outvoted by senators who served the interests mainly of those already well-off.

When Kinnaird addressed council members at a Town Council meeting last month, suggesting that Ephesus-Fordham be rezoned as office and retail only, she may have felt it was deja vu all over again. Not a single council member picked up on her excellent suggestion of a way to avoid digging a deeper debt pit for taxpayers to climb out of.

Council is considering rezoning the 190 acres of the Ephesus-Fordham area as a high-density commercial zone that will gift all developers with an expedited approval process and kick in $10 million in infrastructure improvements that developers often are asked to pay for. Apartment buildings are considered commercial development but, unlike office and retail establishments, cost the town more money in services than it will collect in tax revenue.

The impetus for the E-F rezoning was to ease the tax burden of residential property owners by bringing in more money from office and retail development. Unfortunately for taxpayers, the first projects likely to come out of the ground will be apartments, which will increase the tax burden for homeowners for at least the next decade until some of the office and retail space is built.

Kinnaird’s recommendation offered a practical solution that would go a long way in reducing widespread community opposition. People in Chapel Hill need places to shop for everyday items. The town has no shortage of specialty shops, jewelry stores, art galleries and gourmet merchants, but no place to buy socks and underwear and other functional items that do not have to have cache.

Establishing an area with retail stores on the ground level and office space above would create a shopping destination that might lure back some department stores or other chain stores we frequent that we now have to go to another county to patronize. We might hate the area’s seven-story buildings, but we would go there to shop.

If the town were to sever the DHIC project and Park Apartments from the Ephesus-Fordham zone, then designate the remaining areas as only office and retail, the zone would almost certainly be revenue positive. We wouldn’t risk overwhelming our school system or the Public Works department. And town residents would have an alternative to spending our consumer dollars in another county.

Kinnaird knows what she’s talking about. We would do well to listen. Ephesus-Fordham is back on the Town Council agenda for this Thursday, April 17.
– Nancy Oates

Hometown brand

Driving home from Raleigh one spring night with my car windows rolled down, I Nancy Oatesstopped at a traffic light. A car pulled up beside me, and the driver hollered out, “You must be going to Chapel Hill. I can tell by your bumper stickers.”

Chapel Hill used to be known as an enclave for liberals: people who put time and energy into making society better for everyone. But the town’s reputation seems to be shifting a bit. Whereas public displays of wealth used to be tolerated, now they seem to be aspired to.

The last discount department store in town will leave Chapel Hill in June. Roses, serving the community for more than 40 years, has been priced out of University Mall. Mall landlord Madison Marquette raised the rent on Roses’ space last year, and Roses anteed up to stay put. But this year, the lease offered by Madison Marquette raised the rent even more and cut the space in half. That deal was not fiscally viable for the merchant that sold clothing and sundries at rock-bottom prices.

From an economic development view, the store’s closing makes sense for the town. An art gallery, jewelry store, trendy restaurant or boutique will take over the space at the higher rent, and the town will collect extra sales tax revenue from the pricier goods sold. Residents on a budget will soon move out of town, if they haven’t already, because the town is redeveloping all of its affordable housing out of existence. It makes no sense for budget-minded expats to commute into town to shop at a discount store when there are so many low-cost shopping options over the county lines east, west and south of us.

But as the town moves resolutely toward a moneyed, exclusive community, I feel increasingly uncomfortable. Not because of whether I, personally, can afford to live here, but because I’ve never aspired to live somewhere that prides itself on being a place that only the wealthy can afford. Just as I’m somewhat repulsed by wearing someone else’s name or logo on my clothing and personal property, I feel a similar yuck factor at living in a place that brands itself as a sort of Governors Club without the gatehouse.

The more money I acquire, the more choices I have of where to live. Can my money buy a place where I feel at home with my bumper stickers?
– Nancy Oates

Public-private = win-win

Chapel Hill needs a Stuyvesant Town, a large-scale complex of safe, Nancy Oateswell-built, no-frills apartments with rents affordable to your average working stiff.

For some years during my New York days I lived in Stuy Town, an 11,000-unit complex built on 80 acres of what used to house leaky gas storage tanks and businesses and apartments that would put up with the unpleasant conditions. Met Life bought the land and built Stuy Town and Peter Cooper Village (where the apartments were larger and had higher rents) in 1947, giving preference to veterans, Met Life employees and government workers. Met Life enjoyed a tax abatement in exchange for making the units rent-stabilized, allowing the rents to rise only a certain percentage instead of fluctuating at market rates.

In 2006, Met Life got an offer it couldn’t refuse and sold the complex to a consortium for $5.4 billion. The consortium raised rents to market rate, in some instances in mid-lease. The real estate market crashed a few years later, and the consortium couldn’t make its payments so turned Stuy Town and PCV over to a creditor. Then it came to light that the consortium had been enjoying the tax abatement while charging market-rate rents. The tenants sued. The case went to the Supreme Court, and the tenants won, though they are still waiting for their money.

Chapel Hill doesn’t need the lawsuits spawned by real estate investors’ greed, but the town could use a reasonable public-private partnership to create workforce housing. My understanding is that North Carolina law would prevent a property tax abatement in exchange for below market-rate rents. (If anyone knows for sure, please chime in.) But the town could explore public-private partnerships that give something to both sides.

For instance, the town could work with UNC, the town’s largest employer, to grant expedited approval for workforce rentals on campus that give priority to university and hospital employees. Some of the four-bedroom suite dormitories could be converted fairly cost-effectively to buildings of two-bedroom apartments. Convert one bedroom to a kitchen and designate another as a living room by enlarging the doorway into the central hall and creating a doorway between the kitchen and living room, and you’ve got a modest two-bedroom apartment. Put a laundry room with coin-operated washers and dryers in the basement and install a bike rack out front, and tenants are minutes from work.

Or sell some town-owned land to UNC, with the understanding that the university build workforce rentals on it for employees. Too late now, but the town could have held firm on negotiating with 123 West Franklin that 10 percent of those apartments be for junior faculty and support staff.

Town Council recently approved designating a town planning department staff member as the affordable housing point-person. Let’s hope the person who fills that position is creative, open to ideas and understands the term “win-win.”
– Nancy Oates

Plans vs. promises

At its March 10 meeting, Town Council passed an Affordable Rental Housing Nancy OatesStrategy that was such a foregone conclusion it should have been on the Consent Agenda. But without the fanfare of a staff-narrated PowerPoint and a time for public comment, council members and town staff would have been deprived of a feel-good moment. And while the document puts the spotlight on an area of need that has long been ignored, and the strategy does include some good ideas, that feel-good moment is going to have to last a long time before we see any tangible results.

Some proposed tactics are simple and can be implemented at little cost: Designate a town staff member as the point-person for affordable rentals. That way, developers interested in providing affordable rentals would know who to contact to learn the process, perks and pitfalls of doing so.

Another: Implement expedited reviews for subsidized affordable housing developments. To do this, staff must work with the town attorney on what is legally enforceable. We like to think that Chapel Hill can do what it wants within the confines of its own liberal-minded bubble, but we are smack in the middle of North Carolina and subject to all the draconian laws passed by the state General Assembly and the governor. To structure a deal that will guarantee affordable units requires a keen legal mind, which we have in Ralph Karpinos. Town staff just have to ask him.

Other suggestions in the strategy are more pie-in-the-sky: Encourage the production of affordable rentals through incentives. Good luck with that one. In order to get DHIC, a developer with a track record of building affordable rentals in Raleigh, to commit to building affordable units in Chapel Hill, the town had to give DHIC $2 million worth of town-owned land, and then agree that the units would be affordable only for 30 years. After that, DHIC can convert the units to market rate or above, as is happening to the Colony Apartments in Ephesus-Fordham and to other 30-year-old apartment complexes in town that comprise organically affordable housing but have been resold to private equity investors who exploit the potential for maximum profit.

The plan includes a tax hike of 1 cent per $100 of property valuation, or $40 a year for the average $400,000 house in Chapel Hill.

Meanwhile, it looks like the Eubanks Road Convenience Center will get water and sewer before the Rogers Road neighborhood. Until we make good on our 40-year-old promise to provide water and sewer to an affordable neighborhood that has taken one for the team for two generations, all our lofty strategizing is only so much hot air.
– Nancy Oates

Hounding town staff

Town planning director J.B. Culpepper and I* went to see “The Great Gatsby” atNancy Oates the library, rather than attend the Planning Board meeting taking place at the same time. Culpepper evidently had confidence, as did I, that town planning department staff would do their job in presenting the revised plan for Timber Hollow to the board.

We were wrong.

The owner-investors of Timber Hollow submitted a revised plan to town planning department staff, who, in turn, presented it to Town Council. Some council members saw the revisions as substantial and instructed town planning department staff to send the revised plan to the Planning Board and the Community Design Commission to get input from those two advisory boards.

Planning department staff told the CDC only that the developers “had shifted a number of units,” but that the amount of disturbed land and impervious surface had decreased, and there “was no change to the total areas, unit count or affordable housing,” according to CDC chair Jason Hart. So the CDC made no comment on the revised plan.

Planning Board chair Neal Bench said of the planning staff update to his board, “We have not seen the specifics” and “legality was not discussed.”

The legality refers to the developer asking staff for a density bonus beyond the increase from R-4 to R-5 in exchange for the promise of making the rent for 14 apartments affordable to people making no more than 80% of the Area Median Income. State law won’t allow that deal, yet no one on the planning staff has run this proposal by town attorney Ralph Karpinos. During the Ephesus-Fordham redevelopment hearings, Karpinos said that increased density in exchange for affordable units was unenforceable, but the town planners shepherding Timber Hollow through the rezoning process were not aware of Karpinos’ statement.

It’s certainly not the first time town planning staff have blown off council members. Numerous times the mayor or other council members have asked the planning staff for information before making a decision on a development issue, and when decision time rolls around, the planning staff have failed to deliver.

Taxpayers should not have to follow town staff around making sure they do their jobs, yet apparently that’s the only way to find out whether staff are doing what their bosses – council members – ask them to do.

Is there any wonder why taxpayers have such anxiety over the prospect of Form-Based Code in Ephesus-Fordham that allows town staff to make all the development decisions and answer to no one?
– Nancy Oates
*We did not go together; we just both happened to be there.

Brass tacks, not bronze plaques

Sometimes when I feel overwhelmed by deadlines, I’ll make a list of all I haveNancy Oates to do, then slip in something that’s so easy to do it’s almost a given. “Wash hair,” I might write, or “check email.” I do that first, then I can feel like I’ve accomplished something, and I’ve managed to procrastinate on the hard stuff, using a “legitimate” reason.

Maybe that’s the frame of mind Orange County Commissioners were in at their Feb. 18 meeting when they approved a Commemorative Plaque Policy, a decision that was several months in the making. The board wrestled with such weighty issues as which buildings and projects were worthy of plaque-hood, and cost, characteristics and language for the markers. Ultimately, commissioners decided that buildings and renovation projects costing more than $1 million deserved a 2-foot-by-2-foot square bronze plaque that would include the names of all sitting commissioners at the time, the county manager, and the designer and contractor. The plaques would cost about $1,300 to $1,500 apiece.

Never mind that we closed the county landfill almost a year ago, and we still don’t have a plan for what to do with our trash, nor do we know how we’ll pay for recycling pickup. Commissioners have yet to schedule a town hall meeting to bring the community into the solid waste discussion.

We can see the writing on the wall with cuts to Medicaid (which reduces the number of school social workers, among other cutbacks) and teacher pay, but what have commissioners done to plan for the fallout when the impact of those cuts hits home? As teachers begin to leave the profession and we can’t attract new ones because of the lack of respect our state government has for teachers, how will we handle the shortage? Year-round schools have been known to mitigate overcrowding, though it could have a disruptive effect on family life. We need to begin that discussion.

Commissioners are planning to put a $100 million bond referendum on the November ballot to cover the cost of building a jail, schools and county offices. County staff have not laid out a facilities plan, though Commissioner Alice Gordon has been asking for one for a year. But commissioners did approve a new meeting room for themselves, which would cost $1.5 million, making it eligible for a plaque.

With 65 percent of our taxes going to the county, we need to feel confident that our county commissioners are paying attention to the most efficient use of our money. We need them to collaborate with municipal governments to avoid duplicating services. We need them to prioritize, deciding what buildings we need before approving plaques for them. And we need them to let us know what they’re doing and why.

Come to think of it, “prioritize,” “collaborate,” “be transparent” might make a good list.
– Nancy Oates

To our health

At the Feb. 24 Town Council meeting, a community member asked council members Nancy Oatesto pass a resolution urging Gov. Pat McCrory and the General Assembly to accept the opportunity to expand Medicaid, an option made available by the Affordable Care Act. The cost would be paid for by federal taxpayers, 100% for the first three years, phasing down to 90% by 2020.

This resolution was a no-brainer. As federal taxpayers, we’re paying for the benefits of Obamacare for the rest of the country. Why should those of us who live in North Carolina deny ourselves health-care coverage for those least able to afford it? Instead, McCrory and the state Legislature expect state taxpayers to pick up that cost, at the same time we’re turning down money from federal taxpayers across the country.

Because health care is a right – state hospitals can’t refuse to treat anyone, even if the patient has no money to pay the bill – and because without Medicaid, the poor are denied the well-care doctor’s check-ups and preventive measures that lower health-care costs, North Carolina taxpayers have to pay more – some $65 million over 10 years – by refusing to accept the Medicaid expansion.

So why would our state leaders do something clearly not in our best interests? Maria Palmer provided a clue as she relayed a conversation she had with someone on the front lines of the health-care industry who said, in effect, if you have a chronic illness, you’re better off moving out of state.

The light bulb clicked on for me then. All those draconian new bills the General Assembly has passed and McCrory has signed into law – foregoing the benefits of Obamacare; cutting unemployment and making us ineligible for maximum federal money; getting rid of the medical expense tax deduction, which primarily will hurt the elderly; slicing funding for public education – they are motivators to get the unwanted out of the state to make room for a Masters of the Universe class. If you are sick, old, out of work or can’t afford private schools, McCrory and the General Assembly don’t want you here.

What McCrory and his legislative posse fail to understand is that those laws also will discourage better-paying businesses and corporations from moving in. While our state-level politicians busily work to re-create the 1950s, the rest of the country is moving forward. Healthy businesses that want to grow won’t come to North Carolina because they wouldn’t be able to convince their employees to relocate to a narrow-minded state that truncates their opportunities. And we’ll have a harder time protecting our Chapel Hill bubble because the Legislature is watching to make sure that local municipalities don’t enact any ordinances contrary to state law.

Council adopted the resolution. A healthy economy includes a community in good health.
– Nancy Oates

Senior special

A concept plan for a dense subdivision on the agenda at last week’s councilNancy Oates meeting drew not a single resident to protest. Maybe this developer knew to schedule his presentation at the exact same time as a UNC men’s basketball game, or maybe this developer offered something that many of us have been waiting years for.

Epcon Communities has proposed Courtyards of Homestead, 64 single-family one-level homes laid out cheek-to-cheek on 18 acres along Homestead Road, across the railroad tracks from Homestead Village. Each home would have a private courtyard instead of a yard to maintain. The homes are geared toward empty-nesters, age 55 and older, who want to downsize without feeling downwardly mobile. Because of the one-level floor plans, residents could age in place. The houses would range in size from 1,500 to 2,600 square feet, with two or three bedrooms and a two-car garage. When the developers mentioned the price point of $275,000 to $400,000, even our youthful mayor seemed interested.

No housing option like this exists in Chapel Hill. If you want to age in place in a modest-sized one-level home with no yard, you have to move out of town and probably out of Orange County.

The developers, based in Ohio with almost 30 years’ experience creating these senior-living communities, seem sincere in targeting aging baby boomers, but they may have underestimated the pent-up demand for detached homes of this size, location and price. Young professionals and families will see the attraction, and while such demographic diversity might add to the appeal of the neighborhood, young families likely will have school-age children. If they snap up the homes, that will have ramifications for our school system, which is already nearly at capacity.

Council members brainstormed a few ideas for making the subdivision less appealing to young families, then turned the problem back over to the developers to solve. Scrapping plans for an outdoor pool would be a good-faith gesture. I know my bikini days are never coming back, and the aquatic center is within walking distance for those of us who go to the pool to do laps, not to loll. That would free up space for a bus turnaround, which might lure bus service out that far along Homestead.

Former council member Laurin Easthom suggested in her blog ( that the developers commit to the Housing for Older Persons Act of 1995, which gives them tax credits if 80 percent of the homes have a resident 55 years or older living there. The savings could be put toward the 15 percent of units that need to be affordable housing. Maria Palmer suggested the affordable units could be stacked like condos to save money.

If should council approve this project, I predict a sort of Krzyzewskiville of seniors popping up in front of Epcon’s sales office. If council decides it’s in the town’s best interest to not restrict the subdivision to empty-nesters, baby-boomers who want first dibs on these homes will have to learn to box out. And we just might see our mayor in line, too.
– Nancy Oates

Snow day

“Work from home,” Gov. Pat McCrory told North Carolinians, in a well-meaning Nancy Oatesentreaty to keep people from traveling on icy roads last week. And the governor and I did work from home, and maybe you did, too.

But what about the people who work at grocery stores or fast-food places or who rely on tips from delivering pizzas? How about the housecleaners, security guards, tradesmen, sales clerks and bank tellers? Teachers will have to make up their days off. Did the postal carriers and local government workers get paid that day, or will they have to take comp time or lose a vacation day?

As someone who spent two hours on the road trying to make what is normally a 15-minute drive home from New Hope Commons, where I’d been trying to finish up errands before the snow hit (in my defense, the storm was not supposed to arrive until 2 p.m. that day), I understand the wisdom of just staying put. But did he have to rub so many noses in the fact that his cozy snow days don’t come with the price that many people pay when they can’t get into work and therefore don’t get paid.

If McCrory had said, “Stay home. Whatever you have to do is not worth risking your life or someone else’s,” it would have shown a compassion and understanding that not everyone among his constituency is a white-collar worker who can afford to go a day without pay. His assumption that surely no one lives that close to the edge explains why he has pressed for some of the policy changes he has, and why he is more concerned with puppy mills than children who don’t have adequate food, health care or educational opportunities.

Those untested assumptions get us in trouble every time. Town Council members might learn from McCrory’s mistake. Assuming that residents want only independently owned businesses and no chain stores, except wherever Roger Perry fancies a Target. Assuming that if there’s no place to park, everyone will take the bus. Assuming that homeowners have endless resources and magnanimity when it comes to property taxes. Assuming that we all share the goal of making Chapel Hill a happening place for students, that we only tolerate families with school-age children because they are willing to pay high prices for our real estate, and that we don’t want any more old people in town than can fit at Carol Woods. Assuming that ignoring citizen input will make it go away.

How accurate are those assumptions? How do they guide our policies and growth?
– Nancy Oates

6,200 and counting

Some town leaders have had it with this hick town and want to take Chapel Hill to the Nancy Oatesnext level of cityhood. Town Council approved the redevelopment of Central West. Obey Creek is on track to sail through intact as the developer wants it. And council is poised to allow developers carte blanche in the ever-expanding territory of the Ephesus/Fordham redevelopment.

The rationale for growth always has been snowshoeing the tax base: If you distribute over a larger area the weight of the tax burden the town needs to pay its bills, you’re less likely to sink. But if expanding the tax base results in higher expenses, increased growth defeats the purpose.

Town staff have not done a study to find that tipping point of how much growth is too much. At least they haven’t made that information public. Devoting time and resources to come up with the sweet spot of density that will pay for itself would be important information to have as the council members prepare to make decisions on the extent of redevelopment that’s in the town’s best interest, both fiscally and from a quality of life perspective.

The town’s website lists all of the development and redevelopment projects in the pipeline. Adding up all those that have been approved already (and some are under construction as I write this), Chapel Hill will soon add 3,274 new residential units. Another 2,941 are under review, in the concept plan phase or planned but on hold. A total of 6,215 new units, and that does not include Central West.

Former Planning Board chair Del Snow compiled the numbers for an upcoming Planning Board meeting. The list also notes more than 2 million square feet of retail planned, though at a recent presentation to the Chapel Hill Board of Realtors, the town’s economic development officer, Dwight Bassett, predicted a demand for retail space of only half that by the year 2020, with another million square feet of demand for office space.

To succeed, a store needs about $250 in sales per square foot on average. That means shoppers will need to spend about a half billion dollars a year (yes, that’s billion, with a B). That seems like a lot of shopping to me, though with a new movie theater charging $16 a seat, maybe Chapel Hillians are up to the task.

The chart also shows more than 2 million square feet of office space planned. With an absorption rate of 70,000 square feet per year, that’s a 30-year supply. Again, this does not include any expected development in Central West, nor does it reflect current vacant space.

Some town leaders may adhere to the “if we build it, they will come” philosophy. And to avoid Chapel Hill becoming a ghost city like those in China, I hope they’re right. I also hope someone on staff has calculated what it will cost taxpayers in infrastructure and services. Let’s make sure we know how much it will cost us to grow.
– Nancy Oates