By Scott Sherrill, UNC MPA Student
On Tuesday, January 10, 2012, at 6 PM, Dwight Bassett, the Chapel Hill Economic Developer, made a presentation to inform the Chapel Hill 2020 process.
Bassett put economic development in the framework of maximizing revenues as Chapel Hill approaches build-out and making the most of what development potential remains.
In looking at potential uses for property, the highest return on investment comes from mixed-use high rise development and the least comes from suburban sprawl. For a comparison, Bassett pulled an example from Asheville where a big box development brings in $6,600 in property tax and $45,000 in retail sales per acre and a six story mixed-use development brings in around $414,000 per acre total. In terms of costs, Bassett pointed to a 1989 Florida study, which demonstrated that infrastructure costs per dwelling unit were around 2.5 times as much for suburban sprawl as for downtown, more dense units.
To ground his presentation in Chapel Hill, Bassett made reference to three studies office, retail, and housing, in addition to two small area plans, Ephesus Church at Fordham Blvd. and the draft downtown framework.
Chapel Hill has 4-5% of the office market in the Triangle. Chapel Hill has growth potential for 1,000,000 square feet of office space, 600,000 square feet of which has already been approved, but not yet built. The current vacancy is 240,000 square feet which traditionally, since 1979, has been absorbed at a rate of 70,000 sf per year but with a potential absorbtion rate of 100,000 square feet per year. Even so, until a larger dent can be made in the 240,000 vacant square feet, the approved 600,000 approved square feet of new office space is unlikely to materialize. To put in terms of vacancy rates, at present, the office vacancy rate is around 20.4 percent, to see an increase in office space, the vacancy rate needs to fall to 16% or less.
1,000,000 square feet of new office represents 2100 construction jobs, 140 million dollars in construction wages; 2.68 million dollars in new taxes; an additional tax base of 200 million dollars, 5000 permanent employees, 350 million dollars added to the local economy and 4 cents on the Chapel Hill property tax rate.
The retail strategy overlays land use with demand and attaches growth potential to particular retail areas. At present, Chapel Hill has 1.5 million square feet of retail space; 1 mil square feet of demand is projected for 2020 as compared to 400,000 square feet in demand in 2010. However, Chapel Hill loses 35% of retail sales to other areas.
In 2010, the plan identified 400-600,000 square feet of uncaptured market potential and anticipates 700,000 to 1,000,000 square feet of uncaptured potential for 2020. The majority of leakage falls under the category of department stores, where Chapel Hill loses 47 million dollars in retail sales; however, supermarkets and groceries capture more than 100% of market share, and pull in 180 million dollars from the region.
The housing study is a benchmarking document which compares property values with Raleigh, Durham, and Cary. Land prices with zoning rights in Chapel Hill average $175,000 per acre, significantly higher than Raleigh, Durham, and Cary. The median sales price of $323,000 is also significantly higher than other benchmarked communities. Home values in Chapel Hill experienced 45% growth between 2000 and 2006.
In terms of future demand, the market demand would be 321-463 annual housing permits for next ten years, and 581-817 between 2009 and 2014 for rental units, including 300-400 units of affordable housing.
The study also breaks down for-sale housing, rental housing, workforce housing, and low-income housing for market potential, and shows a wide variety of potential.
Ephesus Church-Fordham Small Area Plan
The Ephesus Church-Fordham Small Area Plan focuses on the street system and connectivity in the area. The small area plan calls for 250,000 sq. ft. of new retail, 280,000 sq. ft. hotel, 360,000 sq. ft. office, 1000+ new residences. The plan calls for a number of connectivity improvements, but also examines a variety of densities for potential redevelopment. The end effect is that the development runs from 6 stories along Fordham Blvd. to 3-4 stories as it approaches surrounding neighborhoods.
Draft Downtown Framework and Action Plan
The downtown framework focuses on attempting to achieve a greater feel of walkability. The theme of the plan focuses on the key words compact, connections, anchor, and green. To improve walkability, the plan incorporates more cross streets between Franklin and Rosemary to break up some of the long block segments. The cross streets vary in terms of the anticipated traffic as some anticipate pedestrians, some cars some bicycles, some transit, and varied combinations.