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HomeMy WebLinkAboutContract 41923LENDER BORROWER FORT WORTH 1/er CITY SECRETAR'' . CONTRACT k 1 Lancaster Rfflxed Use Proiect C.ndDtfl.rwillCommjjtment City of Fort Worth ("City") 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 ORIGINATION FEE DRAW PERIOD N/A N/A at - OFFICIAL RECORD CITY SEt E . . 'I Borrower will be entitled to make requests for draws, on a reimbursement basis, Housing and Economic and Development apartment 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. OTHFR 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 LIEN POSITION RECAPTURE LIQUIDATED DAMAGES RENTAL RATES TITLE INSURANCE AUDITS A valid Deed of Trust on land and all improvements will be recorded by the City to secure payment and performance. 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. 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. 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. The Project shall be required to use the following HOME Program guidelines for establishing rents: a Maximum allowable rents are posted on www.hud.qov/cpd/home/limits/rent/rentlimit.html Borrower will pay the cost of a mortgagee's title insurance policy insuring the amount of the Loan. 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 2 INSURANCE REQUIREMENTS 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. 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 3 RECORDKEEPING CONDITIONS TO LOAN FUNDING 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. The parties hereto agree and acknowledge that this letter constitutes a 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. 4 ACCEPTANCE EXPIRATION 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. 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. 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 returnina a sianed copy to: City of Fort Worth Housing and Economic Development Department 1000 Throckmorton Fort Worth, TX 76102 Attn: Leticia Rodriguez, Development Project Coordinator Sincerely, Susan Alan's Assistant City Manager Approved as to form and legality: 1 u4A 41/0/iin/v(oim.L. VickiS:-Gans-ke t_42aivKD•(1GtZWitoitic SenieP-Assistant City Attorney Atte9ted) �r4, Ma y Jg 4r1x1 C Date: (40 PY4-1 Date: • /Act V 1 /r w• ll . ti114.11 •t , Fiw1 If • 1 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 Vrnacig—atk Date: 4‘452f .. bra Frank Moss, President ---- r21/44 contract Author zatioRs Date OFFICIAL RECORD ©MY SECREI'Akei FT. WORTH, tU''( 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. Staff recommends the followine 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 anon 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 GR76 539120 005206141150 GR76 539120 005206181150 GR76 539120 005206271150 GR76 539120 005206351150 $563.684.00 $290.687.08 $821.839.51 $323.789.41 CERTIFICATIONS: Submitted for City Manager's Office bv : Originating Denartment Head: FROM Fund/Account/Centers GR76 539120 005206141080 GR76 539120 005206141090 GR76 539120 005206181070 GR76 539120 005206181360 GR76 539120 005206271070 GR76 539120 005206271080 GR76 539120 017206351070 Susan Alanis (8180) Jay Chapa (5804) $279.684.00 $284.000.00 $122.736,55 $167.950.53 $696.907.00 $124.932.51 $323 789.41 Additional Information Contact; ATTACHMENTS 1. available funds.ndf Cynthia Garcia (8187) Leticia Rodriguez (7319) M&C Review DATE: CODE: SUBJECT: COUNCIL ACTION: Approved on 3/6/2012 Page 1 of 2 Official site of the City of Fort Worth, Texas Fo11'1^ 'f.1RTI 3/6/2012 NEOFERENCE **C-25460 LOG NAME• 17LANCASTERMIXEDUSEPROJECTREVISION TYPE: CONSENT PUBLIC NO HEARING: 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.asp7ID=16462&councildate=3/6/2012 9/4/2013 M&C Review Page 2 of 2 Forestry Application Fees; (k) Sign Permit Fees; (I) 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 Citv Manager's Office bv: Originating Department Head: Additional Information Contact: ATTACHMENTS Fernando Costa (6122) Jay Chapa (5804) Cynthia Garcia (8187) Leticia Rodriguez (7319) http://apps.cfwnet.org/council_packet/mc review.asp9ID=16462&councildate=3/6/2012 9/4/2013