Town Council on Dec. 9 approved the ground lease, affordability covenants and related easement and funding steps to move Northpointe — a 157‑unit workforce housing development west of the post office — into construction.

The council voted unanimously (7‑0) to adopt second reading of the ordinance authorizing the ground lease and associated covenants and later approved a companion easement for ingress, egress and utilities with the Hilton Head Public Service District. Council also approved a resolution authorizing the disbursement of $1,000,000 in American Rescue Plan Act (ARPA) funds toward on‑site eligible improvements.

The town’s presentation described Northpointe as a mixed set of 1‑, 2‑ and 3‑bedroom rental units with class‑A amenities — a community building, high‑speed internet, pool and outdoor spaces — targeted to the island’s essential workforce. The developer and town said at least 50.1% of the units will serve households earning 60%–79.99% of area median income (AMI); the broader income bands advertised for the project span roughly 50%–150% of AMI.

A town representative explained a lender requirement built into the ground lease designed to protect the financing: no sooner than three years after the first certificate of occupancy, if a unit remained vacant for 45 days and could not be filled by a tenant meeting both the income and on‑island employment qualifications, the property manager may temporarily rent the unit to a Beaufort County worker for a one‑year term; after that lease term the occupant would need to work on Hilton Head Island or vacate. The presenter said the provision helped secure a roughly $43 million capital stack.

Councilmembers asked about funding, occupancy enforcement and tenant documentation. Finance and town staff clarified that the $1,000,000 contribution is ARPA income‑replacement funding previously set aside for Northpointe and will cover about 25% of approximately $4,000,000 in eligible site work; the development partner is responsible for the remainder of the capital stack and any cost overruns. Council also heard that lease terms and property management will govern occupancy limits (the developer and investor require no more than two people per bedroom). The town emphasized that the town’s main financial contribution is the long‑term ground lease and that no local tax dollars were being used for the $1,000,000 ARPA payment.

Officials said construction mobilization could begin in January, with a groundbreaking planned in February; first units are expected to be released to tenants in early 2027 and substantial completion anticipated in mid‑2027.

The vote concludes the council’s local approvals and clears the way, staff said, for the developer to close financing and begin site work.