HomeMy WebLinkAboutIR 9163 INFORMAL REPORT TO CITY COUNCIL MEMBERS
No, 9163
To the Mayor and Members of the City Council December 8, 2009
/0�1 1
0
11,
T&
Page 1 of 2
SUBJECT: Authorize Execution of Amendment and Extension to City
Secretary Contract No. 22444 with Downtown Fort Worth Initiatives, Inc., for
the Rock Island Rental Community Project.
The purpose of this Informal Report is to provide City Council with information regarding authorizing the
City Manager to enter into an amendment extending City Secretary Contract No. 22444 with Downtown
Fort Worth Initiatives, Inc. (DFWII), for the second-lien loan for the Rock Island Rental Community
Project.
The Rock Island Rental Community Project is also known as the Hillside Apartments located between East
First and East Fourth Streets. The apartments are attractive mixed-income affordable housing. Of the 172
residential units, 105 of the units are for households at or below 60%of area median income.
On July 25, 1995 (M&C C-14932), City Council authorized the execution of a contract with DFWII for
$640,000 in Community Development Block Grant funds (CDBG) to provide a portion of the funds for the
development of the Rock Island Rental Community Project.
On January 28, 1997 (M&C C-15878), City Council authorized the execution of City Secretary Contract
(CSC) No. 22444, for a 25-year second-lien loan to DFWII, which commenced on September 30, 1996, and
expires September 30, 2021. The City's $640,000 of CDBG funds were part of a$1,850,000 Community
Loan for the project.
Staff has received a formal request from DFWII, to amend and extend the term of the Community Loan to
December 1, 2045. The 24-year extension would allow McCormack Baron, manager of the project and
general partner of the Rock Island Hillside Partnership to pursue a first-lien mortgage refinancing with a
private lender, Gershman Mortgage, involving a U.S. Department of Housing and Urban Development
funding commitment. Refinancing of the first-lien mortgage would be beneficial as the project is at a break
even point financially. The 10-year City and County tax abatements expired in 2008, which has put a strain
on the project's cash flow.
Additionally, DFWII has requested that they be allowed to develop the mineral estate of the land.
The same requests have been made of the other Community Lenders involved in the$1,850,000 loan. The
Community Lenders are-
Downtown Fort Worth Initiatives, Inc.
Bamk- of Texas
Pier One Services Company
Wells Fargo Bank, N.A'
JP Morgan Chase
Bank One
Justin Management Co.,
LP
Rad- ioS hay,k Corp.
Cftvo Fot+, Worth
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
I I nr- 1-1 1 T�1*1AN1*11Jt_M
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9163
IN To the Mayor and Members of the City Council December 8, 2009
* ° Page 2 of 2
SUBJECT: Authorize Execution of Amendment and Extension to City
Secretary Contract No. 22444 with Downtown Fort Worth Initiatives, Inc., for
the Rock Island Rental Community Project.
As of November 24, 2009, Wells Fargo, Bank of Texas, DFWIL and JP Morgan Chase have approved the
requests and the rest of the Community Lenders are expected to approve the requests shortly.
Staff recommends approval of both requests and associated amendments. Staff will submit an M&C
scheduled on the December 15, 2009, City Council agenda for council consideration. If you should have
any questions regarding this information please contact Jay Chapa, Director, Housing and Economic
Development Department at 817-392-5804.
Dale A. Fisseler, P.E.
City Manager
AS
r
i