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HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2025-10RESOLUTION NO. FWHFC-2025-10 FORT WORTH HOUSING FINANCE CORPORATION A RESOLUTION APPROVING A LOAN IN AN AMOUNT NOT TO EXCEED $500,000 TO TERRELL HOMES GP, LLC OR AN AFFILIATE TO ENSURE THE CONTINUED OPERATIONS AND FINANCIAL SUSTAINABILITY OF THE TERRELL HOMES DEVELOPMENT LOCATED IN THE HISTORIC SOUTHSIDE NEIGHBORHOOD 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 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 residents in acquiring quality, accessible, affordable housing through lending and construction activities; WHEREAS, NRP Development, RBC Investments, and the Corporation formed Terrell Homes, Ltd. to construct and manage the Terrell Homes Development ("Terrell Homes"), a 54- unit, single family affordable housing project located within the Historic Southside Neighborhood and within the City of Fort Worth; WHEREAS, the Corporation is the sole member of Terrell Homes GP, LLC, the general partner of Terrell Homes, Ltd.; WHEREAS, NRP Management LLC has served as the official "unit/apartment" manager for the development since it opened in 2012 and has ongoing contractual obligations with Terrell Homes, Ltd. as set forth in a property management agreement dated December 9, 2011; WHEREAS, a series of unfortunate events owing to the COVID pandemic and exasperated by the increased numbers in homelessness has led to a number of years with declining revenues and increasing expenses; WHEREAS, on May 8, 2025, NRP Management LLC submitted a 30-day notice to terminate its management of Terrell Homes citing Terrell Homes, Ltd.'s failure to remit management fees in the amount of $91,726.39 as a "material breach" of the property management agreement; WHEREAS, financial statements dated April 30, 2025 show an unpaid balance due to third parry vendors in the amount of $86,053.35; WHEREAS, it is in the best interest of the Corporation to pay the balance owed to NRP Management LLC, third party vendors, and contract a replacement property management firm; RESOLUTION NO. FWHFC-2025-10 PAGE 2 WHEREAS, the Board of the Corporation (the "Board") is being asked to approve an additional loan in an amount not to exceed $500,000 to Terrell Homes, GP, LLC or an affiliate in order to ensure the continuing operations and management of Terrell Homes; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION: 1. THAT the Board authorizes the execution and delivery of a loan agreement (the "Loan Agreement") and all other necessary loan documents to provide funding to ensure the continuing operations of Terrell Homes (collectively the "Loan Documents") on the terms listed in Attachment A by and between the Corporation and Terrell Homes GP, LLC, or an affiliate, in an amount not to exceed $500,000, subject to the availability of funds, to support Terrell Homes, an existing 54-unit single-family rental housing development located in the Historic Southside Neighborhood (the "Loan"). 2. THAT Dana Burghdoff, General Manager of the Corporation, or Kacey Bess, Assistant General Manager of the Corporation, or their duly appointed successors, are each authorized to execute and deliver the Loan Documents for and on behalf of the Corporation along with any related documents or agreements necessary to support the ongoing operations of Terrell Homes. This authorization includes the ability to make modifications and amendments so long as they 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. 3. THAT this Resolution takes effect from the date of its adoption. AND IT IS SO RESOLVED. Adopted June 24, 2025 FORT WORTH HOUSING FINANCE CORPORATION los Flores President Attest: L� �e Jannette S. Goodall City Secretary RESOLUTION NO. FWHFC-2025-10 PAGE 3 ATTACHMENT A Loan Terms Lender: Fort Worth Housing Finance Corporation Borrower: Terrell Homes GP, LLC or an Affiliate Project: Terrell Homes Location: 54 Single-family rental housing units located in the Historic Southside Loan Amount: Not to exceed $500,000 Origination Fee: None Amortization: None, repaid through operating income as distributed by the terms in the limited partnership agreement for Terrell Homes, Ltd. Loan Term: Begins on date loan documents are executed. Lien Priority: This loan will be subordinate to permanent financing (mortgage), but Payments: repayment shall be made through operating income as distributed by the terms in the limited partnership agreement for Terrell Homes, Ltd. Recourse: Non -recourse as to Borrower Other Conditions: (If Applicable) • Approval of RBC Tax Credit Manager II, Inc., Special Limited Partner of Terrell Homes, Ltd.