Developers of a large college student housing complex in Cullowhee got an OK from the Jackson County Planning Board to deviate from engineering rules on man-made slopes. 

Haywood Community College has asked for more than $1.4 million from the county for building and renovations projects on campus in the coming fiscal year.

Southwestern Community College officially dedicated a new $8.8 million building on its main campus in Sylva last week. The building was built with a majority of state money but also a large contribution by Jackson County.

A feeling of déjà vu swept over the Haywood County Board of Commissioners meeting Monday as they reviewed more than $19,000 worth of changes to the Haywood Community College’s creative arts building project.

These were not the first, or even the second, design issues that have arisen during the already controversial project. The construction has racked up more than $300,000 in changes, which has left the commissioners wondering how much more money they will have to shell out and, more importantly, how much of that they will get back.

The project is still within its $10.2-million budget. A contingency fund was built into the price tag to cover unexpected costs that crop up during the course of construction. There is still more than $300,000 in the fund.

The conversation between the commissioners and Bill Dechant, HCC’s director of campus development, seemed rehearsed the third time around as Dechant described some additional work that needed to be done to a steel structural column.

“Was this a design error?” asked Board Chairman Mark Swanger.

“It was a design omission,” Dechant said.

“It will be taken up with the architect?” Swanger then queried.

“Yes,” Dechant replied on cue.

The college has already begun negotiations with the architect regarding mistakes that have arisen during the project. Architects from the Raleigh-based Innovative Design have taken responsibility for some of the problems, and HCC hopes that the firm will reimburse the county for the cost of those errors.

Commissioner Kirk Kirkpatrick asked the college to provide the board with updates on the reimbursement negotiations with the architectural firm and a local surveyor.

“I really hope you all put the pressure on the architect and the surveyor,” said Commissioner Mike Sorrells.

Dechant moved onto the priciest of the three change orders, re-grading and repaving a parking lot — a nearly $16,500 cost. The revision was to solve drainage problems that resulted from a lack of information on a topographical survey.

It was not an omission or an error, Dechant said. “It just did not have enough detail.”

However, Commissioner Kevin Ensley, a surveyor by trade, said the survey should have included enough information to prevent the problem.

“They should have gotten that information. A survey should pick this up,” Ensley said. “It’s an omission.”

When asked who the surveyor was, Dechant laughed uncomfortably and admitted that he could not recall at that time. The same survey led to additional costs last month related to the repaving of a sidewalk to prevent other drainage problems.

Although the commissioners seem increasingly exasperated by the repeat visits, Dechant repeated that the amount of revisions is minor considering the scope of the $10.2 million project.

“It’s a complex building, and we have had very few change orders considering,” Dechant said.

It looks like even more change orders are in the cards, however. Another round of change orders were considered by the college’s Board of Trustees at their meeting last week — six change orders in all valued at nearly $12,000.

Change orders first go through the college trustees, then on to the commissioners, so commissioners are likely to get this next batch eventually. The list also reflects more than $7,000 in savings because of various changes to the project.

In January, Dechant went before the Haywood County Board of Commissioners seeking approval to use more than $262,000 in contingency funds. Most of it went to a water pump needed to provide adequate water pressure for the building’s sprinkler system.

Architects from Innovative Design erred when studying the water pressure earlier in the planning process. They tested the pressure in the main water lines running through campus a few hundred feet below the building site. As water flows up the hill to the new building, it loses pressure — a fact the architect did not factor into his plans, Dechant said at a previous commissioners meeting.

In April, he returned to the Board of Commissioners asking for a little more than $25,000 to widen a doorway, reinforce an outside deck and construct a retaining wall as well as pay for a couple of minor miscellaneous items.

Last year, the commissioners and college administrators battled for months about the scope of the creative arts building project, before settling on a plan. Commissioners insisted that the college slash the price of its plans, while administrators argued that the building construction and amenities had been whittled down enough already.

The new facility will house studio and classroom space for students studying the creative arts, such as pottery and woodwork.

Money to pay for the new building is coming from a quarter-cent sales tax approved by county voters more than four years ago to fund improvements to Haywood Community College’s campus.

Hopes of turning the abandoned Haywood County social services building into low-income senior apartments have been dashed, leaving the county in a quandary over who else might want the building and what other uses it could have.

The county recently moved out of the massive, aging, five-story brick office building in Waynesville. The Department of Social Services had not only outgrown the building, but it was also deemed too dated and run-down to bother renovating.

A new life seemed to be in the cards for the building as a low-income senior apartment complex — but the $8.5-million project was contingent on lucrative tax credits to offset the expense of renovating the old office building. The county learned last week that the hoped-for tax credits have fallen through, and the project is off the table as a result.

Patsy Dowling, the director of the nonprofit Mountain Projects that was behind the plan, said the low-income housing is much needed in Haywood County. She said she is disappointed that the project was knocked out of the running for the tax credits.

“Our aging population is growing, and I thought it was a great thing to be proactive to meet the needs of the senior population in our community,” Dowling said.

County Commissioner Chairman Mark Swanger said the county is likewise disappointed — not only to fill a desperate need for low-income housing but because the county is left with a big, old building on its hands.

The tax credits for low-income housing projects are highly competitive. Only five to eight low-income housing projects in the mountain region will land the tax credits this year — out of more than 20 applications.

Mountain Projects withdrew its application for the old DSS building after realizing its score wasn’t high enough to make the cut. The other 26 applications it was up against all had perfect scores.

The downfall of the Haywood County project? It was too far from a grocery store or pharmacy — 0.7 miles instead of the required 0.5 miles.

“They are very strict about how close it is in proximity to major services,” said Dowling.

The old DSS office building was just short of the criteria, costing the project critical points on its application.

“It is not an equitable system,” Swanger said of the tax credit criteria. “It seems very arbitrary when you are looking at rural areas.”

Blueprints called for renovating the old DSS building into 54 apartments, with a mix of one- and two-bedrooms. The total project cost was $8.5 million, including cost of the property and construction.

The tax credits would have amounted to $6.7 million — dramatically lowering the total cost to just $2 million. Indeed, that’s what made the project feasible. The developer partnering with Mountain Projects to do the project would have a very small mortgage in the end, allowing them to charge lower rents.

“The project doesn’t work without the low-income credits,” said Hollis Fitch, president of Fitch Development, a low-income housing developer based in Charlotte.

Fitch works across the state and regularly taps the low-income housing tax credit pool.

“It is a competitive process,” Fitch said.

Fitch’s group had put more than $60,000 into the design and planning for the Haywood project, including blueprints.

After Fitch and Dowling realized they were up against 26 projects with perfect scores — leaving no hope of snagging one of the five to eight slots — Dowling withdrew the application to save on the $5,000 non-refundable application fee.

While Mountain Projects could theoretically apply again another year, Dowling doesn’t anticipate the competition will getting any easier.

With the building not getting any closer to a grocery store, it is hard to see how it would ever land the tax credits needed to pull off the project.

“The building is where it is. We can’t move it any closer,” Swanger said. “Unless there is a dramatic change in the way in the North Carolina Housing Authority ranks its points, the chances would be remote.”

Indeed, getting that criteria changed is the only hope of jump--starting the project at this point. Swanger said he plans to take the issue up with state legislators.

Going once, going twice?

For now, the 70,000-square-foot building is officially for sale, with a price tag in the neighborhood of $1.25 million.

That’s what the developer working with Mountain Projects was going to pay the county, Swanger said.

The central offices for Haywood County Schools are still located in the building but would move out if and when it sells.

Typically, the county would sell property to the highest bidder. But, it doesn’t necessarily have to. The county could opt to sell it for a lower price to a nonprofit entity if it would in some way serve the public interest, as was the case with the sale to Mountain Projects.

Likewise, the county does not want to sell it to someone who will simply park on it as an investment.

“There would be a due diligence on our part to make sure that it is to a responsible party who will not allow it to just deteriorate and become an eyesore or safety hazard,” Swanger said. “You also don’t want someone to buy it at a very low price just to flip it.”

Obviously, the price tag to buy the property would only be part of the necessary investment from a buyer. Almost any use would require renovations.

Of the $8.5 million projected estimated cost to pull off the low-income apartments, $5.3 million was for construction, Fitch said.

The building was originally constructed as a hospital. The layout — long hallways lined with dozens of tiny rooms — isn’t conducive to many uses without major renovations. Age isn’t exactly on its side either. Part dates to 1927 and the rest to the 1950s — a whopping 72,000 square feet in all.

And, the building isn’t in the best shape either. Its sheer antiquity aside, the county scraped by on its maintenance during the years, spending the bare minimum to keep the building from falling into disrepair — but no more.

Now that it is mostly empty, a county maintenance worker is making twice-daily rounds through the building to make sure there are no water leaks, broken windows, varmints or vandals. The county has kept the utilities on. It can’t shut off the water since the school system is still occupying the front portion of the building. The heat is also being kept on, albeit at a cool 48 degrees, to avoid building shock from wild temperature fluctuations.

“To let it deteriorate further is something we would like to avoid,” Swanger said.

In hindsight, the county hasn’t exactly been the best cheerleader for the building. County commissioners repeatedly talked up the building’s short-comings when debating whether to move out.

The county relocated DSS to a repurposed office complex inside the former Walmart.

Haywood County in the real estate business

The old DSS building isn’t the only former office complex Haywood County government is trying to unload. County Manager Marty Stamey joked that it seems like he has a part-time job as real estate agent these days.

After moving several county departments once spread out in three separate office buildings under one roof at the repurposed former Walmart strip mall, the county is now looking to sell the three office complexes.:

• Annex II (board of elections/planning department): $1 million

• Annex III (health department)/annex III: $1.5 million

• Board of elections/planning department/ annex II: $1 million

• Former DSS (old hospital): $1.25 million

The buildings known as annex II and III on the Old Asheville Highway were originally medical offices, but when the old hospital moved out of its former building, doctors likewise moved their practices closer to the new hospital.

By Colby Dunn and Quintin Ellison • Staff Writers

Although retail businesses might have found some relief toward the latter part of the year, homebuilders and real estate agents found fewer reasons for joy in 2010.

For homebuilders, the outlook was pretty bleak, according to Dawson Spano, president of the Haywood Home Builders’ Association. The bleeding in the industry, he said, has slowed but hasn’t altogether stopped, and many contractors around the region are still calling it quits — or at least still feeling the heat of the recession.

“Builders are getting out of the business, but not at the fast rate that it was last year,” Spano said.

The best way to characterize the situation, he said, is that things aren’t yet getting better, but at least they’re not getting worse.

The business they’re seeing now is different than what has long characterized the home building industry in Western North Carolina, with large developments of second and luxury homes on the decline or stopped altogether. And Spano said he’s not certain that kind of construction and housing market will ever return to the area.

“We’re going back to the way it used to be, where you have builders building one, two houses a year,” Spano said. “I think the big developments are dead for a long time. The Balsam Mountain Preserves, the Sanctuaries, those big places — I don’t see people dropping 300 to 400 thousand for a piece of property.”

Homebuilders, though, are seeing a trend towards remodeling, and Spano thinks this may be where the market is going when the country finally drags itself out of the economic slump. Wherever it’s headed, he has no doubt that it will be scaled back.

Phyllis Osborn, executive officer for Haywood’s Home Builder’s Association, said that the numbers bear this out. What they’re hearing from contractors around the region is that work is there, but it’s smaller in scope and opportunities are still sparse, as evidenced by the drop in contractors still in the game.

“We are 136 in our membership and at the end of last year it was 148, so we’re continually dropping,” said Osborn. “And I know in years prior it’s been up almost to 200.”

Spano’s predictions that small building will lead the way out of the recession and beyond are echoed by the National Association of Home Builders, who released a study at the end of December proving that very trend. The NAHB found that 65 percent of builders that are still in business pull in less than $1 million annually.

“We are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward,” said NAHB Chairman Bob Jones in a December statement.

In the real estate market, the general sentiment seems to be much the same – that things are still languishing, but the sales dips are not quite as deep as they were last year.

Bob Holt, who teaches about real estate for Southwestern Community College, said there are fewer agents than during the pre-recession boom years. The ones that have stuck with it, however, are staying relatively busy, he said.

“It is still slow, but things are turning around,” said Holt, a Franklin resident. “The prices are low, the interest rates are low — it is a good time to buy stuff.”

Holt said the situation would not improve significantly for another year or so, “until we clear out all the foreclosures” and the job situation improves.

In Haywood County, the Board of Realtors is looking to a merger with Asheville as a possible force to help mitigate the loss if the economic hits keep coming. For homebuilders, 2007 was the banner year, and for Western North Carolina’s real estate world, the benchmark for booming business was 2005. But as one real estate agent put it at a recent board meeting, 2005 probably isn’t coming back, so the future may be found in a new business model, not a return to pre-recession growth.

“If the real-estate market doesn’t improve, then neither will my membership,” said Lisa Brown, association executive for the Haywood Board of Realtors. The math is simple, and after taking a hit of more than 25 percent last year, the area’s agents are looking for a better 2011.

But John Keith, a Waynesville real estate agent in his second year in the county, remains optimistic. People are still buying, even if the pace is much slower. People still want to move here, even if they can’t make it happen until their current house sells.

“The market is still depressed, but I’m optimistic,” said Keith. “We still know that this is one of the best retirement relocation areas in the country, and there’s still a lot of people that are trying to get here.”

For his part, Spano takes a more poetic view of what’s coming in 2011.

“We’re in the valley of the shadow of death,” Spano said. “We’re there, except now we can see the light at the end of the tunnel.”

Haywood Community College leaders have chipped away more than $430,000 worth of features from its proposed creative arts building, but the project’s $10.3 million price tag continues to leave county commissioners cringing.

The Haywood County commissioners gave the college the go-ahead on the project last week, without addressing the most contentious issue: its cost.

County leaders voted 4-1 to submit a loan application to the state Local Government Commission, which must approve all debt incurred by local governments — without specifying exactly how much money would be borrowed, admittedly an odd omission from a loan application.

Meanwhile, HCC leaders had asked the commissioners to commit outright to a $12 million loan, which would cover other construction projects along with the cost of the new creative arts building.

The county board stopped short of a full endorsement, sticking to its assertion the college has not done all it can to cut costs.

Commissioners agreed to proceed with the loan application once HCC receives bids on the project, hoping the cost would come in less than anticipated.

A special quarter-cent sales tax approved by voters in a referendum two years ago will fund the project. While the special sales tax is earmarked for construction projects at the college, commissioners say they are obligated to make sure it is spent wisely.

Commissioner Kevin Ensley cast the sole vote against the project, again expressing concerns about the proposed building’s price tag.

“I don’t think I can support the building as it’s designed right now,” said Ensley. “I just think the building they’re trying to build is too expensive.”

The college is attempting to acquire “platinum” level environmental certification for its building, equivalent to the highest level of green building in the country. Ensley says the architects he’s consulted have said platinum buildings cost 20 to 25 percent more than usual.

Ensley has requested correspondence between the college and the state construction office and learned, for instance, the college plans to use rainwater to flush toilets in the building, an endeavor that requires double the plumbing.

HCC Board of Trustees Chairman Mark Bumgarner defended the building’s green features, arguing that the creative arts building is subject to strict state energy requirements.

The energy-hungry pottery kilns, welding equipment and shop tools have made it especially costly to meet state guidelines — forcing the college to install more energy saving features than normal to offset the higher than normal energy use.

Following these requirements happens to coincide with criteria for energy-efficient construction.

“The only thing to reduce would be to eliminate space, and space is the most important part,” said Bumgarner. “We’ve gone through a great deal of due diligence. This is not just something that we said, ‘Let’s be fancy and do more than we need to do.’”

As part of its attempts to lower cost, HCC has replaced exterior and interior stone and wood finishes with less expensive options, reduced the amount of exterior site lighting, removed interior sound proofing finishes in low-noise areas, eliminated exterior seating and tables, and eliminated an interior shower stall, planning to use a classroom safety shower instead.

HCC President Rose Johnson said the cost reductions occurred as a part of routine due diligence during the construction design process.

“We informed county commissioners during meetings that we took that step,” said Johnson. “That step was not a result of their questions.”

Though debates have arisen over construction costs in the last few months, commissioners and HCC leaders all agree that the college needs a new creative arts building.

“The college is pleased that the county commissioners took action on is intent to start the process of securing a loan,” said Johnson.

Bumgarner pointed out that HCC’s creative arts program is a keystone that sets the college apart from other community colleges not only in North Carolina, but the entire country.

According to Bumgarner, the county manager and finance director anticipate revenues from the quarter-cent sales tax to bring in about $1.5 million each year, which in Bumgarner’s view is sufficient to apply for a $12 million loan.

“That’s the level that exists with the current recession,” said Bumgarner.

Commissioner Mark Swanger said he would rather see the special sales tax money stretched further rather than every penny being committed to loan payments.

“Why borrow money if you got that money sitting there?” said Swanger, adding that the county commissioners will have the ultimate responsibility for the loan. “If sales tax money coming in is insufficient to pay debt service, the county would be responsible for using property tax money. I take that seriously.”

Commissioner Tom Massie wants to see the county formalize how it funds capital projects.

Under the current method entities simply approach the county when they are in need and ask for funding. Massie suggested that entities fill out an application requesting capital project funding, and then county staff can study the forms to determine if the projects are really needed.

The application would give different capital projects a ranking and help the county prioritize projects. He said the N.C. Institute of Government recommends that local governments handle capital projects this way.

Under the county’s current system there is some disorganization, he said. For instance, he said SCC said it didn’t need anything eight months ago and now needs about $1 million for a new building.

Having a formal system will provide a rational and logical explanation as to why projects are needed. He said since he has been on board, some projects that have been approved were nice but not necessarily needed. The application process would enable the county to plan five to 10 years down the road, Massie said.

Massie made the recommendation to fellow commissioners at a capital projects workshop last week.

Attempts to pass Swain County’s first-ever planning regulations are showing signs of movement, but not in the direction that planning advocates hope.

A county subdivision ordinance, primarily setting standards for road widths and grades, was dropped from discussion by county commissioners a year ago after facing fierce opposition at a public hearing. No work has been done on it since, leaving Swain County as one of the few in the region with no regulations or oversight of construction on mountainside slopes.

The commissioners’ lack of interest in planning has now cost the county a grant that would have rekindled the topic.

Until recently, Swain County was second in line for a pot of money to help communities with planning initiatives, funded by the Southwestern Commission and the Department of Transportation.

The county was given the coveted number two spot because at the time, commissioners seemed serious about a subdivision ordinance and other planning issues.

But since the ordinance is dead in the water, the two grant sponsors asked Swain County Manager Kevin King if it was OK to bump the county further down the list and put neighboring Macon County in the number two spot.

King gave the Southwestern Commission and DOT the go ahead, and later informed the commissioners at the board’s annual retreat last weekend.

“That ordinance was dead anyway,” King told commissioners. “So we don’t have anything in place right now until somebody asks to put it on the agenda.”

King paused to see if commissioners showed signs of interest in the issue, but they remained silent, making it clear they had no intention of being the one to bring the ordinance up again.

Some Swain County residents think now is the time for the county to revisit the issue of planning. The economic downturn has slowed development, leaving commissioners time to hash out details.

“Right now, while land prices are dropping out the bottom, they should be trying to do something,” said Swain native Boyd Gunter. “You got a breathing spell here.”

Gunter, who lives in the Alarka community, has already seen too many developers ravaging his mountains.

“I own mountain land, and I don’t want to see it destroyed,” he said. “It’s just pure negligence on these Realtors’ parts to think you can come and build a house anywhere.”

Gunter has been pushing Swain commissioners to put development regulations of some sort in place for at least two years, but to no avail.