West2nd smackdown: Council rejects permit despite meeting city requirements

Now we’ll never see more than a rendering of West2nd, the $50 million development of luxury condos and retail space that had been proposed at the current site of a Water Street parking lot since 2014. Rendering Keith Woodard Now we’ll never see more than a rendering of West2nd, the $50 million development of luxury condos and retail space that had been proposed at the current site of a Water Street parking lot since 2014. Rendering Keith Woodard

When Mayor Nikuyah Walker chaired her first City Council meeting February 5, citizens got to see how previously out-of-control meetings would be run under a new regime—and learned that  the heckling continues both for councilors and for the West2nd developer seeking a special use permit that was rejected for reasons that had little to do with city code.

When Keith Woodard won a bid in 2014 to build a mixed-use building on a city-owned Water Street parking lot that would house the City Market, parking, retail and residential, he had the blessings of City Council for his innovative design. Four years later, costs soared and he retooled the project, adding 28 luxury units and another floor, which required the special use permit. He also offered to build affordable housing units on Harris Street.

Of all developers in town, Woodard has the best track record on affordable housing. When he bought Dogwood Housing in 2007 from local mixed-income housing icon Eugene Williams, he promised to maintain the affordability of most of the units—and has done so.

So it was odd that Woodard would be the one to be asked to jump through higher hoops by Councilor Wes Bellamy and receive jeers from the Greek chorus in attendance as he sought approval to increase density for West2nd.

That Woodard offered to build affordable units on Harris Street instead of contributing to the Affordable Housing Fund, as most developers do, is unusual. And he said he’d exceed the city’s requirement of 16 units kept below market rate for 4.7 years. When councilors said they wanted a longer term, he said he’d make eight units affordable for 10 years.

Bellamy badgered him to up the number of affordable units. “Why couldn’t all 16 units be affordable for 20 years?” asked Bellamy.

“The project still has to be financially feasible,” explained Woodard, eliciting a big sigh from Bellamy.

Woodard pointed out that he could have put the amount required—$316,000—into the Affordable Housing Fund, “which maybe we should have stuck with that,” and that keeping eight units affordable for 10 years was already challenging at an estimated cost of $474,000.

Bellamy said he was perplexed that Woodard said it wouldn’t be financially feasible “when some would say you’ve made a lot of money in this city and because you’ve already made so much money maybe you can give some back.” That was greeted by whoops from some attendees.

And when Bellamy asked Woodard how much money he was going to make from West2nd, Deputy City Attorney Lisa Robertson advised councilors to “focus on the land use issues” for a zoning application and said that enabling legislation didn’t give council the ability to require more.

“That was a silly question,” says Eugene Williams. “[Bellamy] doesn’t have the facts and he doesn’t know how much [Woodard] had to spend.”

When councilors voted 3-2 to deny the permit, the hecklers applauded. “Those young people know nothing about investing,” says Williams. “That just bothers me to know we had three councilors who wanted to accommodate the audience more than actually trying to make this feasible for both sides.”

Bellamy, Walker and Heather Hill voted against the special use permit. ”It’s not all right to vote against it without explaining specifically what the developer needs to do,” says Williams. He opines that it would have been wiser to say what they wanted and table the vote.

Williams also criticizes Kathy Galvin and Mike Signer’s yes votes and says they seemed more concerned about downtown businesses than low-income residents.

However, Signer spent a fair amount of time during the meeting discussing whether revenue from the project could be directed exclusively to the affordable housing fund. He says he voted for the permit because it would allow the city to increase its current $3.5 million affordable housing annual budget by about 30 percent.

Others have concerns about the Monday night performance, and the word “extortion” has been bandied about.

“If I’m a developer and read those [news] accounts, a red flare has gone up,” says attorney Fred Payne, who is a plaintiff in the lawsuit against City Council for its vote to remove Confederate statues. “Why would I want to invest in this town?”

With the vote to deny the permit, “You can see the degree to which City Council is out of control,” says Payne. “I have a feeling if this were litigated, the city would probably lose.”

He adds, “I don’t think this City Council understands there are limits on what they can do.”

Part of the problem Woodard faces is that four councilors were not around when the city bid out the project in 2014. Galvin was, and at the meeting she said—after a five-minute recess to calm the interruptions from the crowd—“The demand was that the City Market be downtown on that city parking lot. It was not affordable housing.” The project has moved along “based on criteria the city gave this developer.”

Galvin also said the special use permit meets the comprehensive plan and zoning ordinance, and the project would add 80 people living on the mall and 100 jobs in the face of increasing competition to downtown businesses, as well as increase city revenue from the parking lot from $6,500 a year to $945,000 a year. “That’s huge,” she said.

For Bellamy, the message to developers is, “This council will prioritize affordable housing.” He says he appreciates Woodard’s efforts and understands that he met city requirements. “We still have discretion,” says Bellamy. “I hope we can still work together.”

Hill was more concerned about the City Market. “I’m not convinced the market will thrive there,” she said.

She says she’s not “anti development” and suggests looking at the project through a “new lens” and “recognize we ultimately may not be able to accommodate the market on this specific site if we are to meet the needs of the vendors while also competing with other community priorities.”

Woodard says he doesn’t think City Council’s vote to deny the permit was about increased density. “I think this project should be part of [affordable housing] but not all of it,” he says.

Litigation is not an option at this point, he says. “We’re looking at alternate paths to go forward.”

He says he does need a decision soon because people have reserved condos in West2nd. And he’s put $2 million into underground utilities, as well as four years of effort.

“We’re trying to work things out,” he says. “I’m trying to be positive.”

Updated 3:53pm to clarify Mike Signer’s reasons for his vote for the special use permit.



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