HomeMy WebLinkAboutContract 41432 FORTWORTH CITY SECRETARY
CONTRACT NO, I
January 18, 2010
Terrell Homes I, Ltd.
111 Soledad, Suite 1220
San Antonio, TX 78204
Attention: Michael Casias, Project Manager
Reference: Terrell Heights Single Family Infill Development
Conditional Commitment Amendment
Dear Mr. Casias:
We are pleased to present for your review the following terms, conditions, and
requirements based on the application of Terrell Homes I, Ltd, for a subordinate loan to
partially finance the construction of single family rental houses for the Terrell Heights
Neighborhood Infill Program subject to the following terms and conditions:
BORROWER Terrell Homes I, Ltd a Texas Limited Partnership
DEVELOPER An entity to be approved by the City of Fort Worth
CONTRACTOR NRP Contractors, LLC
GUARANTORS N/A
LENDER City of Fort Worth ("City")
AMOUNT $900,000 in HOME Investment Partnerships Program Grant funds for
eligible project costs, as defined in 24 CFR 92.206 ("Loan")
USE/PROJECT Construction of up to fifty-four (54) single family rental houses on
scattered sites in the Terrell Heights neighborhood, as well as a
community center and a park lot ("Project").
At the end of fifteen (15) years, the houses will be sold to HOME-
eligible homebuyers that earn at or below 60% of the Area Median
Income ("AMI") as determined by the United States Department of
Housing and Urban Development ("HUD"). The development will have
a minimum of five (5) "floating" HOME units, with at least three (3) Low
HOME units and four (4) HIGH HOME units, for the duration of the
OFFICIAL RECORR Housinp- and Economic and Development Department
City of Fort Worth * 1000 Throckmorton Street* Fort Worth,Texas 76102
CITY SECRETARY 817-392-7520* Fax 817-392-2013
FT. WORTH, TX
Loan. The LOW HOME unit will be a four(4) bedroom unit. In addition,
five percent (5%) or three (3) of the units in the Project will be
accessible for persons with disabilities and an additional two percent
(2%) of the units or one (1) unit must be accessible for persons with
hearing or visual disabilities.
AFFORDABILITY/ The Project is to remain affordable to households earning sixty percent
AFFORDABILITY (60%) or less of AMI. The Affordability Period is twenty(20) years from
PERIOD the date units have been entered into the HUD IDIS reporting system.
IF the HOME assisted units do not remain affordable for the entire
Affordability Period, then the Loan will become immediately due and
payable to the City.
RENTAL RATES The Project shall be required to use the following HOME
guidelines for establishing rents:
• Lesser of fair market rent (FMR) or,
• HOME assisted units rentals rates shall not exceed maximum
allowable rents for households earning _< 65% of AMI, and
• If more than five (5) HOME assisted units, then 80% of
HOME units shall not exceed maximum allowable rents for
households earning <_ 65% of AMI and 20% of HOME units
shall not exceed maximum allowable rents for households
earning _< 50% AMI.
• Maximum allowable rents are posted on
www.hud.gov/cpd/home/limits/renVrentlimit.html
INTEREST RATE One percent(1.00%).
TERM 1. The term of the contract is two (2) years beginning on the date
of the execution of the contract;
2. The term of the Loan is twenty 20 years beginning on the date
of the Loan documents;
PAYMENT/ The term of the loan shall be 20 years. Interest shall accrue at one
REPAYMENT percent (1%) annually. Payments shall be due annually from cash flow
one year after occupancy reaches 90% for the project. In the event
sufficient funds are not available for payment any outstanding balance
shall be paid at the end of the term.
DRAW PERIOD Borrower will be entitled to make requests for draws, on a reimbursable
basis, during the contract term. Draws will only be approved for HOME
eligible costs in accordance with 24 CFR 92.206. Draws will occur as
scheduled and defined in the contract. City will disburse funds upon
receipt of satisfactory documentation and due diligence satisfaction.
ELIGIBLE COSTS Eligible costs to be paid for by these funds will be stipulated in the
contract and are defined under 24 CFR 92.206.
AUDITS City will conduct annual audits to ensure Affordability requirements.
Borrower will maintain records according to the recordkeeping
requirements outlined below.
RECAPTURE If at any time the Affordability requirement is not met, the City will
foreclose on the property or the HOME funds of$900,000 must be
repaid.
COLLATERAL A valid second lien Deed of Trust on land and all improvements will be
filed by the City to secure payment and performance.
LIQUIDATED There shall be a ten percent (10%) payment of total Loan amount as
DAMAGES liquidated damages if Affordability requirements are not maintained
during the Affordability Period.
CONDITIONS TO LOAN i. This Conditional Commitment does not constitute a commitment
FUNDING of funds or site approval, and any commitment of funds or
approval may occur only upon satisfactory completion of an
environmental review and receipt by the City of a release of
funds from HUD under 24 CFR Part 58. The parties further
acknowledge that the provision of any funds to the Project is
conditional on the City's determination to proceed with, modify
or cancel the Project based on the results of a subsequent
environmental review.
ii. City Council approval of award of HOME funds for the Project
and receipt of HOME funds from HUD for the Project.
iii. PARTIES ARE PROHIBITED FROM UNDERTAKING OR
COMMITTING ANY FUNDS TO PHYSICAL OR CHOICE-
LIMITING ACTIONS, INCLUDING PROPERTY ACQUISITION,
DEMOLITION, MOVEMENT, REHABILITATION,
CONVERSION, REPAIR OR CONSTRUCTION PRIOR TO
THE COMPLETION OF ENVIRONMENTAL REVIEW AND
RECIEPT OF THE RELEASE OF FUNDS FROM HUD.
VIOLATION OF THIS PROVISION WILL RESULT IN THE
DENIAL OF FUNDS UNDER THIS CONDITIONAL
COMMITMENT. A NOTICE TO PROCEED FROM THE CITY
WILL BE ISSUED WHEN THE ENVIRONMENTAL
CLEARANCE HAS BEEN RECEIVED.
iv. Approval of Borrower's Low Income Housing Tax Credit
("LIHTC") application by the Texas Department of Housing and
Community Affairs ("TDHCA").
V. HUD Approval of Site and Neighborhood Standards. Relevant
information must be provided if a Neighborhood and Site
Standards Study is required by HUD per 24 CFR 92.202 and
983.6(b).
vi. A Subsidy Layering Analysis must be conducted to ensure the
Project is not over-subsidized using HOME funds as required by
24 CFR 92.250(b).
i. If HOME funds are to be used for property acquisition or
OTHER demolition, then construction must begin within twelve (12)
REQUIREMENTS months of purchase date or the date on which structures are
demolished.
ii. Borrower will be liable for and will promptly pay all fees Borrower
incurs, including expenses and charges incurred in connection
with the negotiation and preparation of the documents governing
or securing the Loan, and other expenses incurred in connection
with the Project constructed with the Loan, including appraisal
and Texas Commission on Environmental Quality (TCEQ)
environmental fees, whether or not the Loan closes.
iii. Documentation must be acceptable in all respects to the City and
its counsel.
iv. All permits and approvals must be in place prior to funding of the
Loan.
V. All construction contracts, plans, surveys, etc. must be
acceptable to the City and assigned as additional collateral.
Approval is subject to a pre-construction review of plans,
specifications and cost estimates.
vi. Borrower must provide a tenant selection policy to ensure basic
tenant rights and protections in order to comply with federal
regulation 24 CFR 92.253.
vii. Borrower must agree to any reasonable terms and conditions
that are necessary to ensure City and Borrower remain in
compliance with all applicable federal, state and City laws,
regulations and ordinances regarding the Project.
COMPLIANCE WITH If it is determined that the use of the funding provided by the City for the
FEDERAL, STATE, stated Use/Project does not meet HOME requirements, Terrell Homes
I, Ltd. will reimburse the City for the Use/Project costs determined to be
AND LOCAL LAWS ineligible and/or disallowed under the HOME regulations.
Terrell Homes I, Ltd. agrees that all housing projects assisted under
this agreement will meet the property standards requirements in 24
CFR 92.251 which includes compliance with the current edition of the
Model Energy Code (MEC), International Energy Conservation Code
(IECC), lead-based paint standards in 24 CFR 92.355 (if applicable), as
well as City building standards.
Terrell Homes I, Ltd. must comply with displacement and relocation
requirements at 24 CFR 92.504 and 92.353.
Terrell Homes I, Ltd. certifies that it is not currently listed on the
General Services Administration's List of Parties Excluded from Federal
Procurement or Non-procurement Programs in accordance with
Executive Orders 12549 and 12689 and will not enter into agreements
to expend Federal Funds with contractors that are currently listed.
Terrell Homes I, Ltd. must comply with all prescribed procedures
regarding nondiscrimination and equal opportunity, affirmative
marketing, displacement and relocation, labor relations, lead-based
paint and conflict of interest provisions described in 24 CFR 92 subpart
H and 24 CFR 92.504.
Terrell Homes I, Ltd. must comply with all applicable Federal laws,
laws of the State of Texas and ordinances of the City of Fort Worth.
Organizations that are directly funded under the HOME program may
not engage in inherently religious activities as defined under 24 CFR
92.257
INSURANCE Terrell Homes I, Ltd. must maintain and present to the City on a semi-
REQUIREMENTS annual basis, a General Liability Insurance in the amount of $500,000
each occurrence, $1,000,000 aggregate limit.
Terrell Homes I, Ltd. is to maintain and present to the City on a semi-
annual basis, a Business Automobile Liability Insurance as follows:
$1,000,000 each accident on combined single-limit basis, or
$250,000 Property Damage
$500,000 Bodily Injury per person per occurrence
$2,000,000 Aggregate
Terrell Homes I, Ltd. and Contractor to maintain, and present to the
City on a semi-annual basis, Workers' Compensation insurance as
follows:
Statutory Limits
Employers Liability
$100,000 each accident/occurrence
EOFFICIAL RECORD $100,000 disease/per employee
RETARY $500,000 disease policy limit
TH, TX
Contractor is to maintain and present to the City, Builders Risk
insurance. The Builder's Risk insurance must be acceptable to the City,
and must be a valid policy at all times during the Loan.
Contractor to maintain property and flood insurance (if required), in
form and amount satisfactory to the City for the Project during the life of
the Loan. If applicable, insurance must be evidenced by a valid
binder/policy. Certificates of insurance are not acceptable. The City
will be named as Mortgagee and as Additional Insured Party. The
policy will also provide for 30-day prior notification to the City of
cancellation.
RECORDKEEPING Terrell Homes I, Ltd. must maintain records that will provide accurate,
current, separate, and complete disclosure of the status of the funds
received pursuant to this Agreement and pursuant to any other
applicable Federal and/or State regulations establishing standards for
financial management.
Upon receipt of reasonable written notice by the City and as often as
City may deem necessary, Terrell Homes I, Ltd. will make
available to the City all of its records and will permit City to
conduct audits of all contracts, invoices, materials, payrolls,
records of personnel, conditions or employment and all other
data relating to the stated Use/Project.
Terrell Homes I, Ltd. will provide quarterly financial and beneficiary
reports that will contain such records, data and information as City may
request pertinent to matters covered by this Agreement. Reports will be
due to the Housing and Economic Development department within 45
days of the end of the quarter. Required report format/template and /or
instructions to be provided by the City. Terrell Homes I, Ltd. will provide
any additional information as requested by the City within 10 days of
date of receipt of written request.
CLOSING COSTS The Loan is to be closed at no cost to the City. Borrower shall be
responsible for all costs associated with this transaction, including title
insurance, attorney fees, filing fees, closing costs, etc.
TITLE INSURANCE Borrower will pay the cost of a mortgagee's title insurance policy
insuring the amount of the Loan.
EXPIRATION To cause the commitment to remain in effect, the contract between the
City and Terrell Homes I, Ltd. must be executed on or before August
31, 2011. Any extension of such date must be in writing and signed by
the City.
Any funds disbursed against this Conditional Commitment will be subject to the City's
receipt of satisfactory documentation of the Loan and due diligence satisfaction. This
Conditional Commitment is confidential and is intended solely for the use of Terrell
Homes I, Ltd. No other person or parties has any rights whatsoever with respect to the
above terms and conditions. These terms can be modified or other terms negotiated
between the parties upon mutual agreement.
The undersigned attests on behalf of Borrower to the fact that any funds committed
herein were not first provided to the City by the Borrower, the Developer, any consultant,
related party or any individual or entity acting on behalf of the Borrower in its application
for the Loan.
We hope the foregoing is responsive to your needs and that you will accept this offer.
Please indicate your acceptance with your signature below and by returning a signed
copy to:
City of Fort Worth Attested by
Housing and Economic Development Department
1000 Throckmorton
Fort Worth, TX 76102 Marty Hendrix Secre ���n�
Attn: Ryan Haden, Development Project Coordinator a O= Zip
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Assidtant City Manager 4r4
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Leann Guzman Ll
Assistant City Attorney II
The undersigned hereby accepts the foregoing Conditional Commitment and the terms
and requirements herein set for and agrees to be bound thereby.
BORROWER
Terrell Homes I, Ltd.
A Texas limited partnership
By: NRP Group, LC �
y p' Coat act Authorization.
A Texas Limited Partnership n.
Date �-�.��..�.., ..._
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Date: ( $ <
De ra Guerrer , Authdrized Representative
NRP Group, LLC
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
M&C Review Page 1 of 3
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FoRTWom
COUNCIL ACTION: Approved on 6/22/2010
DATE: 6/22/2010 REFERENCE NO.: C-24289 LOG NAME: 17NRP-TERRELL
HEIGHTS
CODE: C TYPE: NON-CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize a Change in Use and Expenditure of$900,000.00 of HOME Investment
Partnerships Program Grant Funds to Terrell Home I, Ltd., in the Form of a Subordinate
Forgivable Loan for Single Family Rental Housing for the Terrell Heights Neighborhood
Infill Program,Authorize the Execution of a Conditional Commitment and Contract and
Authorize a Substantial Amendment to the City's 2002-2003, 2004-2005, 2005-2006 and
2006-2007 Action Plans (COUNCIL DISTRICT 8)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a Substantial Amendment to the City's 2002-2003, 2004-2005, 2005-2006 and 2006-
2007 Action Plans;
2. Authorize the City Manager, or his designee, to substitute funding years in order to meet
commitment, disbursement and expenditure deadlines for grant funds from the United States
Department of Housing and Urban Development;
3. Authorize a change in use and expenditure of$900,000.00 in prior year's HOME Investment
Partnerships Program Grant funds to Terrell Homes I, Ltd., in the form of a subordinate forgivable
loan for single family rental housing development for the Terrell Heights Neighborhood Infill Program;
4. Authorize the City Manager, or his designee, to execute a conditional commitment with Terrell
Homes I, Ltd.,for a twenty year subordinate forgivable loan that conditions loan funding, among other
things, on satisfactory completion of HOME requirements;
5. Authorize the City Manager, or his designee, to execute a contract and any necessary related
documents with Terrell Homes I, Ltd., for the project for a two year term beginning on the date of the
execution of the contract;
6. Authorize the City Manager, or his designee, to extend or renew the conditional commitment or the
contract for up to one year if Terrell Homes I, Ltd., requests an extension and such extension is
necessary for completion of the project; and
7. Authorize the City Manager, or his designee, to amend the conditional commitment or the contract
if necessary to achieve project goals provided that the amendment is within the scope of the project
and in compliance with City policies and applicable laws and regulations governing the use of federal
grantfunds.
DISCUSSION:
On October 7, 2009, the City issued a Request for Proposals(RFP)for developers to award and
expend $2,600,000.00 of HOME Investment Partnerships Program Grant funds by May 1, 2012. On
November 5, 2009, NRP Holdings, LLC, (NRP) submitted a response requesting $815,000.00 of the
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available HOME funds for the development of single family rental houses in the Terrell Heights
neighborhood. As part of the financing for the project, NRP has applied for Low Income Housing Tax
Credits(LIHTC)from the Texas Department of Housing and Community Affairs(TDHCA). NRP also
entered into negotiations with the Fort Worth Housing Finance Corporation(FWHFC)for its
participation in the project. On February 2, 2010,the Board of the FWHFC approved a Memorandum
of Understanding (MOU)with NRP for the development of approximately 54 single family rental
houses as part of the Terrell Heights Neighborhood Infill Program. In accordance with the MOU,
Terrell Homes I, Ltd., will own the rental properties. The FWHFC will form a single asset entity that
will become the sole general partner of the partnership.
City staff reviewed all RFP submissions and recommends the award of$900,000.00 in HOME funds
to Terrell Homes I, Ltd., in the form of a 20 year subordinate forgivable loan for the project. The
project consists of the acquisition of 54 lots on which three and four bedroom single family rental
houses will be constructed. The houses will be available for rent to households earning at or below 60
percent of Area Median Income as determined by the United States Department of Housing and
Urban Development(HUD). The houses will remain rental units for 15 years. At year 16, the resident
occupying the house has the option to purchase it for the outstanding debt against the property. For
the first 15 years, residents will be given education in home maintenance and financial planning. If the
resident does not desire to purchase the property,the partnership will continue to own and manage it.
The $900,000.00 in City HOME funds will produce five HOME-assisted units. The award of HOME
funds are contingent on the award of the LIHTC. Total project cost has been estimated to be
$11,641,895.00.
Staff recommends the following loan terms:
i. Five HOME-assisted units with a 20 year Affordability Period;
ii. Non-interest bearing loan;
iii. Loan forgiven after 20 year Affordability Period expires; and
iv. Contract performance and use of HOME funds secured by a recorded Deed of Trust on the real
property.
The expenditure of HOME funds is conditioned upon the following_:
i. Award of LIHTC;
ii. Satisfactory completion of environmental review per 24 CFR Part 58;
iii. Authorization to use grant funds from HUD; and
iv. Receipt of funding for the HUD grant funding year.
City staff recommends the change in use and expenditure of$900,000.00 in prior year's HOME funds
for the project in order to benefit low and very low income citizens by providing them with affordable
housing. A public comment period on the change in use of the HOME funds was held from May 6,
2010, to June 5, 2010. Any comments are maintained by the Housing and Economic Development
Department in accordance with federal regulations.
This project is located in COUNCIL DISTRICT 8.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated, of the Grants Fund.
TQ Fund/AccounUCenters FROM Fund/AccounUCenters
GR76 539120 0 5206930270 $575.959.41 GR76 539120-005206772220 $121,657.00
GR76 539120 005206006270 $44.601.59 GR76 539120 005206141260 $157.782.00
GR76 539120 005206772270 $121.657.00 GR76 539120 005206930990 $575,959.41
GR76 539120 005206141270 $15-7,782.0_ GR76 539120 005206006990 $44,601.5
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Submitted for City Manager's ffice b) Thomas Higgins (6192)
Originating Department Head• Jay Chapa (5804)
Additional Information Contact: Ryan Haden (7329)
ATTACHMENTS
Terrell_Heights Elevations and Neighborhood.Map.pdf
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=13577&councildate=6/22/2010 8/16/2010