ITEM O4a

OFFICE OF THE CITY MANAGER

(910) 341-7810
FAX(910)341-5839
TDD (910)341-7873

9/21/2010

City Council
City Hall
Wilmington, North Carolina 28401

Dear Mayor and Councilmembers:

The Cape Fear Area Resource Center (CFARC) by way of attached letter dated June 11, 2010 has requested
that its leases with the City of Wilmington for several properties located in the area of 10th and Fanning
Streets, be terminated. Additionally, attached is a memorandum dated June 16, 2010 from CFARC listing
conditions for the termination. This request was discussed by Council at its September 7, 2010 meeting and
a decision was delayed until Council's September 21, 2010 meeting and because of several questions about
the conditions yet to be answered.

One question dealt with whether or not the NAACP could continue to lease space at the facility. CDBG
Funds cannot be used to finance the use of facilities or equipment for political purposes or to engage in other
partisan political activities, such as candidate forums, voter transportation, or voter registration. However, a
facility originally assisted with CDBG funds may be used on an incidental basis to hold political meetings,
candidate forums or voter registration campaigns, provided that all parties and organizations have access to
the facility on an equal basis and are assessed equal rent or use charges, if any. According to the HUD
Greensboro office, dedicated ongoing space cannot be leased to the NAACP since it conducts voter
registration.

The City has placed the property under its insurance coverage, therefore, ongoing insurance coverage by
CFARC is moot. The leased phone system by CFARC at the facility can be assumed by the City for a cost
of $20,000.

Lastly, based on the City Attorney's review, it appears that the 2007 amendment to the 2006 lease added the
parcel of land on which the modular unit sits. That being the case, it appears the modular unit is subject to
the provision that provides termination of lease makes it city property (this would be in spite of the 2005
lease's lack of that language). This response takes into account that the 2007 amendment occurred close in
time to the City granting the funds to purchase the modular unit. Thus, it appears the grant and the
amendment were connected.

A resolution terminating the leases of CFARC is attached and as well as a Supplemental Appropriation
Ordinance of $20,000 to assume the installed phone system.

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Passage of the attached Resolution and Ordinance is recommended.

Respectfully submitted,

Sterling B. Cheatham,
City Manager

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 City Council
Resolution City of Wilmington
North Carolina

Introduced By: Sterling B. Cheatham, City Manager Date: 9/21/2010

Resolution Terminating Leases with Cape Fear Area Resource Center

LEGISLATIVE INTENT/PURPOSE:

WHEREAS, the Cape Fear Area Resource Center (CFARC) has requested the termination of its
leases from the City of Wilmington of city-owned properties located at North 10th and Fanning
Streets due to the organization’s inability to meet current financial obligations in the present
economy;

WHEREAS, other non-profit organizations, including some of the current subtenants, have
expressed interest in occupying some of the facilities currently leased by the City of Wilmington to
CFARC;

WHEREAS, the best interests of the citizens of the City of Wilmington will be served by
termination of the existing leases between the City of Wilmington and CFARC.

THEREFORE, BE IT RESOLVED

THAT, the Wilmington City Council authorizes the termination of all leases to the CFARC of
city-owned properties located at North 10th and Fanning Streets in accordance with the leases.
Further that the City Council authorizes the assumption of the lease payments for CFARC’s installed
phone system which requires a separate action to adopt the Supplemental Appropriation Ordinance
for $20,000.

Bill Saffo, Mayor

Adopted at a ____________ meeting
on ______________, 2010.

Attest: Approved As To Form:

Penelope Spicer-Sidbury, City Clerk City Attorney

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Wilmington Coastal Boxing
=C M O

Dreams of Wilmington = C
B,E and F
D

I
Cape Fear Area
Resource Center =
A, D, G, H*, I, J*, M,
B A
N, and O
*Proposed:
Community Boys & E F

N 10th St
Girls Club use

Fanning S
t
St

H G
Anderson

Hanover S
t

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Cape Fear Area Resource Center