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HomeMy WebLinkAboutS Housing-Development Agreement - Consolidated Housing $70,000 Empowerment Inc-- Please return this copy to _ Clerk to the Board's office for PAF S' 3 ~~ NORTH CAROLINA ~~ ORANGE COUNTY DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, a body politic and corporate, a political subdivision of the State of North Carolina, (hereinafter referred to as the "County") and EmPOWERment, Inc., a North Carolina non-profit co ration (hereinafter referred to as "EmPOWERment"). The effective date of this agreement is c~P.r' / ~~ 208 WITNESSTH WHEREAS, the Orange County HOME Consortium has designated $70,000 in FY 2005 HOME funds to assist in the acquisition of a vacant lot for the purpose of affordable housing development; and WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so designated in an agreement dated July 1, 2005 and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying. out the HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the "Act"), and as further defined in the Federal Program Requirements provided by the U.S. Department of Housing and Urban Development; and WHEREAS, EmPOWERment intends to purchase a vacant lot located at 320 McMasters Street in Chapel Hill and more particularly described in EXHIBIT A attached hereto and made a part of this Agreement (hereinafter referred to as "the Property"); and WHEREAS, EmPOWERment agrees to utilize HOME funds provided for the purpose of acquiring the Property as described in its HOME Program request dated June 1 S, 2007 which is hereby incorporated into this Agreement and hereinafter referred to as "the Project"; and WHEREAS, EmPOWERment intends to build a three (3) bedroom and two (2) bathroom single-family detached dwelling unit to be sold to first-time homebuyers earning up to 80% of HUD area median income; and WHEREAS, afirst-time homebuyer for the purposes of this program is defined as any low income household that has not owned a home within the past three (3) years including households living in manufactured housing not permanently affixed to a foundation, or owner- occupants of homes not feasible for rehabilitation. WHEREAS, notwithstanding any provision of this Agreement, the County and EmPOWERment hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review and receipt by Orange County of a Release of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to proceed with, modify, or cancel the project based on the results of a subsequent environmental review. NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: 1. a. EmPOWERment shall acquire the Property and ensure. that the unit constructed on the Property meets the property standards in 24 CFR 92.251 and the lead-based paint requirements in 92.355 at the time of project completion. A Section 8 Housing Quality Standards (HQS) inspection must be conducted prior to sale of the dwelling to ensure compliance. All construction and any repair work necessary must be completed in accordance with applicable building and zoning ordinances. b. EmPOWERment shall sell the newly constructed dwelling unit to qualified buyers whose income up to 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the sale. c. Financial assistance in the amount of $70,000 in Orange County HOME Investment Partnership Program funds will be provided in the form of a deferred loan with aninety- nine (99) year loan term. A Deed of Trust and Promissory Note will secure the loan funds. This Deed of Trust and Promissory Note shall constitute a lien on the Property subordinate only to the Declaration of Restrictive Covenants described in Section 2 of this Agreement. d. The Project dwelling unit must remain affordable for a period of 99 years. Project Completion is the closing date on the first sale of the dwelling unit by EmPOWERment to a qualified buyer. This 99 year affordability requirement will be secured by a Deed of Trust, Promissory Note, and Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by the County. d. EmPOWERment is responsible for soliciting buyers for the dwelling unit to be constructed on the Property. EmPOWERment and/or its buyers shall be responsible for securing permanent mortgage financing for the homes on the Property. e. EmPOWERment is responsible for verifying the income of the homebuyers, explaining the second mortgage program to potential homebuyers and certifying by written documentation signed by the homebuyer that the program requirements have been fully explained. EmPOWERment shall maintain purchaser files as part of its Books and Records as required and for the period of time required by Section 4.f. of this Agreement. f. EmPOWERment may request in writing the disbursement of funds under this Agreement for actual project costs. 2 g. The Properly shall be acquired and the Project dwelling unit constructed, sold and occupied by June 30, 2008. In the event that EmPOWERment is unable to complete its obligations to acquire, construct, and occupy the Project dwelling unit within this time or by extensions approved by the County under the terms of this Agreement, EmPOWERment will be required to repay the full amount of the County's outstanding loan as provided in the loan documents. h. The Project dwelling unit must have a value that does not exceed 100% of its appraised value. An independent, qualified appraiser must conduct the appraisal. 2. Affordability Requirement. The Project dwelling unit must remain affordable for a period of ninety-nine years. EmPOWERment retains full responsibility for compliance with the affordability requirement for the Project dwelling unit, unless affordability restrictions are terminated due to the sale of the Property to anon-qualified buyer in which event the Resale Provisions of Section 3 of this Agreement pertain. EmPOWERment shall assure compliance with affordability of the Project dwelling unit by having recorded a "Declaration of Restrictive Covenants" (EXHIBIT B) on the Property. This Declaration shall constitute and remain a first lien on the Property during the period of affordability. It is further the responsibility of EmPOWERment to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Agreement that the 99 year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, EmPOWERment, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Star. § 41-29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, EmPOWERment and Orange County agree to do what each must do to accomplish the 99-year duration of this Declaration of Restrictive Covenants. 3. Resale Provisions. EmPOWERment shall assure compliance with affordability of assisted units through the Declaration of Restrictive Covenants. The Declaration of Restrictive Covenants shall include at least the following elements in their resale provisions for the Improvements: 3.1 If the buyer no longer uses the Property as a principal residence or is unable to continue ownership, then the buyer must sell, transfer, or otherwise dispose of their interest in the Property only to a qualified homebuyer, i.e., aloes-income household, one whose combined income does not exceed 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer, to use as their principal residence. 3.2 However, if the property is sold during the term of affordability to anon-qualified homebuyer, the Right of First Refusal provision of the New and Existing First- Time Homebuyer Program portion of the County's Long-Term Housing Affordability Policy must be followed and the net sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of the original first mortgage and (3) the unpaid principal amount of the initial County contribution and any other initial government- contribution secured by a deferred. payment promissory note and deed of trust) or "equity" will be divided 50/50 by the seller of the Property and the County. 3.3 The resale provision shall remain in effect for the full affordability period - 99 years. 4. Miscellaneous Provisions. a. Uniform Administrative Requirements. EmPOWERment must comply with the applicable uniform administrative requirements of 24 CFR §92.505. b. Other. Program Requirements. EmPOWERment must carry out each activity in compliance with all Federal laws and regulations described in 24 CFR, Part 92, subpart H except that the subrecipient does not assume the responsibilities for environmental review or intergovernmental review. c. Affirmative Marketing. If HOME funds will be used for housing containing five (5) or more assisted units, EmPOWERment must prepare and submit an Affirmative Marketing Plan to the County. d. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for the Project dwelling unit. It is the County's intention that the full public benefit of the .Project shall be completed under the auspices of EmPOWERment for the assisted unit as follows: i. In the event that EmPOWERment is unable to proceed with any aspect of the Project in a timely manner, and County and EmPOWERment determine that reasonable extension(s) for completion will not remedy the situation, then EmPOWERment will retain responsibility for requirements for any dwelling unit assisted and County will make no further payments to EmPOWERment. ii. In the event that EmPOWERment, prior to the contract completion date, is unable to 4 continue to function due to, but, not limited to, dissolution or insolvency of the organization, its filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or perform with provisions of this agreement, then EmPOWERment shall, upon the County's request, convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole discretion of County. Conveyance shall be on the terms set forth herein: Conveyance shall occur within thirty (30) days of County and EmPOWERment's agreement oi` EmPOWERment inability to continue. as a viable organization. EmPOWERment shall convey the Property to the County by general warranty deed, free and clear of all liens and encumbrances of record except those which create a beneficial interest in County Declaration of Restrictive Covenants and the County's Deed of Trust. e. Default Remedies. This Agreement may be terminated by anon-defaulting party upon an event of default hereunder, after written notice thereof and thirty (30) days grace period in which the defaulting party may act to cure. As used herein, the term "an event of default"~ shall mean and refer to a failure or act of omission by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or in equity with respect to such default. f. Books and Records. EmPOWERment shall maintain records of its grant requirements under this contract for a period of not less than five (5) full fiscal years following the contract completion date. i. EmPOWERment shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, EmPOWERment shall submit a copy of its annual audit to the County. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of EmPOWERment records that relate to this contract. If any audit by County discloses that payments to EmPOWERment were in excess of the amount to which EmPOWERment was entitled under this contract, EmPOWERment shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, EmPOWERment shall also reimburse County its reasonable costs incurred in performing the audit. ii. EmPOWERment shall maintain files of all tenants, regardless of length of occupancy, residing in the assisted unit. Documentation shall verify eligibility for federal assisted housing at the point of initial tenancy and every subsequent year thereafter for the period of affordability. Information maintained shall include: tenant income level; name of family members; ethnic data; family type - e.g. female head of household; disability status; and monthly rent. iii. EmPOWERment shall maintain records verifying the affordability of the dwelling unit. g. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner here in above described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: i. To the County: Orange County c% Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To EmPOWERment: EmPOWERment, Inc. 109 N. Graham Street, Suite 200 Chapel Hill, NC 27516 ATTN: Executive Director Either the County or EmPOWERment may change the person or address to which any future Notice shall be given as herein provided. h. No Assignment. No transfer or assignment of the interest of EmPOWERment in this Agreement shall occur without the prior written consent of the County; neither may EmPOWERment assign this Agreement without the prior written consent of County. i. Conflict of Interest. EmPOWERment agrees to abide by the provisions of 24 CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no financial interest and shall not acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. EmPOWERment further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by EmPOWERment hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the County HOME Investment Partnership Program. j. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. k. Indemnification. To the extent legally possible, EmPOWERment shall indemnify and hold County, its officers, agents, and employees, harmless from and against any and all claims, actions, liabilities, costs, including attorney fees and other costs of defense, arising out of or in any way related to any act or failure to act by EmPOWERment, its 6 enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. q. Equal Opportunity. EmPOWEltment shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. r. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. s. Gender; Singular and Plural. As used herein, the neuter gender includes the feminine and masculine. The masculine includes the feminine and neuter, and the feminine includes the masculine and neuter and each includes a corporation, partnership or other legal entity when the context so requires. The singular number includes the plural and vice versa, whenever the context so requires. t. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, EmPOWE}tment shall comply with all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds provided by the County, to purchase and develop the Property. u. Publicity; Signage. EmPOWEltment agrees to provide such publicity with respect to the County's participation in the development of the Property as the County shall reasonably require. Any signage at the Property shall acknowledge the County's role and contribution. v. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute on and the same instrument. w. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or EmPOWEltment shall be deemed or construed by the parties or any third party to create any relationship of third party beneficiary, including third party principal or agent, or to create any right, claim or cause of action against the County, EmPOWEltment or any of their respective officers, agents or employees by any third party. x. Performance of Government Functions. Notwithstanding anything in this Agreement which may be to the contrary, nothing contained in this Agreement shall in any way stop, limit or impair the County from exercising or performing any regulatory, policing or governmental powers or functions with respect to the Property including, without limitation, inspection of the Property in the performance of such functions. 8 y. Duration of Agreement. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. IN WITNESS WI~REOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. COUNTY OF ORANGE, NORTH CAROLINA Laura Blackmon, County Manager ATTEST: Donna Baker Clerk to the Board of Commissioners Appro d as to form le ali eoffr 1 i ,County Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Ac~~~ ~ ~ I' II ~. f-~ ~, ~I~tOWt~O~- ~~ ,Finance Director EmPOWERment, Inc. ATTEST: 9 Construction Timeline for Development 320 McMasters Street Chapel Hill, NC 27516 Dec 15, 2007 Upon purchase and settlement on property construction will begin within 45 days Week 1 Contractor Bidding approved & contract awazded Week 2 Building Application submitted Town of Chapel Hill Week 3 All required permits obtained Week 4 Construction Meeting timeline approved with Contractor Contractor is required by contractual agreement to complete the project and obtain a Certificate of Occupancy within 5 months of timeline approval Projected Timeline Estimates: Jan.15, 2008 Property Settlement Feb. 15, 2008 Contract awarded and permits obtained March 15, 2008 Construction begins Aug. 15, 2008 Project completed Thomas Garter Construction Manager Empowerment Inc.