Price tag on the gift

Head and heart – they can coexist. We desperately want them to in Town Council members.

At a council work session last week, DHIC, a housing nonprofit in Raleigh, proposed building 140 apartments – 60 reserved for senior citizens and 80 for low-income families – on 10 acres of what is now part of Chapel Hill Cemetery between Legion Road and U.S. 15-501. DHIC president Gregg Warren made the proposal with two conditions. First, he would need the town to do an expedited approval, because he would use state and federal money to finance the project. The state money would be available only through 2014, he said, and federal money, well, let’s just say with the way things are going, the sooner the better.

The plan would have to be approved by the N.C. Housing Finance Agency to win the money. Warren said he would need a purchase agreement by January and rezoning and special use permit approval by May, then the state would make a decision in the summer about whether to hand over any money.

Warren’s second condition was simpler: The town would have to sell him the 10 acres for $100, total.

The project has much to recommend it. In an atmosphere where developers have focused only on their own profit margins, hearing from a developer who would leverage public money to yield housing for members of our workforce, or retired from our workforce, sounds great. But before taxpayers sign over our assets, we need to know how generous a gift we are giving. And no one on council knew the value of that 10-acre parcel.

Furthermore, no one knew how much the site preparation would cost – the slope of the land and the soil type may pose obstacles to construction – and whether the developer would want the town to pay for it. We may still be paying for the site cleanup of 140 West. Town staff have not yet made public the total bill.

And, of course, the town needs to know the demand for cemetery space and the alternatives if that space is no longer available.

Sure, making public the value of the gift we are giving to this developer to provide us with something we’ve been asking for takes the romance out of it. But the fiscally prudent course would be to know how much it costs.
– Nancy Oates

by on October 7, 2013  •  Permalink
Posted in Council Members, Housing, Land Use
Tagged
Posted by Nancy Oates on October 7, 2013

https://chapelhillwatch.com/2013/10/07/price-tag-on-the-gift/

Small town, big money

The Age of Private Equity Transactions has arrived in Chapel Hill.

Private equity transactions are nothing new; they got a lot of press coverage during the 2012 presidential race because Mitt Romney’s Bain Capital specialized in them and made Romney rich.

This is the concept: Buy an asset with borrowed money; resell it at a higher price; pocket what can be a sizeable difference, with very little risk, and move on.

A private equity firm, using investors’ money, buys what it perceives to be an underperforming company. As the new owner, the firm has control over decisions the company makes. The debt accrued in buying the company makes it more expensive for the company to do whatever business it had been doing, yet the deal has to make money for the private equity investors. So the firm makes changes to the company to increase its profits – laying off workers, sometimes shutting factories, maybe selling the company to a larger operation in the industry that wants to reduce its competition. Ultimately, the original company may go out of business, but not before the private equity investors have made a bundle.

Investors win; communities lose.

Some businessmen (and private equity transactions are dominated by men) consider such a transactional economy to be beneficial. It’s the “trickle down” effect that politicians and business leaders tout during recessions. If some get rich, the theory goes, they will buy something somewhere that will boost the economy of that particular part of the world. U.S. wage-earners during the Reagan years know that “trickle” is the operative word.

In Chapel Hill, 123 West Franklin is by far the largest private equity transaction in town. Atlanta-based Cousins Properties will tear down University Square shopping center to build offices, retail space, apartments and a parking deck. The shops that had made up the shopping center have moved elsewhere or shut down. They were not offered space in the redeveloped location. Once the project is done, Cousins plans to sell it and exit.

Overall, I see 123 West Franklin as a welcome addition to downtown, though it got off on the wrong foot by being stingy about its contribution to affordable housing. It could have designated 10 percent of its units as affordable; instead it proposed donating $60,000 as payment-in-lieu. In the end, it promised $250,000 as PIL, still scroungy for a $100 million development.

Timber Hollow is another. (You didn’t expect I’d get all the way through this without mentioning a Strom, did you?) Ron Strom, doing business as Blue Heron Investments, bought the 198 organically affordable apartments and plans to bump up the number of units and raise the rent by at least a third in order to make the revenue stream more attractive to the next owner. He aims to sell the complex by 2015. Town residents sacrifice affordable living space for nearly 200 individuals and families so Strom can walk away with more money than he could ever spend in a lifetime, chanting, “It’s not the money; it’s what the money means.”

Investors win; community loses.
– Nancy Oates

by on September 30, 2013  •  Permalink
Posted in Business, Downtown Chapel Hill, Housing, Land Use
Tagged
Posted by Nancy Oates on September 30, 2013

https://chapelhillwatch.com/2013/09/30/small-town-big-money/

Free market

Developers and property owners who rant about their “right” to make the maximum profit regardless of how it affects the quality of life for the rest of the community should spend a couple hours at the end of a Saturday afternoon at the Orange County Solid Waste Convenience Center on Eubanks Road. There they could note the individuals and families waiting to see what gets dropped off in the “free shed.”

Saturday mornings are popular times for yard sales, and later in the day, some sellers decide they don’t want to make room in their closets again for their unsold merchandise. So they take it to the free shed on Eubanks Road for anyone who wants it. Those who drop off items receive no tax write-off, only the knowledge that their useable items will be snapped up and begin a new life in another home.

In my observation, the number of people who spend their Saturday afternoons “shopping” at the free shed instead of at Southpoint is increasing. Yet they seem to remain invisible to developers and property owners concerned only about making their own well-off selves richer.

I spent the past week barking behind Ron Strom as he presented his rezoning request to various boards and commissions. Strom claims that the rents at the Timber Hollow Apartments he purchased last year are 32 percent below market rate, so he plans to bump up the rent on one-bedroom units from about $700 a month to about $925. And he plans to build more than half again as many new luxury rentals and tricking up the amenities, adding a resort-style pool, party plaza and coffee shop to appeal to well-to-do tenants. To speed the approval process, he stamped his plans “affordable,” even though the plan won’t yield a single affordable unit.

Every market rate apartment complex has a predictable vacancy rate. Stom’s plan allows him to claim that his vacant units are the affordable ones and that if he can’t rent them out within 30 days to tenants who qualify for affordable units, he can rent them at market rate. No tenant on a budget can pay the buyout for breaking a current lease in order to move into Timber Hollow with less than 30 days’ notice. So, goodbye affordable units.

The Rules of Strom deem graduate students (who receive annual stipends of $15,900 for a PhD student and $11,900 for a master’s student) make too much to qualify for affordable units because he includes as income their scholarship funds paid directly to the school and personal loans students take out to make ends meet.

Strom claims he can’t make the numbers work to provide actual affordable rentals, yet at every public meeting he brings a posse of six to eight men, professionals who charge about $300 an hour – the middle-aged white men in the group, anyway. He likes to portray himself as community minded, but recall that when 3Cups didn’t garner him enough return on his investment, he pulled out, and the independent coffee shop was sold to a franchise.

If Strom wanted to make a positive contribution to the community, he could preserve the existing affordable housing, and maybe open a free coffee bar next to the free shed on Eubanks Road.
– Nancy Oates

by on September 23, 2013  •  Permalink
Posted in Ethics, Housing, Land Use, Lifestyle
Tagged ,
Posted by Nancy Oates on September 23, 2013

https://chapelhillwatch.com/2013/09/23/free-market/

Seeing red

About 200 taxpayers turned out for the open house last Tuesday night that showed off the four plans for Central West Focus Area that we got for the nearly quarter of a million dollars we paid to Rhodeside & Harwell. Or as Jim Ward framed it in an email on the Central West listserv: a quarter of the revenue the town gets from hotels over the course of an entire year.

Crowds lined up before the doors to Amity Church opened, even though it was dinner time and they could have gone to the Estes Hills Elementary School Open House or to the Rosemary Imagine brainstorming session, both of which offered refreshments, unlike the Central West Open House. Instead of snacks, participants in the Central West event got strips of red and green stickers handed out by town staff. Maps and photos were laid out on tables, and newsprint lists hung on walls, ready for the community to put green-dot stickers on design aspects they liked and red dots on what they didn’t.

Town staff ran out of red dots within the first 10 minutes.

Some Central West Steering Committee members, responding to town residents’ concerns about the additional traffic that the consultants’ plans would dump on the already over-stressed Estes Drive, drew up an alternative plan. Town staff narrowly avoided a public relations debacle when, after initialing banning the alternative plan from the property, relented and let it be shown, as long as it was not inside the building with the rest of the plans, where it might be misconstrued as staff sanctioned.

Alternative plan supporters set up their proposal on the walkway outside the building only. Ward, who is not up for re-election this year and perhaps is fed up with citizen input, crashed through the bushes, leaving footprint-sized divots in the mulch in his haste to get inside the building to stand by the consultants’ plans and avoid constituents looking at the alternative plan.

When a politician reaches that level of curmudgeon, town residents pay for it. The Central West process has highlighted a growing disconnect between town staff and the public. Staff are as professional and courteous to the public as always, but there is an element of lip-service to staff interactions with the citizens, as if the development plans are a done deal, and they have to listen politely until members of the public give up and go away. And if enough people on the dais have had their fill of feedback from the public, we’ll end up with a town out of a textbook, all matchy-matchy, rather than the one with character we’ve had for generations.

Don and I didn’t stay long after sticking on our dots. We wanted to give up our parking space to some of the other cars circling. Besides, we had some things to grill, and not just politicians.
– Nancy Oates

by on September 16, 2013  •  Permalink
Posted in CH2020, Land Use, Politics
Tagged
Posted by Nancy Oates on September 16, 2013

https://chapelhillwatch.com/2013/09/16/seeing-red/

Lotsa lux

Remember Bicycle Apartments? Trinitas Ventures doesn’t, evidently. The Indiana-based developer of student apartment complexes has opened a rental office in the arcade on East Franklin Street for its project formerly known as Bicycle and now called Lux at Central Park.

Gone are the images of healthy, clean-living students bicycling to campus and back, keeping reasonable hours because they wouldn’t try to bike home at 3 in the morning after a night at the bars and bring the party with them. Now that Trinitas has all its approvals and permits, it has changed its image to market to students whose families have money and perhaps are used to having someone clean up after them.

The motto for this revamped student housing? “Live Life Lux.” The posters tout “Resort-style pool” and “Free tanning”; “Granite countertops” (what student would want to go through college without them?), a “Cyber café” and “24/7 fitness center.” And, of course, “Social events” and “Walking trails” (no mention of whether they lead to campus).

Undoubtedly, this is the type of complex Trinitas had planned all along but figured that Town Council members in Chapel Hill might have second thoughts about approving a project that would raze affordable housing to build luxury rentals.

A similar project will come before council soon. The once affordable Timber Hollow Apartments are being renovated into luxury living with granite countertops, resort-style pool and state-of-the-art clubhouse. And that developer, Ron Strom, not only is pressing for an upzoning from R-4 to R-5 but has proposed an “overlay zone” that would allow him to build density beyond R-5 by claiming to reserve some units as affordable. Trouble is his proposal has so many loopholes that none of the units will be rented at affordable rates, and he won’t accept Section 8 vouchers. If council swallows his line, the only one who will benefit is Strom, who will have even more high-rent apartments to boost his profit margin.

On top of all this, the Land Use Management Ordinance rewrite has abolished public hearings for rezoning. Instead, the town manager would make rezoning decisions and wouldn’t have to heed input from council or other taxpayers.

If the town, even with its expensive, time-consuming rezoning and special-use permit process, can’t get developers to hew to the vision they presented to council and the public, what will our town look like if developers don’t even have to pay lip service to our standards?

We need Town Council members who can look behind the veneer of a developer’s PowerPoint, council members who will ask the kind of questions that reveal what the developer really plans to build.

It’s an election year. Who do you think can hold developers accountable?
– Nancy Oates

by on September 9, 2013  •  Permalink
Posted in Council Members, Elections, Housing, Lifestyle
Tagged , , ,
Posted by Nancy Oates on September 9, 2013

https://chapelhillwatch.com/2013/09/09/lotsa-lux/

At first glance

The Friends of Downtown held a sneak preview of the candidates for Town Council last Thursday. I sat in the audience next to Julie McClintock, which didn’t seem like a mistake at the time, until Mark Kleinschmidt, running unopposed for mayor, got up to speak and made mention of the “constant contrarians.” And suddenly, all eyes were upon Julie and me.

I can’t speak for Julie, but I plead guilty to taking any good idea, eyeballing it for dents or scuffs, shaking it to see what pieces fall out, dropping it to see whether it breaks, then checking its price tag. The mayor sees that as being negative. I call it being thorough. We can agree to disagree.

What all of us in the windowed meeting room on the second story of the Franklin Hotel might agree on was that the non-incumbents showed well. It was refreshing to note that when panel moderator Gregg Gerdau asked the candidates for a 2-minute elevator speech to introduce themselves, all more or less stayed within the two minutes. When Gerdau asked them a question, for the most part they answered it before moving on to an issue closer to their passion.

Not so, the incumbents. Sally Greene, first elected in 2003, and Ed Harrison and Kleinschmidt, elected in 2001, have campaigned numerous times over the years. We already know their values, how they are likely to vote on issues and what pet projects they’ll promote. Plus, Town Council meetings begin a week from tonight. They’ll have plenty of opportunity to insert the planks of their platform in discussions of issues that come before council.

At the forum, the newcomers had time only to mention in passing some of their ideas.

George Cianciolo sees an advantage of increased revenue with increased growth, and wants to make room for more entrepreneurs.

Loren Hintz differentiated between the homeless and panhandlers, and argued that the increase in vandalism downtown is likely not due to panhandlers.

Gary Kahn mentioned the importance of continuity, that development on one side of the street should mirror development on the other.
Paul Neebe focused on high property taxes that are pushing out even the middle class; he also favors taking a carrot and a stick approach to solving problems.

Maria Palmer noted that many of the working poor can’t go places on Sundays, the only day of the week they have off, because buses don’t run on Sunday.

Amy Ryan wants to respect the brand of Chapel Hill, but worries that college students, like her daughter, won’t be able to afford to live in town after they graduate. She also put forth the idea of a trolley bringing people downtown from remote parking lots.

D.C. Swinton would like to clear up the misperception that homeless people are bad people, and he suggested incentivizing business owners to hire more workers, even at minimum wage.

This should be an interesting election season, with plenty to talk about, even critically.
– Nancy Oates

by on September 2, 2013  •  Permalink
Posted in Uncategorized
Posted by NancyDon on September 2, 2013

https://chapelhillwatch.com/2013/09/02/at-first-glance/

Elected or selected?

Bill Strom started it, then Penny Rich took advantage, too; then Lydia Lavelle and now Ellie Kinnaird. All left office between elections, leaving a small group of politicians to select their successors. And if Valerie Foushee is appointed to Kinnaird’s seat, a small group of politicians will decide who takes her seat as District 50 representative in the N.C. House, a seat she had barely warmed, getting elected only last year.

I make a big distinction between Sen. Ellie Kinnaird’s motives for leaving office and Bill Strom’s. Kinnaird, at 81 and perhaps feeling the press of time, left office as a way of switching tactics to work toward restoring sanity to the General Assembly, where since November Republicans have been destroying the safety net for the state’s most vulnerable residents. Kinnaird figured she could do what people elected her to do more effectively from the street. Strom, who sold his house in Chapel Hill months before he quit Town Council and bought an apartment in New York – timing it so that his seat would not be put on the ballot – manipulated the system just because he could.

As for Rich, Lavelle and Foushee (she hasn’t been appointed yet, but she made known her interest in seeking Kinnaird’s seat the same day Kinnaird resigned), I guess they had to seize the opportunities that came up. Because county commissioners are elected to their four-year terms in even years and Town Council members are elected to their four-year terms in odd years, Rich would have had to be out of office for a year in order to complete her council term and run for health insurance, I mean, county commissioner. A whole year trying to think up things to do to keep her name in the news.

Lavelle could have finished her term before running for mayor, but maybe someone hard to beat would be running for mayor then. The same for Foushee. If she had waited until her term ended before running for the state Senate, who knows what the competition would be.

What I wish had happened was that Sally Greene had sat down with Kinnaird well before the 2012 election and Kinnaird had announced that she wouldn’t seek re-election but would heartily endorse Greene running for the seat. But as the saying goes: If wishes were horses, bloggers would ride, or something like that.

The state elections in 2012 indicate that letting voters select lawmakers might not be the wisest choice, but I believe it’s the best one. If we believe voters were duped into electing that red-tie crowd, it’s up to us to educate voters to make wise choices. But first things first – we need to join Kinnaird to make sure everyone has a ticket to the polls.
– Nancy Oates

by on August 26, 2013  •  Permalink
Posted in Council Members, Elections, Politics
Tagged
Posted by Nancy Oates on August 26, 2013

https://chapelhillwatch.com/2013/08/26/elected-or-selected/

Who reads this?

Blame it on the way I was raised – clamming up when accused of a wrong didn’t absolve me of the punishment. My parents’ strategy to raise responsible, contributing members of society didn’t include Miranda’s right to remain silent. They heard out my side, if I was willing to talk, then judged, ruled and implemented. It worked.

So I’m not swayed by the comments that imply I should not have written what I’d heard about 3 Birds if the company’s owners, the Judds, didn’t make time to weigh in. Probably the Judds figured, “It’s a blog. Who cares?” If I were a reporter from The Wall Street Journal, 3 Birds might have made my calls a higher priority.

Whether or not to get their message out, on a blog or an established news site, is the Judds’ prerogative. But if someone chooses not to comment, I’ll go with what I know or have heard from others. Most rumors have some grain of truth, and I try to stake out what I can verify. When I run information I haven’t been able to verify, the community lets me know what I’ve gotten wrong.

As for anonymous posts, I can think of several reasons people would want to participate in the conversation without revealing their real names. Recall how harshly readers criticized one commenter who spoke about a transportation topic that he knew a lot about because he worked in that field. Readers accused him of being biased. Well, aren’t we all?

When I worked on staff at a Triangle newspaper, I was not allowed to park in the company’s free parking lot because I had a Kerry/Edwards bumper sticker on my car. Nor was I allowed to put up any political candidate signs in my yard. Management’s rationale? “You work for a newspaper. We don’t want the public thinking we have a bias.” Not displaying bumper stickers or yard signs didn’t stop an employee from preferring one candidate over another, neither did displaying public endorsements mean that the preference would somehow spill over into the employee’s writing or editing of stories. But when you work for an organization, you obey company policy, especially in this tight job market.

At Chapel Hill Watch, I’m fine with anonymous posts, as long as you use the same pseudonym each time you comment. There are ways to game that system so I’ll never find out if you comment from different email addresses using different pseudonyms. But I don’t think many people will go to that effort to stuff the comment box on a blog. I suspect one comment about 3 Birds was not from an actual current employee, but reading it made me laugh out loud. I could use more moments like that in my day, and I thought maybe you could, too.

This blog is a place to share what you’ve heard and what you’ve thought about, even if you don’t want your real name to get the credit.
– Nancy Oates

by on August 19, 2013  •  Permalink
Posted in Ethics, Media, Politics
Posted by Nancy Oates on August 19, 2013

https://chapelhillwatch.com/2013/08/19/who-reads-this/

3 Birds struggles to fly

When it first hatched in 2010, 3 Birds could have nested anywhere in the country. The three founders – Layton and Kristen Judd and Leonard Wohadlo – chose Chapel Hill, in part because of the proximity to the young talent pool provided by UNC. Initially, 3 Birds hired as many as a dozen interns a year, dangling the prize that they could move into full-time jobs as the company grew and prospered.

3 Birds develops its own software and intellectual property to build e-mail and text-messaging platforms and other interactive, digital marketing products. Rather than just ship the technology off to customers, 3 Birds can bring in account managers and marketing people to create strategy and run it, becoming a company’s off-site marketing department. Its customers are concentrated mainly in the automotive industry.

Starting strong, 3 Birds soon outgrew its office space at 321 W. Rosemary St. Last year, when the company threatened to move to Durham because it could not find an affordable, large enough space downtown, Scott Maitland and the Town of Chapel Hill swooped in for the save. Maitland had extra office space in the building at 505 W. Franklin St. that he’d purchased for his Top of the Hill distillery, and the town wanted the West Rosemary Street space to house a startup incubator, Launch.

Maitland, who, among other things, teaches entrepreneurship at UNC Kenan-Flagler Business School, offered 3 Birds reasonable rent, and the town threw in a parking lot across South Graham Street at a discount. The town also took over the three and a half years on the West Rosemary Street lease (a total of $105,000), in exchange for 3 Birds providing $10K of in-kind marketing services annually to Launch and an additional $10K in cash per year through 2015.

3 Birds promised to bring its staff working in the Chapel Hill office to 52 by the end of 2013 and 80 by the end of 2014.

But 3 Birds evidently has struggled recently. Earlier this year it lopped off its top-salaried employees and replaced them with lower-paid workers. Its website says it has 32 employees at present, but 3 Birds isn’t giving an update. If 3 Birds doesn’t meet its employment target, its only penalty is to pay for parking at a discounted rate of $42.50 a month for each employee it is short. The parking lot was a sweet deal. 3 Birds has full use of the parking lot for 12 hours a day, and the company can coordinate parking two and three cars deep. Given that the cheapest parking space the town leases costs about $95 a month, it is a much better deal for 3 Birds to remain lean and pay for the discounted parking.

Chapel Hill wants startups. Even though the startup failure rate is high, when a startup does succeed, it grows rapidly. But if the town made its deal in hopes that 3 Birds’ employees would keep west end restaurants afloat at lunch and dinner, we may be in for a disappointment.
– Nancy Oates

by on August 12, 2013  •  Permalink
Posted in Business, Downtown Chapel Hill, Economic development, Parking
Tagged
Posted by Nancy Oates on August 12, 2013

https://chapelhillwatch.com/2013/08/12/3-birds-struggles-to-fly/

Hit the gas

It’s not that no news happens while Chapel Hill public information officer Catherine Lazorko is away, it’s just that no one finds out about it until she returns.

In the wee hours of Friday morning, gasoline spilled from a tank at the BP Family Fare in the 1200 block of MLK Jr. Boulevard that had started renovating the day before. A digger dropped a section of concrete, puncturing an underground tank of high-test while digging footings for a new pump island. The workers didn’t realize the tank had sprung a leak, and before they quit work for the day, they set up a sump pump in the hole they’d dug because they were expecting a thunderstorm that night.

Once the rain came and began filling the hole, the sump pump kicked in, efficiently pumping the water and gasoline into a sewer that drains into Crow Branch, then Booker Creek, then Eastwood Lake. A police officer on patrol about 5 a.m. noticed the odor and turned off the sump pump and summoned the Fire Department.

By that time, about 2,400 gallons of gasoline mixed with ethanol had been pumped into our waterways.

Shortly before lunchtime Friday, I called the Planning Department to find out what was going to be built at the BP site. I’d driven by the night before and had seen the mini-mart boarded up, the concrete torn up and the diggers parked nearby. The woman I spoke to couldn’t put her hands on the paperwork immediately, but emailed me about 20 minutes later with a summary of the renovation that the Community Design Commission had approved at its Jan. 16 meeting. The plan included constructing a larger pump canopy and relocating four gas pumps.

Evidently, the Planning Department was not yet aware of the gas spill, though by this time the police and fire departments, South Orange Rescue Squad, DENR, the EPA, Zebra remediation services and the contractor doing the work at the BP were spread out from MLK to Eastwood Lake, working to contain the spill.

Lazorko had been away and was not due in until noon. She emailed the first press release by 12:30.

I spoke with a neighbor whose house backs onto Crow Branch. She said that the gasoline fumes had awakened her about 2 in the morning. Once Town Hall opened at 8:30, she began asking questions and was told that no permit to dig had been issued. Perhaps the person she talked with was misinformed, but it is a question someone at Town Hall had better look into.

I spoke with others who watched the cleanup efforts and were impressed by the construction of underflow dams that let water flow through while gasoline, which is lighter than water and floats to the top, was absorbed by fabric rolls laid across the creek. Zebra also used its crisis-strength wet-vac. Nevertheless, some dead fish floated to the banks.

Sure, accidents happen. But putting a sump pump in a hole next to a gas tank was a bonehead move of a magnitude that makes P.J. Hairston look like an amateur. Pollution aside, this was a flammable substance in an electrical storm. We are lucky it wasn’t much worse.
– Nancy Oates

by on August 5, 2013  •  Permalink
Posted in Environment
Tagged
Posted by Nancy Oates on August 5, 2013

https://chapelhillwatch.com/2013/08/05/hit-the-gas/

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