APPROVED City Council — Action Request Form Date: March 9, 2011 To: The City Manager From: _D. Ritchie Brooks, Community and Business Development Department Director Council Action Requested Authorize financing for development of housing on West Second Street Summary of Information: ‘On September 20, 2004, the City Council approved a conceptual development plan for property on West Second Strect at Shady Boulevard, and on April 18, 2005, the City Council authorized the sale of four lots on the north side of West Second Street (639, 645, 649 and 653 West Second Street) to Sustainable Housing, LLC, of which the principal is Mr. William G. Benton, 1105 Brookstown Avenue, Winston-Salem, NC 27101 (Developer). On April 19, 2010, the City Council approved a modification to the conceptual development plan, approved the sale of one lot on the southwest comer of West Second Street and Shady Boulevard (646 West Second Street) to the Developer, and confirmed that the sales price for the property is $25,000 per lot for a total of $125,000. (See the table below for Street Address, Block/Lot and PIN.) The City and Sustainable Housing, LLC entered into a development agreement on June 5, 2006, based on the September 2004 and April 2005 Council actions. The development agreement has been amended twice to extend the term and to incorporate the changes in the 2010 modification. ‘The agreement also provides that on the sale of the land to the Developer an encumbrance and lien of $20,145.91 will be recorded against each lot to recover the City’s costs for acquisition, demolition, and storm drain replacement that occurred in 2000 and 2001. The encumbrance will be forgiven on completion of a housing unit and transfer by the Developer to an owner-occupant purchaser ‘The Developer's plans include development of new construction housing for middle-income households using designs from the Southeastem Center for Contemporary Art (SECCA) Home House competition. There will be four housing units surrounding a common, private roadway on the north side of West Second Street and one housing unit at 646 West Second Street. The Developer has requested $125,000 in financial assistance from the City to fill a funding gap in the project cost. These funds are derived from Housing Finance Funds. Specifically, City funds are proposed to install the private roadway and sidewalk on the north side of West Second Street. ‘Committee Action: Committee Finance 5/9/11 Action Approval For ‘Unanimous Against Remarks:APPROVED ‘The proposed financing will be in the form of a 20-year, deferred, no interest loan secured by the property and will be allocated to each of the five housing units. The loan balance will be forgiven by the amount of real property taxes paid to the City each year for each housing lot Any outstanding balance at the end of the loan term would be amortized over five years at 2%. At 2010 tax rates, a housing unit would have to have a tax value of at least $264,000 to repay the Joan in 20 years. Street Address Block/Lot PIN 639 West Second St. (0095 106. (6835-06-3045.00 645 West Second St. (0095 105 (6835-06-2094.00 649 West Second St. (0095 032 (6835-06-2044.00 (653 West Second St. (0095 031 (6835-06-1083.00 646 West Second St. (0100 109) (6835-05-2898.00