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Based on the number of units, the minimum amount that would need to be loaned to score points with NCHFA is $224,450. The loan would be structured very similarly to the one for Villas at Forest Park, and would generate a comparable amount of program income coming back to the City over the next 20 years. A local government contribution is not required, but may make the project less competitive. The City of Concord has approved a Loan for about $340,000 for Douglas Development to build a senior apartment community in the Logan area. The City of Salisbury also approved a loan for $150,000 fox Douglas Development to build a senior apartment community. In addition, the City of Winston-Salem has agreed to loan $550,000 to Douglas Development for the development of a G4- unit low-income family apartment community. The Public Works Department has determined that there is sufficient sewer capacity to accommodate this development. D. Fiscal Considerations Funding of this project would require a little over two years of HOME funds dedicated. The HOME funds potentially available to commit to the Forest Park Crossing project aze: ^ $125,301 from the 09-10 HOME grant -currently planned for downpayment assistance ($20,000), and the remainder for acquisition & rehab of homes in the Carver area for the CCM Teaching Housing partnership. ^ $124,597 from the 10-11 HOME grant -currently planned far acquisition & rehab of homes in the Carver area for the CCM Teaching Housing partnership. The annual HOME allocation is not the only source of HOME funds; additional HOME funds will come back to the City in the form of program income when the two houses constructed by Prosperity Unlimited are sold (estimated $190,000 #otal in program income). A public hearing would be required by HUD prior to final commitment of HOME funds. E. Policy Issues Staff's assessment of the pros and cons of funding this proposal is: PROS: ^ The housing market analysis conducted by staff during the development of the 2010-15 Consolidated Plan showed a need. for more units in Kannapolis affordable to low income families. A third parry consultant who conducted a housing market analysis as part of Douglas Development's application for the tax credits to the NC Housing Finance Agency confirms this need. ^ Douglas Development has shown high quality development and very goad property management through their Villas at Forest Park project. Examples of their projects in other cities have also been consistent with this assessment. Community Development Program Administrator Sherry Jones contacted the Chief of Police in the City of Danville, VA to see if there were any crime issues associated with a Douglas Development community there, and he said there were not. If a low income apartment community were to be constructed in Kannapolis, staff would have more confidence with Douglas Development doing a quality job rather than another unknown group. Attachment number 6 G-3 Page 193