DGDC: $3 million residential investment nearly a done deal

After spending millions to restore buildings, construct a new Paramount Theatre and open restaurants and boutiques along Center Street, city leaders and residents have long agreed that the next step in the downtown Goldsboro renaissance is to eliminate the blight in the neighborhoods that surround it.

And in the coming weeks, a private investor and newly formed non-profit will take the first step toward making that goal a reality.

Downtown Goldsboro Development Corporation officials confirmed Thursday that a deal between non-profit Communities Inc. and an unnamed investor is immanent and will culminate in the greenlighting of Phase One of a residential development plan that will, for starters, see the construction of 16 to 20 new homes on the outskirts of the Municipal Service District.

The exact location of the lots will not be revealed until the deal is finalized, but an official announcement is expected in the coming days.

The project represents more than $3 million in private funds and officials expect the first five homes to be constructed this year.

“That gets us to the starting line,” DGDC board chairman Doug McGrath said. “So, it’s really important to recognize what’s ahead of us. We can’t look around every corner, but this gives us at least a starting point to be able to make a difference.”

City officials have contended that the only way to fully realize the Downtown Master Plan, which was unveiled in 2005, was to include a housing strategy.

When asked to reflect on just how far downtown has come during an interview in 2019, Mayor Chuck Allen put it bluntly — characterizing the area “around downtown” as “not good.”

“How do we fix Virginia Street? And how do we fix Carolina Street,” Allen said. “We’ve got to figure it out, and it’s really a hard fix, but it needs to be a priority.”

Behind the scenes, the DGDC was attempting to answer the question — thinking first about a partnership with the U.S. Department of Housing and Urban Development.

But what happened instead ensured no federal, state or local dollars would be necessary.

DGDC business and property development specialist Scott Satterfield told the New Old North that the organization has, over many years, cultivated a network of people who believe in residential development — from builders and architects to people who work in finance.

“We knew that there had been conversation for years about this need for residential development, and depending on who you talk to … what they think the solution should be,” Satterfield said. “All these solutions have to be tested against money.”

And so, Communities Inc. was born.

“It dawned on us that we had this network and have this problem in our community. Why hasn’t this entity tried to leverage its good will and its capacity to try to address this problem?” Satterfield said. “Not (only) is it a threat to the millions of dollars that have been invested in downtown Goldsboro … it is also just a problem for our citizens. We feel like there was this problem not on the lowest end of the spectrum and certainly not on the highest end of the spectrum, but there was a whole (population) in the middle where people were having to make a choice between whether they wanted to stay in an unsafe area that had high concentrations of poverty, or they were going to try to be in a home they could not afford because the median salary is so low.”

The new non-profit gave the DGDC the ability to operate with that network of stakeholders in a different capacity.

“We are actively in development now. Instead of just passively trying to support the development or market it one house at a time, we said we think some capital needs to be put into it,” Satterfield said. “We need to invest in it. We need to bring all that work to bear and then we can identify a development partner that will do (the work).”

Satterfield, McGrath and DGDC director Erin Fonseca stressed that the new development would be a win for the community and the local government — for starters, because it comes at no cost to taxpayers.

“This is not public money. This is private money,” Satterfield said. “So, this is not a decision about whether the city gives money for something downtown or to DGDC. This is DGDC’s privately raised capital being put into a private project. In other words, we’re not asking the city for dollars.”

But the project will result in more money in city and county coffers.

“Right now, the city is spending all this money in these neighborhoods on these lots,” Satterfield said. “They’re generating no value, and somebody is having to pay to maintain them.”

That somebody is the city.

By offloading the property for use by Communities Inc., Goldsboro taxpayers avoid the cost of maintenance and, once the homes are built, will see a return.

“We had to pick an estimate on the value of the house. Based on the size of the houses down there … let’s just do an estimate of $200,000 a house. If it’s a $200,000 home on one of those lots, the tax value is estimated to be about $2,672,” Satterfield said. “Per unit. Per year.”

That benefit alone, he said, would make the project worthwhile.

But it’s the human impact he hopes local residents will celebrate.

From adding a nearby client base for businesses located in the MSD to offering housing options to what he considers an underserved part of the city and county population, it’s the ability to enhance lives that will be the true legacy of residential development completed by Communities Inc.

Satterfield noted that down payment assistance will be offered to teachers, firefighters, police officers, city and county employees and veterans.

“It makes it possible for some folks to qualify who might not otherwise qualify and … it grants equity into an asset that is such an important piece of wealth-building,” he said. “They end up with something they can pass down … so you’re actually creating wealth for people and you’re doing it without federal dollars, without state dollars and without city dollars.”

All while remaining “sensitive” to those who currently live in the neighborhoods they will call home to ensure “a strong and diverse” community.

“We are very sensitive to the fact that we want the people who live in that community to be able to stay in that community and afford to live in that community,” Satterfield said.

And beyond the first phase, the non-profit will continue to work with the DGDC to find investors willing to help them address housing issues in other city neighborhoods.

“What we have said all along is, ‘Look, we will try to address any problem, any range of house size or housing issue, and we will work to build the appropriate partnerships and appropriate networks to make that happen,’” Satterfield said. “You’ve got to start somewhere. When we were working with the developer side, there was a real strong back and forth about where Phase One would land and what it would incorporate.

“Part of this is about what can be acquired. There was available property. There were available lots. There were available homes that people weren’t living in. … So, you could get scale and that’s super important.”