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The Hendersonville City Council on a 3-2 vote Thursday chose a developer for the old Grey Hosiery Mill who plans to renovate the 98-year-old structure for an expanded Wingate University campus.
Council members met for an hour and 12 minutes before emerging from a closed session to vote on the decision. Mayor Barbara Volk joined council members Jeff Collis and Jerry Smith in voting yes; councilmen Steve Caraker and Ron Stephenson voted no, saying they preferred residential development.
"We started this project (several years ago) off and on and we've discussed it since 2005," Collis said. "I have never supported residential, low, high or medium income. I think it's the wrong place. It's right next to Courthouse overlooking the jail. I think any residential we put in there would end up becoming dilapidated or end up being vacant like we see so many other properties on that street."
Stephens defended the idea of residential.
"I very much support the university there, and I also very much support housing there ... and I think it would help bridge the gap between Seventh and Main," he said. "I would have voted for White Challis," a proposal for 30 loft apartments.
Mayor Volk said: "I have a problem seeing housing in that area. That's why I prefer to go with the proposal that did not include housing."
Caraker also supported housing, saying it would do more to spark redvelopment of Seventh Avenue than other proposals the council received.
Wingate now holds classes for its pharmacy and masters in business administration degrees in rented space on North King Street. Robert Englander, the president of the CathFord consulting company, said Wingate plans to add physical therapy and physician's assistant degree programs, triggering the need for another 10,000 to 12,000 square feet of space.
90 days to prove project can work
The council's vote gave Richmond-based CathFord 90 days "to demonstrate to the City Council that they can perform in accordance with their proposal." That includes proof that Wingate is on board for the project.
The council's vote requires the developers to show "that they would be able to come to an agreement with Wingate," Mayor Volk said. She said city leaders have talked with Wingate officials.
"They are interested in the proposal but they do have some requirements so Mr. Englander will have to be able to fulfill Wingate's requirements," Volk said. If CathFord and Wingate can't reach an accord, "then we'll talke about it again," she said. "We did not make a second choice. We'll go back and talk about it."
The council heard ideas Monday that ranged from the expanded Wingate campus to a retail marketplace to "live-work" lofts to rent-subsidized apartments.
The developers made the presentations in response to the Hendersonville City Council's request for ideas for use of the city-owned mill property and its historic centerpiece built in 1915.
Two of the developers proposed loft apartments, one that would be more upscale and another that would be affordable housing.
In its financial analysis of the Wingate project, CathFord estimated the construction costs of $6.7 million, including $325,000 for exterior façade repairs, $1 million for interior improvements, $492,000 for interior demolitions and environmental abatement, $447,000 for design and engineering, $76,000 in legal fees, $417,844 in financing costs, and $590,000 for project management and other administrative costs.
The developer projected a construction loan of $5.3 million that would require an annual payment of $397,000. It projected that Wingate would pay $451,000 a year in rent.
CathFord president Robert P. Englander Jr. told the council that his company had done projects ranging from 8-unit apartment buildings to a 100,000-square-foot mixed use building. The company proposes converting the mill to classroom space for Wingate University's expected expansion of programs including physicians assistant and physical therapy programs.
"We want to convince you and the community first, and then we've got to go to Wingate University and negotiate," Englander said. "The mill's in stable condition but needs a great deal of work."
Company officials have talked with Wingate officials, whom they described as bullish about expanding in Hendersonville. Englander said at one point that Wingate had just signed new leases that expire in 2015, then said it might be 2016.
"We feel like as Wingate grows — and we think Wingate wants to grow in the community — that there is space available so we can take that parking space and build additional space on that site," he said. "At that point we would be looking for parking elsewhere and we'd fight that fight when it comes."
Like the other developers, he declined to go into specifics about the price his company would be willing to pay for the property. "At what price we need to move more deeply into the weeds on that," he said.
The earliest the Wingate option could be ready is August 2015, he said.
Wingate University has outgrown its leased space on King Street and will need 10,000 to 12,000 square feet of additional space for the new degree programs in Hendersonville, the developer said.
The CathFord team includes CJMW architects, who guided the renovation of the Hendersonville City Hall in 2006. Another partner is contractor Frank L. Blum Construction of Winston-Salem.
Englander, the managing partner of the consulting company, has consulted on 350 projecte valued at more than $1.5 billion in Virginia and Texas, his proposal said. The company has "extensive experience" in the use of historic tax credits and other tax credits available in North Carolina for redevelopment of old textile mills.
"Main Street is bustling with retail establishments and is very pedestrian friendly due to its wide sidewalks, easily identifiable crosswalks, and traffic calming practices," the proposal said. "The location of the Mill two blocks from this active retail thoroughfare and a block from both City Hall and the County Courthouse, make it a natural fit to connect the areas with an additional active, and vibrant precinct.
"Conversations with business owners have confirmed that the connection of the Mill site to Main Street retail and
the nearby public buildings (Courthouse and City Hall) will allow more organic growth in the intervening blocks and help activate the entire area, rather than just pieces.
"While the Mill is in stable, but fair condition, requiring substantial investment to stabilize and renovate, it sits on approximately ½ city block and is well located to be an anchor for development to the east from Main Street offering additional economic development opportunities for future growth.
"Wingate University currently offers educational opportunity in Hendersonville through its Pharmacy Program, currently located in a nearby office building. This program has been extremely successful in Hendersonville and Wingate has plans to expand local program offerings to include a Physician's Assistant Program and a new Physical Therapy Program."
Built by Captain James P. Grey and son James P. Grey Jr., the mill originally made children's socks. Owners added other buildings in 1919 and 1947. The property, listed on the National Register of Historic Places, is the last remaining industtrial building from the era in Hendersonville. The property contains eight buildings and a total of 28,135 square feet.
On Monday council members asked the developers about their financing and their timetable, and asked what kind of support they expected from Hendersonville. None said they would seek money from the city as part of a partnership, although some said their projects depend on the city either giving away the property or selling it at a price that would make their project feasible.
Three other presenters pitched projects on Monday.
Olde Mill Place
Marie France N. LaChance, the owner of Nonesuch House & Home décor store at 234 N. Main St., and John Kennedy, the owner of Trinity Construction of Hendersonville, described an upscale retail shopping area with food and an event space.
LaChance said she has been disappointed in the number of local shoppers on Main Street.
"We're not drawing that local traffic. Our concept is to create a marketplace, another destination point," she said. "Downtown Main Street will more than double in size and function. I would love to see it come back to life, not just be that shell that you drive by on Grove Street."
Kennedy said the project, called the Olde Mill Place, has "financing coming from Chicago, New England and Wells Fargo."
Council members wanted to know when they would find out what the finished project would be. If the council selects the partnership, Kennedy said, the next step will be project design. "Once we know, we'll give you a full set of renderings that will show you exactly what it will look like," he said.
The White Challis Redevelopment Co. proposes upscale loft apartments that would be rented for five years and could turn into condos after that. The team includes president Chris Challis, a partner, Jack White; Austin Fazio, of Hendersonville; Scott Johnson of Greenville; and Jim Hall, the owner of Investors Realty Group.
"I'm very pro-downtown Hendersonville," Fazio said. "Our family has been in Hendersonville a long time, the family business (golf course designer Tom Fazio's TJF Enterprises) has been on Main Street for 15 years. My wife and I, we don't go anywhere except for Main Street. It's not just the seasonal tourist anymore, we have young and old downtown, I see it all the time, and it's year-round."
White said the environmental remediation is an important part of the project. Tests have shown groundwater contamination that will have to be cleaned up.
The developers proposes 30 500- to 1300-square foot lofts in the historic mill and four townhomes as a flex feature.
Coucilman Jeff Collis probed the developers about the finances of Investors Realty.
"If we're giving he property to somebody we would not want that property to be at risk of foreclosure when there's foreclosed property all over town," Collis said.
Challis responded that he was not aware that was true of IRG.
"You always have some inventory you're working on. We do back home."
Collis, a probation officer, asked the developer what effect jail expansion would have on a residential development. Collis said the county has plans, perhaps by 2020, of expanding the jail all the way to Fourth Avenue.
"We're very concerned about perceptions but we are also a group that knows how to manage perceptions," Challis said.
White Challis Redevelopment Co. also said in its proposal that it would use the 1949 brick addition of the mill, at Grove and Fifth, for Wingate's programs.
The proposal envisions a mixed-use development of 30 urban loft apartments, two "commercial flex units" for office or retail and four "live-work" brownstone units on Fourth Avenue East.
The team includes architects Johnston Design Group and contractor Triangle Construction.
Grey Mill Lofts
The Landmark Group, of Winston-Salem, proposes the Grey Mill Lofts, using all but a 1960s addition in an adaptive reuse of the historic mill. Landmark says it will build up to 60 live-work lofts for artists plus offices, galleries and a black box space for the Arts Council of Henderson County, which it lists as a partner.
The apartments would be available only for low- and moderate-income couples and families. The financing of the mill renovation depends on state tax credits from the N.C. Housing Finance Agency. Landmark has done many mill and warehouse renovations, said Rex Todd, one of the team members.
"We do historic preservation to a fault, we live it breathe it," he said.
Patty Smyers, executive director of the Arts Council of Henderson County, board member Carol Walters also spoke in favor of the Landmark proposal.
Apartments would rent for well-below market values, with the housing finance agency covering the difference.
A one-bedroom loft would rent for $312 to $624, compared to the market value of $655; while a two-bedroom unit would rent for $375 to $750, under the market rate of $777, said team member Vann Joines,
The state housing agency would require the rent-subsidized tenants for 30 years, Joines said. The company plans to have three-quarters of those on the higher end of the eligible income and a quarter on the lower end, he said.
The Grey Mill Lofts proposal is not a certainty. The developer would submit an application next May and could start work in 2015. The N.C. Housing Finance Agency last year received about 150 applications and funded 32.