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HomeMy WebLinkAbout11434RESOLUTION NO. 11434 A RESOLUTION APPROVING AN AGREEMENT BETWEEN NEIGHBORHOOD HOUSING SERVICES OF PUEBLO, INC., DBA NEIGHBORWORKS OF PUEBLO, AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR THE CONVEYANCE OF PROPERTY AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME. WHEREAS, the transfer of a City owned property to a non - profit housing provider to be sold to a low -to- moderate income family, complies with the CDBG and HOME federal regulations; and WHEREAS, the attached Agreement has been approved as to form by the City Attorney; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Property Disposal Agreement between the City and Neighborhood Housing Services, Inc., a copy of which is attached herein, is hereby approved. The President of the City Council is hereby authorized to execute the Property Disposal Agreement in the name of the City, and the City Clerk is directed to attest same. INTRODUCED October 14, 2008 BY Vera Ortegon Councilperson PRt %rtw unri, A :s r) a { CLERK µ — �9 ......_ _..,. Background Paper for Proposed RESOLUTION AGENDA ITEM # 18 DATE: OCTOBER 14, 2008 DEPARTMENT: HOUSING AND CITIZEN SERVICES / ADA RIVERA CLARK TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN NEIGHBORHOOD HOUSING SERVICES OF PUEBLO, INC., DBA NEIGHBORWORKS OF PUEBLO, AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, FOR THE CONVEYANCE OF PROPERTY AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME. ISSUE Transfer of a City owned property located at 1215 E Orman, which the City redeemed out of foreclosure to Neighborhood Housing Services of Pueblo for sale to a low -to- moderate income family or individual. RECOMMENDATION Approve BACKGROUND The City originally rehabilitated this owner - occupied property and placed a second mortgage lien on the property. The property went into foreclosure and it was deemed prudent for the City to redeem the property from foreclosure as the first lien was of a lesser amount than the outstanding rehabilitation loan. It was anticipated that the sale of the property would make the City whole. The site was later identified by City staff as a contributing piece of property to the proposed new fire station for the south side of the City. The property was held until the location of the fire station was identified earlier this year. Neighbor Works has requested that the City donate the property to them. They in turn will rehabilitate the structure and sell it to a low -to- moderate income household or individual. The property lies within their target area. The property was initially boarded -up and has since been vandalized and re- boarded several times. The City continues to be responsible for the maintenance of the property including utility payments, weeds, etcetera. NHS has previously received two other homes from the relocation of 1 -25 homes and was very successful in marketing said properties to their clients. The property must be sold to a low -to- moderate income family or individual to be used as their primary residence. For 2008, this would target a family of four earning $43,100 or below. The amount of HOME funds initially invested in the property is $22,220. These funds once recouped, upon the sale of the property, will be considered program income and must be used for other HOME eligible activities. FINANCIAL IMPACT If the property is transferred to NHS and sold by it, the City will save on utility and weed maintenance costs, apart from ending the City's liability for the property. In addition, the property will return to the tax rolls. PROPERTY DISPOSAL AGREEMENT THIS AGREEMENT is made and entered into this 14th day of October, 2008, by and between the City of Pueblo, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003 (the "City ") and Neighborhood Housing Services of Pueblo, Inc., dba NeighborWorks of Pueblo, a Colorado Nonprofit Corporation, 1241 E Routt Avenue, Pueblo, Colorado, 81004 ( "Disposal Agency "). WHEREAS, City holds a certain parcel of property, described more particularly in paragraph 8 hereof (hereafter referred to as the "Property "), which has been assisted with federal funds provided under authority of the HOME Investment Partnerships 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 C.F.R. Part 92 (collectively "HOME "); and WHEREAS, the Property is presently owned by the City; and WHEREAS, the Property are presently not suitable for habitation nor eligible for participation in any of City's housing programs; and WHEREAS, Disposal Agency represents that it is a community housing development organization which operates programs designed toward providing affordable housing and that it will be either able to make use of the Property in connection with one or more of its housing programs or projects or will be able to dispose of such Property in a manner that will recover, as Program Income, the HOME funds invested therein; NOW, THEREFORE, in consideration of the foregoing recitals and the promises and mutual covenants contained herein, the parties agree as follows: 1. Within thirty days after execution of this Agreement, City shall execute and deliver to Disposal Agency a quit claim deed or deeds conveying and transferring to Disposal Agency all of the City's right, title and interest in the Property. The conveyance of the City's right, title and interest in the Property is "AS 1S" and "WITH ALL FAULTS" and shall be in such form as the City Attorney shall require. 2. With respect to the Property conveyed hereunder, Disposal Agency shall either (a) rehabilitate the improvements upon the Property consisting of single family residence in accordance with one or more of Disposal Agency's affordable home programs for use by low or moderate income persons, or (b) resell the Property to a low or moderate income person for rehabilitation by such person for use as the person's primary residence, or (c) with prior written approval by City, resell the Property in order to maximize recovery of HOME Funds. 3. All funds recovered by Disposal Agency from the resale or lease of Property, including any funds received in repayment of principal and interest on any notes accepted in full or partial payment of the purchase price of the Property, shall be retained by Disposal Agency; provided, however, that the entire amount recovered by Disposal Agency from the resale, rental, lease or other reuse of each Property including any receipt of principal and interest on said notes, up to, but not exceeding, the amount of the HOME Investment shown for the Property in paragraph 8 of this Agreement, shall be deemed Program Income which may only be used by Disposal Agency in accordance with the provisions, restrictions and limitations of this Property Disposal Agreement. 4. No property conveyed to Disposal Agency pursuant to this Agreement shall be resold by Disposal Agency to any low or moderate income person for an amount exceeding the U.S. Department of Housing and Urban Development's FHA maximum loan amount as established yearly. 5. In the event Disposal Agency rehabilitates the Property conveyed hereunder or resells the same for occupancy or rehabilitation by any low or moderate income person, Disposal Agency shall comply with HUD's Lead -Based Paint regulations, including such regulations as are published at 24 CFR Part 35. Any contracts concerning rehabilitation by Disposal Agency, or for rehabilitation by subsequent purchasers which are subject to approval by Disposal Agency, shall be made subject to contractually enforceable provisions for the inspection and elimination of lead -based paint hazards under Subpart B of the aforementioned regulations, and Disposal Agency shall be responsible for the inspections and certifications required under 24 CFR §35.14(0. 6. All Program Income received by Disposal Agency which is attributable to the Property conveyed hereunder or is otherwise derived under the provisions of this Agreement shall be used by Disposal Agency only for programs or projects eligible for the use of HOME funds which have been approved by City prior to expenditure of Program Income funds and shall be used only in accordance with applicable HUD regulations. In connection with such approved programs or projects, an amount not exceeding 10% of the amount of the eligible expenditure may be applied by Disposal Agency to administrative costs associated with the project or program. 7. The parties acknowledge and agree that Disposal Agency is an independent contractor and not an agent of City for any purpose in connection with this Agreement. Disposal Agency agrees to indemnify, defend and hold City harmless from and against any and all claims, damages, liabilities and court awards including costs, expenses and attorney fees incurred arising from or related to any act or omission of Disposal Agency or its officers, agents, employees, volunteers or contractors or arising from or related to Disposal Agency's use, reuse, modifications, resale or leasing of the Property. 8. The Property is located in Pueblo County, Colorado and has the legal descriptions and HOME Investment amounts as set forth below: Description: Lots 38 and 39, Block 11 of College Hill Subdivision, Second Filing, also known as: 1215 E Orman Avenue, Pueblo, Colorado HOME Investment: $22,220 -2- 9. In the event the Property is sold by Disposal Agency to a qualified low or moderate income buyer without recapturing the full amount of the HOME Investment at time of sale, Disposal Agency shall require, by deed restrictions, mortgage conditions or other enforceable means, that the Property remain affordable as defined in the HOME regulations, and that, in the event of failure of such requirement, that the remaining HOME Investment amount for such Property is recovered. 10. Disposal Agency, and not City, shall be responsible for payment of any closing costs whatsoever, in connection with the conveyance described in paragraph 1 of this Agreement. 11. HOME regulation 24 CFR, § 92.356 is incorporated herein by reference, and sets forth applicable HOME requirements pertaining to Conflict of Interest. Disposal Agency, and its Board of Directors, officers and employees, shall avoid all conflicts prohibited by the 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. 12. Disposal Agency shall maintain records as to the use of the Property, proceeds from resale of any Property and use of Program Income. Accounting records shall be kept on a generally recognized accounting basis and as requested by the City's auditor. Disposal Agency agrees to comply with all applicable uniform administrative requirements described or referenced in 24 CFR Part 92. 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 Disposal Agency which relate to this Agreement for the purpose of making an audit or examination. At any time within 15 years after date of this Agreement, the City may require all of Disposal Agency's financial records relating to this Agreement to be turned over to the City. 13. The City shall have the right to monitor and evaluate the progress and performance of Disposal Agency 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 may periodically review Disposal Agency's performance using on -site visits, progress reports required to be submitted by Disposal Agency, audit findings, disbursement transactions and contact with Disposal Agency as necessary. Disposal Agency shall furnish to the City periodic program and financial reports of its activities in such form and manner as may be requested by the City. Disposal Agency shall fully cooperate with City relating to such monitoring and evaluation. 14. Disposal Agency shall maintain files containing information which shall clearly document 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 Disposal Agency for a period of five years, except that with respect to any Property for which the HOME Investment has not been fully recovered, such records shall be maintained for the full required period of affordability. Activity reports shall be -3- submitted quarterly no later than the ninth day of the month following the end of the period for which the report is submitted. The frequency of reporting under this paragraph and paragraph 13 of this Agreement shall be specified by City, and may be changed, from time to time, as the City may in its sole discretion deem necessary or desirable. 15. As to the City, Disposal Agency 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 Disposal Agency, the ownership, rehabilitation or sale of any Property conveyed to Disposal Agency or by the conditions created thereby or resulting therefrom. Disposal Agency further agrees to indemnify and save harml 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 Disposal Agency, or the ownership, rehabilitation or resale of any Property conveyed to Disposal Agency, or warranties, if any, upon any resale, or out of any violation Disposal Agency of any statute, ordinance, rule or regulation. 16. 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 and supersedelall 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 Disposal Agency and City. 17. The persons signing this Agreement on behalf of Disposal Agency represent and warrant that such persons and Disposal Agency 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 Disposal Agency enforceable against Disposal Agency in accordance with 11its terms. IN WITNESS WHEREOF, Disposal Agency 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: City rk A Municipal rpora ion By President of the City Council [SEAL]._ . . _. - - - ATTEST: Title: NEIGHBORHOOD HOUSING SERVICES OF PUEBLO, INC. a Colorado Non -Profit Corporation -5- Reception 1786161 10/28/2008 QUIT CLAIM DEED THIS DEED, made this Lf ay of , 2008 between Pueblo, a Municipal Corporation, of the first part, and Neighborhood Housing Services of Pueblo, Inc. dba NeighborWorks of Pueblo, of the second part, WITNES SETH, That the said party of the first part, for and in consideration of the sum of One Dollar ($1.00) to the said party of the first part in hand paid by the said party of the second part, the receipt whereof is hereby confessed and acknowledged, path remised, released, sold, conveyed and QUIT CLAIMED, and by these presents doth remise, release, sell, convey and QUIT CLAIM unto the said party of the second part, its successors and assigns forever, all of the right, title, interest, claim and - demand -which the said party of the first part hath in and-to the following described real property situate, lying and being in the County of Pueblo and State of Colorado, to wit: Lots 38 and 39, in Block 11 of College Hill, Second Filing, also known as 1215 East Orman Avenue, Pueblo, Colorado. TO HAVE AND TO HOLD the same, together with all and singular the appurtenances and privileges thereunto belonging, or in anywise thereunto appeitaining, and all the estate, right, title, interest and claim whatsoever, of the said party of the first part, either in law or equity, to the only proper use, benefit and behoof of said party of the second part, his heirs and assigns forever. Grantee takes said right, title and interest of said party of the first part subject to all liens, encroachments, leases and environmental conditions, including both those of record and those not of record. IN WITNESS WHEREOF, The said party of the first part hath caused its corporate name to be hereunto subscribed by the President of the City Council of Pueblo, and its corporate seal to be hereunto affixed, attested by its City Cleric, the day and year first above written. ATTEST: PUEBLO, A M CIP L CORPORATION By President of the City Council The foregoing instrument was acknowledged before this J day of� 2007 by Barbara Vidmar as President of City Council and Gina Dutcher, City Clerk. Witness my hand and official seal. ....My commission- expireaa 6 -21 - 201 f :ST:A �,F�RAVO N6FF ARY PUBLIC OF COLORADO of az7' Public Fe � �� n l� �Cco� STATE OF COLORADO )