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A development described last year as the largest affordable housing project in Chapel Hill’s history has been shelved, replaced by a mostly market-rate project near downtown.
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Texas-based developer SMN ATX Investments LLC submitted a rezoning application Aug. 31 for a mixed-use building with up to 310 apartments and a touch of ground-floor retail at 611 Martin Luther King Jr. Blvd.
The proposed project will need a rezoning, because the current zoning only allows projects with at least 25% affordable housing. A Chapel Hill Town Council review has not yet been scheduled.
The site, a half-mile north of Franklin Street and the UNC-Chapel Hill campus, was approved in May 2025 for Hillside Trace, a 100% affordable, six-story building with 190 apartments for middle-income workers and families.
Nonprofit developer Taft-Mills Group and Community Home Trust, a local nonprofit real estate firm, ushered Hillside Trace through the town’s Community Priority process in under seven months last year, because it offered at least 25% affordable housing.
Taft-Mills Group was awarded $4 million in September from the town’s voter-approved housing bond money and was planning to seek federal low-income housing tax credits to help with construction costs.
But the landowner, Lawler Development Group LLC, pulled out of the deal earlier this year, town spokeswoman Susan Brown said. The bond money awarded for Hillside Trace was never released and is available for future affordable housing projects, she said.
Leslie Lawler, who owns Lawler Development Group with her son Daniel Lawler, did not answer The News & Observer’s questions about the failed deal when reached by phone Monday.
Plans for the new project — 611 MLK — call for a roughly 90-foot-tall building with over 400 underground parking spaces on the first two stories, which would be nestled into the hill. That would help reduce the building’s visual impact, project documents note. The western facade would step down toward existing single-family lots in the North Columbia Street neighborhood near Chapel Hill Town Hall.
The building plan includes a central, landscaped courtyard with a swimming pool, and a retail space that could include “a grab and go style market and coffee,” documents state.
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Roughly 10% of the apartments — up to 31 studio and one-bedroom units — could be leased at a rate affordable to someone earning up to 60% of the area median income, or about $53,400 a year. Market-rate apartments would be up to four-bedrooms.
The 3-acre site now has several older, single-family homes partially hidden from the street by trees. Lawler Development Group has rented out the homes since acquiring the properties over 10 years ago.
The company owns several other properties around the downtown area in neighborhoods popular with UNC-CH students.
If the 611 MLK project is approved, it would leave only about 8% of the existing trees, documents state. The developer could meet the local tree canopy rule — covering 30% of the site — with existing trees, new landscaping and a payment to the town, they said.
The plan also preserves a stream buffer and wooded lot on the site’s northwestern corner.
A traffic study is expected in the next few months, but the developer doesn’t expect all tenants to have a car. The site is a short walk from a key bus corridor serving UNC, the planned Carolina North campus and the future North-South bus-rapid transit line.
Previous construction has already replaced many older, smaller apartment complexes in the area, which is popular with UNC students. The town’s land-use plan envisions more dense residential and commercial growth throughout the MLK Jr. Boulevard corridor from downtown to Eubanks Road, near Interstate 40.
In October, the council approved 701 Martin Luther King Jr. Blvd. on the northeastern corner of MLK Jr. Boulevard and East Longview Street, a short walk downhill from the 611 MLK site.
The 701 MLK project is similar to 611 MLK, with up to 200 apartments and a small, corner retail space. Roughly 10% of those apartments could be affordable, and the developer has agreed to accept federal Section 8 housing vouchers — a rarity in Chapel Hill.
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