City Council

COMMITTEE ON REAL ESTATE June 15, 2015 A meeting of the Committee on Real Estate was held this date beginning at 4:31 pm at City Hall, 80 Broad Street, First Floor Conference Room. PRESENT Councilmember Alexander, Chair, Councilmember Waring and Mayor Riley. Staff: Colleen Carducci, Director of Real Estate Management, Geona Shaw Johnson, Director of Housing and Community Development, Florence Peters, Housing Development Officer, Christopher Morgan, Director of Planning, Steve Kirk, Project Manager- Senior Engineering, Laura Cabiness, Director of Public Service, Adelaide Andrews, Deputy Corporation Counsel, and Laurie Thompson Executive Assistant to the Mayor The meeting was opened with an invocation by Councilmember Waring. APPROVAL OF MINUTES On motion of Councilmember Waring, seconded by Mayor Riley, the Committee voted unanimously to approve the minutes of the May 26, 2015 meeting. APPROVAL TO AMEND THE AGREEMENT OF PURCHASE AND SALE BETWEEN THE CITY OF CHARLESTON AND SEAN LUCAS FOR THE PURCHASE OF 1915 DOSCHER AVENUE IN THE ROSEMONT COMMUNITY. THE ORIGINAL CONTRACT PRICE WAS $195,487; HOWEVER, THE PROPERTY WAS APPRAISED FOR $180,000; THE LENDER HAS REQUESTED AN ADJUSTMENT IN SALES PRICE TO MATCH THE APPRAISED VALUE. (TMS# 464-01-00-049) [ORDINANCE] The Chair stated that it seems pretty straightforward that the lender won’t lend more than it’s worth. He found it unusual finding that the market pricing is starting to move higher. Ms. Peters said that, in that particular neighborhood, there haven’t been many sales. It’s an older neighborhood with older houses. The City is the first entity to build something new there. We had the same issue when we sold the first home in 2007. We had to go 10 miles out to find something that was comparable to what we were building. Councilmember Waring asked when situations like this happen, do we get more than one appraisal. Ms. Peters said in this case, the bank didn’t request another appraisal. They don’t plan to because of the type of funds, NSP (Neighborhood Stabilization Program), that we’re using. On motion of Mayor Riley, seconded by Councilmember Waring, the Committee voted unanimously to amend the Agreement of Purchase and Sale between the City of Charleston and Sean Lucas for the purchase of 1915 Doscher Avenue in the Rosemont Community. The original contract price was $195,487; however, the property was appraised for $180,000; the lender has requested an adjustment in sales price to match the appraised value. (TMS# 464-01-00-049) [Ordinance]. AUTHORIZE THE MAYOR TO EXECUTE A MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF CHARLESTON, AS SELLER, AND THE HOUSING AUTHORITY OF THE CITY OF CHARLESTON, AS PURCHASER, SETTING FORTH THE EXPECTATIONS OF THE PARTIES REGARDING THE CONVEYANCE AND DEVELOPMENT OF THE PARCELS OR TRACTS OF LAND (OR PORTION THEREOF.) THE MOU CONTEMPLATES THE EXECUTION OF TWO (2) TRANSFER AND DEVELOPMENT AGREEMENTS (T&D AGREEMENTS) FOR AFFORDABLE HOUSING DEVELOPMENT TO BE COMPLETED IN TWO SEPARATE PHASES OF CONSTRUCTION. THE T&D AGREEMENTS WILL REQUIRE AFFORDABLE HOUSING RESTRICTIVE COVENANTS BE RECORDED AT THE TIME OF DEED TRANSFERS. (TMS# 459- 05-04-216; 459-05-04-207; 459-05-04-208 AND 459-05-04-197; CERTAIN PARCELS WITHIN THE COOPER RIVER BRIDGE REDEVELOPMENT AREA BOUND BY MEETING, LEE, HANOVER AND COOPER STREETS) Ms. Shaw Johnson stated that this MOU contemplates the development of 155 or more homes on the Cooper River Redevelopment Site. The activities and Phases will be codified in two Transfer and  Committee on Real Estate minutes June 15, 2015 page 2 of 4 Development Agreements. The first Phase begins on parcel B in January 2017 with a commitment of $2 million required in December 2016 from the City. The thought is that the Charleston Housing Authority would be ready to execute a construction contract having bid out this particular development through their procurement process. The second Phase would begin in 2018 with similar requirements. The Housing Authority has estimated that the cost for this development would be about $14 million. In Phase I, 60 units would be developed; of that amount, 10 would be for sale. In Phase II, there would be 95 units developed with 20 being for sale. The remainder would be rental. In Phase I, the majority of the rental is for the elderly, and it would also cover households earning between 30% and 150% area median income (AMI). We have a nice range of affordable housing that would be covered there. Prior to the commencement of the construction, several assessments related to the infrastructure have to occur. There is a 30 foot drainage easement that has to be removed, and the thought is that the City would bear the cost for that. There is a newly discovered sewer line that may need to be removed. If the sewer line can’t be capped, it will have to be removed and the Housing Authority would bear the cost for that. The Housing Authority will work with Forsberg Engineering to have an assessment done to find out where the pilecaps are located on the site. We also have a line item for an additional $50,000 that will be allocated, per your approval, for predevelopment or extraordinary expenses. The MOU also contemplates that the Housing Authority will pay for and construct a 20 foot bike path, which will be owned and maintained by the City. If the Housing Authority should default in anyway, the properties would come back to the City at no charge to us. There is also a voluntary cleanup contract (VCC) that has to be addressed. The MOU indicates that the Housing Authority would endeavor to have the additional properties added to the VCC and the City would make every effort to assist them with that. There is currently a VCC in place. Under the Phase II of development, it indicates that the City, at its discretion, can provide a cash contribution for the redevelopment of parcel A, parcel J and any other future parcels that might be required. However, the City elects to not make a cash contribution. The City would convey the property to the Housing Authority for them to develop at their own expense. They would need to include the City’s restrictive covenants for those properties. The Housing Authority has the option to reject or accept the City’s offer. Because we are building affordable housing at different levels, it meets the restrictive covenants imposed by the SCDOT mitigation agreement, so we don’t have to work to get those removed except for when we’re looking to sell the ownership units. Mayor Riley thanked Ms. Shaw Johnson, Ms. Carducci, Ms. Andrews, and everyone who worked on this. This is a really important development for the City because we’re able to introduce housing back into these neighborhoods that were interrupted when the first Cooper River Bridge was built and also the Pearman Bridge. By using the Housing Authority, this will always be affordable housing. One concern was that with the wonderful robust growth that is going on with the City and the Peninsula is that if you go out 50 years, it could be left to its own market forces and would no longer be affordable. The elderly and rental portions are 30%-150%. Mr. Keane worked with Ms. Shaw Johnson to develop a plan for this development. They are 4 stories. There will be a variety of people, income and experiences, which is a great advantage to the City. To have the developer being an entity that exists for the purpose of providing affordable housing is the best development plan that we could achieve. He heartily recommended this to the Committee for approval. Councilmember Waring asked if we can go back in the archives and find out how many houses were removed as a result of the bridge coming through versus how many units would be in the affordable category going back into the neighborhood. Mayor Riley stated that the Records Management staff could help with that. That would be good information to have. Councilmember Waring stated that there are going to be people who say that the people who were displaced don’t have enough units to go back to, but he doesn’t think that will be the case with this development. He asked if the owner-occupied homes are going to be put up for sale to the public or if they’re going to be some type of aspect for affordability for ownership. Ms. Shaw Johnson stated that they will follow our first-time homebuyer guidelines, where we target persons earning up to 120% of the AMI. Mayor Riley said that these will be condos within the building. Councilmember Waring stated that that information needs to be shared with the media and the public. Ms. Shaw Johnson stated that the Housing Authority would heavily depend on us to help with the sale of those houses because they only do rental. Councilmember Waring asked if that was a part of the MOU. Ms. Shaw Johnson stated that it will be a part of the Transfer and Development Agreement. Councilmember Waring stated that with transferring this property to the Housing Authority, it would be great if you had minority participation similar to what was done with the Gaillard. The Mayor stated that he believed we could require them to follow the City’s minority business enterprise construction goals. Mr.  Committee on Real Estate minutes June 15, 2015 page 3 of 4 Cameron shares our zeal. Councilmember Waring commended staff for the hard work. This development is going to be great. Mayor Riley said that Mr. Keane’s staff worked very hard on this, as well as the City’s Design Division. We need to get copies of these (referring to some handouts provided by Ms. Shaw Johnson) for everyone tomorrow. The Chair stated that seeing the smart growth sustainability cities concept ordinance that should be forthcoming in a couple of months, he was curious as to whether this project could participate in that. He asked if there could be incentives to have add a floor or 2 to increase the amount of housing in the area given that you add the public artwork, bike paths, bike racks, and the other criteria that we’re looking at in that ordinance. We have to drive density to make public transportation work. He thinks that ordinance will come to Council after the Developer’s Council at the Chamber and also the Realtor Developer’s Council review it. Mayor Riley stated that one thing they were concerned about is the scale of it on either side. We feel that we have to be careful with the height there. If it’s too high, it doesn’t successfully connect with the neighborhood. Councilmember Waring asked if we could step back and do it similar to some of the hotels. Mayor Riley said that you also have to deal with parking. If we put something too different, it wouldn’t read that neighborhood. The Chair said that there’s a school there and the Cigar Factory is near. It would give us the opportunity to create a little more density and would utilize our smart growth concept. Mayor Riley stated that this is a preliminary design. The Committee will have lots of times to review it. Councilmember Waring confirmed that they have to go before the Board of Architectural Review (BAR). On motion of Mayor Riley, seconded by Councilmember Waring, the Committee voted unanimously to authorize the Mayor to execute a Memorandum of Understanding (MOU) between the City of Charleston, as Seller, and the Housing Authority of the City of Charleston, as Purchaser, setting forth the expectations of the parties regarding the conveyance and development of the parcels or tracts of land (or portion thereof.) The MOU contemplates the execution of two (2) Transfer and Development Agreements (T&D Agreements) for affordable housing development to be completed in two separate Phases of construction. The T&D Agreements will require Affordable Housing Restrictive Covenants be recorded at the time of deed transfers. (TMS# 459-05-04-216; 459-05-04-207; 459-05-04-208 and 459-05-04-197; certain parcels within the Cooper River Bridge Redevelopment Area bound by Meeting, Lee, Hanover and Cooper Streets). REQUEST APPROVAL OF THE SECOND AMENDMENT TO AGREEMENT TO BUY AND SELL REAL ESTATE BETWEEN FLOURNOY DEVELOPMENT COMPANY, LLC, (SELLER) AND THE CITY OF CHARLESTON TO EXTEND THE CLOSING DATE TO THE EARLIER OF (A) JULY 31, 2016, OR, (B) SIXTY DAYS FOLLOWING WRITTEN NOTICE FROM SELLER TO CLOSE THE TRANSACTION (TMS# 421-11-00-063 AND A PORTION OF 421-11-00-058; FOLLY ROAD) Ms. Carducci stated that this is an extension due to the developer’s delays on their large residential development adjacent to the park property. As part of their contract with the City, once they finish their construct project, they’re required to hydroseed and create a nice green lawn on the park for the City and then we’ll have our closing. They don’t think they’ll need to go through July of next year, so that’s why there is the option of 60 days following written notice. On motion of Councilmember Waring, seconded by Mayor Riley, the Committee voted unanimously to approve the Second Amendment to Agreement to Buy and Sell Real Estate between Flournoy Development Company, LLC, (Seller) and the City of Charleston to extend the Closing Date to the earlier of (a) July 31, 2016, or, (b) sixty days following written notice from Seller to close the transaction (TMS# 421-11-00-063 and a portion of 421-11-00-058; Folly Road). CONSIDER THE FOLLOWING ANNEXATIONS: (i) 216 Rice Mill Place (TMS# 269-01-05-024) 0.155 acre, Cainhoy (District 1) (ii) 941 Dupont Rd. (TMS# 351-09-00-007) 0.90 acre, West Ashley (District 7) Mr. Morgan stated that 216 Rice Mill Place is a single-family residence in the Nelliefield subdivision. 941 is a commercial establishment behind Orleans and Sam Rittenberg.  Committee on Real Estate minutes June 15, 2015 page 4 of 4 On the motion of Councilmember Waring, seconded by Mayor Riley, the Committee on Real Estate voted unanimously to approve the annexations listed above. EXECUTIVE SESSION REGARDING CONTRACTUAL NEGOTIATIONS RELATED TO THE FOREST ACRES DRAINAGE PROJECT Councilmember Waring spoke about the workshops for West Ashley planning. He said that many good ideas came out of it. He commended Mr. Morgan on the work he did. He spoke about the idea of a Farmers Market potentially being at the old St. Andrews High site. He drove over there to Moultrie Middle and took pictures of their Farmers Market. He said that it’s not a big piece of land, but it has done well. The Chair stated that the number of people that showed up was incredible. There was a great deal of interest. He thanked our Planning staff, as well as the County’s for their work. Some creative ideas came out of it. He mentioned a section, which is defined as urban core, which includes the Citadel Mall site, and could be a candidate for some of the sustainable building incentive programs that we’re looking at for Upper Peninsula. On the motion of Councilmember Waring, seconded by Mayor Riley, the Committee on Real Estate voted unanimously to enter into Executive Session at 4:58 p.m. On the motion of Councilmember Waring, seconded by Mayor Riley, the Committee on Real Estate voted unanimously to exit Executive Session at 5:01 p.m. The purpose of the Executive Session was to discuss contractual negotiations related to the Forest Acres Drainage Project. No action was taken. On the motion of Councilmember Waring, seconded by Mayor Riley, the Committee on Real Estate voted unanimously to authorize staff to proceed with the acquisition of Tract 4 in accordance with the appraised value and as directed. There being no further business, the meeting was adjourned at 5:02 p.m. Techina Jacques Clerk of Council’s Office