HomeMy WebLinkAboutContract 41391 FORT WoRTH CITY OWMrSECRETARY
NO. i
Wool'
January 14, 2011
Cornerstone Assistance Network Housing Development Corporation
3500 Noble Avenue
Fort Worth, Texas 76111
Attention: Philip Posey- Director
Reference: Cornerstone Assistance Network Housing Development Corporation
Cornerstone Poly Single Family Housing Development
Dear Mr. Posey:
We are pleased to present for your review the following terms, conditions, and
requirements based on the application of Cornerstone Assistance Network Housing
Development Corporation, a Community Housing Development Organization ("CHDO"),
for a deferred payment loan of up to $270,000.000 from the City of Fort Worth for the
development of up to three (3) single-family infill houses located within the Polytechnic
Neighborhood, along with to one (1) house from CHDO Proceeds, subject to the
following terms and conditions:
BORROWER Cornerstone Assistance Network Housing Development Corporation
("CANHDCO)
DEVELOPER Cornerstone Assistance Network Housing Development Corporation
CONTRACTOR TBD
GUARANTORS N/A
LENDER City of Fort Worth ("City")
AMOUNT $270,000 in HOME Investment Partnerships Program Grant funds for
eligible construction and other development costs as defined in 24 CFR
92.206 ("Loan"). The Loan will be a deferred payment loan that will be
forgivable if CANHDC fulfills all conditions set forth in the contract with
City. The parties agree that if additional HOME funds are needed to
complete the project as determined by both parties, city staff will ask
the City Council for additional funds.
Housiniz and Economic and Development Del2artment
The City of Fort Worth * 1000 Thrcekmorton Street* Fort Worth,Texas 76102
817-392-7520* Fax 817-392-2013 OFFICIAL RECORD
CITY SECRETARY
FT. 'ENQRTH, TX
L--
USE/PROJECT Construction of up to three (3) single-family houses. All houses will be,
at a minimum, 1,200 square feet with 3-bedrooms, 2-baths with
attached garage. The houses must be sold to HOME-eligible
homebuyers that earn at or below eighty percent (80%) of the Area
Median Income ("AMI") as determined by the United States Department
of Housing and Urban Development ("HUD").
AFFORDABILITY 1 The Affordability Period is five (5) years from the date units have been
AFFORDABILITY entered into HUD IRIS reporting system.
PERIOD
The HOME Program requires:
• Each home will be sold to a HOME-eligible buyer earning equal
to or less than 80%of the Area Median Income (AMI).
• CANHDC agrees to ensure that all HOME-assisted housing or
housing identified as match for the HOME program meet all
affordability requirements identified in 24 CFR 92.254.
FULL TIME CANHDC will have a minimum of one (1) full-time employee who works
STAFF REQUIREMENT solely for CANHDC.
CHDO PROCEEDS CHDO Proceeds are defined as total HOME investment in the unit,
minus funds allocated as development subsidies, buyer subsidies,
developer's fee and any repayments from sales proceeds. It is
expected that the CHDO Proceeds from the sale of the three (3)
houses will be used to build up to one (1) additional house but the
number of houses will be determined by the amount of CHDO
Proceeds generated. CHDO Proceeds will be retained in a restricted
account for CANHDC to use in accordance with the contract.
INTEREST RATE 0%
TERM 1. The term of the contract is one (1) year beginning on the date of
contract execution. The term of the contract requires
completion of construction but does not require completion of
the sale of the house to a HOME-eligible buyer. The completed
houses must be insured and maintained and remain vacant
while being actively marketed for sale.
2. The term of the Loan is one (5) years.
3. The contract or the Loan terms may be extended for up to six
(S) months if CANHDC requests an extension and such
extension is necessary to complete the Project.
PAYMENT/ Payment will be deferred through the Loan term. The Loan is
REPAYMENT forgivable if the following conditions are met: (1) houses are sold to a
HOME-eligible buyer who will occupy the house his or her primary
residence and (2) CHDO Proceeds from the three (3) houses are used
to construct an additional house to be sold to aHOME-eligible buyer. If
the CHDO Proceeds are not sufficient to construct an additional house,
the CHDO Proceeds will be held in a restricted account for CANHDC
until such time as additional proceeds are generated. Upon completion
and sale of the additional house, the CHDO Proceeds will be retained
by CANHDC with no further obligation to the City.
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 920206.
COLLATERAL Upon execution of contract, the City will place a valid first lien Deed of
Trust on each of the lots. This lien will be released when the houses are
purchased from CANHDC by a HOME eligible homebuyer for use as
his or her primary residence.
AUDITS City will conduct annual audits to ensure Affordability requirements.
Borrower will maintain records according to the recordkeeping
requirements outlined below.
RECAPTURE If the units built with Loan funds are not occupied by aHOME-eligible
buyer during the Affordability Period, the HOME funds will become
subject to recapture in accordance with 24 CFR 92.254(a) (5) (ii).
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.
Ol. 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. Documentation must be acceptable in all respects to the City
and its counsel.
Cornerstone Assistance Network development Corporation (CANHDC)
must require each homebuyer to utilize a minimum of $1,006.06 from
the city's Homebuyer Assistance Program for down payment
assistance to ensure that the house remains affordable for five (5)
years. Failure to require down-payment assistance will result in
repayment of the total of HOME funds awarded.
OTHER i. If HOME funds are to be used for property acquisition or
REQUIREMENTS demolition, then construction must begin within twelve (12)
months of purchase date or the date on which structures are
demolished.
ii. Construction work on the Project must begin within 6 months of
the date of contract execution or the contract will terminate.
iii. 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 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 CANHDC agrees that as a certified Community Housing Development
FEDERAL,, STATES Organization, they will comply with 24 CFR 92.300 and 92.301.
AND LOCAL LAWS If it is determined that the use of the funding provided by the
City for the stated Use/Project does not meet HOME
requirements, CANHDC will reimburse the city for the
Use/Project costs determined to be ineligible and/or disallowed
under the HOME regulations.
CANHDC agrees that all housing projects assisted under this
agreement will meet the property standards requirements in 24
CFR 92.251 and lead-based paint standards in 24 CFR 92.3551
as well as City building standards.
CANHDC must comply with displacement and relocation requirements
at 24 CFR 92.504 and 92.353.
CANHDC 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 12589 and will not enter into
agreements to expend Federal Funds with contractors that are
currently listed.
CANHDC 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.
CANHDC 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
Borrower must agree to any reasonable terms and conditions as
necessary in order to ensure City and Borrower remain in compliance
with all federal regulations, state laws, and local ordinances regarding
the Project.
INSURANCE CANHDC must maintain and present to the City on a semi-annual
REQUIREMENTS basis, a General Liability Insurance in the amount of $500,000
each occurrence, $1,000,000 aggregate limit.
CANHDC 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
CANHDC 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 accidentloccurrence
$100,000 disease/per employee
$500,000 disease policy limit
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.
E.ECORDKEEPING CANHDC 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, CANHDC 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.
CANHDC 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
formatltemplate and for instructions to be provided by the City.
CANHDC 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, attomey 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 this Conditional Commitment to remain in effect, the contract
between the City and CANHDC must be executed on or before
January 31, 2012. 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 Cornerstone
Assistance Network Development Corporation. 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.
V1 61 Q
We hope the foregoing is responsive to your needs and that you will accept this p�o000000 0 ��a
Please indicate your acceptance with your-signature below and by returnin
Copy t0• i��o° $A 0.
City of Fort worth �o�
Housing and Economic Development Department � o0
1000 Throckmorton Atte by: � °�0000�o
Fort Worth, TX 76102 ��ix a 4b'O
Attn: Ryan Haden, Development Project Coordinator
haaAy Hendrix, City ere
Sincerely,
Date:
S san lams
Assi nt City Manager
NO M&C REQUIRED
Appr ved as f and legality:
/10 f-im,/11 / tA 1441 14W& VVtMfl1(14-11o(M--
Date:
bef ann Guzman //r - --
Assistant City Attorney
The undersigned hereby accepts the foregoing Conditional Commitment and the terms
and requirements herein set for and agrees to be bound thereby.
BORROWER
Cornerstone Assistance Network Housing Development Corporation
Signed:
Date: I Z G
Philip Posey
Director
0FFIC6AL RECORD
CITY SECRETARY
FT. WORTH, TX
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Official site Ili C"ity of ir" ir'tl�i,,Texas
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COUNCIL ACTION: Approved on 1/25/2011
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DATE: 1/25/2011 REFERENCE C-24710 LOG NAME: 17CORNERSTONE POLY
NO.:
CODE: C TYPE: NOW PUBLIC NO
CONSENT HEARING:
SUBJECT: Authorize a Change in Use and Expenditure of$320,000.00 of HOME Investment
Partnership Program Grant Funds to Cornerstone Assistance Network Housing
Development Corporation for the Development of Three Single Family Houses in the
Polytechnic/Wesleyan Neighborhood, Authorize the Execution of Conditional
Commitment and Contract and Authorize a Substantial Amendment to the City's 1996-
1997, 2003-20041 2004-20051 2005-20061 2006-20071 2007-2008 and 2009-2010 Action
Plans (COUNCIL DISTRICT 5)
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RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a substantial amendment to the City's 1996-1997, 2003-2004, 2004-2005, 2005-2006,
2006-20071 2007-2008 and 2009-2010 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$320,000.00 in HOME Investment Partnership
Program Grant funds to Cornerstone Assistance Network Housing Development Corporation, a
certified Community Housing Development Organization, for the development of three single family
houses in the Polytechnic Neighborhood;
4. Authorize the City Manager, or his designee, to execute a conditional commitment with
Cornerstone Assistance Network Housing Development Corporation that conditions funding, among
other things, on satisfactory completion of the HOME requirements;
5. Authorize the City Manager, or his designee, to execute a contract with the Cornerstone
Assistance Network Housing Development Corporation for the project for a three year term beginning
on the date of execution of the contract;
6. Authorize the City Manager, or his designee, to extend or renew the conditional commitment or
the contract if Cornerstone Assistance Network Housing Development Corporation requests a written
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
grant funds.
DISCUSSION:
On October 14, 2010, the City issued a Request for Proposals (RFP) to certified Community Housing
Development Organizations (CHDO) to award and expend up to $1,261,931.00 of HOME Investment
Partnerships Program Grant funds. The HOME funds available under the RFP were originally
allocated to other projects that were not completed either because of lack of private funding,
environmental issues or market condition. On November 18, 2010, the Cornerstone Assistance
Network Housing Development Corporation (CANHDC) submitted a response requesting
$540,000.00 of the available HOME funds to acquire six sites on which it proposed to construct single
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family houses. The request also included funds for related CHDO operating expenses.
City staff reviewed all RFP submissions and recommended the award to CANHDC of$320,000.00 in
HOME funds to the Community Development Council (CDC) at its meeting held on December 1,
2010. The CDC agreed with staffs funding recommendation for the project. Up to $50,000.00 of the
awarded funding will be used for operating expenses and $270,000.00 for construction of three
houses and other development expenses.
CANHDC plans to develop three single family houses to be located in the Polytechnic/Wesleyan
neighborhood. The houses will have three bedrooms, two baths, with an attached garage and range
between 1400 and 1475 square feet. The houses will be sold to an individual or family that earns 80
percent or less of Area Median Income as determined by the United States Department of Housing
and Urban Development (HUD). Buyers must meet all HOME Program requirements including
applying for and receiving at least $1,000.00 in down payment and/or closing cost assistance from
the City's Homebuyer Assistance Program and occupying the house as their primary residence for
five years.
Staff recommends the following contract terms:
i. Construction must begin within six months of contract execution;
ii. Cornerstone's performance under the contract and use of the HOME funds will be secured by
a recorded Deed of Trust;
iii. Houses must be sold to an eligible buyer; and
iv. Proceeds from the sale of houses must be used to construct additional houses for a HOME
eligible buyer; and construction of Proceeds houses must occur with the three year contract term.
The expenditure of HOME funds is conditioned upon the following:
i. Satisfactory completion of the environmental review per 24 CFR Part 58, and
ii. Authorization to use grant funds from HUD.
City staff recommends the change in use and expenditure of up to $320,000.00 in HOME funds for
the project to benefit low and very low income citizens by providing affordable housing. A public
comment period on the change in use of these HOME funds was held from December 16, 2010 to
January 20, 2011. Any comments are maintained by the Housing and Economic Development
Department in accordance with federal regulations.
This project is located in COUNCIL DISTRICT 5.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated, of the Grants fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
GR76 539120 017206351 XXX $50,000.00 GR76 539120 017206351030 $50,000.00
GR76 539120 005206107XXX $47,000.00 GR76 539120 005206107130 $47,000.00
GR76 539120 005206846XXX $3,455.50 GR76 539120 005206846520 $3,455.50
GR76 539120 00520693OXXX $763.02 GR76 539120 005206930080 $763.02
GR76 539120 005206006XXX $25,500.00 GR76 539120 005206006220 $25,500.00
GR76 539120 005206141 XXX $184,342.80 GR76 539120 005206141220 $184,342.80
GR76 539120 005206181 XXX $8,938.68 GR76 539120 005206181030 $8,938.68
Submitted for City Manager's Office b Susan Alanis (8180)
m
Ori ating Department Head: Jay Chapa (5804)
Cynthia Garcia (8187)
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Additional Information Contact: Ryan Haden (7329)
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ATTACHMENTS
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