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HomeMy WebLinkAboutContract 41398SECRETARY January 25, 2011 Tarrant County Housing Partnership 3204 Collinsworth Street Fort Worth, Texas 76107 Attention: Donna Van Ness Attention: Donna VanNess, Executive Director Reference: Tarrant County Housing Partnership Hillside\Morningside Neighborhood Single Family Infill Development Dear Ms. VanNess: We are pleased to present for your review the following terms, conditions, and requirements based on the application of Tarrant County Housing Partnership, a Community Housing Development Organization ("CHDO"), for a deferred payment loan of up to $331,931.00 from the City of Fort Worth for the development of up to three (3) single-family infill houses located within the Hillside\Morningside Neighborhood, along with to one (1) house from CHDO Proceeds, subject to the following terms and conditions: BORROWER Tarrant County Housing Partnership, Inc. ("TCHP") DEVELOPER TCHP CONTRACTOR TBD GUARANTORS N/A LENDER City of Fort Worth ("City") AMOUNT $331,931.00 in HOME Investment Partnerships Program Grant funds for eligible construction and other development costs as defined in 24 CFR 92.206 ("Loan"). The Loan will be a deferred payment loan that will be forgivable if Borrower fulfills all conditions set forth in the contract with City. USE/PROJECT Construction of up to three (3) single-family houses. All houses will be, Housing and Economic and Development Department The City of Fort Worth � 1000 Throckmorton Street ,k Fort Worth, Texas 76 817-392-7520 *Fax 817-392-2013 CIYv SECREii��te? at a minimum, 1,200 square feet with 3-bedrooms, 2-baths with rear detached garage. The houses must be sold to HOME -eligible homebuyers that earn at or below eighty percent (80%) of the Area Median Income ("AMI") as determined by the United States Department of Housing and Urban Development ("HUD"). AFFORDABILITY/ The Affordability Period is five (5) years from the date units have been AFFORDABILITY entered into HUD IDIS reporting system. PERIOD The HOME Program requires: • Each home will be sold to a HOME -eligible buyer earning equal to or less than 80% of the Area Median Income (AMI). • Borrower agrees to ensure that all HOME -assisted housing or housing identified as match for the HOME program meet all affordability requirements identified in 24 CFR 92.254. FULL TIME Borrower will have a minimum of one (1) full-time employee who works STAFF REQUIREMENT solely for Borrower. CHDO PROCEEDS CHDO Proceeds are defined as total HOME investment in the unit, minus funds allocated as development subsidies, buyer subsidies, developer's fee and any repayments from sales proceeds. It is expected that the CHDO Proceeds from the sale of the three (3) houses will be used to build up to one (1) additional house but the number of houses will be determined by the amount of CHDO Proceeds generated. CHDO Proceeds will be retained in a restricted account for Borrower to use in accordance with the contract. INTEREST RATE 0% TERM 1. The term of the contract is three (3) years beginning on the date of contract execution. The term of the contract requires completion of construction but does not require completion of the sale of the house to a HOME -eligible buyer. The completed houses must be insured and maintained and remain vacant while being actively marketed for sale. 2. The term of the Loan is three (3) years. 3. The contract or the Loan terms may be extended for up to six (6) months if Borrower requests an extension and such extension is necessary to complete the Project. . PAYMENT/ Payment will be deferred through the Loan term. The Loan forgivable if the following conditions are met: (1) houses are sold to is a REPAYMENT HOME -eligible buyer who will occupy the house as his or her primary residence and (2) CHDO Proceeds from the three (3) houses are used to construct an additional house to be sold to a HOME -eligible buyer. If the CHDO Proceeds are not sufficient to construct an additional house, the CHDO Proceeds will be held in a restricted account for TCHP until such time as additional proceeds are generated. Upon completion and sale of the additional house, the CHDO Proceeds will be retained by TCHP with no further obligation to the 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 HOME eligible costs in accordance with 24 CFR 92.206. Draws will occur as scheduled and defined in the contract. City will disburse funds upon receipt of satisfactory documentation and due diligence satisfaction. ELIGIBLE COSTS Eligible costs to be paid for by these funds will be stipulated in the contract and are defined under 24 CFR 92.2069 COLLATERAL Upon execution of contract, the City will place a valid first lien Deed of Trust on each of the lots. This lien will be released when the houses are ,purchased from Borrower by a HOME eligible homebuyer for use as his or her primary residence. AUDITS City will conduct annual audits to ensure Affordability requirements. Borrower will maintain records according to the recordkeeping requirements outlined below. RECAPTURE If the units built with Loan funds are not occupied by aHOME-eligible buyer during the Affordability Period; the HOME funds will become subject to recapture in accordance with 24 CFR 92.254 (a) (5) (ii). CONDITIONS TO LOAN i. This Conditional Commitment does not constitute a commitment FUNDING of funds or site approval, and any commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by the City of a release of funds from 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. 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- 3 LIMITING ACTIONS, INCLUDING PROPERTY ACQUISITION, DEMOLITION, MOVEMENT, REHABILITATION, CONVERSION, REPAIR OR CONSTRUCTION PRIOR TO THE COMPLETION OF ENVIRONMENTAL REVIEW AND RECIEPT OF THE RELEASE OF 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 WHEN THE ENVIRONMENTAL CLEARANCE HAS BEEN RECEIVED iv. Documentation must be acceptable in all respects to the City and its counsel. Borrower must require each homebuyer to utilize a minimum of $1,000.00 from the City's Homebuyer Assistance Program for down payment assistance to ensure that the house remains affordable for five (5) years. Failure to require down -payment assistance will result in repayment of the total of HOME funds awarded. OTHER i. If HOME funds are to be used for property acquisition or REQUIREMENTS 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. Borrower will be liable for and will promptly pay all fees Borrower incursI 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. Documentation must be acceptable in all respects to the City and its counsel. iv. Zoning 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, L! regulations and ordinances regarding the Project. COMPLIANCE W ITH Borrower agrees that as a cered Community Housing Development FEDERALY STATE, Organization, they will comply with 24 CFR 92.300 and 92.301. AND LOCAL LAWS If it is determined that the use of the funding provided by the City for the stated Use/Project does not meet HOME requirements, Borrower will reimburse the City for the Use/Project costs determined to be ineligible and/or disallowed under the HOME regulations. Borrower agrees that all housing projects assisted under this agreement will meet the property standards requirements in 24 CFR 92.251 and lead -based paint standards in 24 CFR 92.355, as well as City building standards. Borrower must comply with displacement and relocation requirements at 24 CFR 92.504 and 92.353, 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 and conflict of interest provisions described in 24 CFR 92 subpart H and 24 CFR 92.504. Borrower must comply with all applicable Federal laws, laws of the State of Texas and ordinances of the City of Fort Worth. 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 agree to any reasonable terms and conditions as necessary in order to ensure City and Borrower remain in compliance with all federal regulations, state laws, and local ordinances regarding the Project. INSURANCE Borrower must maintain and present to the City on asemi-annual basis, REQUIREMENTS a General Liability Insurance in the amount of $500,000 each occurrence, $1,000,000 aggregate limit. Borrower is to maintain and present to the City on asemi-annual basis, a Business Automobile Liability Insurance as follows: 9 $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, Builders Risk insurance. The Builder's Risk insurance 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 life of the Loan. 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. The policy 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 Agreement and pursuant to any other applicable Federal and/or State regulations establishing standards for financial management. Upon receipt of reasonable written notice by the City 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 Agreement. 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 to be provided by the City. Borrower will provide any additional information as requested by the City within 10 days of date of receipt of written request. CLOSING COSTS The Loan is to be closed at no cost to the City. Borrower shall be responsible for all costs associated with this transaction, including title insurance, attorney fees, filing fees, closing costs, etc. TITLE INSURANCE Borrower will pay the cost of a mortgagee's title insurance policy insuring the amount of the Loan. ACCEPTANCE In order for this Conditional Commitment to remain effective, an original of this Commitment letter must be executed by Borrower and any Guarantors and returned to the City on or before January 26, 2011. Any extension of such time for acceptance must be in writing and signed by a City representative. EXPIRATION To cause this Conditional Commitment to remain in effect, the contract between the City and Borrower must be executed on or before January 31, 2012. 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 Tarrant County Housing Partnership. 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 agreement. In the event of a conflict between any of the terms or conditions presented in this commitment and the subsequent contract, the terms and conditions presented in the contract would supersede those presented in this commitment. 7 We hope the foregoing is responsive to your needs and that you will accept this offer. Please indicate your acceptance with your siqnature below and by returninq a siqned copy to: City of Fort Worth Housing and Economic Development Department Attested byo 1000 Throckmorton Fort Worth, TX 76102� Attn: Avis F. Chaisson, Development Project Coordinator fif y Hendrix, City Se r R �Aa� AV ko00000po Sincerely, .� zw ,00no op0 1 1/1.tij Date: 7 I / �o o' Susa Al�anis Qi o o �c < Assist nt City Manager Y �a�oa0000� p, jIQ t1U. Approv as to fo nd legality: 4112Date: Le nn duzman Assistant 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 Tarrant County Housing Partnership, Inc. Executive Director Contract Authoriaatiou Date: ®F�ICIAL REC®RD 8 CITY SECRE'TAIt Imo. TMIRx41, �: Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION2 Approved on 1/25/2011 DATE: Tuesday, January 25, 2011 LOG NAME: 17TCHP-HILLSIDBMORNINGSIDE REFERENCE NO.: C-24714 SUBJECT: Authorize a Change in Use and Expenditure of $381,931.00 of HOME Investment Partnerships Program Grant Funds to Tarrant County Housing Partnership, Inc., for the Development of Three Single Family Houses in the Hillside-Morningside Neighborhood, Authorize the Execution of Conditional Commitment and Contract and Authorize a Substantial Amendment to the City's 2010-2011 Action Plan (COUNCIL DISTRICT 8) RECOMMENDATION: It is recommended that the City Council: 1. Authorize a substantial amendment to the City's 2010-2011 Action Plan; 2. Authorize the City Manager, or his designee, to substitute 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 a change in use and expenditure of $381,931.00 in HOME Investment Partnerships Program Grant funds to Tarrant County Housing Partnership, Inc., a certified Community Housing Development Organization, for the development of three single family houses in the Hillside-Morningside neighborhood; 4. Authorize the City Manager, or his designee, to execute a conditional commitment with Tarrant County Housing Partnership, Inc., that conons funding, among other things, on satisfactory completion of HOME requirements; 5. Authorize the City Manager, or his designee, to execute a Contract with the Tarrant County Housing Partnership, Inc., 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 if Tarrant County Housing Partnership, Inc., requests a written 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 October 14, 2010, the City issued a Request for Proposals (RFP) for certified Community Housing Development Organizations (CHDO) to award and expend up to $1,261,931.00 of HOME Investment Partnerships Program Grant funds. On November 18, 2010, the Tarrant County Housing Partnership, Inc., (TCHP) submitted a response requesting $617,884.00 of the available HOME funds to acquire seventeen sites on which it proposed to construct single family houses. The request also included funds for related CHDO operating expenses. City staff reviewed all RFP submissions and recommended the award to TCHP of $381,931.00 in HOME funds to the Community Development Council (CDC) at its meeting held on December 1, 2010. The CDC agreed with staffs funding recommendation for the project. Up to $50,000.00 of the awarded funds will be http://apps.cfwnet.org/ecouncil/printmc.asp?id=14661&print=true&DocType=Print 01/26/2011 Page 2 of 2 used for operating expenses and $331,931.00 for construction of three houses and other development expenses. TCHP plans to develop three.single family houses to be located in the Hillside-Morningside neighborhood. There are three floor plan options available and all houses will be at a minimum 1250 square feet with three bedrooms, two baths and a rear detached garage. The houses will be sold to an individual or family that earns 80 percent or less of Area Median Income as determined by the United States Department of Housing and Urban Development (HUD). Buyers must meet all HOME Program requirements including applying for and receiving at least $1,000.00 in down payment and/or closing cost assistance from the City's Homebuyer Assistance Program and occupying the house as their primary residence for five years. City staff recommends the following Contract terms: i. Construction must begin within six months of date of Contract execution; ii. TCHP's performance under the Contract and use of the HOME funds will be secured by a recorded Deed of Trust; iii. Houses must be sold to a HOME eligible buyer; and iv. Proceeds from the sale of houses must be used to construct additional houses for a HOME eligible buyer and construction of Proceeds houses must occur within the three year contract term. The expenditure 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 up to $381,931.00 in HOME funds for the project to benefit low and very low income citizens by providing affordable housing. A public comment period on the change in use of these HOME funds was held from December 16, 2010 to January 20, 2011. Any comments are maintained by the Housing and Economic Development Department in accordance with federal regulations. This project is located in COUNCIL DISTRICT 8. FISCAL INFORMATION /CERTIFICATION: 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 GR76 539120 017206461XXX GR76 539120 017206461XXX FROM Fund/Account/Centers $150.000.00 GR76 539120 017206461030 $231.931.00 GR76 539120 017206461040 CERTIFICATIONS: Submitted IVI City Manager's Office bv: Originating Department Head: Additional Information Contact: Susan Alanis (8180) Jay Chapa (5804) Cynthia Garcia (8187) Avis F. Chaisson (6342) ATTACHMENTS 1. Available Funds -Hillside-Morningside 206461.pdf (CFW Internal) $150.000.00 $231.931.00 http://apps.cfwnet.org/ecouncil/printmc.asp?id=14661&print=true&DocType=Print O1/26/2011