What type of property may be included in a municipal project development district?

There are two different kinds of project development district options available to municipalities.

G.S. 160A-515.1 allows a municipality’s governing body to establish a project development district which is comprised of all or part of one or more redevelopment areas. A municipality’s planning commission, as established by municipal ordinance, may designate the following types of property as a redevelopment area:

• Property that is blighted because of dilapidated, deteriorated, aged, or obsolete buildings; inadequate ventilation, light, air, sanitation, or open spaces; high density of population or overcrowding; or unsanitary or unsafe conditions;
• A nonresidential redevelopment area with dilapidated, deteriorated, aged, or obsolete buildings; inadequate ventilation, light, air, sanitation, or open spaces; defective or inadequate street layout of faulty lot layout; tax or special assessment delinquency exceeding the value of the property; or unsanitary or unsafe conditions;
• A rehabilitation, conservation, and reconditioning area in present danger of becoming a blighted or nonresidential redevelopment area; or
• Any combination of the above types of areas.

Alternatively, G.S. 158-7.3 authorizes a municipality to create a project development district and fund public improvements that are part of a development project within the district.

A development project is a capital project that includes capital expenditures by both private entities and one or more units of local government and that increases net employment opportunities for residents of the development district or within a two-mile radius of the project, whichever is larger, and increases the local government’s tax base.

The project development district is comprised of property that meets at least one of the following criteria:

• Blighted, deteriorated, deteriorating, undeveloped, or inappropriately developed from the standpoint of sound community development and growth;
• Appropriate for rehabilitation or conservation activities; or
• Appropriate for the economic development of the community.

An additional limitation applies to a plan for a project development district established pursuant to G.S. 158-7.3 and located outside a city’s central business district. A maximum of 20 percent of the plan’s estimated square footage of floor space of private development forecast may be proposed for use in retail sales, hotels, banking, and financial services offered directly to consumers, and other commercial uses other than office space. The 20 percent limitation does not apply to a project development district located in a development tier one area that is created primarily for tourism-related economic development.