AGENDA # 14
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Items Related to the Scarlette Drive Affordable Homeownership Project
DATE: January 10, 2000
The purpose of this agenda item is to transmit recommendations to the Council about the Scarlette Drive Affordable Homeownership Project.
In the near future, we will return to the Council with a response to a petition from the Community Land Trust in Orange County requesting that the Town’s funds in the project be a grant for permanent second mortgages for lower-income homeowners.
Since 1996, the Council has been partners with the Orange Community Housing Corporation to develop affordable housing on the Scarlette Drive property. The Council has budgeted Community Development funds and funds from the Housing Loan Trust Fund to assist with the development of the site.
The Council agreed to develop restrictive covenants and examine traffic calming techniques that could be used to protect the neighborhood. We have developed a proposed list of covenants that we believe will satisfy concerns raised by the Council and residents of the Scarlette Drive neighborhood.
At this time, we recommend that the Council convey the Scarlette Drive property to the Orange Community Housing Corporation to develop the property. In turn, the Orange Community Housing Corporation would convey the property to the Community Land Trust in Orange County. We also recommend that the Council convey the property with stipulations. The key stipulations that we recommend include:
In 1955, the Town acquired the 1.23 acres of property located on the corner of Scarlette Drive and Legion Road. The property adjoins, but is not a part of the Memorial Cemetery.
On April 26, 1996, the Council received a report on vacant land owned by the Town. In the report the Scarlette Drive site was identified as a candidate for resale, reuse or for construction of affordable housing.
In 1995 and 1996, Orange County agreed to convey an adjoining .016 acre strip of property on the Scarlette Drive site to the Town of Chapel Hill. A requirement of the transfer was that the property would be used for affordable housing purposes. On May 13, 1996, the Town Council adopted a resolution to accept the portion of the property owned by the County. On February 4, 1997, the deed transferring the property was recorded with the Orange County Register of Deeds.
On June 24 1996, the Council authorized the Manager to work with the Orange Community Housing Corporation to develop an affordable housing plan for homeownership on the Scarlette Drive property.
On June 8, 1998, Robert Dowling, Executive Director of the Orange Community Housing Corporation, presented a concept plan for the Scarlette Drive townhomes to the Council. At that time, Mr. Dowling noted that the fourteen townhomes would be developed for first time homebuyers earning less than 80% of the area median income by household size. Discussions about the potential for using the property as a land trust also occurred.
On July 7, 1999, the Town Council approved a rezoning and special use permit for the Scarlette Drive townhomes.
In December 1996, the Council established the Land Trust Implementation Task Force. The Task Force was charged with designing a general mechanism to create a land trust for the purposes of establishing long-term affordable housing.
On October 26, 1998, the Land Trust Implementation Task Force presented recommendations to the Council for creating a land trust in Orange County (please see Attachment 1). The report offered the following recommendations for the creation of a land trust:
· Establish a new 501 (c )(3) organization with a volunteer Board of Directors that establishes policy.
· Contract with Orange Community Housing Corporation to perform the administrative tasks, particularly the long-term tasks.
· Developers would be responsible for construction and would transfer the land to the Land Trust once the homes were sold to qualified buyers.
At that time, the Council received the report from the Task Force and created the Land Trust Steering Committee to identify a Board of Directors for the land trust organization, develop expertise on the CLT model and for organizing the CLT, developing the Bylaws, Articles of Incorporation, Lease and Resale Formula and educating the private and public sectors (please see Attachment 2).
In May, 1999, the Community Land Trust in Orange County was officially incorporated and received tax exempt status under Section 501(c )(3) of the U.S. Internal Revenue Code. Many of the members of the Steering Committee have become the initial Board of Directors for the organization. Bylaws and Articles of Incorporation have been developed and the Board is in the process of completing the Ground Lease and finalizing the Resale formula.
Please see Attachment 3 for a chart of the stakeholders involved in the Scarlette Drive Homeownership Program. The intent of the chart is to explain the roles of the parties involved in the development and use of the property.
DISCUSSION
During the public review process on the rezoning of the Scarlette Drive property and the development of the Scarlette Drive Townhomes, residents of the Scarlette Drive neighborhood raised several concerns about the project. Concerns raised by the residents included: maintenance of the Townhomes and the grounds of the development; the need for buffering between the development and Memorial Cemetery; an increase in traffic in the neighborhood; and the need for sidewalks along Scarlette Drive.
In response to these concerns, on July 7, 1999, the Council adopted a resolution instructing the Manager and requesting the Orange Community Housing work together to involve the neighbors in planning for restrictions on this development. The intent of this meeting would be to plan restrictive covenants for the use of the property prior to transferring the land to the Orange Community Housing Corporation and the Community Land Trust in Orange County (CLTOC).
Also on July 7, the Council added special use permit requirements for buffering along the western property line adjacent to the cemetery and street plantings. The Council also adopted a resolution calling for construction of a sidewalk by the Town along Scarlette Drive from U.S. 15-501 to the property line.
The Town is the current owner of the Scarlette Drive property. After restrictive covenants are placed on the property, the next step would be for the Town to convey the property to Orange Community Housing Corporation as the developer of the property. In turn, the Corporation will transfer the land to the Community Land Trust in Orange County. The Town would place deed restrictions on the property requiring that the land be used for an affordable homeownership land trust project. In addition, we propose to develop a three-party agreement among Orange Community Housing Corporation, the Community Land Trust in Orange County, and the Town that would incorporate terms governing the use and development of the property.
Public Funding
To date, the Town has committed $192,770 of Community Development funds ($23,770 of fiscal year 1996 – 97 funds and $169,000 of fiscal year 1999 – 2000 funds) and $20,000 from the Housing Loan Trust Fund to the Orange Community Housing Corporation for the development of this project. In addition to the Community Development funds, $124,000 of Federal HOME Program funds administered by the Orange County Department of Housing and Community Development has also been budgeted for this project.
The Town will also construct a sidewalk with curb and gutter from the edge of the property to Highway 15-501 along Scarlette Drive, and to fund a portion of the construction costs for a brick wall along Legion Road.
We recommend the Council consider the following agenda items:
· A report on restrictions on development for the Scarlette Drive property, including proposed restrictive covenants; and
· A report on the proposed transfer of the Scarlette Drive Property to Orange Community Housing Corporation, and ultimately, the Community Land Trust in Orange County.
We propose to return to the Council at a later date with a response to a petition from the Community Land Trust regarding making the Town’s funds in the project a grant. This response will include more specifics on the proposal to develop a three-party Performance Agreement among the Town, Orange Community Housing Corporation, and the Community Land Trust in Orange County.
ATTACHMENTS
1.
October 26,
1998 Report from the Land Trust Implementation Task Force (begin new pg. 1)
2.
Stakeholders
and Roles for the Scarlette Drive Affordable Homeownership Project (pg. 9)