An artist’s conception of how one of the buildings in the Leonhardt Landing apartment complex would appear.
Sari
Thanks to a recent allocation of more than $13.3 million in disaster recovery funds from the state of North Carolina, Morganton could have 144 more affordable apartments by early 2029.
Alongside the N.C. Department of Commerce’s (NCDOC) Division of Community Revitalization and the N.C. Housing Finance Agency (NCHFA), Gov. Josh Stein awarded more than $69 million in Community Development Block Grant Disaster Recovery (CDBG-DR) funds to 10 projects across Western North Carolina.
The allocation of funds, the governor said, laid the groundwork for 828 apartments across the region to “remain financially accessible to people living in the 828 area code for the next 30 years.”
Of those 10 projects, the 144-unit Leonhardt Landing, developed by Sari & Co. Real Estate Development, received $13,347,500 — which will serve as the first steppingstone toward fully funding the $37.5 million endeavor.
The project will be on the far east side of Morganton in the 1300 block of East Union Street, which also serves as U.S. 70 Business.
While the CDBG-DR funds act as a loan on paper, Sari & Co. CEO and owner Jim Sari said, “The low-cost loan is a 0% (interest), no payment 30-year note that will eventually be forgiven. It’s only structured as a note for tax purposes. It effectively operates like a grant.”
Under NCHFA funding requirements, recipients of CDBG-DR financing must operate under income limits and rent restrictions for a minimum 30-year affordability period.
As long as Sari & Co. follows the guidelines and restrictions of the NCHFA, the principal will be forgiven after 30 years, Sari explained.
The NCDOC will monitor the projects receiving funding throughout the three-decade affordability period to ensure compliance and to confirm the units serve low- and moderate-income households.
Sari explained that 25% of the apartments will be allocated to very low-income tenants, falling at 30% or below the county’s median income — $58,592 as of 2024, according to the U.S. Census Bureau. The other 75% of the apartments will be for residents making 70% or below of the median income.
“There are few to none of these in Burke County,” Sari said. “Most affordable units are capped at 60%. This allows a whole new income group to benefit from an affordable rent to more workforce level residents.”
Sari & Co. expects the project to comprise 24 studio apartments, 24 one-bedroom units, 48 two-bedroom units, and 48 three-bedroom units.
According to previous reports from The Paper in May, rent prices per month will be $681 for studios, $873 for one-bedrooms, $1,035 for two-bedrooms, and $1,211 for three-bedrooms.
“It will take till summer (2027) to close all of the tax credit sales and interim bank financing,” Sari said. “Construction will start immediately following the summer 2027 closing and will be about an 18–24-month process. We should anticipate some units to come online in the first quarter of 2029.”
OTHER FUNDING
Morganton City Manager Sally Sandy said that about $12 million of the remaining funds will come from a city-facilitated bond.
The city will act as a conduit for Sari & Co., who will take on the debt risk. As the “middleman,” Morganton will receive a 1% fee from the developer, meaning the city earns $120,000 for facilitating the funds.
“We had to have them do this or the deal doesn’t get done,” Sari explained. “(We) have to use tax exempt bonds issued by locality to get the credits. The city support and this action were critical to the success of the project.”
Sandy explained that the city had reviewed Sari & Co.’s previous work in other cities, including contacting the municipalities to understand the developer’s reputation, and that they were impressed.
Sandy expected that portion of the funding to come sometime in the next four to six months.
“We definitely need more of all types of housing,” Sandy said, explaining that Leonhardt Landing is one of several projects in motion within the city. “Obviously, we’re excited. It’s another opportunity for families to have a place to live that we’re sure hopeful is affordable.”
