HomeMy WebLinkAboutAgenda - 06-02-2009 - 6bORAGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 2, 2009
Action Agenda
Item No. (~ -~
SUBJECT: Transfer of Chrysalis Properties
DEPARTMENT: Housing/Community Dev. PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Spreadsheet -Chrysalis Properties Tara L. Fikes, 245-2490
PURPOSE:
1) To approve the transfer of 17 properties currently owned by the Chrysalis Foundation
for Mental Health, Inc. to Community Alternatives for Supportive Abodes (CASA);
2) To approve the transfer of one triplex to Cross Disability Services, Inc (XDS);
3) To authorize the appropriation of $145,290 from Community Development Program
Income to finance the transfer and stabilization of these units; and
4) To authorize the County Attorney's Office to prepare the necessary documents to
complete the transfer and authorize the Chair of the Board of the County
Commissioners and the County Manager to execute the necessary documentation.
BACKGROUND: In mid-January the County received notice of the pending closure of the
Chrysalis Foundation for Mental Health, Inc. - (a local non-profit organization) due to financial
insolvency.
The Chrysalis Foundation for Mental Health, Inc. was initially known as the OPC Foundation for
Mental Health and was established with the assistance of the OPC Area Mental Health Authority
as a separate foundation. The purpose of the foundation was to acquire and hold property for
the Area Mental Health Authority and to subsequently lease that property to persons with
disabilities. The Foundation has operated for approximately 10 years and currently owns 20
units in the County with 18 of those units currently under lease to persons with disabilities. Most
of these properties are located in the Towns of Carrboro and Chapel Hill with one property
located in the unincorporated area of the County.
Eight (8) of the 20 properties were partially financed with HOME Investment Partnership funds
totaling $413,625; and approximately twelve (12) properties were financed with Orange County
Affordable Housing Bond funds totaling $560,000. A total of 12 properties have a private first
mortgage with Roxboro Savings Bank and Orange County holds a second mortgage on each of
these properties. Attached is a spreadsheet of the subject properties.
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All properties have recorded Declarations of Restrictive Covenants requiring a 99 year
affordability provision and all have a recorded Deed of Trust securing the investment. Both the
Declaration of Restrictive Covenants and Deed of Trust contain resale provisions that provide
should Chrysalis become unable to operate the property as affordable rental property it may be
transferred to another 501(c)(3) organization with a similar interest in affordable housing.
Thus, in the interest of preserving these units for affordable housing, County staff, in
collaboration with Chrysalis and OPC Mental Health Agency, have talked extensively with staff
of two non-profit organizations -Community Alternatives for Supportive Abodes (CASA) and
Cross Disabilities, Inc. (XDS), regarding the potential transfer of these properties to their
organizations. Both organizations serve clients that are disabled and low-income -the same
population targeted by Chrysalis. Both have indicated an interest in assuming ownership of
these properties.
After extensive review, the Board of Directors of both organizations have approved accepting
ownership of the Chrysalis properties with the following conditions. For CASA, it has been
determined that approximately $324,297 in additional investment is necessary in order to take
ownership of 17 of the 20 properties. Of this amount, approximately $206,647 is necessary to
rehabilitate the properties and the remainder ($117,650) covers transaction costs and the initial
capitalization of a replacement reserve and operating reserve. XDS is interested in assuming
ownership of the remaining three (3) properties and estimates the need for an additional
investment of $27,940 is necessary to cover the cost of rehabilitation of the property ($22,110)
and $6,560 to cover transaction costs and the initial capitalization of a replacement and
operating reserve. Thus, a total of $351,937 ($324,297 + $27,940) represents the additional
investment necessary to preserve 20 properties with $1,559,868 in appraised value and 18
current tenants.
FINANCIAL IMPACT: A total of $198,000 in HOME Investment Partnership Program and
Chapel Hill Community Development (CDBG) funds will be available from the 2009-2010
program budgets. It is recommended the remaining $153,937 needed comes from Orange
Community Development Program Income. This program income was derived from repayments
for second mortgages provided in the Magnolia Place subdivision. The total amount of funds
available is $171,598. If funds are provided for this project, there would be a balance remaining
of $17,661.
RECOMMENDATION (S): The Manager recommends the Board:
1) Approve the transfer of 17 properties currently owned by the Chrysalis Foundation for
Mental Health, Inc. to Community Alternatives for Supportive Abodes (CASA);
2) Approve the transfer of one triplex to Cross Disability Services, Inc (XDS);
3) Authorize the appropriation of $153,937 from Community Development Program
Income to finance the transfer and stabilization of these units; and
4) Authorize the County Attorney's Office to prepare the necessary documents to
complete the transfer and authorize the Chair of the Board of the County
Commissioners and the County Manager to execute the necessary documentation.
Chrysalis Foundation Properties
Address Purchase
Date
Lender(s) Outstanding Mortgage
Balances
CASA
1 203 Ashley Forest (Tyler Creek) 10/1/2007 Roxboro Savings Bank - 1st mortgage $ 61,629
2 213 Ashley Forest (Tyler Creek) 10/1/2007 Orange Co. -HOME - 2nd mortgage $ 100,000
3 800 Pritchard Ave. Ext. B-6 (University Gardens) 4/19/2004 Orange Co. -Bonds - 1st mortgage $ 300,000
4 800 Pritchard Ave. Ext. C-3 (University Gardens) 4/19/2004
5 800 Pritchard Ave. Ext. E-3 (University Gardens) 4/19/2004
6 529 Hillsborough Street G-1 (Brookside) 4/19/2004
7 529 Hillsborough Street G-3 (Brookside) 4/19/2004
8 111 Ashley Forest (Tyler Creek) 4/19/2004
9 336 Ashley Forest (Tyler Creek) 4/19/2004
10 2308 Redbird Lane 4/19/2004
11 110-A Dillard Street 11/26/2002 Roxboro Savings Bank - 1st mortgage $ 70,938
12 110-B Dillard Street 11/26/2002 Orange Co. -HOME - 2nd mortgage $ 180,000
13 112 Dillard Street 11/26/2002
14 112-A Johnson Street 10/20/2003 Roxboro Savings Bank - 1st mortgage $ 19,736
15 112-B Johnson Street 10/20/2003 Orange Co. -HOME - 2nd mortgage $ 260,000
16 114-A Johnson Street 10/20/2003
17 114-B Johnson Street 10/20/2003
XDS, Inc.
18 1100 Roosevelt Dr. #1 7/22/2003 Roxboro Savings Bank -1st mortgage $ 70,575
19 1100 Roosevelt Dr. #2 7/22/2003 Orange Co. -HOME - 2nd mortgage $ 133,625
20 1100 Roosevelt Dr. #3 7/22/2003
O
Chrysalis Foundation Properties
Total Mortgages
Roxboro Savings Bank $ 222,878
Orange Co. -HOME $ 413,625
Orange Co. -Bonds $ 560,000
$ 1,196,503
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