HomeMy WebLinkAboutContract 42219 FORTWORTH
CITY SECRETARY
CONTRACT NO.
Pilgrim Valley Manor Apartments Commitment
LENDER City of Fort Worth ("City")
BORROWER Fort Worth Pilgrim Valley Manor, LP
DEVELOPER Fort Worth Pilgrim Valley Manor Developers, LLC
CONTRACTOR Icon Builders, LLC
GUARANTORS N/A
AMOUNT $200,000.00 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 and redevelopment of the Pilgrim Valley
Manor Apartments, a 168 unit existing multifamily complex and the on-site
community center. The site is located at 1701 E. Robert Street in Fort Worth, Texas
76104 (the"Project").
HOME UNITS The Project will have a minimum of 4 "floating" High HOME units for the duration of
the Affordability Period as defined below.
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$16,934,894.00.
OTHER SOURCES
TERM 1. 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 2 years beginning on the date of execution.
2. The term of the Loan is 2 years beginning on the date of execution of the
Loan documents.
The terms of the Contract and the Loan may be extended for up to one (1) year upon
Borrower's written request, at City's option if such extension is necessary for
completion of the Project.
INTEREST RATE The lesser of 1% or the Applicable Federal Rate(AFR) per annum.
AFFORDABILITY/ The HOME units are to be rented to households earning eighty percent (80%) or less
of Area Median Income ("AMI") as determined by the United States Department of
Housing and Urban Development ("HUD"). At initial lease-up, the High HOME units
must be rented to households earning sixty percent (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.
ousin2 and Economic Development Department
The City of Fort Worth * 1000 Throckmorton Street* Fort worth. Texas 761 OFFICIAL RECORD
817-392-7520* Fax 817-392-2013 CITY SECRETARY
I P : ; o u i FT. WORTH, TX
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AFFORD
PERIOD ABILITY The Affordability Period is 15 years from the date the Project status is changed to
complete in HUD's IDIS reporting system
PAYMENT/ Interest shall be paid quarterly. Principal and all accrued but unpaid interest will be
REPAYMENT due and payable no later than 2 years from date of the Loan documents.
CONDITIONS TO LOAN
FUNDING
i. PARTIES ARE PROHIBITED FROM UNDERTAKING OR COMMITTING ANY
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 Low Income Housing Tax Credits("LIHTC"or"Tax
Credits")from the Texas Department of Housing and Community Affairs
("TDHCA")
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
contract execution or the Contract will terminate.
iii. Documentation must be acceptable in all respects to the City and its counsel.
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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 Loan term. Draws will only be approved for identifiable hard construction costs in
accordance with 24 CFR 92.206. Draws will occur as scheduled and as defined in
the Contract. City will disburse funds upon receipt of satisfactory documentation of
eligible costs and proof that such costs were paid.
ELIGIBLE COSTS Eligible costs to be paid for by these funds will be stipulated in the Contract and are
defined under 24 CFR 92.206.
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.
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.
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.
RENTAL 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/home/limits/rent/rentlimit.htmi
■ The following applies when combining LIHTC with HOME funds:
• HOME-assisted High HOME Rent unit—High HOME Rent
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• 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 15 year 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.
COMPLIANCE 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.
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
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Borrower and Contractor to maintain, and present to the City on a semi-annual basis,
Workers' Compensation insurance as follows:
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
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 City hereby reserves for itself, its successors and assigns, the right to pursue all
CONDITIONS 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
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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 September 6,
2011. 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 October 28, 2011. 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 Pilgrim
Valley Manor, LP. 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: Fabiola Suarez, Development Project Coordinator
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Sincerely,
Date: 1
Sus n Janis, Assistant City Manager
Approved as to form and legality:
Vicki S. Ganske, Senior Assistant City Attorney Ll
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THE UNDERSIGNED ON BEHALF OF BORROWER F ♦ EPTS THE FOREGOING COMMITMENT AND THE
TERMS AND REQUIREMENTS HEREIN SET FORTH AND AGREES TO BE BOUND THEREBY.
BORROWER
Fort Worth Pilgrim Valley Manor, LP
By: IAP Fort Worth Pilgrim Valley Manor, LLC,
It's General Partner
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Date:
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By: K.T. (Ik4)A bari, Manager
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/14/2011
DATE: Tuesday,June 14,2011 REFERENCE NO.: C-24977
LOG NAME: 17PILGRIMVALLEYMANOR
SUBJECT:
Authorize Change in Use and Expenditure of$200,000.00 of HOME Investment Partnerships Program Grant
Funds to Fort Worth Pilgrim Valley Manor,LP,in the Form of a Subordinate Interim Loan for the
Acquisition and Rehabilitation of the Pilgrim Valley Manor Apartments Located at 1701 East Robert Street,
Authorize the Execution of Conditional Commitment and Contract,and Authorize a Substantial Amendment
to the City's 2008-2009 Action Plan(COUNCIL DISTRICT 8).
RECOMMENDATION:
It is recommended that the City Council:
1.Authorize a substantial amendment to the City' s 2008-2009 Action Plan;
2. Authorize the City Manager,or his designee,to substitute funding years in order to meet United States
Department of Housing and Urban Development commitment,disbursement and expenditure deadlines;
3. Authorize a change in use and expenditure of$200,000.00 in prior year's HOME Investment Partnerships
Program grant funds to Fort Worth Pilgrim Valley Manor,LP,in the form of a subordinate interim loan for
acquisition and rehabilitation of the Pilgrim Valley Manor apartments located at 1701 East Robert Street,
Fort Worth,Texas;
4. Authorize the City Manager,or his designee,to execute a conditional commitment with Fort Worth
Pilgrim Valley Manor,LP,for a subordinate interim loan that conditions loan funding, among other things,
on satisfactory completion of HOME requirements;
5. Authorize the City Manager,or his designee,to execute a contract with the Forth Worth Pilgrim Valley
Manor,LP, for the project for a two—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 Fort Worth Pilgrim Valley Manor, LP, 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:
Fort Worth Pilgrim Valley Manor, LP, has requested$200,000.00 in HOME Investment Partnerships
Program grant funds in the form of a subordinate construction loan for the acquisition and substantial
rehabilitation of the Pilgrim Valley Manor apartments. a 168 unit multifamily complex located at 1701 East
Robert Street. The apartments currently have a 100 percent Section 8 contract subsidy through the United
States Department of Housing and Urban Development(HUD) but the project requires substantial
rehabilitation in order to prevent the cancellation of the HUD Section 8 contract and preserve the affordable
housing.
The project consists of 15 two—story buildings with 168 units including 40 one—bedroom/one—bath units, 64
two—bedroom/one—bath units and 64 three—bedroom/one—and—one—half—bath units. Of these 168 units,nine
will be made accessible for persons with mobility disabilities and four will be accessible for person with
hearing/visual disabilities. The units will be available to households earning 60 percent or less of the Area
Median Income(AMI)as set by HUD.
Fort Worth Pilgrim Valley Manor,LP,has submitted an application for"At—Risk" Low Income Housing Tax
Credits(LIHTC)for the project to the Texas Department of Housing and Community Affairs (TDHCA).
Total project costs including the award of$200,000.00 in HOME funds is approximately$16,934,894.00.
Staff recommends the following loan terms:
i. Designate HOME—assisted units according to HOME regulations with a 15 Year Affordability Period;
ii. Secure payment and performance of the HOME requirements by a recorded Deed of Trust on the real
property for the length of the Affordability Period;
iii. One percent interest rate; and
iv. Repayment of principal and accrued interest due two years from date of loan documents.
The commitment of HOME funds is conditioned upon the following:
i. Award of LIHTC;
ii. Satisfactory completion of the environmental review per 24 CFR Part 58;
iii.Authorization to use grant funds from HUD;and
iv.Receipt of funding for the 2010-2011 grant year.
Staff recommends the change in use and expenditure of$200,000.00 in HOME funds for the project,which
benefits low and very low income citizens by providing them with affordable housing.A public comment
period on the change in use of these HOME funds was held from May 6, 2011 to June 6,2011.Any
comments are maintained by the Housing and Economic Development Department in accordance with
federal regulations.
All actions described herein are subject to appropriation and receipt of federal funds, as well as
determinations of the City Council as to allocation of the federal funds.This project is located in COUNCIL
DISTRICT 8.
FISCAL INFORMATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated,of the Grants Fund.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
GR76 539120 005206271160 $200.000.00 GR76 539120 005206271080 $200.000.00
CERTIFICATIONS:
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Cynthia Garcia (8187)
Fabiola Y. Suarez (6811)
ATTACHMENTS