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HomeMy WebLinkAbout065502-DT1 - Construction-Related - Contract - Maren Grove, LLCD226139685 07/20/2026 07:36 AM Page: 1 of 14 Fee: $72.00 Submitter: Stewart Title Company - Austin Electronically Recorded by Tarrant County Clerk in Official Public Records MARY LOUISE NICHOLSON COUNTY CLERK City Secretary Contract No 65502-DT1 03/21so&27MDk NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. Deed of Trust Security Agreement - Financing Statement City Funds ($550,000.00) Terms Date: July V7, 2026 Grantor/Borrower: Maren Grove, LLC, a Texas limited liability company Grantor's Mailing Address: Maren Grove, LLC Attn: Megan Lasch 5501-A Balcones Dr. #302 Austin, TX 78731 Trustee: Leslie L. Hunt or Denis McElroy, either of whom may act independently Trustee's Mailing Address: City Attorney's Office City of Fort Worth 100 Fort Worth Trail Fort Worth TX 76102 Tarrant County Lender: City of Fort Worth, a Texas municipal corporation Lender's Mailing Address: City of Fort Worth Neighborhood Services Department Attention: Director 100 Fort Worth Trail Fort Worth, Texas 76102 Tarrant County Loan Authority: The loan (the "Loan") evidenced by that certain UDAG Loan Agreement between Borrower and Lender of even date herewith (the "Loan Agreement"), the Note Deed of Trust -$550,000.00 OFFICIAL RECORD Page l Maren Grove, LLC CITY SECRETARY FT. WORTH, TX D226139685 Page 2 of 14 described below and secured by this Deed of Trust Security Agreement — Financing Statement ("Deed of Trust") is being made as approved by the Fort Worth City Council on June 9, 2026 (M&C 26-0493). The Loan Agreement, Note, and Deed of Trust are referred to herein collectively as the ("Loan Documents"). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Loan Agreement. Obligations Promissory Note ("Note") Date: Of even date herewith Original Principal Amount: $550,000.00 Borrower/Grantor: Maren Grove, LLC Lender: City of Fort Worth Terms of Payment: As provided in the Note Maturity Date: As provided in the Note Property (including any improvements): Being Lot 3, in Block 2, of OUR LADY OF VICTORY HEIGHTS, an Addition to the City of Fort Worth, Tarrant County, Texas, according to the map thereof recorded in Cabinet A, Slide 7553, Plat Records of Tarrant County, Texas. Together with the following personal property to the extent owned by Grantor: All fixtures, supplies, building materials, and other goods of every nature now or hereafter located, used, or intended to be located or used on the Property; All plans and specifications for development of or construction of improvements on the Property; All contracts and subcontracts relating to the construction of improvements on the Property; All permits, licenses, franchises, certificates, and other rights and privileges obtained in connection with the Property; All proceeds payable or to be payable under each policy of insurance relating to the Property; and All. products and proceeds of the foregoing. Notwithstanding any other provision in this Deed of Trust, the term "Property" does not include personal effects used primarily for personal, family, or household purposes. In addition to creating a deed -of -trust lien on Property described above, Grantor also grants to Lender a security interest in all of the above -described personal property pursuant to and to the extent permitted by the Texas Uniform Commercial Code. Prior Liens: Deed of Trust - $550,000.00 Maren Grove, LLC Page 2 D226139685 Page 3 of 14 The lien created by this Deed of Trust is and shall be subject and subordinate in all respects to the liens, terms, covenants, and conditions of (1) that certain Multifamily Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing securing (a) that certain Promissory Note (With Swap Provisions) dated April 30, 2025 in the original principal amount of $18,600,000.00 made by Grantor and payable to Zions Bancorporation, N.A. d/b/a Amegy Bank, and (b) that certain Promissory Note dated April 30, 2025 in the original principal amount of $1,000,000.00 made by Grantor and payable to Rainwater Charitable Foundation, a Texas charitable trust, (2) that certain Deed of Trust, Security Agreement, and Assignment of Contracts, Leases and Rents and Fixture Filing securing that certain Promissory Note dated April 30, 2025 in the original principal amount of $2,000,000.00 made by Grantor and payable to O-SDA Industries, LLC, a Texas limited liability company, (3) that certain Deed of Trust, Security Agreement — Financing Statement securing that certain Promissory Note dated April 30, 2025 in the original principal amount of $2,607,363.00 made by Grantor and payable to Rethos Maren Grove LLC, a Minnesota nonprofit limited liability company, and (4) that certain unsecured Non -Revolving Credit Note (Predevelopment) dated January 10, 2025 in the original principal amount of $821,400 from Grantor and payable to Raza Development Fund, Inc., an Arizona nonprofit corporation (collectively, the "Senior Indebtedness", and the loan documents evidencing the Senior Indebtedness, the "Senior Loan Documents"). Subject to the terms of the Senior Loan Documents, if default occurs in payment of any part of principal or interest of the Senior Indebtedness, or in observance of any covenants contained in the Senior Loan Documents, the entire debt secured by this Deed of Trust will immediately become payable at the option of Lender. Upon written request of Grantor, Lender agrees to reasonably cooperate and promptly review and sign any subordination agreements to subordinate the debt evidenced hereunder to any of the Senior Indebtedness and will not unreasonably withhold or delay Lender's signature, including any documentation related to any refinance of any Senior Indebtedness permitted by the Loan Agreement. Other Exceptions to Conveyance and Warranty: Validly existing easements, rights of way, and prescriptive rights, whether of record of not; all presently recorded and validly existing restrictions, reservations, covenants, conditions, oil and gas leases, mineral interest, and water interest outstanding in persons other than Grantor, and other instruments, other than conveyances of the surface fee estate, that affect the Property; validly existing rights of adjoining owners in any walls and fences situated on a common boundary; any discrepancies, conflicts or shortages in area or boundary lines; any encroachments or overlapping of improvements. For value received and to secure performance of the Obligations, Grantor conveys the Property to Trustee in trust. Grantor warrants and agrees to defend the title to the Property, subject to the Other Exceptions to Conveyance and Warranty. On performance Deed of Trust - $550,000.00 Maren Grove, LLC Page 3 D226139685 Page 4 of 14 of the Obligations including payment of the Loan if required by the Note and Loan Agreement and all other amounts secured by this Deed of Trust, or upon forgiveness of the Loan, this Deed of Trust will have no further effect, and Lender will release it at Grantor's expense. Clauses and Covenants A. Grantor's Obligations Grantor agrees to- 1. keep the Property in good condition and repair; 2. pay all taxes and assessments on the Property before delinquency, and not authorize a taxing entity to transfer its tax lien on the Property to anyone other than Lender; 3. defend title to the Property subject to the Other Exceptions to Conveyance and Warranty and preserve the lien's priority as it is established in this Deed of Trust; 4. obey all laws, ordinances, and restrictive covenants applicable to the Property; 5. maintain all insurance coverages with respect to the Property, revenues generated by the Property, and operations on the Property that Lender reasonably requires ("Required Insurance Coverages"), issued by insurers and written on policy forms acceptable to Lender, and deliver evidence of the Required Insurance Coverages in a form acceptable to Lender at least 10 days before the expiration of the Required Insurance Coverages. 6. keep any buildings occupied as required by the Required Insurance Coverages; 7. obey all laws, ordinances, and restrictive covenants applicable to the Property; 8. if the lien of this Deed of Trust is not a first lien, pay or cause to be paid all prior lien notes pursuant to their respective terms and abide by or cause to be abided by all prior lien instruments; and 9. notify Lender in writing of any change of address; 10. Invest a minimum of $ 18,000,000 in the Property and achieve Completion by the Completion Deadline; and Deed of Trust - $550,000.00 Maren Grove, LLC Page 4 D226139685 Page 5 of 14 11. During the Performance Period, make reasonable efforts to create, or cause its Management Company and/or commercial tenant to create, three (3) new FTEs for City residents.; Grantor agrees not to do or intentionally or knowingly permit, or permit under circumstances in which it knew or reasonably should have known, anything to be done that will impair the security of this Deed of Trust. B. Lender's Rights 1. Lender or Lender's mortgage servicer may appoint in writing a substitute trustee, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the Loan are used to pay any debt secured by prior liens, Lender is subrogated to all the rights and liens of the holders of any debt so paid, subject to the terms of the Senior Loan Documents and any subordination agreements entered into by Lender in connection with the Senior Indebtedness. 3. Notwithstanding the terms of the Note to the contrary, and unless applicable law prohibits, all payments received by Lender from Grantor with respect to the Obligations or this Deed of Trust may, at Lender's reasonable discretion, be applied first to amounts payable under this Deed of Trust and then to amounts due and payable to Lender with respect to the Obligations, to be applied to late charges, principal, or interest in the order Lender in its discretion determines. 4. If Grantor fails to perform any of Grantor's Obligations under this Deed of Trust, subject to prior written notice and cure period, Lender may perform those obligations and be reimbursed by Grantor on demand for any amounts so paid, including reasonable attorney's fees, plus interest on those amounts from the dates of payment at the rate stated in the Note for matured, unpaid amounts. The amount to be reimbursed will be secured by this Deed of Trust. 5. If there is a default on the Obligations or if Grantor fails to perform any of Grantor's Obligations under this Deed of Trust and the default continues after any required notice of the default and the time allowed to cure, Lender may - a. declare any unpaid principal balance and earned interest on the Obligations immediately due; b. exercise Lender's rights with respect to rent under the Texas Property Code as then in effect; Deed of Trust - $550,000.00 Maren Grove, LLC Page 5 D226139685 Page 6 of 14 c. direct Trustee to foreclose this lien, in which case Lender or Lender's agent will cause notice of the foreclosure sale to be given as provided by the Texas Property Code as then in effect; and d. purchase the Property at any foreclosure sale by offering the highest bid and then have the bid credited on the Obligations. Notwithstanding anything to the contrary, if an event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies Lender shall give Borrower written notice of such default. Borrower shall have a period of 30 days after such notice is given within which to cure the default prior to exercise of remedies by Lender under the Loan Documents, provided, however, that (i) if Borrower reasonably cannot perform or comply with any such obligation within such thirty (30) day period and if, in Lender's reasonable judgment, Lender's security will not be impaired, then Borrower may have such additional time to rectify such failure as Borrower reasonably may require, provided and for so long as Borrower proceeds with due diligence, and (ii) if, in Lender's reasonable judgment, Lender's security will be impaired if Borrower does not perform or comply with any such obligation in a period of less than thirty (30) days, Borrower will have only such period (if any) following demand in which to rectify such failure as Lender may reasonably specify. 7' rtk -- 'f t f .l f it d the ts....... f f the Loan ., 71,.,.....- a is r cxxroradac¢c vccuiS ciixaci cac ccxaxo oximyv-c , Notices given to Grantor shall be in writing and delivered to the address listed above, or to such other address as Grantor designates by written notice to Lender. Each such notice or other communication shall be effective on the date of receipt when sent by U. S. Mail, postage prepaid, by certified mail, return receipt requested or by a nationally recognized overnight delivery service. 6. Lender may remedy any default without waiving it and may waive any default without waiving any prior or subsequent default. C. Trustee's Rights and Duties If directed by Lender to foreclose this lien, Trustee will - I. either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then in effect; 2. sell and convey all or part of the Property "AS IS" to the highest bidder for cash with a general warranty binding Grantor, subject to the Prior Lien and to the Other Exceptions to Conveyance and Warranty and without representation or warranty, express or implied, by Trustee; 3. from the proceeds of the sale, pay, in this order - Deed of Trust - $550,000.00 Maren Grove, LLC Page 6 D226139685 Page 7 of 14 a. expenses of foreclosure, including a reasonable commission to Trustee; b. to Lender, the full amount of principal, interest, reasonable attorney's fees, and other charges due and unpaid; C. any amounts required by law to be paid before payment to Grantor; d. to Grantor, any balance; and 4. be released by Lender against all costs, expenses, and liabilities incurred by Trustee for acting in the execution or enforcement of the trust created by this Deed of Trust, which includes all court and other costs, including reasonable attorney's fees, incurred by Trustee in defense of any action or proceeding taken against Trustee in that capacity. D. General Provisions 1. If any of the Property is sold under this Deed of Trust, Grantor must immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor will become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Recitals in any trustee's deed conveying the Property will be presumed to be true, absent evidence to the contrary. 3. Proceeding under this Deed of Trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. This lien will remain superior to liens later created even if the time of payment of all or part of the Obligations is extended or part of the Property is released, unless a subordination agreement is executed by the Lender. 5. If any portion of the Obligations cannot be lawfully secured by this Deed of Trust, payments will be applied first to discharge that portion. 6. Subject to the rights of senior lien holders under the Senior Loan Documents and any subordination agreements entered into by Lender in connection with the Senior Indebtedness, Grantor assigns to Lender all amounts payable to or received by Grantor from condemnation of all or part of the Property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the Property. After deducting any expenses incurred, including reasonable attorney's fees and court and other costs, Lender will either release any remaining amounts to Grantor or apply such amounts to reduce the Obligations and any excess proceeds shall be paid to Grantor. Lender will not be liable for failure to collect or to exercise diligence in collecting any such amounts. Grantor will immediately give Lender notice of any actual or known threatened proceedings for condemnation of all or part of the Property. Deed of Trust - $550,000.00 Page 7 Maren Grove, LLC D226139685 Page 8 of 14 Notwithstanding the above, in the event of any fire or other casualty to the Property or eminent domain proceedings resulting in condemnation of the Property or any part thereof, Grantor shall have the right to rebuild the Property, and to use all insurance or condemnation proceeds available therefor, provided that (a) such proceeds are sufficient to keep the Obligations in balance and rebuild the Property in a manner that provides adequate security to Lender for repayment or performance of the Obligations or if such proceeds are insufficient then Grantor shall have funded any deficiency, (b) subject to the rights of senior lien holders, Lender shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan Documents other than attributable to casualty or condemnation. If the casualty or condemnation affects only part of the Property and total rebuilding is infeasible, then proceeds available to Lender on account of its interest in the Property may be used for partial rebuilding and partial repayment of the Obligations in a manner that provides adequate security to Lender for repayment of the remaining balance of the Obligations, and any excess proceeds shall be paid to Grantor. 7. Subject to the rights of senior lien holders under the Senior Loan Documents and any subordination agreements entered into by Lender in connection with the Senior Indebtedness, Grantor assigns to Lender absolutely, not only as collateral, all present and future rent and other income and receipts from the Property. Grantor may as Lender's licensee collect rent and other income and receipts as long as Grantor is not in default with respect to the Obligation or this Deed of Trust. Subject to the terms of the Loan Documents, Grantor will apply all rent and other income and receipts to payment of the Obligations and performance of this Deed of Trust, but if the rent and other income and receipts exceed the amount due with respect to the Obligations and the Deed of Trust, Grantor may retain the excess. If Grantor defaults in payment or performance of the Obligations or performance of this Deed of Trust and such default continues beyond all applicable notice and cure periods, subject to the rights of senior lien holders, Lender may terminate Grantor's license to collect rent and other income and then as Grantor's agent may rent the Property and collect all rent and other income and receipts. Lender neither has nor assumes any obligations as lessor or landlord with respect to any occupant of the Property. Lender may exercise Lender's rights and remedies under this paragraph without taking possession of the Property. Lender will apply all rent and other income and receipts collected under this paragraph as required by the Texas Property Code then in effect. Lender is not required to act under this paragraph, and acting under this paragraph does not waive any of Lender's other rights or remedies. 8. Interest on the debt secured by this Deed of Trust will not exceed the maximum amount of non -usurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any excess interest will be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the debt. Deed of Trust - $550,000.00 Page 8 Maren Grove, LLC D226139685 Page 9 of 14 9. In no event may this Deed of Trust secure payment of any debt that may not lawfully be secured by a lien on real estate or create a lien otherwise prohibited by law. 10. When the context requires, singular nouns and pronouns include the plural. 11. The term Note includes all extensions, modifications, and renewals of the Note and all amounts secured by this Deed of Trust. 12. Grantor agrees to (a) keep at Grantor's address, or such other place as Lender may approve, accounts and records reflecting the operation of the Property and copies of all written contracts, leases, and other instruments that affect the Property; (b) prepare financial accounting records in compliance with generally accepted accounting principles consistently applied; and, (c) at Lender's request on reasonable notice from time to time, permit Lender to examine and make copies of such books, records, contracts, leases, and other instruments at any reasonable time. 13. Grantor agrees to deliver to Lender, at Lender's request from time to time, internally prepared financial statements of Grantor and any guarantor of the Note prepared in accordance with generally accepted accounting principles consistently applied, in detail reasonably satisfactory to Lender and certified to be materially true and correct by the chief financial officer of Grantor or its certified public accountant, as applicable. 14. If Lender orders an appraisal of the Property while a default exists or to comply with legal requirements affecting Lender, Grantor, at Lender's request, agrees to reimburse Lender for the reasonable cost of any such appraisal. If Grantor fails to reimburse Lender for any such appraisal within 20 days of Lender's written request, that failure is a default under this Deed of Trust. 15. Grantor agrees to allow Lender or Lender's agents to enter the Property during regular business hours upon at least 48 hours prior notice and inspect it and any personal property in which Lender is granted a security interest by this Deed of Trust. 16. Grantor may not sell, transfer, or otherwise dispose of any Property, whether voluntarily or by operation of law, except for condemnation or to obtain utility easements, without the prior written consent of Lender. If granted, consent may be conditioned upon (a) the grantee's integrity, reputation, character, creditworthiness, and management ability being satisfactory to Lender; and (b) the grantee's executing, before such sale, transfer, or other disposition, a written assumption agreement containing any terms Lender may reasonably require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, a transfer fee, or any other modification of the Note, this Deed of Trust, or any other instruments evidencing or securing the Obligations. Grantor may not cause or knowingly permit the Property to be encumbered by any liens, security interests, or encumbrances other than the liens securing the Senior Deed of Trust - $550,000.00 Page 9 Maren Grove, LLC D226139685 Page 10 of 14 Indebtedness, the liens securing ad valorem taxes not yet due and payable, and as otherwise expressly provided in the Deed of Trust, without the prior written consent of Lender. If granted, consent may be conditioned upon Grantor's executing, before granting such lien, a written modification agreement containing any terms Lender may require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, an approval fee, or any other modification of the Note, this Deed of Trust, or any other instruments evidencing or securing the Obligations. Notwithstanding the foregoing, Borrower shall be entitled to (i) enter into residential leases, (ii) enter into leases, licenses, occupancy agreements, or contracts for the provision of preschool services located at the Property, and (iii) enter into utility easements which serve the Property so long as such easements do not unduly burden the Property and do not allow the holder of the easement to cause damage to the Project. Except as expressly permitted herein, Grantor may not grant any lien, security interest, or other encumbrance (a "Subordinate Instrument") covering the Property that is subordinate to the liens created by this Deed of Trust without the prior written consent of Lender. If granted, consent for a Subordinate Instrument may be conditioned upon the Subordinate Instrumenfs containing express covenants to the effect that - a. the Subordinate Instrument is unconditionally subordinate to this Deed of Trust; b. if any action is instituted to foreclose or otherwise enforce the Subordinate Instrument, no action may be taken that would terminate any occupancy or tenancy without the prior written consent of Lender, and that consent, if granted, may be conditioned in any manner Lender determines; C. rents, if collected by or for the holder of the Subordinate Instrument, will be applied first to the payment of the Obligations, then due and to expenses incurred in the ownership, operation, and maintenance of the Property in any order Lender may determine, before being applied to any indebtedness secured by the Subordinate Instrument; d. written notice of default under the Subordinate Instrument and written notice of the commencement of any action to foreclose or otherwise enforce the Subordinate Instrument must be given to Lender concurrently with or immediately after the occurrence of any such default or commencement; and e. in the event of the bankruptcy of Grantor, all amounts due on or with respect to the Obligations and this Deed of Trust will be payable in full before any payments on the indebtedness secured by the Subordinate Instrument. Deed of Trust - $550,000.00 Maren Grove, LLC Page 10 D226139685 Page 11 of 14 Grantor may not cause or permit any of the following events to occur without the prior written consent of Lender: if Grantor is (a) a corporation, the dissolution of the corporation or the sale, pledge, encumbrance, or assignment of any shares of its stock; (b) a limited liability company, the dissolution of the company or the sale, pledge, encumbrance, or assignment of any of its membership interests, other than an assignment to a senior lien holder or to the Investor Member; (c) a general partnership or joint venture, the dissolution of the partnership or venture or the sale, pledge, encumbrance, or assignment of any of its partnership or joint venture interests, or the withdrawal from or admission into it of any general partner or joint venturer; or (d) a limited partnership, (1) the dissolution of the partnership, (2) the sale, pledge, encumbrance, or assignment of any of its general partnership interests, or the withdrawal from or admission into it of any general partner, or (3) except for a limited partnership interest in a low income housing project, the withdrawal from or admission into it of any controlling limited partner or partners. If granted, consent may be conditioned upon (a) the integrity, reputation, character, creditworthiness, and management ability of the person succeeding to the ownership interest in Grantor (or security interest in such ownership) being reasonably satisfactory to Lender; and (b) the execution, before such event, by the person succeeding to the interest of Grantor in the Property or ownership interest in Grantor (or security interest in such ownership) of a written modification or assumption agreement containing such terms as Lender may reasonably require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, a transfer fee, or any other modification of the Note, this Deed of Trust, or any other instruments evidencing or securing the Obligations. Notwithstanding anything to the contrary herein or in any other Loan document, the following shall not constitute a default under any of the Loan Documents - a. the withdrawal, removal, replacement, and/or addition of a Managing Member of the Grantor in accordance with the Operating Agreement, or the withdrawal, replacement, and/or addition of Grantor's Managing Member provided that prior notice of any additional or substitute Grantor's Managing Member is delivered to Lender and any additional or substitute Managing Member is reasonably acceptable to Lender and is selected with reasonable promptness. Any additional or substitute Managing Member that is an affiliate of Grantor's Investor Member is hereby deemed acceptable to Lender; b. the sale, transfer, conveyance or pledge of partnership interests in the Grantor; C. the sale, transfer, conveyance or pledge of any membership or ownership interest in Grantor's Managing Member, d. the dilution of Managing Member's interest in cash flow and/or capital transaction proceeds in Grantor in accordance with the terms of the Operating Agreement; and C. any amendment to the Operating Agreement which does not affect the financial terms of the Operating Agreement, and does not otherwise adversely affect Lender's security interest in the Property. f. the sale, transfer, conveyance or pledge of any investor member interest in the Grantor. Deed of Trust - $550,000.00 Maren Grove, LLC Page 11 D226139685 Page 12 of 14 17. Grantor agrees not to grant any future lien or security interest covering the Property or to permit any future junior encumbrance to be recorded or any existing or future claim to otherwise become an encumbrance against the Property. If an involuntary encumbrance is filed against the Property, Grantor agrees, within 30 days of actual notice, to either remove the involuntary encumbrance or insure against it or provide a bond acceptable to Lender against the involuntary encumbrance. 18. This Deed of Trust binds, benefits, and may be enforced by the successors in interest of all parties. 19. If Grantor and Borrower are not the same person, the term Grantor includes Borrower. 20. Except as may be specifically stated in this Deed of Trust or the Note, Grantor and each surety, endorser, and guarantor of the Obligations waive all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. 21. Grantor agrees to pay reasonable attorney's fees, trustee's fees, and court and other costs of enforcing Lender's rights under this Deed of Trust if this Deed of Trust is placed in the hands of an attorney for enforcement. 22. If any provision of this Deed of Trust is determined to be invalid or unenforceable, the validity or enforceability of any other provision will not be affected. 23. The term Lender includes any mortgage servicer for Lender. 24. Grantor represents that this Deed of Trust and the Note are given for the following purposes: The debt evidenced by the Note is for the public purpose of providing projects that meet certain Community Development Block Grant (CDBG) program requirements, including use in a CDBG-eligible area, be a CDBG economic development project, and include private investment, which purpose shall be met through the construction of the Maren Grove affordable housing development and the fulfillment of the Grantor's obligations herein. 25. If the Property is transferred by foreclosure, the transferee will acquire title to all insurance policies on the Property including all paid but unearned premiums. 26. Grantor is entitled to partial releases from the Deed of Trust as provided in the Loan Agreement between Grantor and Lender. Deed of Trust - $550,000.00 Page 12 Maren Grove, LLC D226139685 Page 13 of 14 27. The debt and the performance secured by this Deed of Trust is a nonrecourse obligation of Borrower. Neither Borrower nor any other parry shall have any personal liability for repayment of the Loan. The sole recourse of Lender under the Loan Documents for repayment of the Loan or performance of any of the Obligations shall be the exercise of its right against the security for payment as defined in the Note. THE NOTE AND THE DEED OF TRUST CONSTITUTE THE FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. STATE OF TEXAS § COUNTY OF TARRANT § Mares Grove, LLC, a Texas limited liability company, By: O-SDA Maren, LLC, a Texas limited liability company, its Managing Member By: O-SDA Industries, LLC, a Texas limited liability company, its Sole Member By: Megan Lasch, Sol&ember ABIGAIL TATKOW Notary Public, State of Texas Comm. Expires 12-13-2026 Notary ID 13422905 n Asa This instrument was acknowledged before me on June3b, 2026 by Megan Lasch, the Sole Member of O-SDA Industries, LLC, a Texas limited liability company, the Sole Member of O-SDA Maren, LLC, a Texas limited liability company, the Managing Member of Maren Grove, LLC, a Texas limited liability company, on behalfsf�ompany. N6tary Py6lic, State of Texas Deed of Trust - $550,000.00 Page 13 Maren Grove, LLC D226139685 Page 14 of 14 AFTER RECORDING RETURN TO: City of Fort Worth City Attorney's Office Attention: Leslie L. Bunt 100 Fort Worth Trail Fort Worth, Texas 76102 Deed of Trust - $550,000.00 Maren Grove, LLC Page 14 City of Fort Worth, Texas Mayor and Council Communication DATE: 06/09/26 M&C FILE NUMBER: M&C 26-0493 LOG NAME: 19MAREN GROVE UDAG FUNDS SUBJECT (CD 9) Authorize Expenditure in the Amount of $550,000.00 of Urban Development Action Grant Miscellaneous Revenue as a Forgivable Loan to Maren Grove, LLC, or an Affiliate, in Support of Maren Grove Apartments Located at 801 W. Shaw Street; Authorize Execution of Related Contracts; Find that the Loan Serves a Public Purpose and that Adequate Controls are in Place; and Adopt Appropriation Ordinance RECOMMENDATION: It is recommended that the City Council: 1. Authorize expenditure in the amount of $550,000.00 of Urban Development Action Grant Miscellaneous Revenue as a forgivable loan to Maren Grove, LLC, or an Affiliate, in Support of Maren Grove Apartments Located at 801 W. Shaw Street; 2. Authorize the City Manager or his designee to execute a loan agreement and all other related documents necessary for lending activities with terms as specified below; 3. Authorize the City Manager or his designee to extend the contracts if such extensions are necessary for completion of the Project, and to extend all other required documents for lending activities as necessary for the development of the Project; 4. Authorize the City Manager, or his designee, to amend contracts and other related documents if necessary to achieve Project goals, provided that the amendments are within the scope of the Project and in compliance with City policies and applicable laws and regulations; 5. Find that providing the loan serves the public purpose of providing decent, safe, and sanitary housing for low-income residents, while also creating new jobs in the City, and that adequate controls are in place through the various loan documents and agreements to ensure the public purpose is carried out; 6. Accept interest revenue and miscellaneous revenue receipts in the Grants Operating Other Funds account; and 7. Adopt the appropriation ordinance increasing estimated receipts and appropriations in the Grants Operating Other Fund in the amount of $54,248.59 from Urban Development Action Grant Miscellaneous Revenue Program Income for the purpose of funding future projects. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to approve financial actions to support Maren Grove (Project). This initiative aligns with the City's Comprehensive Plan and Neighborhood Conservation Plan and Housing Affordability Strategy by delivering quality, affordable housing for low -to moderate -income residents while also fostering economic development and revitalizing the City. The Project is a 90-unit affordable housing multifamily property developed by O-SDA Industries in partnership with Saigebrook Development (Developer) and financed in part with equity from 2024 9% Housing Tax Credits. All of Maren Grove's units will be income -restricted serving families with below -market rents adjusted for the Area Median Income (AMI) with 20 deeply affordable units for reserved households at 30% AMI, 26 units at 50% AMI, 28 units at 60% AMI, and 16 units at 80% AMI. Affordability will be enforced through a state -imposed Land Use Restriction Agreement on the property for a minimum of 40 years. The Project is an adaptive reuse of the historic Victory Arts Center. In addition to rehabilitating the existing structure, it will include an added residential building and an on -site reduced -cost Pre -Kindergarten Program for residents and members of the surrounding community. The Project closed on financing and began construction in June 2025 and is currently about 85% complete. Maren Grove received a $4,000,000.00 award through the Environmental Protection Agency's Greenhouse Gas Reduction Funds (GGRF) to close a financing gap, however, the GGRF program was terminated in Spring 2025 as a result of shifting funding priorities at the federal level. After securing additional construction financing, the Project still faces a financing gap of over $2,000,000.00. The Developer responded to the City's Notice of Funding Availability for Community Development Block Grant -Disaster Recovery (CDBG-DR) funding for multifamily housing development. However, after review, the Project was determined to be ineligible because it did not meet the applicable CDBG-DR regulatory requirements. With these funding sources unavailable, additional gap financing is needed to support Project completion. City staff has identified $550,000.00 in unprogrammed Urban Development Action Grant (UDAG) revenue funds that may be used to support the Project. To address the remainder of the financing gap, the Developer will defer a portion of their fee and implement value -engineering measures. The Project is an eligible UDAG economic development activity consisting of the adaptive reuse and rehabilitation of the historic Victory Arts Center combined with new construction of a 90-unit affordable multifamily development. The Project supports economic recovery through private investment, long-term affordability, and the provision of an on -site reduced -cost Pre -Kindergarten program. UDAG funds may be used because new housing construction and rehabilitation are eligible activities under Title I and UDAG regulations. Funding the Project will also result in the creation of at least three new full-time jobs in the City through property management, maintenance, and staffing of the on -site Pre -Kindergarten Program. Staff recommends execution of a contract with Maren Grove, LLC, or an affiliate, for a forgivable loan in UDAG funds in the amount not to exceed $550,000.00 on the following loan terms and conditions: UDAG Loan Terms: 1. Loan term to commence on the date of execution and terminate 40 years after project stabilization. Final payment of principal and accrued, unpaid interest will be due 40 years after project conversion coterminous with final payment date of permanent loan; 2. Five-year performance period to begin on the date the project reaches stabilization, or 12-months after completion whichever comes first; 3. Interest rate of zero percent so long as borrower complies with all of the terms of the contract and loan documents; 4. UDAG funds will be used for eligible construction costs associated with the new multifamily housing construction; 5. UDAG contract funds shall comply with applicable Urban Development Action Grant (UDAG) requirements under Title I and 24 CFR Part 570, including adherence to eligible UDAG economic development activities and the requirement that the Project contribute to economic recovery; 6. Developer must employ the equivalent of at least three full-time positions during the performance period; 7. UDAG loan shall be forgiven if all terms and conditions are met and Developer has complied with all contract regulations and requirements; and 8. UDAG funds will be provided on a reimbursement basis for eligible construction costs only. Staff recommends approving the expenditure and execution of contracts and related loan documents with Maren Grove, LLC in the amount of $550,000.00 in UDAG funds for construction costs in support of the Project. UDAG Miscellaneous Revenue funds are rental revenues received from the lease of the City -owned parking garage under General Worth Square (City Contract No. 11085, as amended and assigned). UDAG Funds must be used for projects that meet certain CDBG program requirements, including use in a CDBG-eligible area, qualification as a CDBG economic development project and inclusion of private investment or UDAG economic development activities that contribute to economic recovery. Annual revenue from the parking garage is approximately $373,000.00. Currently the City has an appropriate balance of $506,863.69 in UDAG funds. In addition, the City is in receipt of but has not appropriated a total of $ 54,098.59 of UDAG Funds. After funding this loan, and after all funds have been appropriated, the garage rental revenues account will have a remaining balance of approximately $10,962.28. Adoption of the attached appropriation ordinance will appropriate the current balance of program revenue for use on this $550,000.00 loan, with the balance of appropriated funds to support future City projects or programs. Through this M&C, the City Council finds that the Project serves a public purpose by assisting the City in fulfilling its goals under the its Comprehensive Plan and the Neighborhood Conservation Plan and Housing Affordability Strategy, by providing quality, accessible, affordable housing for low- to moderate- income residents and supporting economic development and revitalization, and that the forgivable UDAG loan, are vital to the financial feasibility of the Project. The Council further finds that adequate controls are in place through the various loan documents and agreements to ensure that the public purpose is carried out. This project is located in COUNCIL DISTRICT 9. FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that funds are currently available in the Hyatt Regency Parkg Garage Rev project within the Grants Operating Other Fund and upon approval of the above recommendations and adoption of the attached appropriation ordinance, funds will be available as appropriated. The Neighborhood Services Department (and Financial Management Services) will be responsible for the collection and deposit of funds due to the City. Prior to an expenditure being incurred, the Neighborhood Services Department has the responsibility of verifying the availability of funds. This is a reimbursement grant. Submitted for City Manager's Office by. Dana Burghdoff 8018 Originating Business Unit Head: Kacey Thomas 8187 Additional Information Contact: Dyan Anderson 7398 FORTWORTH. City Secretary's Office Contract Routing & Transmittal Slip Contractor's Name: Maren Grove, LLC Subject of the Agreement: UDAG Deed of Trust M&C Approved by the Council? * Yes 9 No ❑ If so, the M&C must be attached to the contract. Is this an Amendment to an Existing contract? Yes B No ❑ 65502 If so, provide the original contract number and the amendment number. Is the Contract "Permanent"? *Yes 8 No ❑ If unsure, see back page for permanent contract listing. Is this entire contract Confidential? *Yes ❑ No B If only specific information is Confidential, please list what information is Confidential and the page it is located. Effective Date: Date of execution of the contract Expiration Date: If different from the approval date. If applicable. Is a 1295 Form required? * Yes ❑ No M *If so, please ensure it is attached to the approving M&C or attached to the contract. Project Number: If applicable. *Did you include a Text field on the contract to add the City Secretary Contract (CSC) number? Yes B No ❑ Contracts need to be routed for CSO processing in the followingorder: rder: 1. Katherine Cenicola (Approver) 2. Jannette S. Goodall (Signer) 3. Allison Tidwell (Form Filler) *Indicates the information is required and if the information is not provided, the contract will be returned to the department.