Raleigh developer Kane Realty has offered to contribute $1 million to the city’s affordable housing efforts to gain a rezoning it needs for a potentially 40-story tower in downtown Raleigh.
The offer was presented to the City Council’s Growth and Natural Resources Committee during a presentation on the tower’s potential impact in the northern section of downtown.
The Peace Street tower, proposed for the corner of Peace Street and Capital Boulevard, is part of a three-phase plan by Kane Realty and its development partner, Williams Realty, to turn the northern entrance to downtown into a hub of office and residential projects.
The tower would be the third phase of the Smokey Hollow project, named after a neighborhood that was the site of a major urban-renewal project in the 1960s. The first phase is under construction and will be home to a 40,000-square-foot Publix grocery store.
Altogether, the three phases will add hundreds of apartments and hundreds of thousands of square feet for office and retail.
The proposed tower, which is currently zoned for 12 stories, would be a signature landmark for the northern entrance to downtown, an area the city and state have poured millions of dollars into in recent years to improve. Along with the Smokey Hollow buildings, the city is developing a new park adjacent to Peace Street and the state is in the process of reconfiguring the traffic patterns for Capital Boulevard.
But City Council members, who will ultimately vote on the project, had expressed concerns about the tower’s impact on traffic and lack of affordable housing.
Kay Crowder, a City Council member and chair of Growth and Natural Resources, praised Kane Realty’s offer.
“I just want to commend your group and Mr. Kane for really looking at what is important for the citizens of Raleigh,” Crowder said during the meeting. “You understand how important it is for us to be able to answer the question of affordability, and for you guys to be willing to make a million-dollar contribution to that is outstanding.”
Bonner Gaylord, a former City Council member who represents Kane, said the donation will have a larger impact than if Kane tried to put affordable housing in this specific project.
“Truthfully that money can go a lot further in other projects that don’t have extremely high construction costs that a tower like this can bring,” Gaylord said.
Raleigh has $13.6 million earmarked for affordable housing in next year’s budget, starting July 1, which is expected to add 645 rental units in the city, The News & Observer reported. The money helps developers to cover their costs of providing subsidized housing.
Efforts to reach Kane Realty for comment were unsuccessful as of noon Thursday. Kane hasn’t said how much the Peace Street tower could cost to build, but the final cost of The Dillon, its 17-story tower in the Warehouse District, was $150 million, The N&O reported.
Thanks to a recent change by the City Council, a developer can now offer affordable housing as a bargaining chip in rezoning cases. But the change has caused some to worry it could make other housing more expensive or the council could deny projects that don’t volunteer affordable housing.
Raleigh, like many cities, is facing an affordable-housing crunch. The N.C. Housing Coalition defines housing as affordable if families pay no more than 30% of their income on housing and utilities. Nearly one in four households in Wake County pays more than that, and more than 55,000 of those households are renters.
The city said it wants to add 5,700 affordable housing units over 10 years and raised the property tax rate to help pay for those affordable homes and apartments.
The main discussion on Wednesday, however, centered on traffic concerns.
“I’ve got to go back to my constituents and say, ‘I promise you that Peace Street will work when this project is built,’” City Council member Russ Stephenson said.
Kane Realty agreed to do a traffic impact analysis for any site plan it submits for the site, an additional step that is traditionally not required of downtown developments. The potential impact is clouded, though, by the massive amount of construction being done around Peace Street, making an accurate study difficult at the moment.
The analysis could determine what traffic mitigation Kane would need to add to get is final project ultimately approved for construction. It could also delay the project an uncertain amount of time. A site plan would be submitted after the rezoning request, when Kane would have a more concrete idea of how tall the building would be and how much residential and office space it would have.
If built to proposed zoning maximums, the city estimated the tower could add about 8,444 trips a day to that section of Peace Street. The number of trips added would be 5,682 under current zoning, according to city estimates.
The council could vote on the Kane rezoning at its Tuesday, June 18, meeting.