SALISBURY — The Salisbury City Council on Tuesday approved an incentives grant of as much as $142,204 for a mixed-use development at Lee and East Innes streets.

The vacant lot at 201 E. Innes St. will soon be developed with a three-story building. The first floor will house the offices of Healthcare Management Consultants, which currently operates off Statesville Boulevard.

The second and third floors will each house four two-bedroom, two-bathrom apartments, ranging in size from 940 square feet to 1,440 square feet.

According to City Planner Kyle Harris, rent for the units is projected to run “above average” for downtown residences.

The money comes from the city’s Downtown Revitalization Incentive Grant, a program Harris said was established in 2014.

The four-part grant program was meant to promote economic growth in the downtown municipal service district, he said.

Some $92,204 will go toward residential construction. Another $50,000 will be evenly split between water and sewer infrastructure and a sprinkler system.

The money will be awarded once the project is complete.

To date, five of the now nine approved grants through the program have reached completion. Three others including last night’s proposal are still under construction.

A ninth project, the Wallace Dry Goods / Wallace Annex rehabilitation on Fisher Street, was never completed because of changes in the market.

Though no money was lost in the effort, Mayor Pro Tem David Post expressed concern about tying up funds that could be used for other viable projects.

“Since it locks the money up, I’d like us to maybe at some point in time in the future to consider requiring a deposit,” said Post. “Because when … they’ve budgeted money that we have for that, then that’d mean somebody else can’t come along and actually do a project … because the money’s been locked up by somebody else who decides to walk away from it.”

Harris said there are measures in place to ensure the money is not infinitely tied up. All projects must show progress within six months of their approval, he said.

Mayor Al Heggins said she was curious about how incentive grants are being marketed to ensure equal opportunities for minority and women businesses.

Janet Gapen, the city’s planning director, said the money is available to anyone as long as they meet thresholds related to size and scale of the project.

During a public hearing held before the grant’s approval, some residents expressed concern about the proposed rental rates.

“You’re creating kind of this elitism in terms of housing downtown,” said M.T. Sidoli, “If you’re going to have more shops and more restaurants, people have to work there, and people have to have a place to live. They keep getting pushed out of the city.”

Renee MacNutt said she has seen a similar conundrum with her two adult daughters. One lives in San Fransisco and another in Denver, she said.

“The problem those cities are having is the employees that are needed are your minimum wage, your service industry, your dress shop clerks, all that,” MacNutt said. “The more we grow, the further they get rented out financially, and it’s hard to keep employees.”

But Councilwoman Karen Alexander said the city has plenty of subsidized and affordable housing available, citing Yadkin House and a recently approved new development on Statesville Boulevard.

“In any city, you want to have different options for different people, because everyone is not the same,” Alexander said. “You have different sizes and different costs. We certainly have a lot of assisted apartment complexes throughout our city, and we have a wonderful transit system.”

Heggins agreed that the city needs a mixture of developments, but she said city officials need to be cognizant of a need for affordable housing downtown.

“We don’t want to make it a place where people can’t afford to move downtown,” she said.

The parcel will be developed by Downtown Properties LLC as part of a three-phase project called Bankett Station. Other proposed changes include renovation of a warehouse building and reconstruction of the granite facade of a historic gas station.

The total costs for the mixed-use, new construction are estimated at $2.9 million, and additional requests are to follow for the remaining two sites.