Chapel Hill OKs high-rise apartments downtown with affordable housing, retail
Chapel Hill’s council took a developer at its word Wednesday night, approving a seven-story building for downtown that includes a smattering of affordable apartments and potentially affordable retail space.
The 101 E. Rosemary St. building will not have everything the council wanted from Charlotte-based Grubb Properties, but it will bring the kind of housing downtown needs, Mayor Pro Tem Karen Stegman said.
The goal is having residents and workers downtown year-round to support businesses, especially during UNC’s summer break.
“I’m frustrated that’s the need that you hear from us over and over and over and over, but then you can’t quite get there,” Stegman said before the 9-0 vote. “We want everything, and you want everything, and that’s where we are.”
The 150-unit Link Apartments Rosemary will serve primarily young professionals. For 30 years, five apartments will rent at a rate affordable to those earning 80% of the area median income — up to $53,520 a year for an individual or $61,120 for a couple.
The remaining apartments will be included in Grubb Properties’ “essential housing” program, leasing at slightly less than the market rate for young, middle-income tenants. The apartments will be restricted to tenants age 22 and older.
The building’s ground floor will have about 3,500 square feet of retail space, a portion of which could be rented at half the commercial market rate, or about $18 a square foot, officials said.
‘Granular’ gains in housing, retail
Council member Michael Parker attempted to negotiate Wednesday for more apartments serving residents at up to 65% of the area median income, or up to $43,485 a year for an individual.
“It would be really meeting a very important town need,” Parker said, noting the developer could make up the shortfall over time.
His attempts fell flat.
There are financial challenges that already exist because the 0.64-acre site is small and the cost of construction continues to rise, Grubb Properties official Whitney St. Charles said. The developer also has concerns about the viability of retail space in the new building because of its location off East Franklin Street, she said.
Council member Amy Ryan celebrated the “granular” benefit of affordable retail, despite reservations about the building’s final design.
“Especially in downtown, the idea that we’re going to get some retail incubator space I think could be very meaningful for a lot of our entrepreneurs in town,” Ryan said.
It’s an easy decision, said Aaron Nelson, president of the Chamber for a Greater Chapel Hill-Carrboro. He noted the town could use the project’s new tax revenues to build affordable housing elsewhere in Chapel Hill.
“When we survey businesses about their No. 1 challenge, it’s hiring, and when we say what is the No. 1 challenge in hiring, they say it’s housing,” Nelson said.
“Their employees are not willing to drive 45 minutes from somewhere else, and if we can only find them more housing, they will be more successful in finding them,” he said. “I think this is the perfect project in the perfect place.”
Council member Camille Berry,said she believes it’s a financially tough project but that will fill a need in housing young professionals. Berry previously worked for Community Home Trust, a nonprofit affordable housing developer.
“It’s not perfect,” she said. “None of the proposals we get are perfect, but this delivers a package that we have not had in quite some time.”
Opportunity Zone tax benefits
The 90-foot apartment building will replace a vacant, two-story PNC bank and parking lot, becoming the latest Grubb project on the 100 block of East Rosemary Street.
The developer is wrapping up a renovation of the former CVS building into an Innovation Hub in partnership with the town and UNC, and preparing to build a 250,000-square-foot wet lab and office building approved last year.
The office project will replace the Wallace parking deck near Henderson and East Rosemary streets, about half a block from the new apartment building and the town’s new, 1,100-space parking deck now under construction.
The developer plans to lease parking spaces from the town and nearby landowners to serve the new apartment building. The site also is served by multiple Chapel Hill Transit routes, including the future North-South bus-rapid transit bus.
The Innovation Hub and the $40 million-plus apartment building project will be built using federal Opportunity Zone tax benefits. The program, created in 2017, encourages reinvestment in designated low-income tracts by deferring capital gains reinvested until 2026.
In Chapel Hill, the only Opportunity Zone is an area from East Franklin Street to Estes Drive that was identified because of the large student population, many of whom rent and earn little income, The News & Observer has reported.
This story was originally published April 27, 2023 at 9:58 AM.
