AGENDA ITEM EXECUTIVE SUMMARY
ITEM TITLE*
title
Authorization to Execute a Development Contract with Habitat for Humanity of Orange County for the Duplexes in the Homestead Gardens Affordable Housing Development
presenter
RESPONSIBLE STAFF, TITLE, DEPARTMENT*
Alicia Arnold, Director, Housing and Community Development Department (HCD)
Emily Holt, Affordable Housing Assistant Director, HCD
Maggie Simon, Affordable Housing Development Coordinator, HCD
STAFF RECOMMENDATION*
Staff recommend that the Council authorize the Town Manager to execute a development contract with Habitat for Humanity of Orange County for the development of the duplexes in the Homestead Gardens Affordable Housing Development.
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ACTION/DECISION POINTS*
Council must approve or reject the authorization to execute the development contract with Habitat for Humanity of Orange County for the development of the duplexes in the Homestead Gardens Affordable Housing Development.
LEGISLATIVE CONTEXT*
In November 2018 <https://chapelhill.legistar.com/LegislationDetail.aspx?ID=3760315&GUID=212CC318-56AD-416C-A079-39C9F7E37174&Options=&Search=>, Council authorized the Town Manager to issue a Request for Qualifications to identify potential development partners for 2200 Homestead Road and to begin negotiations with potential developers. Staff now need Council authorization to execute a development contract with Habitat for Humanity of Orange County.
BACKGROUND AND CONTEXT*
Background
The Town and its outside legal counsel at Ellinger & Carr have worked with Habitat for Humanity of Orange County to draft a development contract that establishes the major terms and conditions related to the development of Town land for the construction and sale of the duplexes as part of the Homestead Gardens Affordable Housing Development.
The Town Council has consistently reviewed and authorized elements of the project leading to consideration of this agreement.
• In September 2017, Council designated 2200 Homestead Road as a mixed-income affordable housing site and authorized the Town Manager to continue to pursue development there.
• In June 2018, Council gave feedback on a Concept Plan for the development of 2200 Homestead Road.
• In November 2018, Council authorized the Town Manager to issue a Request for Qualifications to identify potential development partners for 2200 Homestead Road and to begin negotiations with potential developers.
• In June 2020, Council approved $3.3M in Affordable Housing Bond funding for the 2200 Homestead Road project.
• In November 2020, Council approved $173,395 in Affordable Housing Development Reserve funding for the 2200 Homestead Road project.
• In May 2021, Council approved the Conditional Zoning of the 2200 Homestead Road project.
• In October 2021, Council authorized the Town Manager to execute a site development agreement with Self-Help Ventures Fund for the 2200 Homestead Road site.
• In November 2022, Council approved $3,028,839 in affordable housing funding for the 2200 Homestead Road project.
• In June 2023, Council authorized the Town Manager to execute option to ground lease agreements with CASA, Habitat for Humanity of Orange County, and Community Home Trust for the Town-owned 2200 Homestead Road site.
• In November 2023, Council approved a Modification to the Conditional Zoning of the 2200 Homestead Road project.
Key components of the development contract:
• Confirmation of general terms and conditions: reconfirms the project scope and 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 for each development site before construction and upon meeting the requirements set forth in the executed option agreements, each with a term of 99 years and an annual rent of $10.00.
• Developer responsibilities: the developer will be responsible for the site planning, construction, development, and sales of the duplexes at Homestead Gardens 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.
• 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.
TRADEOFFS, ALTERNATIVES, IMPACTS
If Council does not authorize execution of the development contract, Habitat for Humanity of Orange County will not be able to proceed with building or selling the 12 duplexes at Homestead Gardens Affordable Housing Development.
If Council authorizes execution of the development contract, Habitat for Humanity of Orange County will proceed with securing the permits and financing needed to begin construction of the duplexes.
FINANCIAL IMPACT
There is no financial impact from the development contract.
COMPLETE COMMUNITY CONNECTION
The Homestead Gardens project is consistent with the Complete Community strategy, by adding affordable housing, with a mix of housing types and for a mix of income levels, that is transit accessible and expands the Town’s greenway system.
ATTACHMENTS
Resolution
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