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
Aubrey Hills Apartments Affordable Housing Loan Commitment
end
COUNCIL DISTRICT(S):
Council District(s)
District 4
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:
Aubrey Hills is a proposed 32-unit garden-style apartment community for families located at 148 Horseshoe Road. City Council is asked to authorize a loan commitment letter and subsequent loan documents in the amount of $2,145,000 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:
Halcon Development, LLC. is a private developer constructing a 32-unit community and producing eleven (11) HOME rental units. The property is a vacant parcel located at the southern end of Horseshoe Road off of Yadkin Road. Funding in the amount of $2,145,000 would come from the City’s annual allocation of HOME funds, the development requires a 2% interest loan fully amortized over 30 years and due in full at year 20.
At the April 3, 2023, Work Session, City Council reviewed information about this project as a 52-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 with the total number of units being decreased to 32. The number of HOME-funded units has remained at eleven (11) units consisting of one (1) one-bedroom units, eight (8) two-bedroom units, and two (2) three-bedroom units and shall be rented exclusively to persons or households earning no greater than 50% 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 $2,145,000 from HOME Funds to Aubrey Hills Apartments.
• Do not authorize a loan commitment letter and subsequent loan documents in the amount of $2,145,000 from HOME Funds to Aubrey Hills 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 $2,145,000 from HOME Funds to Aubrey Hills Apartments.
Attachments:
Aubrey Hills Commitment Letter 04.22.24