Agenda Item # 1
Columbus Consolidated Government
Council Meeting
March 24, 2009
Agenda Report # 365
TO: Mayor and Council
SUBJECT: Property Acquisition - 801 9th Street
INITIATED BY: Department of Community Reinvestment
________________________________________________________________________________
________
Recommendation: Approval is requested to purchase a 17 unit gated Senior
Living Facility known as Legacy Terrace located on 1.96 +/- acres at 801 9th
Street (a/k/a Tax Map 019 010 005) in the Liberty District in Columbus,
Muscogee County, Georgia (see attached map).
Background: 4th Street Tower, Inc., was selected in 1992 to serve as the
City?s designated Community Development Housing Organization (CHDO) as required
by the Department of Housing and Urban Development?s (HUD) HOME Program. As
part of the HOME Program, each jurisdiction is required to allocate a minimum
of 15% of the jurisdiction?s entitlement to the CHDO annually.
4th Street Tower, Inc. used $944,367 of its CHDO allocation over a three-year
period, FY2005 - FY2007, plus a loan of $1.5 million from a private lending
institution to construct/build the Legacy Terrace facility at a total cost of
$2.5 million. As part of the HOME Program funding, seven of the units are
required to be designated for persons of low and moderate income (80% or less
of median income). These seven units must remain available for low and
moderate-income citizens for 20-years (affordability period). The
affordability period means that in 20 years the federal grant is forgiven and
no pay back of HOME funds is required. If the facility is not maintained by
the CHDO for the entire affordability period, payback of HOME funds is
required. Ten of the seventeen units can be market rate rent and seven must be
maintained for elderly throughout the affordability period as required by HUD.
Analysis: 4th Street Towers, Inc./CHDO was able to obtain a
construction/building loan of $1.5 million from a private lending institution
to combine with the City?s CHDO allocation of $944,367 by putting up eight (8)
other properties built and/or rehabilitated in earlier years (with CHDO funds
allocated to 4th Street Towers Inc./CHDO) as collateral. In recent months, 4th
Street Towers, Inc./CHDO has struggled to make the mortgage payments on Legacy
Terrace with only four of the seventeen units rented.
4th Street Towers Inc./CHDO made the City aware of their struggle as the City
is responsible for the administration of the HOME funding, ultimately
responsible for payback, if the 4th Street Tower Inc./CHDO is not able to
continue ownership of the property through the end of the affordability period
(would be the same with any organization approved as the City?s CHDO). After
exploring all available options with the 4th Street Towers, Inc./CHDO, we have
concluded that allowing the property to go into foreclosure is not the best
option for the City because of the payback requirement due to the affordability
period (would require the City to return to the federal government $1,667,000
and lose Legacy Terrace and the eight (8) other properties used as collateral
where CHDO funds are associated). Therefore, after consulting with outside
legal representation, City?s and 4th Street Towers, Inc./CHDO, and much
negotiation with the lien holder and 4th Street Towers, Inc./ CHDO, we have
concluded that it is in the city?s best interest to purchase the Legacy Terrace
for $1,000,000. After the purchase, the City will begin negotiation with the
Columbus Housing Authority to manage the facility for seniors and its Section 8
program until the affordability period is completed. After the affordability
period, the City would be in a position to sell the Legacy Terrace facility at
fair market value and return the proceeds back to the appropriate City?s
funding source (the 1999 SPLOST ? Liberty District Fund for property
acquisition and infrastructure improvements). 4th Street Towers, Inc./CHDO will
put up $350,000.00 to keep the eight (8) properties they used as collateral
that have CDHO funds associated with them.
Financial Considerations: The required funding by the city to purchase the
Legacy Terrace property from 4th Street Towers, Inc./CHDO is $1,000,000. The
city?s funding for this purchase would come from the 1999 SPLOST ? Liberty
District. The appraisal from an independent appraiser for the Legacy Terrace
facility is $910,000. The cost to 4th Street Towers to construct the Legacy
Terrace facility in 2006 was $2.5 million.
Legal Considerations: The purchase of property requires Council approval.
Recommendations/ Actions: Approve the attached resolution to purchase a 17
unit gated Senior Living Facility known as Legacy Terrace located on 1.96 +/-
acres at 801 9th Street (a/k/a Tax Map 019 010 005) in the Liberty District in
Columbus, Muscogee County, Georgia (see attached map).
A RESOLUTION
NO.
A RESOLUTION AUTHORIZING THE PURCHASE OF 801 9TH STREET A/K/A TAX MAP
019 010 005 FROM FOURTH STREET TOWERS, INC., IN THE LIBERTY DISTRICT, IN
COLUMBUS, MUSCOGEE COUNTY, GEORGIA (SEE TAX MAP).
WHEREAS, 801 9th Street a/k/a Tax Map 019 010 005 is to be acquired to preserve
existing housing as a Senior Living Facility; and,
WHEREAS, the total acreage of property is 1.96 +/- acres; and,
WHEREAS, it has been determined the price of $1,000,000 is fair and equitable;
and,
WHEREAS, funding for this purchase would be made from the 1999 SPLOST ? Liberty
District Fund.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS
FOLLOWS:
That the City Manager is hereby authorized to purchase the 17 unit gated senior
facility known as Legacy Terrace on 1.96 +/- acres of property at 801 9th
Street a/k/a Tax Map 019 010 005 for the purchase price of $1,000,000 from 4th
Street Towers, Inc., using monies from the 1999 Special Purpose Local Option
Sales Tax/SPLOST ? Liberty District Fund.
Introduced at a regular meeting of the Council of Columbus, Georgia,
held the _________day of _____________, 2009 and adopted at said meeting by the
affirmative vote of ____________members of said Council.
Councilor Allen voting __________.
Councilor Anthony voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Hunter voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
Attachments