04/02/13 — Apartment proposal raises concerns

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Apartment proposal raises concerns

By Josh Ellerbrock
Published in News on April 2, 2013 1:46 PM

MOUNT OLIVE -- A public hearing on the proposed Berry Lane Gardens apartment complex on N.C. 55 across from Walmart in the north part of Mount Olive brought a few concerned citizens and questions by the board to developer Steven Brock during Mount Olive town board's meeting on Monday night.

Concerns were centered around two possible future problems for the apartment complex -- the clientele the apartment complex would attract and the future management of the apartments.

The 56-unit proposed development would set an upper limit on income for those wishing to rent, as part of the federal housing credit program that the developer hopes to receive funding from.

"The basic premise is that housing tax credits are awarded to a developer to help them finance the development with a lower amount of permanent debt, thus allowing them to offer the units at a lower rent," said Brock of Brock Venture Inc., a development company out of Wilmington.

Mayor Ray McDonald Sr. led with questions concerning tenant selection. McDonald pointed out past housing developments -- two out of four in Mount Olive -- where tenants and bad management led to major problems with the town.

"I can assure you, we need the housing in Mount Olive. We just need the right kind. That's all we're concerned about," McDonald said.

"This is work force housing. These are apartment units where working people who make a lower age pay a rent every month and are subjected to the same sort of criteria of any market rate apartment. What it is not, is more important. It is not Section 8 housing. It is not what some people call projects or low income housing," Brock said.

"There's so much demand for (the apartments), we don't really need bad tenants," he said.

Town commissioner George Fulghum was satisfied with Brock's answers on tenants but asked whether the tax credits needed for financing would tear the rug out from under the developer's feet if the credits were to disappear.

"We've all seen in recent history what happened at these refurbished apartments here in town when the tax credits run out and it becomes not of lucrative a business -- when they tended to back away from them and let them default," he said.

Brock assured that the property management group he is working with, Landmark Group out of Winston-Salem, has had a good working history apparent with the more than 80 different complexes the company has worked with and that if something did happen, the company would deal with it in a responsible manner.

To prove so, McDonald asked whether he and members of the town board could tour Landmark's Group closest complex in Greenville before making a decision on the rezoning permit regarding Berry Lane Gardens, which Brock agreed to.

There are three parts of the rezoning permit needing approval by the town. First, the seven acres needs to be rezoned from commercial to residential. Second, a special permit use for a multi-family dwelling needs to be granted, and third, there has to be a change in the limits that the town currently has in the municipal code for the size of such buildings.

"Even if we rezone it, it won't meet the rezoning specs?" McDonald asked. "(Town Attorney) Caroll (Turner), you can answer this for me. Are we kind of going outside the normal limits of changing the zoning?"

"Mount Olive College brought this same issue forward. We didn't have zoning that could accommodate three to four, five story buildings. But we're a big city now. We got that kind of thing," Turner said.

"Plain and simple, the changes, in my opinion, need to be made anyhow. We just hadn't gotten around to doing it because nobody brought in a project calling for it," he said.

The proposed changes in the zoning code call for increasing the height of allowed complexes, the number of units per acre and the number of units per building. The largest of those changes -- going from eight units per building to 24 units per building -- is still below many municipalities, Turner said. For example, Raleigh's zoning code is set at 30 units per building.

Before the developer can go forward with the project, the developer must win federal housing credits given out by the North Carolina Housing Finance Agency, who holds a competition every year to allot those funds. The final decision on allotment is made in August. About one in four developers who apply to the competition wins any housing credits.

"Winning the competition is crucial for us to proceed," Brock said.