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HomeMy WebLinkAboutContract 43317 (2)CITY SECRETARY L. CONTRACT Ntl i'REDEVELOPMENT AGREEMENT This Predevelopment Agreement ("Agreement") is made and entered into by and between the City of Fort Worth (hereafter "City") and the Fort Worth Local Development Corporation (hereafter "Developer"), a Texas non-profit corporation. City and Developer may be referred to individually as a "Party" and jointly as "the Parties". The Parties state as follows: WHEREAS, City has received a grant from the United States Department of Housing and Urban Development ("I -IUD") through the HOME Investment Partnerships Program ("HOME"); WHEREAS, City has conditionally committed to loan $2,000,000.00 in HOME funds to Developer for the acquisition and construction costs of 2 multistory buildings containing up to 130 mixed income rental units located between Throckmorton Street and Monroe Street on the North side of Lancaster Avenue ("Project") as further described in, and on the terms outlined in, the Conditional Commitment attached hereto as Exhibit A; and WHEREAS, Developer has requested a portion of the committed funds as reimbursement for predevelopment expenses already incurred. NOW, THEREFORE, the Parties agree as follow: 1. City will expend up to $1,000.00 out of the committed $2,000,000.00 of HOME prior to execution of loan documents and the HOME contract in order to reimburse Developer for predevelopment expenses, so long as such expenses are classified as "exempt activities" as defined in 24 CFR Part 58. 2. Developer agrees that if (i) the conditions and terms outlined in the Conditional Commitment are not met, (ii) if for any reason the HOME contract or loan documents are not executed by December 31, 2013, or (iii) if the HOME contract and loan documents are executed but Developer defaults under same, then all funds reimbursed under this Agreement will be repaid to City immediately upon written notice by City to Developer. [SIGNATURES APPEAR ON NEXT PAGE] 06_1 4-1 2 PO4:12 IN OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX IN WITNESS WHEREOF, the Parties hereto have executed this Contract in Fort Worth, Tarrant County, Texas, on June 13, 2012. CITY OF FORT WORTH BY: �?►�+ Y Fernando Costa, Assistant City Manager APP1ROVED Ay TO FORM AND LEGALITY: f (2f21,i44 jy1� Assistant City Attorne FORT WORTH LOCAL DEVELOPMENT CORPORATION By: Frank Moss, President my J. Kaj��, ti Contract Authors zatio* Date Secre Predevelopment Agreement - Lancaster �,o.6u.:c1111204.1., h 00 I:7 0 0° p/A oh 00 t)'1 0 au , ice' % 0 o ¢ 01 g 0 a° ri a0 a 4414t 00000Qoa 2 OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX EXHIBIT A CONDITIONAL COMMITMENT [ATTACHED] Predevelopment Agreement - Lancaster 3 FORT WORTH Lancaster Mixed Use Protect 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 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 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, rexas 76102 317-392-7520 * Fax 817-392-2013 ELIGIBLE COSTS INVESTMENT / OTHER SOURCES AFFORDABILITY/ AFFORDABILITY PERIOD COLLATERAL LIEN POSITION RECAPTURE LIQUIDATED DAMAGES RENTAL RATES TITLE INSURANCE AUDITS COMPLIANCE WITH FEDERAL. STATE. AND LOCAL LAWS 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 to be paid for by these funds will be stipulated in the contract and are defined under 24 CFR 92.206. Estimated investment of up to $10 Mittlon. The HOME assisted units in the Project are to remain affordable as specified in 24 CFR 92 254 of the HOME Regulations for a minimum of twenty (20) years from the 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. 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 wntten 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: • Maximum allowable rents are posted on www. hud. aov/cod/home/llmitslrent/rentl imit. html Borrower will pay the cost of a mortgagee's title insurance policy insunng 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. 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 'he 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 Rehabilitation Act of 1973. Section 504-requires flue percent (5%) of the units, or at - least one (1) unit, whichever is greater, to he.acretssible 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 nondiscrimtnafton and equal opportunity;- affirmative marketing, displacement and relocation, labor relations,lead-based paint; property standards, and conflicts of interest provisions descnbed in 24 CFR 92 Subpart H and 24 CFR 92.504. Borrower must provide a tenant selection policy. to ensurebasic protections in order to comply with -federal regulation 24 CFR.92.25 and Borrower must comply with all applicable -Federal laws,. laws- of the: State of Tex and -ordinances -of the City dotFottWorth. INSURANCE RgguifigmeiVTSI: Borrower must maintain or cause to be maintained and present to the Cityon 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-maintaln.and present to the.City on_a semi-annual basis; a Business: Automobile Liability -Insurance -as follows: -- S1,000,000 each accident or,combined single -limit basis, or $250 000 Property Damage- $500,000 Bodily Injuryper person per occurrence $2,000 000 Aggregate - Borrower and Contractor to maintain, and present to:.the CI a semf=annual basis? Workers' Compensation insurance as follows: - Statutory Limits Emplayers Liability $100,000 each accidemNoccurren $100,000-.dtsease/per employee $500,000 disease policy limit Contractor-ss to mairttairt and present to the. City, a Builders Risk 'nsurancet policy acceptable tothe.City, and must be a-val icy at all times dunng the Loan; term Contractor to maintain property and florid_ Insurance (if required); in form and amount satisfactory to the City for the Project the Loan term: If applicable, insurance must be evidenced by a valid binder/policy, Certificates of insurance are not acceptable: The City .vtllbe named as Mortgagee and. as Additional insured Party. Ail policieswillalso provide for 30-day prior notification to the City of cancellation RECORDKEEPING CONDITIONS TO LOAN FUNDING OTHER REQUIREMENTS 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 rviiI make available to the City ail 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 UselProject. 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 r. 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. 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. Documentation must be acceptable rn ail respects to the City and its counsel. 4 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. AN 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, attomey'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. 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 coov to: City of Fort Worth Housing and Economic Development Department 1000 Throckmorton Fort Worth, TX 76102 Attn: Leticia Rodriguez, Development Project Coordinator Sincerely, OuccutAte Sus1a�Alanis Assistant City Manager Approved as to form and legality: havtakt LRa,w;&b. (lints City Attorney Date: Co' E4-' i Date: 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: /5'22 -70 // Frank Moss, President Officio s to of the C ty of Fort Woith Texas! COUNCIL ACTION: Approved on 6/14/2011 DATE: 6/14/2011 REFERENCE C-24976 LOG 17LANCASTERMIXEDUSEPROJECT NO.: NAME: CODE C TYPE: NON- PUBLIC NO CONSENT HEARING: 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. Page 1 of 3 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 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/CERTIFICATION: The Financial Management Services Director certifies that funds are available in the current operating budget, as appropriated, of the Grants Fund. 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 Submitted for City Manager's Office bv: Originating Department Head: Additional Information Contact FROM Fund/Account/Centers GR76 GR76 GR76 GR76 GR76 GR76 GR76 539120 539120 539120 539120 539120 539120 539120 005206141080 005206141090 005206181070 005206181360 005206271070 005206271080 017206351070 Susan Alanis (8180) Jay Chapa (5804) Cynthia Garcia (8187) Leticia Rodriguez (7319) $279.684.00 $284,000.00 $122,736.55 $167,950.53 $696.907.00 $124, 932.51 $323.789.41 Page 2 of 3 ATTACHMENTS Page 3 of 3