Birmingham is expanding its plans for the Druid Hills neighborhood. On Tuesday, the City Council voted to amend the Druid Hills Urban Renewal Plan by 104 acres to include blighted areas such as the vacant Carraway Hospital and F.D. McArthur School campuses.

Inclusion in DHURP is intended to make the area more conducive to potential developers, Michael Ward, a senior planner at City Hall, told the council. It gives the city authority to provide incentives for projects located in urban renewal districts, such as clearing land, constructing or reconstructing streets, installing utilities, assisting with property acquisition and selling property it owns for below market value.

The F.D. McArthur School closed in 1997 and was purchased by the city in 2004; in 2017, the British tabloid Daily Mail published a series of photos showing its “desolate ruin.” Carraway Hospital, meanwhile, closed due to bankruptcy in 2008; it was purchased last year by Corporate Realty Development, which plans to turn the property into a mixed-use development.

“At the time (DHURP was adopted) in 1998, there wasn’t a need to include the Carraway site, because Carraway was still in operation,” Ward said. By expanding the plan to include the derelict hospital, “it will also show that the city supports (Corporate Realty’s) development project.” Woodfin told the council that the city had not yet offered any incentives for that project.

District 8 Councilor Steven Hoyt echoed some residents’ concerns that the development may change the character of the neighborhood, arguing that the council should know Corporate Realty’s plan before approving the changes to DHURP. “We don’t know if it’s going to be user-friendly or impede the quality of life of the residents of the community,” he said. “If there’s a proposal to build an amphitheatre, that’s going to be a problem for those residents … This is still an older neighborhood.”

District 1 Councilor Clinton Woods said that the discussion was not about the development but about the urban renewal plan and called discussion of Corporate Realty’s project “premature.”

John Hilliard, the councilor from District 9, agreed. “I respect your opinion and I think that you are a very smart and brilliant councilman and colleague and I respect that,” he told Hoyt. “But at some point I would hope that we would stick to the issue at hand now and call for the vote so that we can move on.”

“I don’t need to (be) patronized because I know who I am and what I bring to the table,” Hoyt said. “Thank you, but I don’t need it.”

Woodfin maintained that affordable housing “has to be a component of the development in Druid Hills” and that the city would work to protect homeowners from gentrification in the area. The McArthur School, he said, would likely be “transformed into affordable housing … to maintain the character of the community.”

Hoyt appeared satisfied by Woodfin’s assurances, though he said he would keep an eye on the “details” of Corporate Realty’s development going forward. The council then voted unanimously to approve the changes.

Revolving Loan Fund Comes to Halt for Birmingham

The council also voted to withdraw Birmingham from a federal economic development grant program — the U.S. Department of Commerce’s Economic Development Administration Revolving Loan Fund — that allowed the city to provide loans to small businesses at a lower interest rate than banks.

Birmingham had participated in the EDA RLF since 1986 as a co-grantee with Jefferson County. But Josh Carpenter, Birmingham’s director of economic development, told councilors last month that the city “basically stopped writing loans in 2000” because the program had become “cumbersome to deal with.”

Carpenter said that the city would instead “pull that money back in-house and focus on our small business strategies where we help divide the money out differently.”

Woodfin’s administration has prioritized consolidating its economic development efforts; last year, his budget cut $1.3 million in funding from economic development organizations such as REV Birmingham and the Birmingham Business Alliance, requiring them instead to apply for funding through the Department for Innovation and Economic Opportunity. The organizations whose applications were approved received only a portion of their requested funding.

Once the EDA returns the $779,000 of in-kind funding Birmingham had contributed to the project, the council will hold another vote on how to spend it. Carpenter said that the mayor’s office plans to use the money to commission a study of economic disparity in Birmingham.

“This offers us a fresh opportunity to talk about what’s not working and then actually consider a set-aside program for minority (and women-owned businesses),” he said, noting that the study would likely take only a month or two to complete. Any money left over would go toward a “small business micro-grant program,” he said.

Despite Birmingham’s withdrawal, Jefferson County’s government will remain a participant in the EDA RLF.