Title
Interlocal Agreement with the City of Charlotte - Providence Square Redevelopment
Action
ACTION:
1) Adopt a Resolution approving an Interlocal Agreement with the City of Charlotte for the reimbursement of public improvements to be constructed by a private developer in support of new economic development opportunities by committing 45% of the incremental ad valorem taxes created by the project for a period of fifteen years in the amount not to exceed $12,130,000 (together with interest on such amount at a customary municipal rate).
2) Authorize the County Manager to execute a contract for the same, with any necessary or helpful nonmaterial changes.
Staff Contact: Roger Johnson, Director, Office of Economic Development
Presentation: Yes
BACKGROUND/JUSTIFICATION:
Levine Properties is leading a joint-venture development initiative to redevelop an existing area with 60+-year-old apartments & commercial uses known as “Providence Square” on 84 acres at Providence Rd./Old Providence Rd. & Sardis Lane in Charlotte, NC. The redevelopment goal is to replace deteriorated units & create ±975 new units with 100 units being reserved as workforce housing at 80% AMI and 8 units being reserved as affordable housing at 60% AMI, and 225,000 sf of updated commercial uses including smaller format retail, grocery store and neighborhood office & other recreational and institutional uses.
Levine Properties is coordinating with Northwood Ravin (together, the “Developers”) on the sale and redevelopment of 20 acres across Providence Rd. by Northwood Ravin for up to 745 residential units. Separately, it is noted that the Developers have coordinated with Horizon Development Properties on its successful rezoning of the Gladedale housing community to allow up to 75 affordable units.
As part of its community commitments, the Developers will undertake the following efforts, which will be monitored by the County on a quarterly basis:
• Developers will support County Park & Recreation goals with park land donation & greenway improvements:
• 4.4 acre park land donation (est. $2.9 million)
• Monetary contribution to park activation ($1 million)
• Greenway bridge (est. $2.5 million) and multi-use path & trail improvements (est. $3.25 million)
• Good faith efforts to activate buffer areas (determined by developer and County staff)
• Supports County/City housing goals with units in South Charlotte;
• 100 workforce units at 80% Area Median Income on Levine site
• 8 affordable units at 60% Area Median Income on Levine site
• $500,000 Developer Contribution to City/County Housing Initiatives
(It is noted that Horizon has separately successfully rezoned its property to increase existing 49 affordable units to 75 units at 30%-80% Area Median Income)
• Supports County/City diversity and economic mobility goals:
• MBE minimum target of 15% and WSBE minimum target of 10%
• Other economic mobility & community building initiatives
• Supports County/City sustainability & environmental goals:
• Stabilized water/sewer usage, mobility hub/Electric Vehicle charging, ped/bike facilities
The total redevelopment private investment is estimated at $490M over the span of six years starting from 2026. The Developers will be funding the project utilizing private funding, except for the Tax Increment Grant (TIG) public funding request.
The total TIG request between the Mecklenburg County and the City of Charlotte will be a not to exceed amount of $19,000,000, ($12.13M from the County, and $6.87M from the City- plus interest at a customary municipal rate) and based on the following eligible infrastructure improvements per the Interlocal Agreement:
• Multi-Use Path Connecting McAlpine Creek to Mixed-Use Village (estimated cost of $3,000,000)
• Multi-Use Bridge Spanning McAlpine Creek and Connecting to Greenway (estimated cost of $2,500,000)
• Providence Road & Other Off-Site Public Street Improvements (estimated cost of $12,500,000)
• Providence Road Corridor Access Management Improvements (estimated cost of $2,200,000)
• Total Estimated Costs - $20,200,000
The mechanism to finance this reimbursement will be the dedication of 45% of the new, incremental ad valorem taxes created by the project to be constructed by LNR Development, LLC (a joint venture by the Developers for purposes of executing the infrastructure improvements). This mechanism is pursuant to Article 20 of Chapter 160A of the North Carolina General Statutes. Under this Article, the City of Charlotte will enter into an infrastructure reimbursement agreement with LNR Development, LLC for the entirety of the $19,000,000 net present project cost. The City of Charlotte and Mecklenburg County will enter into an interlocal agreement in which the County will remit to the City 45% of the County’s incremental ad valorem taxes for a period of no more than 15 years for an estimated net present value of $12,130,000.
The developers made a presentation to the Mecklenburg Board of County Commissioners’ Economic Development Committee on December 3, 2024 and received a Notice to Proceed to the Public Hearing on January 22, 2024, contingent upon the Economic Development team verifying financials associated with the projects (e.g. the 84 and 20 acres) and completing a REMI analysis and feasibility study that satisfy the Mecklenburg County standards.
The Developers presented their infrastructure reimbursement and interlocal agreement request to Charlotte City Council on December 9, 2024, which was approved.
PROCUREMENT BACKGROUND:
N/A
POLICY IMPACT:
N/A
FISCAL IMPACT:
N/A