Agenda Item #
Columbus Consolidated Government
Council Meeting
May 9, 2017
Agenda Report #
TO: Mayor and Councilors
SUBJECT: Redevelopment Proposal for Claflin School
INITIATED BY: Community Reinvestment Department
Recommendation: Approval is requested to revise the current lease agreement
with Friends of Historic Claflin to allow for the conversion of the school into
44 (+/-) units of affordable housing, with an area of the school to be
set-aside for educational programs and to display the school?s history.
Background: The current agreement approved by City Council per Resolution
411-16 is to allow Friend of Historic Claflin (FHC) to redevelop the school
into an educational facility. The current approved schedule is for the
abatement, stabilization, and replacement of roof to be completed by June 2017.
The restoration is to begin in July 2017 and be completed by May 2020.
Friends of Historic Claflin have not been successful in raising the required
amount of funding to move forward with this project. They have been approached
by an affordable housing developer, Oracle Housing, LLC (the Developer) with a
proposal to redevelop the school by converting it into 44 (+/-) units of
affordable housing, with a portion to remain dedicated to educational programs
and to display the history of the school. The Developer would utilize
Low-Income Housing Tax Credits (LIHTC) and Historic Tax Credits for the
redevelopment. The development is estimated to cost approximately $12 million.
Developer is aware of the educational deed restriction on the Claflin property
which would require the federal government to release or interpret the
educational use restrictions in order for the affordable housing development to
go forward. Developer has agreed to undertake the preliminary phases of this
project entirely at its own risk, bearing full responsibility for all costs
incurred during the preliminary development period even if the deed
restrictions are not removed and the project cannot move forward. If they are
awarded the tax credits, and the deed restrictions are lifted, they anticipate
this project will be completed by June 2019. FHC is requesting amendments to
the existing lease agreement between itself and the City to make it possible
for it to pursue this affordable housing project with the Developer.
Based on the (FHC) request, staff is recommending that the lease agreement and
any other agreements between the parties be revised as follows:
? Change the scope of the project to include the conversion of the school into
44 (+/-) units of affordable housing, with a portion of the school to remain
set-aside for educational programs and to display the school?s history.
? Allow FHC to enter into an agreement, the terms of which shall be approved by
the City, with Developer to carry out the redevelopment utilizing Low-Income
Housing Tax Credits and Historic Tax Credits.
? In a separate letter of understanding address to the City, Developer will
confirm that the previous Memorandum of Agreement it entered into with FHC on
February 8, 2017 is no longer of any force or effect. In that letter, Developer
shall also assume full financial responsibility for any loss it incurs as a
result of any expenditures it makes for the benefit of the project in the
event that the project cannot proceed because the Federal Government does not
lift the deed restriction or because Developer is unsuccessful in obtaining the
tax credits necessary for the project.
? The current lease between the City and FHC will be extended to 45 years due
to the requirements of the tax credit programs.
? The amendment to the lease will also provide that the lessee, FHC agrees to
submit annual audits prepared by a CPA, financial statements and tax returns as
well as an outline of its educational programming for the year and that an
update of the results of such required reporting will be made to the Council
annually.
? The amended lease will contain a mechanism for replacing the current
non-profit lessee with another non-profit or governmental entity in the event
that lessee is non-compliant with the terms of the lease.
Analysis: The redevelopment of this property will assist with the elimination
of blight, develop approximately 44 units of affordable housing, and create
local jobs.
Financial Considerations: The City will not incur any expenses associated with
the redevelopment of Claflin School. Friends of Historic Claflin and the
Developer will be responsible for all costs associated with the construction
and operations of this facility.
Legal Considerations: Council must approve all real estate transactions.
Recommendations: Authorize the City Manager to approve the revision of the
current lease agreement with Friends of Historic Claflin to allow for the
conversion of the school into 44 (+/-) units of affordable housing, with an
area of the school to be set-aside for educational programs and to display the
school?s history.
RESOLUTION
NO. ________
A RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND THE LEASE AGREEMENT
WITH FRIENDS OF HISTORIC CLAFLIN, INC TO ALLOW FOR THE CONVERSION OF THE SCHOOL
INTO AFFORDABLE HOUSING.
WHEREAS, Friends of Historic Claflin, Inc. (FHC) have been approached
by Oracle Consulting, LLC (Developer) with a proposal to redevelop the school
by converting it into affordable housing; and,
WHEREAS, the lease will be amended to (1) change the scope of the project to
include
the conversion of the school into 44 (+/-) units of affordable housing, with a
portion of the school to remain set-aside for educational programs and to
display the history of the school; (2) to allow FHC to enter into an agreement
satisfactory to the City Manager and the City Attorney with Developer, to carry
out the redevelopment utilizing Low-Income Housing Tax Credits and Historic Tax
Credits; (3) to extend the lease agreement to 45 years due to the requirements
of the tax credit programs; (4) to provide for annual reporting and monitoring
by Council of FHC?s performance under the lease; and (5) and to provide for the
replacement of FHC as lessee in the event of a breach of the agreement;and,
WHEREAS, Developer will confirm in writing to the City that the
previous Memorandum of Agreement it entered into with FHC on February 8, 2017
is no longer of any force or effect, and will also confirm that Developer
assumes full financial responsibility for any loss it incurs as a result of
any expenditures it makes for the benefit of the project in the event that the
project cannot proceed because the Federal Government does not lift the deed
restriction or because Oracle is unsuccessful in obtaining the tax credits
necessary for the project; and,
WHEREAS, the redevelopment of this property will assist with the
elimination of blight, develop new units of affordable housing, and new local
jobs.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS
FOLLOWS:
That subject to the terms and conditions set forth above, the City
Manager is hereby authorized to sign an amendment to the Lease Agreement
executed between Columbus Consolidated Government and Friends of Clafin, Inc.
Introduced at a regular meeting of the Council of Columbus, Georgia, held the
_________day of _____________, 2017 and adopted at said meeting by the
affirmative vote of ___________members of said Council.
Councilor Allen voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Garrett voting __________.
Councilor Henderson voting __________.
Councilor Huff voting __________.
Councilor Thomas voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Teresa Pike Tomlinson, Mayor
Attachments
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