Luxury apartment developers are not, generally speaking, deserving of the public's pity. Still, it was tough not to feel just a tiny bit bad for Scott Underwood last Wednesday evening.
Underwood's firm, Woodfield Investments, is under contract to purchase, for $10 million, 36 acres of land just east of Fordham Boulevard and Ephesus Church Road in Chapel Hill. Currently owned by the American Legion Post 6, it's one of the last large chunks of undeveloped property left in the town. Woodfield intends to build somewhere between 400 and 600 high-end apartment units, plus ritzy add-ons like a resort-style swimming pool and a private dog park. The result will be, as the brochure puts it, an "amenity-rich, self-contained environment" with "market-defining interior design."
In an old, amenity-poor building on the Legion's property, Underwood stressed his Tar Heel bona fides to a skeptical crowd of more than 100 Orange County baby boomers. He's lived in the Triangle for 24 years. He earned his MBA from UNC. His parents went to UNC. His grandfather was a professor at UNC.
"There's Carolina blue running through my blood," Underwood said.
The baby boomers weren't moved. When Underwood noted that millennials were moving to Chapel Hill because of its "authentic" feel, loud scoffs rang out inside the wood-paneled room. Reaching for common ground, Underwood asked, "But would you at least agree that Chapel Hill is a great place to live?"
"Not if you build this thing," a woman snickered, to nods and cheers. Tough crowd.
Underwood may have roots in Chapel Hill's past, but he was pitching a version of its future that an increasing number of its residents abhor. Last November, Mayor Mark Kleinschmidt and two* town council incumbents were ousted by challengers backed by the newly formed political action committee Chapel Hill Alliance for a Livable Town. CHALT's basic premise is that development in Chapel Hill is out of control, and the decisions of the previous mayor and council were enriching elites and developers while squeezing out ordinary, long-time residents.
"Several of us who were voted in during the last election believe that a healthy town has room for development, but also room for the people who work here and keep the town going," says council member Nancy Oates. "And to make it affordable for them, you need a different approach than just building a bunch of luxury apartments."
Whether demand exists for 400–600 new luxury apartments in Chapel Hill is debatable. Underwood trotted out a study indicating that Chapel HIll needs to build 2,000 additional residential units by 2020. But an analysis by Del Snow, former chair of the town planning commission, suggests that there are already some 5,500 new residential units in the pipeline—meaning Chapel Hill is doing fine without the Woodfield development.
Blaming a developer for building too many luxury condos, though, is like faulting a fox for lurking around the chicken coop. Ultimately, it's up to local officials to step in.
In 2010 Chapel Hill passed an inclusionary-zoning ordinance that requires builders to make 15 percent of most new-home developments affordable. But because state law forbids any kind of rent control, this ordinance doesn't apply to rental developments like Woodfield's.
There are other—albeit duller—tools in the toolbox, however. And many argue that in the case of the Legion property, the town failed to make use of them.
To back up a bit: Chapel Hill and the American Legion reached an agreement in 2005 giving the town first crack at buying the Legion's property if it ever decided to sell it. In the ensuing years, the Legion property was identified in at least two public plans as a potential site for future parkland, which is scarce in eastern Chapel Hill.
Last June, town manager Tom Stancil informed the council that a buyer, Woodfield, was interested in the Legion property. The council went into a closed-door session to discuss its options. According to the meeting minutes, Stancil "said Council could consider buying the property or negotiate with the proposed buyer to get the Town's interest in a park site with a roadway."
The council voted to authorize Stancil to negotiate with Woodfield on both options. On Sept. 30, Stancil received a letter from the Legion's attorney indicating that an offer had been made and the town had 60 days to decide whether to buy the Legion property at the slightly discounted price of $9 million. Then, on Nov. 9—six days after the mayor and three council members were voted out of office—the council again went into closed session and voted to waive its right of first refusal.
"All we did was advise that the town didn't have $9 million—which is half the town's fund balance—to make an offer," Stancil tells the INDY. "And we went back to [Woodfield] and said, basically, that the town would like to integrate our public space with any development going forward, and that there's interest in a roadway that would potentially make land on Ephesus Church Road more accessible. And they said, 'OK.'"
But a timeline of meetings regarding the Legion property, recently released by the town in response to concerns about the process, indicates that economic development officer Dwight Bassett met with Woodfield as far back as March. This has raised a variety of concerns among CHALT members: Did pro-development town officials such as Bassett play matchmaker between the Legion and Woodfield? If so, why would the town not steer the Legion toward a developer of commercial or office property, which few would dispute the town is in much greater need of? (Bassett did not respond to requests for comment.)
CHALT cofounder David Schwartz also notes that a $40 million bond referendum (approved in the November election) to finance things like parks and sidewalks was being shaped throughout last year—the same time frame in which the council was discussing options regarding the Legion's land behind closed doors.
The Legion property is "exactly the kind of capital acquisition well suited to this type of bond," Schwartz says. "By authorizing town staff to negotiate and execute agreements regarding the property in closed session and signing away the town's right of first refusal, the council denied the public an opportunity to participate in a discussion about the best use of the site and how public acquisition might be financed."
Parks and recreation director Jim Orr confirms that, despite the town's interest in the property as parkland being a matter of public record, his department was not informed that the property was for sale or that the town was negotiating with a private developer for it.
Stancil notes that the current memorandum of understanding between the town and Woodfield doesn't guarantee anything.
"It just says, 'We sure would like a road to be a part of this development, and we'd like to connect to whatever green space that exists on the development,'" Stancil says. "But if the council doesn't like that, then it won't happen."
The sale is conditional on a rezoning—something the new council would ultimately have to approve. Despite the presentation last Wednesday, Woodfield hasn't even submitted its application for the project yet.
"I understand why citizens are concerned," says Mayor Pam Hemminger. "We're totally out of balance with residential spaces over commercial spaces in town. It's the Legion's right to sell to whoever they want to, but I think people wanted a park and were hoping it wouldn't be a luxury development. We keep allowing luxury apartment after luxury apartment to go up in Chapel Hill. And I don't think that's what we should be building."
This article appeared in print with the headline "Legion of boom."
Correction: The story originally said that three town council incumbents had lost in last year’s election. In fact, two did.