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HomeMy WebLinkAbout2001 NS Housing - EmPOWERment, Inc HOME Program Property AcquisitionNORTH CAROLINA ORANGE COUNTY DEVELOPMENT AGREEMENT 5 This is an AGREEMENT between ORANGE COUNTY, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County ") and EmPOWERment, Inc., a North Carolina non - profit housing organization (hereinafter referred to as "EmPOWERment"). The effective date of this agreement is May 1, 2001. WITNESSTH WHEREAS, the Orange County HOME Consortium has designated $100,000 in FY 1999 HOME funds for the purpose of conveying these funds to assist with acquisition of two units on Graham Street in Chapel Hill hereinafter referred to as the "Project ", which property is more particularly described in Exhibit A attached hereto and made a part of this Agreement (hereinafter referred to as the "Property "); WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so designated in an agreement dated July 1, 1997 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 wit 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 two rental units located at 225 and 227 North Graham Street in Chapel Hill (herein after referred to as the "Property "), and described in EXHIBIT A attached hereto and incorporated herein; and WHEREAS, EmPOWERment intends to lease these units to families earning up to 80% of HUD area median income as described in their HOME Program request dated March 19, 2001 which is Exhibit B to this Agreement, and hereinafter referred to as "the Project ". NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: Project Activities 1.1 EmPOWERment shall acquire the dwelling units defined in Project, obtain all permits and licenses necessary to rehabilitate the units in the Project if necessary, and ensure compliance with all applicable building and zoning ordinances as well as Section 8 Housing Quality Standards (HQS). J R 1.2 Financial assistance in the amount of $50,000 for each dwelling unit for a total of $100,000 in Federal HOME Program funding will be provided in the form of a deferred loan with a forty (40) year loan term, forgivable at the end of 40 years. The HOME Program investment will be secured by a Deed of Trust and Promissory Note. This Deed of Trust and Promissory Note shall constitute a lien on the Property, second only to the Declaration of Restrictive Covenants described in paragraph 4 of this Agreement, with the County as the secured party/beneficiary. The County agrees to subordinate its Deed of Trust lien to a lien securing private, first -time permanent financing obtained by EmPOWERment, Inc. at the time of purchase. 1.3 The period of affordability will be 99 years and will be secured by a Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by EmPOWERment and/or Orange County. 1.4 EmPOWERment shall make certain that the seller is aware of their rights under the federal Uniform Relocation Act prior to completing the sale of the property. The seller must also complete a Lead Based Paint Disclosure Form if the property was built prior to 1978. 1.5 The property to be acquired must have a value that does not exceed 95% of the area median purchase price for that type of housing. Value must be established by one of the following methods: i. An appraisal by a qualified appraiser. ii. Tax assessments may be used to establish value, but only if they are current and can be computed at 100% of market value. 1.6 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. Further, not more than 90 days after the end of each fiscal year, EmPOWERment must furnish to the County an annual accounting of income and expenses for each dwelling unit. The operating assumptions allowed at the time of initiation of this project including reasonable rent increases will be acceptable for future budgets and reports. Any excess cashflow must be returned to the County within 90 days of the end of the fiscal year for deposit into the local HOME Program Trust Fund for use in future affordable housing projects. 1.7 EmPOWERment agrees to lease the property to families whose income does not exceed 80% 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 established in accordance with HOME Program guidelines. Residential leases will not exceed one year in term. The Project must not cause displacement of existing tenants. 1.8 EmPOWERment is responsible for verifying the income of prospective tenants and maintaining eligibility data. EmPOWERment shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section 5c. of this 7 Agreement. EmPOWERment must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial lease -up. Each year thereafter EmPOWERment must furnish the County with an annual report on the project by July 31 of each year certifying that all tenants earn less than 80% 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. Time for Commencement and Completion. In addition, EmPOWERment agrees to furnish to the County a copy of its annual audit, performed by a certified public accountant within 90 days of the end of the fiscal year of expenditure of the HOME Program Funding. The Project Completion Date must not exceed November 1, 2001 and is date the property is acquired, rehabilitated if necessary, and occupied by a low- income family. 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 the Termination of Agreement provisions of this Agreement (Section 6.a.) shall pertain. EmPOWERment may, at its option, submit a written request for a delay of completion for County approval. The County may, at its option, approve any delay in the completion date or declare EmPOWERment in default. EmPOWERment shall monitor the constructed units for affordability for the period of affordability — ninety -nine (99) years. Final contract completion date shall be the latest end date of all assisted unit affordability periods. 3. Affordability Requirement. Each unit must remain affordable for a period of ninety - nine years. EmPOWERment retains full responsibility for compliance with the affordability requirement for assisted units, unless affordability restrictions are terminated due to the sale of the Property to a non - qualified buyer in which event the Resale Provisions of Section 4 of this Agreement pertain. EmPOWERment shall assure compliance with affordability of assisted units by having recorded a "Declaration of Restrictive Covenants" (EXHIBIT C) 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 no later than one day before the expiration of 30 years of the date of the purchasing the property in the event that EmPOWERment is still the owner of the dwelling units at the time of the rerecording. 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 Section of this Agreement that the 99 year affordability requirement contained herein be accomplished and that EmPOWERment and the County will do what is necessary to ensure that the same is not extinguished by the Real Property Marketable Title Act or any comparable law E:3 purporting to extinguish, by the passage of time, non possessory interests in real property. Both EmPOWERment and County agree to do what each must do to accomplish the 99 year affordability requirement. 4. 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: 4.1 If the buyer no longer uses the Property as rental property or is unable to continue ownership, then the buyer must sell, transfer, or otherwise dispose of their interest in the Property only to an agency with similar interest in affordable housing and serve families with incomes not exceeding 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. The non - profit fund, foundation, or corporation of like purposes must have established its tax - exempt status under Section 501 (c)(3) of the Internal Revenue Code. 4.2 However, if the property is not sold, transferred, or otherwise disposed to 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. 4.3 The resale provision shall remain in effect for the full affordability period — 99 years. 5. Miscellaneous Provisions. a. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for all properties constructed with funds provide affordable units, to low- income families. It is the County's intention that the full public benefit of this project shall be completed under the auspices of EmPOWERment for the assisted units 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 units assisted and County will make no further payments to EmPOWERment. Z N ii. In the event that EmPOWERment, 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 EmPOWERment shall, upon the County's request, convey to the County the properties assisted with funds. Conveyance shall be at the sole discretion of County and on a dwelling unit by dwelling unit basis. Conveyance of properties shall be on the terms set forth herein: Conveyance of properties shall occur within thirty (30) days of County and EmPOWERment's agreement of EmPOWERment's inability to continue as a viable organization. EmPOWERment shall convey the subject properties 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). b. Default, Remedies. 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. C. 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. 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's 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 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: 10 tenant income level; name of family members; ethnic data; family type — e.g. female head of household; disability status; and monthly rent. EmPOWERment shall maintain records verifying the affordability of the assisted units. d. 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/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To EmPOWERment: EmPOWERment, Inc 109 N. Graham Street 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. e. 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. f. 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 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 HOME Investment Partnership Program. g Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 11 h 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 employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, EmPOWERment shall, upon County's tender, defend the same at EmPOWERment's sole cost and expense, promptly satisfy any judgment adverse to County or to County and EmPOWERment jointly, and reimburse County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by County. i Subcontracting. EmPOWERment shall not subcontract work under this contract, in whole or in part, without the County's prior written approval. EmPOWERment 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 EmPOWERment specified in this contract. Notwithstanding County's approval of a subcontractor, EmPOWERment shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor EmPOWERment shall indemnify, defend, and hold County harmless from all claims of its contractors. j No Joint Venture or Agency. The County and EmPOWERment each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or EmPOWERment under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. k 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 EmPOWERment 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 EmPOWERment be a waiver by the County of its rights and remedies with respect to that or any other breach. 1 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. m 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 may 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. The County and EmPOWERment 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 t 12 approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the County and EmPOWERment 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. n Equal Opportunity. EmPOWERment 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 this Project. o Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. P. 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. q. 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. r. 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, EmPOWERment 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. S. Publicity; Signage. EmPOWERment 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. t. 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. U. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or EmPOWERment 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, EmPOWERment or any of their respective officers, agents or employees by any third party. 13 V. 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. 14 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. (SEAL) ATTEST: COUNTY OF ORANGE, NORTH CAROLINA John M. Link, Jr., County Manager Beverly A. Blythe Clerk to the Board of Commissioners Approved as to form and legality Geoffrey Gledhill, County Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. Kenneth Chavious, Finance Director NORTH CAROLINA ORANGE COUNTY This is to certify that on this day personally came before me Beverly A. Blythe, with whom I am personally acquainted, and being by me duly sworn, says that John M. Link, Jr. is the County Manager of Orange County, NC, and that she the said Beverly A. Blythe, is the Clerk to the Board of Commissioners of the County of Orange, the body politic and corporate named within and which executed the foregoing instrument; that she knows the common seal of said County; that the seal affixed to said instrument is said common seal; that the name of Orange County was subscribed thereto by the said County Manager of Orange County, NC and said Beverly A. Blythe subscribed their names hereto and said common seal was affixed, all by order of the Board of County Commissioners of Orange County and that said instrument is the act and deed of Orange County. Witness my hand and notarial seal, this the day of 20_. Notary Public My commission expires: EmPOWERment, Inc. (SEAL) ATTEST: Secretary NORTH CAROLINA ORANGE COUNTY President 15 1, , Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me with whom I am personally acquainted, who, being by me duly sworn, says at he is Secretary and that is President of EmPOWERment, Inc, a North Carolina corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate seal and attested to by its Secretary. Witness my hand and notarial seal, this the day of 20_. Notary Public My commission expires: