Developer’s complaint to cost schools, community millions

Carrboro Board of Alderman

Developer’s complaint to cost schools, community millions

By Ari Sen

Ask any high school or college student and they’ll tell you that one late paper or homework assignment doesn’t carry to large a penalty. Ten points off or perhaps the difference between an A and a B.

But one local apartment owner’s late paperwork might have led to proposed legislation that could cost local schools and taxpayers millions of dollars.

The bills, House Bill 406 and House Bill 436, would eliminate impact fees for municipalities across the state. HB 406 specifically targets impact fees for Orange County whereas HB 436 would ban the fees in several municipalities including Carrboro, Cary, Chapel Hill, Pittsboro, Raleigh and Wake Forrest. HB 436 also applies to Catawba, Chatam and Orange counties.

“It’s probably a good sign in that there’s not a whole bunch of people signing onto these and saying, yes, we support this,” Orange County Rep. Graig Meyer said in a Board of Commissioners meeting.

Despite Meyer’s comments, both bills have cleared their first procedural hurdles by making it to the finance committee of the General Assembly. Seils said they were told it was unlikely the bills would be voted on this week, but they could move to the House floor as soon as next week.

Impact fees are fees paid by developers to the local town or county government that help to fund social programs such as infrastructure projects or schools. Orange County currently receives $2.8 million in revenue from these impact fees, which goes to support both Orange County and Chapel Hill-Carrboro Schools. Chapel Hill-Carrboro schools budget is roughly $144 million for the 2017-2018 school year whereas the smaller Orange County public schools requested roughly $44.5 million for the 2017 fiscal year. Alderman Damon Seils said the only ways the county could make up the lost funding is by cutting spending or raising property taxes by at least two cents.

“If we are looking at a shortfall caused by loss of revenues we are talking about needing to make up that revenue some other way, notably by increasing property taxes,” Seils said.

“Of course the community is not going to support cutting spending—that would be a pretty major hit on the school system.”

Seils said the bills were likely brought on by a single development in Orange County. Orange County Rep. Verla Insko told the News and Observer that the development in question is likely the Chapel Hill complex currently known as Townhouse.

Townhouse apartments are currently owned by A.P. Segar, and are located on Hillsborough Street, roughly a half a mile from downtown Chapel Hill. In 2014 Segar submitted a proposal to update the apartment complex, adding additional recreation facilities and 204 new beds putting the total for the facility up to 850. The complex would also be renamed, changing from Townhouse to Grove Park.

The impact fees increased for some developers recently when the town underwent its re-evaluation process which became active on January 1. After the re-evaluation, Grove Park’s impact fees would rise from roughly $300,000 to more than $1 million.

The Orange County commissioners passed a grandfather clause that would cover Grove Park and other developments from the new impact fees, but only if they were to submit the paperwork on time, which Seils believes Grove Park didn’t.

After the late filing, Segar hired four lobbyists including former lawmaker and attorney Bill Faison. Documents show that Faison lobbied the bills’ primary sponsor, House Speaker Pro-Tempore Sarah Stevens.

“I think you have to look at who benefits from (the bills),” Seils said. “In this case who introduced the bill, who was lobbying for the bill, who benefits if the bill passes.”

Campaign finance reports show that Stevens accepted campaign contributions from real estate and construction companies that opposed impact fees in the past. Stevens also operates S&E Properties, a Mt. Airy real estate leasing and rental company, with her husband.

Both Chapel Hill and Carrboro have spoken out against the bills. Carrboro’s resolution opposing the bill was drafted by the Triangle J Council of Governments, a group of local governments, stakeholders and partners that attempt to solve problems in the Triangle region. Triangle J said the bills could cause up approximately $28.9 million in lost revenue across the region.

“That really affects rural communities that use this revenue particularly for infrastructure and it does not spare communities that are Republican-led or Democrat-led—progressive or conservative it doesn’t matter,” Carrboro Alderman Bethany Chaney said in Tuesday night’s work session. “Everything really is damaged by this bill and we think because the regional impact is so great and our region is interdependent we need to support our colleagues’ cause to let these bills fail at the NC General Assembly.”

Seils feared that the bills represent an attack on Orange County and its values.

“In the case of this impact fee bill it’s pretty clear based on the history of the bill that it was meant to benefit particular people,” Seils said. “It had a very clear motive.”


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