Policy - DEFERRED - Long-Term Affordability Policy Exception Request

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N December 20, 2010 Dr. Tara Fikes Housing and Community Development Orange County PO Box 8181 Hillsborough, NC 27278 Dear Tara: This letter is in response to your email asking about the need for HOME funds at the affordable rental project in the Winmore development known as The Landings at Winmore. As you know Community Home Trust is not the developer of The Landings. When we applied for the HOME funds in 2007,1 did not fully understand what the Home Trust's role would be in this development. However, I was convinced that notwithstanding our role, the Landings was a much needed rental project for the Chapel Hill /Carrboro area. I also believed BOARD OF the development proposal enabled our community to leverage a modest amount of HOME TRUSTEES funds per unit to create fifty -eight affordable apartments in an upscale neighborhood. In short, Mary Bratsch I viewed this as a unique opportunity that hopefully would warrant an allocation of HOME President funds. Michael Hansen The developer of The Landings, Dean Edwards, has told me there were project costs incurred Vice President that were loaned to the project by Crosland LLC as the Managing Member of the The Landings Mary Jean Seyda during construction. Mr. Edwards informs me that these costs, some of which are outlined Treasurer below, were not funded by the Bank of America construction loan. As you can see, the costs Lisa Inman well exceed the $300,000 of HOME funds that were approved for this development. Sccrebiry John Cooper It is my understanding that the $300,000 of HOME funds are needed to repay funds advanced by Crosland for this development. The costs provided to the Landings by Crosland include: Jacquelyn Gist Jonathan Weiler A second question has been the length of the affordability period, which is typically 99 years for Executive Director any projects that include funding from Orange County. The developer has raised questions Robert Dowling about the practicality of a 99 -year affordability period in the event that Community Home Trust is unable to purchase the property. As you know, Community Home Trust has a Right of First Refusal for The Landings. Although our intention is to exercise this right and maintain these units as affordable rentals in perpetuity, market conditions and our own financial strength will determine if we are able to exercise this right and purchase the buildings. However, in any case, the developer informs me that the senior financing for the project provided by the NC P.O. Box 307, Carrboro, NC 27510 1 919 - 967 -1545 Land Option Costs $20,000.00 Eric Hallman Bank of America Closing Costs $66,300.00 Pam Hemminger Pre- development Costs $1,526.49 Architect Fees $238,939.97 Alan Lee Survey & Engineering Fees $147,711.70 Gene Pease Appraisal $3,000.00 Soils Investigation $3,625.00 Bruce Runberg Jim Tucker As you can see, these costs total about $480,000. Jonathan Weiler A second question has been the length of the affordability period, which is typically 99 years for Executive Director any projects that include funding from Orange County. The developer has raised questions Robert Dowling about the practicality of a 99 -year affordability period in the event that Community Home Trust is unable to purchase the property. As you know, Community Home Trust has a Right of First Refusal for The Landings. Although our intention is to exercise this right and maintain these units as affordable rentals in perpetuity, market conditions and our own financial strength will determine if we are able to exercise this right and purchase the buildings. However, in any case, the developer informs me that the senior financing for the project provided by the NC P.O. Box 307, Carrboro, NC 27510 1 919 - 967 -1545