HomeMy WebLinkAbout2008-117 Housing - Development Agreement-Community Alternatives for Supportive Abodes,,
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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 Community Alternatives for Supportive Abodes, a North Carolina non-profit corporation
(hereinafter referred to as "CASH"), The effective date of this agreement is .~ ~ ~~
WITNESSTI3
WHEREAS, the Orange County HOME Consortium has designated approximately
$435,222 in FY 2008 HOME funds for the substazatial rehabilitation of 10 rental units located at
701-719 Pritchard Avenue Extension in Chapel Hill; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 2008 and as such is the lead entity in a representative
capacity for all members of the Orazage 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 defzned in the Federal Program Requirements provided by the U.S.
Department of Housing and Urban Development; azad
WHEREAS, CASA intends to lease ten dwelling units. The dwelling units are located
at 701 - 719 Pritchard Avenue Extension in Chapel Hill, NC (herein after referred to as "the
Project dwelling units" or "the Project"). The Project dwelling units are located on properties
more particularly described in EXHIBIT A attached hereto and made a part of this Agreement
(hereinafter referred to as "the Property"); and
WHEREAS, CASA agrees to utilize HOME funds provided for the purpose of
substantially rehabilitating the Project dwelling units and the Property as described in its HOME
Program application dated February 29, 2008 which is hereby incorporated into this Agreement
and hexeinafter referred to as "filae Project"; and
WHEREAS, CASA intends to make the Project dwelling units available for lease to
families eaxrzing up to 50% of HUD area median income; and
WHEREAS, notwithstanding any provision of this Agreement, the County and CASA
hereto agree and acknowledge that this Agreement. does not constitute a commitment of funds
or site approval, and that such commitment of fuzads or approval may occur only upon
satisfactory completion of an ezavironmental review and receipt by Orange Couzaty 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 fiznds 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. CASA shall ensure that the Project dwelling units meet 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 purchase to ensure compliance: Any repair work necessary must be
completed in accordance with applicable building and zoning ordinances.
CASA: agrees to lease the Project dwelling units to families whose income does not
exceed 50% of the area median income by family size, as determined by the U.S.
Department of Housing and Urban Development and as amended from time to time.
Monthly rents must not exceed the HOME Program Rents in effect at the time of
occupancy. Residential leases will not exceed one year in term.
b. Financial assistance in the amount of $435,222 in Orange County HOME Investment
Partnership Program money will be provided in the form of a deferred loan with a
ninety-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 and the Deed of Trust recorded to Geoffrey E. Gledhill,
Trustee for Orange County, recorded at Book 4583, Page 488, Orange County Registry.
The Project dwelling units must remain affoxdable for a period of 99 years. 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
maybe exercised by the County. .
CASA may request in writing the disbursement of funds under this Agreement for actual
project costs. Any program income arising from this project rmust be expended prior to
requesting HOME funds: After acquisition of the Property, any program income must
be repaid to tl~.e County each year.
c. The Property shall be acquired .and the Project dwelling units rehabilitated and
occupied by September 30, 2009. The .Project Completion date is the day when the last
of the Project dwelling units is occupied after all of the Project dwelling units are
rehabilitated. In the event that CASA is unable to complete its obligations to acquire,
rehabilitate, and occupy the Project dwelling units within this time or by extensions
approved by the County under the terms of this Agreement, CASA will be required to
repay the full amount of the County's outstanding loan as provided in the loan
documents.
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d. An annual rental operations budget must be submitted to the County each year at
least sixty days prior to the July 1 beginning date for the fiscal year.
e. CASA is responsible for verifying the income of prospective tenants and
maintaining eligibility data. CASA shall maintain tenant files as part of its Books and
Records as required and for the period of time required by Section 4f, of this Agreement.
CASA must provide the County an initial occupancy report verifying the income
eligibility of all tenants at the time of initial lease-up. CASA must furnish the County
with an annual report on the Project dwelling units by July 31 of each year thereafter
certifying that all tenants earn less than 40% of the area median income by family size,
as determined by the U.S. Department of Housing and Urban Development and as
amended from time to time.
2. Affordability Requirement. Each of the Project dwelling units must remain affordable
for a period of ninety-nine years. CASA retains full responsibility for compliance with
the affordability requixement for each of the Project dwelling units; 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. CASA shall
assure compliance with affordability of each of the Project dwelling units as provided in
the Declaration 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 CASA 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 uicluding 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 Agreerrient that the 99 year duration of this
Declaration of Restrictive Covenants be accomplished and that any future owner of the
Property, CASA, and Orange County will do what is necessary to ensure that the same is
not extinguished by N.C. Gen. Stat. § 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, CASA 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. CASA shall assure compliance with affordability of each of the
Project dwelling 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 CASA no Ioilger uses the Property as rental property or is unable to continue
ownership, then CASA must sell, transfer, or otherwise dispose of its interest in
the Property only to an agency with similar interest in affordable housing and
serve families with incomes not exceeding 50% 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. The non-profit fiend, foundation,
or corporation of like purposes must have established its tax-exempt status under
Section S01 (c) (3) of the Internal Revenue Code.
3.2 However, if the Property is sold, transferred, or otherwise disposed of to other
than an agency with similar interest in affordable housing during- the term of
affordability, the Right of First Refusal provision 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. CASA must comply with the applicable
uniform administrative requirements of 24 CFR §92.505.
b.. Other Program Requirements. CASA 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 fox housing containing five
{5} or more assisted units, CASA 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 all Project dwelling units. It is the County's
intention that the full public benefit . of the Project shall be completed under the auspices of
CASA for the assisted units as follows:
i. In the event that CASA is unable to proceed with any aspect of the Project in a timely
manner, and County and CASA determine that reasonable extension(s) for
completion will not remedy the situation, then CASA will retain responsibility for
requirements for any dwelling units assisted and County will make no further
payments to CASA.
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ii. In the event that CASH, prior to the contract completion date, is unable to 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 CASA shall, upon
' the County's request, convey to the County the Property assisted with HOME fiends.
Conveyance shall be at the sole discretion of County and on a Project dwelling unit
by Project dwelling unit basis.
Conveyance shall be on the terms set forth herein:
Conveyance shall occur within thirty (34) days of County and CASA's agreement of
CASA's inability to continue as a viable organization. CASA 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 Deed of Trust).
e. Default, Rennedies. This Agreement may be terminated by a non 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. Soaks and Records. CASA 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
completian date.
i. CASA shall ensure access to records and financial statements, as necessary, to
provide effective monitoring and evaluation of project performance. Additionally, CASA
shall submit a copy of its annual audit to the County.
Upon reasonable advance notice, County or its authorized representatives nzay from time
to .time inspect, audit, and make copies of any of CASA records that relate to this
contract. If any audit by County discloses that payments to CASA were in excess of the
amount to which CASA was entitled under this contract, CASA shall promptly pay to
County the amount of such excess. If the excess is greater than 1% of the contract
amount, CASA shall also reimburse County its reasonable costs incurred in performing
the audit.
ii. CASA shall maintain files of all tenants, regardless ,of length of occupancy,
residing in assisted units. 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; naive of
family members; ethnic data; family type - e.g. female head of household; disability
status; and monthly rent.
iii. CASA shall maintain records verifying the affordability of the dwelling units.
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, wiless
changed as hereinafter provided, be as follows:
i. To the County: Orange County
c/o Housing and Community Development
Department
P.O. Box 8181
Hillsborough, NC 27278
ATTN: Director
ii. To CASA: CASA
P.O. Box 12545
Raleigh, NC 27605
ATTN: Executive Director
Either the County or CASA may change the person or address to which any fiiture Notice shall
be given as herein provided.
h. No Assignment. No transfer or assignment of the interest of CASA in this.
Agreement shall occur without the prior written consent of the County; neither may CASA
assign this Agreement without the prior written consent of County.
i. Conflict of Interest. CASA agrees to abide by the provisions of 24 CFR 570.b 11
with respect to conflicts of interest, and covenants that it presently has no financial interest and
shall acquire any financial interest, direct or indirect, that would conflict in any manner or degree
with the performance of services required under this Agreement. CASA further covenants that
in performance of this Agreement no person having such a financial interest shall be employed
or retained by CASA 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, CASA shall indemnify and hold
Caunty, 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 CASA, its employees, agents, officers, and
contractors in connection with this contract. In the event any such action or claim is bxought
against Caunty, CASA shall, upon County's tender, defend the same at CASA' sole cost and
expense, promptly satisfy any judgment adverse to County or to County and CASA jointly, and
reimburse .County for any loss, cost, damage, or expense, including attorney fees suffered or
incurred by County.
1. Subcontracting. CASA shall not subcontract work under this Agreement, in
whole or in part, without the County's prior written approval. CASA shall require any approved
subcontractor to agree, as to the portion subcontracted,. to comply with all applicable federal,
state, and local laws, rules, ordinances, and regulations at all times and, in the performance of the
work and to comply with all applicable obligations of CASA specified in this contract.
Notwithstanding County's approval of a subcontractor, CASA shall remain obligated for full
performance of this contract and County shall incur no obligation to any subcontractor CASA
shall indemnify, defend, and hold County harmless from all claims of its contractors.
m. No Joint Venture or Agency. The County and CASA .each agree and
acknowledge that nothing contained herein or otherwise, including, without limitation, any act of
the County or CASA under this Agreement, shall be deemed or construed to create any
relationship of joint venture, partnership or agency between the parties.
n. Effect of Waiver or Forbearance. No failure by the County to insist upon the
strict performance of any term or condition of this Agreement, or to exercise any right or remedy
upon the breach by CASA of any of its obligations, agreements, or covenants hereunder, shall be
a waiver of such affected term or condition or of such breach; nor shall any forbearance by the
County to seek a remedy for any breach by CASA be a waiver by the County of its rights and
remedies with respect to that or any other breach.
o. Governing Law. This Agreement shall be construed in accordance with. and
governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement
shall be brought in courts sitting in North Carolina, with venue in Orange County.
p. Severability. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by the
fact that for any reason any other provision inay be invalid or unenforceable in whole or in part.
If any provision of this Agreement or the application thereof to any person or circumstances
shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or
the application of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law. Th:e County and
CASA agree to substitute for such provision of this Agreement or the application thereof
determined to be invalid or unenforceable, such other provision as most closely approximates, in
a lawful manner, such invalid, illegal or unenforceable provision. If the County and CASA
cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as
the court deems reasonable and judicially valid, legal and enforceable. Such provision
determined by the court shall automatically be deemed part of this Agreement ab initio.
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q. Equal Opportunity. CASA 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 fernirune
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. Recording. The parties hereto agree that upon notice to the other and at its own
cost and expense, a party .may record this Agreement in the Office of Register of Deeds for
Orange County.
u. 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, CASA 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.
v. Publicity; Signage. CASH 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.
w. 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.
x. No Third Party Rights. The parties hereto covenant and agree that nothing
contained in this Agreement or any act by the County or CASA 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,
CASA or any of their respective officers, agents or employees by any third party.
y. Performance of Government Functions. Notwithstanding anything in this
Agreement which may be to tlse contrary, nothing contained in this Agreement shall in any way
stop, limit or impair the County from exercising or performing any regulatory, policing or
goven~zmental powers or functions with respect to the Property including, without limitation,
inspection of the Property in the performance of such functions.
z. 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 WHEREOF, 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
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(SEAL) ~~,. ~3~. ~~
t y' Laura Blackmon, County Manager
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ATTEST:
Donna Bakex
Clerk to the Board of Commissioners
Approved as to form an legality '
Geoffrey ,County Attorney
This document has been preaudited in accordance with the N.C. Local Government and Fiscal
Cont ct.
,Gary Humpheys, Finance Director
Community Alternatives for Supportive Abodes,
Inc.
(SEAL)
President
ATTEST:
Sec etary
F:\Lisa\or8ngecounly\CASA Peitehard Ave Dev Agmt C.L.doc
EXHIBIT A
PROPERTY DESCRIPTION
Beginning at an iron stake in the western right-of--way of Pritchard Avenue Extension, said stake
being in the southern terminus of Pritchard Avenue Extension and running thence South 70° 25'
West 97.2 feet to an iron stake; thence North 20° 46' West 227.81 feet to air iron stake; thence
North 77° 30' West 56 feet to an iron; running thence North 3° 44' East 227.64 feet to an iron;
thence North 68° 30' East 54.3 feet to a stake in the western right-of way of Pritchard Ave.
Extension; running thence and with said right-of--way South 15° 44' East 198.0 feet to a point,
and South 17° 0' East 261 feet to the point and place of BEGINNING and being Lots 1-16,
Pritchard Ave. Extension as shown on that plat of survey of E.C. Leonard, Registered. Land
Surveyor, dated October 1952 as revised Maxch 1971 by Rose, Pridgen and Freeman,
Engineering Associates, a copy of which is recorded in Plat Book 18 at Page 187, to which
reference is hereby made for a more complete description.
LAW OFFICES
COLEMAN, GLEDHILL, HARGRAVE & PEEK
A PROFESSIONAL CORPORATION
129 E. TRYON STREET
P. O. DRAWER 1529
HILLSBOROUGH, NORTH CAROLINA 27278
919-732-2196
FAX 919.732-7997
www.cghp-law.com February 27, 2009
Stephen D. Lowry, Esquire
The Law Offices of Lowry & Associates
8358 Six Forks Road, Suite 104
Raleigh, North Carolina 27615
RE: CASH -Pritchard Avenue
Dear Steve:
' ''L _ _ ...~ 1
MAR 1
0 3 2009 }
G
__ 7
FROM THE DESK OF
GEOFFREY E. GLEDHILL
E-MAIL: ggledhill@cghp-law.com
Enclosed are the Subordination Deed and the Development Agreement for the HOME
money funding of this project. Both are originally signed by Orange County. The Subordination
Deed will need to be completed incident to its recording. I think you now have everything you
need to complete the closing on this transaction. I look forward to receiving the title insurance
policy(ies) updated to reflect the HOME program transaction and the repair of the Orange
County affordable housing bond portion of the transaction.
With a copy of this letter to Tara Fikes I am enclosing the original of the Amendment to
Promissory Note (related to the housing bond program loan) and the original of the HOME
program Development Agreement. With a copy of this letter to Donna Baker I am enclosing a
copy of the HOME program loan agreement. That agreement was approved by the Orange
County Board of Commissioners at the Board's May 1, 2008 meeting.
Very truly yours,
COLEI~'AN, GLEDHILL, HARGRAVE & PEEK, P.C.
E.
GEG/lsg
Enclosures
xc: Donna Baker
Tara Fikes
F:\Lisa\letters\Stephen Lowry CASA Pritchard Ave ltr.doc