The city of Greensboro is taking another shot at developing affordable housing at the former Regency Inn property in Northeast Greensboro.
On Tuesday, the council voted to sell the property at 2701 N. O. Henry Boulevard to Raleigh-based nonprofit developer DHIC Inc. for $350,000.
The developer plans to invest roughly $30 million to build 114 units that would be affordable for individuals whose incomes are at 30%, 50% and 60% of the Area Median Income.
Fifty-four new units would be reserved for people 55 and older, while the remainder would be for families. The project will be funded using Low Income Tax Credits.
The city has spent at least four years attempting to bring housing for homeless or low-income populations to the site. Those efforts have faced setbacks, as partnerships with other nonprofits have failed.
Last year, the city bought the property from the nonprofit Partnership Homes for $210,500 and forgave a $3 million loan. The city demolished the motel buildings late last year.
90% discount?
On Tuesday, the vote to proceed with the sale was 8-1. Councilman Zack Matheny, a frequent critic of the city’s handling of the property, opposed the sale.
He questioned why the city would sell the property for $350,000 when the site had a tax value of nearly $1.5 million and the city had spent in excess of $3.5 million on it.
“We’re selling it at a 90% discount,” Matheny said. “Tell me how that’s fair and reasonable.”
Cynthia Blue, the assistant director for Housing and Neighborhood Development, replied, “Affordable housing generally can’t be built without some form of subsidy.”
Matheny also questioned whether there was not the potential for more units on the site and raised concerns over the uncertainties regarding DHIC’s ability to obtain the tax credits needed for the project.
Kayla Strampe, the director of enterprise strategy and development for DHIC, told Matheny that while the tax credits were not a sure thing, she felt confident in their ability to secure the funding.
“It would be disingenuous of me to say that we would always be successful in a 9% (tax credits) application, but again, the work that we’ve put into this so far leads us to believe that we would be successful,” Stampe said.
Stampe also pointed to the nonprofit’s track record to set aside concerns. She said they had nearly 40 years of experience with Low Income Tax Credit projects, that they have never sold a property and that they currently manage 3,800 units in 54 developments across the state.
Blue said the city does have means of ensuring the city is protected if the tax credits don’t come through but such language would need to be written in the contract. City Manager Trey Davis said that provision could be part of additional negotiations with the nonprofit.
Blue said the contract will likely be closed in December. She said the city would have to wait until the current emergency shelter program operating at the site moves around the first of November. An underground storage tank also needs to be removed from the site.
Concentration of low-income housing
The agreement for the site received criticism from one speaker, activist Jason Hicks, who said the concentration of low-income housing on the eastern side of the city contributed to poverty in the area.
Councilwoman Sharon Hightower supported the sale but acknowledged that many in the community, including her, had concerns about how low-income housing is distributed in the city.
She said Low Income Tax Credit housing “is a dirty word” and that some residents “absolutely deplore it.”
“I hear the argument,” Hightower said. “I’ve made the argument about the saturation sometimes, but you have to look at it through a full lens and say, Are we not our brother’s keeper to also find a way to help?’”
Councilwoman Goldie Wells, whose district includes the former motel property, was enthusiastic about the project.
“The community, all of us over in Northeast Greensboro, are excited about the prospect of having this new housing development, and it satisfies a need that we have in the community,” she said.
Mayor Pro Tem Marikay Abuzuaiter said the city could not pass up the opportunity, even as she alluded to the challenges the city has faced with the property in the last few years.
“Have we perhaps spent way too much money on certain things? We do that all the time, and I hate to put it that way,” she said. “I don’t mean that it’s acceptable. It’s not. But in seeing where we’ve been with this project and things kind of backfired, and to see where we are today with the possibility of ‘This is going to be a success,’ that’s where I am.”
Abuzuaiter added, “I don’t want to waste one penny of any taxpayers’ money but sometimes things kinda happen and hit us in the face.”
kevin.griffin@greensboro.com
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