Winston-Salem approves Hoots mill redevelopment loan

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by Jordan Green

Winston-Salem council applauds diversity of business owners at West End Mill Works, punts on affordable housing near BB&T Ballpark and stands up for tenant’s rights to have a voice in residential parking restrictions.

Members of Winston-Salem City Council talked about the diversity of downtown revitalization on Monday night — and about whether tenants should have a say in neighborhood proposals to restrict on-street parking.

They didn’t always agree on everything, but they unanimously supported a loan to developers John Bryan and Dewey Anderson to continue the redevelopment of West End Mill Works into a second phase, after council members’ concerns about diversity were assuaged.

The city will provide a $195,000 loan at a below-market interest rate of 3.5 percent from an economic development fund to help finance redevelopment of the 1935-vintage Hoots Milling Company Roller Mill, an overall investment of $1.3 million. The city loan supplements private financing, including an $889,000 loan from Carolina Bank and a $195,000 loan from the Downtown Winston-Salem Foundation.

The first phase of the completion, the redevelopment of an adjacent one-story warehouse, is complete, with an investment of $1.4 million. The facility is home to Hoots Beer Co.; the Porch, a Tex-Mex restaurant; the Breathing Room yoga studio; Sutler’s Spirit distillery; the Olio glass-blowing studio and the Eightpoint Muay Thai kickboxing gym. Between them, the businesses employ 84 people.

“This is a good economic model for what we should be doing with our development dollars,” said Councilman Jeff MacIntosh, who represents the Northwest Ward. “We’re providing gap financing — that last little bit that the developer needs to make the deal work. This project is returning an area that had virtually nothing going on in it to a vibrant area; we’re going to see other economic development. It’s providing small-business incubation. So to me it just hits the mark on so many different things.”

Mayor Pro Tem Vivian Burke expressed appreciation to Bryan and Anderson for responding to her questions about the diversity of their tenants “without being defensive — for being positive in knowing that we’re trying to reach an understanding in this community and provide opportunity for our people and small businesses.”

A document prepared by the city manager’s office indicates that women have an ownership stake in four of the six businesses with leases at West End Mill Works, and three list women as their managers.

The council could not reach the same consensus on a decision to extend financing on the sale of city property near BB&T Ballpark to a company owned by Billy Prim, the CEO of Primo Water Co. Under the terms of the original financing arrangement, the city loaned Prim’s company $980,361 in 2009 at 5.5-percent interest with the unpaid balance due in the fifth year. Assistant City Manager Derwick Paige has said that Brookstown Development Partners, which owns the property, is merely a holding company, and that Prim has been looking for a buyer to develop the property. Paige has also said that the recession frustrated Prim’s efforts to find a buyer for the property.

Several council members, including Burke, Derwin Montgomery and James Taylor Jr., have expressed vocal concern that housing in downtown needs to be kept affordable for people with modest incomes. In an Aug. 6 letter to the city, Prim provided something less than a full commitment on that count.

“Brookstown will of course always consider the potential benefits to the community and other important stakeholders,” he wrote. “When we sell this property, it will most likely be for retail use. But if there is more housing, we will encourage them to make sure we have affordable housing to attract a diverse group of people.”

Burke asked City Manager Lee Garrity about the affordability of units in an apartment complex under development by Greensboro-based Samet Corp. across the street from the ballpark. Garrity responded that the rental prices for the apartments run from $950 to $1,500 per month.

“That’s a little high for when we talk about workforce housing — the housing for teachers, police officers. For the middle class, that’s a little high.”

Montgomery argued that the city was squandering an opportunity as lender to set some conditions on the use of the property to ensure that some of the units are set aside for affordable housing.

“We should make a statement about affordable housing, particularly in property that we own or that we’re selling particularly that can be used for affordable housing,” he said. “There’s no concrete statement that this property will be developed for housing, but if it is used for housing there should be some affordability requirement on that property.”

MacIntosh said he agreed the city needs to encourage affordable housing downtown, but took issue with placing restrictions on the property.

“I think we need to lean towards incenting developers to do this while offering them something in exchange or giving that component,” he said. “I think it’s very difficult to hamstring the property with requirements before you even know what its use is.”

He added that the city should consider incentivizing affordable housing by allowing developers to increase population density.

The council approved a five-month extension on the loan by a 6-2 vote, with Montgomery and Taylor dissenting.

The council also approved an amendment to city ordinances allowing residents to restrict on-street parking through permitting in residential neighborhoods. Under the proposed change, 70 percent of affected property owners or residents on a particular block would have to vote in favor to institute permitted parking, with tenants and property owners receiving one vote apiece while owner-occupants received two votes.

MacIntosh argued that tenants should not have the right to vote on parking restrictions, adding that from his experience their participation would effectively kill any effort to implement change. MacIntosh and Councilman Robert Clark wound up on the losing side of another 6-2 vote.

“For those of us that live in the inner city or any neighborhood, it’s important that those people have some say-so and engagement in the community,” Councilwoman Denise D. Adams said. “I feel like it is a type of injustice for me to pay rent, live in a house for 20 years or so or 10 years, and I’m a good neighbor, I do everything I’m supposed to, but I don’t have a voice in the community. I don’t think so.”