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HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2012-10RESOLUTION NO. FWHFC-2012-10 FORT WORTH HOUSING FINANCE CORPORATION A RESOLUTION TO PURCHASE AN EQUITY INTEREST IN THE HILLSIDE APARTMENTS LOCATED BETWEEN EAST 1ST STREET AND EAST 4TH STREETS IN DOWNTOWN FORT WORTH 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 increase home ownership and to facilitate the development of quality, accessible, affordable housing for low and inoderate income City residents through lending and construction activities; WHEREAS, in 1995, the City Council entered into a contract with Downtown Fort Worth Initiatives, Inc. (DFWII") for $640,000.00 to provide a portion of a 25 year subordinate loan totaling $1,850,000.000 (the "Community Loan") for the develo�ment of the Rock Island Rental Community Project located between East 1St Street and East 4t' Street in downtown Fort Worth; WHEREAS, the project, now known as the Hillside Apartments, is a 172-unit, mixed income residential apartment community, which was developed through a community partnership comprised of the City, local investors and DFWII, who participated in the Community Loan. The project was also financed by a first lien mortgage and tax credits. In addition to its portion of the Community Loan, the City also provided $2.4 million of the City's Community Development Block Grant ("CDBG") funds for land acquisition and infrastructure.; WHEREAS, the participants in the Community Loan, other than DFWII and the City, received a proportionate interest in Rock Island Hillside Associations, L.P. (the "Partnership"), a sole purpose Texas limited partnership that owns the improvements. DFWII owns the land and leases it to the partnership under the terms of a long term ground lease; WHEREAS, DFWII, a non-profit affiliate of Downtown Fort Worth, Inc., wishes to refinance the first lien loan to take advantage of record low interest rates, and would like to eventually purchase the project. Radioshack Corporation ("Radioshack") is interested in selling its interest in the project; WHEREAS, DFWII has proposed that the Corporation provide ternporary financing by purchasing Radioshack's portion of the Community Loan and receiving its 37.125% interest in the Partnership. The Corporation would give DFWII an option to buy this interest from the RESOLUTION NO. FWHFC-2012-10 PAGE 2 Corporation when it has obtained the capital to purchase the project. The Corporation will receive partnership distributions while it is a limited partner but will forgo loan payments on the Community Loan; WHEREAS, the Board finds that it is in the Corporation's best interest to purchase Radioshack's interest in the Community Loan, acquire a 37.125% interest in the Partnership, and enter into an agreement with DFWII to sell DFWII the Corporation's interest in the Partnership and the Community Loan. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION (THE `BOARD"): 1. THAT the Board approves the purchase of Radioshack Corporation's ("Radioshack") interest in the Community Loan for $307,747.60 plus accrued interest. 2. THAT the Board authorizes the Corporation to become a limited partner of the Rock Island Hillside Associates, L.P. (the "Partnership") and to take all necessary and appropriate actions to participate in the Partnership as a limited partner. 3. THAT the Board authorizes the Corporation to enter into an agreement with Downtown Fort Worth Initiatives, Inc. ("DFWII") to sell DFWII the Corporation's interest in the Partnership and the Community Loan. 4. THAT Tom Higgins, General Manager of the Corporation, or Jesus J. Chapa, Assistant General Manager of the Corporation, are authorized to execute and deliver all documents necessary to purchase Radioshack's interest in the Community Loan, to enter the Partnership as a limited partner, to enter an agreement with DFWII to sell DFWII the Corporation's interest in the Partnership and the Community Loan, and to otherwise take all actions necessary to implement this Resolution. 5. THAT this Resolution takes effect on the date of its adoption. AND IT IS SO RESOLVED. Adopted November 6, 2012. FORT WORTH HOUSING FINANCE CORPORATION F t �t . B. � � Salvador Espino, President