MEMORANDUM
TO: Roger L. Stancil, Town Manager
FROM: J.B. Culpepper, Planning Director
Loryn Clark, Housing and Neighborhood Services Coordinator
SUBJECT: Response to Request from Habitat for Humanity Regarding Extension of Loan Terms
DATE: April 15, 2009
PURPOSE
Tonight we return to the Council with a response to a request from Habitat for Humanity to extend the terms of a loan between the Town and Habitat for the acquisition of property on Sunrise Road (see Attachment 1).
Adoption of the attached Resolution would authorize an amendment to the terms of a Performance Agreement between the Town and Habitat for Humanity to extend the repayment deadline of a loan for the acquisition of property on Sunrise Road from February 28, 2009 to February 28, 2010. We also recommend that prior to approval of an extension to the loan and the preliminary subdivision plat beyond February 28, 2010, Habitat must provide the Council with an update about its plans to develop this property.
The Town has provided financial support to Habitat for Humanity for many years. Since 2002, the Council has allocated over $300,000 in federal and local funds to Habitat to construct homes in the Pine Knolls, Northside, Culbreth Park and Abbots Colony neighborhoods, and to support the development of New Homeplace, Rusch Hollow I and II, Bradley Ridge and the Phoenix Place subdivisions.
On November 25, 2002, the Council adopted a Resolution to provide up to $50,000 from the Housing Loan Trust Fund to Habitat for Humanity for either an extended option or to assist with the acquisition of the Sunrise Road property. The memorandum stated that the Council could authorize contract extensions, and the resolution authorized the Town Manager to execute the contract based on the information in the memorandum. The Town entered into a Performance Agreement with Habitat for these funds on February 12, 2003. The terms of this loan required repayment by February 28, 2005. These funds were provided for the acquisition of the property. Habitat executed a Deed of Trust and Promissory Note to the Town for these funds. Orange County provided the balance of funds, $250,000, to purchase this property. Habitat purchased the 16-acre site on February 27, 2003.
On March 7, 2005, the Council adopted a resolution to extend the repayment date of a loan for the acquisition of property on Sunrise Road from February 28, 2005, to February 28, 2006.
On February 27, 2006, the Council adopted a resolution to modify the terms of a Performance Agreement between the Town and Habitat to extend the repayment date of this loan from February 28, 2006, to February 28, 2007.
On February 12, 2007, the Council adopted a resolution to modify the terms of the Performance Agreement from February 28, 2007 to February 28, 2009 (see Attachment 2).
In a letter dated February 9, 2009, Susan Levy, Executive Director of Habitat for Humanity, requested that the Town extend the contract time period for two years until February 28, 2011 (see Attachment 1). On March 9, 2009, the Council discussed this request. The Council discussed this request and other projects delayed by the current financial crisis.
DISCUSSION
Habitat entered into a partnership with Regions Development LLC, the developer of the Bradley Green Subdivision, to develop Bradley Ridge. It was envisioned that Bradley Ridge would include sixty-three single-family homes, including a combination of Habitat homes for households earning less than 80% of the area median income and market rate homes. The Council approved a preliminary plat for the subdivision on February 25, 2008, with the Preliminary Plat approval valid for one year from that date. The Town Manager has the authority to approve this extension. We contacted Habitat for Humanity on February 25, 2009 informing them that the approval was expiring and it would be necessary to submit a fee of $799 to extend the approval. We received a request for an extension from Habitat, but we have not yet received the $799 fee.
Though plans for the development of the Bradley Green Subdivision are unknown at this time, we understand that the Board of Habitat intends to use this property for affordable housing purposes.
On March 9, 2009, we presented Habitat’s request to the Council for review. At that time, the Council asked the staff to review this project along with other projects that were being delayed as a result of the credit crisis. This item is also on tonight’s agenda. We have reviewed this request and think that it would be reasonable to extend this Agreement for one year until February 28, 2010. We also recommend that prior to approval of an extension to the loan and the preliminary subdivision plat beyond February 28, 2010, Habitat must provide the Council with an update about its plans to develop this property.
RECOMMENDATION
We recommend that the Council adopt the attached resolution authorizing an amendment to the terms of the Performance Agreement to extend the repayment deadline for an additional year to February 28, 2010. This extension would allow Habitat time to determine its plans for the development of this property. We also recommend that prior to approval of an extension to the loan and the preliminary subdivision plat beyond February 28, 2010, Habitat must provide the Council with an update about its plans to develop this property.