Newsletter 10/13: As The Pearl opens, where’s the affordable housing?

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LEDGER IN-DEPTH

By Michelle CrouchCo-published with N.C. Health News

Jacqueline Stowe has seen big promises come and go.

The 76-year-old grew up in Brooklyn, a thriving Black community just outside uptown Charlotte that in the 1960s was bulldozed for urban renewal. City leaders told residents they would rebuild and that families like hers could come back.

That never happened.

Now, decades later, Stowe fears that another promise tied to the same land — a vow to create affordable housing — could be broken, too.

In 2021, Atrium Health unveiled an ambitious plan to build the city’s first four-year medical school on the Brooklyn land, along with an accompanying research and technology campus that aimed to make Charlotte a center for medical innovation.

To make it happen, Atrium said it needed $75 million in taxpayer money to pay for infrastructure such as roads, utilities and parking. In return for the public investment, hospital leaders made a series of commitments that they said would lift up the whole community.

At the top of the list was a promise to create affordable housing.

The city and county signed off. In July, the first phase of the project — now called The Pearl — opened on 20 acres off South McDowell Street. Two gleaming towers house the Charlotte campus of the Wake Forest University School of Medicine, a surgical training center and a growing roster of medical technology companies.

The $1.5 billion innovation district is already being celebrated as a success, fueling new jobs, research opportunities and investments while positioning the city as a hub for medical innovation. The first medical school class started this summer.

So far, however, the affordable housing that was promised hasn’t materialized, and it’s not clear when or where it might be built.

“They promised us housing, and here it is 2025, and still nothing has happened,” said Stowe, who serves on The Pearl’s community advisory council. “I’m thinking, ‘Here we go — we’re getting screwed again.’”

Atrium’s housing commitments were repeatedly emphasized in meetings leading up to the 2021 city and county votes on the hospital’s request for $75 million in tax incentives.

When Atrium Health CEO Gene Woods pitched the project to the Charlotte City Council on Nov. 1, 2021, he emphasized housing early in his comments: “We understand that in developing this site, it’s going to be important to continue to focus and be committed to affordable housing, both on the site and also away from the site.”

A PowerPoint presentation that night about the project laid out the hospital’s two housing promises:

Some community members, including Stowe, said at the time that 5% wasn’t enough on The Pearl site, especially given its history. At a subsequent meeting, several city council members asked about increasing the percentage, but then-Assistant City Manager Tracy Dodson said it wasn’t possible.

Instead, she said, the city would get more bang for its buck by supporting housing on Arium’s North Tryon Street site, where development costs were lower. Because Inlivian owned an adjacent 14-acre site, the two entities could create a master plan for the whole area, she said.

Four years later, there is no sign of any housing — or any announced plan for housing — at either site. And Atrium still owns the North Tryon Street land, where it operates a busy distribution center for medical supplies.

In an emailed statement, Atrium spokesman Dan Fogleman stressed that the hospital system is honoring its obligations related to housing: “The arrangements surrounding the affordable housing commitments tied to the TIG [tax-increment grant] are very complex and, based on your line of questioning, I want to make it clear that Atrium Health has met or exceeded what it agreed to do.”

Building affordable housing is notoriously complicated and time-consuming, so it’s possible Atrium and its development partners are still putting the pieces together on that component of the project. They could argue that Phase I of the district is still underway, with housing to come. (The Pearl’s own website indicates Phase I is complete.)

Fogleman didn’t answer a question about why housing wasn’t included in Phase I.

But he did say that Atrium is “working with a developer that would include affordable housing within the district as part of its larger project.”

And it turns out that, despite what was presented in 2021, Atrium isn’t legally bound to include affordable housing at The Pearl.

The Ledger/NC Health News reviewed the agreement between Atrium and the city and found that the document does not require low-income housing to be built as part of Phase I of The Pearl.

In fact, the agreement includes a caveat that allows Atrium to forgo the housing altogether: “It being understood that up to 350 units of such housing is contemplated but a determination of including rental housing within the project has not yet been made.”

If no apartments are built at The Pearl within eight years, the contract says, then Atrium would need to increase the number of units built at the North Tryon Street site.

That helps explain a response from city spokesman Jack VanderToll. When asked about the affordable units that were supposed to be part of Phase I, he responded: “The contract assures that if housing is built at The Pearl, at least five percent will be affordable housing, and it will be part of the Phase I development.” (Emphasis added)

In another change from what was presented, city leaders were told all of the affordable units — 5% of the total — would be reserved for residents earning below 50% of Charlotte’s median income. But the agreement cuts that in half. It says only 2.5% will serve those lower income households, and the other 2.5% will go to residents who earn up to 80% of the area median income.

Atrium also pledged in 2021 to donate a 14-acre site at North Tryon and 32nd streets to Inlivian, where a mix of affordable apartments and homes could be built.

City records show Atrium still owns the land, although it has added a deed restriction saying any future development must be for affordable housing — as required in its agreement with the city. On a recent afternoon, trucks bearing the Atrium logo were pulling in and out of a large warehouse on the site.

When asked about the land, Inlivian spokeswoman Cheron Porter told the Ledger/NC Health News that Atrium was not donating the property after all.

Instead, she said, it was now part of a proposed land swap: Atrium wanted Inlivian’s Baxter Street property near The Pearl for medical offices. In return, it had offered the North Tryon Street parcel and another property on East Morehead Street.

When asked to double check her information because the North Tryon parcel was supposed to be donated, Porter responded in an Oct. 3 email: “I can confirm, this is not a donation.”

This appears to be another case where the signed legal agreement between Atrium and the city doesn’t match the public promise.

While city officials and the public were told in 2021 that Atrium would donate the entire 14-acre parcel to Inlivian, the contract instead says the developer will “contemplate” contributing the land. The document also says Atrium could contemplate donating only “a portion” of the land rather than the full site.

City spokesman VanderToll did not answer questions about the language in the contract or whether elected officials were told about those changes.

In a letter to elected officials on Oct. 7 — sent after the Ledger/NC Health News started asking questions about affordable housing at The Pearl — Atrium executive Collin Lane defended the hospital’s record. He pointed to the hospital’s $20 million contribution to the city’s Housing Impact Fund. He also said Atrium was following through on the commitments detailed in its agreement with the city.

Lane’s letter said the hospital and Inlivian now have a signed land deal, which he characterized as a “negotiated land exchange of two parcels,” not three. He stressed that the two parcels Atrium is transferring to Inlivian are worth significantly more than the three-acre Pearl site the hospital is getting in return.

Lane attributed the slow progress on the housing to many factors, including “multiple iterations of the deal” and “multiple leadership changes at Inlivian.” The city, Atrium and Inlivian have also been working on a master plan for the area, Lane explained.

“Affordable housing projects take years to complete and, since we are not a developer, we cannot control the multiple variables that impact timelines,” Lane wrote.

Although city presentations originally said Atrium would “partner” with Inlivian to develop the North Tryon Street site, the hospital now appears to be stepping back:

“As Atrium Health is a health care provider and not a developer, we’ve entrusted Inlivian to lead the actual development and continue to check in with them regularly on how we can support forward momentum on this project,” Lane wrote.

In an emailed response to questions, Inlivian’s Porter said the housing authority has begun a comprehensive assessment of the land to determine what can be developed and is collaborating with the city on a plan for the area. She also said Atrium is “working on plans to relocate its staff from the distribution center.”

At the Nov. 22, 2021, meeting in which the city council voted on the tax incentives for The Pearl, then-council member Julie Eiselt asked for an assurance that the affordable housing at North Tryon Street would be developed “within a certain time frame, maybe a few years.”

In response, Dodson was reassuring: “I spoke to Atrium about that today,” she said. “We can ensure that 14 acres will go to affordable housing, and we can put a time limit on when that could be done. … I think three years is realistic once the property changes hands and actually is owned by Inlivian.”

When asked whether the city was holding Atrium accountable to its housing commitments and that timeline, VanderToll said the city has been “highly engaged” in planning for the area around the North Tryon site:

“The Atrium parcel is part of a larger, complex project that includes redevelopment of former public housing, significant community engagement efforts, rezoning considerations, etc. All of the partners are in regular communication as this project moves forward and all parties are working together towards the goal of delivering affordable housing on the North Tryon site.”

For some former Brooklyn residents, Inlivian’s plan to trade its Baxter Street property near The Pearl to Atrium for medical offices is disappointing, because it removes more land that could have been used for housing.

Rev. Janet Garner-Mullins, who serves on The Pearl’s community advisory council, said keeping the Inlivian site on Baxter Street would have guaranteed at least some affordable housing in the area that used to be Brooklyn.

However, with it being given up for offices, she said it’s hard to see how a substantial number of affordable apartments for returning residents will ever happen.

“Housing is important on this site because of the historic relationship that this place has to the Brooklyn neighborhood,” Garner-Mullins said. “To not have housing here — again — I believe is a miscarriage of justice.”

Garner-Mullins said Atrium’s original commitment to designate as affordable only 5% of a possible 350 units on-site was already inadequate.

“It’s an insult” that the hospital hasn’t built those units yet or unveiled a site plan for them, she said. “It sends a message to the community that they’re putting profits over people.”

Earlier this year, Lane, the Atrium executive, went before the Mecklenburg County commissioners to offer an update on how the hospital was meeting its commitments. The board pressed for details on the on-site housing that was supposed to be part of The Pearl and on the off-site units promised for North Tryon Street.

Atrium distributed a spreadsheet showing that both housing efforts remained “in the planning phase.”

Emails obtained by the Ledger/NC Health News as part of a public records request show that commissioners Laura Meier, Leigh Altman and Mark Jerrell followed up over the summer, asking for updates on the housing.

In an Aug. 12 response to Meier and Jerrell, Deputy County Manager Leslie Johnson wrote that housing “is part of Phase II” of the innovation district, adding that it “is currently in the design phase with construction planned to begin within next 6 months barring no unexpected delays.”

Her answer suggested a more definitive timeline than Atrium’s Lane, whose letter said only that Atrium is “in talks with a developer to include additional affordable/workforce housing space in The Pearl as part of their project.”

While those updates may have satisfied county leaders, Stowe said she isn’t getting her hopes up.

Stowe said she goes to The Pearl every few weeks, an experience that leaves her with mixed emotions. While she has fond memories of the neighborhood, “our roots were destroyed,” she said. “I can’t show my grandkids where I grew up.”

Stowe and Garner-Mullins said they appreciate efforts to honor the history of Brooklyn at The Pearl with an interactive walking museum called “A Purposeful Walk.” It includes panels that tell the story of Brooklyn’s churches, schools, businesses and the people who lived there. Stowe and Garner-Mullins are prominently featured in the installation.

Still, with the lack of progress on housing so far, they worry The Pearl will become another case of promises made and not kept.

“My question is, how can we hold them accountable?” Stowe said. “Just do what you said you were going to do.”

Garner-Mullins added, “I’ve been told by individuals in government that we have to trust them. Well, how long are we going to have to wait?”

Michelle Crouch covers health care. If you have tips or ideas for her, please shoot her an email at [email protected].

This article is part of a partnership between The Charlotte Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area.

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Dennis LaCaria, who has been one of the main faces of school construction in Mecklenburg County for nearly 20 years, is taking a new job in Wilmington.

He probably isn’t a household name, but any Charlotte-Mecklenburg Schools parent who has ever paid attention to school boundary changes or school construction will know who he is. LaCaria joined CMS as its facilities planning and real estate director in 2006.

A news release from the city of Wilmington last week said that in Charlotte, LaCaria “secured the state’s largest school bond referendum at $2.5 billion, obtained an additional $26.5 million in local funding, and managed a $9 billion portfolio of physical assets.”

He’ll be the new chief of staff to Wilmington City Manager Becky Hawke. If that name sounds familiar, it’s because she served until June as the town manager of Matthews. —Tony Mecia

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