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KANNAPOLIS <br />City Manager <br />City of Kannapolis <br />May 10, 2010 City Council Meeting <br />Staff Report <br />TO: Mayor and City Council <br />FROM: Irene Sacks <br />SUBJECT: HOME funds for Forest Park Crossing Apartments <br /> <br />A. Action Requested by City Council <br />Motion to approve a loan for $224,450 for the Forest Park Crossing apartment community. <br />B. Required Votes to Pass Requested Action <br />Majority at the meeting <br />C. Background <br />The City of Kannapolis loaned $220,500 in HOME funds to Douglas Development for the Villas at <br />Forest Park, a 64-unit senior, low-income apartment community off Little Texas Road. The <br />apartments opened in Spring 2009 and leased up quickly. The loan was at 2% interest for 20 years, <br />and the first payment of $13,385.64 is due on July 1, ZOIO and will be treated as program income for <br />the City. <br />Douglas Development owns the parcel adjacent to the Villas (and next to Forest Park Elementary) and <br />has plans to build aloes-income family apartment community there. Called Forest Park Crossing, it <br />would be 56 units for families at 60% of area median income or below (roughly $40,000 fora 4- <br />person family). The total investment for the project is $7.8 million. The construction materials and <br />quality would be comparable to that for the Villas at Forest Park. A community center, playground, <br />picnic areas are planned. The developers would hire a management company that conducts strict <br />criminal and background checks on applicants, and they will invite the Kannapolis Police Department <br />to be part of that process from the beginning, <br />Douglas Development is submitting an application to the North Carolina Housing Finance Agency <br />(NCHFA) for tax credits. The process of being awarded the tax credits involves a scoring system that <br />includes paints for various factors, one of which is a contribution from the local government toward <br />the funding of the project. Douglas Development has approached the City of Kannapolis to request a <br />loan from HOME funds to generate additional points needed to make their application competitive. <br />G-3 <br />Attachment number 6 <br />Pa~e197 <br />