The question of changes to Durham's stormwater management standards drew a range of speakers -- including a number of downtown stakeholders -- with questions and concerns over the changes.
The state was surprised to learn that the part of Durham falling into the Cape Fear Basin currently lacked stormwater control rules, with the City now pushed to move to impose the requirements in place in the Neuse River basin -- which applies to northern Durham Co. -- to the southern side of the Bull City.
Durham's City Council struggled with the impact on development, as well as whether these rules, which have been in place in some Wake County communities since the turn of the decade, would or wouldn't disadvantage the Bull City relative to other neighboring areas.
The development community raised the specter of pricing transit-oriented, dense development projects out of economic feasibility, an idea that raised concerns with some members of Council. Yet others, led by Councilwoman Diane Catotti, noted that off-site mitigation is possible and that the impact would be less than developers are fearing.
The Council will consider the matter again at this Thursday's work session after last night's public hearing; a March 2 vote and mid-March enactment date are in progress.
Bill Kalkhof of Downtown Durham Inc. noted that DDI understood the Council's interest in moving forward with new rules given the uncertainty over the Jordan Lake rules, and thanked the City for providing information sessions on the subject, but cautioned that the new standards proposed would impact what he described as "dense, in-fill development" that Kalkhof noted were the best rejoinder to fighting suburban sprawl.
Melissa Norton of DDI added that the organization had heard "significant concerns" about the impact on downtown and the compact neighborhoods of the changed stormwater requirements -- implemented to comply with new state rules -- and called for a longer period of consideration and discussion to find ways collaboratively to support the initiative without impacting dense urban development.
"Essentially the idea here is to build up rather than building out," Norton said, arguing that redeveloping an existing parking lot should be treated differently than developing a greenfield.
"DDI believes that the proposed stormwater ordinance still fails to distinguish between downtown redevelopment of existing impervious surfaces and new greenfield development in a meaningful way," she added, warning that the regulation as proposed could tend to push development towards suburban Durham sites where runoff mitigation could be handled on-site more easily, or to neighboring counties with looser restrictions.
The area south of Main St. and the railroad tracks falls into the Cape Fear river basin, where the new stormwater best management practices "are oriented towards suburban-style development" like retention ponds and riparian buffers, something that don't work in downtown redevelopment, Norton said.
Tucker Bartlett of Scientific Properties was similarly blunt in his assessment of the impact. "If the opportunities for treatment are greater in suburban and rural areas than they are in urban areas, and the cost of treatment is greater in urban areas, the obvious result is making development relatively more difficult in our downtown," encouraging more sprawl, he cautioned.
Scientific Properties, whose acquisitions have focused on areas like the current Johnson Chrysler site near the Durham Freeway, would be particularly impacted by the changes.
"Had Golden Belt been subject to these new rules, we wouldn't have been able to do that development," Bartlett said, noting that the developer would have been unable to afford to buy land off-site to do a nitrogen offset mitigation there; the alternative would have been to take down historic buildings to install bioretention ponds and sand filters, he said.
Noting the April 1 deadline with the state for solving some of these issues, Bartlett asked the Council to take some more time to find a solution to downtown's impact.
Another developer took a more suburban-focused approach, calling for continued work with the state to see how other municipalities "are looking at this differently" than Durham is, and to look at the length of the sunset provisions for developers who've bought land yet are frozen out of development right now due to economic conditions, and who might find themselves under new regulations by the time the economy turns around.
Patrick Byker, speaking as a private citizen and for the National Association of Industrial and Office Properties, noted that transit-oriented, higher-density projects would be particularly impacted by the changes -- even though these are explicitly called out in the comprehensive plan for compact development.
Byker further noted that the proposal -- which has only been under public discussion since December -- hasn't been analyzed to see its impact on the city-wide growth patterns for Durham.
Ron Horvath noted he's been working for four to five months with the City staff and with his customers to analyze the proposal. He noted that in suburban development areas like north and south Durham, a two-acre site would see a usable land area decrease of 20%, and a stormwater cost increase of $100,000 to develop; within what Horvath called the "free zone" south of I-85 to Chapel Hill Rd., the urban area that has lacked stormwater management controls, "your cost has gone from about a hundred and a quarter to two-fifty" on a two-acre site.
A downtown site, Horvath added, "is hard-pressed to make the numbers work" save for a re-use of stormwater through chillers and other technologies. He noted that the new regulations being imposed are more isolated to communities, and that Durham will be impacted differently than other communities. "You are definitely at a disadvantage after March 13" relative to neighboring counties on development, Horvath warned.
(Horvath's approach, however, appeared to assume on-site mitigation as opposed to off-site mitigation.)
Mayor Bell noted that Durham has been successful in redeveloping downtown due to developer interest, public contributions, and a taxing structure providing credits to redevelopers of buildings like tobacco warehouses. "What I've heard this evening is, it's not so much that we can't provide the facilities to meet these requirements, it's that it's going to be too costly to do that type of development if you're required to do that." Bell asked if anyone has thought of trying to approach the state or federal government to allow tax credits for this additional kind of runoff mitigation required to make the projects work.
"If we adopt what we've got, nobody's going to win on this. And when I say that, if the developers don't do the development, then we're stuck with property particularly here in Durham that doesn't get developed. It's just not a win-win situation for us," Bell said.
City staff noted that the town of Cary adopted the Neuse Rules in their Cape Fear River basin when the rules were first initiated, while Raleigh is in the Neuse River Basin to begin with, and that this is arising because the City has a large portion of the urban core into South Durham that currently has no water management rules.
They maintained that there are grant programs through the Clean Water Management Trust Fund, $30-40 million a year through the state, though Bell replied that such grants are competitive, whereas tax credits aren't. "I'm looking for something more extensive than [grants]," Bell said.
Paul Wiebke from the City's stormwater staff replied that the buy-down program would be the same in Durham as in Wake County, with the buy-downs actually less expensive in Durham than in other communities.
Councilwoman Diane Catotti drew attention to a memo from Ted Voorhees from last week, talking about methods of reducing nitrogen such as buying nitrogen credits or adding off-site land.
Catotti also noted that there are now nitrogen alternative methods available in the Cape Fear Basin and not only the Neuse Basin going forward. She also noted that the Jordan Lake Rules pending in the state would be "much more restrictive than these" when and if they come down.
"I think the real issue is cost, there's no question. If they can't make the numbers work to make a project go forward now. But I think ultimately what we have to be very conscious of is, who will pay. Because if the developers can't make the numbers work now, ultimately it's our citizens that will have to pay, whether for retrofits or other things," she said, adding that Council was already on record as supportive of most of the more-restrictive Jordan Lake rules.
Deputy city manager Ted Voorhees noted that the state might want to look at finding ways to impose the costs of compliance more broadly on the whole citizenry of the state, rather than creating these new mandates moving down to new development only.
City manager Tom Bonfield noted that these rules would be roughly the same as those already in place in Cary and Raleigh.
Councilman Mike Woodard noted that Cary has been working under these rules "for seven or eight years" -- Cary adopted these Neuse Rules citywide in March of 2001, and Raleigh around the same time.
Woodard also noted through Socratic questioning that this was first mentioned to the development community in summer 2008, with an initial draft of the rules coming forward in late October; he then asked developers to explain what was meant by looking at a high level at the project impact.
Byker noted that high-level impact revolved around the effect the changes would have on dense, transit-oriented development. Byker noted that one location impacted would be Davis Park, initially targeted as dense infill development near a future transit stop. "With these new stormwater requirements, I believe we're struggling to get to 1,300 units" versus an initial 1,800-2,000 units, Byker warned. Similar impact would happen on a project between Duke and UNC's medical centers on a future transit line, he said.
Yet Catotti noted that one doesn't have to use their "highest cost, highest profile" land for this stormwater -- Davis Park could choose to buy an off-site location to do mitigation there rather than on-site, requiring no impact to the number of units. She further noted that the City was buying up Neuse River Basin land around Lake Michie at $10,000 an acre, a less dramatic impact than that raised by developers during the discussion.
"We do know that there's additional land around Lake Michie. Essentially, we're saying you can go buy tree-covered land to use as an alternative. I just think we have to keep this in perspective," Catotti noted.
Councilman Brown asked City staff if anyone has looked at the impact of these new rules on Eastway Village, for instance; Wiebke noted that Eastway Village was already built to the standards of the Neuse Rules.
Wiebke also noted that the penalty for Durham's non-compliance with the rules would be $25,000 a day -- an amount that Bell stressed the city would not incur, as Council would pass "something" to avoid this. Yet Bell pressed staff and developers to take the idea of a tax credit for these expenses and to "put that on the table" with state and congressional stakeholders.
Woodard also noted an interest in the City developing a land-bank from which developers could acquire parcels for off-site mitigation, asking the staff to look at a possibility to take out an option for land for future acquisition.