SUMMARY MINUTES OF A Comprehensive Plan
WORK SESSION OF THE CHAPEL HILL TOWN COUNCIL
MONDAY,
FEBRUARY 7, 2000 AT 4 P.M.
Mayor Rosemary Waldorf called the meeting to order
at 4 p.m.
Council members present were: Flicka Bateman, Pat Evans, Kevin Foy, Lee
Pavăo, Bill Strom, Jim Ward and Edith Wiggins.
Council Member Joyce Brown was absent, excused.
Staff members present were: Town Manager Cal Horton, Assistant Town
Managers Sonna Loewenthal and Florentine Miller, Planning Director Roger
Waldon, and Town Clerk Joyce Smith.
Also present were consultants Michael Curzan and Bill Quinby.
Mr. Horton introduced Bill Stockard, the new
Assistant to the Manager. He said that
Mr. Stockard was an honors graduate of the UNC School of Journalism, a former
assistant to the town manager in Stanley County, and an experienced reporter
and editor. Mr. Horton added that Mr.
Stockard had been one of the leading graduates of the MPA program at UNC-Chapel
Hill, and was a former volunteer intern with the Town.
Bill Quinby, Senior Managing Director of Julien J. Studley, Inc., and Michael Curzan, President and CEO of UniDev, made a joint presentation before the Town Council.
1a. Presentation by Mr. Quinby and Mr. Curzan
Mr. Quinby explained
that they would provide three basic services: strategic planning,
pre-development work, and project management.
He said that the object of strategic planning is to arrive at a
feasibility study that answers the question of whether or not someone’s idea
makes sense—operationally, physically and financially—and if it can work.
Mr. Quinby explained that pre-development work would
include screening the development team, and would involve evaluating markets,
sites and existing buildings, as well as alternative approaches to
development. Mr. Quinby stated that the
team would create preliminary ideas for solutions, develop budgets and
schedules, obtain necessary judicial approvals, negotiate and secure necessary
financing, and negotiate contracts.
Lastly, Mr. Quinby said, they would manage the project by meeting
schedules and budgets, handling problems expeditiously, and meeting
expectations.
Mr. Quinby said the project encompasses overseeing
the schedule and budget, as well expectations and contracts, and making sure
that what is expected is delivered. He
said that clients come to them when they need help organizing and prioritizing,
when they need realistic solutions to difficult problems, and when their time
is scarce. They also come to them when
they need help bringing parties together, need to reach closure on complicated
projects, and when they want to do good deeds but still break even.
Mr. Quinby explained that the team had worked with
similar projects at Westminster College, George Washington University,
University of Kentucky, Aspen Institute, University of California at Irvine,
University of Chicago, and Dartmouth College.
He said that they were working with both California systems right now: the California state university system,
which is the largest system in the country, and the University of Chicago
system.
Mr. Quinby then turned the presentation over to Mr.
Curzan, who outlined the lessons they have learned while going through similar
processes in other communities. He described
in general what they expect to happen in Chapel Hill. Mr. Curzan pointed out that significant income can be earned,
that value can be created, and that occupancy expenses can be minimized when
universities and cities work together during the development process. He pointed out that cities and universities
have unique financing tools available to them, and that visionary development
initiatives can attract other key institutions, such as federal and state governments
and foundations.
Mr. Curzan emphasized that sustainable and efficient
development should become a priority for all initiatives. He said that developer skills are key to
successful development projects, and added that the developer should be supplemented
with experienced oversight from the institution or by an owner’s
representative.
Mr. Curzan recommended thinking of real estate
issues as being like a motion picture rather than like a snapshot. Large projects require substantial lead
time, he said. He noted that it is
important to look at development over a ten, fifteen, and twenty-year
timeframe.
Regarding Chapel Hill, Mr. Curzan pointed out that
there are limited opportunities for development on UNC’s central campus and on
Mason Farm Road. He said that the best
development would be on the Horace Williams property, Parker Properties, Home
Site, and downtown Chapel Hill.
Mr. Curzan noted that Chapel Hill’s housing vacancy
rate is very low, at two percent. The
average income home sales price in Chapel Hill is high, he said, at
$277,000. The median income is $69,000,
up from $24,000 in 1980.
Mr. Curzan stated that development should maintain a
town’s social fabric, continue a sense of communities, and create
employer-employee affordable housing.
He recommended using the term “employer-employee” because people react
well to the concept of helping employees find housing regardless of what their
incomes are. Mr. Curzan pointed out
that with tax exempt financing and certain types of guarantees, a town can beat
the private market by a substantial amount.
Mr. Curzan recommended staying aware that a city or
state university can develop rental and for-sale housing for all citizens more
cheaply than the private sector. He
pointed out that the city and university can control housing prices—sale or
rental—to maintain affordability and still make money through the development
process.
Mr. Curzan said that his team had created a model
program at the University of California at Irvine. He said that the program started in the 1980s, when housing
prices were $215-220,000, and now has 600-700 different types of housing
units. He added that the Irvine program
works for people making $20,000 as well as for those making $150,000. Mr. Curzan explained that his team had
pioneered the idea of putting the land in through a ground lease, which
controls the price of housing over time.
Mr. Curzan also mentioned California State
University at Channel Island, where he is working as an owner’s representative
to build 900 units of commercial housing, 1,000 units of student housing,
350,000 square feet of research and development space, and convenience
retail. He said that California State
University will generate more than $400-million over 25 years for the university
and will rent and sell below the market.
What is important about this, Mr. Curzan said, is that the university
was given an old site but no money to develop the site. He explained that the university had to
generate the funds itself to create the new university.
Mr. Curzan pointed out that the most important costs
of developing housing are financing, operations, land, and infrastructure. He added that construction and development
fees were significant, but were less important. Mr. Curzan stated that the preferred methods of financing were to
reduce monthly payments (e.g. interest rate assistance loans, Community
Reinvestment Act loans, waiver of points, tax exempt financing, reduce or
exclude private mortgage insurance through guarantees), or to reduce down
payments (e.g. grants, increase loan amounts through guarantees).
Mr. Curzan noted that additional options would be a
soft second mortgage loan or to reduce the costs charged by service providers
(e.g. brokers, movers). He explained
that homeowners most want a reduction or elimination of down payment costs and
monthly payment assistance.
Mr. Curzan said that some homeowners cut back on
maintenance and repairs to reduce operations costs. He pointed out that this leads to deterioration in the long run,
and said that the preferred method is to reduce property taxes (e.g. tax
abatement/exemption) and to reduce energy costs through “green development.”
Mr. Curzan explained that the annual payments of six
percent per year could be done either through a tax-exempt bond issued by the
city or a Community Reinvestment Act loan, which could be made at a below
market interest rate. He suggested
excluding private mortgage insurance so
that the university, the city, or some combination thereof, would be a
guarantor on the mortgage.
Mr. Curzan stated that they would do in Chapel Hill
what they have successfully done in Irvine—created a non-profit corporation
which has a huge revolving source of capital and is, therefore, able to build
more housing and provide assistance loans.
He added that if the housing went down to $160,000 it could be
affordable to those with incomes of less than $40,000. If the Town were to take out part of the
real estate taxes, he said, that would reduce the housing income by over
$10,000. Mr. Curzan pointed out that
there were numerous ways that the Town could make housing more affordable.
Mr. Curzan listed key questions to ask when
beginning the strategic planning process:
·
Are
Chapel Hill and UNC willing to accept the Downtown Plan’s concept of
encouraging the “incubation of vital, well-integrated, mix-use development, of
which housing would be a key component?”
·
Are
Chapel Hill and UNC-CH interested in encouraging housing development for people
with incomes of $30,000 to $60,000?
·
Do
Chapel Hill and UNC accept the proposition that a community design commission
comprised of representatives of both institutions would be useful in handling
downtown development?
·
Will
Chapel Hill and UNC be willing to use downtown land to create affordable
housing if they can do so without having to bear any out-of-pocket costs?
Questions from
Council
Mayor Waldorf pointed out that this is conceived of
as a partnership and that representatives of UNC and UNC Hospitals have worked
with the Town and are each prepared to invest in one-third of the feasibility
study. She requested that Mr. Curzan
summarize at some point what documents and deliverables they will have at the
end of the feasibility study so it would be clear how they would move forward
from there.
Mr. Curzan read from his firm’s letter regarding the
Downtown Small Area Plan. The letter
explained that the study would be looking at employee group housing objectives
which would include discussions with people to learn exactly what they want and
how much they can afford to pay. He
said that the study would then summarize the value and benefit analysis of the
use of properties by the Town and the University, as well those that would be
available from private properties. Mr.
Curzan said that the study would examine what would happen to them if they were
put into employee housing, with parking being replaced and probably
supplemented and with retail being added.
Mr. Curzan said that his firm would offer ways they
believe this could be done, including associated benefits and constraints that
they think would occur as the Town proceeded.
He said they also would give order of magnitude expenses and income
models for each of these scenarios, and would run them out for fifteen to
twenty years.
Mr. Curzan explained that his firm would recommend a
financial development and ownership structure.
He said they would have met with the banks and with Fannie Mae, and with
everybody on the Council and at the University to begin to think through where
they would get the seed money to do the development. Finally, Mr. Curzan said, they would give a preliminary master
plan, as well as the set of next steps for planning, design and
implementation.
2b. Discussion by Town Council
Council Member Foy asked Mr. Curzan if the scope of
the study would cover all the land that was marked in yellow on the map. Mr. Curzan responded that was correct.
Mayor Waldorf commented that the Council should
decide what the scope of the study should be.
She added that the parts of the downtown that are envisioned as changing
positively over time are the yellow areas which are not outlined in green on
the map. Mayor Waldorf noted that the
areas outlined in green were properties that should be preserved as they are. She expressed hope that the consultants would
have freedom to look at properties other than those that are publicly owned.
Council Member Foy asked if this would include both
East and West Rosemary Street. Mayor
Waldorf replied that it would depend on what the Council’s wishes were. Council Member Foy asked if it was the case
that the feasibility study would not be confined to the housing issue. Mayor Waldorf and the consultants replied
that this was correct. Council Member
Foy asked if the feasibility study would look at other than employer-employee
housing and give the Town, essentially, a master plan for that corridor. Mr. Curzan replied that doing so would go
beyond the scope of the study.
Council Member Strom wondered if the Council should
consider expanding the scope of the study.
Council Member Foy suggested the possibility of
having retail at the ground level and housing above. Mr. Curzan said that he assumed they would be working with retail
and parking related to this development.
He added that the only area they had not really looked at was the office
market.
Council Member Wiggins asked Council Member Foy if
he was suggesting approaching this from a master plan standpoint for the yellow
area, rather than as an employer-employee initiative. Council Member Foy replied that he did not want to derail the
project. Council Member Wiggins
remarked that there would be a way to proceed in that direction without
derailing the housing part, but added that the Hospital and the University
probably would contribute only to the housing component.
Council Member Wiggins stated that the Town probably
would have to fund more than one-third of the project if they wanted to
increase its scope to include a master plan.
Mayor Waldorf agreed, pointing out that one of the reasons the Town’s
inquiry had focused on housing was housing had been a point of concern of all
parties. She agreed that the University
and Hospitals were willing to take up one third each of the stated cost.
Mayor Waldorf said she assumed that if the Town
wanted to expand the scope, it would do so with the understanding that it would
pick up that additional cost. She said
that she liked the idea of expanding the scope, and suggested making a decision
on that as the study progresses.
Council Member Evans expressed concern about short
term parking, particularly on the west end of Franklin Street. She pointed out that the market can change
with time, depending upon what is done by the private sector and/or adjoining
communities. Council Member Evans
questioned whether the report the consultants would bring back might be too
time-sensitive so that if the Town is not willing or able to implement it now,
then it would become outdated. Mr.
Curzan replied that the type of housing problem that exists in Chapel Hill
tends not to go away but tends to get worse each year.
Council Member Evans asked if Mr. Curzan meant that
the demand would be ever-present and the financial feasibility, therefore,
would get better rather than worse. Mr.
Curzan said that her understanding was correct. He gave the example of Stanford University, which he said made
land available on its campus for faculty housing about 25 years ago by leasing
the ground for about a dollar and not putting any constraints on the price of
the housing. Faculty members built
housing there for $150,000-$200,000, he said, and now most of those units are
worth about $1 million.
Mr. Curzan pointed out that no one can afford to buy
those Stanford units, other than medical faculty. He said that Stanford is being forced to either write them down
using a tremendous amount of their endowment or to turn them loose and have the
public buy them. Mr. Curzan stated that
this is why Irvine had put constraints into the ground lease. With constraints, he said, something that is
affordable today should remain affordable twenty years from now.
Council Member Bateman asked how people react when
they are told that their appreciation and profit on the house they are buying
will be limited. Mr. Curzan replied
that buyers had been “terrific” about it.
He added that eighty percent of the new faculty at Irvine had purchase
units, rather than the fifty percent that had been projected. Mr. Curzan noted that buyers understand that
they will not get rich on this, but that they will make three to four percent
on their investment. He stated that he
had not encountered anyone who resented the fact that they would be sharing
some benefits with the university.
Council Member Ward asked for clarification on the
scope of the project. He suggested that
affordable housing was only a piece of what the Town, University, and Hospitals want. Council Member Ward remarked that the “package deal” only makes
sense if it comes with retail and some office.
He added that he thought it would be inappropriate for the Town to pay a
larger share in order to have retail in the mix, since it would benefit the
University and Hospitals as well.
Mayor Waldorf asked Mr. Curzan to articulate as
clearly as possible what he envisioned as the scope of the study, including what
properties he would look at and what retail questions he would address.
Council Member Foy clarified that the consultants
would not look only at Town-owned and University-owned property, but would make
recommendations of where units should be built regardless of who owned the
property. Mr. Curzan agreed, adding
that they would probably start with Town-owned property. He pointed out that some associated, private
land owners will want to participate and some will not. In the case of those who do not, Mr. Curzan
said, the Town might be faced with the use of eminent domain. He said that the consultants would inform
the Council about ideal properties, and the Council would decide how to obtain
the use of those properties.
Council Member Ward urged the Council, University
and Hospitals to open up the scope of the project and ask the consultants to
look into the reasonableness and effectiveness of making the mix of housing,
retail and office happen.
Mayor Waldorf asked how other Council members felt about
that.
Council Member Bateman asked if Council Member Ward
was suggesting a study of the entire yellow area.
Mayor Waldorf said that she did not think that was
feasible.
Council Member Ward stressed that the three entities
working together for that kind of mix in the downtown area would lead to the
long-term success of the project.
Council Member Bateman asked what level of detail other Council members wanted in the expanded plan that would be different from that in the Downtown Area Plan that the Comprehensive Plan Work Group had already put together. Mr. Horton replied that it would be a question of determining whether it would be feasible to add a certain amount of office to the development mix, and how much would be supportive of the development and contribute to the cash flow.
Council Member Bateman asked if the “development mix” would be the housing that had been proposed. Mr. Horton replied that it would be housing, associated parking, replacement parking, and retail. He said that this should, in theory, make the entire development more prosperous and allow more development with greater certainty. Mr. Horton added, though, that “you never know until you see what the market says.”
Council Member Pavăo suggested endorsing the project as it is planned and keeping the dialogue open about expanding it.
Council Member Ward endorsed that, adding that his intention was not to hold up the process.
Mr. Curzan noted that he understood that his firm
would bring back additional proposals in a month to six weeks if the Council is
still interested. Council Member Strom
suggested making sure that the expanded scope is part of the motion.
Council Member Foy stressed going ahead with this
the way it had been planned, and then, in four to six weeks, be prepared to
expand the scope and the amount of investment if that is what they decide to
do.
Mr. Horton noted that the Council might want some
further elaboration and cost estimates from Mr. Curzan.
Council Member Ward pointed out that the University
and Hospitals should be included in discussions.
2c. Direction to Town Manager
COUNCIL MEMBER FOY MOVED, SECONDED BY COUNCIL MEMBER
PAVĂO, TO REFER THE PROPOSAL TO THE MANAGER TO ENGAGE IN A CONTRACT WITH UNC
AND UNC HOSPITALS AND BRING A REPORT BACK TO THE COUNCIL. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).
Item 2 -
Continuation of Action Plan Discussion
Mayor Waldorf stated that this had been completed during the previous meeting.
3a. Possible Location of Municipal Operations
Facility
Mr. Horton explained that the briefing given by
Public Works Director Bruce Heflin at a recent Council meeting was all that was
necessary on this item. Mayor Waldorf
added that the Council had made all the decisions they could make on this,
having authorized the staff to begin looking at the land and tentatively
approving a map configuration for the northwest area that would permit
something like this to happen. Council
Members agreed that this item had been addressed.
Council Member Evans inquired about a statement on
page five, regarding single family homes being converted to student
housing. Mayor Waldorf suggested that
each Council member make a list of textual errors, as well as outdated and
incorrectly phrased sections, and circulate them to all other Council members
by February 21. Mr. Horton offered to
compile those lists and distributed them to Council members.
2b. Citizen Information Process
Planning Director Roger Waldon explained that Alan
Rimer had brought a petition asking that there be additional opportunities for
public review of the Comprehensive Plan.
Mr. Waldon noted that although the Plan is before the Council for
comment and at a place where it could be adopted, the Council could choose to
amend it.
Mr. Waldon pointed out that the Land Use Plan
probably will be followed by a series of other public planning initiatives, one
of which will likely be a zoning initiative which would lead to public
hearings. He added that if the Council
did choose to adopt the Comprehensive Plan they might want to consider taking
it to the community for feedback that would be considered at a later time. He said that the staff recommends that the
Council adopt the Plan after the changes that it has suggested come back.
Council Member Strom asked Mr. Waldon to clarify
what he had said about the “zoning initiative.” Mr. Waldon replied that the Comprehensive Plan is a guide and a
blueprint for the future. He pointed out
that what makes it enforceable are the changes to zoning and the changes to the
Development Ordinance. Council Member
Strom asked what the public process would be while the Council was changing the
zoning. Mr. Waldon replied that after
the Council adopted the Plan they probably would ask the Manager how the
existing zoning around Town is different from what is called for in the
Comprehensive Plan.
The likely scenario, Mr. Waldon explained, would be
as follows:
Mayor Waldorf recommended that the Council decide
what process it wants to follow.
Council Member Evans suggested moving forward, but stressed that
approving the Comprehensive Plan does not mean that it cannot be changed. Mayor Waldorf noted that Council Member Evans
was speaking in favor of option four (adopt the Plan and proceed with
implementation).
Council Member Foy suggested option two (adopt the
Plan and then hold public information meetings). He suggested taking citizen comment into account now rather than
next year when people are angry because the Council had acted rashly. Council Member Pavăo asked how long the
public sessions would take, and Council Member Foy replied, “over a couple of
months.”
Mayor Waldorf said that she did not see much difference
between options two and four, except that option two involves extra
meetings. Mr. Waldon said that the
Council would be encouraging the staff under option two to be aggressive in
encouraging organizations to invite the staff to come and tell them about the
Comprehensive Plan. Mayor Waldorf asked
if the staff had the flexibility to do that.
Mr. Horton replied that they did, adding that he hoped that all Council
members would be interested in being on the speaking circuit as well.
Council Member Ward supported option two, and
pointed out the importance of adequately informing the public about the
Comprehensive Plan.
Council Member Strom also spoke in favor of option
two, adding that the rezoning process would go more smoothly if Council members
go out on the speaking circuit because they will be able to predict where
problems are and develop a better Plan.
COUNCIL MEMBER FOY MOVED, SECONDED BY COUNCIL MEMBER
PAVĂO, TO PROCEED WITH OPTION TWO. THE
MOTION WAS ADOPTED UNANIMOUSLY (8-0).
Mayor Waldorf suggested discussing a target adoption
date. Mr. Horton stated that the staff
could have the final draft ready by the second meeting in March. Mayor Waldorf noted that option two required
adopting the Plan and then holding public meetings. She pointed out that the Council could adopt it as early as the
second meeting in March.
Council Member Strom said that he did not see why
they should not do that given that they just passed option two. Others agreed, and Mr. Horton said that
doing so probably would position the Council to rezone in the fall.
Council Member Wiggins asked when the Council would
look at the Development Ordinance. Mr.
Horton replied that the Council had already authorized the staff to solicit
proposals for reworking the Development Ordinance and would bring that proposal
to them within 30 days so that they could initiate that process this
Spring.
Council Member Wiggins clarified that working on the
Development Ordinance would not be contingent upon anything in the rezoning. Mr. Horton replied that he did not believe it
would be, unless things, such as changing categories, came out of the
Development Ordinance which the Council wanted to consider in the rezoning.
3d. Other Issues Identified by Council Members
Council Member Foy recalled that the Triangle Land
Conservancy had petition the Council to include maps rating land in Orange
County by its wildlife value in the Comprehensive Plan. He pointed out that the staff had concluded
that the maps were not accurate and had suggested an alternative. Council Member Foy objected to the
alternative being in words rather than a visual representation. He wondered if there might be a way to get
an updated version of the maps into the Comprehensive Plan.
Mr. Waldon referred to figure eleven in the draft
Comprehensive Plan (Natural Areas and Environmentally Sensitive Areas). He said that the staff is proposing a
combination of words, which refer to the Triangle Land Conservancy’s document
in several places, and pictures.
The meeting was adjourned by consensus at 5:33 p.m.