HomeMy WebLinkAboutAgenda - 06-26-1996 - IX-B t
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ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No ZX-$
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 26, 1996
SUBJECT: Request for Impact Fee Reimbursement
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DEPARTMENT: Housing/Comm.Development PUBLIC HEARING YES NO_x_
Budget Amendment YES N0_X
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ATTACHMENT(S) : INFORMATION CONTACT
First Centrum Correspondence Tara L. Fikes, 2490
Project Summary TELEPHONE NUMBER
Hillsborough 732-8181
Chapel Hill 968-4501
Mebane 227-2031
Durham 688-7331
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PURPOSE: To consider a request for First Centrum Corporation requesting
exemption or reimbursement of $186, 000 in school impact fees.
BACKGROUND:
First Centrum Corporation is planning to build a 123 unit apartment complex
for the elderly in Carrboro to be known as Carolina Spring. The company has
applied to the N.C. Housing Finance Agency for Low Income Housing Tax
Credits to finance this project. First Centrum contends that the County' s
impact fees as well as OWASA' s fee requirements cause their tax credit
application to be less competitive with others in the state. Further, they
question the "appropriateness" of requiring new elderly housing developments
to pay the impact fee considering the fact that the residents will not
impact school growth. Thus, they are asking the County to either exempt or
reimburse the impact fee requirement for this project. Under the current
ordinance exemption of the fee is not permissible.
County staff has reviewed the information provided by the developer and has
prepared the attached project summary.
On November 1, 1995, the Board approved an Impact Fee Reimbursement Policy
which establishes a procedure for consideration of impact fee reimbursement
for 501 (c) (3) non-profit organizations developing single-family housing for
first time homebuyers. Rental housing development is not included in this
policy. Further, for-profit companies building either owner-occupied or
rental housing is not covered under this policy.
RECOMMENDATION:
The Manager recommends not approving the request for First Centrum
Corporation requesting exemption or reimbursement of $186, 000 in school
impact fees.
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Carolina Springs Project Summary
First Centrum Corporation of Sterling, Virginia proposes to
build 123 housing units for the elderly on West Poplar
Avenue in Carrboro. The unit and rent distribution is as
follows .
Bedroom # of Monthly Minimum of Area
Size Units Housing Income Median
Costs Required Income
1 45 513 $20,520 60
1 30 385 $15,400 45
2 28 615 $24,600 60
2 20 461 $18,440 45
Total Project Costs: $7, 362, 779
According to the developer, payment of the impact fees would
produce the following results.
Bedroom # of Monthly Minimum $ of Area
Size Units Housing Income Median
Costs Required Income
1 75 513 $20,520 60
2 48 615 $24,600 60
Total Project Costs: $7, 548, 779
(an increase of 3%)
Major Difference: Units affordable to families at 45% of
the area median would be eliminated and all units would be
affordable at 60% of median income. This would yield
additional annual rental income of $83, 040.
The increase in project costs caused by the impact fees
would increase the debt service for the project by $17, 836
annually.
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FIRST CENTRUM, Received
ceived
Southeast Region
APR ? -31996
Managers Office
April 16, 1996
Mr. John Link
County Manager
Orange County
300 West Tryon Street
P.O. Box 8181
Hillsborough, N. C. 27278
RE: Carolina Spring
Proposed Affordable Apartments for Senior Citizens
N. C. Highway 54 Bypass and West Poplar Avenue
Carrboro, North Carolina
Request for exemption or reimbursement of $186,000 school impact fee
Dear Mr. Link:
This letter is written fo you at the suggestion of Ms. Tara Fikes of the Orange County
Department of Housing and Community Development and with the strong endorsement of
the Mayor and Board of Aldermen of the Town of Carrboro.
First Centrum Corporation develops affordable housing in the mipdwest and eastern United
States, financed primarily by the sale to investors of tax credits for affordable housing
which are allocated by the individual states in which we develop housing. We are hoping
to be able to finance and develop an affordable apartment community for senior citizens in
Carrboro.
On March 26, 1996, the Town of Carrboro Board of Aldermen unanimously approved the
Conditional Use Permit Zoning of property in Carrboro for our proposed development. On
March 29, 1996 we submitted an application for affordable housing tax credits to the
North Carolina Housing and Finance Agency. Although we had spoken to Ms. Fikes earlier
in the year regarding the subject of this request, First Centrum Corporation did not want to
bring this request to Orange County officially until we had proper standing via the
Conditional Use Permit Zoning in Carrboro.
We are aware through our conversations with Ms. Fikes that, while Orange County has no
written policy regarding exemption of the school impact fee, Orange County has been
willing to consider reimbursement of the school impact fee for affordable housing, if it is
"for sale" housing rather than "for rent" housing, and if it is developed by a "non-profit"
developer.
7000 Peachtree-Dunwoody Road,Building 11 ■ Atlanta,Georgia 30328-1615 ■ (404)698-0250 - Modem(404)698-0510
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First Centrum Corporation is an established and respected FOR PROFIT developer of
affordable RENTAL housing. Even though the proposed Carolina Spring project would be
rental housing by a for-profit entity, we hope to justify this request by explaining to you
the competitive and restrictive nature of tax credit financing for affordable housing; the
effect of the Orange County school impact fee on the competitiveness of our tax credit
application with the North Carolina Housing and Finance Agency; the inability of developers
of affordable housing, whether non-profit or for-profit, to finance costs like the school
impact fee, or ever recover this cost through higher rents to the residents or through sale
of the property; and the probable impact on the low income senior citizen residents if this
project is required to pay the school impact fee.
AFFORDABILITY
Aside from charitable volunteer-based groups like Habitat for Humanity, the only program
in the United States today that is successfully creating housing that is affordable to
households with annual incomes far below the local median income is the low. income
housing tax credit program. "Affordable" rental housing, according to Section 42 of the
Internal Revenue Code, is defined as rental housing for which resident's annual expense for
rent and utilities must be no more than 30% of the resident's annual income, which itself
must be at or below ITO% of the area's median annual income (AM1). (We propose to
voluntarily lower rents on some apartments at Carolina Spring to as low as 45% AMI, to
reach even lower income senior citizens.)
Affordable rental housing is very much needed in Carrboro, as in virtually every community
in America. It is extremely difficult to develop anywhere because the tax credit program's
restricted rents (usually about 70% to 90% of market rent levels) do not allow enough net
operating income (annual rental income less annual operating expenses) to support a loan
amount of much more than half the cost of development. The balance of the development
cost must be financed with "soft" or publicly subsidized funds and by private investors.
Such investors will usually not invest equity in affordable rental housing as a real estate
investment alone, without the return offered by the tax credits. In appraisal terminology,
the present value of the capitalized income stream and reversion of an "affordable"
apartment project is often worth no more than the cost to develop the project.
Affordable rental housing has negligible "return on" investment (annual cash flow after
debt service) and marginally probable "return of" investment, which is why it is not
attractive to the developer or to potential investors to put equity dollars into affordable
housing purely as a real estate investment, and why Congress created the low income
housing tax credit program -- to attract investor equity to affordable housing - - not based
on the value of the real estate itself, but based on the value of the tax credits sold to the
investors by the developer who has received an allocation of a state's annual tax credits
for affordable housing.
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COMPETITIVENESS
The allocation of available investment tax credits in each state has become extremely
competitive. In North Carolina last year there were applications for six times the amount of
tax credits that were available. The NCHFA predicts even more competition this year.
First Centrum Corporation's application to the NCHFA is very competitive in every area but
one-- total "off-site" cost requirements, of which the Orange County school impact fee of
$186,000 is by far the largest component.
First Centrum has developed over 170 affordable housing communities, and..our experience
is that "off-site"costs typically total about $500 per unit in local jurisdictions similar to
Carrboro and Orange County, which would be $62,000 for a project of this proposed size
(124 apartments). As the Carrboro Conditional Use Permit review progressed during
March, the total "off-site" costs reached about $364,000, consisting of the $186,000
Orange County school impact fee, $30,000 of OWASA "street frontage" requirement to
extend the water distribution system (not required by Carolina Spring itself), and $148,000
of Town of Carrboro requirements to make off-site road improvements on it road frontages.
Potential "off-site" costs of $364,000 would be about $3,000 per unit and would
represent over 5% of the total development cost for a project budgeted at $59,000 per
unit. (Orange County's schhool impact fee by itself would represent over 2.5% of the total
budget.) That magnitude of cost burden for "off-site" requirements is unsupportable for
affordable housing projects in the view of lenders, investors, and state housing agencies,
particularly for affordable housing projects that would be totally occupied by senior citizens
who do not create significant demand on schools, roads, water or sewer.
The North Carolina Housing and Finance Agency will be reviewing in excess of one
hundred competing tax credit applications from communities around the state. In the
annual tax credit workshops, the NCHFA informs developers that it hopes to allocate tax
credits to developers in communities that demonstrate, not just a philosophical support for
affordable housing, but financial commitment as well, whether in the form of local project
grants, tax abatements, exemptions from fees, waivers of proffers etc. The NCHFA feels
that the State's annual tax credits for affordable housing are too limited to be allowed to
be used to fund "non-housing" local community objectives, no matter how meritorious.
As the enclosed NCHFA - required development budget ("Project Development Costs
Description") indicates, the NCHFA does not even provide a line item category for off-site
costs.
During the CUP Review on March 26 by the Carrboro Board of Aldermen, First Centrum
went through the same explanation of affordable housing that is contained in this letter.
The Board. of Aldermen unanimously amended the Carrboro "off-site" requirements,
reducing road improvement requirements from $148,OOOto about $35,000, and strongly
encouraged First Centrum to request exemption or reduction of the OWASA requirements
and Orange County school impact fee. A copy of the Town of Carrboro's endorsement of
an exemption from the school impact fee is being forwarded to you from Mayor Nelson.
We are simultaneously requesting exemption from the OWASA expansion requirement.
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As an affordable housing developer, we are caught in the middle, wanting to win an
allocation of State tax credits for affordable housing in Carrboro and wanting to comply
with Town, County, and OWASA "off-site" requirements, but knowing that these
requirements collectively create an "off-site" cost burden which makes this and any future
application for affordable housing in Orange County only marginally feasible, and at a
competitive disadvantage relative to other tax credit applications from other communities in
North Carolina.
LINKAGE OF AFFORDABLE SENIORS APARTMENTS TO THE SCHOOL IMPACT FEE
First Centrum Corporation is not questioning the authority of Orange County, OWASA, or
the Town of Carrboro to require new development to help pay for the cost of additional
services required by such new development. But, as a developer of affordable housing, we
are asking each entity to consider that a requirement on an "across the board" basis, or the
levying of a flat fee, regardless of the affordability of the housing being proposed and
regardless of the actual impact of the proposed development on a particular service, while
unquestionably intended to be a rational and efficient method of funding particular
services, may have the unintended effect of being exclusionary to certain types of
development, like affordable rental housing for seniors, that will benefit Orange County.
We are asking that you take into account that one unit of affordable housing, whether
owner-occupied or renter-occupied, simply cannot afford the same "off-site"cost burden
that a much more expensive unit of middle-income or upper-income housing can afford.
Also, please consider "for rent" affordable housing as well as "for sale" affordable housing
for exemption from the school impact fee; rental housing is the most critical housing need
for senior citizens. The prospective residents for affordable senior housing are usually in
their 70's through 90's and are not interested in, or able to purchase, a "for sale"
residence. We have explained previously that a developer of tax credit rental housing,
unlike developers of market rent apartments, is generally not able to sell these apartments
at a profit, so any exemption of the school impact fee stays with the property to the
benefit of the low-income residents.
As to a rational nexus between the proposed development and the school impact fee, it is
very important to understand that, FOR AT LEAST 30 YEARS (and probably longer) the
proposed Carolina Spring apartments can be legally occupied ONLY by senior citizens of
age 62 and over, and will add NO CHILDREN to Orange County schools. Carolina Spring
WILL annually provide fair share support to Orange County schools through payment of
property taxes. It seems inappropriate, however, to First Centrum Corporation, to the
Town of Carrboro, and most likely to the NCHFA, for a "senior citizens only" affordable
apartment community to pay an up-front fee of $186,000 for somehow impacting schools.
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RAMIFICATION OF SCHOOL IMPACT FEE ON AFFORDABLE HOUSING
As we explained to the Carrboro Board of Aldermen, if the proposed Carolina Spring
development were a "market rent" apartment community, then off-site costs such as the
school impact fee could be "passed on" to residents in the form of rent increases over the
life of the property, or possibly recovered earlier if the property could be sold at a profit.
Affordable apartments are different, however, in that rent levels are restricted for a
minimum of 30 years, and the current marketplace offers little possibility of selling a rent-
restricted propery at all, let alone at a profit.
Rents in affordable housing are permitted to increase only with increases in area median
income, and are limited by market rents for apartments as well. The owner of affordable
rental housing takes on more risk than the owner of market rent apartments, in that, if
market rents decline, the below market rent structure of affordable housing is less
advantageous, and affordable apartments may have to compete to a greater degree with
the conventional apartment market. On the other hand, when market rents increase, the
owner of affordable rental housing still cannot increase rents unless permitted by increases
in area median income.
With the total potential "off-site" costs of Orange County, Carrboro, and OWASA,
affordable housing is not feasible. Just to cover the cost burden of the $186,000 school
impact fee would require Carolina Spring to generate about $18,600 more net operating
income each year (assuming a 10% capitalization rate) than it currently does, in order to
increase the development loan amount by about $186,000. Please keep in mind, the total
amount of equity in the project is fixed by the investment market pricing of tax credits, and
has little to do with the real estate; therefore, added cost burdens must be dealt with by
justifying more debt:on the project. In order to increase the net operating income of a
project to support additional debt, either operating expenses must be decreased or rental
income must be increased.
There are no operating expense line items in our operating budget that are discretionary
and eligible for cutting , other than resident support services for seniors (medical services,
exercise programs, financial lectures, etc.) which neither we nor NCHFA would wish to
decrease. As to increasing rental income, we are not allowed to increase our present
proforma rents above the maximum allowable rents for households at or below 60% of
area median income. The only way we could increase rental income, therefore, would be
by eliminating EXTRA rent reductions presently included voluntarily in our proforma to
allow some of our apartments to be affordable to senior households not just at or below
60% of area median income, but at or below 45% of AMI. in other words, the only
practical alternative we would have to finance the Carolina Spring development budget,
INCLUDING Orange County school impact fees of $186,000, would require eliminating the
EXTRA low rents presently proposed for some of the apartments ($352 per month for a
one bedroom and $418 for a two bedroom) and having only the 60% AMI rent structure
(8480 per month for a one bedroom and $572 for a two bedroom). The difference in rent
structure would remain in effect MONTH AFTER MONTH FOR 30 YEARS (or more), 'which
is a huge impact on the low-income seniors residing in the apartments.
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FOR-PROFIT DEVELOPMENT OF AFFORDABLE HOUSING
The fact that Orange County has been willing to consider exempting or reimbursing the
school impact fee for affordable housing, if it is developed by NON-PROFIT developers,
suggests an assumption that either: (a) "non-profit" developers receive little or no
compensation for their developer services (and, therefore, cannot afford the school impact
fee); and/or (b) "for-profit" developers receive adequate or more than adequate
compensation for their developer services (and, therefore, can afford the school impact
fee).
For MARKET PRICED housing, whether "for sale" or "for rent," BOTH (a) and (b) above are
probably accurate. For AFFORDABLE housing, however, NEITHER (a) nor (b) is accurate.
State housing agencies, including the North Carolina Housing and Finance Agency, allow
"non-profit" developers AND "for-profit" developers EXACTLY THE SAME developer fees
and EXACTLY THE SAME amount of tax credits for affordable housing. Furthermore, both
"non-profit" developers and "for-profit" developers use their earned development fees for
the same purposes - - to pay for salaries and other operating expenses, and to pursue more
tax credit development opportunities in subsequent years.
In affordable housing;whether you operate as a "for-profit" or as a "non-profit" has little to
do with your PROFITS on a particular affordable housing project; it only relates to your
form of incorporation for income tax purposes.
The NCHFA does not allow a "for-profit" developer such as First Centrum Corporation any
larger developer fee, as a percentage of total project cost, than a "non-profit" developer
would be allowed on the same project. In fact, since "for-profit" developers frequently
develop affordable apartments more efficiently (lower total cost per unit) than "non-profit"
developers, while the "for profits" and "non-profits" are allowed the same percentage of
total project cost as a developer fee, the "for-profit" frequently receives fewer dollars for
developing the same amount of housing than a less efficient "non-profit" receives.
The enclosed "Project Development Costs Description" of NCHFA indicates that the
Developer Fee is allowed to be a MAXIMUM of 15% of total development cost (excluding
some contractor, finance, and reserve costs), whether the developer is a "non-profit" or a
"for-profit." Developer fees for MARKET RATE development are typically in the 15% to
20% range. For the Carolina Spring project, however, First Centrum Corporation is
voluntarily REDUCING its proposed developer fee to ONLY 8% to do our fair share to make
the total project cost as low as possible and the tax credit application as competitive as
possible. We are confident that no other "for-profit" or "non-profit," is proposing a lower
developer fee than First Centrum Corporation.
The developer fee to First Centrum Corporation for Carolina Spring is $447,293. At the
same time, First Centrum Corporation is investing $122,711 in the Carolina Spring project,
even though our investment is considered unrecoverable. The "net" developer fee,
therefore, is only $324,582;and most of that amount would not be received until 1999,
' PART 1V.. PROJECT DEVELOPMENT COSTS DESCRIPTION l 2 3
TOTAL COSTS 30%PV 70%PV 9
ELIGIBLE BASIS ELIGIBLE BASIS
I. Purchase of Building(s)(Rehab)
2. Demolition
3. On-Site Improvements
4. Rehabilitation
5. Construction of New Buildings(s)
6. Accessory Building(s)
7. General Requirements (Max. 6%of lines 2 thru 6)
8. Contractor Overhead (Max.2%of lines 2 thru 7) •
9. Contractor Profit (Max. 8%of lines 2 thru 7;6%if identity of interest)
10. Construction Contingency
It. Architect's Fee-Design
12. Architect's Fee-Inspection
13. Construction Insurance (Prorate)
14. Construction Loan Ori ination Fee Prorate
15. Construction Loan Interest (Prorate)
16. Construction Loan Credit Enhancement (Prorate)
17. Construction Period Taxes
anx.• e. i ri .......
18. Bond Premium .w :.. ........'•�,E#z<:::>:>;:..�.:�:�.:«,;;.;:,,,.:.;:�.:<.:; :a>::�:::
19. Credit Report
20. Survey
21. Property Appraisal (Feasibility)
22. Environmental Report
23. Market Stud
24. Permanent Loan Origination Fee ;. . ``x?}'
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25. Permanent Loan Credit Enhancement
26. Cost of Issuance .......... •..•� ;Y::s
27. Title and Recording
28. Real Estate Attorney
29. Other Attorney's Fees
30. Organizational (Partnership)
31. Tax Credit Application Fee 5%x Annual Credits
111 W
32. Tax Credit Monitoring Fee (5375 x it of Units) ''"'`"`
33. Cost Certification
34. Fumishings and Equipment
35. Consultant
36. Other
37. Developer's Fee (Max 15%of fines 2 thru 36, less lines 8 do 9) •
38. Placement Fee "'
39. Tax Opinion
40. Rcnt-Up Expenses
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4l. Rent-Up Reserve al ::s:.w::.::.
42. Operating Reserve <
43. Relocation Expenses
44. DEVELOPMENT COST Sum of lines I thru 43
45. Less Federal Financing (Other than CDBG)
46. Less Disproportionate Standard
47. Less Non qualified Nonrecourse Financing
48. Less Historic Tax Credit (Residential Portions
49. TOTAL ELIGIBLE BASIS (Line 44 less lines 45 thty 48
50. Applicable Fraction %of units occupied by low-income occupants) % %
51. TOTAL QUALIFIED BASIS (Line 49 multiplied by line 50
52. Tax Credit Rate % %
53. AMOUNT OF TAX CREDITS Line 51 multiplied by line 52
54. TOTAL AMOUNT OF TAX CREDITS REQUESTED
55. Cost of Land • See Allocation Plan
56. TOTAL REPLACEMENT COST Line 44+55 Shaded items are excluded from Eligible Basis.
(11)-Part A,Page 9 of 12 0126/96
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after the project has been financed (1996), constructed (1997), and leased up (1998), and
has achieved its proforma operating results for three consecutive months.
How much of this $324,582 First Centrum Corporation ever receives for its efforts, after
covering all cost over-runs for three years of pre-development, development, lease-up, and
stabilization, is uncertain; but we are not in a position to cover the $186,000 school
impact fee and other "off-site" requirements.
We hope this explanation will dispel any notion that "for-profit" developers of affordable
housing are getting rich at the public trough, or less deserving of consideration than "non-
profits" for exemption or reimbursement of the "off-site" fees.
We need the cooperation of Orange County and OWASA on "off-site" requirements, as
well as the already received cooperation of the Town of Carrboro, to ensure that the
Carolina Spring seniors community can be financed and built. Without such cooperation it
is unlikely that affordable housing will be feasible in Orange County.
First Centrum Corporation very much appreciates your time and consideration of the
foregoing explanation of affordable housing feasibility - - an esoteric but extremely
important subject.
We respectfully request an exemption or reimbursement of the $186,000 school impact
fee for the propsed Carolina Spring project, in order to keep the project financeable to
lenders and to keep the apartments affordable to low-income senior citizens in Orange
County.
If you have any questions, please let me know. I would be pleased to respond by letter,
by telephone, or preferably in person at your convenience. First Centrum Corporation is
looking forward to the same positive working relationships in Orange County that it has in
all the other communities in which it has provided affordable housing.
Sincerely,
Jerry A. ohl
Executive Vice President
encl: NCHFA budget form
cc: Mike Nelson
James Harris
Donna Dyer
'FIRST CENTRUM,
RECEIVED
Southeast Region MAY 3 0 1996
April 29, 1996 Aped............
Ms. Tara L. Fikes
Director
Orange County Department of Housing and Community Development
300 West Tryon Street
Hillsborough, North Carolina 27278
RE: Carolina Spring
Proposed Affordable Apartments for Senior Citizens in Carrboro, N. C.
Request for exemption or reimbursement of $186,000 school impact fee
Dear Ms. Fikes:
Thank you for your letter of April 24, 1996, confirming Mr. Link's feceipt of my
April 16, 1996 letter request. This letter is to provide additional information that
you have requested in order to fully consider First Centrum Corporation's request.
I am enclosing several portions of our recent tax credit application to NCHFA,
which cover the information you have requested, specifically:
- a full description of the proposed apartment complex which includes the
number and types of units and proposed rents.
- a detailed project budget.
- cash flow projections for the first TWENTY years of operation, which is
the cash flow projection required by NCHFA, even though you will see in our
application that we are commiting to THIRTY years of low income occupancy in
our application (Part A, page 5 of 12). If you want to see an additional ten years
of cash flow projected beyond twenty years, please let me know, and we will be
glad to do some additional calculations.
- some other materials describing the importance of our project to the low
income seniors community in Orange County.
The information provided herewith is consistent with my April 16, 1996 letter, and
will hopefully make that lengthy explanation and request more understandable.
Thank you again for your consideration of First Centrum's request. We would be
extremely appreciative of Orange County's approval of this request in order to
make affordable housing for senior citizens feasible in Orange County.
Respectfully
Jerr ohla
Executive Vice President
7000 Peachtree-Dunwoody Road,Building 11 ■ Atlanta,Georgia 30328-1615 ■ (404)698-MO - Modem(404)698-0510
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Date of Application -ch 28, 1996
NORTH CAROLINA HOUSING FINANCE AGENCY
RENTAL HOUSING PROGRAMS APPLICATION FORM
PART 1. PROGRAM FUNDS REQUESTED
OC Low-income Housing Tax Credit o Rental Production Program (RPP) Loan Funds
Requested Loan Amount: S
(if applying for both Tax Credits and RPP Loan Funds, please submit two copies of this application)
PART H. APPLICANTIOWNER INFORMATION
A. Project Name and Address
Project Name Carolina Spring
Address_ 1600 West Poplar Avenue
City Carrboro County Orange Zip 27514
Census Tract 0107.03 Block Group
Is this project located in a Qualified High Cost area ? K Yes ❑ No
Name of Political Jurisdiction in which project will be located Town of Carrboro
Name of Jurisdiction's Chief Executive Officer Mayor Michael Nelson
Address Town Hal 1 , 301 West- Main S rep-t-
City Carrboro Zip Code 27514 Telephone No. (919) 968-7700
B. Applicant Information
Applicant Name First Centrum Corporation
Address 21400 Ridgett g Circle, Suite 250
City Sterling State Virginia Zip 20166
Contact Person Mark L Weshinskey
Title President
Telephone (703 ) 406-3471 FAX( 703 ) 406-3474
Applicant Entity is K For Profit o Nonprofit (See requirements at top of page 2)
Is the applicant a Community Housing Development Organization (CHDO) which has been certified by the
North Carolina Housing Finance Agency? o Yes Iii No
C. Project Owner
Ownership Entity Name Carolina Spring Limited Partnership
Address 21400 Ridgetop Circle, Suite 250
City Sterling State Virginia Zip 20166
Federal Tax Identification Number(TID) 38-2318251
Is this TID assigned to o Project Owner? d(Applicant ?
(if a federal tax ID number has not yet been assigned to the project's ownership entity, please use the applicant's
TID.)
D. Ownership Structure
Owner is a X Limited Partnership o Limited Liability Co. o Individual o Corporation
General Partners or Officers
CP Carolina Suring, LLC
Managing General Partner or Executive Officer Mark L. Weshinskey
Ownership Entity o Exists K,ro Be Formed
* Mr. Weshinskey is President of First Centrtmt of Virginia, Inc. ,
the Managing Member of CP Carolina Spring, LLC.
(II) - Part A, Page 1 of 12 01/29/96
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If Applicant is a nonpt, organization, please attach as Exhibit A a c :)f each of the following:
• Articles of Incorporation
. Bylaws
. IRS 501(c)(3) Determination Letter
• Current Board of Directors List, including occupations and phone numbers
• Current Certificate of Existence from the North Carolina Secretary of State
A nonprofit sponsor/applicant/owner must be a community-based 501(c)(3) organization in existence in North
Carolina for at least 12 months.
Please attach as Exhibit B a current financial statement for each of the principal owners. In addition, if the
ownership entity is an existing organization, the most recent and the prior year's audited financial statements
must be attached.
F. Development Team
Management Agent (Must be identified ) Architect
Mr. Paul-Coleman Mr A 'Kant nit-key
Boston Financial Property Archon Associates, Inc.
Management
Attorney Syndicator
Ms. Jennifer D. Malinovskv Mr. Michael Ramires
Fleming, Drutmtond & Ray First Union Capital Markets
Group
General Contractor
Mr. Scot Miller
Apartment Contracting
Corporation
Contractor Selected by ❑ Bid ❑ Negotiation Xt Identity of Interest
G. Project Team Experience
Number of low income rental housing Projects developed and placed in service by the project principal(s) in the
past ten years 86
Number of low income rental housing Units developed and placed in service by the project principal(s) in the
past ten years 3,559
Number of low income rental housing Projects managed by the proposed Management Agent in the put ten
years 91
Number of low income rental housing Units managed by the proposed Management Agent in the past ten years
11 ,832
Please attach as Exhibit C a list of previous multifamily and rental housing experience of the owner and
managing agent or of any principals of the organization. MUD form 2530 will meet this requirement. For each
project include the name, address, number of units, type of financing and whether subsidized or unsubsidized. If
no previous experience, please indicate.
Please attach as Exhibit D a list of all previous Low Income (lousing Tax Credit projects by state. Provide
project information as described above.
(11) - Part A, Page 2 of 12 01/29/96
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PART III. PROJECT I' IRMATION
A. Site Control and Zoning
Applicant is fee simple owner of the property (site and/or site and building(s)? ❑ Yes %No
If yes, specify date of purchase and purchase price S ,
Applicant has valid option/contract for the purchase of the property ? Oc Yes o No
Does an identity of interest (direct or indirect) exist between the applicant and the seller of the property?
o Yes Iq No
if yes, specify relationship
Present zoning classification of the site R-3
4X Multifamily is a permitted use.
g; Variances or special use permits are required and have been obtained
(specify) Conditional use permit Date obtained March 26, 1996
Please attach as Exhibit E evidence of site control (valid option/contract or warranty deed)
Please attach as Exhibit F a letter from local government that the intended use is permitted by local zoning
ordinance.
B. Site Description
Total Acreage/Square Footage of the Site: 9.43 acres 410.771 square feet
Check if capacity of the current system is adequate and utilities are available at the site:
cX Storm Sewer N Water
OC Sanitary Sewer X Electric
Is the demolition of any buildings required or planned? a Yes 3p No
Are there any existing conditions of historical significance located on the project site that will require State
Historic Preservation Office review? o Yes X No
If yes, please attach as Exhibit G a description.
Are there any existing conditions of environmental significance located on the project site? o Yes K No
If yes, please attach as Exhibit If a description.
Please attach as Exhibit I a map clearly identifying the location of the site.
Please attach as Exhibit J recent photograph of the property and site plan, floor plans and elevations for new
construction. .
Please attach as Exhibit K a letter from local officials indicating whether or not the site/project is located in a
floodplain,
C. Project Type
K New Constriction
❑ Acquisition and Substantial Rehabilitation Building is: ❑ Occupied ❑ Vacant
❑ Substantial Rehabilitation Building is: ❑ Occupied ❑ Vacant
❑ Distressed Federally Assisted Project
o Project Receiving Federal Subsidies
(11) - Part A, Page 3 of 12 01/29/96
15
For new construction . habilitation projects, include projected dates
PHASE I PHASE 2 FINAL PHASE
Acquisition Oct 96
Construction Start Nov 96
Construction Completion Jan 98
Placed in Service Jan 98
For acquisition of existing/occupied projects, please attach as Exhibit L a schedule providing the following
details of the proposed low-income units. (This section must be completed to fulfill the application
requirements.) Items 1-6 must be completed for every unit.
1. Unit identification
2. Number of bedrooms
3. Present rent
4. Estimated monthly average utilities paid by tenant
5. Current household size
6. Current household annual income
7. Date of the most recent previous sale or transfer of project ownership
8. Number of presently subsidi2ed units
9. Source of subsidy
10. Number of currently occupied units
Does the project involve tenant relocation? ❑ Yes Bi No
If yes, please attach as Exhibit M a statement of proposed relocation assistance, and describe the relocation plan
to prevent permanent displacement of households. For all RPP projects, any relocation requires compliance with
the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA). Applicants
should include relocation expenses in the development cost budget and use funds other than RPP funds. (See
Section IV, Rental Production Program Information, Page 10.)
D. Project Description
❑ Family % Elderly ❑ Congregate Service ❑ Special Needs
Number of Units 123 * Low Income Units 123 * Special Needs Units
* Common area includes one 2—bedroom unit for staff use
Type of Units:
❑ Townhouse ❑ Detached Two Family (Duplex)
K Garden Apts. N Elevator 3 0 Stories
❑ Detached Single Family ❑ Other
Number of Residential Buildings One 0 l
Accessory Building None Floor Area N/A
Gross Floor Area (includes all covered areas) 111 ,303
Gross Residential Floor Area (incl. heated common space and unheated storage rooms) 111,303
Net Residential Floor Area ( total heated living space excluding common areas,
based on interior "paint-to-paint" calculations) 81 ,647
Recreational Facilities Planned: Community room, fitness room, library, TV lounge,
picnic pavillion, 3 gazebos, resident gardens.
E. Target Market ,
Number of units reserved for households from 51%-60%
of county median income. 73 (59.3%)
Number of units reserved for households from 46%-50%
of county median income.
Number of units reserved for households from 41%-45%
of county median income. 50, (40.7%)',
(11) - Part A, Page 4 of 12 01/29/96
16
Number of units reser for households at or
below 40% of county .--_dian income.
Number of market rate units
TOTAL number of units 123
Please attach as Exhibit N a copy of the market study completed within the past six months by a qualified
individual or firm for tax credit projects of 20 units or more, and for all RPP-funded projects. (See Appendix J
for market study requirements)
F. Proposed Period of Low Income Occupancy (circle one)
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29(30+)years 30
(If low-income occupancy is to exceed 30 years, indicate years of service in space provided.)
G. Unit Mix and Rent Structure
Low Income Units
Bedroom Number Type* Square Estimated Estimated*• Estimated' Total""
Size of Units Feet Monthly Util. Cost Required Monthly
(Net) Rent Rec'd Not in Rent Monthly Housing
by Owner Services Cost to
Fees Tenant
0 BR
I BR 45 APT S64 480 33 513
2 BR * 803
3 BR
4 BR i I
Total Low Income Units 73 * Gross Monthly Rental Income 37,616
Total Elderly Units 73 * Gross Annual Rental Income 451 ,392
Utilities included with rents: K Water/Sewer ❑ Electric (XGas ❑ Other
Identify how the utility costs were estimated: (i.e., estimates provided by a utility provider, HUD standard, or averages
from comparable units.) Applicant must be prepared to submit supporting documentation as to estimates upon request by
the Agency. See attached Utility Allowance m bl of Orange County Housing
Assistance payments Progr_am
Type: APT-Garden Apartment TII= Townhouse DU=Duplex
lIDCP=Ilandicapped Access SF= Detached Single Family
•• Average monthly estimate of gas,water/sewer,and electric expenses not included in rent and paid separately by the tenant
... Fees for support services that a tenant is required to pay
•••• lit I ligh Income counties,total cannot exceed 90%of Maximum Ilousing Expense for low-income occupancy and unit size:in I•o%v Income
counties total cannot exceed 95%of Maximum I lousing Expense for low-income occupancy and unit size. See Appendix It for Maximum
I lousing Expense limits. See Appendix O for list of I1igh and Low Income counties.
* Co mlon area includes one 2-bedroan unit for staff use.
(11) - Part A, Page 5 of 12 01/29/96
4&--47 t c",,.,.-tvJ-h (oY ma vas
rd's r+r'wK4 NW_ -la tr�co,sa IWAA aWrAt
.1 Income Units (45%M) , -fi+- "�S4x- C6T+5.
17
Bedroom Number Type* Square Estimated Estimated•• Estimated Monthly
Size of Units Feet Monthly Rent Utility Cost Housing Expense to A 6409TR~ W
Rec'd by Not Included Tenant
Owner in Rent
0 BR t lraVC715
I BR A
30 ' Apr 564 33 Z; 128x30= 3r940
2 BR 20 APT 803 4 43 715 154XZD= 3,M0
3 BR
4 BR
45% AMI
Total Units 50 Gross Monthly Rental Income(71g)000f 18,920 .LS �,RZO
Total Elderly Units 50 Gross Annual Rental Income Q@titM) 227,040 d Saw
45% AMI
Utilities Included with rents: (X Water/Sewer o Electric N Gas o Other
• Type APT=Garden Apartment III= Townhouse DU=Duplex
FIDCP-handicapped Access SF= Detached Single Family
'• Average monthly estimate of gas,water/sewer and electric expenses not included in rent and paid separately by the tenant
11. Anticipated Rental Subsidies N/A
Tenant-Based Assistance: ❑ HUD o State o Local
Project-Based Assistance: ❑ RECD o HUD ❑ State ❑ Local
Units Receiving Subsidy
I. DESIGN FEATURES
Utilities:
Heat: ❑ Gas Forced Air o Electric Baseboard o Electric Heat Pump
]a Other_Gas—fired boiler/hot water
I-lot Water: K Gas o Electric o Other
Air Conditioning: o Electric Window Units (YElectric Forced Air ❑
Other
Equipment included with low-income units:
X Range rX Refrigerator tX Disposal ❑ Dishwasher
o Kitchen Exhaust Fan ❑ Air Conditioner o Laundry Facilities X Other Range hood
Equipment included with market rate units: N/A
❑ Range ❑ Refrigerator ❑ Disposal o Dishwasher
❑ Kitchen Exhaust Fan ❑ Air Conditioner o Laundry Facilities o Other
Design Quality and Energy Efficiency:
Describe in Exhibit O specific project features that include: Bedroom\bathroom mix, bedroom size,
aesthetic appeal and durability of the construction. Describe project features that will enhance overall
energy efficiency. Be specific regarding rating standards met, insulation factors. HVAC systerns,
building design, etc. (See also Application Part C, Section 4.)
(11) - Part A, Page 6 of 12 01/29/96
{
18
J. Support Services
Describe in Exhibit P any project design features or services specific to the site, or specific to the
residents, such as on-site daycare, employment counseling, financial counseling, home-ownership
counseling, meals, transportation, etc., that will be available to project occupants. Provide an estimate
of the number of households or persons to be served by the services. Also identify how the services
will be funded. Indicate whether there will be a cost to the tenant for the service. Provide letters from
each service provider to confirm the availability of the identified services. Please do NOT include
information on services generally available in the community, such as Department of Social Services or
Department of Mental Health.
All elderly projects must have support services plans.
K. Local Housing Authority Agreement (Optional)
Please attach as Exhibit Q the agreement committing the local housing authority to refer households with tenant-
based subsidies, and the project's management agent to prioritize the authority's client waiting list when selecting
households for occupancy.
(11) - Part A, Page 7 of 12 01/29/96
wN��Dn
�tJ 11��5 19
PART IV. PROJECT DEVELOPMENT COSTS DESCRIPTION 1 2
TOTAL COSTS 30%PV 70%PV
ELIGIBLE BASIS ELIGIBLE B SIS
1 Purchase of building(s),(Rehab).
2 Demolition
3 On-site,improvements... ....................... ... .._ . 430,000 430,000
4 Rehabilitation
5 of new building(s) _ .. __ ....... 4,001,000 4,001,000
6 Accessory building(s) ......
7 General requirements(Max.6%of lines.2.thru 6) ..... . _. ... ............. 235,600 235,600
8 Contractor overhead(Max.2%of lines 2 thru.7) ......._..._. _ 93,332 93,332
9 Contractor profit.(Max.&%of lines.2 thru 7,6%if identity,of interest),._ _... 279,996 279,996
10 Construction contingency ....... ...................... 70,000 70,000
11 Architect's fee-design _.__.. ._ ._..... ..._...._.................................................._. 239,500 239.500
12 Architect's fee-inspection_ ...... ............ ........................................................... 10,500 10,500
13 Construction insurance ............. 15,000 15,000
14 Construction loan origination fee ..._.,. ......._ ....., 70,297 70,297
15 Construction loan interest........__..._ _.__......... ......_.... .. ..... .... ........... 130,387 130.387
16 Construction loan credit enhancement
17 Construction period taxes _. ..... 10,000 10,000
18 Bond premium . .a ..,
19 Credit report
20 Survey,site engineering ._ _ _ __ _ 30,000 30,000
21 Property appraisal.(feasibility). __.. ............._.._ .._.._. 4,000 4,000
..22 Environmental report ...... . ...... .. 4,000 4,000
23 Market study... ..... ... ....._... ._............................. 6,000.
6 000
24 Permanent loan origination fee......... . ........... .................. .... .................. 64 140 w
25 Permanent loan credit enhancement 3 ' "' ' P• `s • "="
26 Cost of issuance
27 Title and recording _ _ _ _ _ _ ..... .. ... 20,000 17,500
28 Real estate attorney_ _ ... . .__ ..._ . ._..._. ...... .......... 37,500 35,000
29 Other attorney's fees_
30 Organizational(partnership)... 2N a#x' '
31 Tax credit application fee(5%x annual credits requested). . .. _. __.,... 34,234 34,234
32 Tax credit monitoring fee(5375 x.number ofunits)._........ ................. ....."_.. 46,500
33 Cost certification_ __ .... ......... ......... 2,500 2,500 30 0
34 Furnishings and equipment _ _. .............. 30,000 00
35 Consultant '
36 Other-marketing costs ........................................... . 100,000
37 Developer fee(Max 15%of Imes,2 thru 36,less lines 8 8t 9)*............. ,, 447.293 447.2913
38 Placement fees _ t ; ak u
39 Tax opinion _
... .. . =-
40 Rent-up expenses _ _ _
41 Rent-up reserves _ 251 000
..... ...............
42 Operating reserve
......................
43 Relocation expenses
... ._......... .. ..... ........... .........
44 DEVELOPMENT COST(sum of lines 1 thru43) ........................... ........ 6,662,779
6,196 1, 39
45 Less federal financing(Other than CDBG)-._.._
46 Less disproportionate standard ._..._..._
47 Less non-qualified nonrecourse.financing
48 Less historic tax credit(Residential portion)
49 TOTAL ELIGIBLE BASIS(Line 44 less lines 45 thry 48) 6,196,139
50 Applicable fraction(%of units occupied by low income occupants) 130.00%
51 TOTAL QUALIFIED BASIS(Line 49 multiplied by line 50) 8,054,981
52 Tax credit rate 8.50%
53 AMOUNT OF TAX CREDITS(Line 51 multiplied by line 52) 684,673
54 TOTAL AMOUNT OF TAX CREDITS REQUESTED 684,6731
_ . . ... ..
55 Cost of land 700 000 0Scc Allocation Plan
56 TOTAL REPLACEMENT COST.(Line.44+55).........._....................._,_„" 7,362,779 Shaded areas am excluded rtom basis
No G .p.v Ve(oPs+15 1s�C�ttij T'(T Wt{{ 1�1Y�o3t�y 441,11
O a
(Il)-Part A, Page 8 of 12
20
PART V. PROJECT FUNDING
A. Summary of Permanent Funding Sources
Source Amount o o a erm mortization nnua e t
Total Period Service
13A --
�N
L,oca(-Governm—ent -
er an- i an A or a e ousing
Group Trust.: 3 , 00 /° 8.625% I8 30 50
OR er Loan ws %M 317
ortgage evenue Mond
Non-rpayabFe Grants
Equity: w Income Housing T71EZ22__Estimated ricin on sale of tax credits: 0.595
Equity: Tist ryO c ax re its
wner nvestment 122,71
t er
T TAL SOUR S'
ources an u ses must equalTotal Replacement Cost me on page
Is any portion of the eligible basis of new construction or rehabilitation financed with federal subsidies other than CDBG
funds or funds from the HOME Program? _Yes _X_No If yes,indicate type and amount:
—Tax-exempt financing _RECD 515 financing _Other
B. Summary of Uses of Funds(From Part IV,Project Development Costs Description)
FLLanpurchase oun o o
(Line 5) 7 , 0 0
improvements(Lines -3) 3 , °ction( Ines 4-12) 4,929,9 o
-- 1 � 2.
Soft costs(Lines 13-36,39 an ) 604,558 8%
Developer fee(Line 37) 447,293 64/9 JeSS ourA v, 122,711
Placement fee(Line 3 )
esel� ryes(Lines 4T-4 ) , o
P e ged reserves
Re—location expenses(Line 43)
T-0TAL L 9E FUNDS* o
TOTAL SOURCES FUNDS 7r,,+
(From Section A) �,3 , 9
Sources and uses must equal'To�alRep acement os me on page
(II) - Part A, Page 9 of 12
1
21
C. Status of Financing Commitments
1. Does the project have a firm commitment for construction financing? X Yes No
2. Does the project have a firm commitment for permanent financing? X Yes No
3. Does the project have a firm commitment for government financing? N/A Yes No
If yes to H2 and/or N3, attach as Exhibit R a copy of the commitment, deed of trust or note. The permanent and/or
government financing commitment must be submitted under lender's letterhead. Applicants must use the Form of
Evidence of Permanent Loan Commitment in Appendix L to meet the requirements of this section.
(Note: A firm commitment for permanent financing is a binding obligation in the form of a letter, resolution, or
binding contract from a private lender or unit of government stipulating that a mortgage loan has been approved for the
project for at least 15 years at a given interest rate subject to normal conditions and exceptions. RECD commitments
must be the obligation of funds. Projects using FHA mortgage insurance must have a firm commitment.)
PART V1. PROJECT PROFORMA (Year One)
A. Project Operations
1. Advertising/Marketing $ 5,000
2. Management Fee $ 32,351
3. Legal $ 400
4. Administrative S 37,147
5. Utilities $ 59,70 _
6. Operating $ 39,853
7. Elevator $ 1 ,600
8. Trash Removal $
9. Decorating/Repairs $ 5,100
10. Maintenance S 14,000
11. Grounds $ 10,000
12. Taxes $ 49,600
13. Payroll Taxes $ 13,000
14. Insurance $ 10,000
15. Other $ 14,500
16. Replacement Reserve $ 18,600
17. Total Annual Expense $ 310,851
18. Per Unit Expense $ 2,507
Estimated Percentage Increase in Annual Expenses: 4 %
Other Anticipated Annual Expenses:
Investor Services Fee $
Partnership Management Fee $
Other Audit, tax return $ 5,000 _���a: � „-y �
dNI RW '* "��Supportive services $ 7,500 °”` s�vv�sS rV
Contingency $ 2,000 t,,tjd v►�{—Pvev;dc
Total of line 15 above $ 14,500 •d �d;-}-,,;y�� Nc�
(11) - Part A, Page 10 of 12 01/29/96
22.
SITE AND NEIGHBORHOOD
The Carolina Spring apartment community is ideally located to provide much-needed
affordable rental housing for low income senior citizens.
LOCAL NEED FOR AFFORDABLE SENIORS APARTMENTS
For much the same "quality of life" reasons that the Research Triangle Area gains such
national attention as a great place to which affluent seniors can move in their retirement:
access to cultural resources, access to the excellent health care resources, the mild
weather and natural beauty of the Piedmont area, and environmental awareness, LOW
INCOME seniors already retired in this area would like to be able to REMAIN in the area,
but presently find it extremely difficult to obtain housing that is both affordable to and
suitable to senior citizens.
The rental housing market in Carrboro / Chapel Hill is dominated by university student,
faculty, and staff housing requirements and is very expensive; as a result, low income
senior citizens have few rental options but to live in poor quality rental accommodations or
to pay most of their annual income to live in better quality accommodations. Either way,
the seniors are surrounded by college students and small children which is not the situation
in which they would most prefer to live.
If these low income seniors had the opportunity to live in a good quality apartment
community for SENIORS ONLY and at AFFORDABLE rent levels, they would love to stay in
the Carrboro / Chapel Hill community. Unfortunately, according to Katherine Leith, Director
of the Chapel Hill Seniors Center, many low income seniors can no longer afford to pay the,;
prevailing rents when they reach retirement, and they are forced to move out of the area to
find affordable rents.
The Carolina Spring community will allow these low income seniors to live their retirement,
years in Carrboro, convenient to old neighborhoods and friends, but in a new all-seniors
community, with.access to amenities and supportive services, both on-site and in the
community, and with AFFORDABLE rents.
This project is located in a Qualified High Cost Area, Census Tract 0107.03 in Orange
County, where high land costs and a very arduous development process make it virtually
impossible to develop an affordable apartment community. As a result, the low income
seniors market is not presently served by adequate and affordable rental apartments.
PROXIMITY OF SERVICES AND SUITABILITY FOR HOUSING
Carolina Spring is Iodated in the Town of Carrboro, on West Poplar Avenue between the
_ - s ^'j =? cl!- ?:fi rte, ':-r ��'
-a t v)f ass on I LdJI d'IJ 11 i �iS� v r
site is the ONLY site in Carrboro that is zoned for multi-family development. The property
owner has selected First Centrum's purchase offer over mutiple offers from developers of
market rent apartments because she realizes the great need for affordable seniors housing
in Carrboro.
23
2
The site is extremely suitable for multi-family housing, having moderate income multi-
family development on three sides, open rural landscape on the fourth side, and an
abundance of retail services, health services, and government services close by. The site is
very beautful, and that beauty will be preserved, with 51 % of the site remaining as open
space including an extensive undisturbed buffer of natural vegetation surrounding the
apartment building.
The site is on two bus routes of the Chapel Hill Transit System, which can carry Carolina
Spring's residents into downtown Carrboro and Chapel Hill or directly to the University of
North Carolina Medical Center complex. The Transit System also provides "E-Z Rider"
service for the convenience of seniors or handicapped directly to a specific destination.
The site is within walking distance ( 1000 feet ) to the north to Carrboro Plaza Shopping
Mall, which provides a supermarket, general merchandise store, bedding store, lighting
store, dry cleaning, drivers license center, dentist, chiropractor, cable TV provider, eyecare
store, a variety of restaurants, and a retail branch bank. Just across the road from
Carrboro Plaza is a new U.S. Post Office and a gas station
To the south on the N.C. Highway 54 Bypass one half mile is the Willow Creek Shopping
Center, which provides a supermarket, drugstore, general practice medicine, dentist, travel
service, video rental, and a variety of restaurants.
By automobile or by Transit System east around the Highway 54 Bypass are:
- UNC Hospitals - 4 miles.
- University Mall - 6 miles.
- N.C. Botanical Garden - 4 miles.
- Friday Center - 6 miles - with FREE university classes for senior citizens.
To the west side of the site is rural area and farm houses, preserved under the Town's
watershed protection zoning for University Lake, which is one mile south of the Carolina
Spring site provides public boating and fishing. The peaceful and pastoral setting is
extremely suitable for an affordable seniors community.
DISTRIBUTION OF LOW INCOME RENTAL UNITS IN THE COMMUNITY
The distribution of low income housing in the Carrboro / Chapel Hill community does not
serve low income households very well at this time . Much of the older single family
housing stock which in most communities would serve low income households has been
"gentrified" by higher income households. Carrboro's housing stock was fairly small to
begin with, until University-related growth began to spawn subdivisions in the 1960's, and
exploded with single-family and multi-family communities in the 1980's, none of which
serve low income households.
24
3
Our Market Study, accompanying this application, documents how high market rents are in
the market area of this site, and how few units are available at affordable rents, or suitable
for seniors households.
As the accompanying Chapel Hill / Carrboro Public Housing map shows, there is only one
PHA property in incorporated Carrboro, the Oakwood Apartments.
The Carolina Spring site is in a high growth corridor, surrounded by a mix of multi-family
and single-family housing in the middle income to upper-middle income range. The
proposed Carolina Spring community will provide a socio-economic neighborhood setting
very comfortable to its residents, who typically had middle range incomes during their
employment years and lived in middle income neighborhoods.
SITE AND BUILDING DESIGN
As Exhibit O of this application details, both the site and the three-story apartment building
will be very attractive to the residents and to the neighborhood. Residents will enjoy
resident gardens, gazebos, picnic pavillion, community room, fitness center, library, and
arts and crafts room, considerably more recreational amenities than most affordable seniors
communities provide. The neighbors will see mainly a beautifully wooded site with one
attracitive residential structure in the middle, nicely landscaped and in scale with the
neighborhood of two and three story apartment communities.
A menu of supportive services, detailed elsewhere, will make living at Carolina Springa
comfortable, convenient, and safe.experience.
1
25
SUPPORT SERVICES PLAN
CAROLINA SPRING will provide a variety of SUPPORT SERVICES specifically programmed
TO IMPROVE THE QUALITY OF LIFE for its elderly residents and specifically made available
AT THE SITE and AT NO COST to its elderly residents.
These support services are intended to improve each resident's PHYSICAL, MEDICAL, and
FINANCIAL well-being, regardless of age.
PHYSICAL FITNESS:
The Carolina Spring residents will not only have an indoor exercise room and outdoor
fitness equipment and walking circuit to facilitate individual exercise, included in the
project design and budget; but, will also be provided with weekly group exercise classes
focusing on mobility, stretching, and flexing, taught by exercise instructors specializing in
elderly fitness, and provided AT Carolina Spring by the Wellness Center staff at an hourly
cost to Carolina Spring and at NO cost to the residents. While all residents will be
encouraged to attend these group exercise classes, offered twice a week for one half hour
per class, it is our experience that about one half of the residents will probably attend
occasionally, and a smaller "hard core" group will attend regularly. A copy of the Wellness
Center's letter to provide these exercise classes is attached.
MEDICAL FITNESS:
The Wellness Center will also be provider of weekly health services, on a regularly-
scheduled day each week for a two hour "drop in" clinic conducted by a Registered Nurse
trained in gerontological medicine, who will provide any interested senior resident with
health assessment and referral for particular symptoms, blood pressure screening, periodic
immunizations, etc. This weekly health clinic will be provided AT Carolina Spring in a
specially designated and private screening room at an hourly cost to Carolina Spring and at
NO cost to the residents. It is our experience that nearly all residents will use these health
services as needed. A copy of the Wellness Center's letter to provide these health
services is attached.
FINANCIAL FITNESS:
Carolina Spring will provide monthly presentations on financial issues pertinent to senior
citizens. The hour long presentations will cover topics such as household budgeting, debt
management, estate planning, income tax preparation, investing, etc., and will "re-cycle"
each year to educate new residents and update continuing residents. These financial
education services will be provided AT Carolina Spring by the Edward D. Jones Company,
a respected financial services firm, at a monthly cost to Carolina Spring and at NO cost to
the residents. All residents will be encouraged to attend presentations pertinent to their
situations. A copy of the Edward D. Jones Company letter to provide these financial
fitness services is attached.
26
The Wellness Center
Chapel Hill Senior Center/Orange County Department on Aging
Madelyn L. Ashley, MSN, RN
Director
The Wellness Center
400 S. Elliott Road
Chapel Hill,N.C. 27514
March 27, 1996
Jerry A. Lohla
Executive Vice President
First Centrum
7000 Peachtree-Dunwoody Road
Building 11
Alanta, Georgia 30328
Dear Mr. Lohla:
The Friends of the Chapel Hill Senior Center through The Wellness Center are willing to
provide, pending board approval, two hours per week of health services for the residents
living in Carolina Springs which will be located at 600 West Poplar Avenue in Carrboro.
This will include a registered nurse doing assessments and blood pressure screening. The
service will be available to the residents in the 124 apartments at this site.
This service will be provided at no cost to the residents. The hourly cost, which will be
billed to your company, is estimated to be $40-70, again pending board approval.
I look forward to our working together in the near future. This project will clearly meet a
need that is not currently being meet in this community.
Sincerely,
Madelyn L. Ashley, MSN, RN
Phone Numbs"968-2073/Fcm Number:968-2093
The Wellness Center 27
Chapel Hill Senior Center/Orange County Department on Aging
Madelyn L. Ashley, MSN, RN
Director
The Wellness Center
400 S. Elliott Road
Chapel Hill, N.C. 27514
March 27, 1996
Jerry A. Lohla
Executive Vice President
First Centrum
7000 Peachtree-Dunwoody Road
Building 11
Alanta, Georgia 30328
Dear Mr. Lohla:
The Friends of the Chapel Hill Senior Center through The Wellness Center are willing to
provide, pending board approval, one hour of fitness programs per week for the residents
living in Carolina Springs which will be located at 600 West Poplar Avenue in Carrboro.
This will include exercise classes focusing on mobility, stretching, and flexing. The
service will be available to the residents in the 124 apartments at this site.
This service will be provided at no cost to the residents. The hourly cost, which will be
billed to your company, is estimated to be$17.50-25.00, again pending board approval.
1 look forward to our working together in the near future. This project will clearly meet a
need that is not currently being meet in this community.
Sincerely,
Madelyn L. Ashley, MSN, RN
Phone Num"n 968-9073/fax Numben 968-2093
28
Edward ones
Edward D.Jones&Co. Graham Wells 111
205 West Main Street,Suite 101 Investment Representative
Carrboro,NC 27510 (919)933-3191
March 27,1996
Mr.Jerry A. Lohla
Executive Vice President
First Centrum Corporation
7000 Peachtree-Ounwoody Road,Bldg. 11
Atlanta,GA 30328
RE: CAROLINA SPRING
Affordable Apartments for Seniors
Carrboro,NC
Financial Seminar Services
Dear Mr.Lohla:
I enjoyed talking with you this morning regarding the Carolina Spring Project that your
company plans to build in Carrboro during 1996-97.There is a need for affordable senior
housing in this area.
As the Edward Jones Company investment representative in Carrboro,I would be pleased to
provide financial seminars to the residents of Carolina Spring. Per our discussion, I would otter a
monthly,one-hour seminar on-site.These sessions would be specifically for the residents of
Carolina Spring and would cover a range of financial topics pertinent to the residents areas of
interest.
•these sessions would be at no cost to the residents.The proposed cost to First Centrum Corp
would be limited to seminar materials/expenses,estimated at$10420 per seminar.
Please contact me when you wish to talk further at the number and address above.
Sincerely,
bULW w
Graham Wells III
cc: John McNeely(fax:703-406-3474)
�.,. _, rc,.• Boa ara . -nr c- - ah• c�wnr n ru...,r -a _7rr•rnr nr-,,-r�z -s•rn
29
-FIRST CENTRUM,
Southeast Region
March 12., 1996
Ms . Tina Vaughn
Executive Director
Town of Chapel Hill
Department of Housing
317 Caldwell Street Extension
Chapel Hill', North Carolina 27516
RE : Carolina 'Spring
Affordable Apartments for Senior Citizens
600 West Poplar Avenue
Carrboro, North Carolina
Local Housing Authority Cooperative Agreement
Dear Ms . Vaughn:
This is to follow up on our conversation last week, regarding the
mutual benefit of establishing a cooperative agreement between
the Department of Housing, which is the designated local housing
authority for the Town of Carrboro and the Town of Chapel Hill,
and First Centrum Corporation, the developer and general partner
of the above-referenced apartment community for senior citizens .
As indicated in the development plans presented to you, the
proposed Carolina Spring community will provide 124 apartments
for low-to-moderate income senior citizens (62 and older) , and
will be financed in part through tax credits allocated by the
North Carolina Housing Finance Agency.
First Centrum Corporation commits to make forty percent (400) of
these apartments available to seniors households with incomes
less than 451; of the area median income adjusted for family size.
This downward skewing of rents is intended to make .401r of the
units affordable to some of your local housing authority
households with tenant-based subsidies .
It is further committed that the Carolina Spring management agent
will give priority to age and income-qualified households on the
local housing authority' s waiting list in selecting households
for occupancy pf the 45t AMI apartments at Carolina Spring.
In entering into this written agreement with First Centrum
Corporation, the local housing authority commits to refer such
qualified households with tenant-based subsidies on its waiting
list to the Carolina Spring management agent .
7000 Penchlree-Dunwoody Raid,Building 11 ■ Atlanta,Georgia 30328-1615 ■ (404)69R4YZ50 - Modem(404)698-0510
30
2
First Centrum Corporation hereby commits to the aforementioned
terms of agreement . Please indicate your concurrence with these
terms by countersigning the two original copies of this letter
agreement where indicated below, and returning one countersigned
original copy to us .
We appreciate your cooperation and we look forward to a long and
mutually beneficial relationship.
Sincerely,
First C rum C p i n
By: t Witness : Av
I t S : E'ca P'. c
Accepted:
Department of Housing
By: ��. 1�a..�.'_"' Witness :
Date:
31
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