Mark Barrett

ASH

ASHEVILLE –

On a 5-2 vote Tuesday, City Council approved about $765,000 in incentives for a development that will bring 209 apartments and commercial and parking space to the River Arts District.

Council members said the RAD Lofts project will accelerate a transformation already going on in the redeveloping neighborhood and provide needed housing and public parking.

"You've shown us a project that we think is a great project and makes a lot of sense," Mayor Esther Manheimer told developer Harry Pilos. "This fits in nicely with the long-term plan for the district."

The incentives agreement obligates Pilos to keep rents on all of the apartments below city guidelines for what it calls "workforce housing" — intended to be affordable to people making 120 percent of median household income — for 10 years after completion. Rents for 11 of those must meet still lower limits.

Asheville may pay to keep RAD apt. project affordable

The limits are higher than the rents Pilos said in October 2013 he expected to charge. He said at Tuesday's council meeting that the main impact of the payments from the city will be to allow him to charge less for the 48,500 square feet of retail and office space planned.

That, he said, will facilitate his plan to recruit only local businesses for the space.

"I'm going to charge as cheap as I can given the incentives I get here tonight. We're going to use (the money) to drive rents down," Pilos said.

RAD Lofts will be located on the former Dave Steel property adjoining the intersection of Roberts, Depot and Lyman streets and Clingman Avenue. Pilos hopes to begin construction late this year.

Manheimer said the incentives are "essentially a rebate of the additional tax revenue that this property will generate" once RAD Lofts is completed. The city expects to collect $147,200 a year in property taxes on the site then, a big jump from the $2,308 it generates today.

A portion of the incentives is a discount on building permits and other fees.

The debate among council members Tuesday was not whether to award incentives but how large the amount should be.

Cathy Ball, executive director of planning and multimodal transportation for the city, told council a strict interpretation of the city's incentives policy would yield a smaller payment to Pilos. Her figures suggest the total would be around $539,000.

Council members Gordon Smith and Gwen Wisler said council should award that amount only. Smith said that would make council's actions more predictable while Wisler said it doesn't appear that the city has "identified what additional factors that would justify" the higher amount.

Manheimer said that when council adopted the incentives policy a few years ago, "We built in some flexibility" and that council should use that to increase the amount given the benefits expected from the project.