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HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2021-03 AND FWHFC-2021-04RESOLUTION NO. FWHFC-2021-03 FORT WORTH HOUSING FINANCE CORPORATION A RESOLUTION APPROVING FORGIVABLE LOANS TO FORT WORTH AFFORDABILITY, INC. FOR THE DEVELOPMENT OF THE COWAN PLACE AFFORDABLE SENIOR HOUSING DEVELOPMENT LOCATED AT 5400 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 COWAN PLACE, 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, 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-2021-03 PAGE 2 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 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-2021-03 PAGE 3 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 and both began working on beginning Phase 1 of the redevelopment; WHEREAS, FWHS formed a Texas Limited Partnership, FW Cowan Place, LP, to construct and manage the Cowan Place Affordable Senior Apartment Complex; WHEREAS, Fort Worth Affordability l the sole member of FW Cowan Place GP, LLC, is an instrumentality of FWHS; ic. ("FWAI"), a Texas nonprofit corporation, is the general partner of FW Cowan Place LP, and WHEREAS, FWAI has requested to be the initial borrower of the FWHFC funds instead of FW Cowan Place, LP so that there is less risk that the funds will be subject to taxation by the Internal Revenue Service; WHEREAS, FWAI has requested two loans; a $1,250,000 forgivable, no interest loan from the Corporation for general construction for the Project, and a $225,000 forgivable, no interest loan from the Corporation for construction of 9 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 9 PSH units, so long as all other requirements of the approved criteria are met; WHEREAS, FWAI will execute loan agreements, promissory notes, and deeds of trust in favor of the Corporation for the Loan Funds and simultaneously loan the Loan Funds to FW Cowan Place, 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 Cowan Place, LP) to the City and (2) assign its obligations under the Corporation's loan documents to FW Cowan Place LP; RESOLUTION NO. FWHFC-2021-03 PAGE 4 WHEREAS, the City is separately considering an award of $500,000 of the City's HOME grant funds from HUD, $360,000.00 of Urban Development Action Grant funds program income in the form of subordinate forgivable loans for the project, and $750,000.00 of the City's Community Development Block Grant funds in the form of a subgrant agreement to FWHS for necessary site improvements related to the Project; and WHEREAS, the Board desires to approve two forgivable, no interest loans to FWAI in the amounts of $1,250,000.00 and $225,000.00, subject to availability of funds, to develop the Project. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: I. THAT the Board authorizes the execution and delivery of a loan agreement (the "Construction Loan Agreement") and related loan documents by and between the Corporation and FWAI, for a forgivable loan in the amount of $1,250,000.00, subject to availability of funds (the "Construction Loan"), for the benefit of the Project subject to the terms set out on Attachment I. 2. 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, for a forgivable loan in the amount of $225,000.00, subject to availability of funds (the "PSH Loan"), for the benefit of the Project subject to the terms set out on Attachment II. 3. THAT the Board authorizes the acceptance of an assignment to the FWHFC by FWAI of the loan documents for the Construction and PSH Loans to be made by FWAI to FW Cowan Place, LP for the benefit of the Project. 4. THAT the Board authorizes the assignment of the Construction and PSH Loan obligations from FWAI to FW Cowan Place, LP to ensure compliance with all FWHFC loan requirements. 5. 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 are met. 6. 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 Construction and PSH Loan Agreements or the Construction and PSH Loans, and each is authorized to extend, modify and amend the Loan Agreements, the terms of the Loans 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. 7. THAT this Resolution takes effect from the date of its adoption. RESOLUTION NO. FWHFC-2021-03 PAGE 5 AND IT IS SO RESOLVED. Adopted June 23, 2021 FORT WORTH HOUSING FINANCE CORPORATION ...... By: „l�, ,(' ,1 Carlos Flores, President RESOLUTION NO. FWHFC-2021-03 PAGE 6 ATTACHMENT Construction Loan Terms Lender: Fort Worth Housing Finance Corporation Borrower: Fort Worth Affordability, Inc. Project: Cowan Place Location: 5400 East Rosedale Loan Amount: $1,250,000 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 Cowan Place, LP (FWAI will repay FWHFC to the extent any funds are paid to it by FW Cowan Place 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 Financing/Underwriting: Must establish that project will be financially viable for entire loan term. Will include evaluation of ownership structure, project operations, RESOLUTION NO. FWHFC-2021-03 PAGE 7 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 RESOLUTION NO. FWHFC-2021-03 PAGE 8 ATTACHMENT II PSH Loan Terms Lender: Fort Worth Housing Finance Corporation Borrower: Fort Worth Affordability, Inc. Project: Cowan Place Location: 5400 East Rosedale Loan Amount: $225,000 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, CNI grant funds, and FWHFC Construction Loan Payments: None as long as no default in Loan terms and no payment is received by FWAI from FW Cowan Place, LP (FWAI will repay FWHFC to the extent any funds are paid to it by FW Cowan Place 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 RESOLUTION NO. FWHFC-2021-03 PAGE 9 Recourse: Non -recourse as to Borrower Grant Match: Grant funds must match FWHFC funds dollar for dollar 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 RESOLUTION NO. FWHFC-2021-04 FORT WORTH HOUSING FINANCE CORPORATION RESOLUTION AUTHORIZING ASSIGNMENT OF U.S. BANCORP COMMUNITY DEVELOPMENT CORPORATION'S ENTIRE LIMITED PARTNER INTEREST IN THE BROADMOOR AT WESTERN HILLS, LTD. LIMITED PARTNERSHIP TO ITS AFFILIATE USB LIHTC FUND 2021-1, LLC WHEREAS, the City Council of the City of Fort Worth ("City") has adopted the development and revitalization of the City's affordable housing stock as a strategic goal; WHEREAS, the City Council has 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, to facilitate 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 residents in acquiring quality, accessible, affordable housing through lending and construction activities; WHEREAS, in 2016, the Board of the Corporation approved the creation of The Broadmoor at Western Hills GP LLC ("GP LLC") to act as the general partner of The Broadmoor at Western Hills, Ltd. Limited partnership ("Partnership") to develop The Broadmoor at Western Hills Apartments, a 324-unit mixed income multifamily housing development located at 2900 Broadmoor Street (the "Project"); WHEREAS, the Board also approved various actions relating to the creation and operation of the GP, LLC, and the Partnership and other actions necessary for the development and operation of the Project, including approving financing from various sources necessary for the development of the Project; WHEREAS, the primary financing was a commercial construction loan insured by Freddie Mac made by the Tarrant County Housing Finance Corporation as assigned to Amegy Bank, a Division of ZB National Association in the approximate amount of $26,750,000.00; WHEREAS, the Partnership at the time of closing consisted of the GP LLC; NRP Broadmoor SPE SLP LLC, a Delaware limited liability company as the Special Limited Partner; and U.S. Bancorp Community Development Corporation, a Minnesota corporation as the Limited Partner; WHEREAS, the Project was completed in August 2018, and has been in operation since that time; RESOLUTION NO. FWHFC-2021-04 PAGE 2 WHEREAS, Article X, section 10.1 of the Limited Partnership Agreement ("LPA") authorizes the Limited Partner by right to transfer its interest to certain types of entities so long as the assignee assumes the Limited Partner's obligations under the LPA; WHEREAS, USB LIHTC Fund 2021-1, LLC, the assignee, is an affiliate of U.S. Bancorp Community Development Corporation; WHEREAS, to complete the transfer of the interest, Freddie Mac, the insurer of the first lien commercial loan on the Project, requires a resolution from the Board authorizing the transfer; and WHEREAS, it is recommended that the Board approve this resolution authorizing the assignment of U.S. Bancorp Community Development Corporation's entire limited partner interest in the Broadmoor at Western Hills, Ltd., limited partnership to its affiliate, USB LIHTC Fund 2021-1, LLC. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: 1. That the GP and the Partnership are hereby authorized to effectuate the transfer of U.S. Bancorp Community Development Corporation's interest in the Partnership to its affiliate USB LIHTC Fund 2021-1, LLC, who shall become the Partnership's Limited Partner, subject to the terms and conditions as set forth in the Amended and Restated Limited Partnership Agreement for the Partnership. 2. That Fernando Costa, the General Manager of the Corporation, or Victor Turner, the Assistant General Manager of the Corporation, or their duly appointed successors, or in the absence of such officer, any other duly elected officer of the Corporation (each, the "Executing Officer"), are hereby fully authorized to execute and deliver the required documents for and on behalf of the Corporation, the GP, or the Partnership, as applicable; 3. That the Executing Officer is hereby authorized and directed for and on behalf of the Corporation to take such other action in the consummation of the transaction herein contemplated and to do any and all other acts and things necessary or proper in furtherance of the transaction contemplated by these Resolutions, as the Executing Officer shall deem to be necessary or desirable, and all acts heretofore taken by the Executing Officer to such end are hereby expressly ratified and confirmed as the acts and deeds of the Corporation; and 4. That, to the extent any of the actions authorized by these Resolutions have already been taken by the GP, the Partnership, the Corporation, Fernando Costa or Victor Turner, such actions are hereby ratified and confirmed as the valid actions of the Corporation, GP, and Partnership, as applicable, effective as of the date such actions were taken. RESOLUTION NO. FWHFC-2021-04 PAGE 3 These Resolutions shall take effect on the date of their adoption. AND IT IS SO RESOLVED. ADOPTED June 23, 2021. FORT WORTH HOUSING FINANCE CORPORATION Carlos Flores, President