TO: Mayor and Members of City Council
THRU: Kelly Olivera - Assistant City Manager
FROM: Christopher Cauley, MPA - Economic & Community Development Director
Jeffrey M. Morin - Housing Program Manager
DATE: January 22, 2024
RE:
Title
Approval of Extension to Award Letter Expiration for Cliffmore Park Apartments
end
COUNCIL DISTRICT(S):
Council District(s)
District 7 - Councilwoman Brenda McNair
b
Relationship To Strategic Plan:
Strategic Operating Plan FY 2022 - 2026
Goal IV: Desirable Place to Live, Work, and Recreate
• Objective 4.6 - To reduce poverty and homelessness
Executive Summary:
East Carolina Community Development, Inc. is a non-profit developer requesting gap financing totaling $683,968 to develop Cliffmore Park Apartments. The complex is located at 5133 Identity Lane, and is 72-unit senior community which will be affordable to households earning below 60-percent of the area median income. The proposed repayment terms are 1% interest rate, over a 20-year term. The loan will be amortized over 30-years, resulting in a final balloon payment. City Council is asked to approve an extension to the previously issued award letter providing funding for Cliffmore Park from the City’s Rental Housing Development Program.
Background:
East Carolina Community Development, Inc. (ECCDI) originally responded to the City's Request for Proposals for the 2021-2022 Annual Action Plan. They were awarded $200,000 at that time. They subsequently requested additional funding of $483,968 due to increased costs since the original award.
ECCDI submitted their application for gap financing in response to the Notice of Funding Availability for affordable rental housing development, issued by the Economic and Community Development Department. Following Staff review for minimum threshold criteria, the proposal was presented to the Fayetteville Redevelopment Commission for approval on October 5, 2022. On November 28, 2022, City Council approved funding of the project.
Issues/Analysis:
The proposed development fits well into the existing community. The area is a mixture of both affordable and market rate rentals; and homeownership. Retail and grocery is located within approximately 1-2 miles, and the community is on the bus line route.
Staff analysis of the development pro forma indicates that funds are required to close on the project and that the financial structure of the development allows for repayment of the loan with the proposed terms. The development will be required to remain affordable for 20 years and City staff is required to examine the rent rolls and housing quality on an annual basis.
Budget Impact:
No impact on the budget as funds for this project were previously approved on November 28, 2022, and are still available from the HOME Investment Partnership through the Department of Housing and Urban Development. Repayment of funds is treated as program income and revolved into the program to provide additional funding for future projects.
Options:
1. Approve six (6) month extension of award letter for funding in the amount of $683,968 for Cliffmore Park Apartments from the City’s Rental Housing Development Program,
2. Deny the six (6) month extension of award letter for funding in the amount of $683,968 for Cliffmore Park Apartments from the City’s Rental Housing Development Program; or
3. Remand to Staff for additional information
Recommended Action:
Staff recommends that City Council move to approve the six (6) month extension of the previous award letter for funding in the amount of $683,968 for Cliffmore Park Apartments from the City’s Rental Housing Development Program and allow the Director of Economic and Community Development to grant similar extensions for this project in the future.
Attachments:
Updated Cliffmore Park Award Letter