HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2022-07RESOLUTION NO. FWHFC-2022-07
FORT WORTH HOUSING FINANCE CORPORATION
A RESOLUTION APPROVING A FORGIVABLE LOAN TO FORT WORTH
AFFORDABILITY, INC. FOR THE DEVELOPMENT OF THE HUGHES HOUSE
AFFORDABLE MULTI -FAMILY HOUSING DEVELOPMENT LOCATED AT 4830
AND 4908 EAST ROSEDALE STREET AS PART OF THE MULTI -YEAR CHOICE
NEIGHBORHOODS IMPLEMENTATION GRANT IN THE CAVILE
PLACE/HISTORIC STOP SIX AREA; AUTHORIZING EXECUTION OF CONTRACTS
AND RELATED LOAN DOCUMENTS; AUTHORIZING ACCEPTANCE OF
ASSIGNMENT FROM FORT WORTH AFFORDABILITY, INC; APPROVING
PARTIAL WAIVER OF POLICY; AND AUTHORIZING ASSIGNMENT OF LOAN
OBLIGATIONS TO FW HUGHES HOUSE, LP
WHEREAS, the City Council of the City of Fort Worth ("City") has adopted development
and revitalization of the City's neighborhoods and affordable housing stock as a strategic goal, and
City residents and the City Council have determined that quality accessible affordable housing is
needed for moderate, low and very low-income City residents;
WHEREAS, the City Council created the Fort Worth Housing Finance Corporation (the
"Corporation") in 1979 pursuant to the Texas Housing Finance Corporations Act, Chapter 394
of the Texas Local Government Code, to facilitate neighborhood revitalization and housing
initiatives in the City, including but not limited to issuing tax exempt bonds, developing,
rehabilitating and promoting housing, and assisting low to moderate income City citizens in
acquiring quality, accessible, affordable housing through lending and construction activities;
WHEREAS, the Housing Authority of the City of Fort Worth, Texas commonly known
as Fort Worth Housing Solutions ("FWHS"), owned and operated the Cavile Place Apartments
formerly located at 1401 Etta off East Rosedale Street in East Fort Worth in the Cavile Place
neighborhood;
WHEREAS, in 2012 the Board of Directors of the Corporation (the "Board") agreed to
partner with FWHS to develop a plan for the revitalization of the Cavile Place Apartments along
with the surrounding neighborhood that would be included in FWHS's applications for available
grants for the project from various federal programs, as well as other sources which are available
to assist with the redevelopment of public housing and surrounding neighborhoods;
WHEREAS, on May 7, 2013, the Board accepted the Cavile Place Neighborhood
Transformation Plan (the "Transformation Plan") created by Gilmore Kean, LLC along with a
broad coalition of community leaders and public officials, to support the redevelopment of Cavile
Place and an extended area including the Historic Stop Six Neighborhood, and on July 22, 2014,
the City Council adopted a Resolution approving the Transformation Plan and incorporating it into
the City's Comprehensive Plan (M&C G-18264, Resolution No. 4333-07-2014);
WHEREAS, in 2015, FWHS began the redevelopment process for Cavile Place by
acquiring property within the transformation area to develop affordable housing in the first phase
of redevelopment;
RESOLUTION NO. FWHFC-2022-07
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WHEREAS, the Fort Worth Transportation Authority, commonly known as Trinity
Metro, committed to assess and enhance public transit access in the area;
WHEREAS, the Fort Worth Independent School District has created the Historic Stop Six
Initiative to develop a stronger educational foundation for children, build stronger families, and
revitalize the community by empowering citizens;
WHEREAS, on June 28, 2016, the Board approved a Memorandum of Understanding with
the City, FWHS, Trinity Metro and the Fort Worth Independent School District to aid in the
redevelopment of Cavile Place and the revitalization of the Historic Stop Six Neighborhood;
WHEREAS, from 2016 through 2019, FWHS worked to eliminate blight in the designated
area by property acquisition, demolition and property maintenance;
WHEREAS, in 2016 the City Council supported the implementation of a Neighborhood
Improvement Strategy pilot program for Cavile Place and Stop Six and approved the use of
$2,500,000.00 in capital funds to implement strategic capital investments aimed at increasing
public safety, improving the physical characteristics of the neighborhood, promoting economic
revitalization, providing supportive services to reduce poverty, and improving the quality of life
(Resolution No. 4722-12-2016);
WHEREAS, the Choice Neighborhoods Implementation ("CNI") grant is the U.S.
Department of Housing and Urban Development's ("HUD") signature place -based initiative for
comprehensively revitalizing neighborhoods, and FWHS determined that it would apply for the
CNI grant to partially fund the redevelopment of the Cavile Place/Historic Stop Six area;
WHEREAS, in May 2019, FWHS initiated a neighborhood planning process to update
and revise the Transformation Plan in order to apply for the CNI Grant from HUD, which is
specifically aimed at the redevelopment of public housing and surrounding neighborhoods,
including affordable housing development and permanent supportive housing development;
WHEREAS, Permanent Supportive Housing ("PSH") involves long term rental assistance
and case management for individuals and families who have been homeless for over a year and
are disabled;
WHEREAS, on October 22, 2019, the Corporation approved setting aside $5,000,000.00
for forgivable, no interest loans for the development of PSH projects that meet the following
criteria:
At least 20 PSH units per project
No more than $25,000.00 of Corporation funds per PSH unit
Foundations/grants to match Corporation funds dollar for dollar
Forgivable, no interest loans evidenced by promissory notes and loan agreements, secured
by mortgage liens
20-year Performance Period as PSH project
Developers to furnish equity
Project must be financially viable for entire 20-year Performance Period
RESOLUTION NO. FWHFC-2022-07
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Project must meet acceptable underwriting criteria including project operations, sources
and uses, ownership structure, and developer financial strength
All loans subject to Board approval;
WHEREAS, FWHS requested the City to be Co -Applicant and the Lead Neighborhood
Implementation Entity for the CNI Grant, in addition to the support of various other governmental
bodies, social service agencies, and nonprofits;
WHEREAS, the Board supported FWHS and the City's application for a CNI Grant by
approving the use of $1,250,000.00 of the Corporation's funds for construction -to -permanent loans
for housing development financing, and approved the use of $1,250,000.00 of the Corporation's
funds specifically set aside for the development of PSH, with certain stipulations for eligibility
(Resolution No. FWHFC-2019-06);
WHEREAS, in Spring of 2020, HUD announced that the City and FWHS were awarded
a CNI Grant;
WHEREAS, Phase I of the redevelopment is currently under construction and consists of
a 174-unit affordable senior development to be known as the Cowan Place Apartments;
WHEREAS, as part of the Phase I financing, the FWHFC provided two loansa
$1,250,000.00 construction -to -permanent loan and a $225,000.00 loan for the development of PSH
units (FWHFC-2021-03);
WHEREAS, the Parties are ready to proceed with Phase II of the redevelopment, which
will consist of a mixed -use, affordable housing development to be known as the Hughes House
Apartments;
WHEREAS, FW Hughes House, LP, a Texas limited partnership, was formed to construct
and manage the Hughes House Apartments;
WHEREAS, Fort Worth Affordability Inc. ("FWAI"), a Texas nonprofit corporation, is
the sole member of FW Hughes House GP, LLC, the general partner of FW Hughes House LP,
and is an instrumentality of FWHS;
WHEREAS, FWAI has requested to be the initial borrower of the FWHFC funds instead
of FW Hughes House, LP so that there is less risk that the funds will be subject to taxation by the
Internal Revenue Service;
WHEREAS, FWAI has requested a $325,000.00 forgivable, no interest loan from the
Corporation for construction of 13 PSH units in the Project (collectively "Loan Funds");
WHEREAS, FWAI has requested a waiver of the approved criterion for the FWHFC PSH
set -aside that requires a minimum of 20 units per development in order to approve the loan for the
benefit of the Project which includes only 13 PSH units, so long as all other requirements of the
approved criteria are met;
RESOLUTION NO. FWHFC-2022-07
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WHEREAS, FWAI will execute loan agreement, promissory note, and deed of trust in
favor of the Corporation for the Loan Funds and simultaneously loan the Loan Funds to FW
Hughes House, LP for the development of the Project;
WHEREAS, to collateralize the loans from the Corporation to FWAI and ensure
compliance with all loan requirements, FWAI will (1) assign its loan documents (from the loan
from FWAI to FW Hughes House, LP) to the City and (2) assign its obligations under the
Corporation's loan documents to FW Hughes House LP;
WHEREAS, the City is separately considering awards of $1,000,000.00 of the City's
HOME grant funds from HUD and $150,000.00 of Urban Development Action Grant funds
program income in the form of subordinate loans for the project; and
WHEREAS, the Board desires to approve a forgivable, no interest loan to FWAI in the
amounts of $325,000.00, subject to availability of funds and the terms in Attachment I, to develop
the Project.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE FORT WORTH HOUSING FINANCE CORPORATION:
1. THAT the Board authorizes the execution and delivery of a loan agreement (the "PSH
Loan Agreement") and related documents by and between the Corporation and FWAI,
which shall for all purposes of the resolution include an affiliate of FWAI, for a forgivable
loan in the amount of $325,000.00, subject to availability of funds (the "PSH Loan"), for
the benefit of the Project subject to the terms set out on Attachment I.
2. THAT the Board authorizes the acceptance of an assignment to the FWHFC by FWAI of
the loan documents for the PSH Loan Agreement to be made by FWAI to FW Hughes
House, LP for the benefit of the Project.
3. THAT the Board authorizes the assignment of the PSH Loan obligation from FWAI to FW
Hughes House, LP to ensure compliance with all FWHFC loan requirements.
4. THAT the Board approves a waiver of the 20-unit per project criterion for the PSH Loan
so long as all other criteria for the PSH Loan is met.
5. THAT Fernando Costa, General Manager of the Corporation, or Victor Turner, Assistant
General Manager of the Corporation, or their duly appointed successors, are each
authorized to execute and deliver the Loan Agreements for and on behalf of the Corporation
along with any related documents or agreements necessary to implement the PSH Loan
Agreement or the PSH Loan, and each is authorized to extend, modify and amend the Loan
Agreement, the terms of the Loan or the terms of any related documents or agreements,
provided any such extensions, modifications and amendments are within the scope of the
project, and in conformance with the goals and purposes of the Corporation, as may be
amended from time to time.
6. THAT this Resolution takes effect from the date of its adoption.
AND IT IS SO RESOLVED.
Adopted May 24, 2022
RESOLUTION NO. FWHFC-2022-07
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FORT WORTH HOUSING FINANCE CORPORATION
By:
4,
Carlos Flores
President
Attest:
Jannette S. Goodall
Corporate Secretary
RESOLUTION NO. FWHFC-2022-07
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ATTACHMENT
PSH Loan Terms
Lender: Fort Worth Housing Finance Corporation
Borrower: Fort Worth Affordability, Inc.
Project: Hughes House Apartments
Location: 4830 and 4908 East Rosedale
Loan Amount: $325,000.00
Origination Fee: None
Interest Rate: 0%; default interest rate 6%
Amortization: Loan to be forgiven 40 years after the Project's conversion, provided
Borrower has complied with all Loan terms
Loan Term: Begins on date loan documents are executed and matures 40 years following
conversion of the Project.
Performance Project must remain affordable for 20 years. Commences
Period: upon conversion (on date project is leased up, 90% of units for 90 days or
other similar measure approved by Lender)
Lien Priority: Subordinate loan to commercial construction lender and CNI grant funds
Payments: None as long as no default in Loan terms and no payment is received by
FWAI from FW Hughes House, LP (FWAI will repay FWHFC to the extent
any funds are paid to it by FW Hughes House, LP)
Loan Documents: Loan Agreement, Promissory Note, Deed of Trust, and Guaranty if
applicable
General Contractor: Acceptable to FWHFC
Guarantees: Payment and completion guarantees in form and substance acceptable to
FWHFC required from GC during construction period. If personal
guarantees are required by FWHFC, must be acceptable to FWHFC in
amount, duration, form, and substance
Recourse: Non -recourse as to Borrower
Grant Match: Grant funds must match FWHFC funds dollar for dollar
RESOLUTION NO. FWHFC-2022-07
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Financing/Underwriting: Must establish that project will be financially viable for entire
Performance Period. Will include evaluation of ownership structure,
project operations, sources and uses of funds including cash flow
analysis, developer/project owner's most recent financial
statements, and if applicable, financial statements from team
members and guarantors
Other Conditions: Borrower to pay all costs of Loan closing
Borrower to provide lender's title policy
Development must receive/pass Environmental Review
Acceptable environmental remediation, if required
All financing acceptable to Lender
Lien priority acceptable to Lender
Approval of final construction plans for project
Survey acceptable to Lender
Appraisal acceptable to Lender
P & P bond or LOC or satisfactory equivalent from General Contractor
Receipt of all required governmental approvals
Approval of current financial statements from Guarantor
Approval of final project budget
Borrower counsel opinion in form and content satisfactory to Lender
Borrower to furnish acceptable equity
Must comply with all loan requirements from senior and subordinate
lenders
Monitoring: Project to be monitored at least annually
Reports: Annual audit, copies of all reports to local, state or federal agencies, voucher
providers. Any additional reports required by Lender
Tenants: Tenants occupying the PSH units funded by Lender must be chronically
homeless individuals referred through the Tarrant County Continuum of
Care Coordinated Entry