Wilmington developer Matt Scharf wants to build below-market-rate apartments, aimed at senior renters, and a small grocery store on just under 5 acres in Wilmington.

The project at 1302 Kornegay Ave. would redevelop the former Creekwood North community's recreation space. But Scharf, of Wilmington-based Real Properties LLC, is getting some pushback from city officials for several reasons.

Scharf's application to rezone the property from an R-7 residential designation to an office and institutional conditional district for the mixed-use project is the subject of a Wilmington Planning Commission meeting Wednesday.

According to the agenda, the city's staff recommended denying the project because it will "further concentrate lower income housing in one area of our city. While city policies support the need for affordable housing, they recognize that for such housing to be of benefit to its residents, it is better to distribute such housing for both existing and future residents of affordable housing in our city."

Scharf said he has met with various officials in the past, including city leaders and affordable housing advocates, to gauge what Wilmington's affordable and workforce housing needs are. That led him to a separate project, Studio 17, a 32-unit development under construction at 514 S. 17th St. that will provide housing to veterans. 

Those discussions also led him to another realization, he said.

"One of the greater needs right now is for senior housing," Scharf said. "This is an underserved sector of the market."

The rents at the Kornegay Avenue apartment complex would be below the market rate, he said. According to RENTCafe.com, the average rent in Wilmington is $1,153.

The price of the Kornegay Avenue site ($185,000 his company paid for it in June) would help Scharf create the below-market-rate rental project, whereas it would be impossible to do something similar in the Mayfaire/Landfall submarket, or even midtown Wilmington, something Scharf, real estate agents and developers have all said.

Additionally, Scharf said, he feels the 1,800-square-foot grocery store planned would also help the surrounding residents.

"There's approximately 1,000 people there in that neighborhood that can go to this store," Scharf said.

The city staff's recommendation of denial lists other reasons besides the potential to concentrate lower-income residents.

"The comprehensive plan calls for quality design and site planning so that infill development is implemented with minimal adverse impacts on desired character of the existing built environment. The proposed density is not compatible with the existing community fabric and does not provide for an appropriate transition from the existing single-family neighborhood."

The recommendation goes on to say, "There is not an appropriate transition between the established Creekwood North community, the proposed multifamily housing, and the proposed Salvation Army campus. The proposed density may be more appropriate if there were existing services in close proximity."

Scharf said the demand exists for more apartments like those he proposes. He also said, "We're doing everything in our power to keep the rate as low as possible, but the scale of the project has to be right, meaning more units."