Chapel Hill News

County weighs Chapel Hill’s Ephesus-Fordham plan

The county commissioners had several questions Tuesday about Chapel Hill’s plan to improve roads and add apartments, more stores and offices to the Ephesus-Fordham commercial district.

The town has asked the county to help repay $10 million in debt that will finance road and some stormwater changes. The town is using bond and other financing that uses Town Hall as collateral, with plans to repay the debt using increased tax revenues from redeveloped property.

Town officials want the county to pay up to half the debt – about $400,000 a year for 20 years. The commissioners will talk about the town’s request again Jan. 27.

Chapel Hill business management director Ken Pennoyer said the town would report annually on how public and private projects are progressing and their impact on the local economy and taxes. The Orange County Board of Commissioners could decide each year how much they want to pay, he said.

If the development brings in more public school students than expected, for instance, the commissioners could use part or all of the county’s payment to cover the related school costs.

“We would like to see a 20-year commitment and we would like to see that happen automatically,” Pennoyer said, “but we understand that in order for that to make sense, the project would have to basically meet the needs of the county in regard to your expectations on economic development.”

That caveat caught the commissioners’ attention. Commissioner Mark Dorosin said he appreciated the change, which he called “encouraging.”

But he and other commissioners still had questions about the plan, including what kind of businesses and retail to expect, whether the county would violate any state rules by paying for road work and what effect new residents might have on social services, schools and other county budget items.

There are benefits, commissioners Vice Chairman Earl McKee said, but also pitfalls in the town’s plan.

“We’re going to have to have some large, Costco, Target-type (stores),” he said “I’m not advocating for any store. I’m just saying we’ve got to have something that’s going to generate a fairly significant amount of retail sales.”

“I’d like to know where the residential breakpoint is using all costs, not just the costs of schools,” McKee said. “The impact of this additional housing, this additional retail, if it is particularly retail on the lower end of the rate scale. How does that impact our social services? If somebody is making $12 an hour, $10 an hour, they’re not going to be able to live in Orange County” without help from local agencies.

Dwight Bassett, the town’s economic development director, said his expectations for the district are higher now, based on talks with property owners and the local market’s performance. The town has been expecting roughly 2.2 million square feet of new development, including 1,495 apartments, 460,000 square feet of retail, 300,000 square feet of hotel space and 150,000 square feet of offices.

The changes, when complete, could make property in the district worth roughly $260 million, town officials said, and generate about $2.3 million in property tax revenues for the county and another $541,840 in property taxes for the Chapel Hill-Carrboro City Schools district. CHCCS and the Orange County Schools also could receive roughly $1.9 million in impact fees from new residential development, staff said.