Friday, June 21, 2024

Starway Village to be financed with WHA bonds, breaks ground in September

Starway Village will break ground in September after securing needed financing through bonds issued by the Wilmington Housing Authority. (Port City Daily photo/file)

WILMINGTON — An affordable housing complex, with support on a local, state and federal level, is gearing up to break ground in September.

READ MORE: Government trifecta gap-funds $14.4M for Starway’s affordable housing project

Starway Village, a 278-unit development on Carolina Beach Road, received $14.4 million in financial support from the city, county, and state. Another $37 million — of a roughly $56 million project — will be financed through tax-exempt bonds, issued by the Wilmington Housing Authority.

The Wilmington City Council voted to approve the use of the bonds Tuesday. It’s required by federal tax code for the elected legislative body of the jurisdiction overseeing the issuer of the bonds to sign off.

The bonds will be sold in two phases to cover the two residential buildings: $23.5 million to finance up to 176 units and $13.6 million for the other 102 units.

“Proceeds from the bond sale are loaned to the developer to provide a portion of financing along with other sources of funds,” said Kristen Kirby with McGuireWoods, bond counsel for WHA.

The city has no liability or responsibility for the bonds; the developer is solely accountable for repayment. WHA earns a 1% administration fee for being the pass-through.

As a “conduit for funding,” WHA executive director Tyrone Garrett told PCD last week, the it can help “create affordable units of housing, cut down and reduce expenses.”

Issuing the bonds through WHA ensures a lower interest rate than securing the financing through a private entity, he added.

“It cuts down on the overhead and creates more subsidy for the unit,” Garrett explained.

All units within Starway Village will be subsidized to accommodate people earning 60% average median income and below, or roughly $30,000. Rent is anticipated to start at $750 for a one-bedroom.

Starway developer Ted Heilbron with Kelley Development Group told council he anticipates breaking ground on the project in September, with 18 months of construction.

“We hope to be welcoming folks in in 2025,” he said. “We cannot wait to stick a shovel in the ground.”

The recent fire at one of the buildings on site did not cause a time delay, Heilbron said, but it was an “embarrassment and disappointment” to the developers.

“It implies negligent ownership and stewardship of the property over the eight months since we purchased it in December,” he said. “We’ve worked extensively with the New Hanover County Sheriff’s Office to process trespassing citations.”

He said the the building required a crew of nearly 60 to extinguish the fire; it’s set to be demolished.

Heilbron has been securing permitting with the city since January. Simultaneously, he is working to obtain county building permits and approval from the North Carolina Department of Transportation, since Carolina Beach Road is a state-owned road.

He hopes to wrap up all permitting by late August, early September prior to breaking ground.

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