BY TED M. NATT JR.

Staff Writer

Construction of Tyler's Ridge at Sandhills is expected to begin next month after developer Jim O'Malley closes on federal financing for the controversial mixed-use project.

The first phase calls for putting in the roads and sewers for the residential and commercial sections, and construction of a leasing office and 144 apartments.

O'Malley expects to complete the infrastructure and leasing office by mid-July and the apartments by Oct. 1, Jonathan Jordan, broker in charge of the Clift Commercial real estate office in Southern Pines, said Tuesday.

"When occupancy reaches 80 percent, he'll start the second phase of 72 apartment units," Jordan said.

Clift Commercial is marketing the commercial development, but Jordan said there hasn't been much activity because of tax matters.

O'Malley said in a telephone interview Tuesday that he traded commercial property in Wisconsin with his father, John, for the Tyler's Ridge land in a deal that closed Aug. 25, 2011.

"I had to hold off for two years on selling the commercial property because we're related parties," Jim O'Malley said. "However, that doesn't mean I can't develop it before then. The site will be pad-ready by mid-July."

Jordan said there has been past interest in the commercial development.

"I think the apartments will show everyone that the project will get done," he said. "The commercial folks always want rooftops first."

Jordan, who has seen construction plans for the residential development, added that potential commercial clients are monitoring the nearby Mill Creek shopping center, which is anchored by Harris Teeter.

"Everyone is curious to see how Mill Creek fills out," he said.

O'Malley said he expects to close on a 40-year fixed rate loan from the U.S. Department of Housing and Urban Development (HUD) on Jan. 17 and break ground four days later.

O'Malley initially hoped to start construction of 48 apartment units in December 2011 so they would be available before the fall 2012 semester at Sandhills Community College.

"I didn't get final town and state approvals for the project until July 2012, so I couldn't submit my loan application until August 2012," he said. "I got my loan approval letter in October, but decided to not break ground until after the holidays."

Southern Pines Town Council member Mike Fields said the beginning of work will be "a positive first step."

"I still think there's demand for the type of high-end apartments that Mr. O'Malley is bringing to the market," Fields said.

The Town Council in July 2011 approved O'Malley's revised application to develop the 46.2-acre project at the corner of N.C. 22 and Airport Road.

Tyler's Ridge will include stores on the north side, featuring small shops and a restaurant. A multifamily development on the south side includes 216 one- and two-bedroom dwelling units. In between, there will be three single-family lots.

The project endured an arduous public hearing process because of opponents' concerns.

The Planning Board voted 4-2 in January 2011 to recommend that the council deny a permit for the project. O'Malley withdrew the initial application in April 2011 after he realized the application did not comply with the town's Unified Development Ordinance (UDO).

He submitted a second application in May 2011, and the Planning Board approved it unanimously. The Town Council voted 4-1 to approve it in July 2011.

The primary changes in the revised application included the addition of the single-family lots, a reduction of the number of apartments from 232 to 216, a revision of access to N.C. 22 to improve traffic flow, and a review of the project by the Federal Aviation Administration, since it lies so close to Moore Regional Airport.

Opposition to the project centered around safety concerns, aircraft noise, an alleged glut of apartments in Southern Pines, current commercial space vacancies in Moore County, and the project's proximity to the Sandhills Horticultural Gardens.

FAA standards prohibit the construction of any structure that would encourage public assembly in a runway protection zone (RPZ), areas that extend beyond the edge of a runway.

RPZs are trapezoidal zones that have specific land-use regulations to keep runways clear of any obstacles that could hinder takeoff and landing. They begin 200 feet beyond that area usable for takeoff and landing.

The commercial portion of the project and the three single-family lots would be in the airport hazard overlay zone, but the multifamily residential portion would not.

However, part of the multifamily portion is under the eventual departure path for planes coming off the main runway once the current airport expansion is complete.

Contact Ted M. Natt Jr. at (910) 693-2474 or tnatt@the pilot.com.