TO: Mayor and Members of City Council
THRU: Kelly Olivera, Assistant City Manager
FROM: Christopher Cauley, MPA, Director of Economic and Community Development
Jeffrey Morin, Housing Program Manager
DATE: August 26, 2024
RE:
Title
Hillside Manor Rehabilitation Loan Commitment
end
COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
GOAL IV: The City of Fayetteville will be a highly desirable place to live, work and recreate.
• 4.5: To ensure a place for people to live in great neighborhoods
• 4.6: To reduce poverty and homelessness
Executive Summary:
Hillside Manor is a 50-year-old senior living apartment complex located at 1920 Rosehill Road. City Council is asked to authorize a loan commitment letter and subsequent loan documents in the amount of $2M from the American Rescue Plan Act Funds (ARPA) for substantial repairs to address health, safety, and accessibility. This commitment will be valid until December 31, 2024, with a six-month extension allowed at the Director’s discretion.
Background:
Hillside Manor is private nonprofit owned affordable housing development with 32-units of senior living. Hillside Manor-FMHA, LLC is associated with the Fayetteville Metropolitan Housing Authority but is no longer considered public housing. While this project does not create additional affordable housing, it seeks to address ADA accessibility, energy efficiency, and much needed repairs. This project is already secured affordable housing with a 20-year contract under a Housing Assistance Payments (HAP) agreement. The project requires $2M loan and the terms of the loan require 1% payment of interest only payments for the first five years and transitioning to 1% fully amortized over a 25-year term for a total of 30 years.
Issues/Analysis:
The commitment letter will be used to draft the legal documents to secure the City’s investment. These documents will be executed at loan closing where the City will be represented by Banks Law Firm as outside legal counsel.
Budget Impact:
City Council allocated $4M in ARPA funds for affordable housing initiatives. This loan represents $2M of the total $4M. Council previously allocated the remaining $2M on two other affordable housing projects: $1.25M on Fayetteville Gardens (100 units of multi-family housing) and $750,000 on Rosehill Road (15 units of single-family housing).
Options:
• Authorize a loan commitment letter and subsequent loan documents in the amount of $2M from American Rescue Plan Funds (ARPA) to Hillside Manor.
• Do not authorize a loan commitment letter and subsequent loan documents in the amount of $2M from American Rescue Plan Funds (ARPA) to Hillside Manor.
• Direct Staff to some other action
Recommended Action:
Staff recommends that Council move to authorize a loan commitment letter and proceeding loan documents in the amount of $2M from American Rescue Plan Funds (ARPA) to Hillside Manor.
Attachments:
Hillside Manor Commitment Letter 08.02.2024