HomeMy WebLinkAboutContract 31369 ITY
CON
CONTRACT Y �30
MODIFICATION, RENEWAL
AND EXTENSION AGREEMENT
THE STATE OF TEXAS §
COUNTY OF TARRANT §
THIS MODIFICATION, RENEWAL AND EXTENSION AGREEMENT (the "Agreement"),
made and entered into effective as of r 200 by and among the City of Fort Worth
("Lender") and I�TDC Fort Worth Affordable Housing I, Ltd, a Texas limited partnership
("Borrower").
RECITALS:
WHEREAS, Lender is the owner and holder of one certain Promissory Note dated December 11,
1996 (the "Note") in the original principal sum of FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000) (said loan, together with any and all renewals, extensions,
modifications, amendments, and increases thereto or thereof, being herein collectively called the
"Loan") secured by land situated in Tarrant County, Texas, and more particularly described as:
See Exhibit "A" attached hereto and made a part hereof for all purposes
and any improvements situated thereon, (the land and the improvements sometimes are
hereinafter collectively called the"Property"); and
WHEREAS, said Note is secured, in party, by that certain Deed of Trust dated December 11,
1996, from Borrower to Edwin Cook, Trustee, as recorded in Vol. 12762, Page 175 of the
Official Public Records of Real Property in Tarrant County, Texas, covering the Property(which
Deed of Trust, together with any and all renewals, extensions, modifications, amendments, and
increases thereto or thereof, being herein collectively called the "Deed of Trust");
WHEREAS, the Note was issued pursuant to a Construction Loan Agreement between Lender
and Borrower dated December 11, 1996, which Loan Agreement is City Secretary Contract No.
22442 (which Loan Agreement, together with any and all renewals, extensions, modifications,
amendments and increases thereto or thereof, being herein collectively called the "Loan
Agreement");
WHEREAS, the Project as defined in the Loan Agreement has been completed and Lender has
advanced all Loan Proceeds to Borrower as set forth therein;
WHEREAS, the Loan and Deed of Trust are second and inferior to that one certain deed of trust
in favor of Bank One Texas, N.A. securing a promissory note in the original principal sum of
$4,543,000.00, which deed of trust is recorded in the Official Public Records of Real Property in
Tarrant County, Texas (the"Bank One Deed of Trust");
02-24-05A,!9 00 RCVU �°) -' 1
9 Ui .0•.:11 aG'6r
WHEREAS, the Project is a low-income rental housing development subject to the terms of that
one certain Declaration of Land Use Restrictive Covenants for Low-Income Housing Credits
recorded in Vol. 12625, Page 413, of the Official Public Records of Real Property in Tarrant
County, Texas, covering the Property, which requires that at least seventy-five percent (75%) of
the units in the Project must be occupied by tenants at or below sixty percent (60%) of Area
Median Gross Income (the "Declaration");
WHEREAS, the Note was modified in a Modification and Extension Agreement dated June 16,
1998 that extended the term of the Note;
WHEREAS, the Note, the Deed of Trust and the Loan Agreement and all related loan documents
are sometimes hereinafter collectively called the"Loan Documents";
WHEREAS, Borrower is seeking a new General Partner and has requested that Lender modify
certain provisions of the Note and Deed of Trust, all as hereinafter provided, and in consideration
thereof Borrower has made certain agreements with Lender as hereinafter more fully set forth;
WHEREAS, Lender has agreed to such requests, subject to the terms and conditions set forth
herein; and
WHEREAS, Borrower and Lender desire to set forth their understanding with respect to the
terms and conditions of the modification of the Loan hereunder.
AGREEMENT:
NOW, THEREFORE, for and in consideration of TEN DOLLARS ($10.00) and other good and
valuable consideration paid by each of the parties to the other, the receipt and sufficiency of
which are hereby acknowledged and confessed, Borrower and Lender agree as follows:
1. The Note is renewed, modified and extended as follows:
a. The parties hereto acknowledge that the outstanding principal balance of the
Note as of the date hereof is FIVE HUNDRED THOUSAND AND NO 100
DOLLARS ($500,000.00).
b. Effective as of, and commencing on December 11, 1996, no interest on the
principal amount of the Note remaining from time to time unpaid shall accrue.
C. Effective as of, and commencing on December 11, 1996, the principal amount
of the Note shall be due and payable as follows:
A payment of $200,000 of the principal amount is due and payable within
fifteen (15) days of the effective date of Borrower obtaining a new General
Partner or the sale of the Property, whichever comes first. No interest shall be
charged on this repayable portion of the principal.
LIT`
F $300,000 of the principal amount shall forgivable provided the Property is
maintained as a low-income rental housing development in compliance with
the terms of the Declaration and the terms of the Bank One Deed of Trust now
assigned to Fannie Mae.
2. Borrower hereby agrees and acknowledges that it is well and truly indebted to Lender
pursuant to the terms of the Note, as renewed, modified and extended hereby. Borrower
hereby promises to pay to the Lender, or order, the Note in accordance with the terms
thereof, and hereby agrees to observe, comply with and perform all of the obligations,
terms and conditions under or in connection with the Note, the Deed of Trust, and any
and all of the other Loan Documents, all as modified hereby.
3. Borrower hereby acknowledges and agrees that the liens and security interests of the
Deed of Trust and the other Loan Documents are valid and subsisting liens and security
interests and. are superior to all liens and security interests other than those exceptions
approved by Lender in writing and the Bank One Deed of Trust. Nothing herein
contained shall affect or impair the validity or priority of the liens and security interests
under the Deed of Trust or the other Loan Documents.
4. Except as otherwise expressly modified hereby, all terms and provisions of the Note and
the Loan Documents shall remain unchanged and hereby are ratified and confirmed and
shall be and shall remain in full force and effect, enforceable in accordance with their
terms.
5. Borrower, by its execution of this Agreement, hereby declares that it has no set-offs,
counterclaims, defenses or other causes of action against Lender arising out of the Loan,
the renewal, modification and extension of the Loan, any documents mentioned herein or
otherwise; and, to the extent any such set-offs, counterclaims, defenses or other causes of
action may exist, whether known or unknown, such items hereby are waived by
Borrower.
6. Borrower also agrees to provide to Lender, upon demand, the reasonable attorneys' fees
and expenses of Lender's counsel, filing and recording fees and other reasonable
expenses incurred by Lender in connection with this Agreement. Borrower also agrees to
provide to Lender such other documents and instruments as Lender reasonably may
request in connection with the renewal, extension and modification of the Loan effected
hereby.
7. The parties hereto shall execute such other documents to be filed for record as may be
necessary or as may be required, in the opinion of counsel to Lender, to effect the
transactions contemplated hereby and to protect the liens and security interests of the
Deed of Trust, the insurance thereof and the liens and/or security interests of all other
collateral instruments.
8. Notwithstanding anything to the contrary in this Agreement or the Note, or in any other
Loan Documents, whether now existing or hereafter arising and whether written or oral,
L) blcP:,
it is agreed that the aggregate of all interest and other charges constituting interest, or
adjudicated as constituting interest, and contracted for, chargeable or receivable under the
Note or otherwise in connection with the Note shall under no circumstances exceed the
maximum rate of interest permitted by applicable law. In the event the maturity of the
Note is accelerated by reason of an election by the holder thereof resulting from a default
thereunder or under any other document executed as security therefor or in connection
therewith, or by voluntary prepayment by the maker, or otherwise, then earned interest
may never include more than the maximum rate of interest permitted by applicable law.
If from any circumstance any holder of the Note shall ever receive interest or any other
charges constituting interest, or adjudicated as constituting interest, the amount, if any,
which would exceed the maximum rate of interest permitted by applicable law shall be
applied to the reduction of the principal amount owing on such Note or on account of any
other principal indebtedness of the maker to the holder of such Note, and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of principal
thereof and such other indebtedness, the amount of such excessive interest that exceeds
the unpaid balance of principal thereof and such other indebtedness shall be refunded to
the maker. All sums paid or agreed to be paid to the holder of the Note for the use,
forbearance or detention of the indebtedness of the maker to the holder of such Note shall
be amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full for the purpose of determining the actual rate on such
indebtedness is uniform through the term thereof.
9. The terms "maximum amount" or "maximum rate" as used in this Agreement or the
Note, or in any other agreement entered into in connection with the Note or securing the
indebtedness evidenced by the Note, whether now existing or hereafter arising and
whether written or oral, include, as to Article 5069-1.04 of the Revised Civil Statutes of
the State of Texas (and as same may be incorporated by reference in other statutes of the
State of Texas), but otherwise without limitation, that rate based upon the "indicated rate
ceiling"; provided, however, that this designation shall not preclude the rate of interest
contracted for, charged or received in connection with the Loan from being governed by,
or construed in accordance with, any other state or federal law, including but not limited
to Public Law 96-221.
10. This Agreement shall be binding upon, and shall inured to the benefit of, the parties'
respective heirs, representatives, successors and assigns.
11. In the event the enforceability or validity of any portion of this Agreement, the Note, the
Deed of Trust or all other Loan Documents is challenged or questioned, such provision
shall be construed in accordance with, and shall be governed by, whichever applicable
federal or Texas law would uphold or would enforce such challenged or questioned
provision.
12. Borrower hereby releases Lender, its successors and assigns, from all claims, demands,
liabilities and causes of action which Borrower may be entitled to assert (although no
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such claims are known to exist) against Lender by reason of Lender's contracting,
charging or receiving for the use, forbearance or detention of money, interest on the Loan
evidenced by the Note prior to the execution of this Agreement in excess of that
permitted to be charged to Borrower under applicable law.
13. This Agreement, together with the Loan Documents contains the entire agreements
between the parties relating to the subject matter hereof and thereof and all prior
agreements relative thereto which are not contained herein or therein are terminated.
This Agreement and the Loan Documents may be amended, revised, waived, discharged,
released or terminated only by a written instrument or instruments, executed by the party
against which enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. There are no unwritten oral agreements between the parties
relating to the subject matter hereof. Any alleged amendment, revision, waiver,
discharge, release or termination that is not so documented shall not be effective as to any
party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement in one or more
counterparts, each of which shall be deemed an original and all of which together will constitute
one and the same instrument, effective as of the date first above written.
BORROWER:
NDC FORT WORTH AFFORDABLE HOUSING I, LTD., a Texas limited partnership
By: Neighborh ev ent Collaborative, a District of Columbia non-profit corporation,
Its Gam` r �
ByJohn A. Ca si
ItsChief Executive Officer
By: RBM-184 Apartments, Inc., a Texas corporation,
Its General Partner
By:
Its:
LENDER:
"7
OF ORT W TIS Attested By:
Dale . isse 1
D
a e F' er, V
lblourty N�ndrL
Assistant City Manager
City Secretary
Contract Authorization
Date
T. n, cl—
APPROVED AS TO O AND LEGALITY:
By: '�/
Assistant City Attorney
STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on '� u1 200 by Dale
A. Fisseler, the Assistant City Manager of the City of Fort W rth, on behalf the City of Fort
Worth. �`- /
v KATHY F.DURHAM
- •'': MY COMMISSION EXPIRES
Juumy24,M Notary P blic, State of Texas
STATE OF CALIFORNIA §
COUNTY OF LAKE §
This instrument was acknowledged before me on-Pf&M -51A , 200 , byJohn A.
Carlisis, the Chief Executive Officer of Neighborhood Development Collaborative, a District of
Columbia non-profit corporation, General Partner, on behalf of NDC Fort Worth Affordable
Housing I, Ltd., a Texas limited partnership.
Nota ubl c, State of California
Printed Nme of o ary_�
M.MARRNEW
My ommi ion Ex fres: Iz --1 4- -07 _ Commission# 1440082
-i Notary Public-Caiitomla
Lake County
My Comm.Expires Oct 14,2007i
STATE OF TEXAS §
COUNTY OF HARRIS §
This instrument was acknowledged before me on 200_ by
, the of RBM-184 Apartments, Inc.,
a Texas corporation, General Partner, on behalf of NDC Fort Worth Affordable Housing I, Ltd., a
Texas limited partnership.
Notary Public, State of Texas
�y r, i-r
r -tint
such claims are known to exist) against Lender by reason of Lender's contracting,
charging or receiving for the use, forbearance or detention of money, interest on the Loan
evidenced by the Note prior to the execution of this Agreement in excess of that
permitted to be charged to Borrower under applicable law.
13. This Agreement, together with the Loan Documents contains the entire agreements
between the parties relating to the subject matter hereof and thereof and all prior
agreements relative thereto which are not contained herein or therein are terminated.
This Agreement and the Loan Documents may be amended, revised, waived, discharged,
released or terminated only by a written instrument or instruments, executed by the party
against which enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. There are no unwritten oral agreements between the parties
relating to the subject matter hereof. Any alleged amendment, revision, waiver,
discharge, release or termination that is not so documented shall not be effective as to any
party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement in one or more
counterparts, each of which shall be deemed an original and all of which together will constitute
one and the same instrument, effective as of the date first above written.
BORROWER:
NDC FORT WORTH AFFORDABLE HOUSING I, LTD., a Texas limited partnership
By: Neighbor11Wd1)evt.16pment Collaborative, a District of Columbia non-profit corporation,
Its r
G
ByJohn A. isi
ItsChief Executive Officer
By: RBM-184 A s, Inc., a Texas corporation,
Its Gen artner
lva
By: 7`orJ'I f LTO►A 1 Qo��
Its: G.D_4P .
LENDER:
Attested By:
CITY OF ORT WO
r
Dale A. isseler, V Nlarty Headr
Assistant City Manager City Sccretary
Contract Authorization ; 1 -
Date - n ..•.,-, �1n
J:i
APPROVE))AS TO R ND LEGALITY:
By-
Assistant City Attorney
STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on 6 �! � �, �y ; , 2005 by Dale
A. Fisseler, the Assistant City Manager of the City of Fort Wordi, on behalf the City of Fort
Worth.
KATHY F.DURHAM
MY COMMISSION EXPIRES
'=',• Jwualy24,200A Notary P blit, State of Texas
STATE OF CALIFORNIA §
COUNTY OF LAKE §
This instrument was acknowledged before me on 0"1 , 2001, byJohn A.
Carlisis, the Chief Executive Officer of Neighborhood Development Collaborative, a District of
Columbia non-profit corporation, General Partner, on behalf of NDC Fort Worth Affordable
Housing I, Ltd., a Texas limited partnership.
Nota ubl e, State of California
Pn*jRted,N4me of toary:�
1 1"I l Y1 ` l I nn.huUanNRw
My ommis6ion Ex ires: l-p ---14 -OEZ _ Commluw#1440082
Notary Public-CoNtomfa
Lake County
OIMVCofnrm Expkes Oct 14.2007
STATE OF TEXAS §
COUNTY OF HARRIS §
his instrr�u,�,�ent was acknowledged before me on iY1 Cly t� 200 by
the ,_ • of —]84 Apartments, Inc.,
a Texas corporat n, General Partner, on behalf of NDC Fort Worth Affordable Housi g I, Ltd., a
Texas limited partnership. '
Notary Public, State of Texas
t►����" MONICA L. PEASE
Notary Public
STATE OF TEXAS
O
My Commission Expires 05/19/2008
7 We .I.fVt::L�t) Yl�b�o
AFTER RECORDING, RETURN TO:
Housing Department, Attention Karen Meunier
City of Fort Worth
1000 Throckmorton St.
Fort Worth TX 76102
CITY
Page 1 of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 2/17/2005
DATE: Thursday, February 17, 2005
LOG NAME: 05AUTUMN CHASE REFERENCE NO.: C-20528
SUBJECT:
Approval of Modification, Renewal and Extension Agreement between the City of Fort Worth and
NDC Fort Worth Affordable Housing I, LTD.
RECOMMENDATION:
It is recommended that the City Council:
1. Approve a Modification, Renewal and Extension Agreement (Modification Agreement) between the City
of Fort Worth and NDC Fort Worth Affordable Housing I, Ltd. (NDC) that modifies NDC's current
$500,000.00 debt to the City to a $200,000 loan and forgives $300,000.00 in current debt; and
2. Authorize the City Manager to execute the Modification Agreement with NDC for the repayment of the
modified $200,000 loan balance and forgiving the remaining $300,000 in current debt to the City.
DISCUSSION:
The City of Fort Worth provided financial assistance to Riverbend Apartments currently known as Autumn
Chase Apartments in the amount of $500,000 to renovate 184 units through its Rental Rehabilitation
Program in 1996. The general partner was NDC Fort Worth Affordable Housing I, Ltd. NDC also received
funding through a Low Income Housing Tax Credit (LIHTC) award.
The City was in a subordinate position to the original senior note in the amount of $4.54 million held by
Bank One Texas. The senior note was subsequently assumed by Amresco Capital, L.P. in July 1998. Its
current balance is $3.28 million. The City of Fort Worth re-subordinated and modified its subordinate note in
June of 1998. The current City of Fort Worth note is a cash flow loan with a 25-year term. No principal
payments have been paid on the note because Autumn Chase has experienced a negative cash flow since
the inception of the loan. As of December 31, 2004, the Limited Partnership has accrued $419,840 in
liabilities to the general partner and $150,000 in deferred development fees. Net cash flow is
$234,793. The general partner has fulfilled its obligations under their contract, and has funded over
$500,000 to pay for operating deficits to date. It has elected to withdraw from the project due to losses
experienced to date.
MMA Financial (MMA), asset manager for the portfolio in which Autumn Chase is held, is seeking a new
general partner. Autumn Chase is one of three properties in the portfolio included in the general partner
offering. The other two properties are Creekstone Ranch in Victoria, Texas and Cityscape Apartments in
Peoria, Illinois. Both have experienced positive cash flow and returns on investments. The offering was
sent to 3,000 potential investors. Only one prospective general partner has indicated willingness to invest
in the portfolio. MMA approached the City to request forgiveness of its loan as an alternative to allowing
Autumn Chase to go into foreclosure on its senior note.
http://www.cfwnet.org/council_packet/Reports/mc_print.asp 2/21/2005
Page 2 of 2
The current ownership has made good faith efforts to maintain and market the property. However, the sub
market and general rental market have not been able to support the operating expenses and debt service
on the property. Competition from Cobb Hill, a newly constructed LIHTC apartment community located
within the same sub market has eroded Autumn Chase's ability to increase rents or attract the best tenant
market. Since the current GP stopped funding deficits in May 2004, MMA has funded an additional $47,000
in capital improvements for gates, security cameras, signage and improved lighting, fence replacement,
landscaping, picnic tables and benches and pool repairs. In addition MMA has made staff changes and
evicted problem tenants in an effort to reduce illicit activities on the property. This resulted in a physical
occupancy of 55% in October 2004. Management reduced rental rates in September 2004. As of
December 2004, occupancy has only increased to 60%.
The potential new investor is Pinnacle Realty Management Co. which has a track record for sound
operation of rental properties. Pinnancle is a management service company and national leader in third-
party fee management of investment real estate, managing a portfolio of apartment, office, industrial and
retail assets in 42 states and more than 20 Texas cities.
It is not anticipated in the foreseeable future that the sub market in which Autumn Chase is located will
allow the property to increase its income stream adequately to fund operations, its senior debt service and
also be able to provide excess cash flow for the City's subordinate note. Autumn Chase is now 13 years
old and the rehabilitation completed with the City's loan is now almost ten years old and is not adequate to
compete with much newer construction projects. The City's anticipated investment in nearby Sierra Vista
and the Glen Edens subdivision currently under construction will be well-served by maintaining sound
management and the physical appearance of Autumn Chase, both of which could be undermined by a
foreclosure on the senior note if a new general partner is not brought in.
The Housing and Workforce Development Committee was briefed on this request November 16, 2004, and
authorized the Housing Director to bring the request to City Council. The proposed Modification Agreement
is attached as Attachment "A".
This project is located in Council District 8.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will have no material effect on City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
GR92 207000 000206078000 $300,000.00 GR92 126152 000206078000 $300,000.00
Submitted for City Manager's Office by: Dale Fisseler (6140)
Originating Department Head: Jerome Walker (7537)
Additional Information Contact: William Hewitt (7565)
http://www.cf\vnet.org/council_packet/Reports/mc_print.asp 2/21/2005