HomeMy WebLinkAboutTB Minutes 2013-03-25 Meeting of the Ithaca Town Board
Monday, March 25, 2013 at 4:30 p.m.
215 North Tioga Street,Ithaca, NY 14850
Minutes
Board Members Present: Herb Engman, Supervisor; Bill Goodman, Deputy Town Supervisor;
Pat Leary, Tee-Ann Hunter, Eric Levine, Rich DePaolo, and Rod Howe
Staff Present: Susan Ritter, Director of Planning, Bruce Bates, Director of Code Enforcement;
Mike Solvig, Director of Finance; Jim Weber, Superintendent of Highways; Paulette Terwilliger,
Town Clerk and Dan Tasman, Senior Planner
Meeting was called to order at 4:30 p.m.
Agenda Item#2
Review Draft Agenda for Regular Meeting
Agenda Item#4 (moved up)
Report of Town Officials
Mr. Solvig handed out financial reports and reported that so far so good. It is only March, but
we are on track so far.
Mr. Weber handed out a memo on the equipment purchases that had been identified in the
budget and the status. He stated that we have been able to get some good prices by piggybacking
with the County, State Bids, and our own bidding process.
Ms. Ritter reported that Kirk Sigel, our long-time Chair of the Zoning Board of Appeals is
winning the David Allee Award for Outstanding Zoning Board Chair which will be presented at
the Planning Federation's meeting in April. Mr. Engman noted that he and Fred Wilcox will be
there and this award was named after a Cornelian so it is a nice circle.
Ms. Terwilliger reported that the newsletter will be mailed on April first so the Board is aware if
residents call with questions or comments. The next newsletter will be the last hardcopy sent to
every residence. The Clerk's office will be working on details of the electronic version soon.
Agenda Item#3
Update and Discussion on Tompkins County Biggs Property — Ed Marx from the County
and Rick Cowan from Neighborhood Housing Development (Attachment 1)
Mr. Marx recapped the project stating that an Request for Proposals (RFP) was sent out last
summer and they only received one response and that was from Better Housing of Tompkins
County and NFP, an affordable housing developer and they proposed a 70-unit townhome
project. Mr. Marx explained that the RFP had a number of criteria that were assigned points and
you had to meet a certain threshold of points and this proposal did meet the threshold even
though we wanted a mix. Mr. Cowan handed out a development description and a resident
acquisition plan which highlight the features of the proposal. Mr. Marx went on to say that the
focus would still be energy efficiency, common areas, community garden, limited parking areas,
pedestrian orientation, solar orientation etc. Designed to be mixed income from 30%- 90%
median income and a mix of age groups; not targeted toward a particular group.
Board comments
Ms. Leary asked how you could call it appropriate for aging in place if parking is not allowed
near the units and Mr. Marx stated that there would be some units that did. Ms. Leary also stated
that the up to 90% of median income is not close enough because the target we need, the missing
portion of housing is those that are median and somewhat above. Mr. Marx responded that that
is due to financing and that is where the State's requirements are to get the funding and they have
gone as high as they can to try and get a mixed community. One of the alternatives they have
proposed is to have some home-ownership options which would be above median. Ms. Leary
emphasized that the 90%-120% is the span that needs housing and Mr. Marx is proposing
everything but. Mr. Cowen explained that after the term of the project, the houses would be
available in that price range and there will be the opportunity for those living there to purchase.
He added that they are trying to do a mix and not a development such as the recent projects in
say the past 10 years. Ms. Leary wanted to make sure that once you are there, you can't be
evicted if your income goes up and Mr. Cowan responded that once you are there, you are there,
and your rent may go up with your income level, but you would not be ineligible.
Ms. Hunter went in to some detail with Mr. Cowan about the ownership possibilities at the end
of the term and he explained there are different scenarios and financing strategies with other
programs out there that would significantly reduce the price for a buyer and especially a person
who had lived there for some length of time. Mr. Cowan noted that the mission of Better
Housing of Tompkins County is for 40 year minimum of affordability and he used the Lansing
project as an example of how the numbers could work. Mr. Cowan said he doesn't have real
numbers because the plans aren't close to final yet but the commitment is to affordable housing.
Ms. Hunter was concerned that the affordability seems contingent on qualifying for other
programs, not simply income. She also wondered what type of say the Town would have in the
contract with the Home Association. Ms. Hunter also asked if they would be looking for a
PILOT and Mr. Marx and Mr. Cowan were noncommittal.
Ms. Leary asked if there was a possibility of decreasing the time frame of 15 years and Mr.
Cowan said there is not because of the tax-credits for the corporations.
Mr. Engman noted the time and stated that this is an informational discussion not an action item
and we now have materials to review.
Agenda Item#5
Continue review of Comprehensive Plan draft scoping document
Mr. Tasman noted the changes that came from the last meeting. The Board had
recommendations from Ms. Brock and discussed the time period throughout the draft scoping
Adopted 4/8/2013 TB 3/25/2013 pg 2
document and references in the Comprehensive Plan of 15-20 years based on the realistic
timeline of doing the next Plan. Ms. Hunter talked about the baseline being used for growth and
the transportation studies such as the West Hill Traffic Study because we assumed the
connection road at Bundy Rd would be completed but we really have no idea if it will. Mr.
Tasman responded that the assumption in the Study was for a completed build-out by 2050 and
we are looking through 2030 and we do not think that West Hill will come close to build-out in
that period of time and the new mixes of housing change the projections. Mr. Tasman thought
they would probably develop 3 scenarios with estimates of growth with different housing
development styles and new or different zoning.
Mr. Goodman asked about process. The Board discussed the process and the possibility of
setting the public hearing on April 81h for April 22"d to follow the second board meeting of the
month where from 4:30 — 6:30 the board would continue the review and the public hearing
would be from 6:30 until approximately 7:30. Ms. Ritter noted that residents could submit
comments in writing for the board to review as well as appear in person. Mr. DePaolo wanted to
make it clear that any discussion of the Comp Plan prior to the public hearing would not mean
that those sections or areas of discussion would be off the table for consideration after public
input and Mr. Engman and Ms. Ritter assured him it would not, and in fact that is the purpose of
the public hearing. Mr. Engman added that he would be at the Planning Federation and would
miss the meeting and asked if others would be out and no one else expected to be. Ms. Hunter
wanted to make sure publication and notification was more than adequate and Ms. Ritter noted
that they have a list of over 100 email addresses who get regular notices regarding anything to do
with the Plan. The Board accepted the draft scoping document with the changes from the
previous meeting as the final draft ready for public comment.
Agenda #6
Continue review of Comprehensive Plan Chapters 1 and 2
The Board reviewed the Introduction, Community Vision Statement and Chapter 2 — Goals and
Recommendations—Land Use and Development. Minor wordsmithing changes were made.
Mr. Howe asked what tone the board was looking for in the introduction because there is a
combination of visionary and regulatory in there. Mr. Engman responded that they wanted it to
be short so people would read it and give the impression of what we were trying to accomplish in
the rest of the document; the intent of what sort of changes we were trying to do and what sort of
community we wanted to have. There is a mixture of setting the stage of what the Town of
Ithaca is and what it needs to become while at the same time recognizing that this is not the first
start of this planning and thinking by the Town and there are some concepts that did not exist
during the last Comprehensive Plan planning.
Ms. Hunter added that there are some over-arching objectives such as sustainability, affordable
housing, and collaboration with other communities to set the stage.
The Board proceeded to go through each paragraph and section and made minor changes.
Adopted 4/8/2013 TB 3/25/2013 pg 3
The audio connection was lost at 5:38 p.m.
Agenda# 7
Consider Consent Agenda Items
a. Approval of Town Board Minutes of March 11"'
b. Town of Ithaca Abstract
TB Resolution 2013-051a: Approval of Minutes of March 11, 2013
MOVED: Bill Goodman SECONDED: Rich DePaolo
WHEREAS, the draft minutes of the March 11, 2013meeting of the Town Board have been
submitted for review and approval;
THEREFORE BE IT
RESOLVED, that the governing Town Board hereby approves the submitted minutes as the final
minute of the March 11, 2013 of the Town Board of the Town of Ithaca.
Vote: Ayes—Goodman, DePaolo, Leary, Levine, Hunter, Engman and Howe
TB Resolution No. 2013-051b: Town of Ithaca Abstract
Moved: Bill Goodman Seconded: Rich DePaolo
WHEREAS, the following numbered vouchers have been presented to the Ithaca Town
Board for approval of payment; and
WHEREAS,the said vouchers have been audited for payment by the said Town Board;
now therefore be it
RESOLVED, that the governing Town Board hereby authorizes the payment of the said
vouchers in total for the amounts indicated.
VOUCHER NOS. 3465 - 3545
General Fund Town wide 75,885.11
General Fund Part Town 7,446.46
Highway Fund Part Town 60,444.22
Water Fund 463,594.15
Sewer Fund 8,964.28
Fire Protection Fund 529,584.00
Forest Home Lighting District 64.88
Glenside Lighting District 25.76
Renwick Heights Lighting District 34.30
Eastwood Commons Lighting District 46.98
Clover Lane Lighting District 5.91
Adopted 4/8/2013 TB 3/25/2013 pg 4
Winner's Circle Lighting District 8.89
Burlei h Drive Lighting District 20.77
West Haven Road Lighting District 82.38
Coddin ton Road Lighting District 47.90
Trust and Agency 5,606.06
TOTAL 1,151,862.05
Ayes: Goodman, Engman, DePaolo, Hunter, Levine, Leary and Howe
TB Resolution 2013 — 052: Approval of Minutes of February 25, 2013
MOVED: Tee Ann Hunter SECONDED: Rod Howe
WHEREAS, the draft minutes of the February 25, 2013meeting of the Town Board have been
submitted for review and approval;
THEREFORE BE IT
RESOLVED, that the governing Town Board hereby approves the submitted minutes as the final
minute of the February 25, 2013 of the Town Board of the Town of Ithaca.
Vote: Ayes—Hunter, Howe, Leary, Levine, DePaolo, Goodman and Engman
Agenda#8
Review of Correspondence
Mr. Levine noted that he will be out of town for spring break and will not be able to attend the
City and County meetings. Mr. Goodman responded that he will be at the County for the SAFE
Act discussion and Mr. Engman thought he could cover the City. Ms. Hunter asked if the City
was considering any green space in the midst of all the new construction and push for density
and maybe Mr. Engman could ask them.
Meeting was adjourned upon motion and a second at 7:09 p.m.
Submitted by
Paulette Terwilliger, Town Clerk
Adopted 4/8/2013 TB 3/25/2013 pg 5
Tompkins County Request for Proposals to Develop 25.5 Acre Parcel
Town of Ithaca
A Model Community under the US EPA Climate Showcase Communities Program
Submission Deadline: October 9, 2012
Cavuga Rid2e Village - Development Description
Better Housing for Tompkins County, Inc. ("BHTC") was established with the explicit goals of
creating Better Housing, to support Better Communities, which results in Better Lives.
Cayuga Ridge Village (the "Village") is an innovative opportunity to demonstrate the
development of a more energy-efficient, compact, pedestrian-oriented community that is
affordable. Using the lessons shared over 20-years at EcoVillage at Ithaca, we have
conceptualized a truly sustainable community that integrates social, environmental, and
sustainable ideals the result of which is a higher quality of life for its residents.
The Village involves the construction of seventy (70) town homes and one Community Building,
or Common House, on 6.5 +/- acres of a single 25.5 acre site located on Harris B. Dates Drive
south of Indian Creek Road in the Town of Ithaca, Tompkins County. A one-acre parcel along
frontage on Harris B. Dates Drive is proposed to be reserved for future neighborhood
commercial development. The 18.0 balance of the site (72% of the site) is proposed to be
retained as Open Space via either a deed to a public entity, or via a Conservation Easement
higlilighted by Passive Recreation Trails, a 1.0 +/- Community Garden, and a Dog Park. The site
will be integrated into the Black Diamond Trail of the Tompkins County Greenway Trails, which
are a series of paths that promote pedestrian activity. Sidewalks and walking trails will be
extensively utilized within the Development.
Cayuga Ridge Village is innovative in the following areas: design, finance, and structure.
1. Design: The Village will be designed to fully comply with the zoning intent and
requirements of the Planned Development Zone ("PDZ") under the design principles of a
Pedestrian Neighborhood Zoned ("PNZ"). This means that the Village will be a
compact, pedestrian-oriented community. We have proposed that in excess of 72% of the
site will be undeveloped space, passive recreation, recreation trails, and community
gardens. A one-acre parcel on Harris B. Dates Drive will be reserved for future
neighborhood commercial development when it is justified by market conditions.
Options for interim ownership of this parcel is open for dialogue. These options can
include, but are not limited to: County or developer maintaining interim ownership of this
parcel with development conditioned on achieving consensus among the respective
parties.
The developed area of the Village itself will be comprised of only approximately 6.5
acres. A Village is comprised of multiple neighborhoods. Similarly, the Village is
contemplated to include three distinct neighborhoods, each containing 20 - 26 units
ananged around interconnected pocket parks. This provides for communal interaction
6
within the respective neighborhoods, and multiple areas for recreation, play areas, and
gardening. This also de-emphasizes vehicular presence within the neighborhoods, yet
provides for convenient vehicle access for the residents. The Village is intended to be
inter-generational and will provide a mixture of units designed for families and seniors
seeking to "age in place." This will be facilitated by strategically locating one and two
bedroom single-floor units, a number of which will be located most proximate to the
Clubhouse, or common house. Overall, the town homes will meet 100% visitability
standards and contain numerous universal design features such as switches placed lower
on walls, outlets placed higher on walls, non-slip flooring or lower pile carpeting, lever
faucets, etc. Fifteen percent (15%) of the units will be handicap accessible with specific
provisions for individuals with mobility, visual, or auditory impairments.
The Development will consist of 70 total units: 15 - one bedroom, one bath 725 SF units;
19 - two bedroom, one bath 925 SF units; 32 - three bedroom, two bath 1,240 SF units;
and, 4 - four bedroom, two bath 1,350 SF units. All town homes will either be two-story
or single story ranch, built using wood frame construction. In addition to contemporary
designed units, the amenities within each home are numerous, including: kitchen pantry;
dishwasher; linen closet; large closet spaces; front/rear covered porch; programmable
thermostat; and, In-Unit Washer and Dryer Hook-ups.
• The Village will strive to employ construction methods, equipment and
appliances, technology, and community philosophy and interaction that will yield
a community that is 80% more efficient than comparable current traditional
suburban subdivisions. This means that while the developer will commit to
overall building efficiency that is at least 50% more efficient than current code, it
will seek to achieve 80% efficiency increases. These energy efficiencies will be
facilitated by the clustering of the units in 15-separate buildings which
"sandwiches" units between other units, and by the orientation of units to
maximize solar passive heat gain/minimize heat loss.
The Village will adhere to green design and building practices and will include
notable features including Energy Star products and materials. Among the energy
efficient features are: Energy Star central air conditioning, refrigerator, and
dishwasher in kitchen, furnaces with 95% AFUE Rating, Energy Star light
fixtures and sensors. Green Label flooring, low VOC paint and adhesives, low-
flow toilets and fixtures, ventilation features, and native landscaping.
The developer will seek funding sources for installation of photovoltaics to
provide an alternative power source for the Common House.
The energy efficiency achieved by the Village will be evidenced by resident
participation in a comprehensive self-managed log of energy consumption. This
log will be one of the functions of the Resident Association that will be discussed
below.
/
• Buildings will employ water-saving fixtures and appliances that reduce household
water use by at least 50% from code.
• As reflected on the concept site plan, the Village will utilize green infrastructure
such as rain barrels, pervious surfaces, and water gardens to reduce stonn-water
runoff to be managed by traditional storm-water management facilities by at least
50% from that which would otherwise be required.
The Village will also develop a green roof on the Pavilion at the entrance to the
development. This Pavilion will serve as a Bus Stop, and as a seating area for the
Dog Park and the Tot Lot.
The Village will develop a large 1.0 +/- Community Garden and several smaller
Resident Gardens for use by the residents. These will be managed by the
Resident Association (discussed below).
• A central focal point of the Village is the Clubhouse, or Common House. The
Common House will welcome residents and guests to the Village and will be an
engaging facility. It will include a host of amenities to encourage social
interaction in the community. These amenities will ultimately be defined by the
residents via the Resident Association (discussed below). However, it will
include the following:
o Community room with a kitchen;
o Library and small conference room to be stocked by residents;
o Re-use room to promote exchange of items between residents;
o Computer room for homework, tutoring, and adult education;
o Maintenance room where residents will be able to stock and borrow small
repair tools;
o Village Manager's Office; and,
o Common Washing Machine & Dryers for those residents who choose not
to have machines in their individual residences.
• Passive recreation trails will be developed and maintained by the Resident
Association in the undeveloped wooded portion of the property.
• The Village will work with others to provide a trail connection to the Black
Diamond Trail.
2. Finance: Cayuga Ridge Village is a $15.6M project. It is proposed to be developed as a
mixed-income rent-to-own development. Utilizing a complex tier of financing, 100% of
the development can be constructed at the same time. This distinguishes the Village from
a typical suburban subdivision that constructs the infrastructure as residential units are
sold. In this instance, we propose utilizing equity secured from the syndication of low-
income housing tax credits ("LIHTC") allocated via New York State Homes and
Community Renewal ("HCR"). This enables 100% construction and initial occupancy to
occur within 12-months of construction commencement which allows the development to
enjoy considerable construction and transaction cost-savings and economies of scale. A
complete Development Proforma is attached and included herein.
Cayuga Ridge Village is a mixed-income development which significantly exceeds the
affordability goals of the RFP. The affordable and market rate units are exactly the same
and do not differ at all in design and construction. However, the utilization of a mixed-
income finance structure allows for a symbiotic relationship between the various income
strata, and provides the best opportunity for a dynamic diverse community. The income
distribution is as follows:
Total Units:70
30% AMI 12%9 Units
50% AMI 33%23 Units
60% AMI 39%27 Units
90% AMI 16%11 Units
The Development will agree to an affordability period of at least 40-years in its
underlying regulatory agreement with NY HCR. LIHTC require that the development be
managed as a rental development for the 15-year regulatory period. During this time,
BHTC will provide project management and maintenance. This will performed by a full-
time Property Manager and onsite Property Maintenance Personnel. At the conclusion of
the 15-year compliance period, the town homes will convert to homeownership, as
further defined under the Resident Acquisition Plan, attached hereto.
3. Structure: Cayuga Ridge Village will be co-developed by BHTC and The NRP Group
LLC ("NRP). The Development will be owned by Cayuga Ridge Village LLC ("LLC"),
a to-be-formed single asset entity. The Managing Member of this LLC will be a to-be-
formed for-profit corporation that will be owned at least 51% by an affiliate of BHTC,
with the balance to be owned by NRP. BHTC will provide management of the
Development. NRP Contractors LLC will be the general contractor for the Development.
NRP Contractors LLC will work with BHTC to identify local qualified subcontractors
and suppliers available to assist on the Development. RDL Architects, Inc. is the
architect for the Development. NRP and RDL have worked together on over twenty (20)
successful LIHTC transactions and have previously designed and constructed similar
townhome developments. RDL will retain local engineers to assist in the design of the
Development, including local engineering firm T.G. Miller to provide Surveying and
Civil Engineering for the Development. The Development, its policies, and its
maintenance will be overseen and regulated by NYS HCR, the project lenders, and the
equity investors.
BHTC and NRP have been working together for three years to conceptualize enhanced
delivery of innovative and affordable sustainable communities in Central New York.
BHTC and NRP complement one another in their respective development roles. In its
role as Co-Developer, BHTC has played and will continue to play an integral role in the
design of the Development and will act as a liaison between the other development team
members and the local government. This role has been a key component in working
through the local approval process and will be in securing building permits, as well as
garnering local support for the Development. BHTC will provide management services.
Under its role, BHTC will be responsible for marketing, rent-up and on-going
management of the Village.
NRP will take the lead in processing applications for funding, securing and closing
financing for the Development, including the syndication of the tax credits, working with
the architect and contractor on design issues, and other development issues and approvals
such as site plan, environmental requirements, surveying, etc. NRP Contractors LLC will
be the general contractor for the Development and will be responsible for constructing
the development in accordance with all funding requirements. NRP Contractors LLC
will work with BHTC to identify qualified subcontractors available to assist on the
Development so that construction can commence asap following receipt of all local
approvals, and an allocation of LIHTCs.
Better Housing for Tompkins County, Inc.
Better Housing for Tompkins County, Inc. is an Ithaca based not-for-profit whose
mission is creating Better Housing, to support Better Communities, which results in
Better Lives. Through partnerships with other agencies, local government, and state and
federal funding sources, Better Housing for Tompkins County has worked to develop and
improve housing opportunities for low and moderate income individuals, families, older
people and the disabled in the greater Ithaca market since its inception in 1981, and has a
history of successfully managing 121 affordable rental units throughout Tompkins
County. Better Housing for Tompkins County is local, invested in the community, and is
mission driven to provide quality housing for individuals and families of modest means.
The NRP Group, LLC
The NRP Group is a full-service developer, general contractor, and property manager
providing a broad range of services. From start to finish, every project The NRP Group
takes on is carefhlly contemplated and executed to maximize investment return, cost
efficiency, productivity, and satisfaction. NRP is currently the 9"' largest apartment
builder in the nation ranked by Miiltifamily Executive, has been recognized as NAHB's
2012, and 2009 Multifamily Development Firm of the Year, and has been ranked as one
of the top two developers in the Top 50 Affordable Housing Developers for 2007, 2008,
2009, 2010, and 2011 hy Affordable Housing Finance.
Since its founding in September 1995 by Alan F. Scott, T. Richard Bailey and J. David
Heller, the company has experienced continual growth in the fields of single-family,
multi-family and senior housing, as well as commercial and retail properties. In all, more
than 21,000 multi-family and single-family housing units have been built in 13 states,
with 13,000 of those units managed by NRP.
Resident Acquisition Plan
At the end of the 15-year tax credit compliance period, Cayuga Ridge Village LLC or other to-be-
formed New York limited liability company ("Owner") will implement a Resident Acquisition
homeownership program as follows:
An affiliate Better Housing of Tompkins County ("BHTC") will be the single shareholder of the
to-be-formed general partner entity of the owner, and will enter into a Purchase Option and Right of First
Refusal Agreement with the Owner. At the conclusion of the 15-year initial tax credit compliance period,
BHTC will seek permission from the NYS Housing Trust Fund ("HTF") to purchase the balance of the
ownership interest and operate the project in accordance with the limitations and obligations set forth in
the regulatory agreement(s) recorded against the property.
This Resident Acquisition Plan has been included in the scope of the project for Cayuga Ridge
Village (the "Village") for several reasons. Home ownership has historically been out of reach for many
middle-income families. In the wake of the largest housing crisis in U.S. history, this fact has become
even more pronounced due to the disappearance of risky mortgage products that allowed families who
would not otherwise qualify for traditional financing to buy homes they could not afford. With
foreclosures rising and the quality of the available housing stock declining it is particularly imperative for
high-cost housing markets, like Tompkins County, to promote high-quality affordable housing with
homeownership opportunities. Providing a Resident Acquisition Plan promotes homeownership, while
carefully preparing families to become homes owners without the use of unconventional, risky mortgage
products.
To assess interest among residents, BHTC will strongly encourage homeowner education and
counseling as the first step in preparing residents for successful homeownership, prior to the end of the
15-year compliance period. This program assists prior rentors in becoming successful first-time
homeowners by providing education, improving credit worthiness, and allocating available grant funds.
The objective of the program is to assist in all aspects of homeownership. Once enrolled in the program,
participants receive individualized one-on-one financial assessments regarding their income, credit, and
savings, along with their readiness to purchase. Free services provided by our HUD-certified counselors
will include: pre-purchase counseling, post-closing assistance, refinancing, home repairs and
maintenance, credit and budget counseling, and selling a home.
BHTC will seek approval from the HTF in accordance with the terms of the NYS HTF
Regulatory Agreements and loan documents, respectively. The proposed exit strategy of the project is for
Affiliate Non-Profit to form a not-for-profit real estate entity, which will own and operate the individual
homes to be sold. The real estate company will acquire title to the land and buildings, and will allow the
residents to purchase fee-simple ownership of the respective homes.
Restrictions will be placed on each unit to ensure compliance with the extended use regulatory
Agreement(s). Enforced through a deed restriction, the new homeowner must agree to an affordability
period that is consistent with the length of time remaining under the regulatory agreement(s). If the
housing does not continue to be the principal residence of the primary household due to death,
incapacitation, sale, foreclosure, or any other event, the note will require sale to another, qualified
household.
All residents that participate in the homebuyer program will receive credit and homeownership
counseling, and individual pre-purchase counseling. The homeownership counselor will work closely
with each household from initial contact to the closing on their unit. Three main steps occur in a typical
Page 1 of 3
homeownership program that all households will be required to complete prior to participating in the
buyout program:
• Orientation: Orientation is the introduction to the program eligibility requirements.
Orientation will be held in the on-site community room monthly, depending on the
program and the demand. Participants can complete and application at that time.
• Education: Homebuyer education is a mandatory course that all participants must
successfully complete in order to receive assistance through BHTC. The course covers
the home buying process, including readiness to buy, credit and budgeting, money
management, shopping for a house, processing/underwriting and the closing
• Interview: Each family will be scheduled for at least one interview with a HUD-certified
homeownership counselor after they have attended the homeownership education course.
The counselor will meet individually with the household to assist them with assessing
their individual needs and in creating a realistic timeline for homeownership.
The outstanding mortgage balance at the end of the 15-year tax credit period will be allocated to
each of the units proportionately based on the number of bedrooms in each unit. BHTC intends to seek
permission for a transfer of the property, or a portion of the property, and assignment of the associated
debt to the home-owners association. This scenario will allow for a continuation of the existing financing
structure to ensure maximum affordability. The entity will secure a second mortgage to pay transaction
costs and soft costs at closing, or will secure grant funding for the same. This cost would be much lower
if either the HTF Funds principal was forgiven, which would result in even a lower monthly cost, but to
be conservative the Development is not assuming forgiveness of these funds. In addition, if BHTC was
able to secure down payment and closing cost assistance for the residents, this would eliminate the need
for the association to obtain a second mortgage and would further decrease the monthly housing cost.
Homeownership counseling and credit counseling will begin prior to the end of the 15-year
compliance period. It is anticipated that it will take approximately 3-months to close on the removal of
the limited partner and the acquisition of the property by BHTC as the General Partner, under the terms of
the Purchase Option and Right of First Refusal Agreement. It is anticipated that it may take an additional
3 months to obtain all necessary approvals from HOME and to create the home-owners association. After
this, it is anticipated that residents will be able to close on their purchases over a 12 month period.
All existing reserves will remain with the property and transfer to the home-owners association.
This will provide initial capital for any capital improvements that have not been made prior to the
Resident Acquisition Plan. If needed, BHTC will deposit a sum at the closing of its purchase of the
limited partner interest, equal to 1% of the outstanding debt, into an account to be used to pay transaction
costs and enable the home-owners association to take ownership.
BHTC intends to sell all lease purchase properties to qualified tenants in year sixteen, regardless
of whether the resident's initial move-in date is year one or year fourteen. From a financial perspective,
the underlying sale price structure (all remaining debt plus exit taxes plus ....) of each home is the same.
However, it can be seen as unfair for a one-year resident to realize as much "equity" in their home when
they take title, as a fifteen-year resident. To address this concem, the Option Agreement adds a
subordinate sum to the sale price of each house, and then subtracts a proportionate amount for each year
of residency up to ten years. Any surplus revenues earned by BHTC through this formula will be used to
resolve the multiple problems that arise when selling a large portfolio of homes "as is".
The resident's option to purchase their home is contingent on BHTC acquiring title to the
property. This contingency clause is unsettling to a lease purchase buyer. Residents do not want to invest
time and money into their home, only to be disenfranchised at the end of the fifteen years. Yet, the fact
Page 2 of 3
remains that BHTC might not be able to exercise its Right of First Refusal to purchase all properties from
the owner in year sixteen. For example, what if BHTC goes out of existence, or what if BHTC is
removed as general partner by the limited partner due to poor performance? BHTC determined that, in all
fairness, this contingency clause must be included in the Option Agreement. BHTC commits itself in the
Option Agreement to use its best efforts (a high legal standard) to find a replacement home if a resident is
unable to purchase their existing home due to BHTC's inability, after exercising its best efforts, to
purchase the property from the owner.
The Option Agreement allows the resident to designate another party to step into their shoes,
lease the home, and purchase the home at the end of the fifteen years if the resident dies. This is a narrow
right, in that the designated "beneficiary" must qualify for the home all of the regulatory requirements,
and move into the home within 60 days. This approach was designed to address the compelling concerns
of lease purchase buyers without risking regulatory non-compliance or tying up the house in a protracted
probate or legal process.
Page 3 of 3