HomeMy WebLinkAboutContract 41390 FORT WORTH
-,..••.r �r�..�.-- CITY SECRETARY
CONTRACT NO. c10 _
January 14, 2010
Esperanza Cove, Ltd.
111 Soledad, Suite 1220
San Antonio, TX 78204
Attention: Michael Casias, Project Manager
Reference: Esperanza Cove Senior Apartments
Conditional Commitment
Dear Mr. Casias:
We are pleased to present for your review the following terms, conditions, and
requirements based on the application of Esperanza Cove, Ltd, for a subordinate loan to
partially finance the construction of multifamily senior rental houses for the Scenic Bluff
Neighborhood subject to the following terms and conditions:
BORROWER Esperanza Cove, Ltd., a Texas Limited Partnership
DEVELOPER An entity to be approved by the City of Fort Worth___
CONTRACTOR NRP Contractors, LLC
LENDER City of Fort Worth ("City")
AMOUNT $850,000 in HOME Investment Partnerships Program funds for eligible
project costs, as defined in 24 CFR 92.206 ("Loan")
USE/PROJECT Construction of up to sixty-one (61) multi-family rental units at 2819 E.
Belknap Street, 606 Blandin Street, and 2817 Plumwood Street in the
Scenic Bluff neighborhood.
Estimated total development investment is approximately $7,000,000
INVESTMENT
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 of completion of the project as defined by City. If the assisted
units do not remain affordable for the entire Affordability Period, then
the Loan will become immediately due and payable to the City.
Housing and Economic and Development Department FICIAL RECORD
The City of Fort Worth * 1000 Throckmorton Street * Fort Worth, Texas
817-392-7520 * Fax 817-392-2013 CITY SECRETARY
FT. WARTM9 TX
RENTAL RATES The Borrower shall be required to use the Maximum allowable
rents as determined by HUD posted on
www.hud..qov/cpd/home/limits/rent/rentlimit.html
INTEREST RATE 1.5% percent simple interest annually
TERM 1. The term of the contract is twenty (20) years shall begin upon
execution and shall continue for 20 years after the Project is
completed as determined by City.;
2. The term of the Loan is three (3) years beginning on the date of
execution of the Loan documents;
PAYMENT/ The term of the loan shall be three (3) years. Payments shall be due
REPAYMENT when the construction loan is converted to permanent financing or
when the occupancy of the Project is at 80%, whichever is sooner.
DRAW PERIOD Borrower will be entitled to make requests for draws, on a reimbursable
basis, during the loan term. Draws will only be approved for HOME
eligible costs in accordance with 24 CFR 92.206; City will disburse
funds upon receipt of satisfactory documentation of expenses of eligible
costs and proof that such costs were paid. Draws will occur as
scheduled and defined in the contract. Borrower must submit at least
one request for reimbursement for HOME eligible expenses by
December 20, 2011
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/INSPECTIONS City will conduct annual audits and inspections 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 HOME funds
of$850,000 must be repaid or the City will foreclose on the Project
Property
COLLATERAL A valid Deed of Trust on the Project Property 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 This Conditional Commitment is conditioned upon:
FUNDING i. Satisfactory completion of an environmental review and receipt by
the City of a release of funds from HUD under 24 CFR Part 58
and compliance with other federal regulations. 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. Approval of Borrower's Low Income Housing Tax Credit
("LIHTC") application by the Texas Department of Housing and
Community Affairs ("TDHCA").
iv. 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).
V. City determining that the Project is not over-subsidized with
HOME funds as defined in 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, Esperanza
AND LOCAL LAWS Cove, Ltd. will reimburse the City for the Use/Project costs determined
to be ineligible and/or disallowed under the HOME regulations.
Esperanza Cove, 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.
Esperanza Cove, Ltd. must comply with displacement and relocation
requirements at 24 CFR 92.504 and 92.353.
Esperanza Cove, 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.
Esperanza Cove, 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.
Esperanza Cove, 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 Esperanza Cove, 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.
Esperanza Cove, 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
Esperanza Cove, 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
$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.
RECORDKEEPING Esperanza Cove, Ltd. must maintain records that will provide accurate,
current, separate, and complete disclosure of the status of the funds
received pursuant2 s- 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, Esperanza Cove, 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.
Esperanza Cove, 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. Esperanza Cove, 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 Esperanza Cove, Ltd. must be executed on or before August
31, 2012. Any extension of such date must be in writing and signed by
the City.
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.
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 Esperanza
Cove, 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 4: n
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Please indicate your acceptance with our signature below and b returnin a OC,0-k6,
copy to: o
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City of Fort WorthAtte y�b . 0O o x 0
Housing and Economic Development Department 'P � o0 d�
1000 Throckmorton n �0000000°0o a
Fort Worth, TX 76102 "-.c / 5 0�'
Attn: Ryan Haden, Development Project Coordinator Hendrix, City S
Sincerely,
I Date: I
usan Janis
A i nt City Manager
NO M&C .f�E; 111<O
Approv d as to form an legality:
Date: / 97
a
Assistant City Attorney
The undersigned hereby accepts='fie foregoing Conditional Commitment and the terms
and requirements herein set for and agrees to be bound thereby.
BORROWER
Esperanza Cove, Ltd.
A Texas limited partnership
By: NRP Group, LLC
A Texas Limited Partnership
Sied:
A,,,, Date:
D br Guerr ro, Authorized Representative
NRP Group, LLC
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH) '"X
M&C Review Pagel of 2
Official site of the City of Fort worth,Texas
CITY COUNCIL AGENDA F°RT�Fr
COUNCIL ACTION: Approved on 1/25/2011
DATE: 1/25/2011 REFERENCE NO.: C-24713 LOG NAME: 17NRP
ESPERANZA
CODE: C TYPE: NON-CONSENT PUBLIC NO
NO
SUBJECT: Authorize a Change in Use and Expenditure of$850,000.00 of HOME Investment
Partnerships Program Grant Funds to Esperanza Cove, Ltd., in the Form of a Subordinate
Interim Loan for the Development of Esperanza Cove Senior Apartments, Multifamily
Senior Housing Located at 2819 East Belknap Street, Authorize the Execution of a
Conditional Commitment and Contract and Authorize a Substantial Amendment to the
City's 2010-2011 Action Plan (COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize a substantial amendment to the City's 2010-2011 Action Plan;
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$850,000.00 in HOME Investment Partnerships
Program Grant funds to Esperanza Cove, Ltd., in the form of a subordinate interim loan for the
development of the Esperanza Cove Senior Apartments, multifamily senior housing located at 2819
East Belknap Street;
4. Authorize the City Manager, or his designee, to execute a conditional commitment with Esperanza
Cove, Ltd., for a three year subordinate interim loan that conditions funding, among other things, on
satisfactory completion of HOME requirements;
5. Authorize the City Manager, or his designee, to execute a contract with Esperanza Cove, Ltd., for
the project for a term beginning on the date of execution of the contract and ending on the date the
20 year affordability period expires;
6. Authorize the City Manager, or his designee, to extend or renew the conditional commitment or
the contract if Esperanza Cove, Ltd., 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 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) for developers to award and
expend up to $2,260,000.00 of HOME Investment Partnerships Program Grant funds (HOME). On
November 18, 2010, NRP Holdings, LLC, (NRP) submitted a response requesting $850,000.00 of the
available HOME funds for the development of the Esperanza Cove Senior Apartments, a multifamily
senior rental project to be located at 2819 East Belknap Street. City staff reviewed all RFP
submissions and recommends the award of$850,000.00 in HOME funds, in the form of a subordinate
interim loan, to Esperanza Cove Ltd., a Texas limited partnership that will be formed to develop, own
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=14725&councildate=l/25/2011 9/4/2013
M&C Review Page 2 of 2
and manage the project. The development site will be three lots now located at 606 Blandin, 2819 E.
Belknap and 2817 Plumwood in the Six Points Urban Village. The project consists of 61 units in a
three story building with elevators. There will be one and two bedroom units ranging from 750 to 900
square feet in size.
As part of the financing for the project, Esperanza Cove, Ltd., has applied for nine percent
competitive 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 January 4, 2011, the Board of
the FWHFC approved a resolution to enter an agreement with NRP to develop the project and
authorized the formation of Esperanza Cove GP, LLC, to act as general partner for Esperanza Cove,
Ltd. The FWHFC will purchase the development site and lease it to Esperanza Cove, Ltd., under a
long term ground lease. Total project costs are approximately $8,838,698.00. The award of the
HOME funds is contingent upon the award of the LIHTC.
Staff recommends the following loan terms:
i. Designate HOME-assisted units according to HOME regulations with a 20 year affordability
period;
ii. HOME funds secured by a recorded Deed of Trust on the real property;
iii. 1.5 percent simple interest with principal and accrued interest due at the end of loan term; and
iv. Loan term is three years or conversion to permanent financing.
The commitment of HOME funds is conditioned upon the following,
i. Award of LIHTC;
ii. Satisfactory completion of environmental review per 24 CFR Part 58; and
iii. Authorization to use grant funds from HUD.
City staff recommends the change in use and expenditure of up to $850,000.00 in HOME funds for
the project, which is 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 2.
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 017206461XXX $850,000.00 GR76 539120 017206461070 $850,000.00
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Jay Chapa (5804)
Cynthia Garcia (8187)
Additional Information Contact: Ryan Haden (7329)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=14725&councildate=1/25/2011 9/4/2013