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HomeMy WebLinkAbout11169RESOLUTION NO. 11169 A RESOLUTION APPROVING AN AGREEMENT BETWEEN LUCKY STAR LIMITED PARTNERSHIP, A COLORADO LIMITED LIABILITY LIMITED PARTNERSHIP AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR RENTAL HOUSING REHABILITATION, AND AUTHORIZING THE PRESIDENT OF THE COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Agreement dated December 10, 2007 between Lucky Star Limited Partnership, a Colorado limited liability limited partnership and the City of Pueblo, A Municipal Corporation, ( "the Agreement "), for the development of affordable housing, substantially in the form as attached hereto with such minor changes as the President of the City Council and the City Attorney shall approve, is hereby approved. .q Fr.TInN 9 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 December 10, 2007 APPROVED: a d1occindwr %J City Council ATTESTED BY: CITY CLERK BY Randy Thurston Councilperson Res ►41109 Background Paper for Proposed RESOLUTION AGENDA ITEM # DATE: DECEMBER 10, 2007 DEPARTMENT: HOUSING AND CITIZEN SERVICES / ADA RIVERA CLARK TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN LUCKY STAR LIMITED PARTNERSHIP, A COLORADO LIMITED LIABILITY LIMITED PARTNERSHIP AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR RENTAL HOUSING REHABILITATION, AND AUTHORIZING THE PRESIDENT OF THE COUNCIL TO EXECUTE SAME ISSUE A resolution approving an Affordable Rental Housing Rehabilitation Agreement between Lucky Star Limited Partnership, a Colorado limited liability limited partnership and the City of Pueblo, A Municipal Corporation, wherein HOME funds would be provided to the Project. The amount of assistance is $250,000. The funds are provided in the form of a loan. This is a 0% interest rate RECOMMENDATION Approve the Resolution. BACKGROUND Evergreen Partners, LLC., has applied to the Department of Housing and Citizen Services for $250,000 in HOME funds. The Project has received a Low Income Housing Tax Credit (LIHTC) allocation from the State of Colorado, for the project commonly known as Bethlehem Square Apartments. Under the Colorado Housing Finance Authority's requirements the units must remain affordable for a period of 40- years. Total project costs are $9.7 million. The funds are to be used for the acquisition and rehabilitation of a 130 unit rental housing project, which is located at 2008 W. 12 Street. The current owners are opting out of the HUD Housing Assistance Program (HAP), which subsidizes the rents on each unit. The subsidy runs with the unit and not the individual. The loss of the units would displace 130 families. Under the HAP program residents pay only 30% of their income. This is very similar to public housing but it is privately owned. The units are also in danger of not meeting HUD's Housing Quality Standards (HQS), which determines the minimum acceptable quality of the rental. This project will also require that the City approve a payment -in -lieu of taxes (PILT)agreement, which will be presented separately. FINANCIAL IMPACT The estimated project costs are $9.7 million. The $250,000 in HOME funds would be provided as a loan at 0% interest, with principal being repaid annually out of cash flow, the note is due and payable in full in 2049. The HOME funds are available in the 251 Fund. CITY OF PUEBLO AFFORDABLE RENTAL HOUSING REHABILITATION LOAN AGREEMENT This Agreement (the "Agreement ") is made and entered into this 10th day of December, 2007, by and between the City of Pueblo, a Municipal Corporation (the "City ") and Lucky Star Limited Partnership, a Colorado limited liability limited partnership, whose business address is 707 Sable Oaks Drive, South Portland, ME (the "Owner "). WITNESSETH, that: WHEREAS, the City has, under date of June 21, 2007 entered into an agreement 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 an Agreement October 1, 2006 between City and Pueblo County, Colorado, 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), may be made available to qualifying for -profit entities for the purpose of carrying out specific elements of the participating jurisdiction's housing strategy including rehabilitation of affordable rental housing; and WHEREAS, Owner has submitted a proposal to City for acquisition and rehabilitation of rental housing to create or maintain affordable housing in fulfillment of a portion of the City's housing strategy and has been selected by City to receive a Rehabilitation Project Loan for the acquisition of its proposed affordable housing rehabilitation project; and WHEREAS, Owner 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 amended by this Agreement and the attachments hereto; and WHEREAS, based upon Owner's representations, the Consortium and the City believe Owner is capable or can reasonably be expected to become capable of carrying out said project, and the City is willing to provide federal funds received under the Act to Owner for investment in the acquisition of housing to be rehabilitated, sponsored or owned by Owner which will comply with and fulfill approved elements of the City's housing strategy; and WHEREAS, Owner has received a loan commitment from the Colorado Housing and Finance Authority ( "CHFA ") to fund a loan to Owner in the aggregate principal amount not to exceed $ 6,055,195.00, which loan will be secured by a first deed of trust lien upon the Owner's housing rehabilitation project; and WHEREAS, as a condition to funding the aforesaid loan to the Owner, CHFA will require that the City subordinate its security interest in the affordable housing rehabilitation project to the CHFA first deed of trust lien; and WHEREAS, another loan will be made to the Owner for the affordable housing rehabilitation project by the Housing Authority of Pueblo, a Colorado public housing authority, in an amount not to exceed $250,000.00. That loan is intended to have a security interest in said project co -equal in lien priority to that held by City to secure City's Project Rehabilitation Loan; and WHEREAS, the City is duly authorized on behalf of the Consortium to enter into this Agreement 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. OWNER SERVICES (a) Owner shall undertake, or cause to be undertaken by Owner, subject to approval by City, in accordance with all applicable federal, state and local laws and regulations, acquisition, control, and rehabilitation of a one hundred thirty (130) unit affordable housing project, located in thirteen (13) buildings, known as the Bethlehem Square Apartments Project, in furtherance of the City's housing strategy and as approved by the City, and shall satisfactorily perform and complete all services and items of work, and furnish all labor and materials encompassed within or reasonably necessary to construct 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. Before proceeding with the Project, Owner shall furnish City with all reasonable information which City may request concerning the Project and its Owner, 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) Owner warrants and represents that (i) it has the requisite authority and capacity to perform all terms and conditions on Owner's part to be performed hereunder, (ii) that Owner is a limited liability limited partnership duly organized under state law 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. Owner agrees that it shall meet the following deadlines with respect to the Project: (i) Owner shall secure loan commitments for a construction and permanent loan financing for the Project, and furnish evidence thereof to City, on or before March 1, 2008; (ii) Owner shall cause construction of the Project to commence not later than March 1, 2008; and (iii) Owner shall cause construction of the Project to attain substantial completion within 15 months from the date of commencement of construction, but in any event, not later than June 30, 2009. (d) Owner acknowledges that the Project contemplated by this 2 Agreement includes the rehabilitation of at least ten (10) affordable housing units, and agrees that the financial assistance provided under this Agreement will be used solely in connection with activities benefiting such units. 2. ROLE AND RESPONSIBILITIES OF THE CITY Under this Agreement, the City is acting on behalf of both itself and the Consortium. Notwithstanding the foregoing, all obligations of Owner under this Agreement shall run directly to City and be fully enforceable by City and in the name of 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 Owner hereunder and the disbursement of funds in connection with or for the Project. 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 Owner of all loan and other documents required by City, the City will make a loan to Owner, in a principal amount not to exceed Two Hundred Fifty Thousand and No /100 Dollars ($250,000.00) as the public investment for the acquisition, rehabilitation and undertaking of the apartment project by Owner under this Agreement, subject to all terms and conditions of this Agreement and said loan documents (collectively the "Loan "). Provided that Owner is not in default under any provision of this Agreement or the Loan documents, the Loan shall bear interest at the rate of Zero Percent (017o) per annum until paid in full, and shall be repaid over a term not to exceed 40 years, payable out of "net distributable cash flow ", as that term is defined in the Loan documents. Disbursement of the Loan funds to Owner shall be in the form of a single disbursement at or after date of closing which shall be applied to a portion of the aggregate costs of acquisition of the apartments and which is reasonably allocated to the assisted units, upon application of Owner with supporting documentation, which is subject to all of the following requirements, which shall be conditions precedent to such disbursement: (i) the disbursement shall be for eligible approved expenditures after January 1, 2008 with respect to the Project, (ii) that Owner is not in default of any material provision of this Agreement nor applicable law or regulation, (iii) that Owner has timely submitted the request for Loan disbursement detailing the eligible acquisition costs in a format approved by City, (iv) that Owner has certified with each payment or Loan drawdown request is in compliance with the requirements identified in Exhibit "C" and that all expenditures for which disbursement is sought were made for and in furtherance of the Project and are an eligible use of federal assistance under the Act, (v) that City has timely received from HUD sufficient federal assistance under the Act to pay the disbursement hereunder, and (vi) that, in the event the Project is otherwise exempt from ad valorum taxes, the Owner has entered into a Payment In Lieu of Taxes Agreement with City for the Project. (b) Disbursement of Loan funds is also subject to, and such funds 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 Owner hereunder are subject to repayment by Owner as provided in 24 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). 3 (c) City may, in its sole discretion, refuse to make or to close the Loan to Owner, or thereafter may suspend or terminate further disbursement 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 Owner's credit worthiness, the Project or the value of the real property described in paragraph 4(b) of this Agreement; (ii) Owner has allowed or suffered liens (other than the Deed of Trust given to secure the construction and permanent loan financing) to be filed against the Project or the real property described in paragraph 4(b) of this Agreement; (iii) Owner has misapplied Loan proceeds for other than the purposes stated in this Agreement; (iv) Owner 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, Owner shall transfer to City any Grant and 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 December 31, 2009; provided however, that with respect to the Project for which Owner has received financial assistance under and during the term of this Agreement, Owner 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 15 years from the completion of the Project except that if the assistance provided hereunder is used in connection with 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 Owner pursuant to this Agreement shall constitute an indebtedness of Owner to the City (or subsequent holder of the Note) which shall be evidenced by a non - recourse 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 located in Pueblo County, Colorado (the 'Property "): See Exhibit D 0 as evidenced by a Deed of Trust executed by the Owner securing a Note executed by Owner which is payable to City. The amount of the assistance shall continue as an indebtedness until paid in full. (c) During the full Term of this Agreement and for the period of affordability, (i) any failure by Owner to perform any obligation, covenant or provision of the Note or this Agreement required to be performed by Owner, or (ii) any breach of any warranty made by Owner 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 an event of default under this Agreement and the Note. Upon any event of default by Owner, the entire indebtedness, together with accrued interest, shall at the election of the holder, at once become immediately due and payable. 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 the above paragraphs, 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. Owner 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 Owner under this Agreement, the Note and Deed of Trust. (d) The City agrees to subordinate the lien of its Deed of Trust on the Property to the lien of the CHFA first lien deed of trust, to execute and deliver to CHFA a Subordination Agreement evidencing the City's subordination of its security interest and repayment right to the security interest and repayment right of CHFA and to the Land Use Restriction Agreement required by CHFA to comply with Section 42 of the Internal Revenue Code, and such documents as are necessary so that the lien of the City's Deed of Trust on the Property is co -equal in lien priority to the Deed of Trust securing the loan to be made to the Owner by the Housing Authority of Pueblo. 5. TERMINATION OF AGREEMENT PRIOR TO PROJECT ACQUISITION (a) For Cause. This Agreement may be terminated by City for cause, including any nonperformance by Owner, following ten (10) days written notice to Owner containing a statement of the reasons therefore and the failure of Owner to cure as provided herein, 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 Citizen Services whose decision as to both the grounds for termination and the appropriateness thereof shall be final and binding upon both City and Owner. In accordance with 24 CFR 85.43, cause for termination shall include any material failure by Owner 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 immediately upon any non - appropriation of FY 2007 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, Owner shall continue to be responsible for those matters which survive termination identified in paragraph 4 5 above, unless City takes over the project and, in connection therewith, prospectively releases Owner from one or more specific responsibilities in writing. Additionally, at City's sole option, all property acquired by Owner with loan funds (to the extent loan funds were used for acquisition), all loan funds, and all program income, held, owned or retained by Owner, shall immediately become the sole and separate property of the City and Owner shall perform all acts and execute all instruments necessary to transfer and assign such property, funds, and income to City. All finished or unfinished documents, data, studies reports and work product prepared by Owner under this Agreement or with loan funds shall, at the option of the City, become its property. 6. ASSIGNABILITY This Agreement shall not be assigned or transferred by Owner, without the prior written consent of the City, which maybe withheld in City's absolute discretion. Any assignment or attempted assignment made in violation of this provision shall, at City's election, be deemed void and of no effect whatsoever. 7. 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. Owner 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. OWNER RECORDKEEPING Owner 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 recognized accounting basis and as requested by the City's auditor. Owner 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 Owner 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 Owner 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 Owner 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 Owner to assure that the terms of this Agreement are being satisfactorily fulfilled in accordance with HUD's, City's and other applicable monitoring and evaluation criteria and standards. The City shall at least quarterly review Owner's performance using on -site visits, progress reports required to be submitted by Owner, audit findings, disbursement transactions and contact with Owner as necessary. Owner shall furnish to the City monthly or quarterly program and financial reports of its activities in such form and manner as may be requested by the City. 6 10. OWNER FILES AND INFORMATION REPORTS Owner 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 Owner 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 monthly or quarterly no later than the ninth day of the month following the end of month or quarter for which the report is submitted. 11. INDEPENDENCE OF OWNER Nothing herein contained nor the relationship of Owner to the City, which relationship is expressly declared to be that of an independent contractor, shall make or be construed to make Owner or any of Owner's agents or employees the agents or employees of the City. Owner shall be solely and entirely responsible for its acts and the acts of its agents, employees and subcontractors. 12. LIABILITY & INSURANCE (a) As to the City, Owner agrees to assume the risk of all personal injury, including 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 Owner, construction and rehabilitation of the Project, or by the conditions created thereby or resulting therefrom. Owner 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 Owner, construction of the Project or out of any violation by Owner of any statute, ordinance, rule or regulation. (b) Owner 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 Owner shall obtain and keep in force is as follows: (i) To the extent required by applicable Colorado law, Workers' Compensation Insurance complying with statutory requirements in Colorado. Additionally, Owner shall require those contractors and subcontractors working on the rehabilitation of the Project to provide evidence of such Workers' Compensation Insurance. (ii) Comprehensive General Liability (" CGU) Insurance written on ISO Form CG 00 01 0196, 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 shall identify the City as an additional insured. (d) Owner further agrees to procure and maintain or cause third parties 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 Citizen Services 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 Owner by City pursuant to this Agreement. Owner shall furnish a certificate of insurance certifying such coverage to City's Director of Finance prior to disbursement of any funds to Owner. Both said certificate of insurance and the policy procured by Owner shall name the City as a loss payee. 13. CERTIFICATIONS Owner agrees to execute and abide by the certifications contained in Exhibit "C" hereto, which are hereby expressly made apart 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 Owner on funds provided by City hereunder during the period between receipt of such funds by Owner 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 Owner to City. Additionally, in the event HUD or the Inspector General of HUD, should determine that any other income received by Owner 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 Owner shall repay the amount so determined to City. (b) Upon expiration of the term of this Agreement, or upon any prior termination, Owner 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, Owner shall immediately pay to City the full amount of the loan, plus 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 improvements 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. Owner shall execute the 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 Owner 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 Owner do not constitute an investment of more HOME funds than are necessary to provide affordable housing (as required by 24 CFR §92.250(b)), Owner commits to either retain ownership of the project or have Owner's general partner retain ownership for a period of not less than 15 years from and after the completion of the project. Consequently, in the event Owner should sell or transfer title to the Project (except to its general partner), the Property or other real property or improvements constructed or improved with funds provided pursuant to this Agreement, within 15 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 deemed 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 (a "Transfer ") by Owner, unless all of the following circumstances are demonstrated to exist: (i) more than 15 years have elapsed since the substantial completion of the project, or the City approves transfer of the Project and waives acceleration of the indebtedness pursuant to 14(e) above, which transfer may be approved or disapproved in the sole discretion of the City, (ii) CHFA 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 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 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 Owner's obligations under this Agreement and the Note by the purchaser prior to sale or transfer, which consent shall be granted only upon Owner's showing circumstances (i) through (iv) have or will be satisfied. Notwithstanding the foregoing, and contingent upon compliance with and satisfaction of the conditions to transfer approval in 14(f)(ii) through (iv) above the City will approve a property sale if the same is required by Owner's tax credit investor partner, M 15. SPECIAL REQUIREMENTS APPLICABLE TO IMPROVEMENTS TO PROPERTY (a) In addition to all procurement requirements otherwise applicable to Owner pursuant to any other provision of this Agreement or pursuant to any requirement of law or regulation incorporated in this Agreement by reference, Owner shall comply with all requirements of this Paragraph 15. (b) No improvements shall be undertaken to the Property or other real property with funds (or reimbursement) provided hereunder unless and until scope of work and /or plans and specifications, as the case may be, have been filed with the City and approved by both the City's designated representative and the City's Director of Public Works. In the event such scope of work and/or plans and specification require engineering approval under the building codes of the City, Owner shall comply with all such building codes registered and such plans and specifications shall be prepared by a registered Professional Engineer in good standing and duly licensed to practice in the State of Colorado. (c) No disbursement of Loan funds to Owner shall be made by City hereunder unless and until all conditions precedent to payment specified elsewhere in this Agreement have been satisfied and Owner files with City's Director of Housing and Citizen Services a written request for payment signed by an officer of Owner that certifies (i) that the amounts included in the request for payment have not been included in any prior request for payment and (ii) that the authorized project expenditures listed therein for which payment is sought have been completed in accordance with the approved scope of work or plans and specifications, as applicable; provided, however, that if the Loan is for the sole purpose of acquisition of property for the Project, City may disburse Loan proceeds at closing of Owner's purchase of said property. (d) Although Owner does not anticipate the need for relocation of any residents of the property, Owner is required to and shall, at Owner's sole expense, provide for relocation assistance to any persons who may be 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. (e) The contract for construction of Project improvements between the Owner and its general contractor shall include a requirement that the contractor, subcontractor or supplier 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. 16. RECOGNITION OF HUD, CITY In all printed materials, project descriptions and other activities undertaken with funds provided under this Agreement, Owner 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. 10 17. ENTIRE AGREEMENT 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 Owner and City. 18. SIGNATURES The persons signing this Agreement on behalf of Owner represent and warrant that such persons and Owner 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 Owner enforceable against Owner in accordance with its terms. When the Owner consists of more than one person or entity, all such persons or entities shall be jointly and severally liable for performance of the Owner's obligations and responsibilities under this Agreement. Notwithstanding the foregoing, no limited partner in the limited liability limited partnership serving as the Owner, shall have personal liability for performance of the obligations hereunder. 19. LIMITED RECOURSE No partner of Owner nor any partner or member of a partner of Owner shall have any personal liability for any amounts due hereunder, and in the event of any default under this Agreement, the City shall look solely to the assets of Owner and shall not be entitled to seek any deficiency from any partner of Owner nor from any partner or member of a partner of Owner. IN WITNESS WHEREOF, Owner and the City have executed this Agreement as of the date first above written and under the laws of the State of Colorado. ATTEST: City _ rk [SEA,L) CITY OF PUEBLO, a Municipal Corporation By: Q66 PiVesident 6f the City Council Lucky Star Limited Partnership, a Colorado limited liability limited partnership By; No Room at the Inn LLC, a Maine limited liability company, general partner 11 By: Evergreen Partners, LLC, a Maine limited liability company, its sole member B r its: 34 un Ale .6� 12 EXHIBIT A SCOPE OF SERVICES Division 2 Site Work • Provide additional landscaping throughout site • Replace existing playgoand equipment with new play structures and play surface area Division 3 Concrete • Saw cut existing concrete base of stairs to accept new wood apron • 7 existing handicap ramps to remain Division 4 Masonry • Provide tuck pointing at 5% of brick Division 5 Metals • No scope Division 6 Woods and Plastics • Install wood aprons at first step of all 32 stairs • Remove existing dumpster enclosures and install 7 new wood fenced enclosures. Division 7 Thermal and Moisture Protection • Remove ballast and flashing from existing roof in preparation for new roof • Install new TPO membrane roof system over existing at apartment and community buildings • Remove existing and install new vinyl siding (include tyvek & window flashing) at all apartment and community buildings. • Install new vinyl soffit and fascia material ( include trim at top of brick and grade board) at all apartments and community building • Provide new caulking at building exterior • Provide new caulking at all kitchen counters and plumbing fixtures Division S Doors and Windows • Replace 96 aluminum sliding glass door walls (to match 34 recently replaced units). • Install new entry door hardware at all units (HP units to receive lever hardware) • Install new interior doors at community building • Replace doors at handicap units • Upgrade existing mechanical closet doors by adding spring closer /hinges, weatherstrip, and blocking off grill. • Remove selected interior walls of at new handicap unit locations and build new walls to provide proper accessibility. • Provide selected wall removal and new walls at community building to provide new office and handicap accessibility to restroom and kitchenette. Division 9 Finishes • Provide minor drywall repair at apartment walls and prep for paint • Install new carpet at all apartment living rooms, halls, and closets. • Install new VCT and vinyl base at all apartment kitchens, bathrooms, and unit entries. • Provide paint at all existing walls, doors, and ceilings of apartments • Provide new flooring at community building. Architectlowner to determine type and style. • Provide paint at community building renovation locations. • Restain exterior wood stairs to all 2 nd floor apartments, balconies, and railings 13 • Install and finish new drywall at all new wall location (handicap units and community building) Division 10 Specialties • Provide new 2 new property entrance signs, building address ID signage and apartment unit entry number signs. • Provide new apartment toilet accessories at all apartments, (Shower curtain rod, toilet paper holder and towel bar) • Replace surface mounted medicine cabinets • Install new grab bars at modified HP bathrooms Division I Equipment • Provide new energy star appliances for all apartments (dishwasher, range hoods, grease shields, stove, and refrigerator). Division 12 Furnishings • Provide new kitchen cabinetry and plastic laminate counter tops at all 130 kitchens • Provide new bathroom vanity and plastic laminate countertops at all 130 bathrooms and 66 half -baths • Provide new horizontal and vertical blinds at all windows and door walls. Division 13 Special Construction • No Scope Division 14 Conveying Systems • No Scope. Division 15 Mechanical Systems • Provide 130 new kitchen sinks, garbage disposals, and faucets • Provide 196new bathroom sinks and faucets • Replace 137 (70 %) existing 3 gallon water closets w/ 1.6gallon units — remaining water closets are newer 1.6 units • Replace 130 hot water heaters with higher efficiency units • Install 65 new water heater drain pans and run new drain lines • Provide connections for new dishwashers • Install new 92 % High Efficiency Furnaces at all apartments • Install new 13 SEER Central Air conditioning at all apartments • Replace all registers and grills • Provide new heating and cooling thermostats • Provide new tub spout, low flow sink aerators and shower heads • Install new HP compliant bathroom sinks and levers at HP units and community building. • Install new HP compliant toilets at HP units and community building • Install new HP compliant tub /shower assemblies at HP units Division 16 Electrical Systems • Replace all interior lighting fixtures with Compact Fluorescent fixtures • Replace exterior incandescent fixtures with Compact Fluorescent fixtures • Install new exterior site lighting and all new circuits run from new house panel • Provide new circuits to supply power for new dishwashers • Provide new circuits to supply power to new AC condensers • Replace all cover plates at switches and outlets • Install new lighting at community building • Convert apartment electrical service to individual meters include one house meter per building. • Install new underground conduit and feeders from site located transformers to new meter banks. (coordinate with Aquila Power Company) • Provide new lighting at community building interior 14 15 EXHIBIT B ACCOUNTING SYSTEM COMPLIANCE PROVISIONS 1. As used in this Exhibit, the term "Developer" shall mean the entity entering into the Agreement with the City of Pueblo, a Municipal Corporation to which this Exhibit is attached. 2. Developer is subject to and shall comply with the requirements of OMB Circular A -133 3. Developer agrees to maintain Project and accounting records in accordance with generally accepted accounting principles which accurately reflect all costs chargeable to the Project, utilize adequate internal controls, and maintain source documentation for all costs incurred. The City shall have the right to review and approve Developer's account system and internal controls prior to the release of any funds under the Agreement. 4. During the preconstruction and construction phases of the Project, the Developer shall not materially deviate from any approved Project budget unless any proposed major revision thereto has been submitted to City and approved in writing. Change orders of less than $10,000 each or $50,000 in the aggregate shall not be deemed to be material deviations or major revisions to the Project budget. 5. Nothing in the Agreement or the Exhibits thereto shall obligate City to any third parties nor to any contractors, subcontractors, consultants, suppliers or workmen who have contracted with Developer or provided any materials or services to Developer. 6. The City has the right to periodically perform interim audits and a final audit of the Project and funds provided under the Agreement. Developer shall fully cooperate with City in undertaking any such audit and shall provide a suitable work area for City's audit personnel to inspect and copy records. 16 EXHIBIT C CERTIFICATIONS The entity entering into this Agreement with the City hereby certifies that the Project will be conducted and administered in compliance with all of the following requirements: (1) Title VI of the Civil Rights Act of 1964 (Pub. L. 88 -352; 42 U.S.C. 2000d, et seq .) and implementing regulations issued at 24 CFR Part 1; (2) Title VIII of the Civil Rights Act of 1968 (Pub. L. 90 -284; 42 U.S.C. 3601, et sect), as amended; and that the grantee will administer all programs and activities related to housing and community development in a manner to affirmatively further fair housing; (3) Section 109 of the Housing and Community Development Act of 1974, as amended; and the regulations issued pursuant thereto; (4) Section 3 of the Housing and Urban Development Act of 1968, as amended; (5) Executive Order 11246, as amended by Executive Orders 11375 and 12086, as amended by Executive Orders 13279 and implementing regulations issued at 41 CFR Chapter 60; (6) Executive Order 11063, as amended by Executive Orders 12259, and implementing regulations at 24 CFR Part 107; (7) Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93 -112), as amended, and implementing regulations when published for effect; (8) The Age Discrimination Act of 1975 (Pub. L. 94 -135), as amended, and implementing regulations when published for effect; (9) The relocation requirements of Title II and the acquisition requirements of Title III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. 4601 et seq. (URA), U. S. Department of Transportation, Federal Highway Administration, at 49 CFR Part 24; (10) Executive Order 11988 relating to the evaluation of flood hazards and Executive Order 11288 relating to the prevention, control and abatement of water pollution; (11) The flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (Pub. L. 93 -234); (12) The applicable regulations, policies, guidelines and requirements of OMB Circular Nos. A -102, Revised, 24 CFR 85 and Subpart J of 24 CFR 570, A -87, A -110, A -122, A -128 and A -133 as they relate to the acceptance and use of federal funds under this federally- assisted program; (13) The Clean Air Act (42 U.S.C. 7401 et. seq.) as amended; particularly section 176 (c) and (d) [42 U.S.C. 7506 (c) and (d)]; (14) HUD environmental criteria and standards [24 CFR Part 51, Environmental Criteria and Standards]; 17 (15) The Safe Drinking Water Act of 1974 (42 U.S.C. 201, 300 (f) et. seq., and 21 U.S.C. 349) as amended; particularly section 1424 (e) (42 U.S.C. 300 (h)- 303(e)); (16) The Endangered Species Act of 1973 (16 U.S.C. 1531 et. seq.) as amended; including but not limited to section 7 (16 U.S.C. 1536) thereof; (17) The Wild and Scenic Rivers Act of 1968 (16 U.S.C. 1272 et. seq.) as amended; particularly section 7 (b) and (c) [16 U.S.C. 1278 (b) and (c)]; (18) The Reservoir Salvage Act of 1960 916 U.S.C. 469 et. seq.); particularly section 3 (16 U.S.C. 469a -1); as amended by the Archeological and Historical Preservation Act of 1974; (19) Flood Disaster Protection Act of 1973 (42 U.S.C. 4001 et. seq.) as amended; particularly sections 102(a) and 202(a) [42 U.S.C. 4012a(a) and 4106(a)]; (20) Executive order 11990, Protection of Wetlands, May 24, 1977 (42 FR 26961 et. seq.); particularly sections 2 and 5; (21) It will comply with the Lead -Based Paint Poisoning Prevention requirements of 25 CFR Part 35 issued pursuant to the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821 et. seq.); (22) The National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.) as amended; particularly section 106 (16 U.S.C. 4700; and (23) Executive Order 11593, Protection and Enhancement of the Cultural Environment, May 13, 1971 (36 FR 8921 et. seq.); particularly section 2(c). (24) Construction work financed in whole or in part with federal funds is subject to the prevailing wage requirements of the Davis Bacon Act (29 CFR, Parts 3 and 5), the Copeland Act (29 CFR Part 3), and the Contract Work Hours and Safety Standards Act (Public Law 91 -54, 83 Stat. 96). When a project meets this applicability requirement, the labor standards provisions of the HUD 4010 and the Davis Bacon Wage Decision issued for the project will be incorporated into this contract document and shall be incorporated into all construction contracts and subcontracts of any tier thereunder. (25) No CDBG funds may be expended for lobbying purposes and payments from other sources for lobbying must be disclosed 24 CFR Part 87. (26) Where asbestos is present in property undergoing rehabilitation, Federal requirements apply regarding worker exposure, abatement procedures and disposal. CPD -90-44 EPA/OSHA. (27) When HOME Investment Partnership Act funds are used, the Subrecipient will comply with implementing regulations and requirements under 24 CFR 92. (28) Executive Order 12372, as amended by Executive Order 12416 and HUD's implementing regulations at 24 CFR part 52. (29) Executive Order 13198, published at 66 Fed. Reg. 8497 and Executive Order 13279, published at 67 Fed. Reg. 77141, and HUD's implementing regulations. 19 Signature 19 EXHIBIT D LEGAL DESCRIPTION The land referred to is situated in the State of Colorado, County of Pueblo, and is described as follows: Block 11, EXCEPT Lots I1 through 20, inclusive, and Lots 31 through 40, inclusive, and the Easterly 15 feet of Lots 10 and 30 and except the North 1/2 of 12th Street and all of the alley adjacent; Block 20, EXCEPT Lots 9 through 20, inclusive and Lots 31 through 40, inclusive, and the Easterly 15 feet of Lot 8 and EXCEPT the South 1/2 of 12th Street and all of the alley adjacent; ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION in the City of Pueblo, Pueblo County, Colorado, as recorded in Plat Book 4 at Page 9 of the Records of Pueblo County, Colorado, also Blocks 19 and 24, Lots 17 through 20, inclusive and Lots 34 through 40, inclusive, in Block 20, Lots 12 through 20, inclusive, and Lots 33 through 40, inclusive, Block 23, in ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, in the City of Pueblo, Pueblo County, Colorado, as recorded in Plat Book 4 at Page 18 of the Records of Pueblo County, Colorado, together with all alleys located in Block 19 and 24; all of that portion of alley lying East of a line drawn from the Southwest Comer of Lot 17 to the Northwest corner of Lot 37, in Block 20; all of that portion of alley lying East of a line drawn from the Southwest Comer of Lot 13 to the Northwest Corner of Lot 33, in Block 23, all in ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, also together with that portion of l2th Street that abuts Lots 34 through 40, Block 20; Lots 12 through 20, Block 23; Lots 21 through 27, Block 19; and Lots 1 through 8, Block 24; ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, also together with that portion of Graham Avenue, lying Southerly of the Northerly line of Block 19 extended Westerly, and lying Northerly of the Southerly line of Block 24 extended Westerly, in ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, except the following described tract: A parcel of land being a portion of 12th Street, and a portion of Lots 12, 13, 14 and 15, in Block 23 ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, as shown on the recorded plat thereof, being in Pueblo County, Colorado, and described as follows: Beginning at the Northwest corner of Lot 12 in said Block 23, thence Easterly, along the Northerly line of said Lot 12, a distance of 6.18 feet; thence angle right, 57 degrees 25' 16" Southeasterly to the tangent of a curve to the left; thence along the arc of said curve to the left, which curve has a central angle of 237 degrees 25' 16 ", a radius of 52.00 feet, an are distance of 215.48 feet to the Southwest corner of Lot 34 in Block 20, ADEE, CHAMBERLIN AND WILEY'S SUBDIVISION, SECOND FILING, as recorded; thence Southerly, along the Southerly extension of the Westerly line of said Lot 34, a distance of 40.00 feet to the centerline of the aforesaid 12th Street; thence Westerly, along the centerline of said 12th Street, a distance of 50.00 feet to intersect the Northerly extension of the Westerly line of Lot 12 in said Block 23 thence Southerly, along said Northerly extension, 40.00 feet to the point of beginning. 20