Raleigh leaders delay affordable housing funding for Sir Walter, Southeast Raleigh sites

Raleigh leaders have moved forward with several affordable housing efforts, but delayed a decision on two projects in downtown Raleigh and Southeast Raleigh.

Decisions on the two projects — keeping the Sir Walter Apartment in downtown Raleigh as affordable housing for the elderly and putting affordable housing at the site of a joint YMCA and elementary school in Southeast Raleigh — were delayed for Raleigh City Council members to ask more questions about the high cost per unit.

City staff were requesting $3 million in local money for 158 affordable elderly units at the Sir Walter Apartments downtown and $4.6 million for 120 affordable units at the Rock Quarry Road property called Beacon Ridge. The total cost of the projects would be $39.72 million and $22.59 million, respectively.

Council member Dickie Thompson, who asked to delay the vote for two weeks, said he wanted more information about why it will cost $188,258 per unit for the Beacon Ridge project and $251,441 per unit for the Sir Walter Apartments, at 400 Fayetteville St. The city would only pay about $18,987 per unit for the Sir Walter Apartments and $38,333 per unit for Beacon Ridge, with the rest of the money coming from other sources.

In all, city staff recommended that city leaders spend $19.15 million to create 1,089 affordable housing units, a big step toward the city's goal of adding 5,700 affordable housing units. A majority of the money for the affordable housing projects came from funds set aside by 1 cent of the city's property tax rate.

Sir Walter Apartments

Affordable housing advocates worried that downtown would lose the 140-unit apartment complex after owners announced their plans to sell the property once the federal affordable housing requirements are lifted in 2020. At least one buyer jumped at the chance to turn the prime downtown real estate into a hotel, offices or apartments, but that deal fell though late last year.

Now, New York-based Capital Realty Group wants to purchase the former upscale hotel, renovate the current apartments and add 18 units to the currently vacant top floor. The large cost of this project includes the purchase of the property, but would guarantee spot as affordable housing for more than 30 years, said Larry Jarvis, Raleigh's director of housing and neighborhoods.

Thompson said he isn't sure whether downtown Raleigh is the best place for affordable housing. Jarvis said he'd agree if the building was currently empty. But since it already occupies more than 100 affordable housing apartments for the elderly that would be difficult to transfer or absorb, the staff is recommending that council move forward.

If the financing isn't approved by the council, Jarvis said the city would likely not use the space as affordable housing and wouldn't be able to transfer those affordable housing units to a different location.

Wake County Commissioner Chairwoman Jessica Holmes said the city and county have had very preliminary conversations about the county supporting this project with one-time funds, but only if the property remains affordable for its current residents and for years to come.

Beacon Ridge

The news to delay a decision for the Rock Quarry Road project comes on the heels of a groundbreaking celebration for the YMCA and elementary school, where many people, including council members, championed the joint effort to bring together housing, education and access to health care.

"I understand their questions and I hope we can provide them more information to make sure they understand where we are at in terms of cost and the ask and the unique nature of the property," said Gregg Warren, president of DHIC Inc.

DHIC, which is managing the affordable housing piece of the project, doesn't see a "path forward" at the property if the council decides not approve the funding.

The project doesn't qualify for federal funding because a portion of the school property is within a flood plane, Warren said. The plan for the site will include a newly constructed YMCA and elementary school, as well as commercial and retail options with an emphasis on healthcare and access to healthy food and affordable housing.

Council member Corey Branch, who represents the district where this project is planned, looked visibly frustrated during the board's discussion. He said after the meeting that it was the council's decision to wait and that he had nothing else to say about the delay.

Here's a look at the projects that were approved:

Hampton Spring

• Location: 216 Buck Jones Road, Raleigh (District D)
• Units: 56
• Cost: $800,000 in city funds toward the $8.6 million project.
• Details: The project would be near another affordable housing development called Chestnut Hills and a half mile from a shopping center with a Harris Teeter. The one and two bedrooms would range in rent from $350 to $725 and fall 30 to 60 percent below the area median income.

Walnut Trace

• Location: 1800 Rock Quarry Road, Raleigh (District C)
• Units: 180 units
• Cost: $2.25 million in city funds toward the $25.44 million project.
• Details: The property is within a commercial area with a grocery store, police substation, library, banks, pharmacy and other stores. The one, two and three bedrooms would range in rent from $502 to $980 and fall 40 to 60 percent below the area median income. It's also near the joint YMCA and elementary school under construction at 1440 Rock Quarry Road.

Oak Forest Pointe

• Location: 5700 Oak Forest Road, Raleigh (District A)
• Units: 120 units
• Cost: $2.5 million in city funds toward the $18.49 million project.
• Details: The one and two bedrooms would range in rent from $832 to $987 and fall 60 percent below the area median income. It's next to a few commercial properties and homes.

Sumner Pointe and The Pointe at Town Center

• Location: 3900 Sumner Blvd., Raleigh (District B)
• Units: 192 units for elderly people and 264 units for families
• Cost: $2 million in city funds toward the $42 million family project and $4 million in city funds toward the $30.6 million elderly project.
• Details: These two projects are in the same area, but were proposed as four separate requests from Carolina Project Equities. The rents for the elderly project range from 832 to $987 while the rent for the family project would range from $832 to $1,131. It's near to a number of commercial properties, including Triangle Town Center, and within walking distance of a bus stop.

Anna Johnson; 919-829-4807; @anna_m_johnson

This story was originally published April 18, 2018 at 11:10 AM with the headline "Raleigh leaders delay affordable housing funding for Sir Walter, Southeast Raleigh sites."