Asheville City Council has doubled down on subsidizing an affordable housing project just south of downtown after the private developer said construction will cost more and take at least two years longer than initially planned.
On Tuesday, council members voted unanimously to approve over $5 million in tax incentives and low-interest loans for a planned 221-apartment complex at 319 Biltmore Avenue, which the council first greenlit in 2022.
At that time, Charlotte-based developer Laurel Street Residential promised it would not ask Asheville for any handouts beyond the land itself. The city agreed to sell the property for $1, having bought it from Duke Energy for $5.3 million in 2020. But according to Sasha Vrtunski, the city’s affordable housing officer, increases in construction costs have outpaced the growth of projected rents, making the project no longer financially feasible without additional taxpayer support.
“We did our analysis,” Vrtunski told council members, noting that the proposal had also been vetted by Charlotte-based real estate consultant Zelleka Biermann. “We think this is a great deal for the city.”
The extra funding comes with added benefits for Asheville taxpayers. Under the new deal, the project will have 162 affordable units, up from 66 in the initial proposal, and 64 apartments will be restricted to rent only to“extremely low income” residents making 30% or less of the area median income. In Buncombe County, that threshold is $32,150 for a family of four, according to the federal Department of Housing and Urban Development.
All of those apartments will have their affordability locked in for 40 years, double the previously agreed period. And instead of buying the land outright, Laurel Street will agree to a 99-year “ground lease,” after which the parcel and its buildings will become city property.
Neither Vrtunski nor the developer fully explained why the project hadn’t proceeded on its original timeline, which had slated construction to finish by the end of this year at a cost of $51.9 million. The revised proposal has an estimated cost of $70.2 million, with the first apartments not completed until late 2027. Council members asked no questions and made no comments before approving the new deal.
However, Vrtunski did mention Laurel Street’s failure to secure a $1.9 million loan from Buncombe County in May 2024. “At that point, they knew that they needed additional funding to make the project work,” she said. The developer also faced a delay at Asheville’s Planning and Zoning Commission in 2023 over concerns that the plans were too much like “a suburban development.”
Other tidbits
- During public comment, 11 residents urged council to oppose UNC Asheville’s plans for developing 45 wooded acres south of its main campus. As UNCA announced June 13, the project would combine a new 5,000-seat stadium with up to 450 units of market-rate housing and 50,000 square feet of retail space. Speakers raised environmental and transparency concerns over the proposal.
- Asheville will accept a $1.84 million, zero-interest loan from North Carolina state government to help cover Hurricane Helene recovery costs. The city has already taken $2.79 million under the same program. The funds must be repaid within five years, which local officials expect to accomplish through Federal Emergency Management Agency reimbursements.
- The N.C. Department of Transportation will reimburse Asheville $150,000 toward approximately $743,000 in sidewalk improvements on Patton Avenue. NCDOT had originally agreed to pay the city $90,000 in 2021, but no contractor bid on the work until this March, leading to higher projected costs.
- Council members authorized a $115,000 contract with Michigan-based accounting firm Plante Moran for internal audit services. Asheville has unsuccessfully tried to hire a staff internal auditor, a position responsible for financial and operational oversight of city government, since Patricia Rosenberg left the post in October 2021.
- Mission Health, through Florida-based marketing firm Brown Parker & DeMarinis Advertising, is donating $110,000 to support Asheville’s parks in recovering from Helene. The funds include $35,000 specifically earmarked for a temporary dog park at Riverbend Park in East Asheville.
Every second and fourth Tuesday, Asheville City Council meets at the Council Chamber on the second floor of City Hall, 70 Court Plaza, beginning at 5 p.m. (However, the council is taking several weeks off for the summer and will next meet Tuesday, July 29.) See the full recording and the agenda of the June 24 meeting.
