Schewel softens stance on Whitted subsidies

Mar. 15, 2013 @ 06:17 PM

A previously skeptical City Council member says he’s “coming around” on the idea of the city’s helping subsidize the proposed renovation of the former Whitted Junior High School.

“If we can put in a little bit, relatively, to make it happen, I’m not absolutely against that,” Councilman Steve Schewel said this week after the project’s backers briefed the Joint City/County Committee. “But I have to see the numbers before I decide.”

County officials are working with an Atlanta developer, The Integral Group, to convert the former school into apartments for low-income seniors and a preschool run by the Durham Public Schools.

Integral is counting on the county and the school system underwriting about $6.5 million of the renovation’s $15 million to $18 million cost.

The company has also sought a $500,000 contribution from the city – money that would come from the “penny for housing” reserve the council set up last year with the proceeds of a 1-cent increase in the city’s property tax rate.

Schewel and another council member, Diane Catotti, had signaled that they were dubious about the city’s taking part. They cited the city’s massive investment in the nearby Rolling Hills redevelopment and said the county should take the lead on any subsidies for Whitted.

But the $5 million DPS would put into work on the preschool is coming from sources controlled by the County Commissioners, who likewise have final say over $1.5 million in proposed direct subsidies by their government.

Schewel, who attended Monday’s joint committee meeting, said he still wants to see figures for the amount of private equity Integral and its local partner, Forty/AM, are bringing to the table.

“I want to be satisfied that the private commitment is adequate,” Schewel said, adding that his impression is that the developers’ equity “is not large.”

The full council is scheduled to receive a briefing on the project next week, during its Thursday work session.

Also on the Whitted front, Schewel said he’s now “convinced it’s a good thing” that the project might receive an allocation of Section 8 vouchers from the Durham Housing Authority.

Integral wants DHA to assign vouchers to 50 of the 89 apartments it hopes to create.

DHA in handling Section 8 vouchers has the option to make them available to program clients to use anywhere in the city, or to tie them to specific projects.

Schewel had questioned the idea because any allotment to Whitted would have to come from DHA’s existing voucher pool, the size of which is limited by the federal government.

That means an allotment to Whitted, while benefiting the project, would lower the number of vouchers available for rentals elsewhere.

Schewel said he now can go along with the idea because Integral and Forty/AM will be providing quality housing.

“I would ideally hope for additional vouchers, but that’s not the situation here,” he said, indirectly acknowledging that DHA has no control over federal budgeting decisions for Section 8.