AGENDA AND MINUTES FOR REGULAR MEETING FOR THE BOARD OF DIRECTORS November 16, 2016 Thomas Niemann Chair Anthony Scott President
DEVELOPMENT VENTURES INCORPORATED MEMORANDUM TO: FROM: Board of Directors Thomas M. Niemann, Chair SUBJECT: Regular Meeting Held November 16, 2016 DATE: November 16, 2016 OFFICERS: Chair Thomas M. Niemann; President Anthony Scott; Vice President Larry D. Yon, II; Secretary/Treasurer Anthony Scott The Board of Directors of Development Ventures Incorporated will be holding its regular meeting on Wednesday, October 26, 2016, immediately following the regular meeting of the Board of Commissioners of the Housing Authority of the City of Durham. The meeting will be held in the Board Room of the Central Office Building, 330 East Main Street, Durham, North Carolina. AGENDA I. Call to Order Page(s) II. III. IV. Public Hearing(s) General Comments from the Public Changes to the Agenda General Business Action Item(s) 1. Minutes Board of Directors Regular Meeting Held October 20, 2016 1-2 V. Information Items VI. VII. Consent Agenda Action Item(s) New Business
VIII. IX. Closed Session Adjournment
Attendees: Tom Niemann, Chair Bo Glenn, Commissioner Dan Hudgins, Commissioner Anthony Scott, CEO Meredith J. Daye, Director of Development Eric Pristell, The Banks Law Firm Elvert Dorsey, Director of Resident Services Jonathan Blum, Interim Chief Financial Officer Brenda Tillman, Program Specialist Durham Housing Authority Durham, NC MINUTES OF THE DEVELOPMENT COMMITTEE October 20, 2016 Call to Order The meeting was called to order by Mr. Niemann at 2:03 p.m. Public Comments None. Goley Pointe The development is complete and lease up has commenced. Fourteen units have been leased and applications are pending for the other apartments. The North Carolina Housing Finance Agency Final Commitment matured on September 1, 2016, as did the construction loan with Self-Help, and both agreements have been approved for amendment until April 1, 2017. Per Mr. Pristell, the Satterfield lawsuit has not been settled; therefore, it will be going to trial. Ms. Daye provided an overview of the Continuum of Care (CoC) funds that will be recaptured as a result of the delay in construction completion. Funds in the approximate amount of $33,500 will be recaptured from the 2011 CoC grant out of a total of $368,073. Additionally, the entire 2015 renewal grant amount of $37,199 will also be recaptured. The agency has until October 30, 2016 to draw down funds from the 2011 CoC grant for expenditures that occurred prior to August 31, 2016. Mr. Glenn requested that the agency obtain documentation regarding the recapture of funds. Ms. Daye stated that HUD indicated during the grant review in August/September that the agency should be receiving written documentation from the Community & Planning Department of HUD regarding the recapture of unexpended funds for both grants. Additionally, Ms. Daye stated that an Open House is being planned during the month of December and that the Committee will be contacted concerning scheduling for the Open House event. Rental Assistance Demonstration (RAD) Morreene Road & Damar Court Both projects are currently on hold until the audit findings related to approving DHA s mortgage credit status is resolved so the FHA loan application can be resubmitted. Also, DVI is working with RBC to
resolve the funding gap that exists since FHA will not accept two funding sources (Net Operating Income and Capitalized Interest) previously identified in the underwriting. The agency met with North Carolina Housing Finance Agency last month, and will request the 2016 bonds awarded for both projects be swopped out for 2017 bond volume cap. Also, a bond volume increase will be requested for Morreene Road. Ms. Daye stated that it is expected the Morreene Road closing will occur during the first quarter of 2017. Additionally, the site plan and permits have been approved for both projects. There was a brief discussion regarding construction cost increases since the project has been delayed. The Director of Development will contact the general contractors for updated construction costs. The Damar Court project is expected to close during the second quarter of 2017. Both the site plan and permits have been approved. There was a brief discussion regarding the relocation of residents to other public housing sites during renovation. While HUD previously approved for the agency to take units offline for temporary relocation during the renovation, HUD currently indicates that units cannot be taken offline under Undergoing Modernization status for temporary relocation purposes. Ms. Daye is working with the Greensboro Field Office on a compromise to resolve this latest ruling. Additionally, Mr. Scott stated that the agency is looking at reducing the construction phases from four to two phases to expedite relocation and construction activities. Club Boulevard Ms. Daye stated that there was not an update. Mr. Glenn inquired as to why the 9% low income housing tax credit application (LIHTC) was not approved; and Ms. Daye responded that the appraisal was not completed within the required number of days prior to submission of the full application. Ms. Daye stated that she would follow up, at the next meeting, with the other reason(s) that the application was not approved. DVI may submit an application in January 2017 for the development with changes to the number of units and unit types. Mr. Glenn commented that another group is planning to submit a 9% LIHTC application, with support from the City of Durham, and he would not want the two applications to compete for funding. Oldham Towers/Liberty Street No Update. Edgemont Elms The agency is currently awaiting the RAD Conversion Commitments (RCC) for the development. HOPE VI Developments: Morning Glory Senior Village, Calvert Place, Main Street Townhomes, and Holman Homes The agency is currently awaiting the RCC for the developments. Preiss-Steele Place The occupancy rate is currently 93%; Ms. Daye will follow up with the Senior Property Manager to obtain feedback on filling the six vacancies that currently exists. Mr. Niemann inquired if the vacancies are one or two bedroom units. Per Mr. Scott, one vacancy is attributed to a plumbing issue, and the resident was moved to Edgemont Elms. Mr. Niemann inquired if the plumbing problem can be deemed a warranty issue. The response was no because it was not part of the general contractor s scope of work. Management has requested use of reserve funds from the Investor to complete the repairs. Additionally, staff is working on closing out the RPP loan for the development. Mr. Niemann stated that staff should try to get the units leased as soon as possible.
Other Developer/Consultant Per the CEO, follow up interviews with the top three firms was completed early today. EJP Group is the selected firm and the firm has extensive experience working with housing authorities across the country. The plan is to bring them onboard by the end of the month. There was a question about the cost for the consulting services, and the Director of Development said funds were included in the prefunding request to the City for these services, while Mr. Scott and Mr. Glenn both suggested looking at using Capital Funds to cover the expense. Funding for DVI Mr. Glenn posed the question regarding the Development Department budget funding for 2017, and Mr. Niemann inquired about seeing DVI s budget at the next meeting. Ms. Daye noted that DVI funding for the remainder of 2016 is included in the funding request to the City. Mr. Scott stated that proposed line of credit with M & F Bank will be used for 2017 expenses until the Morreene Road and Damar Court transactions close (and the developer fees are received). Fayette Place There was a brief discussion regarding Fayette Place. Mr. Pristell stated that Mr. Banks will be discussing Fayette Place at the upcoming Board of Commissioners meeting next week. Adjourn The meeting was adjourned by Mr. Niemann at 3:05 p.m. The next meeting is scheduled for Thursday, November 3, at 12:00 p.m. Respectfully Submitted, Meredith J. Daye