City Council members heard encouraging words and a cautionary note Thursday on the Southside redevelopments.
On the encouraging side, they got assurance that Phase I of the Lofts at Southside apartments will be finished by their Dec. 31 deadline to avoid losing $11.5 million worth of low-income housing tax credits.
They also heard that four single-family Southside houses are under renovation by private owners.
“We wanted to use public dollars to spur private investment,” said community development director Reginald Johnson. “There is a glimmer of success.”
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On the cautionary side, Johnston said there is a $2.3 million funding gap in the preliminary budget for the Lofts Phase II.
The city has committed to put $3.8 million into Phase II, which consists of 85 rental apartments, 53 reserved for low-income tenants. The current cost estimate is $18.5 million, an average of $218,000 per apartment.
“That strikes me as incredibly high,” said Councilwoman Diane Catotti.
“The average cost now in Durham for a single-family detached home is about $168,000,” said Councilman Eugene Brown, a real-estate broker.
“The costs are very conceptual at this time,” said Karl Schlachter, vice president of the Lofts developer, McCormack Baron Salazar.
Schlachter said his company is working on ways to close the gap, which he said resulted in part from rising construction costs and in part from a lowered cap on low-income housing tax credits since Phase I financing was arranged.
The Southside revitalization project covers 125 acres just south of the Durham Freeway..
The Lofts at Southside, or “Southside East,” is a mixed-income apartment complex at the 19-acre former Rolling Hills site at South Roxboro Street and Lakewood Avenue.
Two of the 12 Phase I buildings remain under construction; 67 units in the others are complete and 15 are occupied, Johnson said. Fourteen of the tenant households have incomes less than 60 percent of the area median.
The Bungalows at Southside, or “Southside West,” between South Roxboro Street and the American Tobacco Trail, is a 48-house development of single-family houses for sale to a mixed-income market of owner-occupants.
Buyers have moved into 11 of the houses, project manager Richard Valzonis said.