Controversial apartment complex continues through city approval process

Apr. 26—A perceived need for more multi-family residences is clashing with fears that a past bad experience will be repeated as the city considers whether to allow an apartment complex to locate in the Moulton Heights area of Decatur.

HōM Flats and Magnus Capital Group, of Grand Rapids, Michigan, wants to build roughly 262 units in an 11-building apartment complex off Eighth Street Southwest. The complex would be geared toward moderate-income residents, and the rent would vary based on income.

A line of people representing groups that are pushing for the city to expand its residential base went before the Planning Commission last week and said apartment complexes like that envisioned in the HōM Flats plan are desperately needed in Decatur.

However, they were countered by Planning Commission member Frances Tate and several residents who live in or near Moulton Heights and oppose the apartments. They said they fear there will be a repeat of the AME Homes/Stonegate Village debacle of the 1990s.

The project is working its way through the city's approval process, which started last week with the Planning Commission voting 6-1 to recommend rezoning the 52 acres where the HōM Flats project is planned.

The commission voted to recommend that the City Council rezone the property owned by John Eyster and family from R-2, single-family homes, to R-4, multi-family residential, so HōM Flats can move forward with its project.

The proposed rezoning ordinance was presented to the City Council on Monday evening. An ordinance requires two readings before the vote. The ordinance's first reading is May 1 with the second reading and vote scheduled for the 6 p.m. June 5 council meeting.

Tate lives near the proposed complex and was vocal in her opposition to the apartments. She said in the April 18 meeting she is worried this could lead to a repeat of the AME Homes/Stonegate problems.

The AME Homes apartments were built off Old Moulton Road in the 1970s "as subsidized housing," Tate said.

AME Homes became Section 8 housing by the late 1980s, and then they were sold to the Decatur Housing Authority and converted to low-income housing called Stonegate Village. Stonegate deteriorated and became crime-ridden to the point that the city demolished it in 2003. The property sat vacant for more than a decade until the city, in a partnership with Community Action Partnership of North Alabama, developed the Seville subdivision on the site in 2014.

"My problem is I would hope we had learned from our mistakes," Tate said. "I know what it does. That's why we have Seville today."

Tate is a member of the committee that worked on the 20-home Seville project, which is now fully occupied.

Moulton Heights resident Michael Burfield called the proposed apartment complex "Stonegate on steroids," and said he worries about the issues it would create.

"If you're going to do residential housing, do it the right way and build homes they can live in," Burfield said. "We don't want anything like this."

Carol Taylor, of Eighth Street Southwest, lives in the subdivision adjacent to the planned development. She said she opposes building an apartment complex on the site.

"We don't want these apartments," Taylor said.

However, others said Decatur is in desperate need of more residences, especially apartments, and that need appeared to trump the fear of a bad outcome for the Planning Commission majority.

"The need only trumps (the fear) if we don't let history repeat itself," Planning Commission Chairman Kent Lawrence said. "We have to be aware of history. We can't say history has shown us 'apartments are bad so we shouldn't do apartments again.' We learn from history and fix the things that cause the problems."

Vishal Arora, founder and CEO of Magnus Capital Partners, said HōM Flats would be a different kind of subsidized development than the low-income subsidized apartment complexes that concern Tate.

He said they're able to do this project because they receive a federal tax credit that allows them to provide lower rent for middle-income tenants "in exchange for pledging income-based support for up to 30 years."

Rent is based on the tenant's income. Arora estimated about 30% of the tenants — those that have an income equal to or higher than the area median income — would pay the full market rental rate for apartments, but all tenants would get the same level of apartment and access to the additional amenities offered by the complex.

A chart displayed by Magnus Capital at a community meeting in March showed rents ranging from $663 a month for tenants with an average annual salary of $23,500, or 50% of area median income, to someone who makes the median income or more who would pay the market rate of $1,585 in monthly rent.

"This is income-based, not just provided housing," Lawrence said. "You have to have an income."

Lawrence said HōM Flats and Magnus Capital Group have the experience and financing to support the type of apartments that the city wants.

"They know how to do it, they have done it and they have the means and balance sheet to do it," Lawrence said.

Lawrence pointed out that the company does most of the project, including development, construction management and operating the apartments after completion.

"They will manage the apartments for the life of them," he said. "They're not building them to sell. They're building them to keep."

Cheyenne Sanchez, president of Young Professionals of Decatur, said the Moulton Heights apartment complex "is a great opportunity for our professionals. There are so many of us but you don't see our faces because they're getting off from work and driving to a home that's not here."

She said she has a database of almost 300 young professionals and many don't have the income to purchase a home.

"When it comes to an apartment, living and creating a community for themselves, it is very difficult because there's just nowhere for them to go," Sanchez said.

Sanchez said they instead end up living elsewhere and commuting to Decatur. As examples, she said her niece works at 3M-Decatur but is renting in Florence while a friend works for Nucor and lives in Huntsville.

Jesi Livingston said she is a young professional who lives in Madison because she couldn't find an apartment in Decatur.

"There's no safe, family-friendly housing (in Decatur)," Livingston said. "It's a constant need. We have some great individuals working in our community but they can't live here."

Jeremy Nails, head of the Morgan County Economic Development Association, said housing availability, especially apartments, is a topic that industries bring up when looking at locating in the city.

"We haven't had new apartments in 15 to 20 years," Nails said. "We're trying to catch up when we know of instances where local employees moved east of Decatur. They get settled there and stay there full time."

Nails said HōM Flats is needed in many sectors, including health care and assembly line workers, and is needed by manufacturing companies who employ thousands of people in Decatur.

He said apartments are particularly needed for the "middle-income employees who can't find or even afford a place with some of the amenities" planned for the complex.

Nails said the new $900 million First Solar project being built in Mallard Fox West Industrial Park on Alabama 20 will be located about one-half mile west of the Decatur city limits so company officials see Decatur as the closest place for its workers to live.

"They were excited about the potential for this (apartment) development," Nails said.

Burfield pointed out that those pushing for the apartments don't live in the Moulton Heights area.

— bayne.hughes@decaturdaily.com or 256-340-2432. Twitter @DD_BayneHughes.