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Haywood County’s old hospital is set to get a new life after commissioners agreed last week to sell the building for use as low-income housing for the county’s senior citizens.

Following discussions in closed session at their Nov. 15 meeting, Commissioner Mark Swanger made a motion to sell the building to Fitch Development company for $1.275 million.

The sale, however, is contingent on the development company reaching several different benchmarks before the deed is handed over.

“There’s a lot of things that have to happen,” explained interim county manager Marty Stamey, one of which is garnering a historic property designation and listing on the National Register of Historic Places.

The company would have to apply for tax credits from the N.C. Housing Finance Agency. If the buyers can jump through those hoops, the county has agreed to front them a 20-year, $159,000 loan at 2 percent interest to get the project off the ground, and increase its competitiveness for the tax credits. Under current plans for the building, that would amount to $3,000 per unit.

Those figures might change, as the final number of units to be housed in the former hospital hasn’t been determined.

This offer is contingent on the fact that all these things come into play,” said Stamey, “but [on the current timescale] the developers would start environmental remediation and construction in April 2012.”

The building is currently home to the county’s Department of Social Services and the Board of Education. While DSS has found a new home in Clyde’s former Wal-Mart building, the Board of Education will now have to find a new space before construction gets under way.

The current plan for the building calls for 53 units. As construction draws closer, an analysis will be done to assess the current needs of the county. The results of that study may change the type and number of units.

The offer from Fitch was one of two bids presented to commissioners and offered the highest purchase price for the property.

Stamey said he sees this as a win-win for the county, who will not only get a good price for the building and pull in more tax revenue, but a valuable piece of Haywood County history will be preserved and maintained. And, elderly residents will find the housing they need.

“There’s a serious lack of elderly housing that’s affordable for seniors in our area,” said Stamey. “A lot of counties and municipalities are doing this across the state, and one of the worst things you’d want to see is for the hospital to sit up there and be a dinosaur and just deteriorate away. It has so much historic value to so many people.”

Built in 1927, the massive brick building was the first county hospital in North Carolina. It was renovated in 1955, but a full-scale renovation would, today, cost about $6 million, more than the county could afford on its own. The sale would not include the site’s excess parking or the building that now houses the Smoky Mountain Center.

Come the start of fall semester, some Western Carolina University freshmen could find themselves residing in unusual living quarters.

A delay in the construction of a new residence hall is forcing WCU staff to scramble for places to put incoming students — and solutions range from creative to cramped.

Balsam Hall, which will house 426 students, including members of the university’s honors program, was supposed to be completed Aug. 1 after a year-and-a-half construction process. But on Aug. 21 — freshman move-in day — just 236 beds will be ready for students, putting about 200 freshmen in a bit of a bind.

“I haven’t yet given up hope it’s going to make it on time, but we have to look at what’s most likely,” said Keith Corzine, director of residential living for the university.

The construction of Balsam Hall is the first phase of a two-phase $50 million project, which will also include the construction of the similar-sized Blue Ridge Residence Hall. The buildings will be the most state-of-the-art dormitories on campus, featuring bathrooms shared by just two students, study spaces, public kitchens and lobbies.

“From the quality of life perspective, it’s a huge gain,” Corzine said.

But the very likely scenario is that phase one of the project, Balsam Hall, won’t be finished on time. Corzine attributes the hold up to a number of construction factors, including delays at critical times and unforeseen challenges with structural work. May was one of the wettest months on record in recent years, Corzine said, which didn’t help things.

“I think we worked through a variety of issues,” he said.

That means making other arrangements for students, hopefully temporarily.

“We think there’s a really strong possibility that anybody inconvenienced by not being able to get in on time would be able to get in around Labor Day, so any inconvenience would be limited to a matter of a couple of weeks,” Corzine said.

Corzine said the university hasn’t decided just where it will house students. One option is Madison Hall, typically used to house graduate students and conference attendees. Grad students could be relocated within the building, Corzine said, and single rooms normally used for conference-goers could be doubled up to house more than one student. Reconfiguring Madison Hall would gain about 70 extra beds, he said.

To find more space, the university will have to get creative. That could likely mean converting study rooms into bedrooms, which the university has done in the past, or temporarily putting two or even three students in single rooms. Corzine realizes, however, that such cramped conditions can be particularly overwhelming for freshman already trying to adjust to life away from home.

“I prefer not to triple it if I can help it,” he said. “You’re going to be putting people in situations with roommates that they most likely don’t know.”

Corzine says he wants to make clear “that the spaces we would put people in would be adequate and as comfortable as we could make them.”

The university will likely cut a financial break to students housed in temporary locations.

“We’ll certainly be looking at the possibility of crediting those students who have been truly inconvenienced, more than likely a pro-rated amount of their housing costs,” said Corzine.

Finishing Balsam Hall by Labor Day will rely on a smooth flow of construction from here on out.

“If everything in the last month-and-a-half breaks just right, if they make up time, and we don’t have any additional delays, then we’re going to be really close with delivering most all the building,” said Corzine. “If you get a delay here or there on something, it’s going to certainly compromise our ability to finish on time.”

 

Growing pains

The university has confronted a student shuffle before. Just last year, the 400-bed Leatherwood Residence Hall was torn down to make way for Balsam Hall and another residence hall that will be built beside it. Students lived in Leatherwood for half the year, then were relocated to empty rooms for the second semester.

“We were able to absorb them mid-year somewhere else,” said Corzine. “That hit us at a point where on-campus demand wasn’t great enough for us to be in a situation like we are in now.”

Corzine listed several factors that have contributed to the lack of space on WCU’s campus, including an increase in the number of sophomores, juniors and seniors who want to live on campus. The lack of off-campus housing in the Cullowhee area is one factor in the number of students seeking dorm rooms.

More than one-third of the university’s student population lives in on-campus housing — 3,475 out of a projected 9,400 this fall. The demand was so great that the university started a waiting list for on-campus housing at the end of last semester.

“We chose to take a position that we could put them on a wait list, but we couldn’t guarantee them housing after that point,” said Corzine.

Record enrollment numbers at WCU could squeeze space even further, according to information presented at a recent board of trustees meeting. The university anticipates between 9,300 and 9,500 enrolled students in the fall of 2009, compared to 9,050 at the same time last year. Applications to the college have soared from 4,500 two years ago to 12,400 this year.

The freshman class is growing particularly quickly, with 1,550 expected this fall, up from 1,219 just last year. Indeed, the university stopped taking tuition deposits from freshmen and instated a waiting list for incoming students for the first time in its history.

Corzine said he doesn’t necessarily mind the challenges growth has and will likely continue to present to university housing. In fact, it’s important to keep WCU residences close to full so that the housing department can continue to fund projects.

“From our perspective, growth is important because we’re self-supporting. We’re an auxiliary service and generate our own revenue,” explained Corzine. “It’s important that we have occupancy rates that are high, so we generate enough money to pay for our costs but also to pay debt on new projects and plan for new projects.”

Still, a shortage of space isn’t an easy situation to navigate.

“We want to be close to full, but obviously any delay creates an issue we’re going to have to work through,” Corzine said. “There’s been a lot of grey hairs over this one.”

 

Preparations

The university is stepping up to accommodate growth. Two old residence halls were demolished to make way for the Balsam and Blue Ridge residence halls, which are among the first parts of a long-range campus master plan.

“We basically had an opportunity to redesign the heart of campus and truly enhance it for generations to come,” said Corzine. A new campus dining hall near the dorms is also nearing completion.

Next up is a redesign of the high-rise Harrell Residence Hall, built in the early 1970s. Harrell will be taken off-line in the fall of 2011 for a major renovation. Over the next seven or eight years, a total of three high rises will be renovated, or about 1,500 beds. Making sure there’s still enough space for students while the buildings are being redone will be a juggling act.

“We’ll have to do them incrementally, and we’ll have to maintain the same basic capacity that we have right now unless we choose to build another building,” Corzine said.

Adding more space for campus housing isn’t out of the question, especially if WCU continues to break enrollment records.

“If our admissions data were to show that we are going to consistently have huge incoming first-year classes, then I think certainly we would have to look at our options and talk about whether we’d want to expand,” Corzine said.

The burst of the nation’s housing bubble has caused real estate markets to tank — everywhere, it seems, but in Swain County. Property values there have increased 30 percent over the past four years, according to the county’s latest property tax revaluation. The increase prompted a stir of disbelief among local residents.

“I do not see how the property values for our homes would jump this much in this economy,” said resident Brenda Denargo to Swain County commissioners at a meeting in April where scores of residents turned out to protest the revaluation.

Though most residents saw a moderate increase in value, some, like Carolyn Shook, saw theirs almost double and expressed concern over the potential of higher property taxes as a result. Currently, Swain’s tax rate is at 33 cents per every $100 of property value.

“These tax rates are just too high for someone drawing Social Security,” Shook said.

Swain County residents have protested the property values in mass, submitting more than 3,000 informal appeals out of a total of about 11,000 properties, said county tax assessor Pam Hyde.

“That’s a lot,” Hyde said. “About 10 percent is normal.”

The 30 percent average increase in Swain County property values is much easier to stomach than the new property values handed down during the county’s 2005 revaluation, the first in eight years. Then, values increased more than 140 percent. The sticker shock was so bad that the county switched over to a four-year revaluation cycle. But with the economy much worse this time around, and residents are struggling to understand why their property values don’t reflect that.

“The economy is bad, and a lot of people are tying that to this revaluation, saying it should be bad,” said County Manager Kevin King.

The reason

But despite the economy and a decline in overall real estate sales, Swain County and the rest of Western North Carolina have stayed largely immune to plummeting property values that have hit other regions of the country.

“The sales have slowed down from the appraiser point of view, but the ones that are selling, the sale price is high,” said King.

The number of sales has indeed slowed drastically, said Lynn Shore, and independent appraiser who helped conduct Swain County’s revaluation and former appraiser for Cherokee County.

While sales have decreased significantly, property values simply haven’t, said Tracy Madgeburg, an independent appraiser who works in Haywood and Jackson counties.

“Our market has held stable,” Madgeburg said. “It has not had drastic decreases in prices by any means, though things are staying on the market a lot longer, and in the past six months, there haven’t been many buyers.”

The lack of sales has made it harder, though not impossible, for appraisers to do their jobs. Property values are based primarily on comparable sales: appraisers scout out a similar house in a nearby location that has recently sold and use that to estimate the price of another home.

“Sometimes we need to go search all of the county for comparables,” Madgeburg said. “If you’re working on a sale of a very unique property, especially a high-end property, it’s necessary.”

If the property is in a downtown area, said Shore, and there aren’t any comparable sales, appraisers may even trek to the next town over to find a similar property that’s recently been sold.

Madgeburg said many lenders want appraisers to use comparable sales from the last three months, but that can be impossible in a seasonally driven market like the mountains. If nothing can be found, appraisers will sometimes go back as much as a year to compare sales.

Appraisers use complicated formulas to determine property values, and strict guidelines govern both independent and county appraisals.

“What the public thinks is this is something the county conjures up,” Shore said. “When this is a mathematical, uniform agenda that the state has.”

Hyde has the authority to adjust property values during the appeal process if she thinks the value is in fact too high. But she can only do so much, and many walk away unsatisfied.

“If they feel like theirs is outrageously out of line, I can adjust it up and down, but I can’t go as low as they want,” Hyde says. “That’s what all the appeals say, ‘The economy’s gone busted and we need taxes down,’ which I understand. I don’t have a problem with that, but I also have a guideline.”

Ray of hope

The property revaluation leaves the board of county commissioners in a bit of a sticky situation. Commissioners know that realistically, many residents wouldn’t be able to pay their property taxes if the tax rate stayed the same while values go up.

“In this economy, you can’t go up on people’s taxes,” said King.

In 2005, after the last revaluation, the county dropped its property tax rate from 55 to 33 cents per hundred dollars to offset the increase people would otherwise see on their tax bills. The county generated only a small increase to the county’s budget.

County commissioners don’t yet know how much they will lower the tax rate by. The process will be a challenge. State budget cuts have already affected the county, and with the prospect of additional cuts to come, property taxes can be a valuable tool for making up lost revenue. The county is already looking at a deficit in its fund balance, furloughs and layoffs, said King. The county also won’t want to lower taxes until all pending appeals are resolved.

A solution to the county’s dilemma could lie in the state legislature in House Bill 1530. Four years ago, Swain County switched from an eight-year to a four-year revaluation schedule to avoid the sticker shock that accompanied soaring property values in the mountains over a longer time frame. The House bill would allow counties to scrap the results of their property revaluation and in Swain’s case, conduct another one in four years.

But with Swain’s property tax rate far below the state average of 58.6 cents on the dollar, the county may not garner much pity from state officials, King said.

“In Raleigh if you’re less than the state average, they say don’t come talk to us,” King said. “But if we went to 58.6 cents (on the hundred dollar) I don’t think you’d get another board of commissioners to run for office.”

Swain County may have low property taxes, but it’s also in a unique situation due to the number of second homes inflating the market price for property.

“What (the state) doesn’t realize is that we’re caught in between a rock and a hard place because the local people aren’t the second homeowners that have driven the prices up,” King said. “We’re a county of have and have nots.”

The county has been hard at work lobbying representatives and the bill sponsors for support. The bill must reach the Senate by Thursday of this week, or it won’t pass.

The Eastern Band of Cherokee Indians has announced plans for an affordable housing development and substance abuse treatment center in Swain County.

The tribe plans to build an affordable multi- and single-family housing development on a 300-acre tract in the Coopers Creek area. The development could have as many as 175 homes on it, according to Chief Michell Hicks.

Though the housing will only be open to enrolled members of the tribe, the housing will help add to the base of affordable housing in the region. The lack of housing in general has been a problem for the Cherokee, who are hemmed in by the borders of the Qualla Boundary.

“We don’t have a whole lot of lower- or mid-income housing here,” said Hicks.

Hicks said of the tribe’s interest in purchasing the Coopers Creek tract, “we’re running out of buildable land, and the goal was to try to find land that had some prospect for multi-use.”

Hicks said the tribe hopes to keep home prices as low as possible.

“(With affordable housing) we do our best to stay under $100,000 for homes. Then again, you have homes that will push the $200,000 mark,” said Hicks.

The tribe hopes to break ground on the project in 2010. There are no estimates of construction costs yet.

The tribe hopes to build a substance abuse center in the Kituwah area, which has special significance to the tribe. Kituwah, referred to as the mother town of the Cherokee, is thought of as the birthplace of the Cherokee people. A council house once rested on an Indian mound that is still visible on the property, and the area is listed as a National Historic Site.

The regional mental health center would be built across the road from the sacred mound site. It would serve not only enrolled members, but the general public. The center would specialize in treating adult and juvenile substance abuse — treatment that is sorely lacking in the region, Hicks said.

“It’s something that has been neglected in North Carolina and in Western North Carolina,” said Hicks.

Drugs are one of the leading crime problems in Cherokee, and by offering treatment for addicts, Cherokee could bring down crime rates. Hicks said the tribe will seek financial assistance at both federal and state levels to fund the project.

To operate the center, the tribe will need to hook it up to Swain County’s water and sewer infrastructure. Currently, the tribe has a 20-year, 50,000-gallon per day agreement to use Swain’s infrastructure. But the mental health center would far exceed that agreement, and would likely prove too much for the current system to handle.

“We can’t put that kind of facility on the system,” Hicks said. “The infrastructure would have to be upgraded.”

Hicks said the tribe would likely propose footing the bill to upgrade the water and sewer infrastructure currently in place in the county and in Bryson City.

The neighborhood covenants of a Maggie Valley homeowners association were put to the test in court recently.

A developer sued the Sherwood Forest homeowners association after they tried to block his foray into rental condos. David G. Baker, formerly of Charlotte, wanted to develop a six-unit condo and extend town water and sewer to the property. The only problem — the covenants of Sherwood Forest forbade multi-family units. The covenants define Sherwood Forest as a neighborhood of single-family houses.

Baker attests that he wasn’t aware of the covenants when he purchased an existing home in the subdivision in 2006, and that no one, including his Realtor, informed him of their existence.

“He felt the information he received when he purchased it was that he was entitled to (build the condo),” said Baker’s attorney, Bryant D. Webster of Black Mountain.

Apparently, the conflict between Baker and the homeowners association started when residents of the subdivision witnessed construction work on the property and notified the homeowners association that it appeared to be in violation of the neighborhood covenants, according to the lawsuit.

The existing home on the lot already had the makings of a multi-family unit, Baker argued. The three-floor house had a separate kitchen and bath on each floor, as well as a coin laundry in the basement.

But this is where the situation gets murky. Both sides agreed that the property was used to house members of the same extended family up until it was sold in 2003, which would explain the separate kitchens. However, Baker contended that in 2005, the property was entered into a multi-leasing situation, with three separate, unrelated individuals renting out each floor.

The homeowners association didn’t agree. It claimed the leases that Baker presented as evidence were insufficient proof that the unit was ever rented out by floor, according to the lawsuit. And members of the homeowners association filled out sworn affidavits attesting that they only became aware of the multi-family use of the property after Baker bought it in 2006. They said there was nothing in the external appearance of the building to indicate it was used as a multi-family unit, and that there were never more than one or two cars there at any given time.

Baker ended up suing the homeowners association to construct his six-unit condo. His main defense was that the homeowners association failed to complain about the multi-family nature of the structure within the required six-year statute of limitations, which he claims started ticking when the unit was first built.

“We felt it was a very strong argument that ... they had not exercised those rights within the applicable time period,” Webster said.

In a judgment handed down March 23 in Haywood County Superior Court, neither party was a clear winner, or a clear loser. The court found that Baker’s structure had been used for multi-family purposes in the past, and could continue to be used as such. However, the court restricted Baker to the three units — one on each floor — and didn’t grant him permission to build three more like he had planned. It also didn’t grant Baker rights to town water and sewer.

“What the court did was in essence split the baby and found that ... it would not be fair to prevent Baker from using it as a three-family unit, but that it would not be permitted to be anything more than that,” said Homeowners Association Attorney Bill Cannon of Waynesville. “The covenants of the subdivision remain intact.”

Cannon said he believes most of his clients — in total, the owners of 38 separate homes named in the lawsuit — were satisfied with the outcome.

Bryant said he felt “both sides got some of what they wanted.” However, he questioned whether the judge should have allowed the six condos Baker wanted since it was already classified as a multi-family structure.

“Our position is multi-family is multi-family, and once that is permitted, whether (Baker) does six units or three is of no real difference,” Bryant said. “Obviously the court didn’t see it exactly that way and we certainly respect the process and the wisdom of the judge who decided, and sometimes getting some of what you want is the best you’ll do.”

Residents of a downtown Waynesville neighborhood are up in arms about a proposed three-story, 64-unit condo development that would provide affordable housing for senior citizens — and, they fear, also lower the property values of their homes.

The development, called Richland Hills, is under the wing of Asheville-based nonprofit Mountain Housing Opportunities, which has several developments in Buncombe County. Rent will range between $300 and $500. To be elligible, you have to be over 55. There is also an income cap.

“Low income is not going to fit here,” said neighbor Lela Eason, who is leading the opposition to the development. “This is a well-established neighborhood, and it will completely change the face of it.”

Mountain Housing Opportunities Project Director Cindy Weeks contends that the neighbors would like the development if they understood it better. The architect designing the building is the same one who worked on the Laurels of Junaluska, another senior development in the county, and the building will use green features.

At this point, there’s probably little Eason and her neighbors can do to halt the project, said Town Zoning Administrator Byron Hickox. The project has already been approved unanimously by the town’s planning board and community appearance commission. It meets all the required building, architectural and landscaping guidelines.

The development is located in the East Waynesville Neighborhood District, where high density development is allowed, said Hickox. Town zoning allows for 16 units per acre in that area, and though Richmond Hills will be three stories tall, it still falls just under the maximum allowed height of 35 feet.

None of that has deterred Eason and her neighbors from waging a protest against the development. Eason faults the town for not informing her community of the development sooner. She says her sister-in-law was the only person to get a letter notifying of the proposed project, and that only came last week.

“It’s kind of sneaky that the whole community doesn’t know about it,” Eason said. “There are people who can see it from their properties who are furious, and they have no clue it’s about to take their property values down.”

 

A poor fit?

A sheet of paper being passed around the East Waynesville district accuses the proposed Richmond Hills development of catering to low income individuals at poverty level. The paper states that drugs are sold out of similar communities in Asheville, and that the safety of the neighborhood may very well be jeopardized should this development be built.

The “low-income” stigma is one Mountain Housing Opportunities has battled many times in its 20-year history. The idea that the nonprofit builds housing projects is incorrect, says Project Director Cindy Weeks.

“People in their heads have some idea about public housing, but that’s not us,” Weeks said. “Nothing about this will be remotely related to public housing. We’re very selective about tenants, and we get background checks and even credit checks.”

Weeks is used to dealing with skeptics. Her answer? She tells them to check out the non-profit’s other developments.

“One-hundred percent of the time, they’ll come back and say it’s beautiful,” Weeks says. Contrary to the reported drugs sold in these complexes, “we’ve never had problems with neighbors; no complaints; no police problems,” she says. “Here in Asheville, it’s gotten to the point where we don’t have much concern over what we’ve built.”

But Mountain Housing Opportunities is dealing with unfamiliar territory in Waynesville. The Richmond Hills project is the group’s first outside Buncombe County. The town was picked based on the results of a market study the nonprofit conducted, which identified Waynesville and Haywood County as having a need for senior apartment homes.

“There’s a lot of seniors in the western part of the state that might be living in substandard housing, not close to medical services or shopping,” Weeks said. “This would be an alternative for them.”

Weeks said a downtown Waynesville location seemed ideal for its accessibility, among other reasons.

“What we liked about the location was that it was well-located to shopping and services in the downtown,” she said. “The site is relatively flat and easy to develop, and we can get access to utilities. Plus, it’s just a nice neighborhood.”

Maybe a little too nice for such a development, says Eason. A one-story, high-end apartment complex would be a better fit, she says — the Richmond Hills complex might be better suited to other areas of the county.

Downtown Waynesville Association Director Buffy Messer doesn’t agree. She says the development will be a good fit downtown.

“I think its actually a very good addition to the area,” Messer says. “We are encouraging more residential in the downtown area. The goal is to expand both shopping and residential.”

Messer says she thinks fear is the driving factor of the opposition to Richmond Hills.

“In many other cities with what is considered low-rent housing, there have been some serious situations with drugs, alcohol and domestic problems,” Messer says. “But we already have some affordable housing throughout the town of Waynesville that probably people don’t even know about.”

Messer says the development is a good way to get seniors living downtown.

“I think so many of our seniors are having to move outside the town and county because we don’t have affordable options,” she says.

With an income cap to qualify, however, it is unclear whether residents will be big patrons of downtown shops. Similar developments by the same entity in Asheville have an income cap of $22,000.

 

Too late?

Hickox says the residents of the East Waynesville district should have raised their protests earlier.

“The bottom line is that now is not the time to make the argument of if it’s a good fit for the community,” Hickox said. That should have been done more than six years ago, when the zoning guildelines were established that allowed for high density development in the district.

“If you wait until they’ve already proposed the project, you’re too late; you’re too far behind,” said Hickox. “If it meets the standards, the town doesn’t have the legal ability to deny it.”

The Richmond Hills project still has to go before the town Board of Adjustment — the final step before it’s approved. That meeting isn’t really for public comments, Hickox said. Those could have been given at the planning board and community appearance commission meetings. Someone making a case before the Board of Adjustment needs to present hard evidence of why the project shouldn’t be allowed. An example would be a history of traffic patterns in the area and evidence of why the project would clog traffic.

The Board of Adjustment meets on Tuesday (April 7), just after The Smoky Mountain News has gone to press. If Richmond Hills is OK’d — and there’s no indication it won’t — Mountain Housing Opportunities will start getting financing in place.

Construction of Richmond Hills is slated to begin within six to eight months — but not without a fight, vows Eason.

“We have a community crying out saying ‘no,’” she says.

By Julia Merchant • Staff Writer

When Wilbur Davis looked out his storefront in downtown Canton recently and saw three young moms pushing babies in strollers, he paused to watch. It’s not that women with babies are a particularly unusual sight in downtown Canton, but not too long ago it would have been.

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