HomeMy WebLinkAboutAgenda - 03-19-2019 6-a - Approval of a Financial Assistance Award to Community Home Trust for the Landings at Winmore Apartment Complex 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 19, 2019
Agenda
Item No. 6-a
SUBJECT: Approval of a Financial Assistance Award to Community Home Trust for the
Landings at Winmore Apartment Complex
DEPARTMENT: Housing and Community
Development
ATTACHMENT(S): INFORMATION CONTACT:
(1) FY 2019-2020 Projections Sherrill Hampton, Housing and
(2) 10-Year Replacement Reserve Community Development Director,
Analysis (919) 245-2490
(3) Draft Resolution
PURPOSE: To adopt a resolution:
1) Approving a $60,000 financial assistance award to Community Home Trust (CHT) to
assist in ensuring adequate operational and capital reserves as it relates to the
Landings at Winmore Apartment Complex; and
2) Authorizing the County Manager to execute the necessary agreement with Community
Home Trust (CHT) as it relates to the $60,000 financial assistance award and include
the necessary reporting requirements in order to periodically review performance and
ongoing improvement of the identified challenges at the Landings at Winmore
Apartment Complex.
BACKGROUND: On February 15, 2019, CHT Executive Director Robert Dowling submitted a
request to the County Manager for financial assistance to aid the recently acquired Landings at
Winmore Apartment Complex as it relates to the complex's operational and capital reserves.
See below for additional information points:
Information Points
■ On May 4, 2011, Orange County made a $300,000 loan to the Landings at Winmore for the
development of the 58-unit apartment complex. The loan came from the federal HOME
Program funds and the interest rate is 2% per year. The loan matures in May 2041.
■ Community Home Trust (CHT) bought the apartment complex on December 29, 2017 and
assumed the loan from the County.
■ The balance of the capital structure for the Landings is as follows:
o An AHP $1,440,000 First Loan originated by Bank of America with a 2% interest rate
and matures in December 2030.
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o An AHP $550,000 Second Loan originated by Bank of America with a 7% interest rate
and matures in December 2030.
o An NC Housing Finance Agency (NCHFA) $4,995,112 loan, provided in lieu of tax
credits with no interest and no payments required. The note matures in December
2025. If the property remains in compliance until that time, the note will be forgiven.
o An NCHFA $332,997 Loan that matures in February 2040. The note bears no interest.
o A United Housing Associates $250,000 Loan that is now assigned to Bank of America.
This loan matures in December 2030 and the note bears no interest.
■ Community Home Trust (CHT) hired Partnership Property Management (PPM) as the property
management company in January 2018.
■ When CHT acquired the property in 2017, the Operating Reserve was $81,938 and the
Replacement Reserve was $85,352.
■ The expenses incurred that were paid from the reserves since CHT's ownership include the
following:
o $22,896.90 of operating reserves for property insurance in October 2018
o $9,743.66 of operating reserves to pay for a variety of normal maintenance activities,
i.e. pressure washing and apartment turnover costs.
o $17,794.69 of replacement reserves for miscellaneous replacements, i.e. appliances
and sprinkler heads.
o All transfers from both reserves were approved by the NC Housing Finance Agency
(NCHFA).
■ CHT cites three (3) factors that caused the challenges being confronted. Those factors are:
o The property lost money in 2015, 2016, 2017 and 2018.
o Six (6) apartments were vacant when they acquired the property and vacancies
remained high for most of 2018. However, by December 2018, there were only three
(3) vacancies.
o Some apartments, especially two (2), were very expensive to turnover and rent.
■ Based on an application from CHT, the Orange County Housing and Community Development
Department provided $3,500 in Risk Mitigation funds in late January/early February 2019 for
one of the aforementioned units.
■ The Town of Carrboro recently provided $30,000 of a $50,000 request. CHT will submit
another request this spring for the remaining $20,000 needed.
■ The property management company, PPM, has worked hard to address the causes of the
losses, i.e. reducing the vacancies and holding tenants accountable to their leases. The
financial performance of the property was turning around at the end of 2018. As of today,
there are only two (2) vacancies and the rental income is more stable.
FINANCIAL IMPACT: A financial impact is anticipated. The requested monetary assistance, if
approved, would be taken from the County's Risk Mitigation and Housing Displacement Fund.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or
ethnic background; age; military service; disability; and familial, residential or economic
status.
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• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
• GOAL: CREATE A SAFE COMMUNITY
The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang
activity, substance abuse and domestic violence.
RECOMMENDATION(S): The Manager recommends that the Board adopt a resolution:
1) Approving the requested $60,000 in financial assistance for the Landings at Winmore
Apartment Complex as it relates to assisting in ensuring that there is adequate
operating and capital reserves; and
2) Authorizing the County Manager, after consultation with the County Attorney, to
execute the necessary agreement with Community Home Trust (CHT) to include the
necessary reporting requirements for periodic review of performance and ongoing
improvement of the identified challenges at the Landings at Winmore Apartment
Complex.
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CHT LANDINGS-CASH BASIS ATTACHMENT A
JULY AUG SEPT OCT NOV DEC JAN FEB MARCH APRIL MAY JUNE TOTAL
Revenue Cash Cash Cash Cash Cash Cash Cash Budget Budget Budget Budget Budget
Gross Rental Income 43,543 43,543 43,543 43,543 43,543 43,543 43,543 43,543 43,543 43,543 43,543 43,543 522,516
Vacancy loss/Collection Loss 563 (8,311) (1,301) (5,299) 3,865 (661) (6,279) (3,483) (3,483) (3,483) (3,483) (3,483) (34,838)
Net Rental Income 44,106 35,232 42,242 38,244 47,408 42,882 37,264 40,060 40,060 40,060 40,060 40,060 487,678
Interest Income-Replacement Reserve 71 78 78 76 79 72 66 67 67 67 67 67 855
Application Fees 225 375 250 250 75 100 310 125 125 125 125 125 2,210
Other Income 0 200 0 0 0 60 0 0 0 0 0 0 260
Key Premium Rents (958) 1,607 736 819 736 736 592 708 708 708 708 708 7,808
Tenant Charges 334 2,852 80 844 (245) 266 434 146 146 146 146 146 5,295
Total Revenue 43,778 40,344 43,386 40,233 48,053 44,116 38,666 41,106 41,106 41,106 41,106 41,106 504,106
Expense
Maintenance:
Exterminating 520 0 0 0 0 335 0 150 150 150 150 150 1,605
Maintenance-Grounds 265 6,450 1,100 3,600 2,200 0 825 1,342 1,342 1,342 1,342 1,342 21,150
Snow Removal 0 0 0 0 0 0 615 67 67 67 67 67 950
Maintenance-Labor 3,321 0 4,920 6,608 3,304 3,304 4,791 3,154 3,154 3,154 3,154 3,154 42,018
Maintenance-Supplies 3,877 2,099 1,635 434 3,393 2,246 1,523 1,000 1,000 1,000 1,000 1,000 20,207
Repairs-Other 1,247 4,079 2,639 1,725 14,573 (2,747) 0 1,579 1,579 1,579 1,579 1,579 29,411
Replacements 2,865 6,040 983 1,134 (11,061) 7,700 2,377 833 833 833 833 833 14,203
Plumbing 193 0 188 726 779 0 0 42 42 42 42 42 2,096
HVAC 1,013 2,017 458 686 0 862 155 667 667 667 667 667 8,526
Electrical Repairs 302 0 2,794 0 (2,681) 0 142 333 333 333 333 333 2,222
Fire Alarm Inspections 233 543 0 0 0 (543) 0 35 35 35 35 35 408
Painting 1,021 2,120 384 781 1,724 (393) 0 625 625 625 625 625 8,762
14,857 23,348 15,101 15,694 12,231 10,764 10,428 9,827 9,827 9,827 9,827 9,827 151,558
Utilities:
Electricity 832 1,101 1,082 674 807 824 853 802 802 802 802 802 10,183
Water 6,169 6,181 5,099 4,596 3,425 4,151 2,797 3,822 3,822 3,822 3,822 3,822 51,528
Garbage 313 166 167 166 167 166 166 313 313 313 313 313 2,876
7,314 7,448 6,348 5,436 4,399 5,141 3,816 4,937 4,937 4,937 4,937 4,937 64,587
Admin&Other:
Advertising 0 711 0 301 807 260 0 167 167 167 167 167 2,914
Office Salaries 2,794 0 3,900 4,580 3,022 2,518 3,629 2,910 2,910 2,910 2,910 2,910 34,993
Payroll Tax 550 0 795 1,008 567 524 738 512 512 512 512 512 6,742
Employee Benefits 524 0 476 104 127 77 87 225 225 225 225 225 2,520
Workers Comp 241 0 352 460 243 234 327 212 212 212 212 212 2,917
Management Fee 0 2,610 2,610 2,610 5,220 2,610 2,610 2,610 2,610 2,610 2,610 2,610 31,320
Legal 181 126 55 0 0 126 208 208 208 208 208 1,528
Auditing 0 0 0 0 0 0 3,300 275 275 275 275 275 4,675
Telephone 410 446 468 614 515 335 561 110 110 110 110 110 3,899
Training 62 223 265 246 242 166 17 50 50 50 50 50 1,471
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CHT LANDINGS-CASH BASIS ATTACHMENT A
JULY AUG SEPT OCT NOV DEC JAN FEB MARCH APRIL MAY JUNE TOTAL
Office Supplies 593 237 116 403 321 270 380 167 167 167 167 167 3,155
Postage 48 0 48 48 190 48 48 71 71 71 71 71 785
Misc.Administrative 175 0 319 41 83 42 406 109 109 109 109 109 1,611
HOA Dues 4,350 0 4,350 0 0 1,450 1,450 1,450 1,450 1,450 15,950
Social Services 0 0 0 0 0 0 2,000 667 667 667 667 667 5,335
Tenant Activities 0 0 0 0 0 0 0 73 73 73 73 73 365
Credit Bureau 180 120 0 0 640 320 40 229 229 229 229 229 2,445
10,108 4,473 9,349 10,470 16,327 7,404 14,269 10,045 10,045 10,045 10,045 10,045 122,625
Property Taxes 0 0 0 0 0 0 10,092 10,092
Insurance 0 0 22,897 26 22,923
0 0 22,897 26 0 0 10,092 0 0 0 0 0 33,015
Mortgage Loan Interest 4,191 4,294 4,278 4,129 4,231 4,083 4,179 4,172 4,162 4,151 4,140 4,129 50,139
Total Operating Expenses 36,470 39,563 57,973 35,755 37,188 27,392 42,784 28,981 28,971 28,960 28,949 28,938 421,924
Net Income/Loss 7,308 781 (14,587) 4,478 10,865 16,724 (4,118) 12,125 12,135 12,146 12,157 12,168 82,182
Taxes&Insurance:
Property Taxes Escrow 0 0 0 0 841 841 841 841 841 4,205
Property Insurance Escrow 0 0 1,833 0 1,833 0 1,833 1,833 1,833 1,833 1,833 12,831
Debt Service-Principal 8,531 8,546 8,560 8,574 8,587 8,604 8,617 8,629 8,639 8,650 8,660 8,672 103,269
Replacement Reserve Contribution 71 78 78 1,702 1,702 72 66 1,702 1,702 1,702 1,702 1,702 12,279
Operating Cash Activitiy (1,294) (7,843) (23,225) (7,631)1 576 6,215 (12,801) (880) (880) (880) (879) (880) (50,402)
CASH RECONCILIATION:
Beginning Cash Balance 994 7,000 783 455 1,042 7,811 14,026 1,225 33,704 32,824 31,944 31,065 994
Operating Cash Activity(See Above) (1,294) (7,843) (23,225) (7,631) 576 6,215 (12,801) (880) (880) (880) (879) (880) (50,402)
Transfer from T&I to Cover Cash Deficit 7,300 1,626 0 8,926
Funds from Operating Reserves 22,897 0 22,897
Funds from Carrboro 30,000 30,000
Funds from Insurance Proceeds/County 8,218 6,193 3,359 17,770
Ending Cash Balance 7,000 783 455 1,042 7,811 14,026 1,225 1 33,704 32,824 31,944 31,065 30,185 30,185
RESERVE PROJECTIONS
The Landings at Winmore
Carrboro,NC Age 9 10 11 12 13 14 15 16 17 18 19
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
APPLIANCES:
RANGE $1,000.00 1 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
REFRIGERATOR $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
OTHER $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
CARPET,VINYL&TILE
CARPET/LVT $15,000.00 $15,000.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00 $9,000.00
TILE
CABINETS:
KITCHENS $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00
BATHROOMS $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00
D R :
EXTERIOR $ 5,000.00 $ 5,000.00
INTERIOR
OTHER
WINDOWS:
WINDOW COVERINGS
HEATING&AIR COND.
GAS HEATING
AIR CONDITIONING $ 3,800.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00 $ 8,000.00
PLUMBING:
WATER HEATER $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00
BATH SINKS
KITCHEN SINKS
FAUCETS
TOILETS
LIFT STATION
TUBS $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00
BATH WALL TILE
OTHER
STRUCTURES:
WINDOWS $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00
SCREENS
INTERIOR PAINT
ROOFING
SIDING
EXTERIOR PAINT $5,000.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 30,000.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00
STORM DOORS
WOOD STAIRS $ 7,500.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 7,500.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00
PRESSURE WASHING
OTHER
PAVIN
ASPHALT
CONCRETE $3,500.00
SEAL&STRIPE $4,000.00 $ 4,000.00
OTHER
LANDSCAPE:
LANDSCAPING $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00 $ 2,000.00
FENCING
RECREATION AREA
SIGNS
RETAINING WALL
OTHER $ 8,000.00 $ 3,000.00 $ 3,000.00
ACCESSIBILITY: OTHER $ 5,000.00
504 $ 1,000.00
OTHER:
OTHER:
OTHER:
TOTAL EXPENSES $ 38,800.00 $ 38,500.00 $ 39,500.00 $ 28,500.00 $ 28,500.00 $ 31,500.00 $ 77,500.00 $ 37,500.00 $ 32,500.00 $ 32,500.00 $ 35,500.00
YEAR BUILT 2010 58
UNITS 58 '
SITE NO 480
PROJECTION 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
RESERVES $ 78,142.90 $ 59,760.90 $ 62,495.62 $ 45,079.73 $ 39,547.20 $ 34,933.37 $ 28,274.99 $ 23,389.72 $ 34,021.03 $ 38,577.59 $ 42,016.40
OWNER DISTRIBUTION
NEW RESERVES $ 20,418.00 $ 21,234.72 $ 22,084.11 $ 22,967.47 $ 23,886.17 $ 24,841.62 $ 25,835.28 $ 26,868.70 $ 27,943.44 $ 29,061.18 $ 30,223.63
OWNER CONTRIBUTION 20000.00
CAPITAL EXPENDITURE $ 38,800.00 $ 38,500.00 $ 39,500.00 $ 28,500.00 $ 28,500.00 $ 31,500.00 $ 77,500.00 $ 37,500.00 $ 32,500.00 $ 32,500.00 $ 35,500.00
RESERVE BALANCE $ 59,760.90 $ 62,495.62 $ 45,079.73 $ 39,547.20 $ 34,933.37 $ 28,274.99 $ (23,389.72) $ (34,021.03) $ (38,577.59) $ (42,016.40) $ (47,292.78)
PUPY 114.48 107.75 70.66 56.82 46.33 34.82 26.88 36.66 39.13 40.25 42.92
RESERVES PER UNIT 77 681.85 602.30 87.50 (403.27) ) )
SIDING TYPE Vinyl/metal/Hardyboard
ROOFS REPLACED
ASPHALT OVERLAYED
ASPHALT SEAL
WINDOWS REPLACED
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RES-2019-019 Attachment 3
RESOLUTION
AUTHORIZING THE APPROVAL OF A FINANCIAL ASSISTANCE AWARD TO
COMMUNITY HOME TRUST (CHT)
FOR THE LANDINGS AT WINMORE APARTMENT COMPLEX
BE IT RESOLVED, the Orange County Board of Commissioners approves the following
award to Community Home Trust (CHT) for the Landings at Winmore Apartment
Complex:
Financial Assistance Award
$60,000 in County funds will be allocated to the Community Home Trust (CHT) to
assist in ensuring adequate operational and capital reserves as it relates to the 58-unit
apartment complex known as the Landings at Winmore located in Carrboro, North
Carolina; and
BE IT FURTHER RESOLVED, that the County Manager, after consultation with the
County Attorney, is hereby authorized to execute the applicable agreement with CHT
and include the necessary reporting requirements as part of the agreement in order to
periodically review performance and ongoing improvement of the identified challenges
at the Landings at Winmore Apartment Complex.
This the 19th day of March 2019.
Penny Rich, Chair
Orange County Board of Commissioners
SEAL