The Town Council will hear from the public Monday before considering in June whether to approve a 1.6 million-square-foot residential and commercial community across from Southern Village.
Obey Creek, at that size, could bring up to 800 apartments and townhomes, 475,000 square feet of retail space, 600,000 square feet of offices and a 400 hotel rooms. About 300 apartments would be designated for adults age 55 and older.
Developer East West Partners envisions 10 buildings, ranging from four to eight stories, including parking under some and parking decks attached to others on 35 acres. About 85 acres surrounding Wilson Creek to the east would become a town-owned public preserve.
The Streets at Southpoint mall in Durham, by comparison, is 1.3 million square feet covering roughly 91 acres.
Many residents have predicted Obey Creek will clog U.S. 15-501 and smaller neighborhood streets with traffic, and cost the town more to provide services than it generates in tax dollars. They also have opposed Obey Creek’s size and height – up to a maximum of eight stories at the back of the site – as too much for land meant to be low density.
The project, if approved, would reverse the community’s vision for the land that was established more than 20 years ago. The eastern side of U.S. 15-501 was last zoned for low-density residential and neighborhood commercial construction in 1992 as part of a swap for high-density homes and businesses at Southern Village. The 35 developed acres would need to be rezoned to allow more density.
Others have argued high-density development at Obey Creek will help provide affordable housing, office space and retail options that the town lacks.
The council has negotiated a 20-year draft development agreement (The latest version is on page 262 at nando.com/1ac) with East West Partners to guide construction. The agreement sets minimum residential, office and commercial space requirements, creating flexibility to meet market changes.
The council could vote June 8. If Obey Creek is approved, it would be annexed into the town.
Here is a brief look at some of the topics:
Why a development agreement?
The state allows towns to use development agreements when projects cover 25-plus acres and will be built over 20 years or more. It outlines what can be built and the infrastructure needed to handle more traffic, students and other community impacts.
Most public improvements, such as roads, bike lanes and parks, would be built during the first phase of Obey Creek construction. The agreement requires annual developer reports, including the property’s tax status, daily car trips and the pace of construction and public improvements.
The agreement has mandatory design guidelines (nando.com/1a8) for building height and design, signs, sustainability, landscaping and land use.
Local and state rules still would apply, and the developer would seek permits and file individual construction plans later. The town manager would approve some plans and minor changes; the Community Design Commission would approve others related to appearance and design. Major changes to the agreement would need additional council approval.
What could be built
One of the biggest concerns has been Obey Creek’s proposed size and the number of residents. The council hasn’t pursued requests to consider a smaller project, and Obey Creek project manager Ben Perry said the developers aren’t interested.
Some suggested setting benchmarks for commercial and residential space, and letting the developer build more once those targets are met. That would guarantee the community gets enough commercial space to help pay for town services to the development and increase the town’s tax revenues.
East West Partners recently offered a plan for addressing those concerns.
The new plan would guarantee at least 35 percent commercial space – retail, office and hotel – as the project reaches 600,000 square feet. The percentage of commercial space would climb to at least 40 percent at 1.4 million total square feet, and 45 percent by 1.5 million square feet.
Parking formulas in the agreement would generate at least 5,000 to 6,000 spaces at the project’s maximum size. Town officials, however, have said the project’s mix of uses could reduce the need to roughly 2,800 spaces. Streets at Southpoint, by comparison, has 6,400 surface parking spaces.
What retail to expect
Obey Creek could include a mix of retailers, Perry said, including a “large general merchandise or department store type tenant.” Other retailers could include a grocery store and junior anchors, such as clothing and specialty stores. The rest would be smaller shops and restaurants.
The project fills underserved sectors of Chapel Hill’s retail and residential markets, he said. Other big projects, such as Glen Lennox, the Ephesus-Fordham district and Chatham Park, have a different focus and are many more years away, he said.
“Speaking generally about development,” Perry said, “there has been virtually nothing built in Chapel Hill since the recession, except for a couple of student housing projects downtown.”
“You really have to go back to the mid ‘90s and early 2000s when Southern Village and Meadowmont were being built to find a period where growth in Chapel Hill kept up with demand,” he said.
About three dozen for-sale homes and rental apartments could be priced to meet the town’s affordable housing guidelines for at least 99 years.
The town’s inclusionary zoning rules require 15 percent of any for-sale housing to be affordable.
State law doesn’t allow affordable rental rules, but the developer would make 5 percent of Obey Creek’s apartments affordable. Half would be for residents with low-income or veterans housing vouchers and priced at the federal fair market rent for Chapel Hill, ranging from $597 for an efficiency apartment to $874 for two bedrooms.
The other half would rent for 30 percent of the total family income for those earning 60 percent to 80 percent of area median income. That would, for example, serve a single person earning $28,312 to $37,750 a year.
Homeowners would pay a transfer fee of 1 percent when buying a market-rate unit to help pay for managing and maintaining the affordable units.
A recent financial analysis estimates Obey Creek will break even for the town or help boost its bottom line, town officials said.
The analysis looked at the original plan from 2012 – roughly 1.5 million square feet and 673 resident units – and estimated its final projected value would be nearly $300 million. Annual revenues generated for the town were estimated at $2.3 million, while town costs were about $1.6 million.
Residents, who have run their own numbers, said it will cost the town more to provide services to the development than it will provide.
The developer does not expect to add many schoolchildren, but the county could revise its formulas for predicting enrollment from apartment projects. Obey Creek would have to meet the rules in place when construction plans are approved. The developer also would talk with the Chapel Hill-Carrboro schools about donating land or money for a future school.
The project would change intersections and add roads, sidewalks, paths and bike lanes to the site and along the U.S. 15-501 corridor between the town limits and N.C. 54. If Obey Creek creates more than 15,858 daily trips, construction would be delayed for another traffic study.
The developer, town staff and N.C. Department of Transportation officials have drafted a number of improvements that account for existing and future construction in Carrboro and the surrounding area, according to an April 2014 traffic study.
NCDOT officials have not given the draft plans final approval. The plans include bus stops, four-way Market Street and Sumac Road intersections, new right-turn lanes at Mt. Carmel Church Road and new markings and interchanges at N.C. 54.
Chapel Hill Transit officials expect to need three more buses and drivers. The annual cost of providing Obey Creek bus service is estimated at $447,000. The developer could contribute up to $32,000 for transit by the third year, and every following year until the agreement expires.
The town also could get $150,000 to use for a traffic study and to slow traffic on Dogwood Acres Drive; to design a pedestrian crossing at Oteys Road and U.S. 15-501; or to help extend the N.C. 54 off-ramp.
The pedestrian bridge
It would be at least 12 feet wide to help pedestrians and cyclists cross the highway between Obey Creek and Southern Village. The town would own the bridge, but the owners association would maintain it to NCDOT standards. It could open when stores, offices and residents move in.
What about parks
The council could trade a wedge of town land for the Wilson Creek Preserve. Residents asked the town to leverage the land for even more benefits.
The town manager would approve park designs, and the owners association would maintain greenways, parks and the preserve. The parks could open during the first building phase:
▪ Wilson Creek Preserve would offer picnic areas and amenities, including at least 8,000 feet of natural surface or gravel trails. An old, very steep quarry could be restored using fill dirt and stones from the developed site. Only areas west of the creek would be disability accessible.
Access will be across a pedestrian bridge over Wilson Creek that would be sturdy enough to bear maintenance equipment. The town could seek a conservation easement.
▪ North Park/Overlook Park are among three acres behind the development
▪ Highland Park, 1.2 acres near Sumac Road that would be community gathering space.
The project must meet local, state and Jordan Lake watershed standards. A stormwater management plan would be submitted with the first building application and certified plans before tenants move in.
Stormwater would be treated before it gets to Wilson Creek, which would be monitored at three sites.
The Town Council meets at 7 p.m. Monday in the Town Hall Council Chamber, 405 Martin Luther King Jr. Blvd. More information about Obey Creek can be found at nando.com/qu.
An historical marker noting the site’s history when it housed the Watts Motel and Restaurant would be installed at Obey Creek. The marker would commemorate 11 UNC and Duke University professors who joined black and white students for dinner at the whites-only restaurant on Jan. 3, 1964.
Albert Amon, a UNC assistant professor of psychology, asked from the front door if the group could be served, according to U.S. Supreme Court testimony. People inside the restaurant recognized him as the man who had been taking photos the previous day, and motel owner Austin Watts pulled Amon into the foyer, where he was kicked and beaten, witnesses testified. Other members of Amon’s group tried to protect him and also were beaten. They were thrown into the parking lot, where they huddled on the ground while women beat them with brooms and sprayed them with a garden hose. Deputies arrived and arrested many in the group.
Duke zoology professor Peter Klopfer, a Chapel Hill resident, was charged with trespassing and took his case to the U.S. Supreme Court. A tributary on the site that flows into Wilson Creek will be renamed Klopfer Creek in his honor. Klopfer, who is a professor emeritus at Duke, and his wife Martha also helped found the Carolina Friends School.