Plans to transform Starway Flea Market into workforce housing move forward

Starway Flea Market makes up 15-plus acres along Carolina Beach Road. (Port City Daily photo/Alexandria Sands Williams)

WILMINGTON –– Starway Flea Market was officially rezoned Tuesday night to pave the way for an incoming 278-unit workforce housing development.

The land was rezoned from commercial to MD-17, a new residential zoning in the rewritten land development code, which goes into effect Dec. 1. The change in zoning is not effective until that date.

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Council approved the rezoning unanimously after an hour-plus of discussion with the applicants and a public hearing.

“We just doubled the amount of affordable housing units under construction in one stroke,” Mayor Bill Saffo said after the vote.

Rent in the complex is expected to price at $754 for a one-bedroom, $900 for a two-bedroom and $999 for a three-bedroom, according to Ted Heilbron, president of Kelley Development Company. Tenants also get the cost of their water and sewer covered.

The project will be made possible through a 4% low-income housing tax credit from the North Carolina Housing Finance Agency, which the developer is currently applying for and expects to obtain.

Originally, the applicant requested a general rezoning to multi-family medium-high density residential (MF-MH), which would allow for 25 units per acre or a maximum of 390 multifamily units on the 15.62-acre site. However, council was concerned there was no guarantee the workforce housing would come to fruition. If plans fell through, the developer could sell the land for a greater profit under the new zoning and it could wind up becoming a large market-rate complex.

PREVIOUSLY: Leery council pursues contract with developer of planned apartments, wants guaranteed affordable housing

As a compromise, staff suggested the land be rezoned to MD-17 instead of MF-MH. MD-17 has substantially fewer dwelling units allowed by right –– 17 per acre –– but includes a provision that allows the applicant to increase their density when workforce housing is incorporated in the project.

If 10% of the residential units are designated as workforce housing for at least 15 years, the developer can build 36 units per acre instead of 17. That allows for up to 562 units on the property, but Heilbron stressed there is no interest in constructing that many apartments.

“This MD-17 . . . kind of assures us that it’s going to be affordable housing instead of approving it just on a wing and a prayer,” mayor pro-tem Margaret Haynes said.

The applicants were agreeable to the change recommended by city staff. Although the developer only needs to dedicate 10% of units to workforce housing to obtain the increased density through the city, the project is planned to comprise 100% workforce housing. Also, the code requires the rent to serve tenants earning 80% of the average median income, but to meet the state credit program requirements, this project will house workers making 60% of the average median income.

“In other words, the rent would be higher or rent could be higher and satisfy the requirement under the city code than the rent commitment that we’re making in order to satisfy the low-income housing tax credit program,” said Sam Franck, an attorney for the developer.

Franck boasted the location as ideal for workforce housing given its convenience to nearby services and less-than-a-half mile distance from New Hanover Regional Medical Center.

“That’s not just about the convenience of commute for medical personnel –– so many of whom fit within this workforce need –– it’s also about us maintaining continuity of medical services at times when we need it most, amidst natural disasters and the like,” Franck said.

The development will resemble Crescent Villas, a low-income housing tax credit project in Florence, S.C.

Tuesday night, council was considering only rezoning the land and could not take into consideration the site plan, which was made available to them. Residents of the nearby neighborhoods spoke out against a planned road that would connect Maryland Avenue to Carolina Beach Road.

Haynes said in the past similar connections were planned for Glen Meade and Oleander but were scrapped after the communities objected. The mayor pro tem said she wanted to be clear with the public and asked if the expansion of Maryland Avenue was a “done deal,” but she did not receive a clear answer.

“I think it’s a vital interest to the people that have been there a number of years in Sunset Park and Sunset South to not create that interconnectivity,” Haynes said.

Franck cautioned the city’s subdivision review board would address the specifics of the street patterns at a later time. “I gotta say that this is not a conditional zoning, so we’re not evaluating a particular traffic pattern or a particular layout at this time but, rather, ‘Would an MD-17 zone make more sense for the city?’” Franck said.

The city attorney agreed it was inappropriate for council to consider details of a site plan when dealing with a general rezoning.

“I’m sure you’re not engaging in mansplaining to me since I have a pretty good concept of what we’re dealing with here this evening,” Haynes said.

Council member Kevin O’Grady iterated the developer must get approval for the road during the technical review process and he was in no way OK’ing the site plan, but he was in favor of the rezoning.

“I’m approving it because it’s affordable housing,” he said. “That doesn’t mean we accept that site plan, that we accept that Maryland Avenue was always intended to go through, or that we accept that it’s intended to go through the only trees that remain on this property, so that there’s almost no trees left. I don’t think we have to accept that.”


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