Ballantyne, NC – The developer planning to build subsidized apartments in Ballantyne said he is no longer pursuing the project, ending a quest to bring the first subsidized housing to the affluent area.
Republic Development Group said late Tuesday it’s withdrawing a rezoning request because it can’t get money from the city’s Housing Trust Fund.
Republic planned to partner with the Charlotte Housing Authority to build 86 apartments for low-income residents, but the authority pulled out Monday.
The authority said the project no longer made economic sense, but its decision came more than a week after two executives left under pressure for how they arranged the deal, the Observer has learned.
One of the employees who left CHA is a business partner of the private developers who proposed the project.
An internal investigation at CHA, as well as intense public opposition, helped cripple the project at Johnston Road and Providence Road West.
“It’s a disappointing end, we wanted to see this through.”
- Stuart Proffitt, Republic Development Group
Earlier this month, as Republic moved forward with the controversial project, the housing authority was investigating how two staff members put the deal together, according to three sources familiar with the deal.
The principals of Republic, John Schwaller and Proffitt, are vice presidents of SPQR Real Estate Co., according to the N.C. Secretary of State’s office. The president of SPQR is Ben Collins, who was a senior development officer with the authority.
Collins helped the authority and Republic create a partnership for the Ballantyne apartments, known as Ballancroft, the sources said.
The CHA agreed to pay Republic $20,000 for its work to rezone the seven acres for the apartments and $50,000 if the effort is successful.
Collins and his boss, Kathleen Foster, vice president for real estate, left the authority on Feb. 11, said CHA spokeswoman Jennifer Gallman. Their departure came after the authority conducted an investigation about how the business relationship between Republic and Collins was handled, according to sources.
Joel Ford is the chairman of the volunteer board of commissioners that oversees the authority.
“If (Collins) had a previous business working relationship, that doesn’t look healthy,” Ford said.
Gallman said she couldn’t discuss details about how Foster and Collins left the authority.
Collins and Foster couldn’t be reached for comment Tuesday.
The authority had said days earlier that bringing low-income housing to Ballantyne is critical. That would help disperse public housing throughout the city. In addition, it would allow some low-income employees in Ballantyne to live near their jobs.
The original plan was for 110 apartments, but that was scaled back to 86 units. Twenty-six of those apartments would have been for people making 30 percent of the area’s median income. That would have been just under $20,000 for a family of four.
The authority said Monday afternoon the reduction in units made the project too expensive.
About 300 residents blasted the project at a meeting Monday night with Republic. Some said they didn’t want public housing in the area, while others said the project would worsen traffic and school crowding.
Some Ballantyne residents asked Schwaller and Proffitt about SPQR at the meeting. Schwaller said the venture was formed to pursue a real estate deal in Cornelius, but that project fell through. He said SPQR is no longer functioning, though the state Web site lists it as active.
Proffitt said Tuesday said he’s surprised by the fallout from SPQR and the authority. He said his relationship with Collins was known inside CHA and that there was nothing improper about Republic’s relationship with Collins.
“There was absolutely nothing wrong with our relationship,” Proffitt said. “Everything we did was 100 percent above board.”
He declined to comment further.
He said Republic’s decision Tuesday to abandon the project was due to the inability to get money from the city’s Housing Trust Fund.
The application for that money was done by the CHA, and Proffitt said the city told him the authority couldn’t transfer the application to a new developer.
The authority is a nonprofit whose commissioners are appointed by the Charlotte City Council and the mayor. It uses money from the city’s Housing Trust Fund but mostly relies on funding from the federal government.
Proffitt worked for Pappas Properties until 2008 and had worked as a developer in California.
Schwaller worked for Grubb Properties, where he worked with the housing authority on a project called Seigle Point near uptown. Collins also worked for nearly two years at Grubb, where he was a project manager.
“What I have heard did raise an eyebrow,” said Charlotte City Council member Patrick Cannon, who lives in the area and who attended Monday night’s meeting. “I have other questions and would like to find out more.”
Republic still has an option on the seven acres. That option expires in 260 days, Proffitt said.
Steve Harrison, Reporter
Maria David, Staff Researcher
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