Chapel Hill News

May 10, 2014

Chapel Hill mayor sees new promise in Ephesus-Fordham plans

Chapel Hill’s Ephesus-Fordham commercial district hasn’t delivered on the economic promise it offered the town 30 or 40 years ago, Mayor Mark Kleinschmidt said, but he thinks a proposed form-based code may inspire developers to reinvest in the 190-acre district.

The Ephesus-Fordham commercial district hasn’t delivered on its decades-old economic promises, Mayor Mark Kleinschmidt says.

But he thinks a new type of zoning called form-based code may inspire developers to reinvest in the 190-acre district that stretches from Elliott Road to Chapel Hill Memorial Cemetery.

Form-based code would guide developers and establish predictability in how buildings are built and fit into the landscape. The draft code makes town staff responsible for approving most future projects, with some Community Design Commission review of building and landscape elements.

The Town Council will talk about the draft code Monday at the Southern Human Services Center on Homestead Road.

Kleinschmidt said the Ephesus-Fordham district’s major issues are transportation, the use of Eastgate’s driveway as a town road and access to Rams Plaza and surrounding areas. The existing development process wasn’t generating projects in the district, he said, but other cities have used form-based code to inspire redevelopment. The town decided to explore one for Ephesus-Fordham, he said.

“We all know work needs to be done, so there’s consensus around it,” Kleinschmidt said. “This is a place (where) we tolerate commercial activity, and we can tolerate more. Why aren’t we getting it? Why isn’t it spitting out the revenue and offering businesses and services people want?”

In packed hearings, however, the public continues to ask how the plan will resolve longstanding traffic and stormwater problems. They want to be sure the district will generate robust commercial tax revenues instead of draining town resources and taxpayers’ pocketbooks.

Kleinschmidt spoke more about the plan in an interview last week.

Q. Are you comfortable with Chapel Hill’s code as proposed?

A. I think so. I am right now. .... I think the code addresses the issues that we would want to test against. When John Richardson went through that “how does the code create the building” exercise at the last hearing ...

Q. Some people didn’t want to hear that ....

A. That’s too bad, because that’s the placemaking. How much blank wall do you have on a building. That’s creating place. How wide are the sidewalks, how high are the buildings, the stepback.

These are the kinds of things that are the subject of these kinds of conversations whenever you do go through the traditional process, and I think we’ve put them in the code in a way that will produce a good product. If it was as some people claim it to be – and they know better than to say this, but they do anyway – that we are creating a code that will never change ever in the future, and everybody will have this existing right to build whatever the hell they want – by the way, when you tell somebody that’s not true and they say it’s true again, I don’t know if they’re just not hearing you or if they’re just lying, so I’m going to try to help them hear me – we’re checking in.

We’re going to check in every six months for the first two years, and then the council will decide what frequency (reviews) should occur after that. I say I’m fine with it now – I am – but there may be a time in the future when we decide something else should happen. I think we should take a look at what product comes out of the ground with the way things are and see how it works.

Q. Asheville’s code retains some of the existing review process while our proposed code tosses out the council and most public hearings. Why?

A. (Lee Einsweiler said) the Haywood corridor (in Asheville) talks about a return to more process whenever the projects are over a certain number of square feet. There’s only two (areas) on that whole corridor that actually qualify for that level of review, because the whole corridor is (2.5 miles long) You’re not going to actually get the large square footage requirement but in a couple of cases, so in practice, you’re not getting a lot of projects that actually have all that process in Asheville. Apparently, my understanding is those larger projects along that corridor are pretty clear what they’re going to be ... but the rest of it’s going to change, and the change is going to be led directly by the code.

Q. Is it possible the plan will be delayed? Is there a deadline for leveraging Town Hall to finance the $8.8 million in Ephesus-Fordham road projects? (The town is repairing flood damage to Town Hall and putting the building up as collateral to get a $10 million loan that would pay for that and also the Ephesus-Fordham road upgrades.)

A. “I’m not sure. I don’t know that’s necessary. The council will figure that out. I think that we are still listening and making changes. ... We’ll have to see what comes in on Monday and see what the responses have been to the most recent round of questions.

I think it’s just a matter of preference for the timeline ... but we’re not going to go ahead and refinance if there’s not a vote to approve the project. ... You need to decide whether we’re going to do something and have the vote, then you go forward and do the financing stuff. You’re not going to go borrow money for projects that may not be approved.

In the past, our infrastructure needs of this kind have been leveraged through redevelopment projects, and that’s just not the option for this area, because (developers would) rather forego a redevelopment opportunity than make the contribution that the town asks for.

(In this project) one developer doesn’t have to pay the cost of a new road. It’s going to be shared with the entire district.

Q. How much of a tax revenue bump could we get? Bassett has said the town won’t reach the 25 percent to 30 percent commercial tax base that its neighbors have.

A. That’s not insignificant, particularly when you look at what that means to our community when we could get tax revenues from a source that has relatively less impact on our ability to provide services ... While we may be only able, even with this project, to increase that percentage a few points, the impact is so much larger than if we were to be introducing the kind of residential that produces lots of schoolchildren.

I can tell you with high confidence that a five-, six-story building could produce for the property a lot more tax revenue than an empty lot.

Q. Is the form-based code critical to attracting redevelopment?

A. The way it’s connected allows for multiple benefits to happen. ... (Without the additional tax revenues for the redevelopment, we would) have to pay back that debt with our general fund. That’s why the other way of paying for infrastructure would be to go and put a bond referendum on the ballot and tell people this is going to raise your taxes by a half a penny or whatever.

I think it’s bad policy when you have an opportunity to actually address a lot of community needs that are peculiar to a particular place and craft a solution that provides you (with a way to address) multiple needs and problems. They could all be separated, but you’re not going to get the fullness of benefits that could happen if we move forward with this approach. That’s why I’m supportive of this approach, because we get more.

Q. Has the town made any development mistakes? How would form-based code improve upon that?

A. I think East 54 was an attempt by the council and the developer at the time to create a place, but they didn’t really use the tools as well as maybe they could have. There was an idea that we need the building on the street. Well, the building’s on the street, but it’s still not creating a place, it’s not creating that space you want to go an hang out in. It just puts the building right up against the street. What we lack there is a street activation.

The form-based code actually looks very carefully at that space: where people enter buildings, how far away they should be, the sidewalk to curb to building interface.

I’m sure some people don’t like 140 West. I do. I think 140 West does a much better job at creating a place I want to go to, and I think those couple hundred people who were sitting outside I saw there today at lunch seemed to be enjoying it, too.

Q. But I think people are worried we’ll end up with something similar to Erwin Road across from Duke Hospital.

A. You can see the effort in it. It’s like seeing a child’s drawing. You can tell that they’ve had some lessons, but they still don’t quite have it well practiced. What they’ve not done over there is they don’t have roads, they don’t have spaces ... They’re just these multi-use buildings along Erwin.

The lessons of that project, what they’re doing there, aren’t lost on the design elements of the Ephesus-Fordham district. The best place to see that is looking at the application of the frontages along the particular roads and what’s required in those places.

If you look at Erwin Road, you don’t have any consideration, because there aren’t buildings that create a place. Here, we’re going to have redevelopment of blocks of space with street frontages that are engaging in a human way. We still have this scar that’s U.S. 15-501 running through it – that’s not going anywhere – so we need to hope that we’re going to be engaging in it.

If you drive by Ephesus-Fordham, and you see a parking deck while you’re traveling along a major north-south U.S. highway, OK, that’s fine. I hope it’s a pretty parking deck for you to look at, but we’re not creating it for you to drive by. We’re creating (the deck and surrounding district) for you to live in and to be inside of and to shop in and to work in and that kind of thing.

Erwin Road, it fails at human engagement. In some ways, East 54 does too. I think 140 West does a good job of it. I think it is a little bit better than Greenbridge, but I don’t think Greenbridge fails. I think we’re going to see better product (in Ephesus-Fordham). If we don’t, if it’s just missing here in certain ways, (the town’s land-use rules) can be changed just as they’ve always been changed.

(You can’t change a seven-story building once it’s built,) but right now, we know that code’s going to require that seven-story building to have certain setback, a certain kind of street frontage, to have a stepback in a certain place. It’s going to be designed in a way unlike, let’s say, University Baptist Church, where you have to walk along that blank wall for so long, it’s just ridiculous. That’s not going to exist in the Ephesus-Fordham district.

Q. If things don’t get built at the expected rate (generating new tax revenue to help pay for the project), what’s the risk to taxpayers?

A. That early bit of development will actually create an increment that pays back what is owed. ... It’s not an uninformed estimation. It’s based on experience and what people are likely to be able to do with the property, and conversations that (town economic development director Dwight Bassett has) had with folks who plan on making changes.

Once we rezone this and people actually have the opportunity to build more on a property, the value of that property’s going to go up, as well, without any changes, because it’s worth more in a sale to somebody. If you own a piece of property today that you can only build one thing on, you can command X dollars for it. If your property’s rezoned and you can do a hundred things on it, you can get X times.

Q. How did the stormwater plan evolve to include on-site developer improvements and potential projects upstream by the town to address the risk of flooding?

A. Part of it’s the community. It’s quality public hearings with people who are asking for other solutions. That’s part of it. And as painful as it is for some people sit through these public hearings, we’ve learned a lot in these public hearings, and I think that’s one of the greatest benefits.

Q. Do you think the public would believe that?

A. Of course, they don’t. They’re not going to, because some people’s emotions are high. If they don’t believe me because their emotions are high, then fine, but the public hearings have made this whole thing better.

I think, over the last couple of years, we’ve seen subtle changes. If you compare this conversation to Central West, it may be marginally more challenging, but if you compare this discussion to any discussion, say, five years ago, there’s a stark difference in tone. It’s frustrating, but ... in this particular area, because of the potential for flooding and (how) that affects people’s quality of life – it’s their homes, it’s where they live – I think it’s easy to understand why emotions run high and concern is expressed passionately. I completely understand that, and I wouldn’t expect anything less than the passion, particularly about flooding issues.

But some of it, I think, is just disinformation about things and the kind of fear tactics that have been played on folks. I just try to separate that from the content of the concerns that are being expressed, and I think the council is doing that too, and I think that’s why we’re seeing some changes.

Q. If the idea is to make the Ephesus-Fordham district an economic driver for the town, why not include more retail and offices?

A. I will resist any efforts to make this purely retail or commercial.

When I first graduated from college, I went to Charlotte to teach. I remember the first month or two I was living there, I had some friends from Chapel Hill who came down ... (and we said) let’s go out, let’s go downtown. ... We went down there, and it was scary. It was scary, because there was nothing there. There were no people, there were no cars. It was a Friday night, and you could hear the wind blowing down the streets.

The reason why is because no one lived there. ... I didn’t want to build a part of Chapel Hill that just rolls up (at night). If you’re going to have it be really active and have it be a people’s place, it needs to have people living there. Same thing with downtown. Downtown becomes a much more vibrant place when you have people living there.

They need more people living (in Ephesus-Fordham). Those people are going to make Great Harvest Bread a better business. Those people are going to keep that liquor store open. Putting those people there makes all the retail much more lucrative than if they weren’t living there.

Q. What if we just improved the traffic and stormwater, without adopting form-based code zoning?

A. That might help inspire some development, because we made a commitment to pay for it all ... . I guess the hope would be that something would come out of the ground that would increase the value to help us with it, but it’s hard to imagine it being more successful than implementing a program that puts all our interests up front pre-development rather than at the permitting phase. I think about the concerns that we hear from folks about the challenges and costs associated with going through the discretionary approval phase that we have in place right now.

Q. Will this plan reduce homeowners’ property taxes?

A. (The state and federal governments have cut funding to the town.) We know that the cost of (government) services isn’t going down, the demand for services isn’t going down, and we need to look for ways to help ease the pressure on increasing tax rates in a lower-revenue environment in order to retain the quality of services that we have today.

I think (the Ephesus-Fordham plan is) a very positive impact. It may be short of actually reducing property taxes.

Maybe in future years, (projects could generate more students), but in the short term, it’s unlikely to produce the students, which means in those first few years, the school system is receiving a great deal more than what (the schools are) being asked to absorb. Ultimately, that will help address some of their needs.

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