Revitalizing West Trade Street - ULI Charlottecharlotte.uli.org/wp-content/uploads/sites/15/2012/03/Historic... · Enterprise Foundation . ... Village and the new Johnson & Wales

From Johnson C. Smith Universityto Gateway Village

Revitalizing West Trade Street:

A Technical Assistance Program Report, 2002-2003Urban Land Institute - Charlotte District Council

Revitalizing W. Trade St. ~ From Johnson C. Smith University to Gateway Village

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Table of Contents

ULI Technical Assistance Program Panelists………………………………………………2

The Assignment: Historic West End Overview………..……………………………………3

Market Opportunity & Development Strategies…………………………………………5

Land Use Planning, Design & Compatibility……………………..………………………19

Finance Alternatives & Implementation Tools ……………………………………….…28

Summary …………………………………………………………………………………….…37

Appendix ………...…………………………………………………………………………….39

ULI – Charlotte PO Box 34155

Charlotte, NC 28234-4155 704-940-7388 (p) ● 704-365-3678 (f)

[email protected] (e)

mailto:[email protected]


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ULI Technical Advisory Services Panel

Panel Chair Jennifer M. Stanton Faison & Associates

Market Opportunity & Development Strategies David Atkins Cousins Properties Garland Hughes Crosland Gwen Jackson Northwest Corridor CDC Jack Levinson Lat Purser & Associates

Land Use Planning, Design & Compatibility Brian C. Jenest Cole Jenest & Stone James Williams, Jr. LS3P John Howard City of Charlotte

Finance Alternatives & Implementation Tools Henry C. Lomax, Jr. Crescent Resources Bradley A. Smith Bank of America Tom Wausauer City of Charlotte Isaac Heard, Jr. Enterprise Foundation


The Assignment: Historic West End Overview

he purpose of this program was to provide the Northwest Corridor CDC ith realistic tools and templates to use as a guide to implement specific development and revitalization projects. Over the past month, the ULI harlotte Technical Advisory Panel noted the following points in their view of the Historic West End redevelopment:

J

CS l

Housing and services for the existing stakeholder community

are the long term goals.

There is an immense amount of history along West Trade however, the history is in the residents and institutions, not in the buildings. There are some notable landmarks in the area including the Ice House, the former A&P building, and several churches.

Johnson C. Smith University is the heart and future of the area.

Timing is paramount – in the present and near future, there are

some exceptional opportunities for funding the redevelopment of the area, including possible grant funding, and market demand for Johnson & Wales student housing projects. It is critical that when the economics are feasible and opportunities present themselves, there is an entity prepared to execute. Market demand and momentum may create opportunities with a brief window.

Pricing is a key hurdle for development and revitalization

along West Trade. The cost of the land is too expensive for proposed projects to make financial sense.

The following physical barriers were noted: the 1-77 bridge

between downtown Charlotte and Historic West End and the fencing around the University.

Transportation into and around this area must also take into

consideration parking. Narrow, shallow lots are a hurdle even with the expectation that there will be pedestrian traffic.

TwreCre

Purpose

Housing

Timing

U’s Biddle Memorial Hal
Johnson C. Smith University is the Heart
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Development strategies and land planning recommendations

are not site or building specific. What is important is that what is developed is successful and supported by the community.

Pricing

Creative techniques for financing and achieving buy-in from

existing property owners and stakeholders. The expanse of options includes the dreaded condemnation but also includes the set up of private REITs (Real Estate Investment Trusts).

The final written report is presented to the Northwest Corridor Economic Development Corporation for further research and implementation. ULI Charlotte thanks all the panelists, interviewees, and a number of individuals that have contributed their input and many hours of work to presenting this project.


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Market Opportunity & Development Strategy

Revitalization

How can the West Trade Street revitalization resulting from Gateway Village and the new Johnson & Wales University campus be a catalyst to increasing the vitality and connectivity of commercial development along West Trade Street on the other side of I-77 to the area that includes Johnson C. Smith?

Revitalizing West Trade Street and increasing the economic value of The Historic West End is tangibly closer to becoming a reality with the addition of Gateway Village and Johnson & Wales University campus. These two new generators will provide positive economic activity, magnifying the life and interest potential of the existing and growing Johnson C. Smith University. Having the leadership of the Northwest Corridor CDC to Shepard the vision into a realistic plan will make a tangible difference to the eventual successful implementation.

The one time catalyst opportunity for the Historic West End to reach its goals is Johnson & Wales University’s $82 million investment decision to consolidate their Norfolk and Charleston campus locations into a state of the art 100,000 square foot campus with a state of the art culinary art facility. Johnson & Wales forecasts demand for 700 off-campus beds in 2005, and 300 additional beds in both years 2006 and 2007. Future Johnson capacity could reach 3,000 students by the year 2008. Johnson &Wales students are profiled as culturally and ethnically diverse. The typical student is emotionally mature, self-directed, and desires to live in an urban surrounding near the school. Moderately priced housing alternatives within walking distance of the school and basic service amenities would be ideal. Johnson & Wales have spelled out their housing needs in a specific directive that should be addressed immediately. Not doing so would be a high impact positive opportunity that may be lost.

Future J&W Campus

Also influential in revitalizing the West Trade Street corridor is Gateway Village. With the potential for 1,564,000 square feet of commercial space at full build out, and approximately 1,064,000 square feet complete to date, the area surrounding Gateway Village benefits from the support for all services (i.e., office, retail, residential dwellings, etc.). Additionally, Gateway Village includes 600 residential units. Demand for residential dwellings will gradually escalate as area employees and students seek a greater range of options within and beyond Gateway Village.

Connectivity


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Gateway Village’s current commercial tenants include Bank of America, Starbucks, Accenture, Advisor Technology Services, YMCA, Chik-Fil-A and Bytes Cafe. These pioneering operators support the initial critical mass of residents and workers that Gateway Village infused into this section of West Trade Street. With the feel of an urban live/work campus, Gateway Village can provide a stable anchor and minimum services for the surrounding neighborhoods.

Catalyst

Revitalizing and connecting commercial development from Johnson & Wales University to Johnson C. Smith University is also strengthened by the following catalysts:

• Northwest Corridor Community Development Corporation is in place to champion the cause.

• Stakeholders from the representative neighborhoods

openly voice support.

The picturesque views of Charlotte skyline are among the best of any vantage point in the city.

Entrepreneurial initiatives are taking shape as grassroot

efforts are supported by local leadership and business networks (e.g., Richard Fuquay’s proposed mixed use project on West Trade Street).

Charlotte, NC Skyline • Obvious and possibly simple solutions can effectively

reduce the formidable physical barrier of the walkway under the overpass bridge. The pathway and walls can be cleaned to create an inviting pathway. Design elements, line of sight and enhancements to the walk way along West Trade Street can encourage pedestrian friendly transportation, and ideally foot traffic between Gateway and JCSU.

Physical Barriers • The extension of the Gold Rush Trolley is not in the

immediate future but the transportation plan calls for a streetcar to run the length of West Trade Street.

• The opening of the Park and Recreation Department’s

$7.5 million, 33,000 square foot indoor water park, Ray’s Splash Planet, brings weekend family activity to the corridor.


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• Johnson C. Smith University’s College of Arts and

Sciences increasing national prominence and the administrations successful efforts to bring in renowned cultural, academic and athletic events, speakers, exhibitions, conferences and programs brings an excitement and pride that inevitably will radiate beyond the campus gate.

Young

The timing is now to develop the corridor.

Who are the compatible prospects for proposed mixed-use developments and what are the critical categories, uses or retailers that would spur interest and establish mass along the corridor?

The Historic West End has the market issues inherent in an urban neighborhood location. Area density is a strength: there are 70,000 residents and 103,850 day time employees within a five minute drive time, or walking distance. Daily traffic at the intersection of I-77 and West Trade Street exceeds 75,000 and where West Trade Street intersects with Beatties Ford Road the volume exceeds 20,400. The average household income is a relatively low $37,328, although 40 percent of residents have annual household incomes over $50,000.

The most frequent shopping destinations are Eastland Mall, University Village, Beatties Ford Hardware and CVS. Less than 20 minutes north Taubman Centers, Inc. is constructing a new 1 million square foot regional mall on I-77 to serve the 90,000 new residents who moved to the Charlotte’s northern suburbs during the 1990s.

Although there are over 2,000 faculty, students and staff on campus at nationally ranked and accredited Johnson C. Smith University, no streetscape has emerged to capture this demand. Residents and business owners describe a cohesive neighborhood, with a lack of services that has successfully controlled loitering and crime. The latest effort to jump start the revitalization of the West Trade Street corridor has received positive feedback from both Johnson C. Smith and Johnson & Wales Universities.

W. Trade Area Neighborhood

Walk-able Administrators from both Universities have identified the need for affordable offsite student housing to support the student population that prefers to live in close proximity to the campuses. Assuming this need can somehow be properly addressed by either the public or private sector, this development could be the impetus for local restaurant and service merchants to consider opening


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businesses along West Trade Street. This high density residential development will increase the density to the point of tipping the perception that the corridor can support street retail.

Community

The excitement surrounding the area is growing with local developers taking interest in deploying capital to the corridor. Residential growth is the engine driving the train along West Trade Street. Any retail and office needs will be supporting and following the residential growth. The mixed-use and multi-use components of this study area are consistent with other mixed-use projects implementing residential, office and retail on single tracts of land.

The integrated campuses and resulting demographics of students and local residents create an opportunity to develop a creative live/work/study community. It is important in any planned community to anticipate how the daily services and needs associated with every day life will be provided. It is more difficult to orchestrate having basic services in an urban environment where the workable commercial parcels are owned by multiple private absentee investors. In addition businesses hesitate to venture where there is a history of socioeconomic decline, abandoned buildings and the perception that the area has a high crime rate.

The retailers and uses discussed below are intended as a first cut recommendation for what is likely to be needed, and therefore most likely to open and thrive, in the Historic West End community:

• Local or regional grocery store supplying basic goods

and perishables to the neighborhood. Possible prospects include Aldi, Sav-A-Lot and SavWay.

• Dry cleaning and laundromat services (e.g., Suds). Compatible Prospects • Additional banking services: either a branch office or

ATM’s. • Post office boxes and copying centers such as Post Net.

Mailboxes Etc., Parcel Plus, Kwik Copy and Kinko’s. • Cosmetic services providers including hair salons, nail

salons, or retail supply outlets. • Drug store or pharmacy. • Movie rental operations such as Hollywood Video or

Blockbuster. • Medical use service providers. Among these uses one

may find an optometrist, dentist, orthodontist, chiropractor, general practitioner, etc.

Park & Shop & Family Dollar


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The Family Dollar on West Trade Street reportedly has high volumes and would be a candidate for expansion. Family Dollar’s sales performance and interest in building out a larger store, combined with the positive story that can be told of the improved demographic profile resulting from the increased student population, will help attract additional soft goods users who would follow Family Dollar into a successful market. Merchants with similar site criteria to Family Dollar include the following:

Restaurants

&

Shops

Goodwill Store Radio Shack Sally Beauty Supply Payless Shoe Stores Famous Footwear Dollar Tree Dollar General Fashion Cents One Price Clothing Play It Again Sports Consignment stores Paycheck Advance Rent-A-Center Odd Lots

Many developers, city planners, community leaders and residents have expressed the need for restaurants. Although there are fast food restaurants near Johnson C. Smith, there is no gathering place of the caliber that would be expected within walking distance of an urban university campus. There is no neighborhood restaurant that provides a comfortable place for residents, students and visitors to mix. The ULI panelists unanimously agree it is important for the revitalization of West Trade Street to attract interesting and casual restaurants to serve both colleges and residents of the community.

Johnson & Wales makes the restaurant category a viable option. The restaurant mix should include moderately priced options, quick serve categories and the possible relocation of one or more of Charlotte’s long established restaurant operators. The following is a wish list of suspects for the corridor:

Magic Johnson’s Starbucks or another coffee house with

local appeal.


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Local pizzeria providing delivery to the neighborhood

and campuses of Johnson C. Smith and Johnson & Wales.

Chinese restaurant providing sit down, take out and

delivery for the neighborhoods and both campuses.

Ethnic restaurants ranging from Vietnamese, Thai, Cajun, Mexican, Low Country Cuisine, etc.

Market to Charlotte institutions such as The Coffee Cup

and Price’s Chicken Coop that represent magnet destinations city wide.

Create spaces and opportunities for local owned

restaurants such as Phat Burrito, Johnny Burrito, Anthony’s Caribbean, Cabo Fish Taco, Showmars etc.

Quick serve restaurants may include Krispy Kreme, Dunkin

Donuts, Subway, Jersey Mikes, Sub Station II, Baskin Robbins, Steak & Hoagie, among others.

Freestanding opportunities may exist for users such as

Ruby Tuesdays, IHOP, Bisquitville and Waffle House.

Character

As restaurants enter the market, creating additional daytime employment and nighttime activity, other ancillary uses will become important to supporting the entertainment component of the integrated demographic. Night time entertainment seems natural for an environment flush with college students, however, this category is not the recommended first step. True, Johnson C. Smith students lack an adequate venue to perform and enjoy entertainment (notable exception being jazz at the historical Excelsior Club). Currently student groups tend to gravitate northeast to the entertainment scene at the University area (UNCC) to participate in off campus poetry readings, and other theater and musical performances. Charlotte’s University area is about a fifteen minute drive.

Nightlife is not a priority if the longer term goal is to spur revitalization and increase the economic vitality of a stable predominantly African American neighborhood that also

Entertainment

includes Bruns Elementary School and church congregations strongly anchored in the community.


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Entertainment and venues for cultural arts are essential and it is recommended that the following uses be pursued as part of the greater plan for the Historic West End:

Anchored

• Bookstore incorporating textbooks as well as lifestyle

interest titles (e.g., bibles, music,) school supplies and college paraphernalia.

• Art gallery, hands on cultural arts retailer. • Jazz club and coffee house concepts. • Edge fashion cluster (Urban Evolution, Urban Hype,

Fashion Avenue, Underground Station, House of Styles, Isaac’s.

• Sporting goods and athletic wear possibly tied to an interactive museum exhibition.

Office The ULI panel determined office users in the corridor should be limited in size and number due to the soft office market and the close proximity to the uptown market. However, there are some specific office users identified for the area which would add to a well balanced community. A sample of these type of tenants includes:

• Cultural and arts facilities (ASC) • Northwest Corridor CDC office • Satellite Chamber of Commerce office • Possible location for the Charlotte Post • Office space for the Government Services Administration

(GSA) • Police sub station

The West Trade Street corridor offers a unique opportunity for the City of Charlotte to revitalize a commercial avenue with solid neighborhood already in place. It is of utmost importance for the success of retail and restaurant tenants to not only encourage or direct additional residential density to the area, but also to create a street edge, which promotes and implements pedestrian activity from the Center City to Johnson C. Smith. Considerations for the redevelopment must include increased public transportation (i.e. Gold Rush, street car), sidewalk infrastructure, landscaping and a connector at the I-77 overpass that alleviates the barrier between the Historic West End and the Center City.

Neighborhoods


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What tracts and project concepts should be the priority if the city secures the $2.5 million federal acquisition fund grant for the Historic West End?

Based on the numerous interviews held by the advisory panel, the most immediate development opportunity will be the need to provide additional student housing. Both local universities, Johnson C. Smith and Johnson & Wales have expressed strong interest in having housing provided in this corridor. Johnson C. Smith currently houses 66% (1,000 out of 1,500 students) of their student body on campus. University administrators would prefer this number be closer to 50%. Johnson C. Smith Campus Additionally, Johnson C. Smith’s enrollment is expected to grow to 2,000 students within the next few years. These additional students will be searching for off-campus housing. Johnson & Wales is planning to build an 800-bed dormitory on its campus to accommodate its initial enrollment beginning in August, 2004. They have forecasted an additional need of 700 beds in 2005 followed by 300 more beds in 2006 and 2007. Johnson & Wales is looking for off-campus housing options to satisfy this demand.

Over half of Johnson C. Smith’s enrollment originates from beyond the Carolinas. Johnson & Wales similarly will attract a student body with incredibly diverse backgrounds and experiences. To put the opportunity in perspective: each year hundreds of newcomers unfamiliar with the layout or street name changes that Charlotte natives find so endearing will arrive to live, work and go to school within the half mile stretch of West Trade Street between Johnson C. Smith and Johnson & Wales. In 2004 when Johnson & Wales begins matriculating the first rush of incoming students the two Universities combined could very well be welcoming over 1,200 newcomers.

Student Housing

We have identified three possible locations that could be immediately developed for student housing:

1. Parcel #1: – This 6.4 acre site is located on the northwest corner

of Five Points bounded by Rozzelles Ferry Road, Beatties Ford Road and Walford Drive. Four landowners control contiguous acreage that has promising workability. PC Godfrey group owns the largest parcel, 3.272 acres. The site provides a unique redevelopment opportunity because of its close proximity to Johnson C. Smith campus and because it connects to the historically significant intersection known as Five Points.


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The Urban Land Institute panel worked out 62 housing units (248

beds) spread over five two-story buildings in a master plan for Challenges this site. This proposal alternative includes 1.0 surface parking spaces per bed.

2. Also included in the redevelopment of this site is the Mechanics

& Farmers Bank branch and a portion of JCSU’s land. It has been proposed that the existing bank branch be relocated in to a new, 20,000 square foot two-story building that would include an additional 80 parking spaces, to be developed on the Five Points corner. The remaining 15,000 square feet would be available for lease to a variety of retail and office users. JCSU’s land will be used for a new 30,000 square foot fine arts facility to be constructed by the university.

Parcel 1 and existing Johnson C. Smith Campus

Small Lots,

Narrow Parcels

3. Parcel #5: – This 7.7 acre site is located on the southwest side of West Trade Street and is bounded by Tuckaseegee Road, Walnut Street and I-77. This site represents the most challenging land assemblage with a total of thirteen different landowners. It is proposed that 292 students could be housed on the full development of this block. Additional challenges with this site include the relocation of two successful retail businesses, Bojangles and a Citgo gas station/convenience store.


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Vision

Parcel 5 from I-77 & W. Trade St.

4. Parcel #6: - This 3.1 acre site is located on the north side of West Trade Street and is bounded by Trade Street, Frazier Street and Montgomery Street plus the wholesale meat packing business. The site presents a serious topographical challenge but with a majority of the West Trade Street frontage currently being marketed for sale, this is a likely site for immediate development. 264 students housed in four three-story buildings could be accommodated on this site.

Parcel 6 W. Trade & Tuckaseegee Rd.

Additional development sites that have been included in the master plan are as follows:

1. Parcel #2: – This site includes 7.5 acres bounded by Bruns Street,

Whitehaven Street, Rozzelles Ferry Road and West Trade Street. The proposed development plan includes housing for 224 students plus 12,600 square feet of retail. It is also assumed that Density State Street from Whitehaven to West Trade Street will be closed and incorporated into the development plan. Parking for this


site is also provided on a one space per bed ratio and four spaces per 1,000 square feet for retail use.

Transportation

Must

Consider

Parking

2. Parcel #3: –

Street and Brutwo property property on th

Student housing wstation would bebuildings one of store. Parking forratio and three sp

3. Parcel #4: – ThTuckaseegee includes seven

Mixed-Use

Parcel 2 ~ W. Trade St. & Bruns

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The West Trade Street frontage between Auten ns Street totals 2.5 acres and is divided between owners. The redevelopment of the Icehouse

e western edge is discussed below.

ould consist of 32 beds while the Servco service replaced with two 10,500 square foot retail

which would include a new Servco convenience this site is also provided on a one space per bed aces per 1,000 square feet for retail use.

Parcel 3 W. Trade St. & Auten St.

e south side of West Trade Street between Road and Auten Street totals 9.4 acres and teen different landowners. However, three


landowners control 6.8 acres of this site including the corner of Tuckaseegee Road and West Trade Street. This site is to be developed in a mixed-use fashion, which would include 320 students and 14,000 square feet of retail space. Included in this site development are eight buildings and 362 parking spaces allocated at 1 space per bed and 3 spaces per retail square footage.

Parcel 4 W. Trade St. & Tuckaseegee St.

4. Parcel #8: - Located on the southeast corner of the Five Points intersection, this site is currently under redevelopment from a local developer. Their plans are to build 9,000SF of retail space and 27 market rate apartments. Rents for the two bedroom apartments are projected to be $750 per month. Additional retail on this block could be developed through the renovation of an 1,800SF historic house currently owned by the Jerusalem House of God and used as their parsonage.

Also identified wpreserved for thesignificance to th

Parcel 8 ~ W. Trade St. & Martin St.

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ere several existing properties that should be ir unique building characteristics and historical

e area. The history of the people who resided


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and built the communities intertwined with Johnson C. Smith is of much more significance than any single building in the corridor. However, the Historic West End is one of the few neighborhoods in Charlotte with a handful of buildings and unique architectural detail tied to the pride and identity of current residents and institutions. The Historic West End has some notable landmarks that have already been restored; the original Biddle Hall on campus at Johnson C. Smith and Wadsworth at Summit, an elegantly renovated historical home used for private functions and weekend jazz concerts. The parcels identified below are some of the interesting buildings that have defining character and could be converted to economically viable uses.

1. Parcel #3: – (10,000SF) Located at the corner of West Trade

Street and Bruns Street, this 1940 structure had been an active part of the community until the past few years. Many of the interviewees during this process discussed the possibility of renovating this facility to accommodate a local jazz club. This would be a very popular use for the immediate area and with the anticipated influx of students, appears to be a viable use. No estimates were performed or provided for renovation costs.

Historic

Preservation

2. Parcel #7: – (37,200SF) Located on West Trade Street, the old A&P building (18,000SF) offers an excellent foundation for creating a significant retail hub when combined with the Jerusalem House of God and additional new construction. Furthermore, Family Dollar is currently occupying space in this building and has previously mentioned the need to expand their store. This could easily be accomplished within the building’s existing structure. Another use of this building could be to recruit a fresh goods market and relocate Family Dollar to another area within the corridor.

Jerusalem House of God – (5,200SF) Located at the northeast corner of West Trade Street and the proposed Bruns Street extension, this 1930 structure could be renovated into a uniquely designed restaurant. Many churches have undergone renovations to become very successful restaurants. With the churches congregations desire to relocate from its urban location, this represents a viable purchase opportunity utilizing federal grant money. The use of grant money for this purchase would be important since there might be a period of two to


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three years before the corridor can support a restaurant for this site. New Construction - A new “L” shaped building is to be constructed on the western edge of this site that would add an additional 14,000 square feet of retail space.

3. Parcel #9: - A two-story 1,800 square foot house is located on

the highly visible corner of Fifth Street and Martin Street and is ideal for renovation into office or retail/restaurant use. Additionally, there are several vacant and underutilized parcels that could be redeveloped with over 100 new townhouses.

Urban

College

Life

Historic West End Master Plan

If all the of the above sites could be fully developed, the West Trade corridor would include an additional 361 student housing units (1,444 beds), 106 townhouses and 107,400 square feet of new or renovated retail/office space. This would impact a dramatic transformation made possible by the one time catalyst event of the new Johnson and Wales University Campus, the compatible needs of Johnson C. Smith University, the bedrock institution that has been the stable anchor and the cooperative initiative of the neighborhood groups which are willing to accept change to reach their stated goals of economic development: improved housing and services for the existing residents, home owners businesses and students.


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Planning Design Compatibility

Area Land Use Planning, Design & Compatibility

How can the narrow divided parcels fronting West Trade Street be configured to accommodate access, parking and footprints of higher density mixed use development?

How can development guidelines be established to visually tie The Historic West End to Gateway Village on one end and Johnson C. Smith on the other?

What public infrastructure improvements can be made to create a pedestrian friendly link between Center City and The Historic West End?

W. Trade St. - From Gateway to JCSU

The following plans address the response to the planning team to the charge to bring to life the vision of how to accommodate the demand opportunity and design facilities that would preserve the character of the neighborhood and work within the sight and architectural style of Johnson C. Smith. The most recent commercial building completed in the area


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was the Biddle Medical Facility which fronts with a streetscape while accommodating parking at the rear of the building.

Thriving

Historic West End Perspective

The planning and design imperative is difficult because there are no standard design themes, there are severe access and parking issues to address because of the small lots, curb cuts, sidewalk requirements and potential conflicting right of ways. In addition, the design team is looking to create a statement to announce the connection between the two Universities and build enough density on small odd parcels, while creating something of quality that can become part of the longevity of the Historic West End. To this end the most dramatic recommendation is that the southwest entrance to Johnson C. Smith University be opened to make a dramatic entrance feature and that a fine arts center be positioned at that intersection where the proposed trolley would be turning around.


Views

A new fine arts and convocthe western side of BeattiesMechanics and Farmers Baintegrate Johnson C. Smith to revitalize the street. Nethree-story, 20,000 to 30,000and Farmers bank. A sharewhere West Trade Street pror three story building ancseveral hundred units of stud

Historic West End Perspective

Hi

ation center for Johnson C. Smith University on Ford Road, roughly next to where the existing nk presently sits would be an effective way to into the neighborhood and create a spill over xt to the new center would be a new two or square foot building anchored by Merchanics d parking facility would be structured roughly

esently dead ends behind the bank. The two horing the bank could also accommodate ent housing.

storic West End Perspective

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ts would be available to both JCSU and J&W students.

academic use, green space and athletic facilities.

h

e redeveloped for some retail or entertainment use.

A new 114 unit student oriented housing facility, enough to accommodate 450 student beds, would also be associated with the shared parking facility. This two or three-story structure would be situated along Rozzelle's Ferry Road where presently exists a collection of small retail shops and the P.C. Godfrey heating and air-conditioning facility. This student oriented housing facility would also cross Rozzelle’s Ferry Road and occupy the land presently owned by the Victory Christian Center, behind the C. M. C. Biddle Point medical building. These student oriented uni

If Johnson C. Smith University is amenable, their historic stone gate entry might be once again relocated and reoriented so as to create a new pedestrian entry to the University over looking a large "green front yard", that would be integrated into an oval of pedestrian amenities and permanently preserved open spaces at the Five Points intersection. The panel recommends that when Johnson C. Smith identifies additional space needs the administration should consider a location in this area to increase the connection between the University and the new development along the corridor. If the University is less self contained it will be more of a catalyst for amenities to serve students, faculty, alumni and visitors. In turn the University could preserve on campus space for essential

Crossroads

stone gate at Johnson C. Smith

Also near the Five Points intersection, between the West Trade Street and West 5th Street, sits the 32,000 square foot mixed use, two building development proposed by Richard Fuqua. With facade improvements made to the Smith Two Way Store that sits between Mr. Fuqua's site and the intersection, the new facility will have 26 two bedroom apartments on the top two floors and 9,000 square feet of retail and office space on the bottom floor. In the future this development could be expandedto absorb the existing house that sits north of the Churcof God. The church structure itself might b


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upfitting to eliminate structural and functional bsolescence.

t

e number of units to be eveloped here is as yet undefined.

ed and leased with a quality nant to replace Stop N Shop.

rom the creased density and income of the two Universities.

s either udent oriented rental housing or townhouses for sale.

Among the historical buildings in the corridor identified for renovation, two could be planned for commercial use. The Carostate Icehouse building might prove appropriate for restaurant, nightclub, or art gallery space after substantial rehabilitation ando Similarly, the House of God Church at 1700 West Trade Streemay be rehabilitated and renovated for some retail use, such as restaurant, nightclub, or art gallery. The triangle of land bounded by Martin Street, West 5th Street, and Summit Avenue should be developed for market rate townhouses for sale and single-family detached housing. Thd

Anchored

Existing W. Trade - Carostate Bldg.

Existing W. Trade

The existing A & P grocery store site should be retained for retail purposes, with parking and façade updated. Ideally, the parking lot facing West Trade Street could be converted into a green space frontage. Parking for retail could be met by assembling parcels north and west of the store in an area presently occupied by housing. In the short term the priority is to get this shopping center upgradte

In addition to the as yet unknown square footage of the preserved and rehabilitated structures, this analysis anticipates approximately 54,000 square feet of additional retail space being developed within the West Trade Street corridor. This is in line with the demand potential that could result if Johnson C. Smith is further integrated into the community and the corridor is utilized by the incoming students and staff of Johnson & Wales University. Existing residents will benefit fin

. The land bounded by Bruns Avenue, Duckworth Avenue, Tuckaseegee Road and West Trade Street should be developed for retail and service uses at its northern end. The southern end is planned to be part of a larger student oriented housing complex for the both Johnson and Wales and Johnson C. Smith. The land west of Duckworth Avenue, and including the Canon's Cathedral land, should be developed ast


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The idea is to buffer or feather the effects of the more intensively developed West Trade Street land from the more residential and fragmented Sieversville neighborhood land. Given that the land at the intersection of Tuckaseegee Road and West Trade Street will probably require substantial environmental remediation, permanently preserved open space might be planned for this site. City guidelines and oversight could make a significant difference to preserving the quality of life in the corridor by adhering to recommendations to cr

eate buffers for high density infill in existing neighborhoods.

ider pre-leasing space for student housing near their campus.

tained; so improving these sites to optimal is not a priority.

for creating a lively and sustainable streetscape include the following:

s are comf rtable in this environment in daylight and at night.

The land east of West Trade Street should be developed as part of a 165 unit (660 beds) student-housing complex oriented toward students from both Johnson and Wales and Johnson C. Smith. Partnerships with both the wholesale meat facility and the Housing Authority should be explored, as both uses are currently less intensive than their sites merit. This is the planned project that can be most quickly implemented because of Johnson & Wales willingness to cons

re a

Bridges

A

W lls

View tte from W. Trade St. of Uptown Charlo

The signature parcels facing one another across West Trade Street just west of its intersection with the access loops of I-77, may be redeveloped in the future in a more pedestrian scaled manner and used for office and retail establishments. The existing freeway and auto oriented fast food and gas station should not be expanded. However, in the short term they are providing services to area residents. These operations are better than abandoned or vacant buildings that are not being main

Objectives

Art can be part of the solution to making the underpass more attractive to pedestrians. Street furniture and decorations comparable to that on the east side of I-77 should be transitioned up the West Trade Street corridor. The pedestrian passage under the I-77 bridge is a tremendous psychological obstacle. Appropriate lighting, landscaping, and super graphics need to be installed so that pedestrian

o


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Where practical, interior neighborhood streets should be connected to the West Trade Street corridor with pedestrian amenities. This will build a connection between the new development along the corridor to the existing residential areas, and to help cement a strong habitual relationship between the retail and service businesses that locate there as well as their potential customers who are residents in the adjacent neighborhoods.

Proposed Zoning and Land Use

ing, etc) will have an opportunity to review each

ology for development, urban design and architectural design.

Existing and Proposed Development Transition

residential development behind the corridor to create density.

e

tional parking? It is probably not reasonable to expect the

The current Central District Plan of proposed land uses is generally consistent with the West Trade Street vision. However, where there are inconsistencies it should be noted that the City will address these issues during the rezoning process whereby other entities (Planning, CDOT, CATS, Zoning Code Enforcement, Engineerproject. The upcoming (PEDscape) plan will address proposed land use, zoning, streetscape improvements and development standards for the corridor through a public input process. Other committees within the City of Charlotte will also be included for feedback and ultimately adoption into the City’s zoning ordinance. The vision of the NWCDC/ULI corridor study is consistent with the Pedestrian Overlay District’s ide

Transition from existing communities to West Trade development faces the dreaded issue of parking. It will be difficult to manage the amount of parking that will be required, particularly surface parking. Planning staff understand and emphasize that future growth needs-infrastructure, parking, and

Another major issue in the transition will be the psychological and physical impacts of growth. How can we mitigate th

Connecting the new - to the Existing

Trust

Existing W. Trade

impact of parking needs over time and is it realistic to expect transit to be a factor in relieving the need for addi


rd is an example of restricted on street parking with high density.

Vehicular and Pedestrian Network

well lighted areas with wide sidewalks, ndscaping, etc.).

Pedestria Connectivity

Universities to place restrictions on car ownership even if transit opportunities improve. Some argue that restricting students’ car ownership will create housing opportunities but Johnson & Wales students are also likely to hold jobs that they may need cars for and Johnson C. Smith is inclined to bypass the potential for external demand by accommodating additional students on campus. As traffic increases from the addition of so many students and additional commercial activity, and work begins on the transit improvements on West Trade Street there may be a situation where there is a limit to how much on-street parking will be allowed and where. Fourth Wa

n

Looking ahead, CATS, CDOT and Planning should work together to assure the smooth coordination of vehicle and pedestrian circulation routes. The transportation issues could mount if there is a disjointed effort. Improving circulation without adversely affecting adjacent neighborhoods may require realigning awkward intersections, eliminating areas with poor visibility/sight lines, testing alternative proposed transit opportunities (Gold Rush, Trolley and existing bus routes) and improving pedestrian connectivity (safe la The neighborhoods may need to anticipate how to mitigate cut

W. t., Beatties Points

intersection

Trade St., Rozzelles Ferry, W. 5th S Ford Rd. - Five

26

alming measures should also be addressed for e arterial streets.

through traffic and the possibility of increased traffic volumes on arterial roads. Innovative pedestrian safety tools should be used, particularly near the commercial mid-block locations because pedestrian flow would be naturally encouraged between the two campuses. Traffic cth


27

Among the underlying assumptions employed during this exercise were the following: • Controlling the amount and impact of surface parking to

avoid creating a suburban scale development that could be a detriment to future urban fabric.

• Protecting and integrating existing historic structures, quality

buildings, landmarks and any significant place or landscaping feature into new development proposals.

• Permanently capturing public green space within the corridor

and tying it into existing green spaces east of I-77, e.g. Frazier Park and Ray’s Splash Park facility at Irwin Avenue School.

I-77 bridge over W. Trade St. • The possibility of creating a destination and a service center

for local residents and visitors that could sustain activity during evening hours and weekends.

Identity

• Realistic phasing sequences for the different development

projects may preclude the possibility of some options.

• Governmental and funding mechanisms may allow assembly and control of strategically located parcels. This mechanism may achieve strong property value appreciation while preventing the speculation that has stymied new development.

• Controlling gentrification. A major method for accomplishing

this might be a private real estate investment trust (REIT). This will allow existing landowners to enter into a partnership agreement that would mean little to no out-of-pocket expenses for a developer when assembling land for redevelopment as well as the opportunity for existing landowners to participate in the financial upside as the corridor matures and land prices increase.

• The need for the Northwest Corridor CDC to provide the

structure to manage streetscape, signage, litter removal, and safety. An adaptation of a business improvement district (BID) may prove useful for these purposes.


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Finance Alternatives & Implementation Tools

Finance

What can the Northwest Corridor CDC, elected officials, stakeholders, public and private enterprises do to avoid gentrification while promoting

development of infill housing in high density mixed use developments? Pricing and multiple absentee ownership of assemblage parcels, has hindered economic development in the Historic West End. Entrepreneurs who have tried to acquire land to develop along the West Trade Street corridor often found they could not substantiate a reasonable proforma. The perception that the land is worth more than the value derived from the potential revenue the site can generate has been an insurmountable gap that prevented worthwhile endeavors. On the one hand, land owners, some of whom are long time residents and some of who are absentee investment enterprises, do not want to miss out on the expected boom in real property values. Tax values do not always reflect the real value of what a property can yield on the market. There are no existing tenants willing to pay what would be needed to cover the cost of purchasing an investment property on the corridor. In turn the number of speculative developers who want to invest their own capital into the risk of a commercial venture on West Trade Street is limited. The ULI finance team put together a plan to enable existing land and property owners to cooperatively benefit from their holding. While unorthodox and requiring cooperation among disparate forces, the creation of a community real estate investment trust (REIT) is one suggestion to pushing the ball ahead. In addition, there is a possibility that the city could secure grant money to obtain property and there are independent investors and institutions that may step forward to invest and develop on the corridor now that there is a more tangible plan in place. This section includes an overview of how to work out the business plan finance for the projects proposed to be planned and practical knowledge on structuring deals and avoiding gentrification. Sample proformas are included and a listing of financial tools is provided in the appendix.

Realizing a Vision: Key Assumptions

• Land assemblage is possible at economic value. • Complete cost of approximately $140,000 per housing unit. • Financing available at 80% loan to value ratio. • Market rents $400 per bedroom per month. • Operating expenses at $4,500 per unit per year.


29

Key Conclusions

Momentum • Maximum land value supported of $3 per square foot

($130,000 per acre). • Cash return on cost at 9.15%. • Equity returns are marginal for market development deal

(15% pretax annually). • Catalyst for community development, generating

appreciation longer term. • Stakeholder motivations must be community driven as well

as economically driven. Framework for Success

• Private REIT, an unorthodox vehicle for cooperation. • Mandatory clarity. • Future share of wealth and income. • Difficult to initiate, but a tent big enough for everyone. • Economic condemnation, a persuasive tool against

extortion.

The Economics of Participating in the Community REIT:

“The Hold Out” Owns a vacant lot for the next several years and pays the city $400 in taxes per

annum (Not to mention the liability insurance)

“The Equitable Sale” Cash out and run. Make: $32,670.00

Invest in the Community

Own shares of the REIT valued at $32,670. At stabilization owner begins receiving distributions: $1,225 every three months or $4,990 per year (estimated). As the

value of the project grows over time, so does the base value of the owner’s shares.

What finance and business support options are available to reduce barriers to development and business entrepreneurship in the Historic West End?

1. The economic environment of the West Trade Street corridor is

such that the maximum amount that can be paid for land and still produce an economically viable project is approximately $3.00 to $4.00 per square foot. This also means that a typical 15,000 square foot residential lot in an adjacent neighborhood should only cost approximately $32,670. Assuming land cost equal approximately 20 percent of total project cost in a


30

detached residential project, a new 1,500 to 2,000 square foot house of this size should cost $163,350 - or approximately the median cost of any new house in the Charlotte Mecklenburg area.

2. In general, there is a need to find a way to minimize the out-of-pocket, cash expense devoted to land acquisition and assembly. This might be accomplished through the use of the private real estate investment trust (REIT) that allows for land owners to participate as partners in the development as opposed to being sellers to a developer. This instrument could also insure that these landowners are able to participate in the economic “up side” when the corridor appreciates in value.

3. There is also an issue of "windows of opportunity", i.e. the need

to coordinate with interests that have an immediate need and that could be translated into development opportunities within the corridor. Specifically, the interest of the Johnson and Wales University organization in having between 500 and 750 beds available for their students by year 2005 means that we must find a way to react to their needs a timely fashion.

Underlying

Assumptions

4. There is also an issue of economies of scale, especially in the production of student housing. The phase of development in the corridor that responds to the needs of Johnson and Wales University should to be in the $25 million range on the site of between 12 and 15 acres in order to produce 650+ beds (165 four-bed units). And illustrative pro forma has been generated to demonstrate how the economic factors involved in the development of this project would interrelate.

5. There is also the need to coordinate with Johnson C. Smith

University with regard to its interest in and needs for student housing at the northern end of the corridor. However, there appears to be no pressure of time or window of opportunity issue associated with this option.

6. The Northwest Corridor CDC must be an active player in the

private REIT, being integrally involved in its set up and operations. There may be an opportunity for the CDC to buy into the REIT by using a project related investment (PRI) for its seed capital. This PRI might be secured from any number of foundation sources, e.g. the Enterprise Foundation or Seedco. They should also seek development partners who will place minimal importance on the generation of development fees


31

and are more interested in generating income from management fees of finished products.

7. The Northwest Corridor CDC must also be instrumental in

protecting the adjacent neighborhoods from inappropriate, demonstrable edge impacts that might be associated with the development of a denser pattern along the West Trade Street corridor. This will mean that they will be the protector of the neighborhoods by ensuring that appropriate “feathering and buffering” techniques are employed to soften those edges. And by paying attention to land cost, they will be able to guard against the gentrification of those adjacent neighborhoods.

8. There appears to be little market demand, generated either by

existing residents or by the proposed increased student resident population, for retail and commercial space. This proposal anticipates the renovation of several existing structures (exact square footage unknown) but only about 54,000 square feet of new retail. In fact, in many of the buildings noted as residential that face on to the West Trade Street corridor there is an opportunity for the first floors to start out as residential and then to convert to retail and commercial later if the need arises.

9. We must guard against attempting to re-develop the corridor

on too small a scale. Achieving sufficient scale may only be possible through the creation of an instrument to allow the assembly and purchase of land in economically sized blocks. To this end, the city might consider extending to the West Trade Street corridor agents the same condemnation authority as is presently enjoyed and by Charlotte Mecklenburg Development Corporation in the Wilkinson Boulevard area. This will allow a coordinated development agent to leverage over property owners (through coercion, condemnation, or cooperation) so that adequately sized developed sites can be assembled a timely fashion and for reasonable prices.

Lively

Streetscapes

Affordable

Housing

On-Street -Parking

10. The City should also pursue funds, i.e. from the US Department of HUD, to be used for any environmental remediation that might be needed, and strategic property acquisitions. Preliminary economic analyses have shown that projects to be developed in the corridor with land prices in the $3.00 to $4.00 per square foot range will not tolerate very much in the way of additional non-value added costs for things such as remediation.


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Land Development Costs

# of

acres $/acre Total land

costs Land 13.494 $ 130,680 $1,763,396

% of land costs Total soft

costs $/acre Soft Costs Details Legal Costs 4.0% $ 70,536 $ 5,227 Insurance 5.0% $ 88,170 $ 6,534 Accounting 1.0% $ 17,634 $ 1,307 Environmental Report 0.1% $ 2,500 $ 185 Engineering Fees 3.0% $ 52,902 $ 3,920 Survey Fees 3.0% $ 52,902 $ 3,920 Permits & Fees 4.0% $ 70,536 $ 5,227 Bonds 1.0% $ 17,634 $ 1,307 Contingency 1.1% $ 18,641 $ 1,381 Total Soft Costs 22.2% $ 391,454 $ 29,009

Total hard

costs $/acre Hard Costs Details Mobilization $ 2,699 $ 200 Erosion control $ 33,735 $ 2,500 Grading $ 215,904 $ 16,000 Storm water $ 175,422 $ 13,000 Sanitary sewer $ 107,952 $ 8,000 Curb $ - $ - Water system $ - $ - Street Paving $ - $ - Sidewalks $ - $ - Landscaping $ 539,760 $ 40,000 Miscellaneous (5% of total other hard costs) $ 53,774 $ 3,985 Total Hard Costs $ 1,129,245 $ 83,685 Total Hard & Soft Costs (LAND DEVELOPMENT) $ 1,520,699 $ 112,694

Linear

FT. $/LF Total Costs

Curb 0 $ 7.00 $ - equals the LF of street times 2 Water system 0 $ 15.00 $ - equals the LF of street

Street paving (12' lane) 0 $ 30.00 $ - equals the LF of street times the number of lanes

4' Concrete wide Sidewalks 0 $ 10.00 $ - $ -


33

BUILDING NEW APARTMENTS FOR RENT ASSUMPTIONS ABOUT OPERATIONS INTEREST RATE 7.0% TERM OF LOAN 10 YEARS TAX RATE $ 1.25 PER $100 OF TAX VALUE INSURANCE 1.0% PER ANNUM OF PROPERTY/TAX VALUE

MANAGEMENT $ 4,500 PER UNIT PER YEAR

"FRONT END RATIO" 28.0%

MAXIMUM % OF GROSS INCOME AVAILABLE FOR RENT

ASSUMPTIONS ABOUT DEVELOPMENT

COST/ACRE LAND $ 130,680 OR $/SF --> $ 3.00

NUMBER OF ACRES 13.6 SOFT COSTS 5.0% APPRAISALS, LOAN ORIGINATION FEES, ETC. NUMBER OF UNITS BUILT 165 GROSS DENSITY 12.2 UNITS/ACRE DEMOLITION $ 100,000 PLUG SITE PREP/GRADING $ 5,000 COST/ACRE AVG. SIZE OF UNIT BUILT (SF) 1,700 CONST. COSTS/SF $ 65.00 CONST. INTEREST RATE 4.5% ANNUAL LANDSCAPING $ 40,000 COST/ACRE ARCHITECTURAL DESIGN 5.0% % OF CONSTRUCTION & LANDSCAPING COSTS DEVELOPER PROFIT 10.0% % OF TOTAL COSTS CONTINGENCIES 5.0% % OF CONSTRUCTION & LANDSCAPING COSTS

TOTAL PER UNIT MINIMUM MINIMUM LAND (INCL CONST. SOFT $) $ 1,863,092 $ 11,291 REQUIRED REQUIRED DEMOLITION $ 100,000 $ 606 MONTHLY MONTHLY ANNUAL LAND DEVELOPMENT EXP. $ 1,530,166 $ 9,274 RENT INCOME INCOME SITE PREPARATION $ 67,890 $ 411 CONSTRUCTION $ 18,232,500 $ 110,500 $ 800.00 $ 2,857.14 $ 34,285.71 LANDSCAPING $ 543,120 $ 3,292 $ 1,600.00 $ 5,714.29 $ 68,571.43 ARCHITECTURAL SVC. $ 938,781 $ 5,690 CONST. INTEREST $ 820,463 $ 4,973 CONTINGENCIES $ 938,781 $ 5,690 TOTALS $ 25,034,792 $ 151,726


34

Building New Apartments for Rent (continued from chart on previous page)

TOTAL PER UNIT MONTHLY ANNUAL MONTHLY RENT UNIT TYPE UNITS SIZE NET RENT RENT $ 800.00 2BR/1B 0 850 $ - $ - $1,600.00 4BR/2B 165 1700 $ 264,000 $ 3,168,000 TOTAL GROSS RENTS FROM UNITS $ 264,000 $ 3,168,000 LESS VACANCY RATE 10.0% $ (316,800) VACANT UNITS 17

NET REVENUES $ 2,851,200 OPERATING EXPENSES/UNIT/YR. $ 4,500 $ (742,500) NET OPERATING INCOME $ 2,108,700 AVAILABLE TO SERVICE DEBT @ RATIO 1.25 $ 1,686,960 MAXIMUM LOAN SUPPORTABLE $22,029,464 ANNUAL INTEREST RATE 6.5% TERM IN YEARS 30 REQUIRED EQUITY INVESTMENT $ 3,005,328 ANNUAL CASH FLOW $ 421,740 RATE OF RETURN 14.03%

(BEFORE TAX)

ANNUAL PROPERTY TAX REVENUE $ 312,935


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Actions to avoid Gentrification

Revitalization

&

Redevelopment

• Having oversight on the mix of price points of proposed developments, i.e. enable the rent structures of the projects under the control of the Northwest Corridor CDC to remain affordable

• Aggressively promoting the vision of the development as

inclusive, i.e. educate current owners about the benefits to their neighbors and themselves of retaining ownership interest in the future development of the area. Educate stakeholders that land prices influences the use and the affordability of future development.

• Continue to reinforce programs to convert existing residents

to homeowners and owners to renovate and landscape.

• Encourage elected officials to create land use and zoning certainty to ensure existing homes in adjacent neighborhoods will be viable uses for the foreseeable future.

• Implement an economic revitalization overlay district to encourage the reuse of existing properties. The goal of this district would be to provide certainty and speed the development approval process.

• Propose elected officials conservatively utilize condemnation

authority to acquire properties pivotal for economic development within the Northwest corridor.

• Aggressively enforce existing codes to prevent any violations

on vacant, poorly maintained and dangerous buildings, dumping on weeded lots, graffiti, and other similar nuisances.

• Assist low income elderly with existing programs for tax relief

and tools such as reverse mortgages and tax deferment.

• Develop corporate support to expand existing down payment assistance programs in selected neighborhoods


36

Finance and business support options to reduce barriers to development and entrepreneurship in the Historic West End might include the following:

• Laying the groundwork for the eventual establishment of a

business improvement district (BID) to create a funding mechanism for enhanced services and improvements.

• Using the “New Market” tax credit program to encourage

and assist with development.

• Instituting location efficient mortgage programs to expand the buying power of home purchasers in areas effectively served by mass transit.

• Seek authority from the North Carolina General Assembly

for condemnation and land assembly by governmental or not- for-profit agents in this corridor.

• Investigating strategies for public participation in the provision of parking, possibly to include partial ownership or subsidy of structured parking on a project by project basis.

• Extending the existing Gold Rush transit service into the

corridor as far as Johnson C. Smith University.

• Allowing off-peak, on-street parking in the vicinity of any retail and restaurant uses that are developed in the corridor.

• Pursuing federal grant funds to assist with land acquisition

and environmental cleanup issues.

Laying

the

Groundwork

• Working with major employers participating in the concept of employer assisted housing programs to work in conjunction with other redevelopment techniques in targeted neighborhoods.


37

Summary

1. The Goal is to provide for housing alternatives and services

to improve the quality of life for existing residents, students and workers, while preserving the strong cultural identity of the community.

2. Johnson & Wales Campus is an opportunity for the Historic

West End to revitalize the section of West Trade Street connecting the center city to Johnson C. Smith University. Student housing is a perishable market opportunity

3. Johnson C. Smith is the core of the Historic West End.

Opening the campus to integrate with the street and bridge to Johnson and Wales and Gateway Center is crucial. This can have the greatest impact on the through out the corridor.

4. It is as important to create an anchor and visual planning

statement at Johnson C. Smith University as it is to provide services at the Johnson & Wales end of West Trade if the corridor is to become an integrated thriving community with an active streetscape.

5. Pricing is a hurdle to economic development because of

the gap between the realities of development costs, projected project revenues and acquisition prices. Creative financing such as forming a community REIT may be workable, as may condemnation.

6. Transportation, parking and small lot sizes are obstacles for

scaled development but can be overcome with cooperative effort.

7. The divide created by the bride between center city and

the Historic West End needs to be alleviated to encourage pedestrian flow.

8. Restaurants will have the most impact on the retail viability

of the corridor and should be the first priority for new development that can accommodate parking, visibility and access. Basic services are needed but options are limited because of economic conditions.


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9. It is imperative that design and planning elements

complement the heritage of Johnson C. Smith and preserve as many of the existing historical buildings as possible.

10. A core organization must be in place to coordinate development. The Northwest Corridor CDC can facilitate dialogue between all parties and organize community leaders, city officials and developers to cooperate toward a common goal.

Mixed-Use

Pedestrian

Urban

Identifiable Nodes

Historic Preservation


39

Appendix

Financial Tools

1. Individual Development Accounts

Individual Development Accounts (IDAs) are dedicated savings accounts, similar in structure to Individual Retirement Accounts, (IRAs) that can only be used for purchasing a first home, education or job training expenses, or capitalizing a small business. They are managed by community organizations and accounts are held at local financial institutions. Contributions for lower income participants are matched using both private and public sources. Additionally, all participants receive economic literacy training that helps them to clean up their credit, establish a budget and savings schedule, and manage their money over the long term.

2. Location Efficient Mortgages

A Location Efficient MortgageSM increases the amount of money homebuyers in urban areas are able to borrow by taking into account the money they save by living in neighborhoods where they can shop at nearby stores and use public transit, rather than driving to work and to the mall. The Location Efficient MortgageSM program was designed to encourage the development of efficient, environmentally progressive communities and to reduce urban sprawl and dependence on cars

By realizing that households in urban neighborhoods spend less on transportation, and therefore have more disposable income, than the national average, underwriting Location Efficient MortgagesSM increases the borrowing capacity for people buying homes in urban communities. Standard loan underwriting recognizes that a buyer can afford to spend 28 percent of his or her gross monthly income on a mortgage payment; the Location Efficient MortgageSM increases this to up to 39 percent by recognizing transportation-related cost savings, thus increasing the size of the loan available to the consumer. A household earning $50,000 a year, for example, can qualify for a $163,000 mortgage under current lending practices; in today's competitive housing market, which may not be enough. In compact, transit-accessible and pedestrian-friendly neighborhoods, if household members save $200 per month on transportation over their suburban counterparts they can qualify for a $213,000 home.


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3. Employer-Assisted Housing (EAH)

EAH is an employer-provided benefit that helps employees purchase a home. An EAH plan can be easily customized to meet the unique needs and circumstances of an employer's overall recruitment, retention, benefits, and community strategies. Particularly in today's highly competitive hiring market, most employers are interested in offering benefits that help recruit and retain employees. EAH is one of a very few employee benefits designed to meet both needs.

The most common EAH benefits are grants, forgivable loans, deferred or repayable loans, matched savings, interest rate buy downs, and/or home-buyer education provided by an employer-funded counseling agency. An EAH may be available to all employees or limited to specific segments of the employee population, such as non-management staff or first time homebuyers. An EAH may also be available for all homes or only homes meeting certain criteria, such as primary residences or homes located in specific neighborhoods.

4. Business Improvement Districts (BIDs)

A tool, formally known as “municipal service districts, for giving local residents and business property owners a more direct involvement in the process of planning for and managing their communities. Their purpose is to allow cities to generate additional revenues to provide services in specific districts above and beyond what is provided in the rest of the city. The assessment rates and boundaries are set by the City Council, with the advice and recommendation of the committee of property owners. The Council can not delegate its responsibility to provide services and tax (assess) properties, but it can, under special circumstances, work cooperatively with the stakeholder/stockholder committee of the area charged with planning for and implementing certain urban services. A number of services or criteria for which a district can be formed in North Carolina include:

• Downtown revitalization projects, • Beach erosion control protection works, • Flood protection works, • Hurricane protection works, • Watershed improvement projects, • Drainage projects, • Off-street parking facilities, • Urban area revitalization projects.


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5. New Market Tax Credits

New Markets Tax Credits are available to equity investors in "community development entities", which in turn will use the proceeds to make loans and investments in business located in low-income communities.

1. Community Development Entities (CDEs). A CDE must have a primary mission of community development, pursued by serving or providing investment capital for low-income communities or persons. It must maintain accountability to residents of low-income communities through representation on a governing or advisory board. The Treasury Department must certify all CDEs. However, certified Community Development Financial Institutions and Specialized Small Business Investment Companies will automatically qualify. CDEs can be corporations or partnerships. For example, a nonprofit organization could form a subsidiary, partnership or limited liability company to act as a CDE. A CDE can meet the community accountability requirement through its controlling parent organization.

2. Allocation of tax credit authority. The Treasury Department will allocate New Markets Tax Credits, through its Community Development Financial Institutions Fund. The volume of New Markets investment starts at $1 billion in 2001, and rises to $1.5 billion annually in 2002-3, $2 billion annually in 2004-5, and $3.5 billion annually in 2006-7. Unallocated authority may be carried over through 2014. Priority for allocations will go to CDEs either (a) with a successful community development track record (directly or through a controlling parent), or (b) intending to invest in unrelated businesses. The Treasury Department may also add other allocation preferences, and will probably ask applicant CDEs for a plan for generating public benefits.

3. Tax credit amounts. Investors will receive tax credits based on the amount of their equity investment in a CDE. Tax credits are claimed over seven years, starting on the date of the investment and on each anniversary: 5% for each of the first three years, and 6% for each of the next four years. This stream of credits totals 39%, with a present value of about 30%. The investor’s basis is reduced by the tax credits claimed. Investors may carry back unused credits to years ending after 12/31/00.

4. Qualified equity investments in CDEs. Equity investments can take the form of stock or any capital interest in a partnership, and must be paid in cash. The investor cannot acquire a previous investment, except to replace a previous New Markets investor.


42

Equity investments must be made within five years of the tax credit allocation to the CDE. The CDE may designate certain investors to receive the tax credits.

5. How CDEs will finance economic development. A CDE can use New Markets investment proceeds to assist eligible businesses by: providing loans and investments to businesses or other CDEs; purchasing loans made by other CDEs; providing financial counseling and other services; and financing its own eligible activities. A CDE could also invest in its own business, such as the development and operation of a shopping center. A CDE must use "substantially all" of the new Markets investment proceeds for these purposes. Treasury — probably the Internal Revenue Service — will define "substantially all," including any allowances for administrative expenses, loss reserves, an initial ramp-up period for placing investments, and a final wind-down period for recovering investments. A CDE must trace how tax credit investments are used for eligible uses if less than 85% of its gross assets are so invested.

6. Eligible businesses and communities. A wide range of businesses is eligible for assistance, including nonresidential real estate and nonprofit businesses, and several tests are designed to ensure that they operate primarily in eligible communities. However, some businesses are explicitly excluded, among them the operation of rental housing. Eligible communities are census tracts with either (a) a poverty rate over 20% or (b) a median income below 80% of the metropolitan area (if applicable) or state median, whichever is greater. The Treasury Department may also approve smaller areas.

7. Recapture. Within the first seven years after the investment is made, an investor could lose the tax credits it has claimed (plus interest) if: (a) substantially all of the cash proceeds are not used for eligible purposes; (b) the investor cashes out its equity investment in the CDE; or (c) the CDE ceases to be a qualified CDE. Treasury is expected to write rules for curing violations within a reasonable period to prevent unwarranted recaptures.

What New Markets Can (and Cannot) Do

Understanding what New Markets can and cannot do is the first step to making the most of this new tool.

New Markets can provide a significant boost to rates of return for economic development investors. The tax credits should work to bridge moderate gaps in financing businesses and commercial and industrial real


43

estate development. This can make the critical difference for the many ventures that can generate significant cash flow and repayment of capital, but not enough to get off the ground without some initial help.

However, New Markets will not directly reduce investment risks substantially. Moreover, New Markets offers a much shallower subsidy than Housing Credits. The New Markets Tax Credit is worth about 30% of the investment made, in present value terms. By contrast, the Housing Credit generally has a present value of up to 70%, and up to 91% in distressed and high cost areas. In addition, the Housing Credit is based on the cost of building the housing, not on the amount invested. That means the Housing Credit alone can drive an investment. In contrast, New Markets Tax Credits are based on the amount invested in a CDE. That means that New Markets investors will need substantial cash flow and capital recovery/appreciation, in addition to the tax credits, to generate a reasonable return. Further unlike Housing Credits, the New Markets credits claimed will reduce the investors’ basis, potentially exposing investors to additional capital gains tax liability when they terminate their investments, and investment commitments may not be bridge financed.


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Press


45

-more-


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48


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ULI - Charlotte Council’s - Historic West End Technical Advisory

Panel Report Session October 21, 2002

(Pictured left - James Williams, Jr. - LS3P far right - Brian Jenest - ColeJenest & Stone)

(Pictured at podium - Isaac Heard, Jr. - Enterprise Foundation)

Documents

Revitalizing West Trade Street - ULI Charlottecharlotte.uli.org/wp-content/uploads/sites/15/2012/03/Historic... · Enterprise Foundation . ... Village and the new Johnson & Wales