The Sir Walter Apartments downtown may remain as affordable housing for seniors after all.
A new out-of-state developer is interested in keeping the senior-housing complex affordable and possibly even adding units to the former upscale hotel, which is on Fayetteville Street near City Plaza.
Affordable housing advocates and current residents were fearful of losing the 140-unit complex after a different developer, GBX Group LLC, was under contract to purchase the property. It had considered the building for potential market-rate apartments, office space or a hotel.
But GBX Group is no longer buying the apartments, according to a statement from Regina Baker, the company's vice president of marketing.
Now the 10-story building is under contract for purchase by New York-based Capital Realty Group, which has been involved with the acquisition or redevelopment of 8,000 affordable housing units across 20 states. Calls and emails to the group went unanswered.
"They were aware the property was being offered for sale and they kind of specialize in affordable housing, including acquiring and renovating existing properties," said Larry Jarvis, Raleigh's director of housing and neighborhoods. "So their plans are actually to add units to the top floor. It's just a vacant floor, so they're looking at adding 14 units and preserve what is existing."
Capital Realty Group has submitted an application for $3 million in local affordable housing funds from the city of Raleigh. The total project would cost $39.7 million, including the purchase of the property and significant renovations that include converting the top floor to affordable units. Its application and others will be presented before the city council in the coming weeks.
Raleigh voted in 2016 to raise its property tax rate by 1 cent to generate $5.7 million a year for affordable housing. In 2017, the city funded three affordable rental projects that generated 368 units. Jarvis said he's coming to the council with even more this year.
Sir Walter's current ownership group purchased the property for $850,000 in 1978. A flier distributed in 2016 listed the sale price of the nearly 200,000-square-foot building at $16.8 million.
"It is under contract, and it is in due diligence," said Bill Benton, one of two general partners of Sir Walter. "The one thing I can tell you is if these buyers buy it they will want to keep it as low- and moderate-income housing."
He said he wasn't permitted to elaborate because of a confidentiality agreement.