UNC Health hopes $5M affordable housing fund boosts Chapel Hill expansion

Tammy Grubb
·6 min read

UNC Health has sweetened the pot for its planned expansion of the Eastowne medical campus in Chapel Hill with an offer of $5 million for affordable housing and promise to preserve 10 acres of forest.

If approved, the proposed revolving loan fund would mark the first partnership between UNC Health and the town on affordable housing, something the community has long desired to see.

The work on the Eastowne campus expansion started in 2017 and is heading toward a vote this spring. The Town Council will continue the public hearing May 24.

The project has been scaled back from roughly 3 million square feet of medical offices, clinics and parking to about 1.1 million square feet, mostly on 30 acres within the Eastowne Drive loop located off U.S. 15-501.

Another 20 acres lies between Eastowne Drive and the Interstate 40 off-ramp.

UNC Health is offering to put half of that land — designated as a natural heritage area — in a conservation easement. The other half would be reserved for possible parking in the future, officials said.

Council members are excited about the opportunities for affordable housing.

“UNC Health needs to be in Chapel Hill, and Chapel Hill needs UNC Health to be here, and so I’m really grateful that UNC wants to make this magnitude of investment in our community,” Council member Michael Parker said at Wednesday night’s council meeting.

UNC Health’s 25-year plan would add six new medical buildings (blue) to the Eastowne campus off U.S. 15-501 and four new parking decks. The only construction planned outside the loop -- on 20 acres of natural resource land -- would be a parking deck, if needed.
UNC Health’s 25-year plan would add six new medical buildings (blue) to the Eastowne campus off U.S. 15-501 and four new parking decks. The only construction planned outside the loop -- on 20 acres of natural resource land -- would be a parking deck, if needed.

But they also want to save the 20-acre natural heritage area, council members said.

“This is the only thing like this in town,” Council member Amy Ryan said. “We have very, very few opportunities to do something of this magnitude on an environmental level, and unfortunately, it is ground zero on your site. That would be a huge gift to the community ... to preserve that.”

UNC Health says the Eastowne redevelopment is crucial for outpatient needs and freeing space at the Manning Drive complex.

Eastowne’s first new building in decades opened in 2021, along with a parking deck. Construction of a second building could begin as soon as it is approved, said Simon George, vice president for UNC Health Care System real estate development.

Four additional buildings — and four more parking decks — could be built roughly one every three to five years if the Chapel Hill Town Council approves the proposed master plan.

Project details

▪ Developer: UNC Health Care

▪ Location: 50 acres at Eastowne Drive, Fordham Boulevard and Interstate 40.

▪ Zoning: Office and institutional, but a rezoning would allow more dense development

▪ Current use: UNC Health Care medical buildings and parking deck

▪ Proposed use: Full medical campus buildout, including seven medical buildings and up to five parking decks, with between 3,500 and 4,700 spaces.

A preliminary rendering of the UNC Health Eastown campus, as seen from the existing parking deck, shows how the next medical building (at right) and future buildings would be connected and look in relation to their environment.
A preliminary rendering of the UNC Health Eastown campus, as seen from the existing parking deck, shows how the next medical building (at right) and future buildings would be connected and look in relation to their environment.

Revolving loan for affordable housing

Elected officials and town staff have been discussing for years how UNC-Chapel Hill and UNC Health should help to provide affordable housing, much of which could serve their employees. UNC Health offered three options Wednesday, including two options that would each provide about 60 affordable units.

The council was most interested, however, in a $5 million revolving loan fund that staff said could create 500 to 1,000 housing units over 20 years. Adding town money to the fund and seeking more money from community foundations, the university, private banks and investors could increase the potential, staff said.

The program would be like one UNC started in 2015 for the Northside Neighborhood Initiative. The $3 million, no-interest revolving loan fund helps buy and preserve land and homes for families.

Council members unsuccessfully pushed Wednesday for UNC Health to do more. Council member Adam Searing alluded to UNC Health’s record $891.1 million profit during the pandemic and $305 million in advance Medicare payments that were later paid back to the federal government.

“We’re talking about hundreds of millions of dollars floating around, and it just seems like for something that’s so important as housing, which would be a lot of your employees, I would think, we could come up with a little more money for a loan program,” Searing said.

UNC Health provides several community benefits now, including nearly $34 million in unreimbursed health care to Chapel Hill residents in 2022, George said, and $1.6 million in property taxes, either through direct payments, payments in lieu or rent to landlords.

The medical provider paid about $46,000 to Chapel Hill and $73,000 to Orange County last year instead of property taxes for a medical office building at Eastowne, UNC Health spokesman Alan Wolf said. Roughly 24% of that went to public safety services, he said.

UNC Health cannot give more money or a grant instead of a loan, George told Searing. The focus is what Chapel Hill wants “in order to help to support the Complete Communities, in order for us also to get this project entitled,” he said.

Parking deck or environmental conservation

The 20-acre natural heritage area includes old-growth hardwoods and wetlands and streams that feed New Hope Creek. It’s also one of the last remaining wildlife corridor links between Duke Forest and Jordan Lake.

The plan to only preserve 10 acres is opposed by many residents and the town’s Environmental Stewardship and Stormwater Management Utility advisory boards, who want the entire tract preserved.

On Wednesday, George said UNC Health won’t build the new parking deck until there’s a need. The current zoning already allows UNC Health to build 250,000 square feet of mixed-use and office construction with staff approval, staff said.

Searing and Council member Jessica Anderson encouraged UNC to sell the 20 acres to a conservation group and use the money to support other “opportunities,” whether that’s affordable housing or parking decks on other land.

A draft diagram explores how UNC Health’s Eastowne campus could be integrated with a potential redevelopment of The Parkline campus across U.S. 15-501 and housing communities proposed for East Lakeview Drive, Old Durham Road and Pope Road.
A draft diagram explores how UNC Health’s Eastowne campus could be integrated with a potential redevelopment of The Parkline campus across U.S. 15-501 and housing communities proposed for East Lakeview Drive, Old Durham Road and Pope Road.

How to get people, cars around

How people get to and from the campus will also be key to a successful project, Mayor Pam Hemminger said.

The area is filled with apartments, clinics and offices, a Wegmans grocery store and The Parkline office building are located across the highway, and at least several hundred more apartments, condos and townhomes are planned just south of The Parkline. Eastowne Drive, and U.S. 15-501, are busy corridors for cars and dangerous for pedestrians.

The Eastowne expansion includes multi-use paths north of the highway, and a future bus-rapid transit route could connect Chapel Hill and Durham along the highway, but how to get pedestrians and cyclists across the highway remains a sticking point.

A pedestrian bridge, while considered for the corridor at one time, is not the best option, Hemminger said. UNC Health is on board with any proposed solutions, George said, depending on the cost.

The issue remained unresolved Wednesday night.