Roj Mahal

On Thursday, town manager Roger Stancil stamped his approval to Village Plaza Nancy OatesApartments, thus setting in motion what one wag refers to as “Roj Mahal.”

Historically, Town Council has had the authority to approve or deny development. But with form-based code rezoning in the Ephesus-Fordham area, Stancil has the final say of what goes up.

Council members who voted for the form-based code Stancil recommended perhaps are beginning to see how poorly it serves the town’s interest, and they may rue that they did not insist on incentives in line with town residents’ values when they had the chance. Density bonuses could have been used to encourage affordable housing and energy efficiency. Instead, Stancil has put forth that council approve paying rebates to developers who build to energy-efficiency standards.

The financials for Ephesus-Fordham seem to be falling short, too. The town borrowed $10 million through a Synthetic Tax Increment Financing deal, putting up Town Hall as collateral. The $10 million would be spent on renovations to Town Hall and infrastructure to mitigate the extra traffic and stormwater runoff that development in Ephesus-Fordham would bring. The money was to be repaid through the additional property tax revenue that would come in from the increased value of property in Ephesus-Fordham.

But a couple days before Stancil approved Village Plaza Apartments, council was informed that the assessed value of the project originally expected to be $54 million had dropped to $45 million. So, the expected tax revenue to repay the loan plummets by nearly 20 percent in this initial project, and we still have to pay out rebates if the developer follows energy-efficiency standards. And we won’t get any affordable housing out of the deal.

Town Council, in approving the Ephesus-Fordham rezoning, had hoped to get more office/retail space that would be revenue positive for the town (cost less in services than comes in through property tax). But what it’s getting in Ephesus-Fordham and several other places in town is only revenue-negative residential construction.

Village Plaza Apartments: 95 percent residential. The Graduate: 100 percent residential. A proposal for Central West: 100 percent residential. The Edge: at least 75 percent residential. Carolina Square, which council thought would be half office/retail and half residential: 62 percent residential after Stancil approved an increase in residential and the developer took advantage of a loophole in the town’s Land Use Management Ordinance that allows building less than approved, in this case, less office/retail.

Council members need to get as incensed about this as their constituents are. Council has the authority to re-craft form-based code to make it work for the town before developers apply to build other projects. And council members need to look over Stancil’s shoulder to make sure he does not undercut their intentions.
– Nancy Oates

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36 Comments

  1. Ph. Sledge

     /  January 12, 2015

    If this is “progress “, Chapel Hill is doomed.

  2. many

     /  January 12, 2015

    I am afraid that this implementation of Form Based Coding is more evidence of Charlotte Thomson Iserbyt’s conspiracy theory.

  3. George C

     /  January 12, 2015

    Nancy,
    Your post today has several items of misinformation – I’m not sure whether this is by neglect in fact-checking or by intent, to provoke controversy.

    ” Stancil has proposed that council approve paying rebates to developers who build to energy-efficiency standards.”
    No, Roger didn’t propose this. The town staff brought forward this proposal after working with a Council sub-committee (Cianciolo, Ward, Harrison) to develop it.

    “But what it’s getting in Ephesus-Fordham and several other places in town is only revenue-negative residential construction.”
    What is your evidence that this project is revenue-negative? For that matter, what is your evidence that all residential property is revenue negative? Perhaps yours and mine and 90% of the Chapel Hill owners of detached, single-family homes are indeed revenue negative properties but do you have any evidence that Greenbridge, 140-West Franklin, Lux Apartments, the Graduate apartments or the future 123 West Franklin are/will be revenue-negative?

  4. Deborah Fulghieri

     /  January 12, 2015

    George, do you mean to say that all these years of the Economic Development Office under Roger Stancil pounding it into our heads that we “need to build up the commercial tax base so that we don’t have to raise property taxes on residents” was a ruse to get the Form-Based Code (no more tedious meetings for developers with commissions, boards, or anyone but Roger Stancil) into place?

    Why, the Edge, Obey Creek, Ephesus-Fordham, and all the rest of the mega-projects are using that very justification! And now you announce that it simply isn’t so. Please explain how additional roads, fire stations, police stations, trash hauling, schools, social services, and all the additional public employees for the same are revenue-positive.

  5. Terri

     /  January 12, 2015

    George,

    For three years now, citizens have been asking the town for an analysis of the cost of services. Orange County can tell us that residential development costs more in services than in revenues generated (sorry, I don’t remember the ratio right now). Commercial on the other hand generates sufficient revenue to pay for itself and, in sufficient volume, could also offset the cost of the residential. What that says to me is that there is some range of residential to commercial that balances finances.

    I read in tonight’s agenda package that staff believe the development at Obey Creek will produce more revenue than costs, but the data provided is lacking in detail. For example, it doesn’t include road maintenance.

    I know you get frustrated that citizens get their details wrong, but maybe the problem is that staff isn’t making the details accessible or clear.

  6. George C

     /  January 12, 2015

    Deborah,

    No, I’m not saying that we don’t want to build up our commercial/retail tax base. But what is clear is that you need enough people living in an area to support those new businesses that we want to try to recruit. This is especially true for smaller, local-based businesses that are going to depend on nearby residents to support their existence rather than trying to convince folks to drive over from other counties or even from the northern areas of our own County.

    Please tell me what new roads Chapel hill has built to accommodate those supposedly ‘revenue-negative’ projects that many like to demonize such as Greenbridge, the Lux, Shortbread Lofts, the Graduate, and 123-West Franklin. 140-West Franklin is indeed costing us money at the moment because the parking revenue is less than was predicted. But that project was and is a partnership so there was a known risk going in that now needs to be handled.

    Please show me the data that these projects are burdening our school system, our police force or our fire department (I would guess that our Fire Chief would be happy to explain that all of these new residential buildings are much safer than anything most of us are currently living in since they are/will be sprinklered). Also. since these buildings generally have ~ 1 parking space/unit (or less) they also contribute far less to our overall traffic congestion (carbon footprint) than most of our suburban residential neighborhoods. I’m sure they are also much more energy efficient than the majority of homes in CH. And all of these projects use/will use private trash collection so how does that cost us?

  7. Nancy

     /  January 12, 2015

    George, anything the line workers on town staff recommend has to get Roger Stancil’s blessing. But to be more accurate, I’ve changed it to “Roger Stancil put forth.”

    As for apartment complexes being revenue negative, that information came from a presentation by a technical expert during the Glen Lennox approval process. He showed various scenarios, and though one came close to breaking even, none was revenue positive. Because the Glen Lennox plan preserves quite a bit of affordable housing, I commend Town Council for approving it, even if it costs taxpayers a little more. I wish we had more redevelopment that benefits the town in ways consistent with residents’ values.

  8. Don Evans

     /  January 12, 2015

    George

    How about providing us with the numbers on just how revenue-positive each of these projects is. I assume that before you and the Town Council voted for these projects, you weighed the tax benefits against the cost and found that there was an influx of money to pay for them.

    Short of some actual data, I find it discouraging that you attempt to discredit Nancy’s reporting rather than provide the data that would reassure us all. Just blithely saying that it’s all good is not enough. If you have the information, share it with us.

  9. Deborah Fulghieri

     /  January 12, 2015

    …and if you don’t have the information, please stop blowing smoke over what data there actually is. You are an elected official who received considerable early money for your campaign from Obey Creek Ventures, as reported by Matt Dees in the Chapel Hill Weekly.

    Also, I asked you how additional services required for these projects would be revenue positive, and you replied that I (a private citizen) should show you (an elected official with access to numerous town staff and reports) how they are revenue-negative. You are in a particular position to know, but seem not to want anyone else to know.

  10. DOM

     /  January 12, 2015

    It’s amazing – one person politely disagrees with some of Nancy’s comments and immediately gets jumped on by all the usual suspects. No wonder there are so few dissenting voices on this site.

    Keep it up, guys, and before you know it you’ll have only yourselves to agree with – a perfectly harmonious world.

  11. Don Evans

     /  January 12, 2015

    DOM

    Several people seek clarification from a town representative who is responsible to the voting public and you call that is getting jumped on “by all the usual suspects”?

    If anyone is doing any jumping, it is the anonymous posters who lash out at inquiring tax payers who want honest answers to their pertinent questions, not misleading evasions or aspersions.

    You would do a better service to this community and its concerned commenters by informing the debate rather than spit-balling.

  12. David

     /  January 12, 2015

    In 2012, the Town hired NC State economist Mitch Renkow to produce a “cost of community services” study. His report can be found here: http://www.ci.chapel-hill.nc.us/home/showdocument?id=18393

    An excerpt:

    “The findings for Chapel Hill are different than the typical results of COCS studies in that that for both land uses [residential and commercial] there is a much greater balance between revenues and expenditures. I find that the residential sector contributes between 92¢ and 98¢ to the Town’s coffers for each dollar’s worth of services that it receives; and that commercial land uses generate $1.07 and $1.19 in revenues for each dollar of publicly provided services that they receive.”

    One reason that residential property in Chapel Hill is not more revenue-negative in this analysis is because one of the largest government expenditures, the public schools, is part of the County budget rather than the municipal budget. When school expenditures are incorporated in the analysis, residential is much more revenue-negative. For example, for Orange County, the residential sector contributes only about 76¢ to the public coffers for each dollar’s worth of services that it receives (2006 data).

    The American Farmland Trust published a report in 2010 summarizing the results of over 100 cost of community services studies from across the country. Only one of the studies yielded a positive revenue to expenditure ratio for residential property, and the median across all 100+ studies was $1.16 in costs for each dollar of revenue.

    http://www.farmland.org/documents/Cost-of-Community-Services-08-2010.pdf

    Given these findings, it seems the burden of proof ought to be on those who want to claim that any given residential development, including multifamily housing, is revenue neutral or revenue positive for the Town.

    A project nay still be worth doing even if it is revenue negative, just as a project may not be worth doing even if it is revenue positive, but our decisions should be informed by an accurate and transparent understanding of the fiscal realities.

  13. Terri

     /  January 12, 2015

    The other county expenditure that needs to be calculated into the equation is social services. And in light of what we heard last week about transit’s budget shortfall, I have to wonder if the base calculation is accurate.

  14. Bruce Springsteen

     /  January 12, 2015

    George, you wrote:

    “No, I’m not saying that we don’t want to build up our commercial/retail tax base. But what is clear is that you need enough people living in an area to support those new businesses that we want to try to recruit. This is especially true for smaller, local-based businesses that are going to depend on nearby residents to support their existence rather than trying to convince folks to drive over from other counties or even from the northern areas of our own County.”

    I don’t think enough thought is given to the other side of the coin. You’re saying, a business can’t survive without people nearby. Yeah, okay, but a business also can’t survive unless people want to shop there. Tax money from business is only generated when people shop there.

    People in that part of CH needed something for a long time but got nothing and then Chatham did the Wal-Mart. Now any business that is built in that area that sells the same thing as Wal-Mart (which means damn near anything) will have a tough competitor only two miles down the road. And before anyone says that people in CH won’t shop at the Wal-Mart, the reason Wal-Mart is right below the Orange / Chatham border sure as heck isn’t because people in Chatham like driving almost to Orange County when they shop at the Wal-Mart.

    The sad reality is that Chatham County and Wal-Mart were more supportive of the needs of people in the southern CH area than was CH or Orange County. Chatham and Wal-Mart weren’t doing it out of generosity towards people in Southern Orange, but the effect is the same.

  15. many

     /  January 13, 2015

    I think this is an interesting debate. One that needs to be had with a broader audience. The outcome will affect the character of the town and county for many years to come

    Ellie Kinnaird has a thought provoking appeal in the CHN about the Lloyd Farm proposal in Carrboro:
    http://www.chapelhillnews.com/2015/01/13/4471315_ellie-kinnaird-you-betcha-its.html?sp=/99/586/885/905/&rh=1 …..it goes to all the points Bruce is making.

    David, I agree on the school budget, balance sheet manipulation like this smacks of Enron style accounting. Terri is correct, many cost centers have been shifted to the county.

  16. Don Evans

     /  January 13, 2015

    So the town hired a consultant three years ago, and he reported to them that predominantly residential developments cost the town more than the tax revenue they bring in, but the council went on a residential development approval spree anyway?

    If a doctor committed this kind of gross negligence, he’d be sued for malpractice.

  17. Fred Black

     /  January 13, 2015

    “Council members need to get as incensed about this as their constituents are.”

    Nancy, do you have a count of how many constituents are incensed? How is it expressed?

  18. Nancy

     /  January 14, 2015

    Of course I don’t have a count, Fred. Only the Board of Elections will, on Nov. 3. But the frustrated voices I hear from Obey Creek to Ephesus-Fordham to Central West, all the way back to CH2020 seem to be mobilizing. Stop by the library on Sunday, Jan., 25, from 1 to 3 p.m. for the “What Makes Chapel Hill a Livable Town?” event.

  19. Fred Black

     /  January 14, 2015

    Nancy, call me unconvinced. In the last 10 muni elections we have seen 2 incumbents defeated, in spite of all the discussion about people turning out to vote against those they were upset with. The 2013 election had a turnout of 11.7%. Some 4,675 votes for mayor and 18,537 votes for council ( can vote for 4). If people are incensed, the unanswered question is will it be sustained such that they will vote 11 months from now. Our history says no, but we shall see.

  20. Julie McClintock

     /  January 14, 2015

    We really need a definitive analysis about whether these large residential apartment buildings pay their way. In every focus area process citizens have asked the Town for a cost benefit analysis to test the assumptions that George and many on the Council are making. In the case of Central West, the town claimed a small increase in net revenues (using questionable staff assumptions, omitted costs, as well as math errors). Council members expressed surprise at the public hearing when Dr. Weisburd presented our conclusions that with additional costs the net was a wash, but voted for the plan anyway. For EF, the staff produced a cost benefit analysis claiming benefits after 20 years, again ignoring key town costs. Rosy assumptions include using sq ft value based on Greenbridge, a comparable that the Town continues to use in their Obey Creek model. After EF, our financial experts who analyzed the staff work wrote to key council members asking them to explain the discrepancies. No response. The Obey Creek model has improved but our analysis still shows key costs left out which could swing the results to a negative bottom line. Maybe Orange County has better accountants. Surely the Town of Chapel Hill can do better, as could a blue ribbon task force of volunteer experts working with town staff.

  21. Terri

     /  January 14, 2015

    All anyone needs to do to see the scale of the problem is read the Chapel Hill News this week. $80M deficit for transit–a service that every CH and Carrboro elected official proudly proclaims. It didn’t get into that kind of hole overnight. Did all of the partner agencies know about this deficit all along?

    Then there’s the 140 West parking deck. Surprise–it’s not generating the planned revenue. Could it be that the estimates were inflated to make the business case for the financial outlay?

    People make mistakes, but these are what my grandpa would have called “doozies.”

  22. many

     /  January 14, 2015

    The real “doozie” is the tax revenue being siphoned off for a 1.8 billion dollar TTA light rail project that serves so few.

  23. DOM

     /  January 14, 2015

    In Chapel Hill, I think it’s useful to undergo an occasional reality check to see just how much the views of a small, vocal minority can mislead people into thinking that’s what the majority of townsfolk think. Have a look at this post from Orange Politics:

    http://orangepolitics.org/2015/01/public-participation-look-central-west

  24. Nancy

     /  January 14, 2015

    Interesting demographic chart, especially coming on the heels of Dwight Bassett’s presentation last night at the affordable housing workshop, where his figures showed the 55+ demographic to be the fastest-growing group in town. According to his figures, Chapel Hill is becoming an increasingly white, wealthy and “mature” town. Some of us would like to see policy changes that would make room for more diversity.

  25. David Schwartz

     /  January 14, 2015

    DOM,

    I entirely agree with your point about the importance of inquiring into how well the views of active participants in local governance represent those of the larger population. Mr. Crayton’s post, however, seems to shed precious little light on the matter. He reports that the demographic composition of Central West participants differs from the demographic composition of town residents as a whole. Fine. He then cites a single young participant’s comments that happen to support the thesis he wants to advance.

    I guess we are supposed to draw the conclusion that, because this participant approved of the CW outcome, and because this participant identified as a young person, all young persons thus approve of the CW outcome. But, as we learned in school, the premises do not warrant this conclusion.

    Are the views of this this one young CW participant representative of young town residents as a whole or of anyone other than him or herself? We have no idea. Similarly, Mr. Crayton quotes the participant as stating that “underrepresented groups in public input generally support the density that the obstructionists are decrying.” What evidence is there to support the claim that residents who are not older and affluent support high-density? And if they do, is that support based on an informed understanding of how density affects traffic, flooding, town finances, school crowding, and other quality of life issues? Again, we have no idea.

    Fortunately, there are more rigorous and persuasive ways of determining what the majority of the population thinks, and we’re using them. As I wrote to you in a previous thread, the Town has been surveying a representative sample of Chapel Hill residents every other year since 2009. In the 2009 survey, fewer than 30% of the respondents reported feeling satisfied with how the Town government was managing growth. Have you seen any more recent data that would suggest the level of satisfaction has increased? Among any demographic group?

    As incredible as it may seem to you, is it not possible that the people you denigrate as a “small vocal minority” do in fact speak for the broad majority of town residents? What would convince you that they do?

  26. Terri

     /  January 14, 2015

    The fact that only 11% of the population voted in the last municipal election could be interpreted as the majority feeling disenfranchised by the town. From there you could say that those who do step up and speak up are the ones who care enough to risk the ire of the elected officials; those who live by the ideals that some in the progressive community treasure as enshrined in truth and justice plaza. You *could* say that but it wouldn’t necessarily be true any more than Travis Crayton’s use of some data to support his personal beliefs are true.

  27. Fred Black

     /  January 14, 2015

    Speaking for a “broad majority” has never been the same as that broad majority voting their own self interest. Talk is cheap because supply exceeds demand!

  28. Nancy

     /  January 14, 2015

    Anecdotally, I did not have time to speak up for or against decisions made by Town Council and town staff while I was raising my children. Only when they left home did I have 4-5 hours to devote to watching a council meeting, writing a blog and participating in community meetings and listservs. From what I observe of my peers, I’m not the only one in that situation.

  29. DOM

     /  January 14, 2015

    Yes, it’s indeed a shame that the vast majority of Chapel Hill citizens who have enough leisure time on their hands to voice their opinions against increased density are most likely relatively affluent over-fifty white folks who want to keep things just the way they were the day they moved here many years ago.

  30. Bruce Springsteen

     /  January 15, 2015

    Lots of people just aren’t interested in politics. So that’s one thing. But do the ones that are interested feel free to speak out?

    Consider these two items along the lines of what I posted about most recently, namely the Wal-Mart on the Chatham / Orange border.

    Item #1: How often in the past have you seen someone arguing in favor of putting a Wal-Mart in southern Orange? The issue was basically a third rail (or whatever that phrase is). It was pretty much a political death sentence.

    Item #2: How is Wal-Mart doing in terms of drawing people from southern Orange? Pretty well, it seems.

    Okay, let’s put Items #1 and #2 together. Nobody would speak in favor of having a Wal-Mart in that general area and yet obviously lots of people wanted one or something like it. So what does that tell you?

    We all know the deal. There is a political power structure whose will must be publicly catered to. One of their tenets is that Wal-Mart is bad, etc, so everyone must speak as if we don’t want them. Then we get Wal-Mart anyway, just below the Orange / Chatham border, and they draw lots of people from Orange.

    It isn’t brain surgery as far as what’s going on. And that’s just one issue. The same reasoning applies to lots of others issues. People simply don’t feel free to speak their mind if their opinion differs from that of the local political power structure.

  31. David

     /  January 15, 2015

    Bruce wrote “obviously lots of people wanted one [a Walmart] or something like it.”

    Not necessarily. The relationship between behavior and desire is not as simple as your statement implies, as I’m sure you recognize. Lots of people feel conflicted. On the one hand, they object to what they see as the economic harm Walmart has done to individual workers, to small, locally owned business, and to society in general. On the other hand, at the end of the day, there are things they need to purchase, and if they have no other convenient shopping options that better align with their values, they’ll shop at Walmart. But that doesn’t mean they are happy about it or that they wanted the Walmart. They may want something very different, but we can’t always get what we want.

    I think it perhaps unfair to say that we don’t have a Walmart in Southern Orange because “the political power structure” has imposed its liberal dogma on a population that do not share its views. The facts on the ground, though unsatisfying and perhaps self-defeating, may simply be the result of elected officials trying as best they can to serve the interests of a citizenry—or at least a sizable segment of it—that feels very ambivalent about these issues.

  32. Terri

     /  January 15, 2015

    I think the Walmart is a perfect example for this discussion. First, there were 4-5 OC elected officials actively opposed to it as reflected by attendance at opposition meetings. Their opposition was environmental. The final footprint of that site is significantly smaller than originally proposed due to court-enforced adherence to stormwater regulations. And now 2-3 of those same OC elected officials seem to be leaning toward an even larger development at Obey Creek.

    Do the younger/newer residents of CH have this history? Do they care or do they just want cheap shopping?

    As predicted before Walmart, the business occupants of Cole Park Plaza have changed significantly. Most importantly, we lost the locally owned hardware store many of us depended on for decades. There are large sections of that shopping center empty now. To me, that provides locally-based evidence of what the E-F neighbors have been saying about impact. Do the younger/newer residents of CH have this history to use for impact?

    Do those so-called younger residents know that we used to have a grocery in downtown CH? That the application of the theory on the table of extra density to support urban life was the reality without the additional density?

    History matters, as does heart and soul commitment. I’m totally sick of this complaint about older people making all the decisions. We show up, we care, we are committed to this community. No one is stopping the younger people from participating.

  33. many

     /  January 15, 2015

    Mr. Crayton’s post goes to a point about democracy and the unsatisfactory way local government encourages or facilitates debate and participation. Debate and participation exposes the “self interest of the different factors” which Adam Smith points out should be “long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

    My friend Fred says self-interest supply exceeds demand, and I agree, but then I naturally ask myself who’s self-interest? Politicians who aspire to a higher office? Town staff that wants to justify their existence? Developers who want to make money? Area residents who are concerned about property values or quality of life? Existing commercial that might benefit form more traffic or fail because of more competition? The whole town which might shop or live in the new development? The whole county who might be a financial stakeholder? Students that might only live here for a few years? The list goes on. No wonder Adam Smith described self-interest as the “invisible hand”

    Again, the role of government should be to facilitate the debate and discussion much better than the chaos that resulted. Mr. Creyton’s point is that there was a failure of government to properly promote and weigh a public interest in the swamp of self-interest.

  34. Bonnie

     /  January 15, 2015

    Walmart in Hillsborough produces over 10% of the county’s sales taxes.

  35. David

     /  January 15, 2015

    I didn’t participate in the Central West planning process, but I have spoken with many residents who did, and they tell me that the “chaos” resulted from staff’s persistent effort to impose a predetermined outcome, which the residents’ steadfastly resisted.

    There seems to have been a culture clash: the staff appear to have viewed the “public participation process” as an opportunity to “sell” a particular planning vision to the residents while the residents expected to craft the vision themselves and not merely rubber stamp something the staff and outside consultants produced.

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