Local & State
|New Brookhill development at financing crossroads after city denial|
|Mixed-income community deemed too risky|
|Published Monday, October 12, 2020 11:00 am|
|LOOKOUT VENTURES INC.
|The proposed New Brookhill apartment community may scrap its affordable housing component after city leaders denied developer Tom Hendrickson's bid for $13 million in financing.|
City government and a key funding agency turned down Zebulon developer Tom Hendrickson’s $13 million financing request for the 324-unit, mixed income apartment community in South End last week. Without public-backed financing, the developer’s best option would become private or corporate sourcing, which would likely result in more expensive rents.
“This news is disappointing and heartbreaking for a number of reasons, but mostly for the people and families who depend on affordable housing in the historic Brookhill community,” Hendrickson wrote in an email to city leaders.
“As you know, affordable housing for the residents of Brookhill has been central to our vision and proposal for New Brookhill from day one. New Brookhill represents the last opportunity for significant affordable housing in the rapidly growing South End area, with close proximity for working families to jobs, services and amenities in Charlotte’s center city.”
The $67 million, 324-unit development, which was announced in December, includes 164 apartments at affordable rental rates, including 65 units at 30% of area median income, 97 at 60% AMI and two at 80% AMI. The other apartments will rent at market rates. Units at the current Brookhill Village rent for an average of $450 a month.
In a March interview with The Post, Hendrickson said a $15 million funding gap needs to be filled before construction can start – this year, he hoped – with help from the public and philanthropic sectors. The goal was for current occupants to move into new homes in 2021 after demolition of unoccupied buildings with construction to proceed in phases. Residents in units to be demolished get priority to move into new housing for which they qualify.
“The unique circumstances and important history of the Brookhill community require out-of-the box thinking and creative solutions to ensure a vibrant future for people from all walks of life,” Hendrickson wrote.
“As the Charlotte-Mecklenburg community continues to struggle with significant affordable housing challenges, we respectfully lift up New Brookhill as the kind of innovative public/private partnership proposal that is needed to provide affordable housing worthy of the aspirations of families in this community today and tomorrow.”
New Brookhill’s near 50-50 split between below-market and market appropriate rents is considered an outside-the-box housing program. Lookout Ventures Inc., owned by Hendrickson, will develop the property and a sister company, Brookhill Land Lease Ventures, is the leasehold tenant through 2049. There’s little time for a developer to recoup any investment before the land reverts to its owner, the family of original developer C.D. Spangler, which Ralphine Caldwell, executive director of Local Initiatives Support Corporation’s Charlotte Office, wrote makes the project financially risky.
In an email to Hendrickson, Caldwell wrote New Brookhill doesn’t “demonstrate a long-term financing strategy, subject to the leasehold interest. Developments such as this, must be able to provide a long-term financing strategy to ensure that both the CHOIF and the City’s debt will be repaid.”
Caldwell added the project affordability window – 27 years – is too small and “reversion of the property back to the original owner of the land at the end of that lease” will likely lead to a loss of affordable units.
Hendrickson said he’s secured $47 million in construction and permanent financing and demonstrated a repayment plan within requested time frames. At this point, he’s not sure if his original vision for New Brookhill will take shape.
“The people and families of Brookhill have waited for too long for a solution to renewal that solves the complex issues of ownership related to the land,” he wrote. “The New Brookhill proposal in hand and ready to move forward represents a solution that eluded potential developers, community leaders, funders and policy makers for decades. Obstacles have delayed the arrival of decent, clean and safe housing in Brookhill Village time and time again. If traditional solutions exist that fit neatly into yesterday’s expectations for how affordable housing can and should emerge for the people of Brookhill, they would have been found years ago.”
Without public support, Hendickson maintains, South End’s housing stock will continue to elude working-class and low-income renters and decrease units available to them.
“The question,” he said, “is not whether Brookhill Village will get re-developed and New Brookhill will get built, but rather... who will live there?”
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