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: April 22, 2024
RE:
Title
Eutaw Landing Apartments Affordable Housing 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:
Eutaw Landing is a proposed 60-unit apartment community for 55+ located adjacent to 839 Elm Street. City Council is asked to authorize a loan commitment letter and subsequent loan documents in the amount of $800,000 from Home Investment Partnership Funds (HOME) to construct this new housing development. This commitment will be valid until June 30, 2024, with a six-month extension allowed at the Director’s discretion.
Background:
SEML Development, LLC. is a private developer constructing a 60-unit 55+ community and producing six (6) HOME rental units. The property is a vacant parcel located near the Eutaw Village shopping plaza on Bragg Boulevard. Funding of the $800,000 would come from the City’s annual allocation of HOME funds, the development requires a 2% interest loan fully amortized over 20 years.
At the April 3, 2023, Work Session, City Council reviewed information about this project as a 60-unit development. Since that time, the development has been approved for Low-Income Housing Tax Credits (LIHTC) from the State of North Carolina’s Housing Finance Agency. The number of HOME-funded units totals six (6) units consisting of three (3) one-bedroom units and three (3) two-bedroom units that shall be rented exclusively to persons or households earning no greater than forty percent (40%) of the Fayetteville area median income.
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:
The City of Fayetteville annually receives entitlement funding from the HOME Program which currently has approximately $5.6M with approximately $4M committed to projects reviewed by City Council.
Options:
• Authorize a loan commitment letter and subsequent loan documents in the amount of $800,000 from HOME Funds to Eutaw Landing Apartments.
• Do not authorize a loan commitment letter and subsequent loan documents in the amount of $800,000 from HOME Funds to Eutaw Landing Apartments.
• Direct Staff to some other action.
Recommended Action:
Staff recommends that Council move to authorize a loan commitment letter and subsequent loan documents in the amount of $800,000 from HOME Funds to Eutaw Landing Apartments.
Attachments:
Eutaw Landing Apartments Commitment Letter 04.22.24