LGC Approves Over $370 Million in Affordable Housing, Retirement Home Financing

Affordable housing remains a challenge in North Carolina, and the Local Government Commission (LGC) continues to fulfill its role in attacking the problem. Commission members approved financing requests today totaling just over $370 million for affordable housing and retirement home projects around the state.

State Treasurer Brad Briner chairs the LGC. The commission is staffed by the Department of State Treasurer (DST) and has a statutory duty to approve most debt issued by units of local government and public authorities in the state. The commission examines whether the amount of money units borrow is adequate and reasonable for proposed projects and confirms the governmental units can reasonably afford to repay the debt. It also monitors the financial well-being of more than 1,100 local government units.

"The housing affordability crisis in North Carolina has become increasingly broad, affecting a range of communities," according to a joint study by the N.C. League of Municipalities and N.C. Association of County Commissioners. Local governments and housing authorities around the state have been working to address the shortage of affordable housing, and frequently file applications with the LGC for financing. At today's meeting, LGC members approved a number of applications for conduit revenue bonds for various housing projects. A conduit revenue bond issuer lends bond proceeds to certain third-party entities at tax-exempt rates.

The largest of those requests was for $101.9 million from the N.C. Medical Care Commission. NCMCC will loan the bond proceeds to United Methodist Retirement Homes to finance expansion and renovation projects at two continuing care retirement facilities: Croasdaile Village in Durham (Durham County), and Wesley Pines in Lumberton (Robeson County).

Inlivian, the housing authority for Charlotte (Mecklenburg County), received approval to issue a $68 million conduit revenue bond. Proceeds will be loaned to Roers Charlotte Apartments II, a Minnesota limited liability company, to acquire, build and equip a 238-unit multifamily rental development known as Vintage on West Boulevard.

Raleigh Housing Authority (Wake County) was given a green light for over $56 million for a pair of conduit revenue bonds that would finance work on low- and moderate-income, multifamily housing developments in Raleigh. Proceeds from a $31.7 million bond will be loaned to Moore Square Harmony Housing LLC, a North Carolina company. The money will be used for a 160-unit housing development on Martin Street. Proceeds from a $24.5 million bond will be loaned to Maple Ridge Apts. Limited, a North Carolina limited partnership, for three four-story residential buildings totaling 146 units on Rawls Drive.

The LGC signed off on a $55 million conduit revenue bond requested by the North Carolina Housing Finance Agency. Bond proceeds will be used for 10 multifamily housing facilities totaling 640 units for low- to moderate-income residents. The properties are part of Landura Portfolio MM, LLC, a North Carolina company. They are located in Craven, Edgecombe, Forsyth, Halifax, Mitchell, Stanly, Vance and Wilkes counties.

LGC members approved a $45 million conduit revenue bond application from the town of Clayton (Johnston County). Proceeds will be loaned to Clayton Leased Housing Associates I, a Minnesota limited liability partnership, to build and equip a 167-unit, multifamily, residential rental facility for lower-income households. It will be located at the intersection of Pritchard Road and Swann Trail in Clayton.

LGC members voted in favor of a $44 million request from the Durham Housing Authority (Durham County) to issue a conduit revenue note. Proceeds will be loaned to Fayette Place JV LLC, a North Carolina limited liability company, for a 252-unit, multifamily rental housing development for lower-income households. It will be located on Merrick Street in Durham.

In non-housing related requests on the agenda, the city of Winston-Salem (Forsyth County) was given the go-ahead for nearly $97 million in financing across two projects. One request was for $70 million in revenue bonds for water and sewer projects. Those include upgrading advanced metering infrastructure; modernizing the R.W. Nielson Water Treatment Plant; repairing a lagoon and machinery at the Archie Elledge Wastewater Treatment Plant; replacing and upgrading capacity of sewer lines along Peters Creek Outfall; repairing and rehabilitating sewer lines and manholes; replacing a force main near Tanglewood Park; and upgrading the 15th St. Pump Station. The second request is for nearly $26.6 million in limited obligation bonds to expand and improve solid waste management facilities including the Hanes Mill Road site for the general health and welfare of city residents.

The LGC approved $89 million in limited obligation bonds sought by Cleveland County. Proceeds will be used to finance part of the costs to build and equip a new justice center including a courthouse, detention center, Sheriff's Office and related public infrastructure. The project will address current capacity restraints and will include demolition of the existing courthouse.

Franklin County plans to undertake multiple projects now that the LGC authorized $38 million in limited obligation bonds to do the work. Projects include renovating and expanding the County Judicial Annex, building and equipping a new Emergency Medical Services Station, and upfitting the Facilities Management Warehouse and Sheriff's Office facility. The county has said population growth has increased demand for judicial services.

Cape Fear Public Utility Authority (New Hanover County) was given the LGC's consent to obtain a State Revolving Fund loan totaling just under $22.4 million for sewer work. Projects include replacing and expanding the Southside Wastewater Treatment Plant to increase capacity from 12 million to 16 million gallons a day. A new treatment process will be implemented and most existing facilities would be replaced or re-purposed. New Hanover County has experienced growth and development, leading to the need for greater treatment capacity. Utility rates are expected to increase between 6.2% and 7.5% each year from 2026 to 2031.

Troutman (Iredell County) was authorized to enter into an $8.7 million installment financing contract to acquire a building and property at 250 Old Murdock Road. Plans are to develop a new Town Hall on the site. Also planned is purchase of land at 338 North Ave., currently leased as a town park. The properties encompass a total of 74.5 acres.

In addition to standard debt issuances, the LGC heard several financing requests from governments on the Unit Assistance List, a designation that significantly lowers the threshold at which LGC approval is required to enter into debt agreements:

• Bailey (Nash County) obtained LGC approval for a lease financing agreement of $59,586 with Ford Motor Credit Company for a police interceptor vehicle.
• Stoneville (Rockingham County) was authorized to purchase two police vehicles through an installment financing contract of $136,599 to replace aging vehicles.
• Red Springs (Robeson County) officials need reliable, safe, fuel-efficient vehicles for public services. With LGC approval in hand, the town plans to enter into a $385,151 lease agreement with Enterprise Fleet Management for seven vehicles to be used by the Police, Parks and Recreation, and Electric departments. The vehicles will replace an aging fleet and minimize downtime through a professionally managed leasing program. A second application approval for $192,000 will allow the town to enter into a purchase agreement with Altec Capital for a bucket truck to be used by the Electric Department. The town's 25-year-old truck is experiencing mechanical failures and can't pass safety inspections. Altec has provided the town with a loaner truck the past two months.

In other business, the LGC considered two resolutions regarding noncompliance with audit report submission requirements placing towns in jeopardy of having a portion of their sales tax distributions withheld:

• Speed (Edgecombe County): The LGC deferred action until its December meeting on an appeal from the town related to its overdue audits. On Oct. 14, the Speed Board of Commissioners adopted a resolution of their intent to voluntarily dissolve the town. Based on that action as a good cause for failure to submit the 2024 audit report, LGC staff had recommended passage of the resolution.
• Taylortown (Moore County): The LGC denied the town's appeal.

The LGC passed a resolution to designate four towns as distressed local government units in compliance with the state's Viable Utility Reserve (VUR) legislation. The towns of Aulander (Bertie County), Candor (Montgomery and Moore counties), and Columbus (Polk County) have not submitted required annual financial audit reports for two consecutive years. The town of Woodland (Northampton County) had an Assessment Criteria score (an evaluation of the drinking water and wastewater systems' infrastructure and financial health) above the distressed designation threshold for two consecutive years. The designations now require the towns to take a number of actions, and could make them eligible for VUR grants to address their challenges.

Related Topics: