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HomeMy WebLinkAbout13629 RESOLUTION NO. 13629 A RESOLUTION APPROVING AN AFFORDABLE HOUSING DEVELOPMENT AGREEMENT BETWEEN POSADA INC., A COLORADO NONPROFIT CORPORATION AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City of Pueblo Affordable Housing Development Agreement (HOME-CHDO) dated March 13, 2017, between Posada, Inc., a Colorado Nonprofit Corporation 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 funds are available in Fund 251, and those will be dedicated to this Agreement. SECTION 3. The officers and staff of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution and the attached Agreement to effectuate the transactions described therein. SECTION 4. This Resolution shall become effective immediately upon final passage. INTRODUCED March 13, 2017 BY: Ed Brown City Clerk’s Office Item # M-4 Background Paper for Proposed RESOLUTION COUNCIL MEETING DATE: March 13, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Ada Rivera Clark, Director of Housing and Citizen Services SUBJECT: A RESOLUTION APPROVING AN AFFORDABLE HOUSING DEVELOPMENT AGREEMENT BETWEEN POSADA, INC., A COLORADO NONPROFIT CORPORATION AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME SUMMARY: This Resolution approves City of Pueblo Affordable Housing Development Agreement (HOME- CHDO) with Posada, Inc., for the development of a single-room occupancy (SRO) affordable rental housing project for homeless youth to be called Nancy’s Place. PREVIOUS COUNCIL ACTION: There has been no previous Council action on this issue. BACKGROUND: The City of Pueblo receives a yearly allocation of HOME funds. As part of the allocation there is a mandatory set-aside for Community Housing Development Organizations (CHDO); fifteen-percent (15%) must be set-aside for these agencies. The set-aside funds if not allocated to an eligible CHDO are recaptured by HUD. The DHCS published two separate notices in the Pueblo Chieftain in 2016: 1) notification of funding availability; and 2) recertification of CHDOs. Posada, Inc., was the only applicant under both notices. The agency qualifies as an eligible CHDO under the new HOME Rule (June 2013) federal guidelines. Therefore, the City wishes to enter into an agreement with Posada, Inc. to develop and rehabilitate a single-room occupancy (SRO) project that will house homeless youth ages 18-25. Under the Agreement the City would provide $285,000 in HOME funds for the proposed development. The Project will consist of the rehabilitation of a 7-bedroom rental complex currently owned by the Agency, called Nancy’s Place. The rehabilitation will include bringing the project into ADA compliance, and electrical and mechanical upgrades. The SRO will remain affordable for a minimum of 15-years. Household income and maximum rents will be established each year by HUD, however the targeted populations income will probably not exceed 50% of AMI. The Agency will provide supportive services and 24-hour supervision. FINANCIAL IMPLICATIONS: The funding is available in the 251 Fund. HOME funding that is not spent within the expenditure period, whether CHDO or entitlement funding will be recaptured by HUD. BOARD/COMMISSION RECOMMENDATION: Not applicable. STAKEHOLDER PROCESS: None. ALTERNATIVES: If the City chooses to enter this Agreement, it must be with an eligible CHDO. No other nonprofit applied for CHDO recertification, nor applied for project funding. Therefore, if this resolution is denied, funds will be de-obligated. RECOMMENDATION: Approval of the Resolution. Attachments: City of Pueblo Affordable Housing Development Agreement (HOME-CHDO) Deed of Trust Promissory Note PROMISSORY NOTE Principal Amount: U.S. $285,000.00 Date of Note: March 13, 2017 FOR VALUE RECEIVED,the undersigned Posada, Inc.,a Colorado nonprofit corporation, hereinafter referred to as "Borrower", and its successors in interest, promises to pay to the City of Pueblo,a Municipal Corporation,hereinafter referred to as the "Note Holder",the principal sum of Two Hundred Eighty-Five Thousand and No/100 (U.S. Dollars ($285,000.00) and interest on the principal balance outstanding from the date hereof until paid,at the rate prevailing on the date of the grant closing pursuant to the Internal Revenue Services' applicable revenue ruling per annum, provided payment is made in accordance herewith,and payable at the Note Holder's office at 1 City Hall Place, Pueblo, Colorado, 81003, or such other place as Note Holder may designate, upon demand of the Note Holder after occurrence of the events specified in this Note. The grant evidenced by this Note is being made to finance a residential housing project (hereinafter referred to as the "Project") in accordance with the Agreement. This Note and all principal and interest payable hereunder are secured by a Deed of Trust of even date herewith upon real property, upon which the Project is located or to be located, and all improvements thereon, situated in the County of Pueblo, State of Colorado (hereinafter referred to as the "Property") and described more particularly as: LOT 15 BLK 28 STARLITE HILLS 3RD also, known as 2105 Norman Lane, Pueblo, CO 81004. The terms,conditions,covenants,provisions,stipulations,and agreements of said Deed of Trust and said Agreement are hereby made a part of this Note by reference in the same manner and with the same effect as if they were fully set forth herein,and the Borrower hereby covenants and promises to abide by and comply with each and every covenant and condition set forth in this Note,the Deed of Trust and the Agreements. The Borrower reserves the right to prepay all or any part of the principal owing on this Note at any time or times prior to maturity without notice and payment of any premium or penalty. Upon the occurrence of any of the following events, the entire unpaid principal hereof, together with all accrued interest thereon,shall,at the option of the Note Holder,and without notice, become at once due and payable and shall accrue interest at the default rate of twelve percent(12%) per annum thereafter until paid in full, and no failure by the Note Holder to exercise such option shall be deemed or construed as a waiver of the right to exercise the same in the event of any subsequent default or breach: 1. Any default in the payment when due, or any part of the principal or interest hereunder. 2. Any breach or failure of the Borrower to perform within the allotted time any term or condition of the Agreement, the Deed of Trust, or any other instrument securing to the Note Holder payment or performance of any obligation of the Borrower. 3. If the Borrower shall be involved in financial difficulties as evidenced: (i) by an admission in writing of the Borrower's inability to pay its debts generally as they become due; (ii) by filing a petition in bankruptcy or for the adoption of an arrangement under the federal Bankruptcy Code(as now or in the future amended)or an admission seeking the relief therein provided; (iii) by making an assignment for the benefit of creditors;(iv)by consenting to the appointment of a receiver or trustee for all or a substantial part of the Borrower's assets or to the filing of a petition against the Borrower under said Bankruptcy Code; (v) by being adjudicated as bankrupt; (vi)by the entry of a court order appointing a receiver or trustee for all or a substantial part of the assets of the Borrower or approving as filed in good faith a petition filed against the Borrower under said Bankruptcy Code; (vii) by the assumption of custody or sequestration by a court of competent jurisdiction of all or substantially all of the assets of the Borrower; (viii)by an attachment for an amount in excess of$25,000 on any substantial part of the assets of the Borrower which shall not be discharged within thirty (30) days from the making thereof; or (ix) by a judgment or decree for the payment of money in excess of$25,000 being entered against the Borrower, or if an attachment,execution or levy is made upon any of the Borrower's assets and the judgment, execution or levy, as the case may be, is not discharged or stayed within thirty (30) days from the date of the judgment, attachment, execution or levy as the case may be. 4. If the Borrower shall have made any misrepresentation or a material nature in its application for the grant, or in any document furnished by it to the Note Holder relative to the Project. 5. If there is pending or threatened litigation with respect to the grant or the performance by the Borrower of any of its duties or obligations hereunder. 6. If the Project cannot proceed because of inability to continue land option or secure zoning or due to any action by any branch of government which impairs use of the Property herein described for proposed Project purposes. 7. If the Note Holder determines that the Borrower has abandoned or discontinued the acquisition, construction,rehabilitation, or completion of the Project. The Borrower, and any and all endorsers, sureties, guarantors and assumers hereof, hereby jointly and severally waive presentment,protest,notices of dishonor and of protest,and all defenses whatsoever on the ground of any extension(s)of the time of payment or of the due dates of this Note, in whole or in part, before or after maturity, with or without notice, it being further agreed by the Borrower and all such parties that they will pay all collection expense, court costs, and reasonable attorneys' fees which may be incurred in the collection or enforcement of this Note or any part hereof. Each subsequent holder of this Note shall be deemed,by virtue of such holder's acquisition of —2— the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by the Agreement or Deed of Trust. This instrument shall be governed by the laws of the State of Colorado and any dispute regarding its terms and conditions shall be resolved in the District Courts of the State of Colorado. Executed and delivered this 3 / day of G4,t/k, , 2017. Posada, Inc., a Colorado nonprofit corporation • By: / //,i Name: • S {� / -.-4.114-4- 144 .. ''"" Title: - t v YL c-7U'2 —3— Reception 2066480 04/03/2017 03:16:36 PM DEED OF TRUST THIS DEED OF TRUST,made this 13"day of March,2017,between Posada,Inc.,a Colorado nonprofit corporation,hereinafter referred to as"Grantor", and the Public Trustee of the County of Pueblo, in the State of Colorado,hereinafter referred to as"Trustee",WITNESSETH: WHEREAS,Grantor has entered into the City of Pueblo Affordable Housing Development Agreement dated the 13`"day of March,2017 with the City of Pueblo,a Municipal Corporation,hereinafter referred to as the"Agreement"; and WHEREAS,the Grantor has executed a Promissory Note,hereinafter referred to as the"Note",dated the 13" day of March, 2017 for the principal sum of Two-Hundred Eighty-Five Thousand and No/100 Dollars(U.S. $285,000.00),payable to the order of the City of Pueblo,a Municipal Corporation,which amount is an indebtedness of Grantor payable with interest in accordance with the terms of said Note;and, WHEREAS,the Grantor is desirous of securing performance of all obligations of Grantor under said Agreement and Note and payment of the indebtedness as specified therein. NOW,THEREFORE,the Grantor,in consideration of the premises and for the purposes aforesaid,does hereby grant,bargain,sell and convey unto Trustee in trust forever,for the use and benefit of the City of Pueblo,a Municipal Corporation(the"Beneficiary"),the following described property,situated in the County of Pueblo,State of Colorado to wit: LOT 15 BLK 28 STARLITE HILLS 3RD also,known as 2105 Norman Lane,Pueblo,Colorado 81004. TO HAVE AND TO HOLD the same,together with all and singular the privileges and appurtenances thereunto belonging:In Trust Nevertheless,That in case of default in the Note or any part thereof or payment as specified therein, according to the tenor and effect of said Note,or in the payment of any prior encumbrances,principal or interest,if any, or in case of a breach of any term of the Agreement,or in case default shall be made in or in case of violation or breach of any of the terms,conditions,covenants or agreements herein contained,the Beneficiary hereunder may declare a violation of any of the covenants herein contained and elect to advertise said property for sale and demand such sale, then,upon filing notice of such election and demand for sale with the Trustee,who shall upon receipt of such notice of election and demand for sale cause a copy of the same to be recorded in the recorder's office of the county in which said real estate is situated,it shall and may be lawful for said Trustee to sell and dispose of the same(en masse or in separate parcels,as the said Trustee may think best),and all the right,title and interest of Grantor,its successors or assigns therein,at public auction at the south front door of the Court House,in the County of Pueblo,State of Colorado,or on said premises,or any part thereof as may be specified in the notice of said sale,for the highest and best price the same will bring in cash, four weeks' public notice having been previously given of the time and place of such sale, by advertisement,weekly,in some newspaper of general circulation at that time published in said County of Pueblo,a copy of which notice shall be mailed within ten days from the date of the first publication thereof to the Grantor at the address herein given and to such person or persons appearing to have acquired a subsequent record interest in said real estate at the address given in the recorded instrument;where only the county and state is given as the address then such notice shall be mailed to the county seat,and to make and give to the purchaser or purchasers of such property at such sale,a certificate or certificates in writing describing such property purchased,and the sum or sums paid therefor,and the time when the purchaser or purchasers(or other person entitled thereto)shall be entitled to a deed or deeds therefor,unless the same shall be redeemed as is provided by law;and said Trustee shall,upon demand by the person or persons holding the same certificate of purchase,when said demand is made,or upon demand by the person entitled to a deed to and for the property purchased,at the time such demand is made,the time for redemption having expired,make and execute to such person or persons a deed or deeds to the said property purchased,which said deed or deeds shall be in the ordinary form of a conveyance,and shall be signed,acknowledged and delivered by the said Trustee,as grantor,and shall convey and quit-claim to such person or persons entitled to such deed,as grantee,the said property purchased as aforesaid and all the right,title,interest,benefit and equity of redemption of the Grantor,its successors and assigns therein,and shall recite the sum or sums for which the said property was sold and shall refer to the power of sale therein contained,and to the sale or sales made by virtue thereof;and in case of an assignment of such certificate or certificates of purchase,or in case of the redemption of such property,by a subsequent encumbrancer,such assignment or redemption shall also be referred to in such deed or deeds;but the notice of sale need not be set out in such deed or deeds and the said Public Trustee shall,out of the proceeds or avails of such sale,after first paying and retaining all fees,charges and costs of making said sale,pay to the Beneficiary hereunder or the legal holder of the indebtedness,all moneys and amounts due,according to the tenor and effect thereof,and all moneys advanced by such Beneficiary or legal holder of said indebtedness for insurance,taxes and assessments,with interest thereon at twelve percent per annum,rendering the overplus,if any,unto the said Grantor, his legal representatives or assigns;which sale or sales and said deed or deeds so made shall be a perpetual bar,both in law and equity,against the Grantor,its successors and assigns,and all other persons claiming the said property,or any part thereof,by,from,through or under said Grantor,or any of them. The Beneficiary or holders of the indebtedness may purchase said property or any part thereof;and it shall not be obligatory upon the purchaser or purchasers at such sale to see to the application of the purchase money. If a release deed be required, it is agreed that Grantor,its successors,and assigns,will pay the expense thereof. 2066480 TD 04/03/2017 03:16:36 PM Page: 2 of 3 R 23.00 D 0.00 T 23.00 Gilbert Ortiz Clerk/Recorder, Pueblo County Co 11111 k!l�1.4 rt i�eigiiitirilii And the Grantor,for itself and for its successors and assigns covenants and agrees to and with the Trustee,that at the time of the ensealing of and delivery of these presents he is well seized of the said land and tenements in fee simple, and has good right,full power and lawful authority to grant,bargain,sell and convey the same in the manner and form as aforesaid;hereby fully and absolutely waiving and releasing all rights and claims he may have in or to said lands, tenements and property as a Homestead Exemption,or other exemption,now existing or which may hereafter be enacted in relation thereto and that the same are free and clear of all liens and encumbrances whatsoever,and the above bargained property shall be in the quiet and peaceable possession of the said Trustee,his successors and assigns,against all and every person or persons lawfully claiming or to claim the whole or any part thereof,the said Grantor shall and will Warrant and Forever Defend. And that during the continuance of said Note or the indebtedness arising thereunder,the said Grantor will in due season pay all taxes and assessments levied on said property;all amounts due on account of principal and interest on prior encumbrances,if any;and will keep all buildings that may at any time be on said lands,insured against loss by fire with extended coverage endorsements in a company authorized to issue such insurance in the State of Colorado,for such sum or sums as such company or companies will insure for,not to exceed the amount of said indebtedness and any prior encumbrances,except at the option of said Grantor,with loss,if any,payable to the Beneficiary hereunder,as its interest may appear,and will deliver the policy or policies of insurance to the Beneficiary hereunder,as further security for the indebtedness aforesaid. And in case of the failure of Grantor to thus insure and deliver the policies of insurance,or to pay such taxes or assessments or amounts due or to become due on any prior encumbrances,if any,then the Beneficiary may procure such insurance,or pay such taxes or assessments or amount due upon prior encumbrances,if any,and all moneys thus paid,with interest thereon at twelve percent per annum,shall become so much additional indebtedness, secured by this Deed of Trust,and shall be paid out of the proceeds of the sale of the property aforesaid,if not otherwise paid by Grantor,and Beneficiary may for such failure declare a violation of this covenant and agreement. If all or any part of the property or an interest therein is sold or transferred by Grantor without Beneficiary's prior written consent,excluding the creation of a lien or encumbrance subordinate to this Deed of Trust,Beneficiary may, at Beneficiary's option,declare all the sums secured by this Deed of Trust to be immediately due and payable. AND THAT IN CASE OF ANY DEFAULT,Whereby the right of foreclosure occurs hereunder,the Trustee or the Beneficiary or holder of certificate of purchase,shall at once become entitled to the possession,use and enjoyment of the property aforesaid,and to the rents, issues and profits thereof,from the accruing of such right and during the pendency of foreclosure proceedings and through the period of redemption,if any there be;and such possession shall at once be delivered to the Trustee or the Beneficiary or the holder of the certificate of purchase on request,and on refusal, the delivery of such possession may be enforced by the Trustee or the Beneficiary or holder of the certificate of purchase by any appropriate civil suit or proceeding,and the Trustee or Beneficiary or the holder of the certificate of purchase,or any thereof,shall be entitled to a Receiver for said property,and of the rents,issues and profits thereof,after such default, including the time covered by foreclosure proceedings and the period of redemption,if any there be,and shall be entitled thereto as a matter of right without regard to the solvency or insolvency of the Grantor or of the then owner of said property and without regard to the value thereof,and such Receiver may be appointed by any court of competent jurisdiction upon ex parte application and without notice--notice being hereby expressly waived--and all rents,issues and profits,income and revenue therefrom shall be applied by such Receiver to the payment of the indebtedness hereby secured,according to the law and the orders and directions of the Court. AND,That in case of default in any of said payments of principal or interest,according to the tenor and effect of said Note aforesaid,or any part thereof,or a breach of any term of the Agreement,or of a breach or violation of any of the covenants or agreements herein,by the Grantor,its successors or assigns,then and in that case the whole of the indebtedness hereby secured,and the interest thereon to the time of the sale,may at once,at the option of the Beneficiary or the legal holder of the indebtedness,become due and payable,and the said property be sold in the manner and with the same effect as if said indebtedness had matured,and that if foreclosure be made by the Public Trustee,a reasonable attomey's fee for services in the supervision of said foreclosure proceedings shall be allowed by the Public Trustee as part of the cost of foreclosure,and if foreclosure be made through the courts a reasonable attorney's fee shall be taxed by the court as a part of the costs of such foreclosure proceedings. Nothing in this Deed of Trust is intended,nor shall it be construed,to grant any rights whatsoever to Grantor or create any condition precedent to the exercise of any right or remedy by the Beneficiary;nor shall any noncompliance with the requirements of this Deed of Trust constitute any defense against enforcement of the Note or this Deed of Trust, including without limitation,Beneficiary's right to accelerate maturity of the entire indebtedness and demand sale of the said property. Should any provisions of this Deed of Trust be found to violate the statutes or court decisions of the State of Colorado,or of the United States,such provision shall he deemed to be amended to comply with and conform to such statutes and decisions. 2066480 TD 04/03/2017 03:16:36 PM Page: 3 of 3 R 23.00 D 0.00 T 23.00 Gilbert Ortiz Clerk/Recorder, Pueblo County, Co 11111 kirdria lierif01411Liii IN WITNESS WHEREOF,the Grantor has hereunto set its hand and seal the day and year first above written. GRANTOR: Posada,Inc., a Colorado profit co'io ati s By: wrr Name: I44in4 (N(,. S41*161tby1 Title: Di rr • STATE OF ' ORADO ss. COUN O I , The foregoing instrument was acknowle ged before me in l IL County,Colorado,this day of kityck. ,2017 b I)1 r ,on behalf of Posada, Inc.,a Colorado nonprofit corporation. PAULA TRUJILLO Witness my hand and official seal NOTARY PUBLIC My commission expires: STATE OF COLORADO NOTARY ID 20144047858 MY COMMISSION EXPIRES DECEMBER 17 2018 I II, l ',Ir. Public � AMENDMENT NO. 1 TO THE AFFORDABLE HOUSING DEVELOPMENT AGREEMENT (HOME—CHDO) This Amendment No. 1 ("Amendment") is made and entered into this 31s`day of a July 2018,by and between the City of Pueblo,a Municipal Corporation (hereinafter referred to as "City") and Posada, Inc.,a Colorado Non-Profit Corporation(hereinafter referred to as"Developer"). WITNESSETH,that: WHEREAS,the City has 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 between the 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 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 for the purpose of carrying out specific elements of the participating jurisdiction's housing strategy including provision of tenant-based rental assistance;and WHEREAS, City and Developer entered into the Affordable Housing Development Agreement (HOME - CHDO) dated March 13, 2017 ("Agreement") for the rehabilitation of rental housing to create single-room occupancy housing for homeless youth; NOW,THEREFORE,in consideration of the foregoing recitals and the covenants,amendments set forth herein,the parties shall amend the Agreement as follows: 1. AMENDMENTS. Subsection 3(c)shall be amended in its entirety and now read: (c) The aggregate of all payments made hereunder shall not exceed Two Hundred Ninety Thousand,Four Hundred Eight and No/100 Dollars (U.S.$290,408.00). 2. GOVERNING LAW AND VENUE. This Amendment shall be governed by the laws of the State of Colorado. Venue for any action arising under this Amendment or for the enforcement of this Amendment shall be in a state court with jurisdiction located in Pueblo County,Colorado. 3. MODIFICATION. Except as expressly modified by this Amendment, the Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the original Agreement by either party, are not waived or excused in any manner, but shall be fully performed in accordance with the terms and conditions of the Agreement as it existed prior to this Amendment. 4. SIGNATURES. The persons signing this Amendment 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 Amendment and that this Amendment 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 Amendment as of the date first above written and under the laws of the State of Colorado. CITY OF PUEBLO, ATTEST: A Municipal Corpo ' n &QX1dI By: Acting City Clerk Sam A.Azad, ity Manager [ SEAL ] Approved as to form: >4Ø4 7OV4.J2. City Attorney POSADA,INC., ATTEST: a Colorado Non-Profit Corporation By: Title:?- 't_ti1Je `rfi!''�� Name: k 1 EaDNIQ ►n [SEAL]