HomeMy WebLinkAboutContract 41923 FORTWORTH CITY SECRETARY
CONTRACT NO, 4 1 g a 3
Lancaster Mixed Use Project Conditional Commitment
LENDER City of Fort Worth ("City")
BORROWER Fort Worth Local Development Corporation ("Borrower")
DEVELOPER Fort Worth Local Development Corporation ("LDC')
CONTRACTOR TBD
AMOUNT $2,000,000.00 of HOME Investment Partnerships Program Grant funds for eligible
project costs as defined in 24 CFR Part 92 (the"Loan")
USE/PROJECT Acquisition and new construction of the project known as the Lancaster Mixed Use
Project, consisting of the new construction of a building that will include both retail
and residential space south of the building known as the 'Zipper Building", located on
1116 and 1118 Jennings Avenue and 1115, 1119 and 1121 Monroe Street, Fort
Worth, Texas ("Project"). The Project will consist of the construction of a five story
building with one floor of retail space and approximately fifty(50) housing rental units,
with both affordable and market rent units ("Project').
INTEREST RATE 0%
TERM 1. The term of contract is for twenty (20) years beginning on the date of the
execution of the contract.
2. The term of the Loan is twenty (20) years.
PAYMENT/ Payments are deferred during the Affordability Period. The Loan will be forgiven 5%
REPAYMENT per year provided all Affordability requirements have been met and the LDC is not
otherwise in default of the Loan terms or contract provisions. Upon default of the
Loan terms or contract provisions the entire balance of the loan will be immediately
due and payable.
LATE CHARGES N/A
OFFICIAL RECORD
ORIGINATION FEE N/A CITY SEGRET`, .R.
DRAW PERIOD Borrower will be entitled to make requests for draws, on a reimbursement basis,
Housing and Economic and Development Department
The City of Fort Worth * 1000 Throckmorton Street* Fort Worth, Texas 76102
817-392-7520 * Fax 817-392-2013
during the contract term. Draws will occur as scheduled and as defined in the
contract. City will disburse funds upon receipt of satisfactory documentation and due
diligence satisfaction including receipt of invoices for approved expenditures and
certified releases of mechanic's liens.
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.
INVESTMENT/ Estimated investment of up to$10 Million.
OTHER SOURCES
AFFORDABILITY/ The HOME assisted units in the Project are to remain affordable as specified in 24
AFFORDABILITY CFR 92.254 of the HOME Regulations for a minimum of twenty (20) years from the
PERIOD date the Project has been closed in the HUD IDIS reporting system. If the HOME
assisted units do not remain affordable for the entire Affordability Period, then the
remaining balance of the Loan will be immediately due and payable to the City.
COLLATERAL A valid Deed of Trust on land and all improvements will be recorded by the City to
secure payment and performance.
LIEN POSITION The Loan will be in first lien position ahead of any mortgages or other financial liens
on the property. The City will take a second lien position if a construction loan is
required. Any changes in the City's lien position must be approved by the City.
RECAPTURE If at any time the Affordability requirements are not met, the City will foreclose its
deed of trust on the property or the remaining balance of the HOME funds must be
repaid.
LIQUIDATED DAMAGES There shall be a ten percent (10%) payment of the initial Loan amount as liquidated
damages if Affordability requirements are not maintained during the Affordability
Period. This payment shall be due and payable within thirty (30) days of written
notice that the City has determined in its sole discretion that the Borrower has not
met the Affordability requirements.
RENTAL RATES The Project shall be required to use the following HOME Program guidelines for
establishing rents:
■ Maximum allowable rents are posted on
www.hud.gov/cpd/home/limits/rent/rentlimit.html
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 to ensure Affordability requirements. 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
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Rehabilitation Act of 1973. Section 504 requires five percent (5%) of the units, or at
least one (1) unit, whichever is greater, to be accessible for persons with mobility
disabilities. An additional two percent (2%) of the units must be accessible for
persons with hearing or visual disabilities.
Borrower must comply with displacement and relocation requirements at 24 CFR
92.353 and 24 CFR 42.
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.
Borrower must comply with all prescribed procedures regarding nondiscrimination
and equal opportunity, affirmative marketing, displacement and relocation, labor
relations, lead-based paint, property standards, and conflict of interest provisions
described in 24 CFR 92 Subpart H and 24 CFR 92.504.
Borrower must provide a tenant selection policy to ensure basic tenant rights and
protections in order to comply with federal regulation 24 CFR 92.253.
Borrower must comply with all applicable Federal laws, laws of the State of Texas
and ordinances of the City of Fort Worth.
INSURANCE REQUIREMENTS Borrower must maintain or cause to be maintained 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, a 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 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, a Builders Risk insurance policy
acceptable to the City, and must be a valid policy at all times during the Loan term.
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.
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RECORDKEEPING Borrower must maintain records that will provide accurate, current, separate, and
complete disclosure of the status of the funds received pursuant to this Conditional
Commitment and the contract and pursuant to any other applicable Federal and/or
State regulations establishing applicable standards for financial management.
During normal working hours 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 Conditional Commitment and contract such as 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 ten (10) days of date of receipt
of written request.
CONDITIONS TO LOAN i. The parties hereto agree and acknowledge that this letter constitutes a
FUNDING Conditional Commitment of funds and/or site approval, and that any
commitment of funds or approval may occur only upon satisfactory
completion of the subsequent items:
a. An environmental review and receipt by the City of an authorization to
use grant funds from the HUD under 24 CFR Part 58. The parties further
acknowledge that the provision of any funds to the Project is conditional on
the City's determination to proceed with, modify or cancel the Project based
on the results of a subsequent environmental review.
b. 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 24 CFR 983.6(b).
c. A Subsidy Layering Analysis must be conducted to ensure the Project is
not over-subsidized using HOME funds as required by per 24 CFR 92.250(b)
ii. City Council-approval of award of HOME funds for the Project and receipt of
HOME funds from HUD for the Project.
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 Authorization to Use Grant Funds from HUD. Violation of
this provision will result in the denial of funds under this Conditional
Commitment. A Notice to Proceed from the City will be issued to
Borrower when the environmental clearance has been received.
OTHER REQUIREMENTS i. If HOME funds are to be used for property acquisition, then construction
must begin within twelve (12) months of purchase date or the date on which
structures are demolished.
ii. Documentation must be acceptable in all respects to the City and its counsel.
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iii. 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.
iv. All permits and approvals must be in place prior to funding of the Loan.
V. 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.
vi. 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.
vii. The Loan is to be closed at not 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.
ACCEPTANCE In order for this Conditional Commitment to remain effective, an original must be
executed by Borrower and any Guarantors and returned to the City on or before
December 1, 2011. Any extension of such time for acceptance must be in writing
and signed by a City representative. These terms can be modified or other terms
negotiated between the parties upon mutual written agreement.
EXPIRATION To cause this Conditional Commitment to remain in effect, the contract between
Borrower and the City must be executed on or before December 1, 2011. Any
extension of such date must be in writing and signed by the City.
Any funds disbursed against this Conditional Commitment will be subject to the City's receipt of satisfactory
documentation of the Loan and due diligence satisfaction. This Conditional Commitment is confidential and is intended
solely for the use of the Fort Worth Local Development Corporation. No other person or parties has any rights
whatsoever with respect to the above terms and conditions. These terms can be modified or other terms negotiated
between the parties upon mutual written agreement.
The City attests to Borrower that any 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.
5
We hope the foregoing is responsive to your needs and that you will accept this offer. Please indicate your acceptance
with your signature below and by returning a signed copy to:
City of Fort Worth Attes b
Housing and Economic Development Department y•
1000 Throckmorton
Fort Worth, TX 76102
Attn: Leticia Rodriguez, Development Project Coordinator
a y Hendrix. City _
Sincerely,
"n&n�_ h
Y
Date: 24-
Sus lanisI ' 0,00Uo 1
Assistant City Manager °o o° �4(
a
Approved as to form and legality: � '1b
Dater-
Gensl�e L wv.+7• �uzl'►1a.�
Ser ion ssistant City Attorney
The undersigned hereby accepts the foregoing Conditional Commitment and the terms and requirements herein set for
and agrees to be bound thereby.
BORROWER
Fort Worth Local Development Corporation
Date: 476
Frank Moss, President
C_ - a�g��
Contract Authorization
Date 1
OFFICIAL RECORD
CITY SECRETARY
FT. WORTHY TX
6
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/14/2011
DATE: Tuesday, June 14, 2011 REFERENCE NO.: C-24976
LOG NAME: 17LANCASTERMIXEDUSEPROJECT
SUBJECT:
Authorize a Substantial Amendment to the City's 2006-2007, 2007-2008, 2008-2009 and 2009-2010 Action
Plans and Substitution of Funding Years,Authorize Change in Use and Expenditure of$2,000,000.00 of
HOME Investment Partnerships Program Grant Funds for the Lancaster Mixed Use Project for the
Construction of Approximately Fifty Housing Units Located on 1116 and 1118 Jennings Avenue and 1115,
1119 and 1121 Monroe Street, Authorize a Conditional Commitment for a Subordinate Interim Loan to the
Fort Worth Local Development Corporation, and Authorize a HOME Contract with the Fort Worth Local
Development Corporation (COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a substantial amendment to the City' s 2006-2007, 2007-2008, 2008-2009 and 2009-2010
Action Plans;
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$2,000,000.00 in prior year's HOME Investment
Partnerships Program (HOME)Grant funds to the Fort Worth Local Development Corporation in the form of
a subordinate forgivable loan for the development of the Lancaster Mixed Use Project for the new
construction of up to fifty Mixed Income housing units located on 1116 and 1118 Jennings Avenue and 1115,
1119 and 1121 Monroe Street,Fort Worth,Texas (the Project);
4. Authorize the City Manager, or his designee, to execute a conditional commitment with the Fort Worth
Local Development Corporation, for a twenty year subordinate forgivable loan that conditions funding to the
completion of the Environmental Review, and among other things,on satisfactory completion of HOME
requirements;
5. Authorize the City Manager, or his designee, to execute a HOME contract with the Fort Worth Local
Development Corporation, for the Project for a term beginning on the date of execution of the contract and
ending on the date the 20 year affordability period expires;
6. Authorize the City Manager, or his designee, to extend or renew the conditional commitment or the
contract for up to one year if the Local Development Corporation, 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:
The Lancaster Mixed Use Project(Project)consists of the new construction of a building that will include
both retail and residential space south of the building known as the " Zipper" building. In the form of a
subordinate forgivable loan, staff recommends awarding $2,000,000.00 to the Fort Worth Local
Development Corporation to develop, lease and manage the project. The development site will be located on
1116 and 1118 Jennings Avenue and 1115, 1119 and 1121 Monroe Street,Fort Worth,Texas.The project
will consist of a five story building with approximately fifty rental units.
Sf iff recommends the following loan terms:
i.Designate HOME—assisted units according to HOME regulations with a 20 year affordability period;
ii. HOME funds secured by a recorded Deed of Trust on the real property;
iii. Forgivable at the end of the loan term upon satisfactory completion of all HOME requirements; and
iv. Loan term is twenty years.
The commitment of HOME funds is conditioned upon the following:
i. Satisfactory completion of the environmental review per 24 CFR Part 58;and
ii. Authorization to use grant funds from HUD.
City staff recommends the change in use and expenditure of$2,000,000.00 in HOME funds for the Project.
The purpose of the Project is to benefit low and very low income citizens by providing them with affordable
housing, in accordance with the HOME regulations, 24 CFR Part 92 et seq. A public comment period on the
change in use of these HOME funds was held from May 5, 2011 to June 6, 2011. Any comments are
maintained by the Housing and Economic Development Department in accordance with federal regulations.
The Action Plan funding years selected may vary and years may be substituted based on the principle of First
In,First Out in order to expend the oldest grant funds first.
All actions described herein are subject to appropriation and receipt of federal funds,as well as
determinations of the Fort Worth City Council as to allocation of the federal funds. This project is located in
COUNCIL DISTRICT 9.
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 005206141150 $563.684.00 GR76 539120 005206141080 $279.684.00
GR76 539120 005206181150 $290,687.08 GR76 539120 005206141090 $284.000.00
GR76 539120 005206271150 $821.839.51 GR76 539120 005206181070 $122.736.55
GR76 539120 005206351150 $323.789.41 GR76 539120 005206181360 $167.950.53
GR76 539120 005206271070 $696.907.00
GR76 539120 005206271080 $124.932.51
GR76 539120 017206351070 $323.789.41
CERTIFICATIONS:
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Cynthia Garcia (8187)
Leticia Rodriguez (7319)
ATTACHMENTS
1. available fundLof
M&C Review Page 1 of 2
Official site of the City of Forr World, ;xas
CITY COUNCIL AGENDA FoRTWORT111
COUNCIL ACTION: Approved on 3/6/2012
DATE: 3/6/2012 REFERENCE*,,C-25460 LOG NAME: 17LANCASTERMIXEDUSEPROJECTREVISION
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Amendment of M&C C-24976 to Expand the Project Location of the Lancaster
Mixed Use Project, Increase the Number of Housing Units and Approve the Waiver of Certain
Related Development Fees (COUNCIL DISTRICT 9)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize amendment of M&C C-24976 to expand the project location of the Lancaster Mixed Use
Project and increase the number of housing units;
2. Authorize amendment of the conditional commitment with the Fort Worth Local Development
Corporation to reflect the expanded location and the increase in number of housing units; and
3. Approve the waiver of certain related development fees.
DISCUSSION:
On June 14, 2011, (M&C C-24976) authorized a substantial Amendment to the City's 2006-2007,
2007-2008, 2008-2009 and 2009-2010 Action Plans and substitution of funding years and authorized
a change in use and the expenditure of$2,000,000.00 of HOME Investment Partnerships Program
Grant Funds for the Lancaster Mixed Use Project (Project). The June 14, 2011, M&C approved the
Project to be developed on 1116 Jennings Avenue, 1118 Jennings Avenue, 1115 Monroe Street,
1119 Monroe Street and 1121 Monroe Street, Fort Worth, Texas and to construct up to 50 residential
units. Staff recommends amending the executed conditional commitment to reflect these changes.
Since June, the Project has expanded to add a residential building with retail on the first level and an
office building space, and retail in the first level and a parking garage. The Project boundary has
expanded to include 13th Street to the North, Throckmorton Street to the East, Lancaster Avenue to
the South, and Monroe Street to the West. In addition, the number of units has increased from 50 to
130 residential units with 19 designated as HOME units.
A public comment period on the expansion of the Project boundaries was held from July 24, 2011 to
August 29, 2011. Any comments are maintained by the Housing and Economic Development
Department in accordance with federal regulations.
The Action Plan funding years selected may vary and years may be substituted based on the
principle of First In, First Out in order to expend the oldest grant funds first.
Fee Waivers:
Since this Project will provide quality, affordable and accessible housing which would benefit low-
income and moderate-income households, Staff recommends that the City waive fees related to the
Project that would otherwise be charged by the City including but not limited to (a) all building permit
related fees (including Plans Review, Inspections and Re-inspection Fees); (b) Plat/Replat
Application Fees; (c) Board of Adjustment Application Fees; (d) Demolition Fees; (e) Structure
Moving Fees; (f)Zoning Fees; (g) Street/Alley and Utility Easement Vacation Application Fees; (h)
Temporary Encroachment Fees; (i) Consent/Encroachment Agreement Application Fees; (j) Urban
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=16462&councildate=3/6/2012 9/4/2013
M&C Review Page 2 of 2
Forestry Application Fees; (k) Sign Permit Fees; (1) Community Facilities Agreement (CFA)
Application Fees; and (m) Street Closure Fees. Water and sewer impact fees are not waived and
shall be fully payable. The City will use a portion of the waived fees to meet the City's HOME match
requirement.
All actions described herein are subject to appropriation and receipt of federal funds, as well as
determinations of the Fort Worth City Council as to allocation of the federal funds.
This project is located in COUNCIL DISTRICT 9.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on
City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
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
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=16462&councildate=3/6/2012 9/4/2013