A developer had big plans for Brookhill. Now he’s backing out

In an emailed letter forwarded to Axios on Tuesday, Tom Hendrickson of Lookout Ventures said he would transfer his ownership interest to a firm led by Charlotte area businessman Mike Griffin.

Context: Brookhill is one of the few affordable housing options left remaining near the rapidly-changing South End. But the complex is in disrepair.

In December 2019, an entity affiliated with Hendrickson purchased the land lease for the property — which means he bought the buildings and development rights but not the land underneath.

• He announced plans to tear down the apartments and create over 300 units, around half of which would be below market rate. About 120 units in Brookhill are occupied, per a recent UNC Charlotte Urban Institute study.
• In order to make the affordable housing work financially, he needed city money. But city officials and the development team could not resolve several key issues.

Why it matters: Charlotte’s affordable housing shortage is worsening as the city grows. Options are especially slim in South End, where nearby luxury apartments are far outside of what most residents with low and modest incomes can afford.

• If developers and city leaders can’t find a solution for Brookhill, it’s likely that its residents will be displaced.

State of play: Residents pay an average of $463 per month in rent, the Urban Institute’s survey of Brookhill residents found.

• Fair market rent for a one bedroom apartment in Charlotte is $1,010, per a county housing report last year.

What they’re saying: “In spite of the hard work and accomplishments by our team and stakeholders, the necessary public funding and support was not available to redevelop Brookhill Village in a manner that was financially viable and respectful of its heritage and current residents,” Hendrickson said in the letter.

According to Hendrickson, Griffin’s plans include privately funded affordable housing. On Wednesday, Griffin confirmed that, but declined to share additional details about his plans.

• “I do have a vision to do what’s morally right and to help,” Griffin said.

Flashback: C.D. Spangler Sr. developed Brookhill in 1950 for Black residents during segregation.

• It originally included 418 apartments, but the owners did not keep up with repairs, and the complex deteriorated.
• When Spangler Sr. — whose son was C.D. Spangler Jr., the beloved North Carolina icon and billionaire who ran the state’s university system and died two years ago at 86 — built the property, he put a 99-year ground lease on it.
• That ground lease is what Hendrickson purchased back in 2019, and Griffin now owns.

Between the lines: But the complicated ownership structure has been a roadblock to redeveloping the 36-acre site for decades.

• One of the city’s key concerns was that the length of time the housing would be affordable. The ground lease runs until 2049, at which point the property and improvements have to be handed back to the company owned by the Spanglers.
• Ralphine Caldwell, who heads LISC Charlotte, which manages a private affordable housing fund and advises the city, denied Hendrickson’s request for money in part because she was concerned the housing would become unaffordable at the end of the lease.

City Council did approve $3 million from the public Housing Trust Fund for the project, under certain conditions. But Leslie Blaser, a spokeswoman for the city, said those contingencies have not yet been met. Hendrickson had asked for $13 million between the public and private funds.

City perspective: City staff has met with Brookhill residents and will continue to do so to connect them with resources, Blaser said in an email.

• The city contracted with United Way of Central Carolinas to assess the community’s needs in Brookhill, which is what led to the UNC Charlotte study.

Ray McKinnon, who has worked with residents for many years, said he’s not hopeful about the outcome, although Hendrickson said the new developer plans affordable housing. The average monthly household income of residents surveyed was $1,368, which is a little over $16,000 annually.

• Even most affordable housing that is built is intended for those earning more than that.
• “We’re about to see again who are the people who bear the cost mostly of our decisions as leaders, policy wise, and it’s going to be the people it always is — poor people, Black people, brown people,” he said.

The impact: Debbie Williams lived in Brookhill for more than 20 years. It’s a family-oriented community, with longtime residents, said Williams, now executive director of the Brookhill Community Resource Center.

But for the last several years, there’s been a cloud of uncertainty hanging over tenants.

“All around the Brookhill community, they are just building and building, and it’s as if they are taking no notice of what’s sitting right in the middle of their world,” Williams said. “I think there’s enough wealth in the city of Charlotte that more attention could’ve been paid to what’s going on around here.”