MEMORANDUM
TO: Mayor and Town Council
From: Council Committee on Affordable Housing
Council Member Greene, Chair
Council Member Kleinschmidt
Council Member Strom
Council Member Czajkowski
Subject: Marriott Residence Inn Development Affordable Housing
DATE: January 26, 2009
PURPOSE
The purpose of this memorandum is to recommend that the Council accept an $85,000 payment-in-lieu of providing an affordable housing unit for the Marriott Residence Inn Development. The development is located in the northwest quadrant of the intersection of Fordham Boulevard and Erwin Road, adjacent to Dobbins Drive. We have consulted the staff and believe that acceptance of a payment-in-lieu is a Minor Change to the Special Use Permit. We recommend that the Council adopt the attached resolution to endorse the amount of $85,000 as a payment-in-lieu as a Minor Change to the approved Residence Inn Special Use Permit.
On March 24, 2003, the Town Council approved a Special Use Permit for the Marriott Residence Inn development to authorize construction of a three-story, 73,120 square-foot extended-stay hotel with 108 lodging units. The approval included a two-story, 6,000 square-foot building containing 3,000 square feet of office space and 3,000 square feet of residential floor area, comprised of four dwelling units. The applicant offered one of the four dwelling units as an affordable unit for sale or rent in the Residence Inn development. Construction of the project, including the affordable housing unit, is complete.
In response to a petition from the owner of the property, the Summit Hospitality Group, on January 23, 2006 the staff presented a memorandum recommending that the Council endorse a payment-in-lieu of $70,000 as part of a Minor Change to the approved Residence Inn Special Use Permit (please see Attachment 2). The Council took no action on this request.
DISCUSSION
The Summit Hospitality Group is required by the stipulations in the approved Special Use Permit for the Residence Inn to reserve one of three dwelling units (33 percent) for qualified buyers or renters, with a gross income equal to 80 percent or less of the median family income. The affordable housing stipulations require that the applicant work in conjunction with the Orange Community Housing and Land Trust to market the units to buyers and renters.
Orange Community Housing and Land Trust and the Summit Hospitality Group agree that the Residence Inn site is less than optimal for a single affordable unit. Members of the Committee and staff visited the unit and determined that because the unit is isolated and is not part of a neighborhood, it would be a challenge to market and sell this unit, and would not be a desirable unit to add to the Town’s affordable housing stock. We believe that a payment-in-lieu of affordable housing could be used to support other affordable housing efforts. At a meeting with the Committee, Robert Dowling, Executive Director of Orange Community Housing and Land Trust, suggested that $85,000 would be a reasonable amount for a payment-in-lieu. This represents the amount of subsidy needed to provide an affordable house in Town.
The Council authorized a similar Minor Change to affordable housing provisions for the Providence Glen Condominiums on October 27, 2004. The resolution adopted by the Council permitted a Minor Change to the Providence Glen Special Use Permit, whereby Providence Glen Associates was required to provide $6,000 per unit for each of 16 affordable dwelling units ($96,000). The payments-in-lieu of affordable housing were made to the Town of Chapel Hill Affordable Housing Fund and disbursed to local non-profit agencies for eligible projects.
We agree with the staff’s statement from the January 23, 2006 memorandum that the request to change the affordable housing provisions of the Special Use Permit for the Residence Inn is reasonable because the proposed payment-in-lieu of affordable housing would potentially have a greater impact on the local affordable housing market than adherence to the existing stipulations.
In this situation, we recommend that the Council adopt the attached resolution, endorsing an $85,000 payment-in-lieu of providing an affordable housing unit to the Town’s Affordable Housing Fund.
Following this Council action to endorse the $85,000 payment amount, we understand the Manager would administratively approve a Minor Change to the Special Use Permit for the Residence Inn, to adjust the affordable housing provisions of the Special Use Permit. The applicant would be required to record the Special Use Permit, with this minor change amendment noted.
We recommend that the Council adopt the attached resolution, endorsing an $85,000 payment-in-lieu of providing affordable housing for the Marriott Residence Inn Development.
ATTACHMENT