What @sog_ced is reading: March 2019

The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government read or shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.

Items of interest related to CED in North Carolina:

This National Low Income Housing Coalition report finds that in NC, for every 100 extremely low income households, only 43 affordable units are available. https://t.co/SgBMnMIeBK

House Bill 399, if enacted, would extend the NC Historic Preservation Tax Credit until 2030, raise credit caps, and offer a bonus in disaster recovery areas. http://bit.ly/2TRrMUg

Pisgah Legal Services attorney Robin Merrill discusses evictions in Asheville on the State of Things. https://t.co/WMXQr6U8Hy

Richard Florida writes about the profit margins earned by landlords in high poverty neighborhoods. In middle income areas, rents cover 10% of the housing cost (can be paid off in 10 years). But in high poverty areas, rents cover 25%. http://bit.ly/2TUP3Vq

DFI Online:

Credit Union National Association recognizes credit union professionals for excellence, including an award related to DFI. https://t.co/j3a6uxFvkl

Lumberton City Council hears from DFI and others about plans to build affordable housing for low income persons in disaster recovery areas. https://t.co/WdUXuf1LFf

DFI’s work with the City of Kannapolis is seeing tangible results. The VIDA project breaks ground, bringing residential, retail, parking, and more to downtown.  http://bit.ly/2V67vHe and http://bit.ly/2TIDZ8B       

An article in the News & Observer referred to a university audit completed in May 2017 about administrative oversight and procurement during a former DFI director’s tenure. The audit found no misuse of university funds, but recommended corrective actions, all of which were implemented by the current DFI director, who started in June 2017. The auditor reviewed DFI’s conflict of interest process and made no findings about DFI projects because all were handled satisfactorily. The auditor performed a routine follow-up in 2018 and confirmed that all corrections had been made and no further audit work was required. The article focused on redactions made to the audit by the University Public Records Office. The audit involved a former university employee; due to privacy protections for the former employee, the university redacted the employee’s name and identifying information, and university personnel cannot discuss the details of the audit due to privacy protections for the former employee. The final section of the article describes a private development project in Fayetteville. That private development project is not a DFI project and is not mentioned in the university audit. newsobserver.com: http://bit.ly/2JHYjHK

 Last month’s edition of “What @sog_ced is reading….”

https://ced.sog.unc.edu/what-sog_ced-is-reading-february-2019/

Compiled by Francine Stefan                                                       

2 Responses to “What @sog_ced is reading: March 2019”

  1. Readers may find the following information helpful in understanding the News & Observer story described above.
    • The story focuses on a university internal audit report about a former employee and that employee’s relationship with a contracted vendor that provided staff support for DFI projects. The audit report was completed in May 2017 and recommended for DFI to discontinue the contract with the vendor. Accordingly, one of my first tasks upon assuming the role of director in June 2017 was to build internal staff capacity to perform DFI’s work rather than relying on the outside vendor connected to the former employee. DFI hired staff who had previously worked for the vendor and placed them in space no longer needed by the vendor. The auditor returned in 2018 for routine follow-up and determined that no further audit work was required.
    • According to the story, the reporter sought records after learning that DFI’s former director launched two private real estate projects that were previously the subject of DFI assistance. The story describes one such project located in Fayetteville. Two current university employees are involved in the Fayetteville project, and both university employees had appropriately disclosed their involvement to the university in public documents that were made available to the reporter.
    • DFI has conducted over 130 projects since 2011. In addition to the two projects mentioned in the story, there is one other occasion in which a DFI employee has launched a private development project that was the subject of a concluded DFI project. DFI conducts conflict of interest reviews in those situations and informs relevant local governments. Conflict of interest reviews cannot be discussed by the university due to state human resources law.
    • DFI encourages its part-time employees to engage in private development outside of DFI so long as the activities are disclosed for conflict of interest review. The outside experience with private projects gives those employees current and relevant knowledge about development practices that can be shared with students and local governments.
    • The story mentions that the former director, after leaving DFI, manages a real estate investment company called Rivermont Capital. DFI cannot control and does not track the activities of former employees. However, DFI becomes aware when a former employee’s activities intersect with DFI’s active projects. This has happened on four occasions with Rivermont Capital:
    – Three of them involve a national real estate development firm called Armada Hoffler Properties. Armada Hoffler applied to be the private development partner for local governments in three communities being assisted by DFI: Fuquay-Varina, Greenville, and Morrisville. In the applications by Armada Hoffler, Rivermont was listed as a member of the Armada Hoffler team. Only one of those communities, Fuquay-Varina, is proceeding with Armada Hoffler; negotiations between the town and the firm are ongoing.
    – In one DFI project in Kannapolis, a third party developer was selected by the City to develop a private real estate project. After being selected by the City, the third party developer sought financing for its project from several sources and later obtained financing from Rivermont.
    • DFI is a nonprofit, charitable initiative that has attracted over one hundred million dollars of private investment into challenging projects across North Carolina. Its record of success stems from its commitment to local governments—DFI enters into years-long engagements with communities. DFI staff also teach North Carolina’s next generation of leaders through a graduate course in community revitalization, which provides analysis to North Carolina communities at no charge.

  2. The article above describes a project in Fayetteville that received DFI assistance. For readers who would like to learn more about DFI’s analysis in that project and the role of historic tax credits in making the project feasible, please see my May 2019 blog post here called The Role of the NC Historic Rehabilitation Tax Credit in a Development Project.

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