North Carolina Construction News staff writer
Raleigh City Council and the Wake County Board of Commissioners have approved an additional $2.3 million to cover rising costs on the 156-unit Preserve at Gresham Lake apartment complex in northeast Raleigh.
According to a staff report presented to Raleigh council, “Preserve at Gresham Lake currently faces an unanticipated funding gap due to increased material cost and labor shortages, and the developer LDG requests $2,312,118 in additional funds to help fill the gap and allow the project to move forward.”
$3.3 million was approved last spring by Raleigh and $2.8 million to be paid by Wake County.
“Rising construction costs and interest rates have led to a funding gap,” Erika Brandt, the city’s housing programs administrator, said at a council meeting this week. “Construction costs have risen from about $185,000 per unit to $234,000 per unit which is a 25% increase.”
Rising costs include inflationary pressures on material prices and labor shortages as well as rising interest rates on permanent loans from 3.925% to 6.38%, staff confirmed.
LDG Development, has increased its bond allocation and requested additional funds from Wake County to help cover the increased cost. This will be the Kentucky-based company’s first development in North Carolina, according to its website.
Wake County commissioners also approved $1.3 million additional funding for the Rock Quarry Landing affordable housing development, a 188-unit building in southeast Raleigh.