TO: Mayor and Members of City Council
THRU: Jodi Phelps, Assistant City Manager
FROM: Christopher Cauley, MPA, Director of Economic and Community Development
DATE: February 23, 2026
RE:Title
Murchison Choice Neighborhoods 2025 Grant Application Partnership Certification and Leverage Letter
Title
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COUNCIL DISTRICT(S):
Council District(s)
Districts 2, 3, 4
b
Relationship To Strategic Plan:
Goal II: Responsive City Government supporting a diverse and viable economy
2.2: Community Revitalization - Invest in community places to ensure revitalization and increase quality of life
Goal III: City Investment in Today & Tomorrow
3.2 Manage the City’s future growth and strategic land use
Goal IV: Desirable Place to Live, Work and Recreate
4.5 Neighborhood Vitality - Ensure a place to live in great neighborhoods
Executive Summary:
City staff in partnership with the Fayetteville Metropolitan Housing Authority (FMHA) are making final preparations to submit the Murchison Choice Implementation Grant by March 9, 2026. City Council is asked to authorize the Mayor to sign a leverage letter documenting planned and future leverage to support the Murchison Choice Implementation effort. Council is also asked to authorize the City Manager to execute a Choice Partnership Certification with the FMHA, Pennrose, and Urban Strategies, Inc. (USI).
Background:
In December of 2020, the City of Fayetteville, in partnership with the FMHA, was awarded a HUD Choice Neighborhoods Planning Grant for the Murchison neighborhood. Through the Grant, the City and FMHA have worked with residents and a variety of community stakeholders - including nonprofits, faith-based organizations, anchor institutions, supportive services agencies, businesses, and others - to create a forward-looking Transformation Plan. The Plan is centered on redevelopment of FMHA’s Murchison Townhouses, which includes 60 units of low-income public housing. The Transformation Plan seeks to replace 100% of those housing units within the neighborhood as part of new mixed-income developments. In February of 2024, the City and FMHA applied for the Choice Implementation Grant and was selected as a national finalist but ultimately was not awarded the grant.
The Choice Implementation Grant was announced on December 9, 2025, and is due by March 9, 2024. The Choice Neighborhood Initiative is the Department of Housing and Urban Development’s signature affordable housing program that seeks to rebuild distressed public housing while simultaneously investing in the neighborhood, people, and housing at various income levels. From their website:
The Choice Neighborhoods program leverages significant public and private dollars to support locally driven strategies that address struggling neighborhoods with distressed public or HUD-assisted housing through a comprehensive approach to neighborhood transformation. Local leaders, residents, and stakeholders, such as public housing authorities, cities, schools, police, business owners, nonprofits, and private developers, come together to create and implement a plan that revitalizes distressed HUD housing and addresses the challenges in the surrounding neighborhood. The program helps communities transform neighborhoods by revitalizing severely distressed public and/or assisted housing and catalyzing critical improvements in the neighborhood, including vacant property, housing, businesses, services and schools.
In Fayetteville, approximately $18.5M of the CNI grant funding will be used in addition to $75.6M in public and private funding for the Housing Plan. This plan will demolish 172 units at Murchison Townhouses and Elliott Circle and develop 323 units of mixed income housing at each site. This grant will also provide resources to ensure funding to promote upward mobility, employment and self-sufficiency, and improved quality of life for the residents who live in target housing (Murchison Townhouses). These benefits will be extended to residents of Elliott Circle outside of the Choice funding source. Elliott Circle was chosen as the primary site for redevelopment due to its proximity to Fayetteville State University and the City’s neighborhood parks and trails. The project team believes this site is incredibly impactful to spur the revitalization of this neighborhood and address housing quality, public safety, and economic opportunity for FMHA residents and the current residents of Elliott Circle, all of which will benefit from relocation benefits required by the Uniform Relocation Act requirements and will have the ability to return to the newly developed sites with preference. In addition, FMHA will allocate income qualified Elliot Circle residents Housing Choice Vouchers, an option to move to a public housing development, and preference for the new Central Park Villas development on the Catalyst Site.
Multiple People and Neighborhood enhancements will also be funded by CNI grant funds for approximately $3.9M and $2.6M respectively. These funds will be used to develop and implement the following strategies:
• People: Increasing income and employment.
• People: Increasing access to training and education.
• People: Maintaining independence for seniors.
• Neighborhood: Create access to trails and multi-use paths.
• Neighborhood: Develop gateways and neighborhood branding.
• Neighborhood: Improve access to homeownership and housing quality.
USI was brought on board to assist with the development and execution of the People plans while FMHA and Pennrose serve as co-developers of the Housing plan mentioned above.
Issues/Analysis:
The grant requires a legally binding agreement by and between all parties to implement their portion of the Murchison Choice Implementation grant and requires significant leverage from the community. A variety of government partners, nonprofits, and other institutions have submitted leverage letters to support the application.
Budget Impact:
Funding in the amount of $26M will be made available through the HUD Choice Neighborhood Implementation Grant. However, additional funds are required to support the grant and provide financing for the Housing, Neighborhood, and People Plans. In particular, the Housing Plan requires local dollars to close projected financial gaps in the multifamily development program, the Neighborhood Plan includes significant funding for new homeownership, and the People plan will require investment to cover services related to non-grant-eligible Elliot Circle households.
Staff is requesting that City Council pledge the following funds over the 8-year grant period according to the sources and uses chart outlined below. Note that all amounts may adjust over the grant period as projects and phased development occur:
|
Source |
Use |
Amount |
|
Community Development Block Grant |
Neighborhood Housing Façade Improvements |
$600,000 |
|
Community Development Block Grant |
Commercial Façade Improvements |
$200,000 |
|
Community Development Block Grant |
Neighborhood Trail Improvements |
$500,000 |
|
Community Development Block Grant |
Gateway and Placemaking Improvements |
$200,000 |
|
HOME Investment Partnership |
Elliot Circle Phase I and II |
$593,338 |
|
HOME Investment Partnership - American Rescue Plan |
Elliot Circle Phase I and II |
$3,402,662 |
|
Housing Opportunity General Obligation Bond |
Elliot Circle Phase I and II, Murchison Townhouses |
$1,000,000 |
|
Housing Opportunity General Obligation Bond |
Neighborhood Housing Façade Improvements |
$500,000 |
|
Housing Opportunity General Obligation Bond |
Neighborhood Infill Housing |
$1,000,000 |
|
City General Fund |
Commercial Façade Improvements |
$400,000 |
|
City Capital Improvement Plan |
5-Year CIP Amounts |
$12,498,070 |
|
|
Total Leverage |
$20,894,070 |
The Housing Opportunity General Obligation Bond was approved by voters in 2022 and can be utilized for acquisition, construction, demolition, rehabilitation, and down payment assistance for qualified homebuyers. As of February 2026, $1.88M has been allocated leaving $10.1M available with $2.5M represented above.
Options:
1. Authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement detailing the roles and responsibilities of each Murchison Choice Lead Entity.
2. Do not authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement detailing the roles and responsibilities of each Murchison Choice Lead Entity.
3. Direct staff to some other action.
Recommended Action::Recommended Action
Authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement detailing the roles and responsibilities of each Murchison Choice Lead Entity.
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Attachments:
Murchison Choice Neighborhoods 2025 Grant Presentation 2.23.26