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HomeMy WebLinkAbout09979RESOLUTION NO. 9979 A RESOLUTION APPROVING A PARTIAL SUBORDINATION TO LAND USE RESTRICTION AGREEMENT RELATING TO THE SANTA FE CROSSING PROJECT, 203-227 NORTH SANTA FE, PUEBLO, COLORADO, 81003 AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Partial Subordination To Land use Restriction Agreement relating to the Santa Fe Crossing Project, 203-227 North Santa Fe, Pueblo, Colorado, 81003, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. SECTION 2. The President of the City Council is authorized to execute and deliver the Partial Subordination To Land Use Restriction Agreement in the name of the City and the execution thereof by the President of the City Council is hereby ratified, confirmed, and approved. INTRODUCED November 10, 2003 BY Al Gurule/Councilperson APPROVED: Bill Sova/President of City Council ATTEST: Gina Dutcher/City Clerk 3/02 REV PARTIAL SUBORDINATION TO LAND USE RESTRICTION AGREEMENT City of Pueblo (the "Lender") provides to the Colorado Housing and Finance Authority (the "Authority") this partial subordination to Land Use Restriction Agreement with respect to the real property described in Exhibit A attached hereto (the "Land"). RECITALS 1. Sante Fe Crossing, LLLP is the owner ("Owner") of the multifamily rental housing project located on the Land (the "Project") and has applied to the Authority for an allocation of Iow-income housing credits ("Credits") with respect to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. The Lender is the beneficiary of a deed of trust covering the Land and the Project. 3. Section 42(h)(6) provides that Credits are not allowed unless an "extended Iow-income housing commitment" is in effect with respect to the Project in the form of an agreement between the Authority and the Owner (the "Land Use Restriction Agreement") which is recorded as a restrictive covenant against and running with the Land. 4. Although the Land Use Restriction Agreement terminates in the event of foreclosure, Section 42(h)(6)(e)(ii) of the Code requires that certain limitations as to termination of tenancies and rent increases survive such foreclosure for a period of three years. 5. To assure the survival of the limitations described in said Section 42(h)(6)(e)(ii), the Authority requires, as a condition to its execution of the Land Use Restriction Agreement, that the holders of all security interests in the Land recorded prior to the recording of the Land Use Restriction Agreement acknowledge and agree to the priority of the provisions of Section 42(h)(6)(e)(ii) of the Code. SUBORDINATION AGREEMENT Lender hereby consents to the recording of the Land Use Restriction Agreement as a restrictive covenant encumbering and running with the Land, and acknowledges and agrees that those provisions of the Land Use Restriction Agreement which set forth the requirements of Section 42(h)(6)(e)(ii) of the Code are superior to Lender's security interest and shall continue in full force and effect for a period of three (3) years following the date of acquisition of the Project by foreclosure (or instrument in lieu of foreclosure). ~ IN WITNESS,WHEREOF, Lender has caused this Agreement to be executed by its duly authorized officers this 27th day of October, 2003 (Lender) STATE OF COLORADO ) ss. COUNTY OF '-~-~. (~ /O ) The foregoing instrument was acknowledged before me this 27th day of October, 2003 My corffmission expires: (S E A L) , 2003, by and of Rental\lihtc\i~orms\final\final p~g on disk\partialsubordination.doc