Meeker: North Hills Doesn't Deserve Public Funding
Posted August 16, 2007 11:35 a.m. EDT
Updated August 16, 2007 4:16 p.m. EDT
Raleigh, N.C. — Mayor Charles Meeker sent a sharply worded memo Thursday to City Council members, outlining his opposition to providing a local developer with $75 million in public financing for a planned project.
Developer John Kane has asked the city to underwrite a parking deck for his North Hills East project. The $800 million mix of shops, offices, residences and a retirement community would sit on 45 acres along the Interstate 440 Beltline at Six Forks Road.
The tax-increment financing Kane has requested would involve the city's borrowing the money and repaying the loan with revenue generated from higher tax valuations on the project and nearby properties. The city would pay more than $140 million over the 20-year life of the loan.
Meeker stated three reasons for his opposition to Kane's request: It's bad public policy, Kane is underestimating the development he could undertake without public money, and a state law prohibits any refund of paid property taxes.
North Hills East would sit across Six Forks Road from Kane's thriving North Hills retail, office and condominium project. Kane also has already struck a deal for an office building and a residential project at North Hills East.
"Given all of these factors, it does not make sense for the city to intervene in the market to cause development to occur that the market would otherwise not support," Meeker wrote.
Kane said he has been waiting for more than a year for the City Council to develop a policy governing public support of private developments.
"I'm not sure why he's attacking our project when they haven't even developed a policy," Kane told WRAL.
Meeker also pointed to projects near Crabtree Valley Mall and along Oberlin Road to demonstrate that dense developments can occur without public support. Kane has said that without the city's help, North Hills East would more closely resemble a strip mall than his mixed-use North Hills development.
But Kane said he wouldn't determine the density of development at North Hills East. Under the guidelines of a public-private partnership approved last month by the Wake County Board of Commissioners, a third-party adviser would oversee the development's density, he said.
"What we have proposed is in line with the county's policy," he said.
Meeker also cited state law barring refunds of property taxes and said the city might need to obtain a legal opinion to determine if using tax revenue to repay a loan amounts to such a rebate.
"By my count, we have over 20 projects in various stages of development that involve structured parking," he wrote. "It would be improper, and indeed inequitable, to provide free parking to one builder of a development with structured parking while all of the other builders are expected to pay for their own parking decks."