WILMINGTON — Going into 2023, Wilmington Housing Authority executive director Tyrone Garrett is rebranding the public housing authority, complete with a new look for its portfolio. First on the list to tackle is Hillcrest.
Its redevelopment has been planned for years but stalled when WHA’s former leader, Katrina Redmon, left the organization in August 2021.
READ MORE: Though years out, WHA starts planning to demolish Hillcrest, update Solomon Towers
The process for the 251-unit complex began earlier this week. Related Urban and TedCo. — a joint redevelopment team hired by WHA before Garrett’s arrival — met with current Hillcrest residents Monday on how the community will look and what it will include. The community room was packed with tenants, Garrett said. It was the first in a series of meetings developers plan to have with residents.
“There’s a level of apprehension from residents,” Garrett told Port City Daily, referring to past promises that never materialized. “But now I think we’re in a good position to introduce the new team, talk about some ideas and advise residents to recognize their input will be needed.”
The authority hired BBG Assessments LLC for $177,000 on Dec. 6 to handle a physical needs assessment for all its properties. Garrett said work is expected to begin this week, as meetings are underway with developers Related Urban and TedCo.
Garrett told council his goal is to receive the results of Hillcrest’s assessment by spring to construct a timeline by summer and begin implementing a plan by fall.
Hillcrest, built in the 1940s, currently comprises 251 units across roughly 25 acres on Dawson Street, between 13th and 16th streets. The concrete one-story dwellings were built as temporary housing, are now 80-plus years old and have been deteriorating, some detected with mold.
Plans include razing the current 91 townhouse-style buildings and replacing them with a new complex. It also will be mixed-use, with additional amenities.
“We may have the ability to add more [units] to increase density,” Garrett said, referring to the shortage of affordable housing in the region.
Developers and WHA are working to identify a parcel of land — in the vicinity of the current Hillcrest community — where a new structure could be built prior to demolishing the old one.
“Doing anything outside the area would create confusion and require relocating families out of their community,” Garrett said. “We’re trying to bring people back to their community.”
Garrett explained the plan is to decrease disruptions for families, by phasing development with 100 to 120 units at a time.
“We’ll build in a manner that families only move once into a permanent residence,” Garrett explained.
Anyone currently living in Hillcrest units, 162 of which are occupied right now, will have the first right to return to the transformed housing.
No ground will be broken for at least 18 months; however, if shovel-ready land is available, that goal could be moved up, Garrett said.
“Our commitment is to build first, whenever we can physically and financially do so,” he told council.
The redevelopment will be funded from two different sources: HUD’s rental assistance demonstration (RAD), which allows federally funded housing authorities to access additional sources of financing for projects.
According to HUD, public housing authorities nationwide have a $26-billion backlog in repairs and maintenance.
“RAD creates a mechanism to create a funding source,” Garrett explained to PCD. “It allows a housing authority to convert property in a manner that allows for private equity to be put into it.”
WHA will also utilize low-income tax credits and ensure affordability in the long-term. Residents will continue to pay 30% of their income toward rent.
A blend of RAD and section 18 — a 1937 U.S. Housing Act allowing authorities to demolish and redevelop properties under certain conditions — will create an “equity package,” Garrett said. It converts the property into a private-sector model, as a government-controlled building.
Garrett said in the coming weeks he hopes to form a preliminary estimate on how much money might be needed. Since RAD is market-driven, the price will fluctuate before any construction begins.
The unique financing offered by HUD allows for supplemental money, as WHA relies on the feds’ annual allocations for operating. It receives roughly $21 million annually for all programs.
During the council meeting, Garrett revealed limited funding is what got WHA into financial trouble during the mold crisis.
READ MORE: 73 families still waiting for homes, WHA pushes goal to remediate all moldy units to spring
ALSO: 13 displaced families ready to move home, contractors to start work on WHA units by end of month
When the issues of mold-ridden units became prevalent in October 2021, it displaced the first 21 families. At that time, WHA had a monthly budget of $510,000. Eighteen months ago, WHA also had roughly $2 million in its annual capital fund to cover repairs.
By May 2022, more than 150 families were displaced and WHA was spending $740,000 on hotel costs and $400,000 on per diem, totaling $1.1 million monthly, on a budget roughly half the size.
Garrett told council this week, WHA doled out nearly $11 million over the last year and a half to assist displaced families, while working to get units back in working order and returning residents home.
Fifty-seven families are still in temporary housing waiting for units and Garrett predicts another 42 remediated apartments will be available by the end of February.
Once the North Carolina Office of Recovery and Resilience grant funds are released, $2.3 million awarded to WHA in September, Garrett will tackle the 30-plus units that were taken down to studs.
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