CHAPEL HILL - A seven-story mixed-use complex proposed for the corner of Ephesus Church Road and Fordham Boulevard faces big questions from the Town Council and affordable-housing activists.

Developers for The Park at Chapel Hill presented their concept plan to the Town Council last month and got mixed reviews about its height, density and removal of affordable rentals. A concept plan is an informal first step in the review process aimed at giving developers early feedback.

The Park at Chapel Hill would redevelop the Colony Apartments at 1250 Ephesus Church Road.

It would replace 198 apartments with 800 new units: 750 apartments in two five-story buildings and one seven-story building and 40 townhomes in four two- or three-story buildings.

There would be a 10,000-square-foot retail building, parking for 1,060 cars with 138 on-street spaces, according to the plan.

The redevelopment would also include extending Elliott Road through Fordham Boulevard through the complex onto Ephesus Church Road.

John McAdams, representing Bluerock Real Estate, the developer for the project, said the complex fits with the town’s Ephesus Church Road Small Area Plan.

The project would also contribute to Chapel Hill’s tax base and add to the town’s sustainable housing market, McAdams said.

But the property’s new owner is already displacing some residents by no longer accepting Section 8 affordable-housing vouchers, said Delores Bailey, executive director of Empowerment, a nonprofit that offers affordable homes and rentals in Chapel Hill.

Section 8 is a federal subsidy program that helps low-income people pay market-rate rents. Colony Apartments on Ephesus Church Road had about 15 Section 8 tenants in June 2011, whose leases are being honored but will not be renewed under the voucher program.

“What has happened already with this new project is that a lot of families have lost their homes,” Bailey said.

Demand for affordable housing is shifting to the rental market, she said. Removing the 198 affordable units cuts out much of that market, she said.

Council member Jim Ward said he won’t vote for the project if it does not address affordable-housing concerns.

“This proposal again seems to totally ignore the affordability aspect of the housing that’s being proposed here, and that is very, very troubling for me,” he said.

The town needs to come up with a plan to restore more affordable-housing options, said council member Donna Bell.

“I don’t think it’s insignificant that we are losing 198 affordable rental units in Chapel Hill and we are not replacing it with anything,” she said. “I don’t think it’s necessarily the responsibility of this developer, but what I do think is that we as a town have to come up with a plan.”

Council members also expressed concern the project’s height and density.

“To put another thousand cars on that corner, to me, it’s going to neutralize all the road improvements that will be done,” said council member Gene Pease.

The council will review an official plan later this year if the developer applies for a special use permit to build it.