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HomeMy WebLinkAboutAgenda - 10-24-2006-1ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 24, 2006 Action Agenda Item No. 1 SUBJECT: Process to Enhance Monitoring of Publicly Financed Affordable Housing Projects (e.g. Habitat for Humanity -Sunrise Road ) DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Agreement Amendment Letter from Sunrise Coalition Staff Response INFORMATION CONTACT: Tara L. Fikes, 919-245-2490 PURPOSE: To 1) consider a process whereby the County could enhance monitoring and communications with the BOCC and public on changes in scope or status of .affordable housing projects financed through bond and trust funds; and 2) approve an amendment to the Development Agreement between Orange County and Habitat for Humanity of Orange County (HHOC) for acquisition of~property on Sunrise Road in Chapel Hill as example of this approach. BACKGROUND: Process Proposal County staff is proposing to initiate a process to help ensure the BOCC and the public remain aware and offer comment on changes that could be necessary in a publicly financed affordable housing project once authorized by the BOCC, and a development agreement signed between the County and the nonprofit partner. As with HHOC and their acquisition of a 16-acre tract on Sunrise Road in Chapel Hill, it is not atypical that target dates or design concepts may require modification as project implementation proceeds. What has been missing was a consistent. practice for keeping the BOCC and public informed and involved to the extent advisable as needs arise. Under a process envisioned by County staff, the Affordable Housing Advisory Board (ARAB) would review and make comments on changes requested in County supported projects prior to submission by staff to the BOCC for consideration. ARAB recommendations presented to the BOCC for action at a public meeting would allow the opportunity for presentation and discussion of project changes as well as public participation. Additionally, ARAB and staff would increase written communications to the BOCC on issues or concerns pertaining to major projects under development. Proiect Example: In December 2002, the Board of County Commissioners approved an allocation of $250,000 to Habitat for Humanity of Orange County, NC Inc. (HHOC) to assist in the acquisition of a 16-acre tract of land for the future development of affordable housing. County funds were allocated from the Housing Loan Trust Fund and available Community Development program income. The total purchase price was $400,000. On February 23, 2003, the County entered into a Development Agreement with HHOC that required Habitat to submit a sound, site-specific development proposal for the property by June 30, 2005 with infrastructure construction to begin by September 30, 2005. HHOC informed County staff they were unable to meet these target dates and on May 17, 2005 the BOCC approved an amendment to this Agreement modifying the target dates in accordance with HHOC's current development timetable. In late May 2006, County staff received the attached letter from the Sunrise Coalition requesting an independent project audit. In response, County staff reviewed the areas of concern noted by the Sunrise Coalition and responded to the Coalition in an August 7, 2006 attached letter to Doug Schworer, Chair of the Sunrise Coalition. After a review of the status of the project and the requirements of the Development Agreement, and in consideration of the concerns of the Sunrise Coalition regarding the project design expectations of the Commissioners at the time funding was provided for land acquisition, County staff recommends that the Development Agreement be further amended to provide additional .clarification. The attached draft amendment has been prepared by the County Attorney and incorporates into the Development Agreement reference to the Concept Plan and the condition that "should the site specific development plan of the Project which receives final approval from the Town of Chapel Hill be substantially different from the Concept Plan, Habitat shall submit the Project as finally approved by the Town to the County for its approval before construction work is commenced on the Project". The draft amendment illustrates haw the BOCC could introduce specific oversight capabilities into its monitoring of approved affordable housing projects. While important for the BOCC to remain fully engaged as projects proceed to completion, the BOCC will also want to take into consideration, as has been suggested in the earlier process proposal, the need nonprofit partners have to retain the maximum flexibility in response to dynamic financial, community, and regulatory factors. NOTE: County staff anticipates receiving a project update letter from HHOC in advance of the work session but not in sufficient time to accompany the agenda package when released. This letter will be faxed to the BOCC upon arrival. Additionally, the Chair in conversation with HHOC and Coalition representatives intends to allow each group a brief presentation and comment period when the item comes up for consideration on the agenda. FINANCIAL IMPACT: The BOCC approved the HHOC funding request for this project in 2002 in the amount of $250,000. RECOMMENDATION(S): The Manager recommends that the Board: 1. Discuss and provide feedback regarding the proposal for enhanced monitoring of publicly financed affordable housing projects; and 2. Consider draft amendment to the Development Agreement between Orange County and Habitat for Humanity of Orange County, NC, Inc. dated February 24, 2003 for the acquisition of property on Sunrise load in Chapel Hill, and provide further feedback and direction to staff such that the item could be proposed for action at the next regular BOCC meeting (November 2). 3~, NORTH CAROLINA ORANGE COUNTY AMENDMENT TO DEVELOPMENT AGREEMENT This is the second amendment to the February 24; 2003 AGREEMENT ("the Development Agreement") between ORANGE COUNTY, a general local government unit of the State of North Carolina ("County" or "the County") and HABITAT FOR HUMANITY OF ORANGE COUNTY, NC, INC., a North Carolina non-profit housing organization ("Habitat"). The effective date of this amendment is WITNESSETH WHEREAS, the County and Habitat entered into the Development Agreement and amended the Development Agreement on May 17, 2005; and WHEREAS, the Development Agreement as amended calls for the acquisition of a 17.17 acre parcel of land on Sunrise Road, Chapel Hill, NC by Habitat for the Project ("the Project property"); and WHEREAS, the Project property has been acquired and Habitat has submitted a Concept Plan to the Town of Chapel Hill for Town approval of its site specific development proposal.for the construction of the Project dwelling units ("the Concept Plan"); and WHEREAS, Habitat has provided a copy of the Concept Plan to the County. NOW, THEREFORE, in consideration of the mutual covenants, promises and representations contained herein, it is agreed between the parties hereto as follows: 1. The Development Agreement as amended is further amended to incorporate into it by reference the Concept Plan, a copy of which is attached hereto. Any part of the Development Agreement as amended which refers to or incorporates a different plan for the development and construction of the Project is amended to conform such different plan to the Concept Plan. 2. Should the site specific development plan of the Project which receives final approval from the Town of Chapel Hill substantially. different from the Concept Pian, Habitat shall submit the Project as finally approved by the Town to the County for its approval before construction work is commenced on the Project. A substantially different plan is, for purposes of this Development Agreement, one which decreases the number of Project dwelling units to a number less than 25 or changes the type of dwelling units to be constructed as part of the Project. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. ORANGE COUNTY Rod Visser, Interim County Manager ATTEST: Donna Baker Clerk to the Board of County Commissioners Approved as to form and legality Geoffrey Gledhill, County Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. Kenneth Chavious, Finance Director Habitat for Humanity of Orange County, NC, Inc. President ATTEST: Secretary „,,,, W ~, • „ uel ~ ~~rP-~/7 Pue airs' i az m ' a °oe ' oioai eoi° 4 ~ ` b 15LZ DN IV4! 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I i; 1 I ~~ Q ~~ aQ 5 ''''.•~: ' ;~; 9 w / _ ~ f• 19 ~' p I ~ ~ I' i 9 D 9 g r 1 Y ' a ~~§ ~ ~~! d~~ ' ~iy ~p~ ~@ ~~~ ~ e~ a 6 ~ ~ a,m,ezcox - ;eo'oza "" " a.eotwox - ",ir'cca I , ;j ; ~~ ~ Q~6 Q~ ~~ Q~i E~y~ ~e~' ~9 ••) p 'I I \ • r?ts ~. 1 ~a &. ~~ .arse ~jii; w t ,anuu zw.lclx~ ~ v i it .•'•: < I • 1 ••'tr''1'~' ' i ~ m m r! ` E i' ~7f~•f.~:: ••: '• p I ~ µC1 ~ v d ' ~' ' ' • • • F I R al U LLe. N K ~ R•': •:; ; •;';~';• ' 333 I I 1 "~`.•."__+aa'crrH • r • • 1 • • f ~...-__-.. ( _~~---~_--.--.1 __a.amaa+-- .rrzw 3mx,n 0 (BCD MAY 3 0 2006 May 2$, 2006 Sunrise Coalition, Inc. P.O Box 16722 Chapel Hill, NC 27516 Ms. Tara Fikes Director Orange County Housing and Community Development Orange County Housing and Community Development 300. West Tryon Street Hillsborough, NC 27278 Dear Ms. Fikes: In February 2003, Habitat for Humanity of Orange County (HHOC) entered into a Development Agreement with Orange County for the Sunrise Ridge project. The Sunrise Coalition has reviewed and compared the Development Agreement, Deed of Trust, Restrictive Covenants, and studies submitted by HHOC to the concept plan presented to the Town of Chapel Hill Town Council on April 19, 2006. We have ~~ identified several major non-compliant items. Consequently, we are requesting an independent audit of this project. If the audit finds that HHOC is not in compliance with the agreements, we request; that as per the agreement, the County declare HHOC in default, recall the loan and suspend any further funding for the Sunrise Ridge project. Based on the documents provided to us by the County, HHOC has been non-compliant with the Development agreement in the following areas: 1) HHOC did not submit a site specific development plan to the Town of Chapel Hill by December 31, 2005 as required by the agreement. In fact, HHOC has only submitted a concept plan to the Town of Chapel Hill in January 2006. A concept plan is only a very high level proposal and does not constitute "a sound site specific development plan" as required in the agreement. It should be noted that the plan submitted in January of 2006 . and presented to the Town Council by HHOC on April 2006 was significantly different from the one submitted to the Town Council by HHOC in October 2004. 2) HHOC did not' engage the neighbors in the development of the concept plan submitted in January and presented to the Town Council on April 19, 2006 as required by the Development Agreement. In fact, there was no opportunity for input from the surrounding community regarding this plan. The plan was merely presented to us without an opportunity for input. According to the Agreement, HHOC must provide evidence that the surrounding community has been involved in the development plan. The Sunrise Coalition has submitted documentation to HHOC, the Town of Chapel Hill, ,and Orange County about the lack of any "meaning~fitl" involvement in the development of earlier plans and we have had no involvement in the second plan. 0 3) According to the agreement, HHOC is required to provide to the county quarterly reports beginning January 1 2006. The Sunrise Coalition is not aware that any reports have been provided to the County. The Sunrise Coalition is on record with the County requesting to be copied on any and all correspondence submitted by HHOC related to this development. 4) HHOC has not provided evidence that the development plan is in compliance with all federal, state, local laws, regulations and ordinances applicable to the expenditures of funds provided by the county to the purchase and development of the property. In fact, HHOC has publicly acknowledged on numerous occasions that their plan is not compliant with HUD noise standards. S) The agreements executed by HHOC with the County require than "single family dwelling units" be built. A duplex with a "party wall" is not consistent with the intent of single family homes. HHOC's current plan calls for 24 duplexes and NO single family units. We are therefore requesting that no further Federal or County funds be provided for HHOC's Sunrise Ridge project until the County completes an independent audit of HHOC's compliance with the above-mentioned Development Agreement and related documents. with Orange County and finds HHOC to be in full compliance with the agreement. If HHOC is found not to have complied to the terms of the agreements with the County, we request that, as stipulated in the agreements, the loan to HHOC by the County be recalled. Thank you for your prompt attention to this matter. I would be happy to meet with you if you have any questions. Sincerely, D g Schworer President Sunrise Coalition Cc: John Link County Attorney Michael Brough ~.~' ~"' Orange County Department of Housing and Community August 7, 2006 Development Revitalization • Preservation • Innovation Doug Schworer Sunrise Coalition, Inc. P.O: Box 16722 Chapel Hi]1, NC 27516 Dear NIr. Schworer: Tara L. Filces Director This letter is written in response to your May 28, 2006 letter regarding the Development .Agreement between Orange County and Habitat for Humanity of Orange County, NC, Inc (I~30C) for the Sunrise Ridge Project. The response is ordered by reply to each issue presented in your letter. 1. HHOC did not submit asite-speck development plan to the Town of Chapel Hill by December 31, 2005 as required by the agreement. In fact, HHOC has only submitted a concept plan to the Town of Chapel Hill in January 2006. A concept plan is only a very high level proposal and does not constitute }ta soand site specific development plan" as required in the agreement. It should be noted that the plan submitted in January of 2006 and presented to the Town Council by HHOC on April 2006 was significantly different from the one submitted to the Town Council by HHOC in October 2004. The Town of Chapel Hill requires the submission of a Concept Plan prior to applying for a Special Use Permit via a Development Application. The initial Concept Plan submission by HHOC to the Town was in July 2004 with a revised submission on January 19, 2006. Although submission of the second Concept Plan in 2006 was late by three weelrs (December 31, 2006), staff considers these efforts to begin the Development Application process as sufficient to meet the progress intended'by the requirement in the Development Agreement to submit a "sound site specific development plan ". 2. HHOC did not engage the neighbors in the development of the concept plan submitted in January and presented to the Tovvnt Council on April 19, 2006 as required by the Development Agreement. In fact, there was no opportunity for input from the surroundiag community regarding this plan. The plan .was merely presented to us without an opportunity for input. According to the Agreement, HHOC must provide evidence that the surrounding community has been involved in the development plan. The Sunrise .Coalition has submitted. documentation to HHOC, the Town of. Chapel Hill; .and Orange County about the lack of any "meaningful" involvement in the development of earlier plans and we have had no involvement in the second plan.. It is. our understanding that HHOC field a meeting, with the Sunrise Coalition on February 2, 2006 to review the Concept Plan. Also at that meeting, HHOC Mailing .A.ddress: P.O. Box 8181 • Hillsborough, North Carolina 27278 Main Office: 300 West Tryon Street • Hillsborough, North Carolina 27278 Telephones: 919/732-8181 • 967-9251 • 688-7331 •227-2031 • Extension 2490 • Fax: 919/644-3056 • TDD: 644-3045 ~' Satellite Office:2501 Homestead Road • Chapel Hill, North Carolina 27516 Telephones: 919/969-3016 • Fax: 919/969-3018 O Schwarer Page 2 of 3 responded to a list of questions posed by the Sunrise Coalition regarding the Concept Plan. Therefore, there is evidence that opportunity was provided for input from the neighborhood in development of the Plan as intended by the Development Agreement. 3. According to the agreement, HHOC is required to provide to the county quarterly reports beginning January 1 2006. The Sunrise Coalition is not aware that any reports have been provided to the County. The Sunrise Coalition is on record with the County requesting to be copied on any and all correspondence submitted by HHOC related to this development. HHOC did not provide the quarterly reports as required by the Development Agreement. County staff requested the reports in June 2006 and HHOC has provided the Quarterly Reports for the periods ending March 31 and June 30, 2006. A copy of this report is enclosed for your review. Copies of future quarterly reports will be provided to the Sunrise Coalition as requested. 4. HHOC has not provided evidence that the development plan is in compliance with all federal, state, local laws, regulations and ordinances applicable to the expenditures of funds provided by the county to the purchase and development of the property. In fact, 13HOC has publicly acknowledged on numerous occasions that their plan is not compliant with HUD noise standards. It is our understanding that the Development Application that will be submitted to the Town Council is still under development by HHOC officials.. After the Application is submitted to the Tawn with a capy to Orange County, County staff, in consultation with Town of Chapel Hill staff as necessary, will review the Plan for compliance. 5. The agreements executed by HHOC with the County require that '°single family dwelling units" be built. A duplex with a "party wall" is.not consistent with the intent of single family homes. HHOC°s current plan calls for 24 duplexes and NO single family units: The original Development Agreement does reference.single family dwelling units as the anticipated housing product. However, according to the HHOC Status Report, the proposed Development Application to be submitted to the Town includes 44 single family detached units, thus, it appears that plans to build duplexes on the site have been eliminated. Additionally, your letter requests an independent audit of the HHOC's compliance with the Development Agreement for the Sunrise Road property. The Orange County Board of Commissioners will be officially informed of your request on their next available meeting date. And, in response to your related question, there are no current plans to allocate funding to this project this fiscal year. Also, on the next available meeting date, County staff will recommend an amendment to the existing County Development Agreement in an effort to ensure that the County Commissioners are fully aware of HHOC's development plans. That amendment will require that to the extent the Development Application :actually approved by the Chapel I3i11 Town Council is materially different from the proposal that was the basis for the County's original 0 Schworer Page 3 of 3 Development Agreement, the Board of County Commissioners will be asked to approve the new project design prior to the start of construction: I trust this letter addresses the issues outlined in your letter and I sincerely apologize for this delayed response. If you need additional information, please feel free to contact me. Sincerely, /~~ Tara L. Fikes Director cc: John M. Link, Jr., County Manager Geoffrey Gledhill, County Attorney is Status Report to Orange County Sunrise Ridge Development For Quarter Ending March 31, 2006 and Quarter Ending June 30, 2006 Back~round• Orange County provided $250,000 in funding to assist with the purchase of the Sunrise Road property, which was purchased in February 2003. The Town of Chapel Hill provided $50,000 from its Housing Trust Fund, and HHOC provided $120,000 of its own privately raised funds for the balance of the purchase price and other predevelopment costs, such as survey, appraisal, Phase I environmental assessment, and preliminary wetland delineation and protected species survey. HHOC's Board of Directors created an Ad Hoc Committee in early 2003 to meet with and receive input from neighboring residents of the property. This Ad Hoc Committee met on January 28, 2003 with adjacent property owners; on February 12, 2003 with residents of Chandlers' Green, and on March 10, 2003 with residents who live along and off of Sunrise Road. At these initial meetings, the groups with whom HHOC's Ad Hoc Committee met expressed a very strong opposition to any rental housing being built on the property, and to any change in the current zoning of the property. HHOC's Board subsequently adopted principles .for the development of the property that included the following statement: "the 17 acre Sunrise Road property shall include no more than 68 homes" (the maximum number of homes permissible under the current zoning) "to be built and sold asowner-occupied homes. The design is to encompass architectural variety to allow the best opportunities to create housing for homeowners of mixed income levels, and to create visual interest and harmony." Shortly thereafter, the Mayor appointed a Mayor's Committee to study the site, and engage in conversation with Habitat representatives and neighbors of the property. The Committee set forth 17 suggested goals/principles that it considered desirable for Habitat to consider in preparing development plans. The 17 goals were adopted by the full Council on May 12, 2003, and were embraced and followed by Habitat in preparation of the Concept Plan. One.of the 17 recommendations adopted by the Council was for Habitat "to sponsor a workshop, involving neighbors of this property, to consider possible designs for the use of this property prior to preparation and submittal of a Concept Plan." On October 4, 2003, Habitat sponsored a design charrette for the property that was facilitated by Dr. David Godschalk of UNC's Department of City and Regional Planning. Over 60 individuals participated in the charrette, half of whom were residents of the Sunrise Road community. A team of local architects, planners, and designers who donated their time and expertise, used the results of the design charrette to produce several concept drawings that were presented at a public meeting held in March, 2004. Following the public presentation of the four design concepts, which concluded the charrette process begun in October, the Habitat Sunrise Road Site Committee, Habitat Board of Directors, and the design team prepared a concept ,plan which was submitted to the Town of Chapel Hill in July, 2004. Prior to submitting the concept plan to the Town of Chapel Hill, Habitat representatives met with neighbors of the property, including ii members of the Sunrise Coalition, and the Chandlers Green Homeowners' Association, to present the concept plan and answer questions. The concept plan was presented for review to the Community Design Commission in August 2004 and again in September 2004, and to the Town Council in October of 2004. Following these reviews, Habitat hired an acoustical consultant to conduct on-site measurement of noise levels. Activity Since July X, 2005 During the summer of 2005, two members of the HHOC Board of Directors met with two designated members of the Sunrise Coalition and Andy Sachs of the Dispute Settlement Center. The meetings concluded when both sides failed to reach agreement about the scope of the discussions. Based on the results of the ~on site sound measurements, HHOC decided to limit construction to areas where the projected peak hour average sound level in 2015 would be 67 dBA or less, and to construct the dwelling units such that the overall average sound level inside the homes would be less than 40 dBA. This decision resulted in a boundary line for development that is about 335 feet from the centerline of the highway (I-40). In November 2005, Habitat was able to put a property on Ginger Road under contract that allows for an entry into the proposed subdivision from Ginger Road, and eliminates the need to crass the Resource Conservation District with a road. Also, a private developer had submitted a developmentplan for an adjacent property to the south of Habitat's property. The developer of this property, Bradley Green, agreed to design his sewer to his property so that it would serve Habitat's property, thus eliminating the need for a pump station. The design team that had prepared the first concept plan reconvened late in 2005, and based on the changes noted above, designed a new concept plan of 50 single family, attached homes on I9.4 acres. HHOC Board members contacted members of the Sunrise Coalition to provide them with the results of the sound study, and to give them an overview of the new concept plan, which was then submitted to the Town of Chapel Hill on January 19, 2006. A meeting was set up at Garol Woods for HHOC to present the new concept plan to the Sunrise Road neighbors.. This well attended meeting was facilitated by Andy Sachs, and was held on February 2, 2006. In addition, HHOC responded in writing to a series of questions regarding the concept plan that was submitted to us by the Sunrise Coalition. Those questions and our responses are attached to this report. The Community Design Commission reviewed the plan on February 15, 2006, and the Town Council reviewed it on April 19, 2006. HHOC is currently preparing a development application for submittal to the Town that incorporates feedback from the most recent CDC and Town Council reviews. The current intent is to submit a development application for 44 single family detached homes, in response to the neighbors concerns about the attached single fanuly homes is presented in the concept plan. The development application should be submitted by the end of June 2006.