Chapel Hill's Complete Community Strategy Hits a Snag
At the January 9, 2025 OWASA Board of Directors meeting, Chapel Hill’s Complete Community Strategy hit a snag. Parkline East Community along Old Chapel Hill Road, one of the three pilot areas established for the Complete Community Strategy, may not have sufficient sewer capacity without a potentially expensive upgrade.
The Chapel Hill Town Council adopted their Complete Community Strategy in April 2024. Six months earlier (November 2023), they approved the first rezoning of what is now four multifamily projects for the Parkline East Community. Those four projects have now gone through the conditional rezoning process required to obtain Council approval before construction begins.
A = Meridian/Lakeview (originally named Gateway)
B = Chapel Hill Crossing
C = Old Chapel Hill Apartments
D = East LakeView Townhomes
E = Relevant OWASA pump station (East Knolls)
In a standard zoning district, all properties must be treated the same with respect to density and conditions. But in a conditional zoning district, each property is subject to individualized development conditions.
When the 16-acre Gateway project (now known as Meridian) was rezoned in November 2023, the Town Council first had to change the zoning district from the original R1 (3 units per acre) to T6-OZD (15 units per acre). Then the Council negotiated with the developer to make sure the final permit included all the amenities they wanted as part of the Complete Community Strategy, such as the greenway space, commercial space, etc. The other three projects also had to be rezoned to the newly created T6-OZD district in addition to similar negotiations for the conditions of the development.
The rezoning process for the four projects went as intended. But these large projects weren’t new developments. As redevelopment projects within a previously zoned and inhabited area of town, the rezoning overlooked two issues that had a direct impact on OWASA.
The number of anticipated residents (residential density) in the area remained as 3 units per acre (R-1) until after each new project was approved by the Town Council.
According to OWASA policy, when water and sewer are added to a previously undeveloped area, the first developer to develop that area must pay to build the main water and sewer lines (infrastructure) needed to support build out of the entire area. But who pays to upgrade infrastructure when there are multiple, simultaneous projects that significantly increase residential density?
Residential Density
Prior to the Town Council voting on each of these four Parkline East rezonings, OWASA’s Engineering staff reviewed the proposals and determined there was sufficient water and sewer capacity in the existing infrastructure to support each of the first three projects and provided a letter saying as much to the developer.
Based on that letter from OWASA and the rezoning authorizations, two of those developers closed on the land purchases, invested in the full-scale plans needed to build the developments, and acquired the necessary permits. Two of the three projects are ready to break ground according to what DR Bryan, the Gateway/Meridian developer, told the OWASA Board of Directors Thursday night.
However, the fourth project, which wasn’t as far along in the town’s review process, recently received a letter saying there may not be adequate sewer capacity and a new capacity model must be run before any of the four projects can proceed.
Mr. Bryan was rightly upset that he’s jumped through all the hoops, invested millions of dollars, has a letter from OWASA, and is ready to start construction but is now on hold until the new model recalculates the sewer capacity.
Four new projects proposed for the same area at the same time is a first for the OWASA engineering department, according to staff. The existing sewer was built to serve residential residency based on the R-1 zoning. The more than 1,000 additional residential units proposed for construction through the recent rezonings weren’t anticipated in the OWASA’s computer model for the area. Since conditional use rezoning is done on-the-fly instead of through a small area plan, OWASA had no concrete data with which to update the variables in their computer model. Models are expensive to update and to run, so reprogramming after each of the first three rezonings would have been cost prohibitive.
Road and sidewalk capacity can be built into a conditional zoning permit, but sewer capacity can’t (or at least, it hasn’t been a consideration in the past). In other communities, where water and sewer are municipally owned, it may be more closely coordinated but OWASA is an independent agency, not part of municipal government.
For now, OWASA is having their contractor re-run the area capacity model and the results are expected by the end of January. The cost to update and re-run that model is $12,000.
Who Pays for Expanded Service?
When UNC transferred the water and sewer utility to the newly created OWASA in 1972, they included a provision that has become a sacred mantra within OWASA: Grow must pay for growth. In other words, OWASA customers can not be charged for municipal growth.
With respect to that principle, the $12,000 expense to reprogram and re-run the model would have been paid by the developer, but under this current situation, OWASA staff doesn’t know which of the four developers to bill. So, contrary to their growth-pays-for-growth principle, they decided the OWASA customers will absorb the expense of the modeling run. During last week’s meeting, at least one board member expressed concern with that decision. After more discussion, she seemed to withdraw her concerns due to the inaccurate implication that this problem arose from OWASA staff error.
If the new model dictates expanding the capacity of the current sewer infrastructure is required, determining who pays for what could be a significant expense will create another challenge that will need to be negotiated.
Bottom line
While re-zoning individual properties one-by-one may give the Town the best option for negotiating amenities to ensure the integrity of each project with the Complete Community Strategy, OWASA’s development process depends on a concrete plan for the aggregate development of the area. Those present at last week’s meeting acknowledged that a similar problem could arise with the planned redevelopment along 15-501 south.
Next Steps
The discussion at last week’s meeting was not on the agenda. It arose from one of the developers making a public comment during that portion of the meeting. There was no action taken by the OWASA board, except to request that the issue be included on the agenda for their next meeting on February 13.
Note that nothing about the density programmed into the computer model for the sewer lines was referenced during Thursday night’s meeting. OWASA makes it a practice not to comment on development practices by the towns. This assumption that the base data in the capacity model has created the problem comes from my understanding and should not be attributed to OWASA staff or board members.