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HomeMy WebLinkAbout10793RESOLUTION NO. 10793 A RESOLUTION APPROVING AN AGREEMENT BETWEEN COLORADO LIMITED PARTNERSHIP AND THE CITY OF CORPORATION, FOR AFFORDABLE HOUSING DEVELOPMENT, PRESIDENT OF THE COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. VILLA ANDREA, L.P., A PUEBLO, A MUNICIPAL AND AUTHORIZING THE The Agreement dated August 14, 2006 between Villa Andrea, L.P., a Colorado limited partnership and the City of Pueblo, A Municipal Corporation, ( "the Agreement'), for the development of affordable housing, a copy of which is attached and incorporated herein, having been approved as to form by the City Attorney, is hereby approved. SECTION 2. The President of the City Council is hereby authorized to execute and deliver the Agreement in the name of the City, and the City Clerk to attest the same, by and on behalf of the City of Pueblo. INTRODUCED August 14, 2006 BY Jeff Chostner Councilperson APPROVED: President of City Council ATTESTED BY: CITY CLERK Background Paper for Proposed RESOLUTION ke �J 0- W /0'79 3 AGENDA ITEM # A DATE: AUGUST 14, 2006 DEPARTMENT: HOUSING AND CITIZEN SERVICES / ADA RIVERA CLARK TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN VILLA ANDREA, L.P., A COLORADO LIMITED PARTNERSHIP AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR AFFORDABLE HOUSING DEVELOPMENT, AND AUTHORIZING THE PRESIDENT OF THE COUNCIL TO EXECUTE SAME ISSUE A resolution approving an Affordable Rental Housing Rehabilitation Agreement between Villa Andrea, L. P., a Colorado limited partnership and the City of Pueblo, A Municipal Corporation, wherein HOME funds would be provided to the Project. The amount of assistance is $320,000. The funds are provided in the form of a loan. The interest rate will be the Applicable Federal Rate (AFR) at the time of loan closing. The current rate is 4.52 %. RECOMMENDATION Approve the Resolution. BACKGROUND Sleeping Indian, L.L.C., has applied to the Department of Housing and Citizen Services for $320,000 in HOME funds. Sleeping Indian, L.L.C., as the managing partner and Alliant Capital, Ltd., as the general partner comprise the partners in Villa Andrea L.P., which is the borrower of these HOME funds. The Project has received a Low Income Housing Tax Credits (LIHTC) allocation from the State of Colorado, for the project commonly known as Villa Andrea Apartments. Total project costs are $4.4 million. The funds are to be used for the acquisition and rehabilitation of a 32 -unit rental housing project, which is located at 104 -109 Idaho Street. One unit is for a site manager with the remainder reserved for households earning less than 50% of the area median income of $18,850. Restrictions placed on the project require that the properties remain affordable for a period of 20 years for the HOME funds and 40 years for the Tax Credit funds. FINANCIAL IMPACT The estimated Project cost is $4.4 million. The $320,000 in HOME funds would be provided as a loan. The loan shall bear interest at the rate prevailing on the date of the loan closing pursuant to the Internal Revenue Services' applicable revenue ruling. The current AFR this type of transaction is subject to is 4.52 %. All funds received are considered program income and will return to the HOME fund. The loan is secured by a deed of trust, which is subordinate to the primary lender's deed of trust. The HOME funds are available in the 251 Fund. Ver. 9/16/03; New Proj Rev. 6/28/06 Rev. 8/1/06 CITY OF PUEBLO AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT This Agreement is made and entered into this 14th day of August, 2006, by and between the City of Pueblo, a Municipal Corporation (hereinafter referred to as "City ") and Villa Andrea, L.P., a Colorado limited partnership, whose address is: c/o Sleeping Indian, LLC, 328 Riverview Court, Canon City, Colorado, 81212 (hereinafter referred to as "Developer "). WITNESSETH, that: WHEREAS, the City has, under dates of January 10, 2005 and July 10, 2006, entered into agreements with the U.S. Department of Housing and Urban Development ( "HUD "), whereby federal financial assistance may be made available to City on behalf of the Pueblo Consortium ( "Consortium "), established under Agreements dated September 14, 1998, August 10, 2000 and May 12, 2003 between City and Pueblo County, Colorado ( "County "), as a Participating Jurisdiction for the purpose of expanding the availability of affordable housing pursuant to the Home Investment Partnerships Act ( "the Act ") (42 U.S.C. 12701 et. seq.), the Cranston - Gonzales National Affordable Housing Act and implementing regulations, including but not limited to those at 24 CFR Part 92; and WHEREAS, in accordance with the provisions of the Act and 24 CFR Sections 92.200 and 92.205, a portion of such financial assistance, subject to deobligation (and subject to appropriation with respect to any assistance payable out of future fiscal year allotments), maybe made available to qualifying for -profit entities for the purpose of carrying out specific elements of the participating jurisdiction's housing strategy including new construction of affordable rental housing; and WHEREAS, Developer has submitted a project proposal for acquisition and rehabilitation of rental housing to create or maintain affordable housing in fulfillment of a portion of the City's and Consortium's housing strategy and has been selected to receive a loan for such project; WHEREAS, Developer has represented to the City and to the Consortium that it is qualified and willing to undertake its proposed affordable housing project, as set forth in its application, as further amended by this Agreement and the attachments hereto; and WHEREAS, based upon Developer's representations, the Consortium and the City believe Developer is capable or can reasonably be expected to become capable of carrying out said project, and the Consortium is willing to provide a loan to Developer, in accordance with the terms of this Agreement, for investment in housing to be rehabilitated, sponsored or owned by Developer which will comply with and fulfill approved elements of the Consortium's housing strategy; and WHEREAS, Developer has applied for and received from the Colorado Housing and Financing Authority a preliminary reservation of Federal Low- Income Housing Tax Credits in the amount of $354,911.00 for allocation to Developer's project upon placement of the housing in service; and WHEREAS, the City is duly authorized to enter into this Agreement for and on behalf of the Consortium and to undertake all actions required by this instrument; NOW, THEREFORE, in consideration of the foregoing recitals and the covenants, terms and conditions set forth herein, the parties agree as follows: 1. DEVELOPER SERVICES (a) Developer shall undertake, in accordance with all applicable federal, state and local laws and regulations, acquisition, control and rehabilitation of a thirty -two (32) unit affordable housing project, with ten (10) of the housing units being assisted hereunder, in furtherance of the Consortium's housing strategy and as approved by the City, and Developer shall satisfactorily perform and complete all services and items of work, and furnish all labor and materials encompassed within or reasonably necessary to construct improvements and rehabilitate the project and accomplish the tasks and functions described in the Scope of Services attached hereto as Exhibit "A" and incorporated herein by reference (hereinafter referred to as the "Project "), in full compliance with all provisions of this Agreement. The affordable housing project may be referred to as the "Villa Andrea" Project. Before proceeding with the Project, Developer shall furnish City with all reasonable information which City may request concerning the Project, demonstrate eligibility of the Project for assistance under this Agreement, and obtain the written approval of City's authorized representative as to such Project (b) Developer warrants and represents that (i) it has the requisite authority and capacity to perform all terms and conditions on Developer's part to be performed hereunder; (ii) that it is a limited liability company duly organized under state law and in good standing with the Secretary of State of Colorado; (iii) that it is aware of and understands its duty to perform all functions and services in accordance with the regulatory requirements of 24 CFR Part 92 and those identified in Exhibit "C" hereto; and (iv) that it is accepting federal financial assistance hereunder subject to certain mandatory repayment provisions. (c) Time is of the essence hereof. Developer agrees that it shall meet the following deadlines with respect to the Project: (i) Developer shall secure loan commitments for acquisition and rehabilitation loan and the primary loan permanent financing for the Project, and furnish evidence thereof to City, on or before August 1, 2006; (ii) Developer shall cause construction of the Project to commence not later than September 1, 2006; and (iii) Developer shall cause construction of the Project to attain substantial completion not later than May 31, 2007. -2- (d) [reserved] 2. ROLE AND RESPONSIBILITIES OF THE CITY Under this Agreement, the City is acting on behalf of the Consortium. Notwithstanding the foregoing, all obligations of Developer under this Agreement shall run directly to City and be fully enforceable by City and in the name of the City. The City shall designate a representative of the City who will be authorized to make all necessary decisions required of the City on behalf of the City in connection with the performance of this Agreement, approval of the Project to be undertaken by Developer hereunder and the disbursement of funds in connection with the program. In the absence of such a designation, the City Manager shall be deemed as City's authorized representative. 3. FINANCIAL ASSISTANCE AND METHOD OF PAYMENT (a) Upon execution by Developer of all loan and other documents required by City (hereinafter referred to as the "Loan Documents "), the City will make a loan to Developer, or Developer's Investment LP, in a principal amount not to exceed Three Hundred Twenty Thousand and No /100 Dollars ($320,000.00) as the public investment for the acquisition and rehabilitation of affordable housing to be performed or undertaken by Developer under this Agreement, subject to all terms and conditions of this Agreement and said Loan Documents (collectively the "Loan"). Provided that Developer is not in default under any provision of this Agreement or the Loan Documents, the Loan shall bear interest at the rate prevailing on the date of the loan closing pursuant to the Internal Revenue Services' applicable revenue ruling per annum until paid in full. Disbursement of Loan proceeds to Developer will be periodic and each disbursement is subject to all of the following requirements, which shall be conditions precedent to disbursement: (i) that Developer has expended funds after August 14, 2006 for eligible approved expenditures with respect to the Project and the disbursement will be for such eligible approved expenditures, (ii) that Developer is not in default of any material provision of this Agreement nor applicable law or regulation, (iii) that Developer has timely submitted requests for Loan disbursement detailing the eligible loan drawdown items in a format approved by City, including therewith appropriate documentation and lien waivers from all contractors, suppliers and workmen covering all labor and materials furnished through the date of the request, (iv) that Developer has certified with each payment or Loan drawdown request compliance with the requirements identified in Exhibit "C" and that all expenditures for which drawdown is sought were made for and in furtherance of the Project and are an eligible use of federal assistance under the Act, and (v) that City has timely received from HUD sufficient federal assistance under the Act, and other non - federal matching funds, to pay the disbursement hereunder. (b) Disbursement of Loan proceeds is also subject to, and such proceeds may only be disbursed in accordance with, HUD regulations including but not limited to those at 24 CFR Part 92, as presently promulgated and as same may be revised from time to time in the future. All loan proceeds received by Developer hereunder are subject to repayment by Developer as provided in 24 -3- CFR Part 92. Loan funds provided hereunder for Project may only be used for development hard costs and acquisition costs, as provided in 24 CFR § §92.205(d) and 92.206(a) and (c). (c) City may, in its sole discretion, refuse to close the Loan to Developer, or thereafter may suspend or terminate further disbursements of Loan proceeds, if it has cause to believe any of the following circumstances has occurred or is found to exist: (i) There has been any adverse material change in Developer's credit worthiness, the Project or the value of the real property described in paragraph 4(b) of this Agreement; (ii) Developer has allowed or suffered liens (other than the Deed of Trust given to secure the Loan) to be filed against the Project or the real property described in paragraph 4(b) of this Agreement; provided, however, that this provision is not intended to apply to any lien associated with a loan from the Colorado Division of Housing in an amount not to exceed $280,000.00, nor any predevelopment loan, construction loan, or permanent loan to which the City has subordinated under the terms of its Deed of Trust or subsequent instrument; (iii) Developer has misapplied Loan proceeds for other than the purposes stated in this Agreement; (iv) Developer has defaulted in the performance of any term, condition or covenants set forth in this Agreement or any of the Loan Documents; (d) Upon expiration of the term of this Agreement or upon any prior termination, Developer shall transfer to City any Loan funds provided hereunder which are on hand at the time of expiration or termination together with any accounts receivable attributable to the use of funds provided hereunder. 4. TERM OF AGREEMENT; PERIOD OF AFFORDABILITY; INDEBTEDNESS CREATED (a) Unless sooner terminated, the term of this Agreement, for purposes of undertaking acquisition, construction, rehabilitation and completion of the Project, shall be from the date of execution hereof until May 31, 2007; provided however, that with the respect to the Project for which Developer has received financial assistance under and during the tern of this Agreement, Developer shall have continuing responsibility to comply with the performance, certifications, repayment, affirmative marketing, housing affordability compliance and recordkeeping requirements of this Agreement, and 24 CFR Part 92 (including, without limitation 24 CFR Sections 92.252, 92.254, 92.301, 92.351 and 92.508) which shall survive expiration or termination and remain in effect throughout the required full period of affordability, notwithstanding termination or expiration of this Agreement. As used herein, "period of affordability" shall mean 20 years from the completion of the Project except that if the assistance provided hereunder is used in connection with 0 a project financed by a mortgage insured by HUD under Chapter II of Title 24, Code of Federal Regulations, the period of affordability shall be the full original term of said mortgage or 20 years, whichever is longer. (b) The full amount of loan assistance provided to Developer pursuant to this Agreement shall constitute an indebtedness of Developer to the City (or subsequent holder of the Note) which shall be evidenced by a promissory note (hereinafter referred to as the "Promissory Note" or "Note ") which shall be due and payable with interest as provided therein and which shall be secured by the following real property (consisting of two parcels) located in Pueblo County, Colorado (the "Property "): Lot 1, Block 1, Villa Andrea Subdision, A Resubdivsion of Lots 11, 12, 13, east one -half of Lot 14, and Vacated Alley, Block `L', Former Town of South Pueblo , as evidenced by a Deed of Trust to be executed contemporaneously with said Promissory Note. Developer promises to pay to City or holder the indebtedness as and to the extent same becomes due under the provisions of the Promissory Note and this Agreement. The amount of the assistance shall continue as an indebtedness until paid in full and thereafter for the full period of affordability. (c) During the full Term of this Agreement and for the period of affordability, (i) any failure by Developer to perform any obligation, covenant or provision of the Note or this Agreement required to be performed by Developer, or (ii) any breach of any warranty made by Developer in this Agreement, or (iii) any other violation of any material term of this Agreement or the Deed of Trust given to secure the Note, shall constitute a default under this Agreement and the Note. Upon any default by Developer, the entire indebtedness, together with accrued interest, shall at the election of the holder, at once become immediately due and payable upon 20 days written notice to Developer without cure during said 20 day period. Such written notice shall be given by certified United States Mail or via commercial express courier, at holder's option. Failure of the holder to exercise this election shall not constitute a waiver of the right to exercise the same in the event of any subsequent failure to make any payment or other default. If the entire indebtedness is declared immediately due and payable by the holder pursuant to the provisions of this section, from and after the date of such declaration or acceleration the indebtedness shall accrue interest at the rate of twelve percent (12 %) per annum until the date when the entire indebtedness and such accrued interest is paid in full. Developer further agrees that no release of any security for the indebtedness or extension of time for payment of same, or any installment thereof, and no alteration, amendment or waiver of any provision of the Note or the Deed of Trust securing same shall in any manner, release, discharge, modify or affect the obligations of Developer under this Agreement, the Note and said Deed of Trust. TERMINATION OF AGREEMENT (a) For Cause This Agreement may be terminated by City for cause, including any nonperformance by Developer, upon ten (10) days written notice to Developer including a statement -5- of the reasons therefor, and after an opportunity for a hearing has been afforded. If a hearing is requested, it shall be held before the City's Director of Housing and Community Development whose decision as to both the grounds for termination and the appropriateness thereof shall be final and binding upon both City and Developer. In accordance with 24 CFR 85.43, cause for termination shall include any material failure by Developer to comply with any term of this Agreement. (b) For Convenience This Agreement may be terminated by the City for convenience in accordance with the provisions of 24 CFR 85.44. This Agreement shall terminate immediatelyupon any non - appropriation of FY 2006 funds, or upon any suspension or non - receipt of federal assistance provided to City under the Act, regardless of cause. (c) Post Termination Procedures In the event of termination, Developer shall continue to be responsible for those matters which survive termination identified in paragraph 4 above, unless City takes over the proj ect and, in connection therewith, prospectively releases Developer from one or more specific responsibilities in writing. Additionally, at City's sole option, all property acquired by Developer with grant funds, all grant funds, program income, and mortgage loans originated with grant funds or by payments therefrom and payments received under such mortgage loans, held, owned or retained by Developer shall immediately become the sole and separate property of the City and Developer shall perform all acts and execute all instruments necessary to transfer and assign such property, funds, income, and mortgage loans to City. All finished or unfinished documents, data, studies reports and work product prepared by Developer under this Agreement or with grant funds shall, at the option of the City, become its property. 6. ASSIGNABILITY (a) This Agreement shall not be assigned or transferred by Developer without the prior written consent of the City. Any assignment or attempted assignment made in violation of this provision shall, at City's election, be deemed void and of no effect whatsoever. (b) [reserved] CONFLICT OF INTEREST HOME Regulation 24 CFR, Part 92.356 is incorporated herein by reference, and sets forth applicable laws and regulations that apply to Conflict of Interest. Developer shall avoid all conflicts prohibited by applicable regulations, including but not limited to those set forth in 24 CFR Part 92 as presently promulgated and as same may be revised from time to time in the future. 8. DEVELOPER RECORDKEEPING Developer shall maintain records as to all project work and activities undertaken with loan assistance hereunder, services provided, reimbursable expenses incurred in performing the Scope of Services and complete accounting records. Accounting records shall be kept on a generally Kim recognized accounting basis and as requested by the City's auditor. Developer agrees to comply with all applicable uniform administrative requirements described or referenced in 24 CFR Part 92. The compliance provisions attached as Exhibit "B" hereto are made a part of this Agreement, and Developer agrees to perform and comply with same. The City, HUD, the Comptroller General of the United States, the Inspector General of HUD, and any of their authorized representatives, shall have the right to inspect and copy, during reasonable business hours, all books, documents, papers and records of Developer which relate to this Agreement for the purpose of making an audit or examination. Upon completion of the work and end of the term of this Agreement, the City may, at any time during the period of affordability or within 5 years thereafter, require all of Developer financial records relating to this Agreement to be turned over to the City. 9. MONITORING AND EVALUATION The City shall have the right to monitor and evaluate the progress and performance of Developer to assure that the terms of this Agreement are being satisfactorily fulfilled in accordance with HUD's, City's, the HDLF Loan Committee's and other applicable monitoring and evaluation criteria and standards. The City shall at least quarterly review Developer's performance using on -site visits, progress reports required to be submitted by Developer, audit findings, disbursement transactions and contact with Developer as necessary. Developer shall furnish to the City quarterly program and financial reports of its activities in such form and manner as may be requested by the City. 10. DEVELOPER FILES AND INFORMATION REPORTS Developer shall maintain files containing information which shall clearly document all activities performed in conjunction with this Agreement, including, but not limited to, financial transactions, conformance with assurances, activity reports, and program income. These records shall be retained by Developer for a period of five years, except that with respect to the project undertaken with assistance provided hereunder, such records shall be maintained for the full required period of affordability. Activity reports shall be submitted quarterly no later than the ninth day of the month following the end of quarter for which the report is submitted. 11. INDEPENDENCE OF DEVELOPER Nothing herein contained nor the relationship of Developer to the City, which relationship is expressly declared to be that of an independent contractor, shall make or be construed to make Developer or any of Developer's agents or employees the agents or employees of the City. Developer shall be solely and entirely responsible for its acts and the acts of its agents, employees and subcontractors. 12. LIABILITY AND INSURANCE (a) As to the City, Developer agrees to assume the risk of all personal injury, including -7- death and bodily injury, and damage to and destruction of property, including loss of use therefrom, caused by or sustained, in whole or in part, in conjunction with or arising out of the performance or nonperformance of this Agreement by Developer, acquisition, construction and rehabilitation of the Project, or by the conditions created thereby or resulting therefrom. Developer further agrees to indemnify and save harmless the City, its officers, agents, attorneys and employees, from and against any and all claims, liabilities, costs, expenses, penalties and attorney fees arising from such injuries to persons or damages to property or based upon or arising out of the performance or nonperformance of this Agreement by Developer, construction of the Project or out of any violation by Developer of any statute, ordinance, rule or regulation. (b) Developer agrees that it shall procure and will maintain during the term of this Agreement, such insurance as will protect it from claims under workers' compensation acts, claims for damages because of personal injury including bodily injury, sickness or disease or death of any of its employees or of any person other than its employees, and from claims or damages because of injury to or destruction of property including loss of use resulting therefrom; and such insurance will provide for coverage in such amounts as set forth in subparagraph (c). (c) The minimum insurance coverage which Developer shall obtain and keep in force is as follows: (i) Workers' Compensation Insurance complying with statutory requirements in Colorado. (ii) Comprehensive General Liability ( "CGL ") Insurance written on ISO occurrence form CG 00 0112 04, or a substitute form providing equivalent coverage, with a limit not less than One Million Dollars ($1,000,000.00) per occurrence, covering liability arising from premises, operations, independent contractors, personal injury, products completed operations, and liability assumed under an insured contract, on an occurrence basis. The policy or endorsement thereto shall identify the City as an additional insured. (d) Developer further agrees to procure and maintain, at its own expense, hazard and fire insurance upon the property described in the Deed of Trust on an "all risk" form in such amounts as City's Department of Housing and Community Development may require, but in any event, for not less than the amount of all liens against the property and the amount of funds loaned to Developer by City pursuant to this Agreement. Developer shall furnish a certificate of insurance certifying such coverage to City's Director of Finance prior to disbursement of any funds to Developer. Both said certificate of insurance and the policy procured by Developer shall name the City as a loss payee. 13. CERTIFICATIONS Developer agrees to execute and abide by the certifications contained in Exhibit "C" hereto, which are hereby expressly made a part of this Agreement. 14. PROGRAM INCOME: REVERSION OF ASSETS (a) Unless otherwise authorized by City in writing in a separate instrument executed after date of this Agreement, interest income earned by Developer on funds provided by City hereunder during the period between receipt of such funds by Developer and the expenditure thereof for a purpose authorized by this Agreement shall be deemed program income within the meaning of 24 CFR §92.2 and shall be promptly repaid by Developer to City. Additionally, in the event HUD or the Inspector General of HUD, should determine that any other income received by Developer constitutes program income within the meaning of 24 CFR §92.2 which HUD or the Inspector General of HUD requires be returned to City's HOME Investment Trust Fund Treasury Account, HOME Investment Trust Fund local account or to HUD, then in that event Developer shall repay the amount so determined to City. (b) Upon expiration of the term of this Agreement, or upon any prior termination, Developer shall transfer to City any funds provided hereunder which have not been expended for the authorized purposes of this Agreement as of the time of expiration or termination, together with any accounts receivable attributable to the use of funds provided hereunder. (c) The Project, the Property, and any other real property acquired, constructed or improved in whole or in part with funds provided pursuant to this Agreement shall be used as affordable rental housing within the meaning of 24 CFR § 92.252 for the full period of affordability as defined in paragraph 4 hereof In the event the Project, the Property or such other property ceases to be so used, Developer shall immediately pay to City the greater of (i) an amount equal to the current market value of the Project and property less any portion of the value attributable to expenditures of funds not provided under this Agreement for the construction of the Project or acquisition of, or improvement to, the Property or, (ii) the remaining principal balance and accrued interest owing under the Note. The use restriction and repayment obligation set forth in this subparagraph shall survive termination or expiration of this Agreement and shall be fully enforceable and subject to collection by City or HUD in accordance with applicable laws. Developer shall execute a Deed of Trust which shall be and constitute a lien upon the Property and all other real property acquired or improved with funds provided hereunder, and which shall secure all obligations of Developer hereunder. (d) In the event City incurs any cost or expense in enforcing the requirements of this Agreement, including but not limited to the requirements of this paragraph 14, or in bringing any action to recover the Project or Property or amount of any repayment obligation, or to foreclose or obtain sale under the Deed of Trust or other mortgage or security instrument, City shall be entitled to recover its costs and expenses, including reasonable attorneys fees. (e) To further ensure that the funds provided hereunder to Developer do not constitute an investment of more HOME funds than are necessary to provide affordable housing (as required by 24 CFR §92.250(b)), Developer commits to either retain ownership of the project for a period of not less than 20 years from and after the completion of the project. Consequently, in the event Developer should sell or transfer title to the Project, the Property or other real property or 0 improvements constructed or improved with funds provided pursuant to this Agreement, within 20 years after substantial completion of the Project or said improvements, the entire indebtedness shall immediately become due and payable and shall be repaid to City, together with interest thereon at the rate of 12% per annum from the time of substantial completion until said repayment is made; the aforestated deed of trust or mortgage instrument shall also secure this repayment obligation. (f) It is the intent of the parties that §38 -30 -165, C.R.S. and any similar statute hereafter enacted, be preempted under federal law and regulations in order to maintain affordability of the rental units within the Property. Consequently, this Agreement shall not be assumable, and the indebtedness shall be due and payable upon sale, transfer or assignment, or any attempted sale or transfer of the Property by Developer or the Investment LP, unless all of the following circumstances are demonstrated to exist: (i) more than 20 years have elapsed since the substantial completion of the project, (ii) the Primary Lender also consents to assumption of the mortgage or obligation to which the Deed of Trust securing this Agreement is subordinate, (iii) the sale of the Property is to a subsequent purchaser who agrees in writing to comply with the affordability requirements of this Agreement and applicable requirements, including those set forth at 24 CFR, §92.252, (iv) the sale price and payment of principal, interest, property taxes and insurance by the subsequent purchaser must permit the rental units to remain affordable for the remaining period of affordability specified in this Agreement, with affordability determined by applicable regulations and requirements, and (v) the City or holder of the Note expressly consents to assumption of Developer's obligations under this Agreement and the Note by the subsequent purchaser prior to sale or transfer, which consent shall be granted only upon Developer's showing circumstances (i) through (iv) have or will be satisfied. (g) Notwithstanding anything to the contrary in this Agreement or the Loan Documents, Developer may transfer its interest in the Project and the Property to its General Partner without consent from the City. 15. SPECIAL REQUIREMENTS APPLICABLE TO IMPROVEMENTS TO PROPERTY (a) In addition to all procurement requirements otherwise applicable to Developer pursuant to any other provision of this Agreement or pursuant to any requirement of law or regulation incorporated in this Agreement by reference, Developer shall comply with all requirements of this Paragraph 15. (b) No improvements shall be undertaken to the Property or other real property benefitted with funds (or reimbursement) provided hereunder unless and until: (i) plans and specifications therefor have been prepared by either a registered Professional Engineer in good standing and duly licensed to practice in the State of Colorado or an Architect duly licensed and authorized to conduct a practice of architecture in the state of Colorado; (ii) such plans and specifications have been filed with the City and approved by both the City's designated representative and the City's Director of Public Works; and (iii) all construction contracts for improvements benefitting the property upon which assistance has been provided from City shall have been awarded only after an open, -10- competitive bidding process which has been approved by City's Director of Purchasing and which allows qualified contractors to reasonably participate in the competitive bidding procedures; provided, however, that the open competitive bidding process required herein need not follow the City's procurement requirements for City improvements. Developer may submit its proposed bidding process to the City for review and approval or disapproval to receipt of any funds hereunder. (c) No disbursement of Loan funds to Developer shall be made by City hereunder unless and until all conditions precedent to payment specified elsewhere in this Agreement have been satisfied and Developer files with City's Director of Housing and Community Development a written request for payment signed by an officer of Developer that certifies (i) that the amounts included in the request for payment have not been included in any prior request for payment, (ii) that the improvements listed therein for which payment is sought have been completed in accordance with the approved plans and specifications therefor, and (iii) that the improvements for which payment is sought have been constructed so as to comply with City of Pueblo building codes and Section 8 Housing Quality Standards. (d) [reserved] (e) Every contract for construction of improvements, and all lower tier covered transactions, shall include a requirement that the contractor, subcontractor or vendor certify that neither it nor its principal is debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in any federally funded project. (f) Developer shall, at Developer's sole expense, provide for relocation assistance to any persons displaced as a result of the Project, in accordance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and applicable implementing regulations. 16. RECOGNITION OF HUD, CITY In all printed materials, project descriptions and other activities undertaken with funds provided under this Agreement, Developer shall provide recognition that funds have been provided by the U.S. Department of Housing and Urban Development and the City of Pueblo. Recognition shall be accomplished by prominent disclosure of the role of HUD and the City in all such printed materials and project signage, if any. 17. ENTIRE AGREEMENT; AMENDMENTS The provisions set forth in this Agreement, and all exhibits and attachments to this Agreement, constitute the entire and complete agreement of the parties hereto with respect to the Project and supersede all prior written and oral agreements, understandings or representations related thereto. No amendment or modification of this Agreement, and no waiver of any provision of this Agreement, shall be binding unless made in writing and executed by the duly authorized officers of both the Developer and City. -11- 18. SIGNATURES The persons signing this Agreement on behalf of Developer represent and warrant that such persons and Developer have the requisite power and authority to enter into, execute and deliver this Agreement and that this Agreement is a valid and legally binding obligation of Developer enforceable against Developer in accordance with its terms. IN WITNESS WHEREOF, Developer and the City have executed this Agreement as of the date first above written and under the laws of the State of Colorado. CITY OF PUEBLO, ATTEST: A Municipal Corporation CitZClcrk President of the City Council [SEAL] Villa Andrea, L.P., a Colorado limited partnership By: Sleeping Indian LLC, a Colorado limited liability company By: Name iam Simpson Tit anaging Member -12-