Chapel Hill to UNC Health: $5M affordable housing plan not enough for Eastowne expansion

Tammy Grubb, Mark Schultz
·5 min read

The Chapel Hill Town Council put off an anticipated vote this week on UNC Health’s expansion at its Eastowne campus off U.S. 15-501.

The council, concerned about a plan for parking on environmentally sensitive land and other issues, voted 7-1 Wednesday night to continue the public hearing until June 21.

The postponement came despite UNC Health’s request for a vote and its offer of $5 million for an affordable housing loan fund — a figure that the president of the chamber of commerce called “remarkable.”

“This is definitely a worthy project,” council member Jessica Anderson said. “I would like to see some other way of dealing with the parking.”

The project would add 1.1 million square feet of medical clinics and offices and preserve 20 acres of a natural heritage forest and wildlife corridor. But it reserves about 10 acres of the forest, between Eastowne Drive and the I-40 off-ramp, for additional future parking.

UNC Health has said it needs the expansion to serve outpatients and free space at its Manning Drive complex.

The first new building in decades opened at Eastowne in 2021, along with a parking deck. Construction of a second building could begin as soon as it is approved, said Simon George, vice president of real estate and development for UNC Health Care.

The campus will be expanded one building at a time, with a new one going up about every three to five years, he said.

Aaron Nelson, president of the Chamber for a Greater Chapel Hill-Carrboro, spoke in support of the project.

“These are high-wage jobs in an industry that by definition improves life in our community,” he said.

“Our economy locally is built on ed and med and bed,” he said. “That’s what we do, right? Its education. It’s our health care and our hospital, and it’s our housing and our hospitality industry. ... I said before, City of Medicine eat your heart out We are going to be the place where health care is central.”

UNC Health’s 25-year plan would add six new medical buildings (blue) to the Eastowne campus off U.S. 15-501 and four new parking decks. The only construction planned outside the loop -- on 20 acres of natural resource land -- would be a parking deck, if needed.
UNC Health’s 25-year plan would add six new medical buildings (blue) to the Eastowne campus off U.S. 15-501 and four new parking decks. The only construction planned outside the loop -- on 20 acres of natural resource land -- would be a parking deck, if needed.

A taxing issue

UNC Health is a not-for-profit owned by the state and is not required to pay property taxes, although it sometimes makes a payment instead of taxes. It made a payment in lieu of taxes last year of about $414,000 to the schools, county and town for its Eastowne property, which included $114,000 to Chapel Hill, a spokesperson said.

Mayor Pro Tem Karen Stegman asked Wednesday if UNC Heath would make a larger payment with the expansion. George said not with $5 million the system has agreed to provide for affordable housing.

Mayor Pam Hemmiger asked if UNC Health would give the town an additional $100,000 per year if the affordable housing money was reduced to $4.9 million.

“That is unacceptable,” George said, who noted the system also benefits the town through unreimbursed health care it provides to Chapel Hill residents.

Council member Paris Miller-Foushee said UNC Health was taking a narrow view.

“We’re looking at our budget right now,” she said. “I’m thinking about the people who provide services every single day to community members. ... Those taxes allow us to be able support our folks too.

“When we talk about benefits, it’s not us and you,” she said. “It’s the ‘we’ that I’m hoping we can really be thinking about here.”

Hemminger agreed.

“I think you can can sharpen your pencils and figure out something (better) in payment in lieu,” she said.

George called the council’s insistence on more money in lieu of taxes, on top of the housing offer, “a little harsh.”

The system had offered $3 million for housing plus $30,000 in lieu of taxes for each new building and the town indicated its preference was for $5 million for housing, he said.

The first of roughly a dozen planned buildings and parking decks opened last year on UNC Health Care’s Eastowne campus in Chapel Hill. UNC Health already has enough need to fill a second building, project officials have said.
The first of roughly a dozen planned buildings and parking decks opened last year on UNC Health Care’s Eastowne campus in Chapel Hill. UNC Health already has enough need to fill a second building, project officials have said.

Parking, housing, payment in lieu of taxes

The fate of the natural heritage forest and how UNC Health could help with the town’s need for more affordable housing have been key talking points in the negotiations.

The town’s Environmental Stewardship and Stormwater Management Utility advisory boards and many local residents asked the council to preserve the entire tract. Council members Adam Searing and Anderson had suggested selling the land to a conservation group.

Council members had asked UNC Health to help with housing since thousands of UNC Health workers drive into Chapel Hill every day for work and go home to other more affordable communities.

The proposed $5 million loan fund would help the town address the need, similar to the university’s $3 million no-interest revolving loan fund to buy and preserve land and housing for families in the Northside neighborhood near campus.

A preliminary rendering of the UNC Health Eastown campus, as seen from the existing parking deck, shows how the next medical building (at right) and future buildings would be connected and look in relation to their environment.
A preliminary rendering of the UNC Health Eastown campus, as seen from the existing parking deck, shows how the next medical building (at right) and future buildings would be connected and look in relation to their environment.

The fund could create 500 to 1,000 housing units over the next 20 years — more if the town leverages its money and money from its community, university and private partners, town staff has said.

Traffic has been another concern, especially how pedestrians and cyclists navigate the area once the campus expands and additional development is built south of the highway at The Parkline office campus and along Old Durham and Pope roads.

Project details

▪ Developer: UNC Health Care

▪ Location: 50 acres at Eastowne Drive, Fordham Boulevard and Interstate 40.

▪ Zoning: Office and institutional, but a rezoning would allow more dense development

▪ Current use: UNC Health Care medical buildings and parking deck

▪ Proposed use: Full medical campus buildout, including seven medical buildings and up to five parking decks, with between 3,500 and 4,700 spaces.

The Orange Report

Calling Chapel Hill, Carrboro and Hillsborough readers! Check out The Orange Report, a free weekly digest of some of the top stories for and about Orange County published in The News & Observer and The Herald-Sun. Get your newsletter delivered straight to your inbox every Thursday at 11 a.m. featuring links to stories by our local journalists. Sign up for our newsletter here. For even more Orange-focused news and conversation, join our Facebook group "Chapel Hill Carrboro Chat."