CHARLOTTE, NC (Steve Harrison/The Charlotte Observer) - After 11 years of waiting, the Charlotte City Council ended a partnership Wednesday with developer Peter A. Pappas to build affordable housing near the Scaleybark light-rail station.
The original plan — created before the Lynx Blue Line opened in 2007 — called for a mixed-use development of apartments, shops and offices. It would have included 80 apartments for low-income residents, including some for the city's poorest residents, who make less than 30 percent of the area median income. Those apartments would have been reserved for a family of four making $16,000 a year.
The project was supposed to be the city's signature affordable housing development on the light-rail line.
Twelve years ago, the city bought 16 acres adjacent to the station for $9.2 million. The city spent $2 million from its Housing Trust Fund to buy the land.
In 2007, it then sold the 16 acres to Pappas Properties at a discount, for $5.2 million. (The city reduced some of the price because of what it said were challenging soil conditions.)
This year, Pappas could have walked away from the deal by giving the city the $2 million back, plus interest. That would have been $2.4 million. He would have kept all the land he owns today.
Instead, the developer is likely giving the city a better deal, by deeding to the city 2.31 acres near the light-rail station. Because of soaring land values, that land is likely worth more than $2.4 million.
Real estate records show Pappas' development company recently sold about 4 acres of the site to Pulte Homes for $6.6 million. Pappas Properties will still own nearly 10 acres that he can develop or sell.
For the last decade, city officials have said they believed the apartments would be built, and that only the recession in 2008-09 was holding the project up. But as developers, including Pappas, began building other apartment complexes along the Lynx Blue Line, the city struggled to explain why Scaleybark was still mostly a green field, with a parking lot for light-riders.
Pappas Properties made at least three attempts to win state tax credits critical for building low-income housing. But each attempt failed.
The city thinks it will have a better chance in the future, in part because Harris Teeter has opened a grocery store nearby, and projects receive good scores from the state for having a grocery within walking distance. The state wants residents living in subsidized housing to be near amenities like groceries and jobs.
Before voting unanimously to approve the new deal Wednesday, council members were upbeat.
"He could have just walked away," said council member LaWana Mayfield about Pappas's willingness to give the city 2.3 acres instead of him paying the city $2.4 million and keeping all the land.
Charlotte plans to use the 2.31 acres to build the low-income apartments on its own, or with a nonprofit company. But the new plan calls for all of the 80 apartments to be for people earning 80 percent of the area median income. That's about $43,000 for a family of four.
But the switch from very low-income housing to so-called workforce housing raises questions about whether the apartments are needed. Two consultants have told the city that Charlotte has a surplus of housing for people earning about 80 percent of area median income, and the city's biggest need is for apartments serving the city's poorest residents, who earn minimum wage or less.