Loading...
HomeMy WebLinkAboutAgenda - 08-19-08- 4yORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 19, 2008 Action Agen a Item No. - SUBJECT: Deferred Loan Request -Whiffed Forest Apartments DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Owner Letter Tara L. Fikes, 245-2490 Promissory Note Location Map PURPOSE: To consider approval of a two year deferral of principal and interest payments from the Whiffed Forest LLC for the CDBG loan awarded to them for the Whiffed Forest Apartments. BACKGROUND: In 1992, the County received a CDBG award in the amount of $250,000 to assist in the construction of the Whiffed Forest Apartments in Hillsborough. These funds were provided to the project for infrastructure costs as a loan that would be repaid to the County with a Promissory Note signed on April 21, 1994. A copy of this Promissory Note is attached to this abstract. Actual cash payments have been received since the year 2000 as prescribed in the Note with the last payment received in 2007. A total of $65,461.00 has been received as of this date. County staff received the attached letter from Shelter Resources Corporation (SRC), the General Partner of the Whiffed Forest Apartments, requesting deferment of the annual payment due in 2007. After some discussions, SRC also is requesting deferment for 2008 as well. SRC is making this request based on the County tax office withdrawing its tax-exempt status because the LLC is not anon-profit entity. According to SRC, assuming responsibility for the property taxes has strained the complex's operational budget. Additionally, in recent years, the apartment complex has had difficulty maintaining high occupancy rates and thus has lost potential rent revenue. Staff understands that the current management company is making strides to increase occupancy and thereby increase rent revenue that can be used to cover debt payments. There remains the need for these 35 units of affordable rental units for families in Hillsborough and, with proper management, the vacancies should be able to decrease. FINANCIAL IMPACT: Funds received from this CDBG loan are program income for the County and may be used for other local affordable housing initiatives. Deferment of these payments will delay the receipt of approximately $22,216 by the County until 2009. If this request is approved, the Whiffed Forest LLC will need to execute an amended Promissory Note that details the change in payment schedule. RECOMMENDATION(S): The Manager recommends that the Board approve a two year deferral of principal and interest payments from the Whiffed Forest LLC for the CDBG loan awarded for the Whiffed Forest Apartments. SRCORPORg110N May 13, 2008' Ms. Tara I: ikes D%rector Orange County Housing artd Community,Devetopment Dept: P.O. Box 8181 300 West Tryon Street Hillsborough, NC 2727$' RE; Whined Forest Apartments 115 Holiday Park Kaad Hillsborough; NC 21278 Dear Ms. Fikes: t~C'D MAY ~ 6 20 This letter is in reference to the current economic situation at Whiffed Forest Apartments. As you are aware there is a seeond.mortgage which was'ssued'by your offices and has a required. payment for 2007 of $t I,108.OU. Please allow us'to explain our cur~~ent situation. In March ofthis year a partnership- meeting was held to discuss the ongoing issue of the property's Real Estate Tax Abatement and the inability of Hillsborough Affordable Housing Corporation to meet:.partnership ©perating defcits. As you may be awa~•e the Real Estate Tax. Abatement F~as withdrawn by the Gouniy claiming the properly had to be owned 100% by a non profit. On March 12, 2008 Hillsborough Affordable Housing Corporation withdrew as the General Partner due to its liability to :meet operat=ing deficit requirements, Art-affili~t~e oftho Limited Partner,_Shelter Resources Corporation, became the iiew Genera! Partner'. The-new General Partner funded the Real Estate tax bill in March 2003'in the amount of $24,870:.. The property has no reserve accounts since the County taxing authority seizedthe Partnership's; reserve accounts and the other cash: accounts to pay for the 2406: real estate taxes. Additio~ially the property continues to suffer with vacancy losses ofgreater#Itan 10% and as of Mhy I, 2008. the plrysical vacancy at the property was 20%. Due to the ~tery unfavorable. economic conditions of the property, v~~e respectfully regrzest_a deferral of the 2007 principal and. nteresf pa}~rnent to Orange County in the amount of $11,1 D8. (f you should require any additional information„please contact me at 714-662-5565 Ext. 1 l3 Sincerely, David Shafer President Shelter Resource Corporation. ='• t'~ 17782 Sky Park Circle ~ Irvine:., CA 92G i ~ G4tf4 • Phone 714/CG2-55GS ~ FAX 714/G62-4412. ~ tiv+vFV.wn~inccom NORTH .CAROLINA ORANGE CaT7NTY` $:250, tI40.00 PRQ~iISSORY 1~QTS. _ ~C i( ~, 13 FOR VALUE RECEIVED, the undersigned promises to pay to the. order. of Orange County~':North Carolina, ,ts successors or assigns, at'ite pffce in Hillsborough, North Carolina, in lawful money of the IIn.ted States of America, the principal sum> of Two hundred . Fifty Thousand: and NoI100 Dollars {$250,400.OQ}, with interest thereon on -the whole amount of principal .remaining unpaid from time to time: at the rate of zero per cent {fl~~ per annum for the first five (5 } years,; one .per cent: (I~ ~ per ann~un fat years gx through ten, and three per cent (3~& j per annum for years eleven. through twenty unless, du=nq years ele,vex~ through twenty, interest rate increases on the Central Carolina Bank and Trust.. Company first mortgage. loan. to the maker of this note on the Whined Forest Limited Partnership-owned property,; in which. event the interest rate will, be a maximum of 3~:and not more than an amount necessary to maintain. a debt service coverage ratio of 1.~ between years 11 and 20. The principal and: interest shall. be due and payable annually as follows: Years one through. five - -0-,• Years six through ten - -Eight Thousand Four Hundred Sixty-N.ne and No/100 Dollars ($8, 469.00 ~ axnualiy on the ~tsT shay of commencing ~~ V~ ~ ~~ ~ ,~, • 20Qfl 1 Years eleven through nineteen --Eleven Thousand One Hundred Eight and DTo/100 Dollars ($:11,10$.00} annually on the day of , commencing ~" r~!'r ~ ~ 2;005; And a final payment of One. Hundred Seventy-Eight Thousand Eight ~~nndred Thirty-Twottand No/':100 Dollars {$'I78832.00) on the __ day of ' t_ , 2014, If not s©oner paid, 'the entire re~tuainng indebtedness shall be due and. ;payable- on ~'t ~.. '~~. . 2"`014. If payable in installments, each such installment shall., unless otherwise provided, be applied first to payment of interest. then accrued: and due an the unpaid principal. balance., with the remainder applied to the unpaid principal.:,:. iTnless otherwise provided, this note may be prepaid in full.. or in part at any tune withaut penalty or premium. Partial prepayments shall be applied to installments due in reverse order of`ther maturity. Zn the event of ta) default in payment of any .installment of principal or interest hereof as thee. same becomes due and such; default is not cured within ten (; lO j days from the. due date , or { b default under--the terarts of any :instrument: securing this note, and such default is not cured within fifteen (],5} days after-written notice:. to makez, then in either such event the. holder may without. further notice, declare the remainder bf 'the principal sum,, together with all. .interest accrued„ thereon, at once due and: payable. Failure to exercise this option shall not constitute a. 2 waiver of the right tca exercise the. same at any other time. The. unpaid principal of this Hate and any part thereof, accrued interest and all other sums due under this note and the deed cif trust:, if any, shall bear interest at the rate of three per cent (3~) per-annum after default until paid. Ali parties to this note, incinding maker and any sureties, endorsers or guarantors... hereby waive protest, presentment, notice . of diahaner and.. notice.. of acceleration of maturity and agree to continue to remain bound. for the: payment of principal, .interest and all other sums due and®r this.: Hate: and the deed. of trust notwithstanding any change or changes by way of releases. surrender, exchange, madficat3.on or substitution of any security for thfs note ar by way of any extension or extensions of time for the payncent of grinci:pal and interest..; and all such parties- waive all. and ever-kind of notice of-such .change or changes and agree that the same may be made without notice or consent o~ any of them. This note shall be Han-recourse as to its.. maker, Whitted Forest Limited,Partnershig (:the:".Borrower") and the holder hereof agrees to look on]:y to the assets. of the Borrower and neither H3.llsborough Affordable Hous..ng Corporation.,.. Tnc, as the Borrower's:; .general partner, nor any other partner of the Borrower: shall 'have any personal liability or responsibility for the repayment hereof. Upon default the. holder: of this- .note may employ an attorney to enfoxce the holder's rights and remedies and the maker, principal, surety, guarantor and endorsers of this note hereby agree to pay to 3 V the holder raaz~onable attorneys :fees. not exceeding-a sum equal to fifteen per-cent ~15~) of~the outstanding balance owing on said. note, plus all other reasonable expenses incurred by the holder in ereresi.nq' any of the hclder`'s rights anci reiaedies upon default, The rights and remedies of the holder as provided ;n tha;s note and any instrument securing this note.. shall be cumulative ;and may be pursued. singly,.: successively or together against the property described in the. deed a~ trust or any other funds, property or security held by the holder :tor payment ar security, in the sole discretion of the holder. The failure to exercise any such right or remedy shall. not.. be a waiver or xe3ease of such rights or remedies or the right to exercise. any of them at another tame. This ..note is to be governed and construed .in accordance with the lam of the State of North Carolina.. This note is given for an actual loan of Tt~ Hundred: `Fifty Thousand and No/100 Dollars ($250, 000.00') , and is secured by a deed. of tna.at of even date here~rth t4 Geoffrey E Gledhill, trustee, conveying real estate ownedhY Whtted Forest Limited Partnership located in Orange County, North Carolina which is a second lien. upon the property therein described.. IN TESTIMONY WHEREaF, Whined Forest .Limited Partnership has caused this instrument to be executed by its general partner, Hillsborough Affaxdable Housing Corporation, Inc., and Hillsborough Affordable Housing Corporation, Inc. has caused this instrument to be executed in its corporate name by a:ta President, attested. by its _ Secretary and its corporate. seal to be hereto affixed, 4 i all by order of its: 'Board of Directors first. dulg given, the: day and year first above written.. ATTESTS l1~a ,L Secret ATTEST: - ~-~ . Secret( HILI,SBflROIIG'~ AFFORDABLE SOIISING CORPORATION., INC; Ntiifhlr~ By: ~ ~~,~,,, `char Hildebrandt.. ~•, .~ President- .~ ~ ., s QQ~,~~~ (coxPORAT~ SEAL) ~ ~ ~~ WHTTTSD FOREST `LIMITED- PARTNERSS'1~! By: Hillsborough Affordable Housing Coxporatan, Inc., General Partner Richard Hildebrandt president (CORPORAT$ S~ALj 5 You Count In Orange County Page 1 of 1 Oran a Count N.C. GIS Ma z~ .~---- - „~~~~~." ,.-~.. ti ...~--~ is map contains parcels prepared for the inventory of real property within orange County, and Is compiled from recorded deeds, plats, and Iher public records and data. Users of this map are hereby notified that the aforementioned public primary Information sources should be nsulted for verification of the information contained on this map. The county and Its mapping companies assume no legal responsibitlty for the nformation contained on this ma . This Pa a Printed Monda , Au ust 11, 2008 2:43 m Parcels Current Thru 7/17/2008. Owner Information Current Thru 4/29/2008 Parcel Identification Number: 9865503608 L7 Summary ~ Building CJ Land CD Documents D Prior Owners (7Addresses Create Print Data Page http://gis.co.orange.nc.uslservlet/com, esri.esrimap.Esrimap7ServiceName=YouCountGlS... 8/11 /2008