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Authorize the Town Manager to Execute a Development Contract with the Taft-Mills Group for the Development of the Tanyard Branch Trace affordable housing community.
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Staff: |
Department: |
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Sarah Vinas, Director |
Affordable Housing & Community Connections |
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Emily Holt, Affordable Housing Manager |
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Overview: The proposed development contract is an agreement between the Town and the Taft-Mills Group (TMG) for the Tanyard Branch Trace development on Town-owned land at 110 Jay Street. The agreement establishes the major terms and conditions between TMG and the Town for carrying out the development of the Tanyard Branch Trace affordable housing community.
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Recommendation(s): |
That the Council authorize the Town Manager to execute a development contract with the Taft-Mills Group to establish the major terms and conditions for carrying out the development of the Town-owned parcel at 110 Jay Street.
Background: The Town and its outside legal counsel at Stuart Law Firm have worked with TMG to draft a development contract that establishes the major terms and conditions between TMG and the Town in carrying out the development of the Tanyard Branch Trace affordable housing community.
The Town Council has consistently reviewed and authorized elements of the project leading to consideration of this agreement.
§ In June 2018 Council prioritized the Town-owned Jay Street parcel as an affordable housing site and authorized the Town to pursue development there.
§ In March 2021, the Town executed a Memorandum of Understanding with TMG to begin negotiating an agreement to develop the Jay Street site.
§ In June 2021, the Council provided feedback on the concept plan for Jay Street.
§ In January 2022, the Council authorized the execution of an Option to Ground Lease Agreement with TMG, conditioned on securing all financing, including Low-Income Housing Tax Credit project (LIHTC), and required permits.
§ In April 2022, the Council approved a conditional rezoning of the Jay Street parcel that included the development of 48 affordable units.
§ In November 2022, Council approved the allocation of $2 million in affordable housing funding for a 9% LIHTC project or other Town-prioritized project as part of the FY2023 Affordable Housing Funding Plan. At the time, staff shared with Council that the Jay Street project would be a likely candidate for use of this funding.
§ In April 2023, the Council approved the recommendation to allocate $1,950,000 to the Tanyard Branch Trace project, contingent on the project receiving a 9% Low Income Housing Tax Credit Award in 2023 by the North Carolina Housing Finance Agency.
Key components of the agreement:
§ Confirmation of general terms and conditions: reconfirms the project schedule and names the selected members of the development team.
§ Confirmation of Ground Lease: confirms that the Town and the developer will enter into a ground lease before construction pursuant to the executed option agreement, with a term of 99 years and an annual rent of $1.00.
§ Developer responsibilities: the developer will be responsible for the site planning, deconstruction, development, and lease-up of Tanyard Branch Trace in accordance with the Town-approved plans and affordability restrictions imposed by the Town. Developer will also be responsible for securing all financing and ensuring adherence to state, federal and local funding requirements and Town-issued permits.
§ The Town’s funding commitment: provides for Town funding in the amount of $1.95 million from the Town’s affordable housing funding sources, including $450,000 in American Rescue Plan Act and $1.5 million in federal Community Project Funding.
§ Protection for the Town: gives the Town the ability to terminate the contract in the event the developer commits fraud, leases the project at excessive rent levels, declares bankruptcy, fails to construct the project as agreed to by the Town, or otherwise fails to fulfill its responsibilities under the contract.
Fiscal Impact/Resources: This Development contract acknowledges the $1.95 million awarded to the project but does not allocate any additional Town funds toward the project.
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Attachments: |
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• Resolution |
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE A DEVELOPMENT CONTRACT FOR THE DEVELOPMENT OF THE TANYARD BRANCH AFFORDABLE HOUSING COMMUNITY (2024-06-05/R-7)
WHEREAS, on June 20, 2018 <https://chapelhill.legistar.com/View.ashx?M=F&ID=6331688&GUID=F33634A5-0A6F-4270-92F4-990A14E0C494>, the Council prioritized the Town-owned Jay Street parcel as an affordable housing site and authorized the Town to pursue development on the Jay Street site; and
WHEREAS, on September 18, 2019 <https://chapelhill.legistar.com/LegislationDetail.aspx?ID=4135814&GUID=964ED0B2-5590-4A53-A7A5-E09507E79EB5&Options=ID|Text|&Search=jay+street>, the Council heard the feasibility report on development potential for prioritized Town-Owned affordable housing sites, including Jay Street; and
WHEREAS, on November 13, 2019 <https://chapelhill.legistar.com/View.ashx?M=F&ID=7881855&GUID=5DDDF984-71BF-4B7A-B863-30DDE7FFC84C>, the Council authorized the Town Manager to seek an affordable housing partner for Town-owned land on Jay Street and begin negotiating an agreement under which the parties would prepare a proposed development project; and
WHEREAS, on March 5, 2021, the Town executed a Memorandum of Understanding with Taft-Mills Group to establish the terms and conditions for negotiating an agreement to develop Jay Street; and
WHEREAS, on June 21, 2021 <https://chapelhill.legistar.com/View.ashx?M=F&ID=9506551&GUID=0F494F8B-1646-4091-9FCB-FAFACE5FF7B9>, the Council provided feedback on the concept plan for Jay Street; and
WHEREAS, on January 12, 2022 <https://chapelhill.legistar.com/View.ashx?M=F&ID=10400945&GUID=74AC7208-ED62-4F0B-A9B6-0BA66FE61CC1> the Council of the Town of Chapel Hill authorized the Town Manager to execute an option to ground lease agreement with Taft-Mills Group for the Jay Street site; and
WHEREAS, on April 27, 2022 <https://chapelhill.legistar.com/View.ashx?M=F&ID=10853948&GUID=F019F050-11B3-4C27-8199-3CE3E27487A4> the Council approved the rezoning of the Town’s Jay Street property from R-3 to R-SS-CZD and the accompanying site plan for 48 affordable units; and
WHEREAS, on November 16, 2022 <https://chapelhill.legistar.com/View.ashx?M=F&ID=11464749&GUID=FE3F7401-18E1-45AB-8291-3FC898ED0FB7> the Council approved a funding plan allocating $2,000,000 toward a 9% Low Income Housing Tax Credit (LIHTC) or Prioritized Project; and
WHEREAS, in April 2023 <https://chapelhill.legistar.com/View.ashx?M=F&ID=11932241&GUID=06C33D20-B10E-4AD9-95D5-EAB23D9454C0>, the Council approved the recommendation to allocate $1,950,000 to the Tanyard Branch Trace project; and
WHEREAS, in August 2023, the North Carolina Housing Finance Agency awarded the Tanyard Branch Trace project a 2023 9% Low Income Housing Tax Credit.
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to execute a development contract with the Taft-Mills Group for the development of the Tanyard Branch Trace affordable housing community, as described in the May 15, 2024 meeting materials.
This the 5th day of June, 2024.
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The Agenda will reflect the text below and/or the motion text will be used during the meeting. |
presenter
PRESENTER: Sarah Vinas, Affordable Housing and Community Connections Director
RECOMMENDATION: That the Council adopt a resolution authorizing the Town Manager to execute a development contract with Taft-Mills Group for the development of the Tanyard Branch Trace affordable housing community.