By Madison Lipe for THE PAPER
Morganton leaders took steps Monday to encourage new housing developments, voting to give a developer more time to move forward with a delayed apartment and townhome project, while also expanding the city’s housing stimulus program to support additional residential construction.
Construction costs, design feasibility, and market conditions have put delays on Morganton’s East Meeting Street townhome and apartment project, one that’s expected to be the largest residential development in the downtown area. On Monday evening, city council voted to give 400 Meeting Street, LLC more time to bring in a revised plan with 81 residential units.
Of the units, the developer plans on 65 of them being rental apartments and 16 being townhomes that will either be for sale or rent. Under the redesigned plan, the apartment buildings will front East Meeting Street, and the townhomes will front Union Square Drive.
The development is expected to have parking, accessories, and open space as required by the city’s zoning and building codes. Under the amended development agreement, all zoning and building permits have to be obtained by the developer on or before Dec. 31.
At the latest, construction must begin by May 1, 2027, which is four months from the date the developer should have final approval of plans and permits, including all required transportation, environmental, or other applicable federal, state, and municipal agency or department approvals.
If for some reason 400 Meeting Street, LLC does not meet the timeline that’s outlined in the revised agreement, the city has the right to purchase the property back.
“At the end of the day, our goal is the same,” City Manager Sally Sandy said. “We want additional housing and we’re not as concerned with buying the property back.”
The project is expected to be the largest residential development in the downtown area, Sandy said. For major projects like Murphy’s Farm Apartments and Riverbend Apartments, it takes years of back-and-forth communication between developers and city staff.
“This is how big development works,” Sandy said. “It all comes back to the market, interest rates, borrowing, financing, all that stuff.”
In May 2023, the Morganton City Council approved a 90-day extension for the sale of six adjoining properties on East Meeting Street between White Street and Church Street to 400 Meeting Street LLC, moving the closing deadline to Aug. 10.
The contract had originally been approved in January 2023. At the time, City Attorney Louis Vinay said the buyer had worked diligently to move the process forward and had remained in frequent contact with the city. The city also retained $21,250 in earnest money already paid by the purchaser.
More than a year later, the long-discussed downtown housing project remained alive, but still unfinished. In August 2024, City Council approved yet another extension, this time pushing the closing date back three months to Nov. 5.
That vote marked the fourth extension since the contract was first approved in January 2023 and required the developer, 400 Meeting Street LLC, to add another $10,000 in earnest money to the $41,000 already being held in the city’s trust account.
City officials said the continuing delays were tied to title problems involving the property. The developer wanted to ensure that any issues involving people who might have claims to portions of the land were fully resolved before completing the purchase, adding another hurdle to a project that has faced repeated delays despite remaining active.
The project is part of a larger development to construct additional townhomes and apartments on a piece of land directly across Church Street from the property. Since that land was not purchased from the city, the timeline for that development is up to 400 Meeting Street, LLC.
Sandy expressed confidence that the project is getting closer to becoming a reality.
“They’re far enough along in looking at the development, pricing it, and looking at ways to get private financing,” Sandy said. “They are putting in money themselves, the group of investors, and then also private financing, commercial financing.”
Sandy added that whether all of the units will be for rent or for sale is still to be determined, but she did say that the developer is looking to cost the units in a way that they would construct them so that even if they were rented first, they could be later sold.
“Just for perspective, this is about a $16 million project,” Sandy said.
Mayor Pro Tempore Wendy Cato expressed confidence in the partners involved with the project due to a conversation she and Councilman Butch McSwain had with them.
“You can see the success there,” Cato said.
“I would just urge that people who have commented through the years about the delay, to think about the cost and investment these people are making,” McSwain said. “They have spent lots of money already, so I know they’re serious and it was refreshing to get to meet them, and I feel real good about moving along with the changes.”
The council voted unanimously to approve the amended development agreement.
HOUSING STIMULUS PROGRAM CHANGES
The city council made another move to target the need for more housing in Morganton through broader allowances in the city’s single-family housing stimulus program.
The program was created back in the 1990s, when the city was trying to get subdivisions developed, according to Sandy. In 2021, the city re-energized the program again after a period of inactivity of new housing developments, she said.
One of the original components of the policy was that the city could provide money for infrastructure, including water, sewer, and street development at the beginning of a project to encourage more housing.
If the developer follows through with all of the requirements, then they are able to have half of the money as a grant for the public infrastructure serving the property.
The original program only allowed owner occupied housing, but with the current market conditions, Sandy said it makes sense to include rentals that could later be sold. This would not include apartment complexes, but instead townhomes, and single-family homes that are for-rent.
“Even if they’re rented, this policy still works,” Sandy said. “We’re still creating infrastructure to support housing that our community really needs.”
The changes also set the maximum number of units per project from 30 to 25, and it sets up the repayment plan to begin when the property is rented. The council voted unanimously to adopt the changes to the housing stimulus program, emphasizing a need for more housing in Morganton.
“This is a policy we really need,” said Mayor Ronnie Thompson.