Asheville City Council approves ownership approach to Hilliard affordable housing

CONDO SWEET CONDO: New plans for affordable housing on city-owned land at 360 Hilliard Ave. would develop 64 for-sale condominiums, with 33 affordable units. Screen capture courtesy of the city of Asheville

The third time may be the charm for an affordable housing project on city-owned land that once was home to Asheville’s Parks Maintenance Facility. Having previously approved two other proposals, both of which were subsequently withdrawn before construction started, City Council members unanimously moved ahead with a new plan by Charleston, S.C.-based Kassinger Development Group at its Nov. 13 meeting.

In June 2017, Council had agreed to offer Kassinger a 50-year lease of its land at 360 Hilliard Ave. for a 64-unit rental development including 33 affordable apartments. But the developer, explained city consultant Jeff Staudinger, found that construction cost increases of 25-40 percent since the project’s approval made a rental approach financially infeasible. Instead, Kassinger proposed building the same number of units as for-sale condominiums.

As agreed in Kassinger’s original proposal, the city would still offer a $1.28 million, 2-percent loan from its Housing Trust Fund to help finance the project. However, Kassinger would also buy 1.7 acres of the 2.7-acre property outright instead of leasing it — at half of the appraised value, representing a $375,000 total subsidy and $12,098 per affordable housing unit. This benefit would replace a previously agreed Land Use Incentive Grant, a program only available to rental projects, which had an estimated value of $385,000.

The city would retain the other acre of the property, on which Kassinger would build (and pay half the cost of) a new parking lot for the nearby Aston Park Tennis Center. The developer would also actively market the affordable units to Asheville Housing Authority residents, with an “aspirational goal” of selling 20 units to those households.

Vice Mayor Gwen Wisler raised questions about Asheville’s ability to enforce the agreed-upon 50-year affordability period once the city let go of its land ownership. Future Councils could easily revoke a lease if Kassinger broke its promise, she said, but a sale might leave few options “other than taking them to court.”

Staudinger said that the deeds to each individual condo could be restricted such that future sales were limited to households meeting the income qualifications. Furthermore, he suggested that the Asheville-Buncombe Community Land Trust could be offered the right of first refusal at the affordable price for all sales.

“If employed, [that mechanism] could actually extend that 50-year period on to a far longer period — in fact, permanent affordability, as permanent as the state of North Carolina allows, which is 99 years,” Staudinger noted.

With those concerns allayed, Council members praised the plan as a creative housing solution. Keith Young, who voted against Kassinger’s original proposal, called the new project a step toward fighting gentrification and a welcome change from policies focused on affordable rentals.

“This would be the first project before Council that would directly secure ownership opportunities for those at the lower price points of our community,” Young said. “That directly contributes to providing generational wealth to those who would not otherwise have an opportunity in such an expensive and desirable area as downtown.”

Council member Julie Mayfield agreed, noting that she had voted earlier this year with Young and Sheneika Smith on the Housing and Community Development Committee to add language about affordable homeownership to city policy. “I don’t want to say it’s a great experiment — I think it’s going to be a great success,” she said.

No community members rose to speak about the project before Council gave its unanimous assent. According to Staudinger, land clearing on the site is scheduled to begin in February, with construction to commence in March and project completion to follow within a year.

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NC Court of Appeals rules in favor of developer’s downtown Asheville Embassy Suites plan

(Photo: Rendering by McMillan Pazdan Smi)

ASHEVILLE — The state’s second-highest court ruled Tuesday in favor of the developers who proposed 185-room Embassy Suites hotel downtown, saying the city had not made a case to stop the development.

In a 30-page filing Tuesday, the three-judge North Carolina Court of Appeals argued Parks Hospitality Group of Raleigh is entitled to a conditional use permit for its planned hotel at 192 Haywood St. at the site of the former Buncombe County Sheriff’s Office. The project was valued at $24 million in 2016.

The City Council voted down the project in January 2017, citing concerns of parking, traffic and a high concentration of hotels near the proposed site.

Developer Shaunak Patel appealed the council’s decision to Buncombe County Superior Court, which ruled in his favor. The city appealed that decision to the Court of Appeals.

Patel did not immediately respond to an email seeking comment.

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It was unclear Tuesday whether the city would try to appeal to the North Carolina Supreme Court.

"The city is aware of the decision and is evaluating its options," said Asheville spokeswoman Polly McDaniel.

Ruling: Developer’s use fits site

N.C. Court of Appeals Judge John Tyson wrote that Parks Hospitality Group is not seeking a rezoning, but "rather a (conditional use permit) to conduct a use that is expressly permitted" in the city’s Central Business District, the zoning district that covers downtown. He affirmed the Superior Court’s decision that the developer’s evidence submitted in its quasi-judicial hearing with the city was "competent, material, and substantial."

Tyson’s ruling was affirmed by Judge Lucy Inman and Judge Phil Berger Jr. The court’s ruling is posted below in its entirety.

The former sheriff’s office site is across from another PHG hotel, the $14 million Hyatt Place completed in March 2016. The plans for the contested Haywood Street property include the hotel, which would cover 178,000 square feet, with conference facilities, a rooftop bar, pool and 200-space parking garage.

The fight comes amidst widespread resident dissatisfaction with a booming tourism industry that has pumped millions of dollars into hotels and visitor-oriented businesses but has left many locals feeling displaced by out-of-town crowds.

Council members have talked openly about moratoriums on hotels. The body that controls Buncombe County’s $23 million hotel tax, the Tourism Development Authority, recently pledged to dedicate 25 percent of the tax to infrastructure.

The rest will continue to go tourism marketing, the authority has said.

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