HomeMy WebLinkAbout10018ORDINANCE NO. 10018
AN EMERGENCY ORDINANCE APPROVING AN
INTERCREDITOR AGREEMENT AND SUBORDINATION,
NONDISTURBANCE, AND ATTORNMENT AGREEMENT FOR
THE FUEL AND IRON PROJECT, AND AUTHORIZING THE
MAYOR TO EXECUTE SAME
WHEREAS, there exists a need for affordable housing in the City of Pueblo; and
WHEREAS, there exists a need to construct affordable housing in the City of Pueblo; and
WHEREAS, the City of Pueblo receives HOME Investment Partnership Grant funds from
the U.S. Department of Housing and Urban Development for the creation and retention of
affordable housing; and
WHEREAS, if the Intercreditor Agreement and the Subordination, Nondisturbance, and
Attornment Agreement (together the “Agreements”) for the Fuel and Iron Project are not
immediately approved, the Fuel and Iron Project will not secure necessary funding and the
development of a twenty-eight (28) unit affordable housing rental project known as the Fuel & Iron
Development will not occur; and
WHEREAS, execution of the Agreements is immediately needed for the Fuel and Iron
Project: (1) to commence and complete the project, ensuring the project is not left unfinished,
which would create conditions hazardous to the public health; (2) to commence and complete the
project, ensuring the land does not deteriorate or contribute to blight, thereby protecting the public
health; (3) to provide the City with affordable housing, ensuring Pueblo citizens are able to
maintain suitable living conditions and preserving their health and prosperity; and (4) to maintain
the land, such that those intending to access the development property are not in danger from
deteriorating conditions and preventing the vacant land from being used for criminal activities,
thereby preserving public safety; and
WHEREAS, in accordance with Charter Section 3-20, an emergency ordinance is required
for the immediate preservation or protection of public health, property, or safety, and execution of
the Agreements is declared an emergency; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Intercreditor Agreement between (i) PB&T Bank, a Colorado banking corporation, (ii)
Legacy Bank, (iii) CHF Revolving Loan Fund, a Colorado non-profit corporation, (iv) First
Southwest Community Fund, a Colorado nonprofit corporation, (v) The Housing Authority of the
City of Pueblo, a quasi-governmental entity and corporate body politic, (vi) State of Colorado
acting by and through the Department of Local Affairs for the benefit of the Division of Housing,
(vii) Impact Development Fund, a Colorado non-profit corporation, (viii) Fuel and Iron Commercial,
LLC, a Colorado limited liability company, (ix) Fuel and Iron Residential, LLC, a Colorado limited
liability company, and (x) the City of Pueblo, a Municipal Corporation, (the “Intercreditor
Agreement”) to secure financing for the Fuel and Iron affordable housing development, a copy of
which is attached hereto and incorporated herein, having been approved as to form by the City
Attorney, is hereby approved.
SECTION 2.
The Subordination, Nondisturbance, and Attornment Agreement between Fuel and Iron
Master Tenant, LLC, a Colorado limited liability company, Fuel and Iron Residential, LLC, a
Colorado limited liability, and the City of Pueblo, a Municipal Corporation, (the “SNDA”) to secure
financing for the Fuel and Iron affordable housing development, a copy of which is attached hereto
and incorporated herein, having been approved as to form by the City Attorney, is hereby
approved.
SECTION 3.
The Mayor is hereby authorized, but not required, to execute the Intercreditor Agreement
and the SNDA in the name and on behalf of the City of Pueblo, where the Mayor may execute
the documents by electronic signature and such electronic signature shall be attributable to the
Mayor and the City of Pueblo.
SECTION 4.
The officers and staff of the City are authorized to perform any and all acts consistent with
this Ordinance to implement the policies and procedures described herein.
SECTION 5.
If any section, paragraph, clause, or provision of this Ordinance shall for any reason be
held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph,
clause, or provision shall not affect any of the remaining provisions of this Ordinance.
SECTION 6.
This Ordinance shall become effective on the date of final action by the Mayor and City
Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on September 27, 2021 .
Final adoption of Ordinance by City Council on September 27, 2021 .
President of City Council
Action by the Mayor:
☒ Approved on September 29, 2021 .
□ Disapproved on based on the following objections:
_
Mayor
Action by City Council After Disapproval by the Mayor:
□ Council did not act to override the Mayor's veto.
□ Ordinance re-adopted on a vote of , on
□ Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
Deputy City Clerk
City Clerk’s Office Item # S-1
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: September 27, 2021
TO: President Lawrence W. Atencio and Members of City Council
CC: Nicholas A. Gradisar, Mayor
VIA: Marisa Stoller, City Clerk
FROM: Bryan Gallagher, Director, Housing and Citizen Services
SUBJECT: AN EMERGENCY ORDINANCE APPROVING AN INTERCREDITOR
AGREEMENT AND SUBORDINATION, NONDISTURBANCE, AND
ATTORNMENT AGREEMENT FOR THE FUEL AND IRON PROJECT, AND
AUTHORIZING THE MAYOR TO EXECUTE SAME
SUMMARY:
This Ordinance approves an Intercreditor Agreement and a Subordination, Nondisturbance, and
Attornment Agreement for the Fuel and Iron Project and the development of a twenty-eight (28)
unit affordable housing rental project known as the Fuel & Iron Development.
PREVIOUS COUNCIL ACTION:
The City Council previously approved the City of Pueblo’s Affordable Housing Development
Agreement with Fuel & Iron Residential, LLC, and the associated Deed of Trust and Promissory
Note, for the Fuel and Iron Project and the development of affordable housing.
BACKGROUND:
In September of 2020, the Department of Housing and Citizen Services issued a Notice of
Funding Availability (NOFA) under the HOME Program. Full Plate Management, LLC applied for
HOME funds for the development of a 28-unit rental project to be known as the Fuel & Iron
Development. HOME funds will assist five (5) of the units. This Project is part of a multi-use
facility located in the former Holmes Hardware building. The Project will serve households at 30-
60% of the area median income (AMI). The development of the affordable housing is in
partnership with the State Division of Housing. Project costs for the residential units are
approximately $6.3 million, and are being funded through multiple sources.
The Fuel and Iron Project has experienced multiple delays prior to closing, which is now fast
approaching, and time is of the essence if the developer is to secure contractors. In order to close,
secure all loans, and commence development of the affordable housing, the primary lenders are
now requiring all other lenders to execute an Intercreditor Agreement and a Subordination,
Nondisturbance, and Attornment Agreement. If these agreements are not executed, Full Plate
Management, LLC will be unable to acquire the loans necessary for the development, which will
not occur.
FINANCIAL IMPLICATIONS:
The City HOME contribution is available in the 251 Fund, and is comprised of HOME grant funds,
program income, and City match contributions.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance .
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
Not applicable to this Ordinance.
RECOMMENDATION:
The Department of Housing and Citizen Services recommends approval of the Ordinance.
ATTACHMENTS:
Attachment 1: Intercreditor Agreement
Attachment 2: Subordination, Nondisturbance, and Attornment Agreement