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
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Salvador Espino, President