Own up to tax hike

Get ready for a tax hike, a one-two punch of county and town both wanting Nancy Oatesmore from taxpayers.

Talk of money hung heavy in the air last week, with the county commissioners continuing discussion (kudos to board chair Earl McKee for dissuading his colleagues from rubberstamping approval) of a $125 million bond in 2016, and Town Council holding a work session last Monday in which town staff bandied about the possibility of a $40 million bond in the November 2015 election, plus another $50 million financed in TIF-style installments.

Elected officials for both county and town have the authority to raise taxes without putting a bond referendum on the ballot for voters to approve or vote down. But politicians prefer to raise taxes through a bond because it puts the onus for an unpopular decision (paying higher taxes) on the voters, not the elected officials. When a bond referendum passes, politicians have the excuse that the tax hike came about because voters demanded it.

Instead, elected officials tend to exercise their spending authority on projects that they know voters wouldn’t necessarily spring for. Commissioners spent more than $1 million renovating a lovely meeting room for themselves and others, mainly adults with cars. But wouldn’t it be nice if schoolchildren could wake up every day knowing that they had a similarly beautiful spot in which to learn? Or at least one with adequate heating and without mold.

Town Council members also approved a pricey renovation of its space that included a secret emergency exit, exclusively for council members’ use, and a bullet-proof dais. And look at the exquisite town manager’s suite — oh, right, we can’t because it requires cardkey access. But it must be nice because its budget was three times that of the equivalent space for the permitting center open to the public on the ground floor.

Those expenditures likely would not have met with voter approval. So, being politically savvy, our commissioners position their bond as money for schools, and council members make theirs for new greenways, sidewalks and unspecified stormwater improvements, all of which appeal to voters.

Council members seem to have no compunction against asking taxpayers to pay more for what we value, but they won’t ask developers to contribute.

We have a noisy group of “Not in My Checkbook” businessmen who want residential property taxpayers to subsidize their development projects as a hedge against their risk, most recently The Edge and Village Plaza Apartments, which produced no affordable housing or energy efficiency or stormwater mitigation that would reduce flooding in modest neighborhoods nearby.

Those businessmen are big contributors to the election campaigns of many of our council members and at least one commissioner.

We need elected officials willing to make decisions about what’s best for the community, even the community members who don’t contribute to election campaigns.
– Nancy Oates

Talk, hear, act

Growth has proved a hot topic in the discussions in the local blogsphereNancy Oates recently. Participants have divided into two camps. One side believes that all growth is good and that new development of any kind will make money for the town and thus lower residential property taxes. The other side believes only nonresidential property is revenue positive and pays close attention to what the community gets in return when our tax dollars are used to subsidize developers.

Communication between the two sides appears to have ground to a halt, reduced to name-calling and arguments with no more depth than “Are not!” “Are too!”

Council has made a spate of decisions recently about development projects that directly impact the lives of those of us who live here or want to live here. Council members, repeating what they hear from the town manager and economic development officer, say that if enough buildings are built, the town will make money and pass that cash on to residents in the form of lower property taxes. But as the Wake County commissioners’ chair said, in facing the prospect of a property tax increase, “We can’t grow our way out of this.”

That jibes with my experience. The town has grown substantially in the nearly 20 years I have lived here, yet every year I pay more in taxes. Even in years when the town’s tax rate decreases, my tax bill goes up.

At Lee Storrow’s “listening session” Saturday afternoon, a woman told of trying to find an affordable place to live. “It costs a lot to live here,” she said.

I hope those words ring in Storrow’s head the next time a developer proposes a project that has no affordable housing. I hope those words touched him enough that he will lead his colleagues on council to rework the Ephesus-Fordham form-based code to include affordable housing. And while he’s at it, correct the code to meet town ordinance standards for stormwater so the affordable homes in the neighborhoods around Ephesus-Fordham don’t suffer even worse flooding.

The town manager, his staff, and council members who don’t have time to digest before every meeting 900 pages of jargon-rich text meant to obfuscate, adhere to a neoliberal theory of economics that postulates if you want the economy to grow, you need less government involvement and a climate friendly to big business, and you have to accept a widening gap between the rich and the rest of us.

But many of us who advocate for the community believe that’s not true, that there is a way to grow without sacrificing quality of life, without pushing out young people, modestly paid people and people of color. Council members and town staff need to bargain hard with developers to make sure the community gets something of value for the price taxpayers are paying, and to listen to folks other than those making money from the deals.
– Nancy Oates

We need a hero

It looks like the UNC Board of Governors may be celebrating Black History Nancy OatesMonth by closing down UNC’s Center for Poverty, Work and Opportunity.

The 27% of blacks in North Carolina who live below the poverty line is more than twice the 12% of poverty-stricken whites in our state, which makes the timing of the BOG panel’s recommendation last week all the more ironic.

The Republican-controlled General Assembly appoints the UNC System Board of Governors, which is made up almost exclusively of white male Republicans. Last year, the Legislature directed the university system to shift $15 million from its network of 240 centers and institutes to core academic functions. The panel making the recommendation of which to whack chose three. Of those, two — N.C. Central’s Institute for Civic Engagement and Social Change and UNC’s poverty center — work directly with marginalized populations to level the playing field.

How much would the state save by closing down the poverty center? $0. Not a penny. The center is funded entirely by grants and private donations. But by taking away the center’s affiliation with UNC, the poverty center would have to give back the grant money it received.

Some have said the recommendation is political. The poverty center’s director, tenured law professor and former UNC Law School dean Gene Nichol, has criticized some decisions made by the Legislature and the McCrory administration that have been detrimental to the poor.

Some have said it’s a business decision. McCrory puppeteer Art Pope has made a very good living off of the poor through his empire of Family Dollar and other discount stores. The more poor people in the state, the larger his customer base.

Some have said the BOG is operating out of middle-school cliquishness. Nichol speaks passionately and about injustices, and that may prick the consciences of some of the “haves” in power, who respond by trying to silence him.

Fortunately, Nichol won’t be silenced. The BOG can cut UNC’s ties with the center, and the poor in the state will suffer from the loss of the center’s good work. But Nichol is a tenured professor and is constitutionally protected in telling what he knows.

Here’s where the town of Chapel Hill can step in and show that the values that drew many of us to town are alive and well and in practice. One of the proposals for the 100 W. Rosemary St. building is for it to become a civil rights museum. The museum would not take up the whole building. The town could offer office space to the poverty center and UNC’s Center for Civil Rights, which has been put on notice by the BOG for not having sufficient diversity of opinion. All it would cost the town is the rent differential between what the museum and centers would pay and higher-paying tenants.

In recent years, a majority of elected officials and town staff have shifted away from supporting efforts to take care of people who historically have been oppressed. Offering room to the museum and two centers would be a cost-effective way to get us back on track.
– Nancy Oates

Listen up!

What a blessing to all of us that I stayed home to watch the town’s affordable Nancy Oateshousing seminar on my computer instead of sitting in the audience at Town Hall. Had I been there in person, I might not have been able to contain myself after Robert Hickey from the Center for Housing Policy in Washington, D.C., finished his talk. I might have shaken my finger at Sally Greene and Maria Palmer, who voted for the flawed Ephesus-Fordham form-based code, and admonished, “I told you so! I told you so!”

Make that “WE told you so!” For Hickey repeated many of the same strategies and suggestions that residents informed Town Council members of during the public hearings for E-F and the discussion of what to do with real estate assets the town wants to sell.

Among Hickey’s recommendations: Smooth the permitting process for developers in exchange for affordable housing. (Tysons Corner, Va., developers donate 20-30% of units for affordable housing, he said.) Consider easing height restrictions in exchange for affordable housing. (Though he said more than 3 or 4 stories might not be appropriate for Chapel Hill.) Donate public land for affordable housing. (A majority of council members voted down Matt Czajkowski’s suggestion of opening the cemetery parcel up for bid by for-profit builders who specialize in workforce housing after DHIC bungled its grant application.) Negotiate with major employers to contribute to housing affordable for their modestly paid workers. (Jim Ward’s demand for a higher payment-in-lieu for UNC’s Carolina Square was smacked down by some of his colleagues on the dais.)

Ed Harrison sat quietly in the audience, perhaps feeling vindicated, too.

Dwight Bassett followed Hickey by presenting data that spoke to the need for affordable housing. Millennials and senior citizens are competing for the same low- and moderately priced housing stock, and the rise in rents has far outpaced the rise in income in recent years. Compared to Raleigh, Cary and Durham, Chapel Hill has the lowest percent of single-family detached houses already.

People in the audience, who for the most part did not identify themselves or their interest in the topic, asked trenchant questions: How much would it cost to build an 800-square-foot, 2-bedroom apartment, and what level of income would that require to rent it (given the federal guideline of paying no more than 30% of gross income for housing, utilities and insurance)? Could parking spaces be reduced in exchange for using the space for affordable housing? How will the Chatham Park development affect the demand for affordable housing in Chapel Hill?

The town’s next presentation in the affordable housing series will be March 10 (the Feb. 24 date has been scratched) and will be on “The Real Cost of Housing: What It Costs the Town.” The free session will be held from 5 to 6:30 p.m. at Town Hall auditorium. The public is invited.
– Nancy Oates

Is Southpoint our hero?

I write a business column for a print publication in which I report on new Nancy Oatesbusinesses coming to town and those that leave. For the most recent issue, I had to dance around a bit, because the only business news I could dig up was businesses that had closed downtown. Gigi’s Cupcakes; Caribou Coffee; Top This!; Qdoba (though a new restaurant has made plans to open in the space); The Thrill, followed by the quick opening and closing of The Heel; Time After Time; Ken’s Quickie Mart; Pita Pit; Game Stop; East End Oyster Bar; Cold Stone Creamery; and the pharmacy at Sutton’s Drugstore — all have closed in the past year or so.

As I was home writing up that depressing column, Robert Poitras, owner of Carolina Brewery, was speaking to the Friends of Downtown about how his restaurant and bar has lasted 20 years on Franklin Street. I would have expected him to be an ardent cheerleader of downtown, but I understand he spoke frankly about the challenges of doing business on Franklin Street.

Lack of convenient, low-cost, easy-to-use parking hurt downtown businesses, he told the audience, and the town could have done more to promote downtown businesses. He would like to have seen the town launch a “Rediscover Downtown Chapel Hill” marketing campaign. Instead, town staff spent $5,000, not including staff time, redesigning the town’s website. Ironically, the website before it was redesigned garnered one of the highest satisfaction ratings from town residents on a “How am I doing?” survey about a myriad of town departments. Since the revamp, users have struggled to find relevant information.

Poitras also spoke of wanting to add vitality to downtown without sacrificing its small-town charm.

In researching my business column, I spoke with a longtime Franklin Street landlord who lamented the loss of Parking Lot #2, which has been usurped by 140 West. An open lot feels easier to use and less of a commitment. The landlord opined that patrons of downtown businesses may not realize the underground lot is open to the public. Or they might think it’s too expensive.

The landlord pointed out that quite a few of the new businesses opening on Franklin Street in recent years are chain stores that have deeper pockets than independent businesses and can afford the high rents. But even the chain stores are struggling. Why would customers venture downtown and hassle with parking to go to a chain store when they could drive to Southpoint where the parking is free and take their pick of Any Mall USA stores?

Chain stores won’t draw people downtown, the landlord said; unique businesses will.

With that conversation fresh in my mind, I read a column in a local newspaper written by a local real estate agent pronouncing the form-based code used in Ephesus-Fordham a success, even though it is driving out a passel of unique, independent businesses from Village Plaza. The town manager is pushing for the faulty form-based code to be used with every new development henceforth.

Town residents already are voicing their objections to turning Chapel Hill into Southpoint with houses, and it sounds like independent business owners are joining the protest.
– Nancy Oates

Fix schools now, or later?

I stopped by the Orange County Commissioners retreat Friday afternoon to hear howNancy Oates commissioners planned to prioritize and pay for expenses on their wish list. As the discussion about whether to put a $125 million bond referendum on the ballot versus what’s called “pay-as-you-go” unfolded, I realized some commissioners took the “retreat” literally.

The county has two ways of paying for big-ticket items: issue a bond, which is like an option to borrow, or allowing the board of commissioners to use its power to shift around priorities and raise taxes if it looks like it won’t have enough money to pay its bills.

Each method has pros and cons. Both require a tax increase. The interest rate on a bond can be locked in, and the length of time to repay it is longer than if the board of commissioners borrowed money without a bond. A longer timeline reduces the pressure on the county to come up with the money to make its annual debt payments, because the payments are lower, but the total interest paid is more. Think of a 30- vs. 15-year mortgage.

Pay-as-you-go enables commissioners to reprioritize expenses and gives them more flexibility on how they will spend their money, unlike a bond, which has to be spent only on what the voters approved. Commissioners get the money faster with pay-as-you-go because they don’t have to wait for voter approval. The interest rate on money borrowed via pay-as-you-go is negligibly higher, about $1,000 per million borrowed, but commissioners can pick and choose what to spend on and may not have to borrow as much. Less debt burden eases the pressure on annual budgets.

All commissioners agreed that spending money on school maintenance is top priority. The state has cut funding for schools, and SAPFO (a law that requires more schools be built as the population of school-age children increases) meant that money was shifted to adding capacity and requests for maintenance were turned down. The county budget does not have school maintenance built into its budget the way it has maintenance for county office buildings covered.

So now we have old schools with mold problems, HVAC systems that break down and, in one instance, flooding problems that made the gym unusable. The sooner the problems are fixed the better. Clearly, pay-as-you-go would be the most expedient route.

But one by one, all commissioners except board chair Earl McKee leaned toward a bond. If voters pass a bond referendum, commissioners can respond to complaints of the resulting tax hike by saying, “We didn’t raise taxes; the voters raised taxes.” Hence, the “retreat” — from accountability, common sense and doing what’s best for our children. A bond would delay school maintenance until after the 2016 election (state law won’t allow bonds on the ballot in odd-year elections). Ironically, the discussion took place in a newly refurbished meeting room that cost taxpayers $1.5 million, money that could have been spent on school repairs.

I left the meeting with renewed respect for McKee. His moral compass is leading in the right direction. If only he can convince his colleagues to follow.
– Nancy Oates

What does quality of life mean to you?

Terri Buckner writes:

In 2013, a couple of European psychologists reviewed the literature in an attempt to define the term “quality of life.” Their conclusion was that it “turn[s] out to be an ambiguous and elusive concept.”

In an editorial in the Chapel Hill News, Travis Crayton and Molly DeMarco claimed “Many of us might have originally chosen to live in Chapel Hill/Carrboro because of the high quality of life, exemplified by a vibrant student life, arts and music scene, and abundance of unique, local businesses.”

CHALT members have staked out their desire to “Protect the quality of life in Chapel Hill’s residential neighborhoods, where we live and raise our children.”

Social science researchers learn in introductory methodology courses to define their terms up front. So I am asking you to share your thoughts. What does ‘quality of life’ mean to you? We know there isn’t a “right” answer, but that doesn’t mean we can’t come to a local consensus. If we can construct a shared definition, perhaps it will make conversations about solutions more inclusive, or at least less divisive.

I am posting this same request on OrangePolitics, a blog that targets a different demographic. My plan is to take the contributions and compose a definition and share it in my next Chapel Hill News column. If you are willing to let me use your name (for those who post with their real names) in that article, please include the “You may use my name” at the end of your first post in the thread.
–Terri Buckner

CHALT makes connections

After my children left home, my husband and I thought of downsizing to Nancy OatesHillsborough, where taxes are a little bit lower. But the historic homes were too big, the small homes in a gentrifying section of town needed too much work, and the new homes in the subdivisions north of town left us uninspired.

Knowing that the most successful moves are to someplace not from someplace, we stayed put.

As I sat in traffic last week, first on U.S. 70 into Hillsborough, then on Churton Street, gratitude for our decision almost overrode the frustration of wasting so much time idling my engine as traffic barely moved through light cycle after light cycle. Hillsborough has grown steadily in the past decade, and town leaders apparently didn’t give serious thought to how all those extra cars and trucks on roads that can’t be widened would impinge on residents’ quality of life.

Those of us sensitive to unintended consequences and willing to learn from the mistakes of other towns seem to find one another. Many of us recently organized ourselves into a formal group to share what we’ve observed and learned. We call ourselves Chapel Hill Alliance for a Livable Town, or CHALT (admittedly, we don’t have a branding expert among our number), and we held our first educational event on Sunday afternoon at the library.

The response overwhelmed us. We ran out of parking spaces, surveys and Rice Krispies Treats. We had exhibits on five main areas that affect the quality of life of our town: traffic and transit, affordable housing, the environment (including stormwater management), a fiscal analysis of new development projects, and town planning and design. People filled out surveys rating which commercial and residential projects contributed the most to the town and weighed in on what budget items they would reduce spending on. We had forms for people to register to vote, but everyone who stopped by was already a registered voter.

The exhibits sparked many interesting conversations. People could see how each area impacted all the others. When the town adds something in one area, what does it cost the other areas in terms of increased risk of flooding, for instance, or higher property taxes or longer waits for a bus? If the town spends more on servicing new developments, what cuts will it make in the budget, or where will it generate more revenue? What can council members do to shape new developments to ensure that the people who live here benefit and that a development’s impact is worth the cost to taxpayers?

CHALT’s next event will be held 3-5 p.m. on Feb. 19, at the library in Room A. CHALT will host a talk by an affordable housing expert on March 18, 5-7 p.m., at the library. All CHALT programs are free and open to the public.

Learn more at CHALT.org, where you also can sign up to receive a free subscription to our newsletter, emailed direct to your computer.
– Nancy Oates

The price of doing right

Art Pope tried to buy his way into the university and failed. So Pope, the DickNancy Oates Cheney of the McCrory administration, took another tack: He pressed the N.C. General Assembly, which has appointed several Republican cronies to the UNC System Board of Governors, to push out the system president, a man revered for his integrity, wisdom and even-handedness and a Democrat, to make room for Pope to replace him with a puppet who will do Pope’s bidding.

Do I know any of this for a fact? Of course not. But by this time next year, I feel confident I’ll be able to say I called it.

When I heard the news Friday that President Ross had been given a year to clean out his desk and move on, I felt as though darkness had won. When what’s best for the political elite trumps what’s best for the common good, all seems lost.

I fear we’re heading down that path in the development decisions town leaders are making. Residents I talk with resent Town Council and town manager decisions that build housing to attract only wealthy tenants in town temporarily while middle class and working class residents are squeezed out. Residential development costs taxpayers; residential property taxes go up, so even residents who have no mortgage face ever-increasing property taxes.

Town manager Roger Stancil and town economic development officer Dwight Bassett seem to believe growth can continue ad infinitum, that there is no inflection point at which growth switches from being beneficial to becoming detrimental. Such a point exists, but a majority of council members act as though it doesn’t. They ignore the bottom 99 percent on the wealth continuum in favor of the top 1 percent who will benefit from rampant growth.

Who benefits from the private equity deals of Village Plaza Apartments, Timber Hollow and Obey Creek? The investors who put up the money initially, flip the deal and scurry away with their profits, leaving ordinary residents to subsidize those investors through increased property taxes to pay for infrastructure, energy-efficiency rebates, services and increased debt service.

Tom Ross, as president, made some decisions that displeased the Board of Governors, such as restructuring Elizabeth City State University, which has a predominantly non-white student body, to enable it to remain open though the BOG wanted it closed. Ross led with wisdom and heart, doing what was best for society as a whole. Perhaps that cost him his job. But he leaves with the respect of the majority of the people of North Carolina.

Will a majority of council members have the courage to do what’s right for their constituents, even if it means they fall out of favor with the developers who give so generously to their campaigns?
– Nancy Oates

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