Morganton council approves amended development agreement for 400 Meeting Street, expands housing incentives

Morganton’s City Council on April 6 unanimously approved an amended development agreement with 400 Meeting Street LLC and Haven Capital Partners LLC that revises the schedule and size of a planned residential project and authorizes staff to execute the updated contract.

The amendment raises the planned total to 81 housing units — described by staff as 65 rental units and 16 townhomes — increases the developer’s investment and shifts performance dates. City Manager Sally Sandy told the council the developers "are putting money in themselves" and are aiming to have all necessary plans and permits by Dec. 31, 2026, with construction to begin within four months thereafter. The agreement preserves the city’s option to repurchase the property if the developer fails to secure financing.

Why it matters: the amendment combines several city housing decisions into one package: council also adopted updates to the single-family housing stimulus program and to local loan programs that staff said are intended to make development more feasible while protecting public investment. Those program changes allow certain rental-configured single-family/townhome projects to qualify for infrastructure assistance, reduce the maximum number of units per project in the stimulus program from 30 to 25, and set clearer repayment rules if developers or businesses default.

Details of the development amendment and related policy changes were presented by City Manager Sally Sandy, who reviewed the city's history with the property and the developer’s progress. The council record says the original agreement was approved in November 2023 and the city closed on the adjacent property in November 2024. Sandy said the developer has encountered financing and design challenges but has advanced the project to the point that an extension and adjusted unit mix are warranted. She summarized the revised unit breakdown: "they are looking to do 81 units and that is up from the original 70. 65 rental units and 16 town homes is the breakdown of that."

Council members emphasized the project's private investment and need for housing. One council member described the undertaking as "substantial" and another urged patience, noting the amount the developers have already invested. The council adopted the amendment by voice vote; no roll-call tally was recorded in the meeting transcript.

Policy changes adopted the same evening broaden eligibility for the city's single-family housing stimulus program to allow rental-configured single-family/townhome units (staff described these as units that could be rented initially and sold later, subject to design and fire-separation requirements). The program also establishes a repayment cadence for projects that produce rental housing rather than owner-occupied homes: loans include security and staged repayment with a balloon payoff in year seven if the property remains rental. Sandy said these revisions are aimed at creating more housing supply without changing the program’s infrastructure-support intent.

Separately, council approved amendments to the Main Street and CDBG-entitlement small business loan programs. The Main Street loan changes clarify default and forgiveness terms (maintaining a five-year forgiveness trigger but creating a 30-day cure period and optional 12-month repayment plan in early default cases). CDBG-aligned loan rules were changed to match current federal thresholds: loans of $5,000–$35,000 now require one full-time job or two part-time equivalents; $35,001–$50,000 require two full-time (or four part-time equivalents); loans up to the program maximum (not changed) require three full-time jobs or six part-time equivalents.

What’s next: the amended development agreement authorizes the mayor and city manager to execute the updated contract and make technical edits; the developer is expected to pursue permits through the remainder of 2026 and, if financing is secured, begin construction in mid-2027. If financing fails, the city retains the right to reacquire the property under the terms described in the agreement.

Speakers quoted in this article include City Manager Sally Sandy, Mayor Ronnie Thompson, and council members who participated in the motions and approvals. The council’s approval was recorded by voice; the transcript does not include a roll-call vote list.