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2 <br />All properties have recorded Declarations of Restrictive Covenants requiring a 99 year <br />affordability provision and all have a recorded Deed of Trust securing the investment. Both the <br />Declaration of Restrictive Covenants and Deed of Trust contain resale provisions that provide <br />should Chrysalis become unable to operate the property as affordable rental property it may be <br />transferred to another 501(c)(3) organization with a similar interest in affordable housing. <br />Thus, in the interest of preserving these units for affordable housing, County staff, in <br />collaboration with Chrysalis and OPC Mental Health Agency, have talked extensively with staff <br />of two non-profit organizations -Community Alternatives for Supportive Abodes (CASA) and <br />Cross Disabilities, Inc. (XDS), regarding the potential transfer of these properties to their <br />organizations. Both organizations serve clients that are disabled and low-income -the same <br />population targeted by Chrysalis. Both have indicated an interest in assuming ownership of <br />these properties. <br />After extensive review, the Board of Directors of both organizations have approved accepting <br />ownership of the Chrysalis properties with the following conditions. For CASA, it has been <br />determined that approximately $324,297 in additional investment is necessary in order to take <br />ownership of 17 of the 20 properties. Of this amount, approximately $206,647 is necessary to <br />rehabilitate the properties and the remainder ($117,650) covers transaction costs and the initial <br />capitalization of a replacement reserve and operating reserve. XDS is interested in assuming <br />ownership of the remaining three (3) properties and estimates the need for an additional <br />investment of $27,940 is necessary to cover the cost of rehabilitation of the property ($22,110) <br />and $6,560 to cover transaction costs and the initial capitalization of a replacement and <br />operating reserve. Thus, a total of $351,937 ($324,297 + $27,940) represents the additional <br />investment necessary to preserve 20 properties with $1,559,868 in appraised value and 18 <br />current tenants. <br />FINANCIAL IMPACT: A total of $198,000 in HOME Investment Partnership Program and <br />Chapel Hill Community Development (CDBG) funds will be available from the 2009-2010 <br />program budgets. It is recommended the remaining $153,937 needed comes from Orange <br />Community Development Program Income. This program income was derived from repayments <br />for second mortgages provided in the Magnolia Place subdivision. The total amount of funds <br />available is $171,598. If funds are provided for this project, there would be a balance remaining <br />of $17,661. <br />RECOMMENDATION (S): The Manager recommends the Board: <br />1) Approve the transfer of 17 properties currently owned by the Chrysalis Foundation for <br />Mental Health, Inc. to Community Alternatives for Supportive Abodes (CASA); <br />2) Approve the transfer of one triplex to Cross Disability Services, Inc (XDS); <br />3) Authorize the appropriation of $153,937 from Community Development Program <br />Income to finance the transfer and stabilization of these units; and <br />4) Authorize the County Attorney's Office to prepare the necessary documents to <br />complete the transfer and authorize the Chair of the Board of the County <br />Commissioners and the County Manager to execute the necessary documentation. <br />