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HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2011-22RESOLUTION NO. FWHFC-2011-22 FORT WORTH HOUSING FINANCE CORPORATION RESOLUTIONS APPROVING ACTIONS OF THE CORPORATION AS SOLE MEMBER OF TERRELL HOMES GP, LLC, THE GENERAL PARTNER OF TERRELL HOMES, LTD.; APPROVING ALL ACTIONS NECESSARY FOR THE ACQUISITION, FINANCING AND DEVELOPMENT OF THE TERRELL HOMES I PROJECT; APPROVING FUNDING OF RESERVES AND ESTABLISHMENT OF BANK ACCOUNTS; AND RATIFYING ALL ACTS PREVIOUSLY TAKEN BY THE CORPORATION, THE GENERAL PARTNER OR THE PARTNERSHIP IN CONNECTION WITH THE PROJECT 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, and the City Council has determined that quality, accessible, affordable housing is needed for moderate, low, and very low income City citizens; WHEREAS, the City Council created the Fort Worth Housing Finance Corporation (the "Corporation") in 1979 pursuant to the Texas Housing Finance Corporation 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 citizens in acquiring quality, accessible, affordable housing through lending and construction activities; WHEREAS, on February 2, 2010, the Board approved and accepted a Memorandum of Understanding (the "MOU") with NRP Holdings LLC ("NRP") for the development of approximately fifty-four (54) units of single family rental housing located on scattered sites in the Terrell Heights neighborhood to be known as the Terrell Homes I project (the "Project") which has been awarded tax credits by the Texas Department of Housing and Community Affairs ("TDHCA"), approved the creation of a single purpose entity to serve as general partner of the partnership that will own the development, and approved other actions necessary for the development of the Project; WHEREAS, on October 14, 2010, the Corporation created the Terrell Homes GP, LLC, a Texas limited liability company (the "GP"), which is the general partner of Terrell Homes, Ltd., a Texas limited partnership (the "Partnership"), which was organized to acquire, construct, control and maintain the Project; WHEREAS, on December '7, 2010, the Board approved various actions relating to the creation and operation of the GP; WHEREAS, the Corporation is the sole member of the GP; RESOLUTION NO. FWHFC-2011-22 PAGE 2 WHEREAS, on June 23, 2011, the Corporation entered into the MOU with NRP setting forth in more detail the agreement for the development of the Project which among other things, provided for a loan of HOME funds froin the City to the Partnership approved by the City Council on June 22, 2010 in M&C C-24289; WHEREAS, on June 30, 2011, the Partnership entered into a HOME contract, City Secretary Contract No. 41957, which provided for a loan of $900,000.00 in HOME funds from the City (the "HOME Loan") in order to provide further debt financing for the acquisition of the Land and the development, construction, and operation of the Project; WHEREAS, on June 30, 2011, the Partnership acquired 62 lots in the Terrell Heights neighborhood more particularly described in the attached Exhibit A for the Project (the "Land") on which the Project will be constructed and operated; WHEREAS, the Partnership now desires to convey fee ownership of the Land to the Corporation and desires to enter into a Ground Lease with the Corporation whereby the Partnership shall have a tenant's leasehold estate in the Land; WHEREAS, on June 7, 2011, the Board approved the acquisition from the Partnership of fee ownership of the Land and a Ground Lease with the Partnership for the Land; WHEREAS, the MOU provided that its provisions with respect to the Project will be superseded when the Corporation and NRP and their affiliates, as applicable, enter into definitive agreements with respect to the governance of the Partnership and the development, construction, financing and operating of the Project ; WHEREAS, the GP desires to enter into a master agreement with NRP Management LLC, NRP Holdings LLC, NRP Contractors LLC (the "NRP Parties") and the Corporation with respect to roles and responsibilities of the parties for the governance of the Partnership and the development, construction, financing and operating of the Project (the "Master Agreement"); WHEREAS, the Partnership, in order to provide debt financing for pre-development activities, obtained a pre-development loan from Raza Development Fund, Inc. in the amount of up to $500,000 (the "Raza Loan"); WHEREAS, the Par-tnership, in order to provide debt financing for the development, construction, and operation of the Project, desires to negotiate the terms of, and to enter into, constiuction and permanent loans from Sterling Banlc in amounts up to $9,300,000.00 for construction financing and up to $2,000,000.00 for permanent financing (collectively, the "Sterling Bank Loans"); �a RESOLUTION NO. FWHFC-2011-22 PAGE 3 WHEREAS, the GP desires to admit RBC Tax Credit Equity, LLC as Limited Partner ("RBC"); RBC Tax Credit Manager, Inc. as Special Limited Partner and Rodney Simon as Class A Limited Partner; (collectively, the "Limited Partners") to the Partnership, in order to facilitate the Proj ect through the use of tax credits awarded by the TDHCA as an equity funding source; WHEREAS, the GP desires to amend and restate the agreement of limited partnership (the "Partnership Agreement") in order to allow NRP Group LLC to withdraw as a limited partner and admit the Limited Partners in order to facilitate tax credit equity financing for the Proj ect; WHEREAS, the Partnership desires to enter into a development agreement with the Corporation as developer for services to be provided by the Corporation during the development, construction and initial operating phases of the Project (the "Development Agreement"); WHEREAS, RBC has required the Corporation to guaranty the GP's obligations under the Partnership Agreement and the developer's obligations under the Development Agreement as a condition to its entering into the Partnership Agreement and the Partnership with the GP; WHEREAS, the Partnership desires to enter into an agreement with the GP for the GP to provide certain management services with respect to the business of the Partnership for the term of the Partnership (the "Incentive Management Fee Agreement"); WHEREAS, the GP and the Corporation have negotiated and required that the Partnership execute and deliver a purchase option and right of first refusal for the Project (the "Purchase AgreemenY') to allow the Corporation to purchase the Project at an agreed upon price to continue to operate it as low income housing under the terms of the TDHCA Regulatory Agreement; WHEREAS, the GP desires to open and maintain certain bank accounts for the purpose of establishing operating reserves and lease-up reserves for the Project; WHEREAS, the Board of the Corporation adopts the following Resolutions, as the Resolutions of the Corporation acting on behalf of the GP in its own capacity, and in its capacity as the general partner of the Partnership: NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: HOME LOAN: RESOLVED, that Partnership is hereby authorized to enter into the HOME Loan for the Project; 3 RESOLUTION NO. FWHFC-2011-22 PAGE 4 RESOLVED, the Partnership and GP are authorized to negotiate, execute and deliver various documents relating to the HOME Loan, including but not limited to a HOME contract, Note, Fee Deed of Trust Security Agreement and Financing Statement (to be replaced by a Leasehold Deed of Trust, Security Agreement and Financing Statement at construction loan closing), Subordination Agreement, and financing statements, security agreements, affidavits, certifications, consents, settlement statements, and various other writings and documentation whatsoever (collectively, the "HOME Documents") as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the financing of the HOME Loan, and that the HOME Documents in each and every respect are approved, authorized, ratified and confirmed; CONVEYANCE RESOLVED, that the Partnership is authorized to transfer the fee ownership of the Land to the Corporation for consideration in the amount of $1,110,000.00; FURTHER RESOLVED, that the Partnership is authorized to negotiate, execute and deliver a deed or deeds conveying fee ownership of the Land to the Corporation and to negotiate, execute and deliver all related property transfer documents, including any certificates, affidavits, docuinents, instruments, agreements, consents, statements, and various other writings and documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for such conveyance (collectively, the "Conveyance Documents"); and that the Conveyance Documents in each and every respect are approved and authorized; GROUND LEASE RESOLVED, that the Partnership is authorized to lease the Land from the Corporation for rent in the amount of $1,110,000.00 for the first year of the leasehold, and $100.00 per year thereafter through the end of the term ; FURTHER RESOLVED, that the Partnership, as tenant, is authorized to negotiate, execute and deliver a Ground Lease by which the Land shall be leased by the Corporation as landlord, to the Partnership for a period of up to 99 years, a Memorandum of Lease, and to negotiate, execute and deliver all other documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, inay deem advisable, necessary, desirable, or required for such lease (collectively, the "Lease Documents"); and that the Lease Documents in each and every respect are approved and authorized; 4 RESOLUTION NO. FWHFC-2011-22 PAGE 5 MASTER AGREEMENT RESOLVED, that the GP is hereby authorized to enter into a Master Agreement with NRP Management LLC, NRP Holdings LLC, NRP Contractors LLC and the Corporation; FURTHER RESOLVED, that the GP is authorized to negotiate, execute and deliver a Master Agreement and any other documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the governance of the Partnership and the development, construction, financing and operating of the Project (collectively, the "Master Agreement Documents"); and that the Master Agreement Documents in each and every respect are approved and authorized; RAZA LOAN: RESOLVED, that the Partnership is hereby authorized to enter into pre-development financing for the Project with Raza Development Fund, Inc.; FURTHER RESOLVED, that the Partnership and the GP, in connection with the Raza Loan and related transactions contemplated thereby, are each authorized to negotiate, execute and deliver the Raza Loan's deed(s) of trust, affidavits, security instruments, notes, assignments, agreements, financing statements, documents, instruments, intercreditor agreements, subordination agreements (if any), and all affidavits, documents, instruments, certifications, consents, and other writings of every nature whatsoever (collectively, the "Raza Documents") as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the financing of the Raza Loan, in an amount not to exceed $500,00.00 in pre-development financing; and that the Raza Documents in each and every respect are approved, authorized, ratified and confirmed; STERLING BANK LOANS: RESOLVED, that the Partnership is hereby authorized to enter into construction loan and permanent debt iinancing for the Project with Sterling Bank; FURTHER RESOLVED, that the Partnership and the GP, in connection with the Sterling Bank Loans and related transactions contemplated thereby, are each authorized to negotiate, execute and deliver the Sterling Bank Loans' deed(s) of trust, affidavits, security instruments, notes, assignments, agreements, iinancing statements, documents, instruments, intercreditor agreements, subordination agreements (if any), and all affidavits, documents, instruments, certifications, consents, and other writings of every nature whatsoever (collectively, the "Sterling Bank Documents") as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the financing of the Sterling Bank Loans, in amounts not to exceed $9,300,00.00 in construction financing and $2,000,000.00 in permanent financing; and that the Sterling Bank Documents in each and every respect are approved and authorized; 5 RESOLUTION NO. FWHFC-2011-22 PAGE 6 PARTNERSHIP AGREEMENT: RESOLVED, that the GP and the Partnership are hereby authorized to admit the Limited Partners to the Partnership, pursuant to the terms and conditions as set forth in the proposed Amended and Restated Agreement of Limited Partnership for the Partnership; FURTHER RESOLVED, that the GP is authorized to negotiate, execute and deliver an Amended and Restated Agreement of Limited Partnership for the Partnership, by which, among other things, the Limited Partners are admitted into the Partnership and NRP Group LLC withdraws as a limited partner, and to negotiate, execute and deliver all other documents, instruments, certificates, ancillary equity agreements, consents, statements, and various other writings and documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, or desirable to carry into effect the intent of these Resolutions (collectively, the "Equity Documents"); and that such Equity Documents are hereby approved and authorized; DEVELOPMENT AGREEMENT RESOLVED, that Partnership is hereby authorized to enter into a Development Agreement with the Corporation; FURTHER RESOLVED, that the Partnership, as Project owner, is authorized to negotiate, execute and deliver a Development Agreement and any other documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the development of the Project (collectively, the "Development Documents"); and that the Development Documents in each and every respect are approved, authorized, ratified and confirmed; INCENTIVE MANAGEMENT FEE AGREEMENT RESOLVED, that the Partnership is hereby authorized to enter into an Incentive Management Fee Agreement with the GP and to appoint the GP to render services in managing and administering the Partnership during the term of the Partnership; FURTHER RESOLVED, that the GP is hereby authorized to enter into an Incentive Management Fee Agreement with the Partnership for the GP to provide certain management services with respect to the business of the Partnership; FURTHER RESOLVED, that the Partnership and the GP are authorized to negotiate, execute and deliver an Incentive Management Fee Agreement and any other documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required for the management of the Partnership as provided in the Partnership Agreement and in the Equity Documents and to carry into effect the intent of these Resolutions; and that the Incentive Management Fee Agreement in each and every respect is hereby approved and authorized; � RESOLUTION NO. rWHFG2011-22 PAGE 7 PURCHASE AGREEMENT RESOLVED, that the Partnership is hereby authorized to enter into the Purchase Agreement with the GP and the Corporation to allow the Corporation to purchase the Project; FURTHER RESOLVED, that the GP is hereby authorized to enter into the Purchase Agreement with the Partnership and the Corporation; FURTHER RESOLVED, that the Partnership and the GP are authorized to negotiate, execute and deliver a Purchase Agreement and any other documentation of every nature whatsoever as the Corporation, acting on behalf of the GP and the Partnership, may deem advisable, necessary, desirable, or required to continue the operation of the Project as low— income housing as provided in the Partnership Agreement and in the Equity Documents and to carry into effect the intent of these Resolutions; and that the Purchase Agreement in each and every respect is hereby approved and authorized; RESERVES AND BANK ACCOUNTS: RESOLVED, the General Partner, in accordance with the terms of the Equity Documents, is authorized to establish an operating reserve in the amount of up to $230,000.00 ("Operating Reserve"), to be held in a Partnership account that is interest-bearing, with the interest income to be credited to the required balance; and that the Partnership is authorized to establish a bank account for the purpose of the Operating Reserve; FURTHER RESOVED, that the Partnership, in accordance with the terms of the Equity Documents, is authorized to establish and maintain a replacement reserve, and make contributions on an annual basis in the amount of $300.00 per unit, with an annual increase of 3% ("Replacement Reserve"); and that the Partnership is authorized to establish a bank account for the purpose of the Replacement Reserve; FURTHER RESOLVED, that the General Partner, in accordance with the terms of the Equity Documents, is authorized to establish a lease-up reserve account in the amount of $150,000 ("Lease-Up Reserve"), to be held in a Partnership account that is interest-bearing, with the interest income to be credited to the required balance; and the Lease-Up Reserve will be used to cover operating deficits during initial lease-up of the Project, with any unused balance to be credited to the Operating Reserve prior to RBC's final capital contribution; and that that Partnership is authorized to establish a bank account for the purpose of the Lease-Up Reserve; ALL CLOSING DOCUMENTS AND AUTHORITY: RESOLVED, that the Corporation, acting in its own capacity and in its capacity as the sole member of the GP, the general partner of the Partnership, in connection with all actions authorized in these Resolutions, and related transactions contemplated thereby, is authorized to � RESOLUTION NO. FWHFC-2011-22 PAGE 8 negotiate, approve, execute, and deliver the HOME Documents, the Conveyance Documents, the Lease Documents, the Master Agreement Documents, the Raza Documents, the Sterling Bank Documents, the Equity Documents, including the Incentive Management Fee Agreement and the Purchase Agreement, the Development Documents, and all such agreements, affidavits, security instruments, notes, deeds of trust, assignments, financing statements, documents, instruments, consents, applications, certifications, and other writings of every nature whatsoever as the Corporation deems necessary to consummate the closing of the transactions contemplated by these Resolutions (collectively, the "Closing Documents"), hereby in each and every respect are approved, authorized, ratified, and confirmed; FURTHER RESOLVED, that Tom Higgins, the General Manager of the Corporation, or Jesus J. Chapa, the Assistant General Manager of the Corporation, or in the absence of such officer, any other duly elected officer of the Corporation (each, the `Bxecuting Officer"), are hereby fully authorized to negotiate and approve the terms of and to execute and deliver the Closing Documents for and on behalf of the Corporation, the GP, or the Partnership, as applicable; FURTHER RESOLVED, that the Executing Officer is hereby authorized and directed for and on behalf of, and as the act and deed of, the Corporation to take such other action in the consummation of the transactions herein contemplated and to do any and all other acts and things necessary or proper in furtherance of the transactions 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; FURTHER RESOLVED, that all of the actions, documents, correspondences, recordings, instruments, or other writings that are necessary, advisable, or desirable in order to carry out the foregoing Resolutions, and for the conveyance and leasing of the Land, and the development, financing, construction and operating of the Project, and the governance of the Partnership, for and on behalf of the Corporation, the GP, or the Partnership, as applicable, their approval of each to be conclusively evidenced by their execution thereof, are hereby approved; FURTHER RESOLVED, that, to the extent any of the actions authorized by these Resolutions have already been talcen by the GP, the Partnership, the Corporation, Tom Higgins or Jesus J. Chapa, 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. These Resolutions shall take effect on the date of their adoption. 8 RESOLUTION NO. FWHFC-2011-22 PAGE 9 AND IT IS SO RESOLVED. Adopted October 4, 2011. FORT WOR�H HCTi.1SIlN(� FIN�INCE C0�2PORATION : DanielVa. Sca'rth, Vice President