Title
Resolution Authorizing the City Manager to Enter into an Agreement with Landmark Asset Services, Inc., for Partial Loan Forgiveness to Preserve Affordable Housing
Body
LEGISLATIVE INTENT/PURPOSE:
WHEREAS, City Council has identified workforce and affordable housing as a priority in the City’s Strategic Plan; and,
WHEREAS, the City joined with New Hanover County to create the Workforce Housing Advisory Committee (“WHAC”); and,
WHEREAS, in March of 2021, the WHAC presented a Housing Needs Assessment for Wilmington and New Hanover County prepared by Bowen National Research in which the need for affordable rental housing was identified and quantified; and,
WHEREAS, the study found that over 52% of renters in the City of Wilmington pay more than 30% of their income for rent, meeting the definition of housing cost burdened; and,
WHEREAS, the study identified a gap or need for approximately 4,153 rental units per year for households earning less than 80% area median income (“AMI”) during the period 2020-2030; and,
WHEREAS, beginning in 1990, the City has provided loans to Landmark Asset Services, Inc. (“Landmark”), to support the repurpose and rehabilitation of James A. Walker Apartments to provide affordable housing for households with incomes at or below 60% AMI; and,
WHEREAS, Landmark has submitted a preliminary application to the North Carolina Housing Finance Agency (“NCHFA”) in the 2024 cycle to receive Low Income Housing Tax Credits (“LIHTC”) to rehabilitate a 37-unit multi-family senior housing project, James A. Walker Apartments, at 1020 Rankin Street, Wilmington, NC (“the Project”); and,
WHEREAS, completion of the Project will address all outstanding City Code Enforcement violations, as well as extending the useful life of the building by substantially renovating the units, replacing all mechanical systems, modernizing the elevator, rebuilding the windows, and replacing the roof; and,
WHEREAS, a feasibility study has shown that the existing debt is unsustainable for the Project’s size, so Landmark has requested that the City consider forgiving some of the existing debt, including a $15,000 repair loan, a $174,500 acquisition loan, and accrued interest on the rehabilitation loan; and,
WHEREAS, in exchange for the requested loan forgiveness, Landmark will pay off the principal of the rehabilitation loan in the amount of $215,000, and the $43,000 repair loan, for a total of $258,000; and,
WHEREAS, the Project preserves the supply of affordable rental housing to eligible senior citizens earning at or below 60% AMI, and the project leverages non-City funds to address the City’s affordable housing shortage.
THEREFORE, BE IT RESOLVED:
THAT, the City Manager and the City Attorney are hereby authorized to draft and execute all documents necessary, including Memorandum of Understanding, with Landmark Asset Services, Inc., for the forgiveness of the $15,000 repair loan, the forgiveness of the $174,500 acquisition loan, and any accrued interest on the rehabilitation loan, in order to substantially rehabilitate 37 units of affordable senior housing for households earning 50% and 60% AMI.
THAT, the partial loan forgiveness shall be contingent upon completion of the memorandum of understanding, the project securing all required funding, the repayment of remaining principal balance of the current rehab loan in the amount of $215,000, the repayment of the $43,000 repair loan, and the issuance of a building permit.