HomeMy WebLinkAboutContract 43310 CITY SECRETARY/j
CONTRACT NO. —1
Conditional Commitment of Federal Funds
Proiect: Hunter Plaza Rehabilitation Project
LENDER City of Fort Worth("City")
BORROWER FW Hunter Plaza, L.P. ("FWHP")
DEVELOPER Fort Worth Housing Authority
CONTRACTOR SEDALCO, Inc.
GUARANTORS N/A
AMOUNT $1,800,000.00 of HOME Investment Partnerships Program Grant funds for eligible
development hard costs as defined in 24 CFR 92.206(the"Loan").
USE/PROJECT The Loan is to be used for the rehabilitation of Hunter Plaza ("Project"), a 225 unit
existing multifamily complex. The Project will consist of a mixed income residential
development with retail/commercial space in the ground floor. The existing building
will be rehabilitated into approximately 164 residential units. The unit sizes will range
from, 600 to 900 sq. ft, and will include 1-bedroom 1-bath, 2-bedroom 1-bath, and 2-
bedroom 2-bath models. Forty percent of the units will be market rate and sixty
percent will be available for rent to households earning 60 percent or less of Area
Median Income (AMI) as determined by the U.S. Department of Housing and Urban
Development. The site is located at 605 W 1 st Street in Fort Worth, Texas 76102.
HOME UNITS The Project will have a minimum of 12 floating" HOME units during the 15 year
Affordability Period. Of the 12 HOME units, 9 must be designated as HIGH and 3 as
Low for the duration of the Affordability Period. The number of units is subject to
change based on an evaluation of the pro forma for the Project and the subsidy layer
analysis as required by HUD.
SECTION 504 UNITS In accordance with Section 504 of the Rehabilitation Act of 1973, the greater of 5%or
9 of the units will be accessible for persons with mobile disabilities and the greater of
2% or 4 of the units must be accessible for persons with hearing or visual disabilities.
The total number of Section 504 units for the Project is 13.
INVESTMENT/ Estimated total is $25,043,835.00. All financing for the Project must be secured by
OTHER SOURCES January 1, 2013 and the Borrower will provide to the Lender commitments for
financing from other lenders for construction and permanent loans for the remainder
of the estimated cost of the Project by January 15, 2013.
COMPLETION DATE December 1,2014
TERM Borrower will enter into a contract with City setting forth the terms of the Loan and the
requirements related to completion of the Project ("Contract"). The term of Contract
is for 3 years beginning on the date of execution. The term of the Loan begins on
execution of the Loan documents and will run concurrently with the 15 year
Affordability Period.
The term of the Contract may be extended for up to 1 year upon Borrower's written
request, at City's option if such extension is necessary for completion of the Project.
EOFFI:CIAL RECORD
ECRETARYORTH,TX 06-13-12 P03:21 IN
INTEREST RATE 1%with annual payments of interest from Cash Flow.
AFFORDABILITY/ At initial lease-up, the High HOME units must be rented to households earning 60%
or less of AMI.
If the HOME assisted units do not remain affordable for the entire Affordability Period,
then the Loan will be immediately due and payable to the City.
AFFORDABILITY The Affordability Period is 15 years from the date the Project status is changed to
PERIOD complete in HUD's IDIS reporting system
PAYMENT/ Interest shall be paid annually from Cash Flow. Principal and all accrued but unpaid
REPAYMENT interest will be due and payable at the maturity of the Loan
CONDITIONS TO LOAN i. PARTIES ARE PROHIBITED FROM UNDERTAKING OR COMMITTING ANY
FUNDING FUNDS TO PHYSICAL OR CHOICE-LIMITING ACTIONS, INCLUDING
PROPERTY ACQUISITION, DEMOLITION, MOVEMENT, REHABILITATION,
CONVERSION, REPAIR OR CONSTRUCTION PRIOR TO THE COMPLETION
OF ENVIRONMENTAL REVIEW AND RECEIPT OF THE RELEASE OF
FUNDS FROM HUD. VIOLATION OF THIS PROVISION WILL RESULT IN THE
DENIAL OF FUNDS UNDER THIS COMMITMENT. A NOTICE TO PROCEED
FROM THE CITY WILL BE ISSUED WHEN THE ENVIRONMENTAL
CLEARANCE HAS BEEN RECEIVED.
ii. Compliance with the Uniform Relocation and Assistance and Real Property
Acquisition Policies Act of 1970 as amended (42 U.S.C. 4201-4655) and the
implementing regulations at 49 CFR Part 24, Section 104(d) of the Housing and
Community Project Act of 1974 as amended, and 24 CFR Part 92.353.
iii. Compliance with the Lead-Based Paint Poisonings Protection Act (42 U.S.C.
Section 4831(b)) and the Residential Lead Based Paint Hazard Reduction Act of
1992 (42 U.S.C. Section 4851-4856)and implementing regulations at 24 CFR
Part 35.
iv. Borrower's receipt of award of 4% Low Income Housing Tax Credits(LIHTC or
Tax Credits)from the Texas Department of Housing and Community Affairs
(TDHCA) or receipt of other financing acceptable to City.
v. Borrower's receipt of firm commitment of construction and permanent financing,
and commitment from equity investor to purchase the Tax Credits.
vi. The closing of the sale of the Tax Credits.
vii. A Subsidy Layering Analysis showing that the Project has a gap in funding and is
not over-subsidized with HOME funds as defined by 24 CFR 92.250(b).
viii. If applicable, HUD Approval of Site and Neighborhood Standards. Relevant
information must be provided if a Neighborhood and Site Standards Study is
required by HUD per 24 CFR 92.202 and 983.6(b).
OTHER REQUIREMENTS i. If HOME funds are to be used for property acquisition or demolition, then
construction must begin within twelve (12) months of purchase date or the
date on which structures are demolished.
ii. Construction work on the Project must begin within 6 months of the date of
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Contract execution or the Contract will terminate.
iii. Documentation must be acceptable in all respects to the City and its counsel.
iv. Borrower will be liable for and will promptly pay all fees Borrower incurs,
including expenses and charges incurred in connection with the negotiation
and preparation of the documents governing or securing the Loan, and other
expenses incurred in connection with the Project constructed with the Loan,
including appraisal and Texas Commission on Environmental Quality (TCEQ)
environmental fees, whether or not the Loan closes, in addition to the
principal and interest on the Loan.
V. All permits and approvals must be in place prior to funding of the Loan.
vi. Zoning approvals must be in place prior to funding of the Loan.
vii. All construction contracts, plans, surveys, etc. must be acceptable to the City
and assigned as additional collateral. Approval is subject to a pre-
construction review of plans, specifications and cost estimates.
viii. Borrower must agree to any reasonable terms and conditions that are
necessary to ensure City and Borrower remain in compliance with all
applicable federal, state and City laws, regulations and ordinances regarding
the Project.
ix. The Loan is to be closed at no cost to the City. Borrower shall be
responsible for all costs associated with this transaction, including
mortgagee's title insurance policy, attorney's fees, filing fees, closing costs,
etc.
X. Any financing subordinate to the Loan must be approved by City.
DRAW PERIOD Borrower will be entitled to make requests for draws, on a reimbursable basis, during
the Contract term. Draws will only be approved for the items identified under Eligible
Costs. Draws will occur as scheduled and as defined in the Contract. City will
disburse funds upon receipt of satisfactory documentation such as invoices, proof of
payment, and release of liens prior to City reimbursing for costs associated with this
project.
ELIGIBLE COSTS Eligible costs to be paid for by these funds will be stipulated in the Contract are will
be limited to fees such Architect Fees, Design Fees, Engineering Fees,
Environmental Remediation Fees, and Construction costs. The Borrower must
provide invoices, proof of payment, and release of all liens prior to Lender
reimbursing for costs associated with the Project.
COLLATERAL A second lien Deed of Trust on Project real property and all improvements will be
recorded by the City prior to the first draw to secure payment and performance.
Developer may request that the City move to third lien position, but consent shall be
granted in City's sole discretion. Repayment of the Loan shall not release the Deed
of Trust which shall continue in effect throughout the Affordability Period to secure
the Affordability of the Project.
LIEN POSITION Subordinate only to Borrower's construction loan and permanent financing.
RECAPTURE If at any time the Affordability requirements are not met, the City will foreclose its
Deed of Trust or the Loan must be repaid.
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LIQUIDATED DAMAGES There shall be a 10% payment of original total Loan amount as liquidated damages
for every year that the Affordability requirements are not maintained during the
Affordability Period.
RENT AL RATES The Borrower must use the Maximum allowable HOME rents as determined by HUD:
• Maximum allowable HOME rents are posted on
www.hud.gov/cpd/horf-ie/limits/rent/rentlirrilt.htrr-il
■ The following applies when combining LIHTC with HOME funds:
• HOME-assisted High HOME Rent unit—High HOME Rent
• HOME-assisted Low HOME Rent unit—Low HOME Rent
• LIHTC-assisted unit—Tax Credit rent limit
• HOME-and LIHTC-assisted unit—Lesser of(i) HOME rent limit that
applies (either High HOME rent or Low HOME rent) or(ii)Tax Credit
rent limit
TITLE INSURANCE Borrower will pay the cost of a mortgagee's title insurance policy insuring the amount
of the Loan.
AUDITS City will conduct annual audits during the Affordability Period to ensure Affordability
requirements are being met. Reimbursement requests for HOME eligible expenses
will also be subject to audits. Borrower will maintain records in accordance with the
recordkeeping requirements outlined below.
CO:AIPLIA1:CE WITH FEDERAL, If it is determined that the use of the funding provided by the City for the stated
STATE,AND LOCAL LAWS Use/Project does not meet HOME requirements, Borrower will reimburse the City for
the costs determined to be ineligible and/or disallowed under the HOME regulations.
Borrower agrees that the Project will meet the property standards requirements in 24
CFR 92.251 which includes compliance with the current edition of the Model Energy
Code (MEC), International Energy Conservation Code (IECC), lead-based paint
standards in 24 CFR 92.355 (if applicable), as well as City building standards.
Borrower certifies that it is not currently listed on the General Services
Administration's List of Parties Excluded from Federal Procurement or Non-
procurement Programs in accordance with Executive Orders 12549 and 12689 and
will not enter into agreements to expend Federal Funds with contractors that are
currently listed.
If applicable, Borrower must comply with federal labor standards under 24 CFR
92.354, Davis Bacon prevailing wage rates, and submit required documentation to
ensure compliance.
Borrower must comply with all prescribed procedures regarding nondiscrimination
and equal opportunity, affirmative marketing, and conflict of interest provisions
described in 24 CFR 92 Subpart H and 24 CFR 92.504.
Organizations that are directly funded under the HOME program may not engage in
inherently religious activities as defined under 24 CFR 92.257.
Borrower must comply with all applicable Federal laws, laws of the State of Texas
and ordinances of the City of Fort Worth.
Borrower must provide a tenant selection policy to ensure basic tenant rights and
protections in order to comply with 24 CFR 92.253.
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INSURANCE REQUIREMENTS Borrower must maintain and present to the City on a semi-annual basis, a General
Liability Insurance policy in the amount of $500,000 each occurrence, $1,000,000
aggregate limit.
Borrower is to maintain and present to the City on a semi-annual basis, Business
Automobile Liability Insurance as follows:
$1,000,000 each accident on combined single-limit basis, or
$250,000 Property Damage
$500,000 Bodily Injury per person per occurrence
$2,000,000 Aggregate
Borrower and Contractor to maintain, and present to the City on a semi-annual basis,
Workers' Compensation insurance as follows.-
Statutory
ollows:Statutory Limits
Employers Liability
$100,000 each accident/occurrence
$100,000 disease/per employee
$500,000 disease policy limit
Contractor is to maintain and present to the City, Builders Risk insurance. The
Builders Risk policy must be acceptable to the City, and must be a valid policy at all
times during the Loan.
Contractor to maintain property and flood insurance (if required), in form and amount
satisfactory to the City for the Project during the Loan term.
If applicable, insurance must be evidenced by a valid binder/policy. Certificates of
insurance are not acceptable. The City will be named as Mortgagee and as
Additional Insured Party. All policies will also provide for 30-day prior notification to
the City of cancellation.
RECORDKEEPING Borrower must maintain records that will provide accurate, current, separate, and
complete disclosure of the status of the funds received pursuant to this Commitment
and the Contract and pursuant to any other applicable Federal and/or State
regulations establishing applicable standards for financial management.
At any reasonable time and as often as City may deem necessary, Borrower will
make available to the City all of its records and will permit City to conduct audits of all
contracts, invoices, materials, payrolls, records of personnel, conditions or
employment and all other data relating to the stated Use/Project.
Borrower will provide quarterly financial and beneficiary reports that will contain such
records, data and information as City may request pertinent to matters covered by
this Commitment and the Contract such as tenant leases and income eligibility
certification. Reports will be due to the Housing and Economic Development
Department within 45 days of the end of the quarter. Required report format/template
and/or instructions will be provided to Borrower by City. Borrower will provide any
additional information as requested by the City within 10 days of date of receipt of
written request.
INDEMNIFICATION Borrower agrees to indemnify and to defend and hold City harmless against(a)any
brokerage commissions or finder's fees claimed by any broker or other party in
connection with the transactions contemplated herein; or(b) any claims related to
losses, costs, damages or expense that City may incur, directly or indirectly, including
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reasonable attorney's fees, as a result of or in connection with the presence or
removal of any environmental contamination or hazardous materials at, on or under
the Project or any adjacent of proximate property, and the violation of any applicable
federal and state environmental laws or in connection with the Project. This indemnity
shall survive cancellation, termination, or avoidance of this Commitment.
BREACH OF CONDITIONS City hereby reserves for itself, its successors and assigns, the right to pursue all
remedies, either at law or in equity, to enforce the conditions of this Commitment,
including but not limited to seeking specific performance of Borrower's obligation to
develop the Project. City may also, prior to Loan closing, and in its sole and absolute
discretion, declare this Commitment null and void upon an event of default or breach
by Borrower of any of its representations contained in its application for the Loan or in
this Commitment, or any violation of the HOME regulations, in which event neither
City not Borrower shall have any further rights or obligations under this Commitment,
except for such obligations of Borrower that are expressly stated to survive
termination hereof.
ACCEPTANCE In order for this Commitment to remain effective, an original must be executed by
Borrower and any Guarantors and returned to the City on or before June 1, 2012.
Any extension of such time for acceptance must be in writing and signed by a City
representative.
EXPIRATION To cause this Commitment to remain in effect, the Contract between Borrower and
the City must be executed on or before December 31, 2012. Any extension of such
date must be in writing and signed by the City.
Any funds disbursed against this Commitment will be subject to City's receipt of satisfactory documentation of the Loan
and due diligence satisfaction. This Commitment is confidential and is intended solely for the use of Fort Worth Housing
Authority. No other person or party has any rights whatsoever with respect to the above terms and conditions_ These
terms can be modified or other terms negotiated between the parties only upon mutual written agreement.
The City attests that funds committed herein were not first provided to the City by the Borrower, the Developer, any
consultant, related party or any individual or entity acting on behalf of the Borrower in its application for the Loan.
If the foregoing is responsive to your needs, please indicate your acceptance with your signature below and by returning a
signed copy to:
City of Fort Worth
Housing and Economic Development Department
1000 Throckmorton
Fort Worth, TX 76102
Attn: Leticia Rodriguez, Bus/Com Development Coordinator
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Sincerely,
ef� Date:
Fernando Costa, Assistant City Manager
Approved as to form and legality:
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Vicki Ganske, Senior Assistant City Aft
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THE UNDERSIGNED ON BEHALF OF BOR ER HEREBY ACCEPTS THE FOREGOING COMMITMENT AND THE
TERMS AND REQUIREMENTS HEREIN SET FORTH AND AGREES TO BE BOUND THEREBY.
BORROWER
FW Hunter Plaza, L.P.
By: 4j,——
Name: Barbara Holston Title: Secretary
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CRETARY
RTH, TX
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CM,' "; COUNCIL AGENDA F R�rt ORTF�
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COUNCIL Wit)! "Ap��"
DATE: 6/12/2012 REFERENCE C-25662 LOG 17FWHA-
NO.: NAME: HUNTERPLAZAPROJECT_REVISON
CODE: C TYPE: NOW PUBLIC NO
CONSENT HEARING:
SUBJECT: Authorize Change in Use and Expenditure of Additional HOME Investment Partnerships
Program Grant Funds in the Amount of$1,300,000.00 to FW Hunter Plaza, L.P.,for the
Redevelopment of the Hunter Plaza Apartments Located at 605 West First Street,
Authorize Execution of a Conditional Commitment and Contract, and Authorize
Substantial Amendment to the City's 2003-2004, 2005-2006, 2006-2007, 2009-2010 and
2011-2012 Action Plans and Substitution of Funding Years (COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a Substantial Amendment to the City's 2003-2004, 2005-2006, 2006-2007, 2009-2010
and 2011-2012 Action Plans;
2. Authorize the substitution of current and prior funding years in order to meet commitment,
disbursement and expenditure deadlines for grant funds from the United States Department of
Housing and Urban Development;
3. Authorize the change in use and expenditure of additional HOME Investment Partnerships
Program Grant funds in the amount of$1,300,000.00 for a total of$1,800,000.00 in HOME funds to
FW Hunter Plaza, L.P., an affiliate of the Fort Worth Housing Authority, for the redevelopment of the
Hunter Plaza Apartments located at 605 West First Street;
4. Authorize the City Manager or his designee to execute a conditional commitment with FW Hunter
Plaza, L.P. for a subordinate loan that conditions funding on, among other things, satisfactory
compliance with the HOME requirements;
5. Authorize the City Manager or his designee to execute a contract with FW Hunter Plaza, L.P. for
the project for a three year term beginning on the date of execution of the contract;
6. Authorize the City Manager or his designee to extend or renew the conditional commitment or the
contract for up to one year if FW Hunter Plaza, L.P. requests an extension and such extension is
necessary for completion of the project; and
7. Authorize the City Manager or his designee to amend the conditional commitment or the contract if
necessary to achieve project goals provided that the amendment is within the scope of the project
and in compliance with City policies and applicable laws and regulations governing the use of federal
grant funds.
DISCUSSION:
On December 13, 2011, City Council approved a conditional commitment of$500,000.00 from
Program Year 2012-2013 HOME Investment Partnerships Program Grant(HOME)funds and
$500,000.00 from the General Fund portion of the Fort Worth Housing Trust Fund to the Fort Worth
Housing Authority(FWHA), or its affiliate, for the redevelopment of the Hunter Plaza Apartments
located at 605 West First Street(M&C C-25369). The purpose of the commitment was to show local
support of FWHA's application to the Texas Department of Housing and Community Affairs (TDHCA)
for nine percent Low Income Housing Tax Credits(LIHTC)for the redevelopment project. The
apartments are now vacant but previously housed 225 public housing units for elderly and disabled
persons. FWHA has formed FW Hunter Plaza, L.P.
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Earlier this year FWHA was informed by TDHCA that the project did not score high enough to receive
a nine percent LIHTC award. FWHA now wants to apply for non-competitive four percent LIHTC in
order to move forward with the redevelopment of the apartments. Because of the change in the type
of tax credits it is applying for, FWHA has requested additional funding for the project and has also
requested that all of the City's funds be repaid in 15 years instead of the original three year loan term
for the $500,000.00 of General Funds. Since the financing of the project has changed substantially,
Staff recommends substituting HOME funds for the General Funds from the Housing Trust Fund, and
increasing the amount of HOME funds for the project by $1,300,000.00 for a total award of
$1,800,000.00.
Staff recommends the following HOME loan terms:
1. Loan of HOME funds subordinate only to construction and permanent financing for the
project,
2. Designate HOME-assisted units according to HOME regulations with a 15 Year Affordability
Period;
3. HOME funds secured by a Deed of Trust on the real property;
4. Interest at one percent;
5. Loan term to run concurrently with the Affordability Period;
6. Satisfactory completion of the environmental review per 24 CFR Part 58;
7. Authorization to use grant funds from HUD; and,
8. Equity, construction and permanent financing acceptable to City.
The Action Plan funding years selected may vary and be substituted based on the Principle of First
In, First Out in order to expend oldest grant funds first. The HOME funds may be used for any
eligible costs related to this development.
A public comment period on the intent to use HOME funds was held from May 11, 2012 to June 11,
2012. Any comments are maintained by the Housing and Economic Development Department in
accordance with federal regulations.
This project is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget of the Grants Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
GR76 539120 017206351080 $500,000.00 GR76 539120 017206531070 $500,000.00
GR76 539120 017206531080 $500.000.00 GR76 539120 017206351070 $500,000.00
Submitted for City Manager's Office by: Fernando Costa (6122)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Cynthia Garcia (8187)
Leticia Rodriguez(7319)
ATTACHMENTS
HunterPlaza.pdf
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