HomeMy WebLinkAboutContract 42180 FORTWORTH
OiTy SECRETARY �
July 14, 2011
Tarrant County Housing Partnership
3204 Collinsworth
Fort Worth, TX 76107
Attention: Donna VanNess, Executive Director
RE: Beaty Street Apartments—CHDO Funds
Dear Ms. VanNess:
We are pleased to present for your review the following terms, conditions, and
requirements based on the application of Tarrant County Housing Partnership, Inc., a
Community Housing Development Organization ("CHDO"), for a deferred payment loan
of up to $1,000,000.00 from the City of Fort Worth for the rehabilitation of a multifamily
apartment project located in the 5500 block of Beaty Street, Fort Worth, TX, subject to
approval of the Fort Worth City Council and the following terms and conditions:
BORROWER Tarrant County Housing Partnership, Inc. ("TCHP")
DEVELOPER TCHP
CONTRACTOR TBD
GUARANTORS N/A
LENDER City of Fort Worth ("City")
AMOUNT $1,000,000.00 in HOME Investment Partnerships Program Grant funds for
eligible rehabilitation and other development costs as defined in 24 CFR
92.206 ("Loan").
USE/PROJECT The Loan is to be used for acquisition, predevelopment costs, rehabilitation
and redevelopment of 73 existing multifamily rental units located in the
5500 block of Beaty Street, Fort Worth, Texas, into 66 multifamily rental
OFFICIAL RECORD
nits and a community center. ("Project").
CITY SECRETAR
Ft WORTH, TX
:;7-25- 1 1 P ;
[AFFORDABILITY
FFORDABILITY The units are to be rented to tenants that earn at or below 80% of the Area
Median Income ("AMI") as determined by the United States Department of
Housing and Urban Development("HUD").
The Affordability Period is 15 years from the date the Project is closed in
PERIOD HUD's IDIS reporting system.
INTEREST RATE 0%
TERM 1. The term of the Loan is 15 years to run concurrently with the
Affordability Period.
2. Borrower will enter into a contract with City setting forth the terms
of the Loan and the requirements related to completion of the Project
("Contract"). The term of the Contract will be two years, beginning on the
date of execution. The Contract term may be extended at the City's option
for up to one additional year, if such extension is necessary for the
completion of the Project.
PAYMENT/ Payment will be deferred through the Loan term. The Loan is forgivable at
REPAYMENT the end of the Affordability Period,provided that all Affordability and
HOME requirements have been met and TCHP is not otherwise in default
of the Loan terms or Contract provisions.
DRAW PERIOD Borrower will be entitled to make requests for draws, on a reimbursement
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.
COLLATERAL Upon execution of the Contract, the City will place a Deed of Trust on the
Project real property. This lien may be subordinated only to TCHP's
construction loan and permanent financing.
AUDITS City will conduct annual audits to ensure Affordability requirements are
being met. Borrower will maintain records according to the recordkeeping
requirements outlined below.
RECAPTURE If at any time the Affordability requirements are not being met, the City will
foreclose on the property, or the Loan must be repaid in full.
CONDITIONS TO i. This Conditional Commitment does not constitute a commitment of
LOAN FUNDING 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 (a) the City's determination to proceed with, modify or
cancel the Project based on the results of a subsequent environmental
review and (b) City Council approval of award of HOME funds for the
Project and receipt of HOME funds from HUD for the Project.
ii. 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.
iii. Compliance with the Uniform Relocation and Assistance and Real
Property Acquisition Policies Act of 1970 as amended (49 CFR Part 24)
and Section 104(d) of the Housing and Community Project Act of 1974 as
amended, and 24 CFR Part 570.606.
iv. Compliance with the Lead-Based Paint Poisonings Protection Act (42
U.S.C. Section 4831(b)) and the Residential Lead Based Paint Hazard
Reduction Act of 1992 (42 U.S.C. Section 4851-4856) and implementing
regulations at 24 CFR Part 35.
v. TCHP receipt of firm commitment of construction loan funds and
permanent financing.
OTHER i. If HOME funds are to be used for property acquisition or demolition,
REQUIREMENTS then construction must begin within 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 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.
v. 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 TCHP agrees that as a certified Community Housing Development
WITH FEDERAL, Organization, they will comply with 24 CFR 92.300 and 92.301.
STATE,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, TCHP will
reimburse the City for the Use/Project costs determined to be ineligible
and/or disallowed under the HOME regulations.
TCHP agrees that the Project will meet the property standards requirements
in 24 CFR 92.251 and lead-based paint standards in 24 CFR 92.355, as well
as City building standards.
TCHP must comply with displacement and relocation requirements at 24
CFR 92.504 and 92.353.
TCHP 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.
TCHP 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.
TCHP must comply with all applicable Federal laws, laws of the State of
Texas and ordinances of the City of Fort Worth.
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 TCHP must maintain and present to the City on a semi-annual basis, a
REQUIREMENTS General Liability Insurance in the amount of$500,000 each occurrence,
$1,000,000 aggregate limit.
TCHP 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
TCHP and Contractor to maintain, and present to the City on a semi-annual
T
kers' Compensation insurance as follows:
Limits
Liability
ach accident/occurrence
isease/per employee
isease policy limit
TCHP or Contractor is to maintain and present to the City Builder's 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.
TCHP 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 TCHP 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, TCHP 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.
TCHP 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. TCHP 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 this Conditional Commitment to remain in effect, the contract
between the City and TCHP must be executed on or before September 1,
2011. Any extension of such date must be in writing and signed by the
City.
INDEMNIFICATION TCHP agrees to indemnify and to defend and hold City harmless against (a)
any brokerage commissions or finder's fees claimed by any broker or other
M3�
party in connection with the transactions contemplated herein; or(b) any
claims related to losses, costs, damages or expense that City may incur,
directly or indirectly, including reasonable attorney's fees, as a result of or
in connection with the presence or removal of any environmental
contamination or hazardous materials at, on or under the Project or any
adjacent of proximate property, and the violation of any applicable federal
and state environmental laws or in connection with the Project. This
indemnity shall survive cancellation, termination, or avoidance of this
Conditional Commitment.
BREACH OF City hereby reserves for itself, its successors and assigns, the right to pursue
CONDITIONS all remedies, either at law or in equity, to enforce the conditions of this
Conditional Commitment, including but not limited to seeking specific
performance of TCHP's obligations to develop the Project. City may also,
prior to Loan closing, and in its sole and absolute discretion, declare this
Conditional Commitment null and void upon an event of default or breach
by TCHP of any of its representations contained in its application for the
Loan or in this Conditional Commitment, or any violation of the HOME
regulations, in which event neither City not TCHP shall have any further
rights or obligations under this Conditional Commitment, except for such
obligations of TCHP that are expressly stated to survive termination hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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 intended solely for the use of Tarrant County Housing
Partnership, Inc. 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.
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
Housing and Economic Development Department
1000 Throckmorton
Fort Worth, TX 76102
Attn: Robin Bentley, Community Development Manager
Sincerely,
Date:
usa Alanis
Assistant City Manager
Approved as to form and lega ity:
i
. VV-�z Gl Date:
b /CCK 1�4A4Sx.:.
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.
Attest 0000
BORROWER
Tarrant County Housing Partnership Fafty'Hendrix. City Sf,
Signed: c
Date: 7 /4 I►
nn an ess
Director
OFFICIAL RECORD
CITY SECRETARY { t � ;: Author aatioa
FT. WORTH, TX - r
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Official site of the City of Fort Worth,Texas
ORTTII
CITY COUNCIL AGENDA i
COUNCIL ACTION: Approved on 7/26/2011
REFERENCE 17BEATY STREET
DATE: 7/26/2011 NO.: C-25072 LOG NAME: APARTMENTS-ADDITIONAL
CHDO FUNDING
CODE: C TYPE: NOW PUBLIC NO
CONSENT HEARING:
SUBJECT: Authorize Change in Use and Expenditure of$1,000,000.00 of HOME Investment
Partnerships Program Grant Funds to Tarrant County Housing Partnership, Inc., in the
Form of a Subordinate Forgivable Loan for the Beaty Street Apartments Located in the
5500 Block of Beaty Street, Authorize the Execution of a Contract and Authorize
Substitution of Funding Years (COUNCIL DISTRICT 8)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a change in use and expenditure of$1,000,000.00 in prior year's HOME Investment
Partnerships Program Grant funds to Tarrant County Housing Partnership, Inc. in the form of a
subordinate forgivable loan for the acquisition, rehabilitation and redevelopment of the Beaty Street
Apartments located in the 5500 block of Beaty Street;
2. Authorize the City Manager, or his designee, to execute a contract and any related documents for
the project with the Tarrant County Housing Partnership, Inc., for a two-year term beginning on the
date of execution of the contract;
3. Authorize the City Manager, or his designee, to extend or renew the contract for up to one year if
Tarrant County Housing Partnership, Inc. requests an extension and such extension is necessary for
completion of the project;
4. Authorize the City Manager, or his designee, to amend the contract if necessary to acheive 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; and
5. Authorize the City Manager 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.
DISCUSSION:
On July 13, 2010, City Council approved a contract with Tarrant County Housing Partnership, Inc.
(TCHP) for $1,360,255.00 of the City's Neighborhood Stabilization Program (NSP) grant funds set
aside for households earning less than 50 percent of area median income (AMI) for the acquisition
and redevelopment of the Beaty Street Apartments located in the 5500 block of Beaty Street just
north of Lancaster Avenue (M&C C-24344). On September 14, 2010, City Council approved an
addtional $339,500.00 of NSP funds for the project for a total of$1,699,755.00 to be in the form of a
subordinate forgivable loan (M&C C-24455). The State is providing approximately $1.8 million of its
NSP funds for the project and TCHP is providing approximately $314,000.00 of its own funds for the
project.
The project consists of the acquisition of 73 multifamily units to be rehabilitated and redeveloped into
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64 units. The 64 units will be in the 10 existing multifamily buildings and a single family house located
on the site will be rehabilitated to serve as an office/community center for on-site enrichment
programs such as budget management classes, credit counseling, job skills, and resume
building. The project is now owned by a lender after foreclosure and existing tenants will be
relocated in accordance with Uniform Relocation Act requirments. The 64 apartment units will
provide quality, affordable, accessible housing to individuals and families earning 50 percent or less
of AMI which will increase the total number of very low income households served by the
NSP. TCHP will develop, own, and manage the property.
State and City staff have reviewed the project's development costs and funding sources and the rents
that will be charged. Because NSP requires that the rents be affordable to families earning at or
below 50 percent AMI, State and City staff have identified a gap in the project's finances. Staff
recommends awarding an additional $1,000,000.00 in HOME Community Housing Development
Organization (CHDO) Set-Aside funds to TCHP, a certified CHDO for this project. The funds can be
used for acquisition, predevelopment costs, rehabilitation and redevelopment costs, including, among
other things, making the project more sustainable and energy efficient.
Staff recommends the following contract and loan terms:
i. Units must be rented to tenants who earn at or below 50 percent of AMI;
ii. Secure performance and repayment of HOME funds in case of default with deed of trust;
iii. 15 year Affordability Period;
iv. Loan term to run concurrently with Affordability Period;
v. Loan forgiven at end of Affordability Period if all HOME requirments and contract terms are met.
The expenditure of HOME funds is conditioned upon the following
i. Satisfactory completion of an environmental review per 24 CFR Part 58; and
ii. Authorization to use grant funds from HUD.
Staff recommends the change in use and expenditure of$1,000,000.00 of HOME CHDO Set-Aside
funds for the project which benefits low and very low income citizens by providing them with
affordable housing. A public comment period on the change in use of these HOME funds was held
from June 24, 2011 to July 23, 2011. Any comments are maintained by the Housing and Economic
Development Department. The Action Plan funding years selected may vary and be substituted
based on the principle of first in, first out (FIFO) in order to spend oldest grant funds first.
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.
TO Fund/Account/Centers FROM Fund/Account/Centers
GR76 539120 005206128500 $371.47 GR76 539120 005206128240 $371.47
GR76 539120 005206128500 $99.999.00 GR76 539120 005206698460 $10,745.27
GR76 539120 005206698500 $10,745.27 GR76 539120 005206772460 $44,997.00
GR76 539120 005206772500 $44,997.00 GR76 539120 005206846280 $25.000.00
GR76 539120 005206846500 $25,000.00 GR76 539120 005206846270 $25,000.00
GR76 539120 005206846500 $25,000.00 GR76 539120 005206930210 $16,059.65
GR76 539120 005206930500 $16.059.65 GR76 539120 005206930220 $39,735.83
GR76 539120 005206930500 $3_9735.83_ GR76 _539120.005206930280 $2,376.86
GR76 539120 005206930500 $2,376.86 GR76 539120 005206006210 $340,326.61
ittp:Happs.cfwnet.org/council_packet/mc_review.asp?ID=15495&councildate=7/26/2011 8/26/2011
M&C Review Page 3 of 3
GR76 539120 005206006500 $340,326.61 GR76 539120 005206006220 $34,384.17
GR76 539120 005206006500 $34,384.17 GR76 539120 005206006220 $136,494.00
GR76 539120 005206006500 $136,494.00 GR76 539120 005206006280 $36.719.46
GR76 539120 005206006500 $36,719.46 GR76 539120 005206141220 $187,790.68
GR76 539120 005206141500 $187,790.68 GR76 539120 005206128160 $99,999.00
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Jay Chapa (5804)
Additional Information Contact: Cynthia Garcia (8187)
Ryan Haden (7329)
ATTACHMENTS
Beaty-Street-Apartments_Map.do_c
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=15495&councildate=7/26/2011 8/26/2011