Developers petition Cary to create 48-acre South Hills municipal service district

Developers representing the South Hills site have petitioned the Town of Cary to establish a 48-acre municipal service district (MSD) to finance revitalization and supplemental services in the corridor. Staff briefed the council on Dec. 11 and said it would bring a formal staff report to the Jan. council meeting if directed.

The petition covers a roughly 48-acre area surrounding the former South Hills mall. Staff said the site contains about 400,000 square feet of buildings, roughly 1,800 parking spaces and nearly half of the site as surface parking. The rezoning approved in October 2024 included development standards for mixed-use development, a required mix of commercial and residential uses and a commitment that 5% of new units be restricted at 80% of area median income for 30 years; building heights were described in layers, with the tallest zone up to about 23 floors near the highway.

Under North Carolina law, municipal service districts allow a municipality to levy an additional property tax inside a defined boundary and spend those funds only in the district for specified services. Staff said eligible MSD uses commonly include streetscape and sidewalk improvements, marketing/economic-development activities, additional cleaning and safety programs, and other revitalization services; the MSD plan must enumerate the intended uses. County tax offices (Wake County, Chatham County, Durham County) perform bill collection and charge a small administrative fee to do so.

Staff reviewed the proposed MSD map and said the developer's submission excludes Grace Christian School, although that parcel was part of the rezoning. The developer-proposed map also included 13 parcels not owned by the applicant; staff noted council controls final boundaries and may exclude or include parcels as part of the MSD process.

If council directs staff to proceed, state procedure requires staff to prepare a public report and publish it for a four-week comment period, hold public hearings, and then the council must vote twice on the district. Staff said an MSD that cleared those steps could become effective on the first day of a fiscal year; July 1, 2026 was mentioned as an earliest possible effective date if the timeline and approvals align.

Council members sought specifics the staff report will need to include: several asked staff to present proposed levy options (for example, showing what a penny on the tax rate would yield and the per-parcel tax burden), initial and future revenue projections, and detailed descriptions of which infrastructure and capital projects the MSD could fund. Several members emphasized they want a per-parcel "penny" analysis showing the burden on individual parcels and entities such as Grace Christian School. Staff said those items would be included if council directs staff to prepare the report in January.

Council also discussed policy trade-offs: an MSD imposes an additional property tax on owners in the district and requires administration and oversight, but proponents say the dedicated revenue can accelerate improvements, pay for public services that attract customers, and avoid competition with the town's other priorities. Staff cautioned that the MSD is not a panacea — the current property tax base in South Hills is relatively small while redevelopment is phased — and any levy would be one tool among several to encourage revitalization.

The next step is procedural: staff will bring the petition to the Jan. council meeting and if council formally directs staff to proceed, staff will prepare the statutorily required report, begin outreach and schedule public hearings. No council votes on the MSD were taken at the Dec. 11 work session.