Council to consider purchase contract
By Rochelle Moore
Published in News on June 5, 2016 1:45 AM
The Goldsboro City Council will consider a property purchase contract Monday involving a Virginia-based developer interested in a multi-million dollar residential and commercial building in downtown.
Second Act Communities, a nonprofit based in Virginia Beach, Va., is offering $250,000 for 207 and 219 S. Center St. where a multiple-story building could be constructed, said Julie Metz, director of the Downtown Goldsboro Development Corp.
"This is a big change for us for a developer of this size in downtown Goldsboro," Metz said. "It's huge. This would be the biggest private investment project that I know of in downtown in the 17 years that I've been here."
The council's decision involves allowing the city manager to enter into a purchase contract with Second Act Communities, after an estimated nine month feasibility study is finished. The agreement also allows for two, 30-day extensions, which could push the property closing to at least 11 months. Metz said other city reviews and approvals, involving project details, would also be part of the process.
Addie Wright Thomason, president and chief executive officer of Second Act Communities, said the project is in its early stages and will involve community input, meetings and other reviews.
"We are really at the very beginning of this," Thomason said Friday.
The nonprofit plans to work with city leaders, residents, business owners and others on the development of the building, including the composition of apartments and businesses that match the needs and interests of the community and downtown, Thomason said.
The proposed mixed-use property would become Second Act's first market-rate project. The nonprofit has developed affordable housing in partnership with the Virginia Beach Community Development Corp., which operates a Section 8 housing complex for the homeless and disabled veterans, in Virginia Beach, Va..
"What we develop depends on what partners want," Thomason said. "What we're doing in Goldsboro is the first market-rate property in our tool kit. We do projects for anyone in need, whether they're affordable or market rate."
The nonprofit, in 2015, developed a new business plan and refocused its efforts on projects that meet the needs of partners, including cities such as Goldsboro. Thomason said she started seeking new opportunities, based on her connections in North Carolina and learned that city leaders were interested in mixed-use development in downtown Goldsboro.
"The project idea came from the city," Thomason said. "We weren't looking for anything. We're a little different than a for-profit in that we work in collaboration."
Some concerns were raised by downtown business owners when the project was first announced. Concerns involved whether the property would include subsidized housing.
In February, during a public meeting, Thomason said the apartments would be market rate and not include subsidies. The average rental rate in downtown is between $900 and $925, Metz said.
"At the end of the day, I can guarantee you no subsidies," Metz said. "It's going to be what the market can bear.
"Our vision for that space has always been a mixed use, residential primarily, but a mixed-use project. It's not just the asking price that matters to us. In fact, probably more than anything is what it will be used for and how that will benefit downtown."
Ruth Glisson, owner of Uniquely R's in downtown, said she was initially concerned about the project. If market-rate apartments are developed, Glisson said it would benefit the downtown area.
"I'm very happy with that project, if in fact that's what this company is going to do," she said. "I think it's a great use of that space."
Kathy Cornelison, owner of Carolina Pine Country store in downtown, said she trusts city leaders to develop a project that will benefit the city.
"I feel that anything that's going to bring more residents and retail is good for Goldsboro," she said.
Thomason said the specifics of the project, including the number of apartments, size of the building and investment cost is unknown until the feasibility study is finished. The study will show whether the project is financially possible.
Early estimates of a $15 to $20 million project were mentioned, in April, but Thomason said she is uncertain what the total investment will be. The cost depends on the market study, as well as the apartment and retail needs identified by the community and city officials, she said.
Funding to build the mixed-use property will primarily come from a bank loan and possibly investors, Thomason said.
As a nonprofit, any profit made from apartment and commercial rents would go back into operational and other associated costs of the building, Thomason said.
Second Act Communities will be focused on heavy community involvement throughout the process, she said.
"We are good with revitalization and building communities," Thomason said. "We're not coming to Goldsboro unless the will of the community is for us to come to Goldsboro.
"The signal I've had is that there's a lot of excitement, and that's why we've kept going."
The city purchased the two Center Street parcels in 2006 for $450,000, with plans for a recreation center. By 2007, the downtown master plan shifted the focus to seek private investment to develop a mixed-use property. The city has been seeking a developer for several years, Metz said.
The council will consider the purchase agreement during its 7 p.m. meeting in the council chambers at City Hall, 214 N. Center St. The council will hold a work session prior to the meeting, at 5 p.m., in the City Hall Annex, at 200 N. Center St.