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Home My WebLink AboutAgenda - 06-04-2013 - 5e 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 4, 2013 Action Agenda Item No. 5-e SUBJECT: Community Home Trust Request — Housing Bond Program DEPARTMENT: Housing, Human Rights & PUBLIC HEARING: (Y/N) No Community Development ATTACHMENT(S): Letter from Robert Dowling, Executive INFORMATION CONTACT: Director Tara L. Fikes, 245-2490 PURPOSE: To consider a request from the Community Home Trust to utilize $75,000 of bond funds allocated to the Community Home Trust for second mortgage assistance for repairs to the heating, ventilation and air conditioning (HVAC) systems at the Greenbridge Condominiums. BACKGROUND: The Board of County Commissioners received the attached letter from Robert Dowling, Executive Director of Orange Community Home Trust (CHT), describing the dilemma with some HVAC systems at the newly constructed Greenbridge Condominiums in Chapel Hill. As detailed in the letter, some of these systems have experienced problems that have needed repair and CHT anticipates that, in the future, expensive replacements (approximately $11,000) may be necessary which would be unaffordable to the low income homeowners in that development. CHT has therefore requested to use bond funding to assist with the replacement of the existing systems when necessary in the 15 units occupied by low income homebuyers. This request has been discussed by the Affordable Housing Advisory Board. During that discussion questions arose regarding the responsibilities of the Greenbridge developer and original system warranties. The attached letter from David Rooks, an attorney at Northen Blue, LLP, indicates that given the financial position of the developer, any warranty claims against it would be unsuccessful. Thus, AHAB recommends that the requested $75,000 in bond funds be reallocated for the purpose of replacing HVAC systems in Greenbridge when the need arises. FINANCIAL IMPACT: The subject Affordable Housing Bond Funds ($200,000) have already been committed to CHT, thus no additional financial impact is anticipated. RECOMMENDATION(S): The Manager recommends the Board approve the request of Community Home Trust to reallocate $75,000 of Affordable Housing Bond Funds for anticipated repairs to the HVAC systems at Greenbridge Condominiums. DEC 18 N JU December 18, 2012 Chair Barry Jacobs and the Board of County Commissioners Orange County Hillsborough, NC 27278 i Dear Chair Jacobs and Board Members: Community Home Trust was approved for$200,000 of County bond funds way back in 2005 (1 believe). We asked that those funds be available to reduce the prices of BOARD OF Home Trust homes. I have purposely not tapped into those funds because as local DIRECTORS funds,they are more flexible than federal funds. However, we expect to access $13,000 of bond funds in the next 30 days to reduce the price of an existing Home R.Alan Lee Trust property. President Gloria Beissinger I would like to ask the Commissioners to re-purpose a portion of these bond funds Treasurer to address a situation that just became known to us. As members of the Board know, the Home Trust implements the inclusionary housing programs in Chapel Hill Bruce Runberg and Carrboro. One of our inclusionary developments is Greenbridge, where we sold Secretary fifteen condominiums to low income households. Board members may also be Donna Bell aware that Greenbridge was foreclosed upon and sold to an out of state investor earlier this year. Jess Brandes Cresha Cianciolo In recent weeks, we have learned that the HVAC systems that were installed at Greenbridge have been problematic and are not under warranty. In fact, the Jennifer Ferris system is no longer supported by the manufacturer and parts are not very available. As a result, the new owners of Greenbridge are installing new systems in some of Jacquelyn Gist the yet-to-be-sold market rate condominiums. These sytems cost about$11,000 to Eric Hallman install. This is clearly unaffordable to our homeowners. Pam Hemminger The Home Trust has assisted some owners with repairs of their existing systems. Lisa Inman We are prepared to continue to assist homeowners with relatively inexpensive repairs as necessary. We are hopeful that these inexpensive repairs, which have Jaimie Lee involved replacing system sensors, will allow these systems to reach a useful life of Jim Merritt 15 to 20 years. Of course, at that time the replacement costs will be much higher than $11,000—and will still represent a prohibitive financial burden for a low- Maryann Toone income owner. Jonathan Weiler At my request, the Home Trust board approved a request to the County Executive Director Commissioners that$75,000 of bond funds already allocated to Community Home Robert Dowling Trust be re-purposed to address this financial challenge. These funds are insufficient to replace fifteen systems, but they will provide a necessary downpayment, when those systems need to be replaced. P.O.Box 307,Carrbo%NC 27510 1 919-967-1545 i 3 I realize that it may be problematic to allocate these funds as requested because we will not be spending the funds immediately to purchase new systems. However, I am hopeful that we can work something out to enable this re-allocation of funds. I would be happy to work with Dr., Fikes and County staff to assist in this determination. We, of course would provide an annual report to the Commissioners detailing any expenditures of these funds. As always,thank you for your support and your consideration of this request. Sincerely, !7 �t Robert Dowling( Executive Director Cc: Mr. Frank Clifton, Dr. Tara Fikes I i P.O.Box 307,Carrboro,NC 27510 1 919-967-1545 4 Noita"m Bmm LL-P A Lt:k.rpto-Ukli-IMT.-Y -AT'TpXtX'UY'q AT 1;&W THE EXCHANGE,AT MCAOOWMQNT 1414 JOHN A,W RTHIEZN SUITE 465 MAILING ADDRESS: J,WILLIAM BLUE,JR. (fjTAjEL.RttL,.X(>RTH P.0.Box.zaoo DAVID M.ROO.K$ CHAPFL HILL,NC 27518-22015 CHARLES H,.THIIBAUT CAROL J. HOLCOMP. TELEPHONE(016)446-4441 VICKI,L.PARF4,Or-T CMO)642-66503 EMILY C.WK.A*r.H'gRrPFtP' %fEIPHAW'S 015SOFINE.-R-PPGPR.S, lz MA ro SAMANTHA FiYAT-T CASE Febr.qar LIP Mr;Robert Dowling*' Coblinuftity Home Truo P-0,Box.307 Corboro'.,'NC -.27510 Re. Greenfidilke ffmv claiftv n)e,to look into- You-asked PO might*have fox:the., POtefidd Y 11irg 14V AC ual'CHT units,in G.rocribridge. in 4; 'k to the seller on Warranty fir . t.purchaser anynewtesideme;may t 0 claims for jtosix years after the purchase depending n wh d, h 'rt he-warranty was express or inipl and tf express,: forkqw-long.Greenbri Ye with CH : for up to six years that the iiieluded.an&xPre,8g:.WoO4Aty-;in-its:contrdet,7.with -T. Iuoing units lead been.constructed in"a good and n d Workmanlike manner,according to sound engineering and constructio.o.standitr4s,free from do#ective material's 'so.as to meet the : C4rQlin4.5 This .standard ofwork-wkj1jko qualify prevailing Orange Counly, m:Greenbrid. Dev-0,0-prftortts and SMA Greenbridge .90 f the uris 11-1-nits d uih:tho-deivdjopme ;hgs. 0 no ow-gotion to honor the rcenbildge Developments'warranty oblig. ations to.,CHT or any of tile.other purchasers: CHVs,valid warranty 614ifn against,(Ireenbridge Developments:has value only to the-extent .Greetibridg e- DevelO ments:bas assets:loft. Greeabdidge Development has not filed bankruptcy III either 0 0 itherthe"ddl - r-Eastern!Dfstt.'iotg,.Of"NOrthCarolin4but it:has filed antic tos:O'dissQ11.1tion with the.Secretary Y,of state.Idonot-5nd where-lGreeiibridg Development owns any real estate in Orange'County after the foreclosure;and I could not jt-b,v�med no sets. Thisvooldho�consist with the find any record that ft-regl,estate assets. practice in thierd4l:estate'dev(.'!0P)uqnVcbmb1unit y 0 fformin single purpose entities to 00i and develop specific pro cots. fI 5 ........._ i it is theoreticalty possible to pursue the prino pals of Orsenbridge Development for amounts.owed by the company'but:tlus:remedy s-available onlyin fare:cases where there is.cteavevidence that the prindpals.in the company-disregarded the formalities of the-corporate structure.I stn not aware of any ovidence thattins was the case. In summary;I cliff notthink CT°IT'has a warranty clttirn it-might assert successfully against any solvent.defendant. I.wish.I had lietter news for you: Please call me ifyou have:aiiy questions. SincerelyZ Noiklen Aldo,l.,I,l' Rooks DMR/cm I I I I I i � I