$1000 apartment rent figure causes some concern as city’s Finance Committee approves GMAC project – Winston-Salem Journal
A project to refurbish the downtown GMAC tower and build 240 apartment units nearby won the endorsement of the Finance Committee of the Winston-Salem City Council on Monday, as more details about the appearance and rent ranges of the apartments came to light.
Winston-Salem is being asked to contribute $1.65 million over 10 years to Charlotte developer Grubb Properties to offset costs associated with demolishing the six-story building immediately to the south of the 18-floor GMAC tower on Fifth Street.
Grubb, which developed the Link Apartments Brookstown complex near BB&T Ballpark, will carry the Link name to the new apartment complex that Grubb plans to build on that part of the GMAC block that contains the six-story building and a parking lot on Fourth Street.
Grubb officials provided an artistic rendering that shows how the new apartment block would look as seen from Fourth Street near the Spruce Street intersection. The rendering shows the apartments would have a resemblance to the existing Link apartments near the ballpark, with a variety of exterior surface treatments and colors.
During the Finance Committee meeting on Monday, Assistant City Manager Derwick Paige said that’s Grubb’s goal is to provide apartments in the rent range of $1,000 to $1,100 per month. At those rates, all of the apartments in the development would be on the upper end of what’s considered affordable workforce housing.
But city officials said they haven’t gotten any clarification on exactly what the rents would be on the 30 percent of dedicated affordable housing that Grubb has proposed for the development.
That had Council Member Derwin Montgomery expressing the thought that if the rents don’t go below $1,000 a month he might have a problem considering that level of rent to be affordable.
Montgomery said he will be pressing Grubb officials for answers on that point on Monday, when the city council is scheduled to act on the request.
The GMAC project actually has two phases, only one of which is being handled by Grubb for housing. The GMAC tower is to be renovated at a cost of some $10 million by local businessman Don Flow, who plans to relocate his corporate offices to the tower.
Flow’s idea is to take about 90,000 square feet of the 300,000 square feet of office space in the tower for his business offices, moving about 140 of his employees into the building.
Other companies are expected to take up the rest of the space, but Flow is also proposing to set aside 35,000 square feet for a nonprofit entity that would be called Winston Starts and which would help startup businesses accelerate their growth. Companies could get free office space, and officials talk of making the space and service attractive to college students starting their own companies.
The city isn’t providing any money to Flow for his office building project, but would grant up to $165,000 per year over 10 years to Grubb to support the apartment development. Winston-Salem officials say that payment amounts to 74 percent of the tax payments Grubb is expected to make in that time.
Grubb will be investing $48 million on its part of the project, which is expected to include retail spaces or other amenities on Fourth Street.
Grubb has told city officials that 30 percent of the housing would be for households making less than 110 percent of the area median household income, but it wasn’t clear Monday how low rents could go.
The city’s affordable housing policy says that in order to get city money, developers should provide five percent of their housing to people making 50 to 80 percent of median income, and another five percent for those making 80 to 120 percent of median household income.
Paige said that according to his calculations, rents would have to be from $607 per month to $1,214 per month to fall within the policy levels.
Council Member D.D. Adams said Monday that a rent of $1,100 would not be cheap, and said the developers should be willing to go lower:
“If we could take it down to $999 … it might be a little more palatable,” Adams said. “It is about sending a message to the general public that all the things we do are for the general public. We can do a little bit more and make this happen. I will support this.”
Council member Jeff MacIntosh said that while some people will criticize the deal as a financial incentive, the proposal would bring a “huge addition to downtown.”
Winston-Salem Mayor Allen Joines, who announced the project on Friday, said that studies have shown Winston-Salem doesn’t have enough space for startup businesses.
“This is one of those projects where we are returning to the developer payments he has made to the city,” Joines said, adding that the city would still net $550,000 from the Grubb tax payments.
The endorsement of the Finance Committee came with a unanimous vote, although more discussion is certain to come up during Monday’s council meeting.
Flow has said that he would start almost immediately on the tower project if the city approves the deal and after he has purchased the site. The tower could be occupied with offices by late summer.
The Grubb part of the project would start within a year of the city’s approval. Grubb is also developing 340 apartments in the Wake Forest Innovation Quarter.
$1000 apartment rent figure causes some concern as city’s Finance Committee approves GMAC project – Winston-Salem Journal}