City Council: Bond decision postponed, Rolling Hills rolls forward

Well, we're still in suspense on the two-thirds bond discussion. Patrick Baker mentioned in his priority comments that the administration had some additional work to do on the bonds issue, and asked to have the vote on the subject delayed until Thursday's Council work session.

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Rolling Hills: Well, you gotta admire Larry Hester's guts, I guess. Hester -- the developer behind the failed second go-round of the Rolling Hills re-development (the City foreclosed on Larry & Denise Hester's development effort), and owners of shopping center developments that have received some loans from the municipality -- stood before the Council to complain about Eugene Brown's mention of him and his wife as likely to 'cause trouble' for the project at the recent City Council work session where the development was discussed.

Hester, unsurprisingly, railed against the "urban renewal on a larger scale than the past" for the project. He complained that he is "the most affected landowner, being directly adjacent on one side, and across the street on another." Then -- again, no surprises -- Hester complained about "millions to out-of-town developers" while Fayetteville St. would not get the $25-50 million that the Hesters have requested for a streetscape design to improve the road (a road where, naturally, the Hesters own a shopping center.)

Frankly, I found Larry Hester's complaint to be one of the more self-interested piles of hooey you can imagine. So did Eugene Brown, apparently:

It's really time for facts to be presented to a candid audience. I have read the attorney -- the attorney from Raleigh -- concerning this entire project, and Mr. Manager, I don't think all of our Council members are cognizant of this 60-page report. I'm referring to the report that the City was compelled to produce after the failure of Rolling Hills. The failure that was led by Larry and his wife, Denise Hester.

There was a report issued, paid for by the City, an objective analysis -- and all I have to say is, it's all there in black and white. Finally, Mr. Hester, I guess the word I would use would be "chutzpah" -- and for you to come up here and tell us as a council and me as an individual that you are offended by a remark I made in the paper. So let me tell you what I'm offended about: I'm offended about the fact that, due to your failure, the City may be forced to pay up to $6 million to correct all of your mistakes.

How about another voice of agreement: Elaine Armstrong, a homeowner at Rolling Hills since 1987.

It's been a 20-year nightmare. So for 20 years, the press, the public, and now maybe some unconvinced councilpeople have spoken from a blame-the-victim mentality, in my view... It's also about people who were inexperienced so-called developers. I believe that in the past, past decisions made about Rolling Hills were made by well-meaning people -- but the fact of the matter is, it's a failed project. And I think that now, after about four years, people who live there have had reason to believe there's some new hope with the discussions about the new development.

Also speaking in favor of the project were the president of the Rolling Hills Homeowners' Association and Lavonia Allison of the Durham Committee. Victoria Peterson also spoke, mostly on the not-so-novel (for her) subject of the need to hire African-American males, not illegal Latino immigrants, to do construction work on the site of the redevelopment.

(The funds approved tonight simply go to perform pre-development work like site engineering analysis and design charettes, along with up to $6 million to buy up the Rolling Hills and some adjacent St. Teresa's/Southside neighborhood land. The City still needs to negotiate a master development agreement with Struever Bros. and McCormack Baron Salazar over details such as how much if any money the City would get back for each parcel of land that the developer builds on; essentially, the developers come in and build a mixed-income, affordable and market rate, development and earn the money from selling off the properties, with the City essentially serving to buy up the land. $3.7 million is needed for property acquisition; $1.2 million for relocation, including paying the difference between acquisition price and replacement cost; and the remainder going towards soft costs and contingencies.)

After the public comments, Mike Woodard stepped out of his university-administrator shoes and did his best Perry Mason impression, cross-examining the City's Larry Jarvis on everything from the year-by-year cash flows from the project to the minutiae of who (the City or McCormack Baron Salazar) would own the owner-occupied housing from the time that the house was constructed until the time the structure is sold.

Brown, in his own cross-examination, asked his own bottom-line question: Why should we do this? As Larry Jarvis from the City's staff put it: "It's the moral and right thing to do." There's no demand to buy these houses in the failed subdivision. Jarvis noted that the City could just sell its land holdings there, but with the failure of the project, there's no way to really develop those properties. The frontage properties are scattered in a way that you can't do infill around them; the townhouses are falling apart due to shoddy construction.

Precisely how much of Rolling Hills will be reserved for affordable housing? 20% is the statutory minimum, with Jarvis promising it will be a "higher" level, though the final amount isn't clear. Diane Catotti also raised questions as to whether the threshold for household income could be lowered to help maximize the availability of housing to Durham's poorest.

Mayor Bell made a strong argument that site control is necessary to be ready to move forward with redevelopment, and to bring as many as 1,100 housing units to this portion of Durham. Bell noted the concerns that this project could pull funds from NECD or SWCD, but argued forcefully that Durham has to start somewhere, and has an opportunity to work with two national, deep-pocketed developers.

Woodard made a motion, seconded by Brown, to go forward with allowing the City to begin the planning, engineering, surveying and other design work over 12-14 months' time, and to negotiate a pre-development agreement with Struever Bros. and McCormack Baron Salazar -- but not to approve the agreement's execution, or the acquisition of land from residents, until review of the plans and agreement by Council. The Council broke along institutionalist/progressive lines, with Ali the tie-breaker joining the institutionalists (Bell, Clement, Cole-McFadden) to defeat the substitute motion.

The original motion to support the project as placed on the agenda -- including authorizing the City Manager to negotiate and execute the pre-development agreement with the private-sector developers, and to authorize up to $6 million in current and future housing bond funds towards land acquisition -- came up for vote and passed 6-1, with Eugene Brown the only "no" this time around.

So the project's going forward, to the pleasure of almost everyone, it seems, except Larry Hester. And it's a good thing, frankly -- we're talking about a $75-100 million private investment for a $6 million investment to acquire land, with the privately-owned land and improvements having a total value today of just $3.5 million.

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The Teague-Hankins deal for a hospital land swap in Brier Creek was approved by Council, with a caveat that the state of N.C. will first need to issue a certificate of need, and that Council will get one more pass on the project before final approval.

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Next up in the Meeting That Won't End: Jordan at Southpoint, again! Up to talk: Ken Spaulding, George Brine, and George Stanziale... again! Just like two weeks ago.

Now changed: under the language the developer negotiated with the City to be included in all future water/sewer extensions for the time being, developers will be acting at their own risk in developing during a severe drought condition -- the City may withhold permits for building permits, individual utility connections to units within developments, or hold back permits for water/sewer extensions, in the event that it describes a "water shortage." (Furthermore, the project made changes to its plat in ways that they believe makes this comply with the 'conservation subdivision' concept.)

The debate over permitting water/sewer extensions ran mostly through a loophole question: the extension agreements now have the out-clause for the city in the event of a 'water shortage,' but there's no firm answer on precisely how Durham's City Council will declare a 'shortage,' and whether that will be a Durham or a regional decision.

A frustrated Council moved ahead and approved this extension agreement (6-1, Catotti dissenting); Bell expressed his concern that restrictions on new connections per se would impact small builders working on one or two houses in an in-fill area, for instance, when in reality it's connections of major subdivisions that were the real drivers of new demand.

Watch for this issue to come before Council again.

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In other business, Council additionally approved the Treyburn Village plan amendment and zoning map change, to change an area initially intended for neighborhood commercial development to become low-density residential instead. The annexation of Jordan at Southpoint and other minor zoning changes were also approved.

So was the translation of the Durham Centre parking deck renovations from a City-run project to one to be performed by new building owner Craig Davis Properties, with the City forking over funds it had allocated for the renovations to CDP and allowing them to take over as the manager of the city-owned facility. After some financial pencil-sharpening by Farad Ali -- who is showing himself most willing to ask questions to gain clarity and seek dollars-and-sense answers -- the motion passed to close out a long (four-and-a-quarter-plus hour) meeting.

Comments

[Patrick]

I thought he said "hutzpah" rather than "hustler".

[Bull City Rising]

Patrick: I went back to the instant replay a la TiVo and you're right, it was chutzpah -- now corrected in the article.

[Will]

Kevin - I read your comment about the crappy gov't access channel in the "Durham Magazine" comments and thought I'd bring that discussion over here. What the heck? Is it always like that? Flipping through the channels last night (thanks to the writer's strike) I paused on the city channel and was kind of interested but couldn't watch for long as the snow and audio was driving me nuts.

[Emily]

Nothing about Brown wanting to increase the price of water? That's all WRAL kept saying last night about the meeting - and what they're still saying about it on their website. It's so hard to believe that WRAL completely missed the mark in a story about Durham.

[David McMullen]

Thank you, Councilman Brown. Makes me glad I voted for you.

[Bull City Rising]

"It's so hard to believe that WRAL completely missed the mark in a story about Durham."

I'll have a bit more to say on this general topic in a post later this morning. :)

In re the specific question of the drought and water pricing, that's something we'll tackle shortly here.

[anon]

Larry Hester reminds me of Joe Pesci's character in the movie Goodfellas. How am I funny? Like a clown? Like I'm here to amuse you?... Yes Larry, you are amusing, just like a clown.

[Natalie]

I'm pretty sure I love Eugene Brown.