Wednesday, February 21, 2024

Federal Covid-19 funds could cut costs for developers in a bid to lure affordable housing

At least three major developments located along the Sidbury Road corridor are progressing through county channels. New Hanover County plans to deploy Covid-19 relief funds to extend utilities on the road, a move designed to defray construction costs and attract affordable housing . (Port City Daily/Courtesy NHC)

SOUTHEASTERN N.C. — Close to 9% of American Rescue Plan funds received by New Hanover County will likely be dedicated to extending water and sewer infrastructure on Sidbury Road. It’s a growing corridor in the county’s northern region developers have flocked to, as vacant land within Wilmington dwindles. 

Property on and adjacent to Sidbury Road, identified in county documents as a key area of future growth, has attracted numerous development applications in recent years. 

RELATED: Here’s New Hanover’s spending strategy for $45.5 million from the American Rescue Plan

Hundreds of acres owned by the Trask family were rezoned last year to pave the way for a residential project south of Sidbury Road, while a Charlotte developer plans to construct a 300-acre project called “Sidbury Farms” further east on the corridor. There’s also a 288-unit apartment complex in the works on the northern side of the road. 

“Congressional language explicitly allows the American Rescue Plan allocations for water and sewer projects,” according to the county’s overview of its spending strategy. Extending Sidbury Road’s infrastructure will “ensure access to these vital services, aid in responsible growth and support the creation of affordable housing in northern New Hanover County. The intention is to lower development costs to provide affordable housing.” 

Developers typically pay the bills for constructing water and sewer infrastructure in areas without service, according to a spokesperson for Cape Fear Public Utility Authority. “When completed, they convey the infrastructure to CFPUA to operate and maintain. That way, the costs of building this new infrastructure are not borne by existing CFPUA ratepayers.” the spokesperson wrote in an email. 

Using $4.035 million in federal funds for the extension, however, would eliminate some expenses for developers who build on the utility-barren land, in a bid to encourage housing affordability in new projects. 

“That’s fantastic,” wrote Wilmington developer Dave Spetrino in a text message. “Huge win for our community and affordability. Even the anarchists can’t argue the benefit of this type of role for a government.”

Cindee Wolf, a land-use consultant who previously assisted developers in rezoning Sidbury Crossing — the 288-unit apartment complex on the north side of the corridor — said the injection of public funds into the utility extension could indeed inspire more affordable housing. 

Sidbury Crossing was presented to the board of commissioners last year as a market-rate complex, with single-bedroom units estimated to rent monthly for $1,200.

New Hanover’s decision to spearhead utility extensions would benefit the developments in the area, she added, as many builders would prefer to avoid the process of taking charge of utility installation.

Maps that detail the proposed site of the water and sewer extensions show the addition of a water main that runs along Sidbury Road through a territory of the Trask family project, Sidbury Crossing and Sidbury Farms. Sewer extensions would proceed on a similar route, but would be 1,000 linear feet shorter, according to county documents. 

New Hanover County plans to utilize more than $4 million in American Rescue Plan funds for a utility extension project that will cut costs for developers in one of the county’s fastest growing regions. At least three major developments are currently in the works along Sidbury Road. (Port City Daily/ Courtesy New Hanover County)

Previously, it appears a private company had negotiated with CFPUA regarding sewer extensions on Sidbury Road. A development agreement was produced that shows a company called Sidbury 758, LLC “proposes to fund and construct approximately 11,800 feet of 12-inch sewer force main from College Road to Sidbury Farms subdivision.” Those specifications are virtually identical to those proposed under the American Rescue Plan spending strategy.

CFPUA and the company collaborated on the standard plan for sewer extensions prior to the county’s announcement that federal funding would handle the work, according to a county spokesperson. The CFPUA board scheduled discussion on the plan for its meeting this month.

“The project would have been required to be borne by individual developers impacting the cost-and subsequent affordability of development in this area and reducing the likelihood that future residential projects would include workforce housing,” the county spokesperson wrote in an email.

A company associated with Sidbury Farms was negotiating with Cape Fear Public Utility Authority on terms for utility expansions along the road. Previous plans show the company was prepared to shoulder the costs, but then New Hanover County decided to pay for the extension with federal Covid-19 relief dollars. Both proposals for sewer line expansions use identical specifications.

According to a CFPUA spokesperson, the Sidbury Crossing site has sewer service. The parcels associated with the Trask project and Sidbury Farms neither have water nor sewer service available at the moment. 

On Sidbury Farms, “both sewer and water main line extensions have been designed to serve this area and are expected to begin construction within the next 6 months,” the spokesperson wrote in an email. Plans also exist to provide service to a portion of the Trask parcel, with construction expected to begin within six months. 

On the county maps that illustrate the site of water and sewer extensions, Sidbury Farms is marked specifically as “The Development.” It’s deeded to a limited liability company associated with John Rudolph, owner of commercial real estate company Ruco, LLC.

The county expects the first tranche of Covid-19 funding from the American Rescue Plan to arrive in May, with a goal to begin implementing programs in July. 

County Manager Chris Coudriet said drafting enforcement mechanisms to ensure the generation of affordable housing will be pursued later, at some point after the board of commissioners gives county staff a thumbs up on the spending strategy at its Monday meeting next week. 

The Workforce Housing Advisory Committee, which was directed in a joint effort by the county and City of Wilmington to craft long term solutions to housing affordability, will present findings of its comprehensive housing study next week. 

“The information included in these documents, along with the committee’s work plan that will be presented later this month, will be the basis of the measures our department uses to address housing affordability in this area,” according to New Hanover County Planning Director Rebekah Roth.

Further, the county plans to spend an additional $3.6 million on servicing 120 acres of county-owned property, pegged as the site of a future business park in the county’s northern region, with water and sewer infrastructure. 

CFPUA declined to comment specifically on the Sidbury Road extension plan until after the board of commissioners votes on the proposal.

This article was updated with comments from a spokesperson for New Hanover County.

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