Town of Chapel Hill approves Aura South Elliott residential project

GOVERNMENT

By Adam Powell
Correspondent

In a contested 7-2 vote, the Chapel Hill Town Council approved at its Wednesday, April 9 meeting a proposal to construct up to 350 apartments and approximately 4,000 square feet of commercial space at 200 South Elliott Road. The project includes a payment of $2 million to the town, which it will use to support its affordable housing mission around town in the form of low-income housing tax credits, or LIHTC.

The project may not come to pass when the original developer, Trinsic Residential Group, backed out of the plan earlier this year. After two years of negotiations with city planners and technical reviewers, Trinsic Residential Group determined that it couldn’t move forward with the project, which sits in the town’s Blue Hill district adjacent to the Village Plaza Shopping Center and Whole Foods Market, and across the street from the Berkshire apartment building.

In stepped Rockwood Development Group, a Chapel Hill-based firm that was represented at the City Council meeting by its owner and OWASA Board of Directors member, Susana Dancy.

Dancy, who has been working with town leaders in recent weeks to salvage the project, presented a revised plan that will be constructed by a third-party developer to be determined.

Rockwood has significantly scaled down the proposed retail space, from 11,000 square feet in the original plans to 4,000 square feet, while expanding the residential units to a maximum of 350 units or a minimum of 315 units, and reducing the amount of on-site parking.

However, the most significant revision, at least the biggest one in the eyes of the council, was a revision to reduce the number of affordable homes for residents earning approximately 65% to 85% of Chapel Hill’s Area Median Income (AMI).

Instead of offering 10% of the total units to affordable housing, which was initially proposed by Trinsic Residential Group, Rockwood Development Group proposed to reduce the percentage of affordable housing units down to 5% at the 65% AMI level, or a payment in lieu equaling that percentage, which they said came out to $1.25 million.

“Fight now, construction is still very high,” Dancy explained. “Rents are very flat, and the larger economic things that are going on have created a very risk-averse environment. And so, even in a market like Chapel Hill—a desirable market like Chapel Hill—we are watching investors and developers walk away due to the number of internalized subsidies and the high standards that Chapel Hill expects. And so we’re doing the best we can.”

While council members Adam Searing and Camille Berry ultimately voted against the project, numerous other council members expressed displeasure that the developer had offered a payment instead of constructing more affordable housing within the project and proposed reducing the retail element of the development.

“Thank you for trying to keep this project alive, and for trying to keep housing in Chapel Hill growing, which is one of our main council objectives,” said council member Amy Ryan to Dancey. “This project is teetering on the edge of viability given the market. You also have a very small lot to work with and numerous constraints. So it’s a tricky project, and I believe you when you tell me every time you pull a string here, four more things fall apart over there. So thank you for trying to make it work.”

“I think that as you’re trying to make it work, we’re losing some really important things,” Ryan continued. “We are in the middle of one of the town’s major retail hubs, right? So I’m hopeful we could do a little better. You’ve got two wonderful public spaces out there, so I just don’t know that we’re capitalizing on those. I have issues with the affordable housing. I generally don’t like payment in lieu, but if that did help us with the LIHTC project, we could consider that. I think it would have to come up substantially from the offer that you’re making right now.”

“We need housing – a good place for housing,” added council member Karen Stegman. “A good place for density, But I am still hung up on the affordable housing.”

“I’m okay with a payment in lieu on this one,” added Mayor Jessica Anderson. “And I don’t usually say that, because I think we have guidance from our staff of a direct important use, especially in this time. But I would like to see that payment in lieu go up (from the $1.25 million initially offered by Rockwood). And I’m hoping that an increase there wouldn’t make the entire project undoable.”

“I would like to see the project happen,” the mayor continued. “I think now is a time that we need more housing, and we need money for our LIHTC projects, and we need things to be coming into town when we are seeing that people are not building projects right now. They just aren’t. And there have been times on this council where it’s felt like we’ve had an overwhelming amount of development, and this is not one of those times. We get to leave early almost every Wednesday (at council meetings) compared to what it used to be. So I think we need to be really thoughtful about turning down things that could be providing things we need in this moment in time, and also our planning for the future.”

“In order to potentially get 50 units for LITHC (via the payment in lieu) – that’s something that I would also like you to consider,” said council member Paris Miller-Foushee. “However, my first choice is always getting the (affordable) units. The sticking point for me still is the affordable housing. And as I stated before, looking at reducing your parking – I’d rather house people than cars.”

After breaking down the math regarding the payment in lieu, Council Member Theodore Nollert made the suggestion, like Ryan and Mayor Anderson, that the amount needed to be raised. The council accepted an increased offer of $2 million for payment in lieu of Rockwood’s original offer of $1.25 million.

“I think that what we’re being offered comes in at significantly less than what we would typically take on a development like this,” Nollert explained. “And that’s a challenge mathematically for this one.”

“I’m a very pragmatic person, and I tend to think about trade offs,” said council member Melissa McCullough. “And where we are, you can’t think about what is the ideal if there is no possible way of getting the ideal. And I think that’s where we are right now. I think that the fact that Trinsic abandoned about a million dollars worth of work and ran screaming into the night, means that that we’re in a situation where things aren’t going to be getting done. And that’s housing that we don’t have, and jobs that we don’t have. And I think that it’s time for us to be really practical about what we what we can get and what we can’t get.”

“I think that for the affordable housing, I think that having 300 more units in our housing supply is a good thing,” McCullough continued. “That’s 300 cars that are that are hopefully not driving into Chapel Hill every day to come to a job. it’s 300 people who are right on the bus line. And so I think that the the benefit of having housing, – just having housing there – is good for affordable housing in a holistic way. And I’m very glad to hear that the payment in lieu would would come in handy, because that seems like a good opportunity.”

“Ultimately, I think that all the difficulties that you’ll keep mentioning are just evidence that we’re trying to put a square peg in a round hole with this project,” added fellow council member Elizabeth Sharp. “If it were across the street where we have a giant under-utilized surface parking lot and a single story outdated strip mall retail space, I think I would likely be all for it. But instead, we’re trying to put it across the street from them. it just isn’t the right building for this space, I think, which is why it has been so hard to make it work. I think you’ve worked a lot of good things into it, like the multi modal path. I don’t think that just by putting a lot of people in one in a small square footage means that a space is then walkable just because the bodies have to move around somehow. I think we have a lot of work to do as a town, and we are not able to keep up in this space with this level of densification, to do what we would need to do to truly make this area walkable or activated.”

Despite her reservations, however, Sharp ultimately joined with the major and five of her colleagues later in the meeting to approve the development with the $2 million payment in lieu.

“For the payment in lieu – which I am very rarely in favor of a payment in lieu – however, given our broader budget picture currently, and the number of things that we are struggling to fund that are already on the table, to me a payment in lieu that would go directly towards funding some of those gaps and the affordable housing projects we already have is really compelling,” Sharp stated.

In offering their dissents on the project, Berry and Searing gave perspectives including the fact that this project wouldn’t offer the originally proposed affordable housing, that it was too densely populated, and that it wouldn’t connect to an adjacent road, Couch Road, that would have made the development more interconnected.

As it stands, Couch Road will be available only to pedestrians and local bicyclists. At the same time, a private road from East Franklin Street to South Elliott Road – a longer trek for motorists – will provide access to the development’s parking facilities.

“Miss Dancy, back on February 8, 2023, about this project, I said then that I was not a fan of segregating affordable housing. I stand by that,” Berry stated. “It is concerning. I am concerned about putting up a structure that large and not having a connected road. We saw what happened when we did renovations on Estes that has very little connectivity.

“(Regarding) the parking – I also want to house people, but I really would like for us to be realistic. Is there a single council member that does not have a car? I Is there a single council member who does not live on the bus line?” Berry continued. “I was in a car accident on Friday  (April 4) that totaled my car. We were mostly unharmed. I have a few bruises from that, and when I hear about accidents happening -I frequent that road on foot, because I live within a mile. I frequent that road, and I’m very concerned about it. This is how I felt with the previous applicant, of bringing in that kind of density. And how are we accommodating? Because the reality is, most people have a car. Most people need a car. It is not a win, right? We are not there yet. We are working towards it, but we’re not there yet. For those reasons. I cannot support this.”

“I brought this issue up last time of road connectivity, but I will just bring it up again,” Searing added. “Less than two years ago, we established – at expense and with community members’ extensive participation – a connected roads plan, the main finding of which was that when we do new development ,and it’s between two roads that are not connected, that this is an opportunity to connect those roads. I think that plan should be applied consistently. The roads here are not connected in this case, and therefore I can’t support this project.”

Despite the reluctance of most of the council to approve the project, the prospect of the land sitting vacant and unused for several years compelled many of them to move forward.

Adam Powell has been a correspondent for The Local Reporter since 2023. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the News of Orange County, the Mebane Enterprise, the Caswell Messenger, and the ACC Sports Journal. Powell has won more than 20 North Carolina Press Association Awards throughout his journalism career for Excellence in Education Reporting, Excellence in Sports Columns and Features, and Excellence in Video Production. He has also been recognized by the North Carolina School Public Relations Association (NCSPRA) for Excellence in Education Writing and for his newsletters representing Rockingham County Schools and the North Carolina Cyber Academy. The author of four books. Adam currently resides in Mebane with his wife Julie and children Colt and Jenna. This reporter can be reached at:Information@TheLocal Reporter.press