Editor’s Note: This is the first part in a series regarding mixed-use projects and the market for commercial space and student housing in Boone.
By Jesse Wood
In the past few years, a number of mixed-use projects, which consist mostly of commercial space on the ground level and apartments above, have popped up in the Town of Boone and are currently in the planning or construction phase.
Winkler Square, located across from Hardee’s; Highland Crossing, located adjacent to the old Watauga High School; 494 Lofts across from the Boone Saloon; The Standard of Boone next to McDonald’s (under construction); and Rivers Walk at the old Southern States site in downtown, (being planned) are among recent examples of current or potential mixed-use developments in town.
Boone Planning Director Bill Bailey said that the mixed-use trend began in Boone around 2008, which is when planning for the Boone 2030 plan (The Smart Growth Plan for the Heart of the High Country) first started.
(This was also about the time that the 50,000-square-foot Boone Point development was under construction. Boone Point was touted as being the town’s first modern mixed-use development in town, according to the Boone 2030 plan. Boone Point is located at the corner of N.C. 105 Extension and U.S. 421.)
The Boone Town Council later adopted the Boone 2030 plan in the fall of 2009.
The plan cited pedestrian-friendly, higher-density, mixed-use development among future planning priorities.
This plan was also referenced months later in the spring of 2010 when the Boone Town Council enacted a 60-day moratorium on issuing building permits for multi-family housing developments (apartment complexes) in Boone’s business districts. (For: Jamie Leigh, Lynne Mason, Andy Ball, Rennie Brantz; Against: Stephen Phillips)
The 60-day timeframe allowed town staff and the town attorney time to prepare an amendment to the Unified Development Ordinance requiring mixed-use development for apartment complexes in the town’s business districts.
At the meeting that this moratorium was enacted, Andy Ball, former mayor who at the time was a councilman, said that he felt the apartment complex that was built in place of the demolished Lone Star Steakhouse on Blowing Rock Road should have incorporated retail space since it was located on a main corridor.
In addition, council members were concerned, according to language in the emergency ordinance, that the “town’s business districts are quickly being converted to 100 percent apartment development which … is causing the town to develop in undesirable and detrimental ways.”
In 2013, the Boone Town Council revisited the issue of student housing and adopted the controversial multi-family housing standards recommended by the town’s Affordable Housing Task Force and then the Planning Commission.
(Boone Town Council 4-1- For: Jamie Leigh, Lynne Mason, Andy Ball and Rennie Brantz; Against: Allan Scherlen — Planning Commission 5-4: Aye -Phoenikx Buathier, Robert Cherry, Donald Dotson, Cameron Lippard, Tom Purpur & Nay – Webb Alexander, Susan McCracken, Greg Simmons, Eric Woolridge) — Affordable Task Force Members: Lynne Mason, Jamie Leigh, Phoenikx Buathier, Cameron Lippard, Vice Chair Pam Williamson and Chair Lynnwood Brown)
These standards were designed, for one, to diversify the town’s housing stock, moving it away from solely student housing, according to Planning Director Bill Bailey.
“The driver behind this was to try to get housing that could be used by family or students,” Bailey said, adding that apartments designed for transient students and those designed for families have much different floor plans and features.
The 2013 amendments under section 15:10 of the UDO allow for only two unrelated people to live within a unit in new developments. Any unit with more than two bedrooms requires a “master suite” bedroom that is at least 25 percent larger than other bedrooms. Other changes include required garages or carports and 50 square feet of storage space, a 0.5 ratio of outdoor livability space and limiting parking spaces to two per unit.
Developers wanting to build apartment buildings could bypass those regulations and build under the section of 15.11, which is more geared toward mixed-use development.
If a developer wanted to build apartment complexes in a single-use building within a mixed-use project, then they have to agree to build the commercial space in the initial phases.
“The approved exemption would allow for the new standards to be bypassed in mixed-use projects so long as either, the commercial properties are built in the first phase of construction; no more than one-third of the multi-family units are built prior to completion of all commercial buildings; or the developer offers financial commitments in advance to finish all the residential and commercial properties,” HCPress.com reported in February of 2013.
Since these standards were enacted, Bailey said that only one project has been completed under the 15:10 standards: Winkler Oaks, which is located at Oak and Pine streets.
“We’ve had several developers come in and talk about developing under 15:10, but they found it complicated and they went away,” Bailey said, adding that most choose to develop under 15:11. “Part of the complaint I get is the claim that the covered parking is too expensive.”
For his new apartment complex on Oak Street, John Winkler of the Winkler Organization didn’t have to build commercial space because the zoning didn’t require a mixed-use development. He did say that he had to pass the extra cost of the required car garages and storage space on to the tenants, who are primarily students.
“All the new requirements are going to drive the cost up for the tenants,” said Winkler, who seemed to have an “it-is-what-it-is” response to High Country Press on the town’s regulations pertaining to apartments.
“If you have the proper zoning, it’s usually no trouble,” Winkler said. “There’s going to be hurdles and having these requirements are going to drive the cost up. But if that’s what you have to do, you have to do it.”
But if not for the mixed-use requirement enacted several years ago, Winkler Square, across the street from the Holmes Convocation Center, probably wouldn’t have vacant commercial space underneath its 42 bedrooms.
When asked if he would build the commercial component in his developments if he didn’t have to, Winkler, which operates nearly two-dozen properties, simply said, “No.”
Winkler added that it’s been “very difficult” to find a commercial tenant to fill the commercial space in Winkler Square.
“We think we have it partially rented,” Winkler said. “There are a lot [of commercial spaces] available, but hopefully as the economy improves people will be encouraged to open up new businesses.”
With the vacant commercial space that exists at Highland Crossing and the commercial space that will be available once The Standard of Boone and Rivers Walk and Shadowline sites are online and fully developed, the landscape for commercial space, under apartments or otherwise, looks to be more competitive in the coming years.
See other docs:
Minutes from Planning Commission (Feb. 11, 2013)
Minutes of Quarterly Public Hearing (Feb. 4, 2013)
In Part 2, High Country Press will speak to a local commercial real estate expert or two about how these factors affect the commercial market in Boone. We’ll also talk to elected officials that took part in the related revisions to the UDO and gather more opinions from developers on these multi-family housing regulations.