The town will give Raleigh nonprofit DHIC until next August to secure state and federal financing for an affordable apartment complex proposed for Legion Road.
The Town Council’s 7-1 decision Monday night also extends the deadline to April 30, 2016, for DHIC to buy the 8.5 acres of town-owned land beside Chapel Hill Memorial Cemetery for the project.
DHIC applied in May for state housing and federal tax credits to help build the proposed Greenfield Place. Under the deal, the town would sell the property to DHIC for $100 to develop 144 senior and family apartments.
The project, a key part of the town’s Ephesus-Fordham redevelopment plan, could add a third of the roughly 450 affordable apartments expected in the district over the next 20 years. That number is based on the town’s projection that 30 percent of the district’s 1,495 potential apartments could be affordably priced for those making less than Chapel Hill’s average median income, or $65,700 a year for a family of four.
DHIC officials have said their apartments would rent for less than $935 a month to a family of three earning up to $36,000 a year.
The project also would be the town’s first public-private partnership since adopting an Affordable Rental Housing Strategy this year. DHIC President Gregg Warren was a member of the Mayor’s Committee on Affordable Rental Housing that drafted the strategy.
The state rejected DHIC’s application, because some of the required paperwork was left out by mistake, Warren said. The application will be resubmitted early next year for the federal tax credit.
The state housing credit expires in December, he said, but the state has other workforce housing and low-interest loan programs.
DHIC officials will do all they can to make the project successful this time, he said.
That answer didn’t satisfy council member Maria Palmer.
“An organization as experienced as DHIC – with the track record and the support – I guess I want to know what happened and how is it not going to happen again,” she said.
The agency left out information about its own $300,000 commitment to the project, Warren said. Even though the application was technically incomplete without it, he said, the N.C. Housing Finance Agency could have accepted it anyway.
“I don’t think we’ve ever had such a hurtful error and a small error that has had such a large impact on our partners,” Warren said. “We are very sorry for that, and we are very sorry to our development team that spent considerable time and energy on this, and we’re sorry to the town of Chapel Hill, too. We’re perfectly willing to admit our error and mistake, and we will double check our checklist, you can be sure.”
If DHIC fails to secure funding next year, the council could recruit other partners. The town cannot work with more than one partner at a time, because the agency seeking state and federal help must own or have the right to buy the land for the project.
Council member Matt Czajkowski, who initially opposed selling the land to DHIC and voted Monday against the extension, said the council has three months to look into alternatives.
Three Triangle area developers won tax credits this year for their affordable-housing projects.
“I wouldn’t be surprised if, at the end of the day, the conclusion was DHIC was providing us with absolutely the best alternative,” Czajkowski said. But, “I would be much happier reaching that conclusion with some additional information on what other alternatives are out there.”