Title
Option and Lease of City-Owned Property for Affordable Housing
Action
Action:
A. Adopt a resolution approving an option to ground lease agreement and a 99-year ground lease of 1.73 acres of city-owned property located at 7605 University City Boulevard (parcel identification number 049-241-15) with Merit AH, LLC, and
B. Authorize the City Manager, or his designee, to negotiate and execute all documents necessary to complete the option and ground lease of the property.
Body
Staff Resource(s):
Rebecca Hefner, Housing & Neighborhood Services
Phil Reiger, General Services
Gregory Crawford, General Services
Explanation
* On February 14, 2022, City Council authorized the City Manager and staff to work with Merit AH, LLC, a North Carolina limited liability company (Merit), and an affiliate of DreamKey Partners, Inc. and Conifer Realty, LLC, to finalize a preliminary affordable housing proposal and negotiate a long-term ground lease for an affordable multi-family rental housing development proposed to be called The Merit Apartments (Development).
* The Development is proposed to consist of 68-units and will be located on approximately 1.73 acres of city-owned property at 7605 University City Boulevard (parcel identification number 049-241-15) zoned TOD-NC and in Council District 4 (Property).
* Merit has requested a one-year Option to Ground Lease (Option) the Property with two, six-month extension options (collectively, the Option Period). During the Option Period, Merit will perform due diligence and secure financial commitments before exercising the Option.
* The extension options will be conditioned upon Merit successfully receiving a 2024 Low Income Housing Tax Credit Award from the North Carolina Housing Finance Agency as applicable and demonstrating substantial progress in finalizing their overall project financing.
* The terms of the Ground Lease are as follows:
* Lease Term: 99 years
* Affordability Period: 99 years
* Rent: $1.00/year
* Housing U...
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