The original deal was that the property located on 1110 Castle would include both residential and commercial property. HIPP Architecture would have developed the commercial property of the two existing buildings and built the residential side with 18-20 units of affordable housing (out of 23 total units) at 60-80% average median income. Habitat for Humanity would have managed the residential units.
After two years without being able to negotiate the final points of a deal, the original plans have changed. Much of the council's concern centered around uncertainty about the number of affordable units and the AMI, which was based on the Cape Fear Habitat for Humanity’s model, not HIPP Architecture.
“We as developers never said we were going to do 60-80% AMI, we said we would provide 80 or below,” said developer Clark Hipp.
The commercial property was to be sold at market price but with the community wanting more affordable units, Cape Fear Habitat for Humanity no longer on the deal, environmental concerns and issues with the community land trust, the initial proposal was impacted.
Forced to modify its proposal, HIPP Architecture shifted to offering 15 of 23 total units at a higher rate — 80% AMI — and the two commercial units would go to the non-profit Genesis Block.
Mayor Bill Saffo questioned Genesis Block's ability to afford the two commercial properties: “I would imagine several millions of dollars to do that project but they would have to raise that funding or do they have that funding?”
Hipp insists that Genesis Block is taking the necessary steps to ensure funding for the property.
Council members continued to drive the discussion around the affordable units at the given AMI and the commercial property.
“Do you think fifteen affordable housing units at 80% AMI is appealing? Does that look like a good deal to you for us,” said Councilman Kevin Spears.
Councilwoman Margaret Haynes said she could not understand how the proposal had changed so significantly.
“This project now that you’ve come up with seems to me to be completely different from what we originally started on,” she said.
Hipp explained that he wanted to develop the whole project but city staff did not agree with the commercial part being used at market rate, even though that could have allowed more affordable units.
City attorney John Joye said there are North Carolina laws that complicate being able to just give land away if it's not for public use.
“When the city gives property for a public purpose we’re allowed to just give it for that public purpose, if it's not a public purpose we can’t just give it we have to auction it off and get fair market value for it,” Joye said.
Charlie Rivenbark weighed in to say that, as the city made changes, so did HIPP.
“Mr. HIPP and his group were not the only people that were changing things; their changes came about because we changed it,” he said.
Hipp said he’s willing to work with city council to come up with a better deal that suits everyone but he also wants help from the city. He said residential units cost $219,000 each and if the city wants to lower the rent he wants the city to put money in as a subsidy.
Council voted to continue the discussion to the second meeting of January, then they’ll decide whether to withdraw the previous request for proposal and direct staff to develop a new RFP.
