AGENDA # 4h
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Request from First Baptist Church
DATE: May 22, 2000
The purpose of this report is to respond to a request from the First Baptist Church to increase the budget for its Section 202 Elderly Housing Project previously approved by the Council (Please see Attachment 1).
The attached resolution and budget ordinance would allocate an additional $10,000 from the Housing Loan Trust Fund for an increase in the cost of a land option to secure the project site.
On February 22, 1999, the Council authorized a $25,000 grant from the Housing Loan Trust Fund to the First Baptist Church to conduct a feasibility study for a HUD Section 202 Elderly Housing project. Orange County contributed $10,000 to the Church for the cost of the conducting the study for a total of $35,000. At that time, we noted that it was possible that if the First Baptist Church is awarded funds from HUD for this project, the cost of the feasibility study could be reimbursed from the grant. If the funds are reimbursed from the Section 202 grant, First Baptist Church proposes to use the funds for other costs related to this project, such as additional environmental or topographic surveys and land costs.
On May 10, 1999, the Council authorized an additional $10,000 from the Housing Loan Trust Fund to pay a $2,000 per month land option cost to the Pines Community Center, the current owner of the property (Please see Attachment 2). The Church’s original option on the property expired on December 31, 1999 and was extended for a five-month period that expires on May 31, 2000. The Church is able to extend the option for another five-month period that would expire on October 31, 2000.
In December 1999, the U.S. Department of Housing and Urban Development notified the First Baptist Church that it had received fund reservation in the amount of $3,261,300 for this project.
In a Memorandum dated January 13, 2000, Lane Sarver, on behalf of the First Baptist Church, requested financial assistance from the Town while the project completes the Town’s development review process. Mr. Sarver offered three options for the Council’s consideration:
Option 1: The Town could provide additional funds to the Church pay land option costs to the Pines Community Center.
Option 2: The Town could provide a temporary bridge loan to purchase the property prior to receipt of HUD Section 202 funds.
Option 3: The Town could purchase the land and option it back to the Church
for the project.
We recommend that the Council consider Option 1, and budget an additional $10,000 to the First Baptist Church from the Housing Loan Trust Fund to cover the land option extension. If the Council approved this option, the Church would extend its contract with the Pines Community Center an additional five months (until October 31, 2000) in order to complete the Town’s development review process. Under the terms of the agreement, the Church must continue to pay a land option fee ($2,000 per month) to the Pines Community Center until the review process is complete. This payment is equal to the interest payment due from the Pines Community Center to Central Carolina Bank. Also included in the agreement between the Church and the Center is that option funds be applied to the purchase price.
Currently there are funds available in the Housing Loan Trust Fund for this expense.
If this request were approved, the Town will have contributed a total of $45,000 toward this project. As previously recommended, we continue to recommend that the Church repay the Town funds used for the land option.
RECOMMENDATION
We recommend that the Council adopt the attached resolution and budget ordinance allocating an additional $10,000 from the Housing Loan Trust Fund to the First Baptist Church for land option costs. We also recommend that the First Baptist Church repay the Town all funds used for the land option to the Pines Community Center, Incorporated.
We recommend that the Council adopt the attached budget ordinance to appropriate $10,000 from the Housing Loan Trust Fund for this purpose.
ATTACHMENTS
1. January 13, 2000 Memorandum from L. Lane Sarver, Housing Consultant to the First Baptist Church
2. May 10, 1999 Memorandum to the Mayor and Town Council
A RESOLUTION AUTHORIZING AN ADDITIONAL $10,000 GRANT
FROM THE HOUSING LOAN TRUST FUND TO FIRST BAPTIST CHURCH FOR AN INCREASE IN THE
COST OF A LAND OPTION (2000-5-22/R-8)
WHEREAS, on February 22, 1999, the Council provided a $25,000 grant to the First Baptist church to conduct a feasibility study of property located on Park Road for preparation of a HUD Section 202 Elderly Housing Application; and
WHEREAS, on May 10, 1999, the
Council allocated an additional $10,000 to the First Baptist Church for the
feasibility study and an increase in the cost of a land option;
WHEREAS, the First Baptist Church has requested an additional $10,000 for land option payments;
NOW, THEREFORE, BE IT RESOLVED that the Council of the Town of Chapel Hill authorizes an additional $10,000 grant from the Housing Loan Trust Fund to the First Baptist Church for an increase in the land option costs.
BE IT FURTHER RESOLVED that the Council authorizes the Manager to amend the Performance Agreement with the First Baptist Church to reflect the $10,000 increase.
BE IT FURTHER RESOLVED that the First Baptist Church shall repay the Town all funds used for the land option to the Pines Community Center, Incorporated.
This the 22nd day of May, 2000.
AN ORDINANCE TO AMEND “THE
ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUE FOR THE FISCAL
YEAR BEGNINING JULY 1, 1999” (2000-5-22/O-2)
BE IT ORDAINED by the Council of the Town of Chapel Hill that the Budget Ordinance entitled “An Ordinance Concerning Appropriations and the Raising of Revenue for the Fiscal year Beginning July 1, 1999” as duly adopted on June 14, 1999 and the same is hereby amended as follows:
ARTICLE 1
Current Revised
HOUSING LOAN
TRUST FUND
$389,601 $10,000 $399,601
ARTICLE II
HOUSING LOAN
TRUST FUND
$389,601 $10,000 $399,601
This the 22nd day of May,2000