With contractors again racing the clock to finish the Lofts at Southside Phase I, the city and its developer are getting ready to start on Phase II.
An option contract to sell 5.25 acres of the 19-acre Lofts at Southside tract, formerly “Rolling Hills,” comes up at the City Council’s work session Thursday, along with a progress report on the overall Southside revitalization project.
The option contract would give developer McCormack Baron Salazar (MBS) the site control necessary to apply for low-income housing tax credits. The credits would help pay for building 85 apartments, 53 of them reserved for low-income tenants.
If the N.C. Housing Finance Agency approves the tax credits, the option allows MBS, through its subsidiary Southside Revitalization Phase II LP, to buy the acreage for $1. The city and MBS signed the same sort of agreement on about seven acres for the 132-unit Phase I, which has a Dec. 31 completion deadline to comply with its own tax-credit requirements.
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That deadline has already had a year’s extension, arranged when delays due to weather and dealing with unexpected chemical hazards made it impossible for MBS to meet the original Dec. 31, 2013 deadline for credits worth $11.5 million.
According to a Nov. 17 project report, tenants had moved into 14 of the Lofts apartments, but, according to a progress report from the city’s community development office, one 34-apartment building remained unfinished, with a completion target date of Dec. 19.
Project architects were developing contingency plans to get enough of the building done to satisfy the tax-credit requirement even if the entire building cannot be done before January, according to the Nov. 17 report. According to the report, MBS is also working on ways to close a $2.3 million gap in its preliminary Phase II construction budget, which includes a $3.8 million subsidy from the city.
The application deadline for Phase II tax credits is May 15, 2015. Plans are for an eventual third phase to finish building out the 19 acres, off South Roxboro Street between Lakewood and Piedmont avenues.
The Lofts are part of a $48 million reconstruction at the Rolling Hills site, where two previous private developers tried and failed to build out and sell a residential subdivision, and in the adjacent “Southside West” neighborhood. The city is putting about $28 million into the overall project.
In June, community leaders celebrated the first buyers moving into the first of an eventual 48 new single-family houses in Southside West, an owner-occupant, mixed-income development in conjunction with the Lofts at the former Rolling Hills, or “Southside East,” property.
The Lofts ( nando.com/lofts) are also designed to attract tenants with a range of incomes, based on the area median income – $65,700 for a familiy of four in Durham, according to federal and state agencies. Of Phase I’s 132 apartments,
• 20 are reserved for tenants with household incomes 30 percent or less of the area median ;
• 13 are for tenants with incomes 50 percent of the area median;
• 47 are for tenants with incomes 60 percent of the area median;
Rents for the rest are market rate. Similarly, of the 85 apartments in Phase II, plans are to reserve
• 11 for tenants with incomes 30 percent or less of the area median;
• 42 for tenants with incomes 60 percent or less of the area median;
• 35 for rental at the market rate.
According to the Nov. 17 project update, 32 applications to rent Lofts apartment had been approved, including the 14 tenants already moved in; 26 applications had been rejected; and 102 applications were awaiting approval or rejection. So far, the affordable units were the ones attracting interest, with little interest seen in renting at market rate.