Durham city council members are pushing back against a developer’s proposal to transform a city-owned parking deck into a 32-story apartment building in Durham, citing concerns over the project’s lack of affordable housing.

“I’m having a real hard time understanding the benefit to the city,” Mayor Elaine O’Neal told executives from Craig Davis Properties during the council’s Thursday work session.

The development firm has offered the city $5 million for the 719-space garage, which stands on the corner of Morgan and Foster Streets and is frequently used by downtown employees and patrons of the Carolina Theatre. 

The redevelopment would replace the western half of the deck with The James, a towering complex with ground-floor retail space, 82 public parking spaces, and 308 market-rate rental units. (The eastern section of the deck, which is located beneath the Duke Clinical Research Institute and contains around 300 parking spaces, is not included in the proposal.)

Some units could go for upwards of $7,000 a month, executives said Thursday. 

As part of its pitch, the firm has offered to contribute $650,000 to the city’s affordable housing fund, but executives are opposed to designating affordable units within The James itself, which would become the tallest building in Durham if constructed.

“From an economic standpoint, it’s more advantageous for us to offer a contribution to the (affordable housing) fund as opposed to putting them in that structure,” Earl Guill, the company’s vice president of development, told the council.

Council member Jillian Johnson was skeptical of Guill’s pitch. 

“I would presume that you would still be able to make significant profits on this project if you were to locate some affordable housing units in the building,” Johnson said. “Do you think that’s inaccurate?”

“I think it would be a push,” Guill said, adding that “the analysis of doing that would be difficult for us.”

Council members Javeria Caballero and DeDreana Freeman echoed Johnson’s concerns. 

“We don’t really need $5 million,” Freeman said. “But we do need affordable housing.”

The proposal is also receiving online pushback from Durham residents.

“We definitely need more housing density downtown, but the offer of 6 affordable units elsewhere is supremely insulting & classist (yay poors but not here please),” writer Matt Lardie tweeted. “Are we just giving up on any housing for the working class anywhere near downtown?”

While emphasizing the need for more affordable housing downtown, council member Leonardo Williams said he fears that rejecting this kind of proposal may lead to worsened gentrification in other areas of the city. Tech companies are bringing thousands of new residents to Durham, he said, and they need a place to live.

“I don’t want them going into neighborhoods and taking what people already have,” Williams said. 

Mayor Pro Tem Mark-Anthony Middleton was also more receptive to the proposal than others on the council, calling it an “intriguing offer.”

The garage is owned and operated by the city, though the firm owns the air space above it. Any proposals to redevelop the property must be approved by the firm, the city council, and the Duke Clinical Research Institute, according to city attorney Fred Lamar. 

Craig Davis, the firm’s founder and CEO, told the council that his team would tweak the plan as needed for approval.

When he bought the air space, he said, “I committed to not build offices, but to build housing, because we needed it.”

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Follow Staff Writer Lena Geller on Twitter or send an email to lgeller@indyweek.com.