Amid growth, worries downtown is becoming a ‘gated community’

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by Jordan Green

Councilwoman Denise D. Adams and other black members of Winston-Salem City Council push back against Mayor Allen Joines on assistance for downtown development and incentives for Herbalife due to lack of commitment to affordable housing and poor performance on diverse hiring and employment.

As the economic renaissance of downtown Winston-Salem comes into full bloom with the announcement last week of a $96 million multiuse project around BB&T Ballpark, rumblings of discontent from city council’s African-American caucus highlighted a burgeoning sense that the growth comes with the unwanted baggage of a widening wealth gap.

The four African-American members of city council, who represent the Southeast, East, Northeast and North Wards, have consistently backed provisions to require developers to set aside a certain number of units for affordable housing in exchange for city assistance in big-ticket downtown projects. That stance has sometimes put them at odds with Mayor Allen Joines, who has presided over a progressive, pro-business coalition since he took office in 2001, although the disagreements typically remain genial. On Monday night, the rift was especially apparent, with North Ward Councilwoman Denise D. Adams debating Joines on two different proposed incentives packages during a meeting of city council’s finance committee.

Atlanta-based Brand Properties Real Estate Investment Group is requesting that the city build a $16.3 million parking deck to support what is known as the Brookstown project, which includes an anchor grocery store, housing units and office space wrapping around the back side of the ballpark. Joines said when the ballpark was built, it was understood that the city would invest in parking to support additional development — a promised side benefit to the stadium.

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“This is not something that’s unexpected,” Joines said. “In 2005, we said we would build a deck at such time when it was needed if it pays for itself. And the answer is yes.”

Adams said she wants to see a commitment from the developer to set aside some residential units for affordable housing, and to use minority and women contractors to build the project. She indicated that she and her colleagues have grown tired of good-faith efforts that sometimes don’t seem to deliver.

“I see where they included the comments about the workforce housing and the developer said they would meet with the city to see if they can make the numbers work,” she said. “And I also see at the bottom where they said they’ll make a good-faith effort where we’re asking them to use minority businesses and women. But again, moving forward, in the past, we took that as a good faith. But I’d like to see some numbers.”

The proposal generally received a more enthusiastic reception from the white members of council. Councilman Jeff MacIntosh, who represents the Northwest Ward told developer Brand Morgan: “I’m extremely excited about this. I think this is what we all had in mind when the ballpark opened.”

Councilwoman Molly Leight, who represents the South Ward, said her constituents in the West Salem neighborhood just across Business 40 from the ballpark are ecstatic.

“My phone has been ringing off the hook since this was announced,” she said. “People in West Salem [are saying], ‘We want the grocery store! We want the grocery store!’”

But Councilman Dan Besse, who represents the Southwest Ward, said he is withholding support until he gets a chance to look at the numbers to verify that the project won’t cost the city.

“I’m interested in seeing details and specifics and analysis because the proposal would call for us to purchase the property and then own it,” he said. “And that would be a risk factor for the taxpayers. I want to be assured that that is a good risk.”

Assistant City Manager Derwick Paige wrote in a staff memo that the only way the deal would not finance itself is if the taxable value of the multi-use development fell below $109.5 million or if the city’s tax rate dropped below 54 cents. In that case, the loss could be offset with a sales tax, an occupancy tax or parking fees.

Paige promised to come back to the committee in 30 to 60 days with a detailed plan, including any agreement to include affordable housing in the project.

Adams also butted heads with Joines on an incentives request by Herbalife, a multilevel marketing company, which is considering expanding its manufacturing and distribution hub off of Union Cross Road in southeast Winston-Salem. The committee had previously requested an accounting of employee diversity, and the numbers were disappointing. Paige reported that of the employees that the company hopes to eventually groom into supervisory positions, only 7 percent are African American, 5 percent are Latino and 25 percent are Asian. According to the most recent Census estimate, blacks make up 34.8 percent of the city’s population, Latinos are 15.1 percent and Asians are 2.1 percent.

Adams said she wasn’t surprised by the figures.

“We’ve reinvented ourselves,” she said. “We’re no longer manufacturing when it comes to tobacco, furniture and textiles. We’re innovation, technology. My issue with this is we are now allowing — the city is just as much to blame for this — we’ve got an almost gated community, where people in the urban core and the poor can’t afford to live there. And now we’re creating a workforce that’s like Silicon Valley. Our poor people, people that live in the urban core, minorities cannot even qualify to get a job your tax dollars are helping fund.”

Joines defended the company.

“I had a conversation with some of Herbalife’s folks in California,” he said. “They did provide us this information. I think it demonstrates that they have a good program in place. They’re not where they want to be in a lot of these categories, but they told me that they want to get to where 48 percent of those positions are African American in this group that they’re looking to move up. I thank Herbalife for their willingness to invest in our community.”

Herbalife is requesting $150,000 from the city to partially offset the cost of a $3.5 million investment in new machinery and equipment to allow the company to create 301 new jobs. Some of the positions would be filled by current employees relocating from Herbalife facilities across the country, while others would be filled locally. The incentive grant amounts to almost $500 per job.

The finance committee voted 3-0 to hold the request in committee, with Mayor Pro Tem Vivian Burke abstaining.

The discussions about city assistance for the Brookstown development and incentives for Herbalife were framed by a debate about formalizing a set of guidelines requiring developers to reserve a portion of residential units for what the city calls “affordable workforce housing” if the project receives public support.

Joines said the city needs to be cautious and avoid imposing restrictions that make building projects unfeasible. MacIntosh echoed the sentiment, arguing that if the city is too restrictive, investors might take their money elsewhere.

Adams said with federal grants drying up, developers will be increasingly turning to cities for assistance. If they’re not able to come up with proposals that are fair and inclusive, then her constituents will expect her to withhold support.

“We are at a crossroads, not just in Winston, but in America,” Adams said. “We have been saying since I was on this council for six years that the perception of downtown — everybody loves it — but for some of us it’s a gated community. If we are not proactive in trying to correct something — I’m not saying it’s bad; it’s good — but we need to be better.”