Jay Street Apartments: An Ethical and Legal Concern with Town Government Operations

A perspective from Robert Beasley

My name is Robert Beasley, and I live in the Village West neighborhood of Chapel Hill. I am running for Town Council in this election, and I want to take this opportunity to describe the issues I have with one of the Town’s Development Projects. It was a significant catalyst for my decision to run in this election. What I have written is quite long, so I will open with the closing and say do you research, my fellow voters. Right now, we cannot assume the Town is doing it for us.

The Jay Street Apartment Development Plan is a Town initiated Affordable Housing Complex of two 3 story buildings with over 40 residential units. It is one of the Town’s Affordable Housing Developments targeted for Publicly Owned Land. The site is a 7.5-acre parcel that was purchased by the Town in 2005, and its selection and proposal by Town Staff for development was presented to the Town Council on September 18, 2019. Our neighborhood found out about the project in March of 2021 – just about 7 months ago – and I and others in the neighborhood started attending Town meetings on the Development Plan to learn more about the Development, the history of the site and its selection for development. We were concerned about the density being proposed for this site, the inadequate roadways, pedestrian sidewalks, and physical limitations of the site that would make these mobility improvements difficult to deliver. And we were concerned with the environmental and ecological implications of over developing this property.

I learned a great deal about the Town Government, Affordable Housing, North Carolina General Statutes regarding Towns and Cities, the Jay Street Apartment Development Plan and numerous other plans over the next three months. And what I learned and how I saw our Town Government operating from March through June is what compelled me to run for Town Council. I am uncomfortable with the ethical boundaries I see our Town Government and Operations crossing. I believe we deserve better.

The core ethical – and potentially legal – issue I have with the Jay Street Development is related to the land itself; how it was acquired by the Town, how it was selected for development by the Town, and how the Town is continuing to move forward with the Development Proposal. My neighbors and I discovered by researching the Deed and Town Public Records that the Jay Street Property was purchased with Open Space Bond Funds in 2005. The Open Space Bond was approved in the November 2003 elections, and it was initiated by a Town Council Resolution that called for a “BOND ORDER AUTHORIZING THE ISSUANCE OF $2,000,000 OPEN SPACES AND AREAS BONDS OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA” which included the following order: The Town Council of the Town of Chapel Hill, North Carolina has ascertained and hereby determines that it is necessary to acquire land or rights in land for the preservation of open spaces and areas and to pay the capital costs of such improvements.

The Open Space Bond was included on November 2003 ballot, positioning the funds it secures to be used to preserve open spaces for public use and enjoyment. The Bond was then approved by the voters. In 2005 those funds are used to purchase a collection of undeveloped properties, which includes the Jay Street Parcel. When I learned this, I went back and watched the video recording of the September 18, 2019 Town Council Meeting and discovered that the source of funding was not covered in the presentation by Town Staff to the Town Council. So when the Town Council approved moving forward with the Jay Street Site, it appeared they did not know it had been purchased with Open Space Bond funding. The source of funding was not part of the criteria evaluated in the Town Staff’s site selection process. On June 9, 2021, I petitioned the Town Council to investigate the source of funding for the Jay Street Land Purchase, and if they confirmed it to be the Open Space Bond Funds, to address how land purchased with public funds intended to preserve open spaces for public use and enjoyment was now being prioritized for a private rental property development. I submitted a second petition on June 16, 2021, asserting that the planning process for Affordable Housing Development on Public Land needed to include the legal or ethical feasibility of the sites, which had not been part of the criteria for selecting Jay Street based on the content of the September 18th 2019 Town Council meeting. The Town Council referred my petitions to the Town Manager for investigation and report.

Over the summer, I and other residents of Village West discussed the Jay Street Apartments and Site Selection with Mayor Pam Hemminger. She confirmed to me that the Open Space Bond Funding source of the Jay Street site had not been disclosed to her nor to the Town Council when the site was proposed for development back in 2019. The sense I took away was that the Town Staff did not know about the history of the site and the source of the funds used for its purchase. To be fair to the Town Staff, when asked to identify Publicly Owned Lands for Affordable Housing Development, they were only asked to evaluate site selection based on the engineering feasibility of the sites. So one could see how such a mistake could be made, and this oversight could occur. I expected the Town Manager would confirm the source of funding to be the Open Space Bond Funds, and that it would come back to the Town Council as a discussion item to address the ethical if not legal implications of proceeding with the Development Plan in a Public Hearing. That is not, however, what happened.

On September 7th, the Town Manager forwarded the Town Staff’s response to my two Jay Street Petitions. The short version of their response is Town Staff have confirmed that the land was purchased in 2005 with open space bond funding. However, in consulting the Town Attorney and Outside Counsel, Town Staff were advised that NC General Statute Section 160A-265 authorizes a Town Council to hold, use, and change the use of real property without regard to the method or purpose of its acquisition or to its intended or actual governmental or other prior use. So while the Jay Street Land was purchased with the Open Space Bond Funds, the Town Staff was under no legal obligation to inform the Town Council of the parcel’s purchase history or funding source back in September 2019.

Now I, and I believe most residents of Chapel Hill, recognize that just because something is legal, it is not also ethical by default. This mindset from the Town Staff troubles me greatly, and I believe it is evidence of a more systemic issue tied to the ethics our Town Government demonstrates through its operations. I also believe that the legal response from the Town Staff is flawed by the misuse of a subsection of § 160A-265, which I have communicated back to the Town Manager. The Town is not simply ‘changing the use’ of the Jay Street Property, it intends to sell or convey the property to a third party. And while § 160A-265. Use and disposal of property does allow for the Town to sell or convey the Jay Street Parcel, it includes specific limitations and procedural requirements for doing so; which the Town has not yet demonstrated it will satisfy with the Jay Street Apartments Development Plan. The plan involves conveying the property to a joint partnership of Community Home Trust (a local non-profit) and Taft-Mills Group (a Greenville, NC based for profit affordable housing developer and property management company). And this brings up another ethical question I and others in my neighborhood have raised.

Dustin Mills is the President of the Taft-Mills Group. He is also a member of the Town of Chapel Hill’s Housing Advisory Board. Mr. Mills was appointed to the Board on October 7th, 2020. Just four short months later, the Town of Chapel Hill entered into a Memorandum of Understanding with the Taft-Mills Group to begin planning for the development of the Jay Street Apartments. While the Town Government’s rules regarding appointments to the Housing Advisory Board are being followed with Mr. Mills appointment, we need to ask ‘is this ethical?’ Yes, Mr. Mills ‘recuses’ himself in Housing

Advisory Board votes on the Jay Street Apartment Development Plan. But he is a member of the Board, participating in the Board’s review and decision making for all of the other projects that come through. And he is the presenter of the Jay Street Apartments Development Plan to the relevant Boards, Commissions, and the Town Council itself. Is the simple recusal of voting on his company’s own Development Plans sufficient to prevent bias and inappropriate influence in the Town Government’s decision-making process for the Jay Street Apartments? And these ethical concerns are not specific to Mr. Mills appointment to the Housing Advisory Board; others have raised similar concerns with members of other Town Boards and Committees with ties to For-profit Developers doing business with the Town of Chapel Hill.

In spite of my response to the Town’s response to my Jay Street Petitions, the Town continues to move forward with the Jay Street Apartments Development Plan. The current Town Government Administration has made no attempts that I have seen to bring forward these ethical considerations that I, and others, have raised. And the Administration is allowing Town Staff to continue to work with the Taft-Mills Group, prioritizing our limited Town Resources to further develop and bring forward the Jay Street Apartments Development Plan for further approval this fall. I recognize that Mayor Hemminger and Town Manager Jones are busy, and that they may not have investigated or considered these ethical questions I am raising regarding Jay Street to the same extent as me; but they need to realize the perception this is giving to the residents of Chapel Hill. Allowing the Town Government and Staff to proceed without addressing these ethical concerns in a public hearing and forum gives the perception that the Mayor and Town Manager condone the ethical positions being taken by the Town Staff. It also gives the perception that they do not appreciate the questions residents are raising regarding the integrity of the Town Government’s current operational design and function.

Over the last week or so of the political campaign, I have participated in interviews and read articles from members of the press who are starting to paint a picture of this campaign falling between two camps. Those that want more development, and those that want to preserve and protect Chapel Hill’s green spaces. I reject that narrative. For me, and several other candidates, this campaign is more than a simple binary question development versus conservation. This election is a crucial decision point for Chapel Hill, hinged upon the ethical, equitable, efficient, and effective functioning of the Town Government. It is about ensuring our Town Government seeks out, listens to, and prioritizes the voices and needs of the residents and local businesses of Chapel Hill. It is about ensuring the future Town Council is presented with all of the facts needed to make decisions. And that we are making those decisions with a comprehensive understanding of the larger implications to our Town and those that live here. Do you research, my fellow voters. Right now, we cannot assume the Town is doing it for us.

 

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