Southwest Wake News

Investors seek to remove developer from Apex’s Veridea project

Raleigh

When the Town of Apex gave preliminary approval to a proposal for the town’s largest-ever development, it wanted to make sure it got what it signed up for. In Veridea’s case, that was a 1,000-acre project that hoped to bring sustainable housing and lucrative commercial tenants to Apex.

The town also devised a backstop to ensure that came to fruition – an addition to the town code that required the designation of a “responsible person” who would have to approve the development’s site plan before construction could begin.

In 2011, that was Tom Hendrickson and his company, Lookout Ventures, which originally conceived of Veridea as a self-contained, environmentally friendly community.

But investment group Hudson Realty Capital, the project’s financial backer, is now proposing something quite different from what Hendrickson had envisioned. The plans now involve the phased construction of traditional, mass-market homes without a guarantee of commercial development on the development’s western half.

Hendrickson has indicated his dissatisfaction with the new plans.

And earlier this month, a lawyer representing Hudson submitted to town staff an amendment to the town code that would allow Hudson to remove Hendrickson as the responsible person and name someone friendlier to their plan for the development.

But the responsible party provision was designed to guard against Hudson’s new plan, officials say.

“It’s not typical, but it’s what I would call creative thinking to address a concern we had,” Mayor Lance Olive said. “What’s to say that we can’t forget everything you verbally promised and follow the letter of the code, even though it’s not what we were sold? The solution was to name a responsible person who has to sign off to make sure it’s consistent with the larger vision.”

Town Manager Drew Havens said Hudson Realty Capital had been in talks with staff about naming someone else but that this was the first formal action taken toward doing so.

The amendment, as originally submitted, would allow the majority stakeholder in the land to designate the responsible party. Hendrickson currently owns none of the land included in the project.

The amendment was originally scheduled to be considered by the planning board on July 11 ahead of the council’s July 19 meeting, but Hudson has since asked for its consideration to be temporarily deferred while it irons out some of the amendment’s language.

Hudson’s representatives – including Bruce Radford, who was Apex town manager when the responsible party ordinance was implemented – have expressed a desire to begin construction as quickly as possible. In early June, at a meeting of the town’s planning committee, Hudson approached the town about a $27.5 million investment in sewer infrastructure that would help get the project moving.

That request, in conjunction with Hudson’s departure from Hendrickson’s sustainable concept, has been met with a tepid response.

In contrast to the time pressure Hudson is under to make a return for its investors, Olive said the town is happy to wait for a guarantee of something closer to the original Veridea proposal before it gives the project its blessing and money.

“(The ordinance) is currently working as intended,” Olive said. “It’s hard to see why there’s a valid reason to replace (Hendrickson).”

Radford declined to discuss the amendment at length, as it is still being revised.

Hendrickson, too, said little other than to acknowledge the purpose and origin of the responsible person ordinance.

“In order to ensure that what was promised became what was delivered, we needed that provision in there,” Hendrickson said. “It was well-evaluated, and the principals at Hudson were on board with it as well.”

Jason Barron, the lawyer who filed the amendment, said in an email that his client’s opposition to the ordinance is out of concern for the rights of those who still live on the property to be developed as part of Veridea.

“As it stands right now, if an owner wants to add a porch to their home, they have to ask the responsible party to submit the application for them, and hope that the responsible party does so, with no real recourse to compel them to,” Barron said. “It is an untenable situation from a property rights perspective, especially considering the current responsible party has no interest in the land that it controls.”

Barron didn’t dispute Hendrickson’s claim that all parties had agreed to the provision when it was first adopted.

“Quite frankly, this was an oversight that should have been caught when the ordinance was first approved,” Barron said. “From a property rights perspective, the owners of property within Veridea should always have been ensured of their constitutional right to develop property.”

Gargan: 919-460-2604; @hgargan

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