Look what a New York developer wants to build for the 55+ crowd in Chapel Hill

A New York developer hopes to build luxury housing for people 55 and up near Southern Village, where the 120-acre Obey Creek project has failed to deliver retail, offices and several hundred apartments approved in 2015.

The South Creek project is still in the planning stages but a Chapel Hill Town Council committee learned more last week about the potential mix of duplexes, townhouses and condominiums.

The project also could include a smattering of retail, which would not compete with shops and restaurants in Southern Village across the highway, said Lee Bowman, a Chapel Hill-based development consultant with The Legion Co.

South Creek would be “a nice complement” to Southern Village, where only 18% of residents are 55 and older, he said, adding they already have reached out to neighbors.

Obey Creek also was supposed to work with the Southern Village business district, while adding up to 1.6 million square feet of mixed use and green spaces to the steep, wooded tract. Developer East West Partners failed to find the retail and office tenants to launch construction after several years of public talks and negotiations with the town.

Since the project was approved, Chatham County also has moved ahead with the 7,000-plus acre Chatham Park development, Briar Chapel has added more homes and businesses, and many other development projects are in progress or have been completed along the U.S. 15-501 corridor between Chapel Hill and Pittsboro.

It is unlikely that Obey Creek will ever be built because of changing demand for office and retail space, said developer Steven Dubb, with the Beechwood Organization. His team noted South Creek could be roughly half the square footage of Obey Creek.

Beechwood’s proposed South Creek neighborhood would largely mirror Obey Creek’s site plan, building on roughly 35 acres between the highway and Wilson Creek, which cuts across the site. Environmentally sensitive land east of the creek would still be preserved as an 85-acre community park, Dubb said.

Beechwood has the property under contract and could decide whether to submit a proposal by summer, Bowman said.

If the $153 million project is approved, the developer anticipates generating $834,000 in property tax revenues for the town and $309,000 for the school district.

Housing for older residents

Beechwood is a family-owned residential development company that Dubb’s father founded in Long Island, New York. It specializes in age-restricted, lifestyle condominium communities.

In Chapel Hill, they want to build a walkable, age-restricted community centered around a clubhouse, walking trails and other amenities. A homeowners association would handle building maintenance and landscaping.

An analysis of the town’s residential market shows a need for that “missing middle” housing where adults can age in place, he and other project officials told the council at a May 7 meeting of the Council Committee on Economic Sustainability.

“Last year, we began looking to expand into the Carolinas in part because so many Long Islanders are moving into the Carolinas and to Florida, and we recognize that the Carolinas, and particularly Chapel Hill, is underserved with low-maintenance condo housing for people over 55,” Dubb said.

The development team’s data shows Chapel Hill adding an average of 246 households every year. The town has over 22,600 households now.

Most of that growth is expected to come from those earning $100,000 or more, while the number of families earning less than $50,000 a year is expected to decline, said David Laube, with Noell Consulting Group. Nearly half of the new residents, and current residents seeking a new housing option, could be age 55 and older, he said.

The analysis showed that homes priced at over $500,000 had the strongest potential for developers.

The cost of land and construction does not justify building homes for lower-income families in Chapel Hill, said Laube, whose company has consulted with the town on economic and development studies.

“Some of the challenges were that the majority of the growth in your community was forecasted to be entirely from households earning $50,000 or more, and that folks under $50,000 are effectively getting priced out of the community,” Laube said.

The data also showed 1,004 existing homes and 65 new townhomes, condominiums and single-family homes sold in the last 12 months in Chapel Hill — “a clear indication of an undersupply,” real estate consultant Emma Littlejohn said.

“You don’t have the supply locally to allow them to stay in Chapel Hill and be part of the ... rich, diverse community that supports Chapel Hill,” Littlejohn said. “As younger families are coming in and buying their homes, they’re moving out to neighboring towns that (have) senior product — Cary, Durham, Raleigh, they have a plethora of options for this cohort.”

Traffic, stormwater, concerns

The concerns about South Creek could mirror concerns about the Obey Creek project, including the amount of traffic and stormwater that development could generate. Residents also opposed Obey Creek because of its size — the retail portion would have been nearly one and a half times the size of University Place mall. The maximum office space would have been nearly twice the size.

The land is forested and steeply sloped in places, with an abandoned quarry that was slated for remediation. Obey Creek would have had four-story buildings on the highway, stepping down to eight stories as the project descended the hill to reduce the visual impact.

South Creek would generate less traffic than was expected from Obey Creek — roughly 5,000 new trips a day, instead of the 16,000 trips, Beechwood project officials said. The site would be served by three driveways onto U.S. 15-501, including at Market Street and Sumac Road in Southern Village.

It’s too early to know what changes the traffic might require for U.S. 15-501 and surrounding roads. Obey Creek included a slew of road improvements, including new turn lanes and four-way traffic lights at the Sumac Road and Market Street intersections.

East West Partners also agreed to pay $250,000 to extend an N.C. 54 off-ramp, restripe U.S. 15-501 north of Mt. Carmel Church Road, add pedestrian, bike and bus amenities, and help Dogwood Acres Drive neighbors install traffic-calming features, such as speed humps.

Bowman noted that amending the Obey Creek development agreement — intended to give East West Partners the ability to adapt to changes as the the neighborhood was built over the next 20 years — would require extensive changes.

Instead, Beechwood could ask the town to jointly terminate the development agreement and consider a new conditional zoning permit. That would let the council and developer negotiate development terms.

The land slated for Obey Creek has already been annexed into the town limits.