HomeMy WebLinkAbout2013-162 Housing - The ARC Orange County Housing Corp #4 FY 2010 HOME PROGRAM $150,000 3 _ ♦ � z
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NORTH CAROLINA
DEVELOPMENT AGREEMENT
ORANGE COUNTY
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
THE ARC ORANGE COUNTY HOUSING CORPORATION #4, a North Carolina non-
profit o oration, (hereinafter referred to as "The ARC"). The effective date of this agreement
is .
WITNESSTH
WHEREAS, the Orange County HOME Consortium has designated approximately
$150,000 in FY 2010 HOME funds to assist in the construction of six (6) rental units known as
The ARC Orange Apartments 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, 2011 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, a HUD 811 Capital Advance along with HOME funds is financing the
construction of The ARC Orange Apartments in Chapel Hill (hereinafter referred to as "the
Project"), a new six (6) unit affordable housing development owned by The ARC and serving up
to eight (8) low income families earning less than 50% of the Area Median Income and which
will remain affordable for low income families throughout the term of the 99 year period of
affordability. The ARC Orange Apartments will be located on West Barbee Chapel Road in
Chapel Hill, NC. The Project dwelling units are located on the property more particularly
described in EXHIBIT A attached hereto and made a part of this Agreement(hereinafter referred
to as "the Property"); and
WHEREAS, The ARC agrees to utilize HOME funds provided for the purpose of
constructing the Property as described in its HOME Program application dated February 26,
2010 as amended April 26, 2012 which is hereby incorporated into this Agreement and
hereinafter referred to as "the Project"; and
WHEREAS, notwithstanding any provision of this Agreement, the County and the ARC
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:
I. USE OF HOME FUNDS/SUBSIDY TYPE
1. The Owner shall perform the projects or tasks related to its allocation of HOME funds as
provided in Exhibit B and within the proposed budget outlined in Exhibit C. Exhibits B and C
are hereby made a part of this Agreement and are incorporated by reference, as it now reads or as
it may be modified by the parties.
2. The Owner may not request disbursement of funds under this Agreement until after the
property has been conveyed to Owner, a title insurance policy with the County as a named
Insured purchased and the funds are needed for payment of eligible costs. The amount of each
request must be limited to eligible costs as determined by Orange County staff.
3. Said funds shall be disbursed by check payable to the Owner.
4. HOME funds will be a fixed subsidy provided in the form of a deferred loan.
11. AMOUNT OF HOME FUNDS/GRANT TERMS
The County shall make available to the Owner up to One Hundred Fifty Thousand Dollars
($150,000) at an interest rate of zero percent (0%) pursuant to this Agreement. The funding
provided by the County will be provided as a fixed subsidy in the form of a deferred loan. The
investment will be secured by a forty(40)year Deed of Trust and Promissory Note, forgivable at
the end of 40 years. This Deed of Trust and Promissory Note shall constitute a lien on the
Property,
Said funds shall be disbursed by the County to the Owner for performance of the services
described in Exhibit B.
111. LIEN POSITION
Orange County hereby acknowledges that the terms and conditions of its (i) HOME Program
Development Agreement, (ii) Promissory Note, (iii) Deed of Trust and Security Agreement and
(iv) Declaration of Restrictive Covenants (collectively referred to as "Orange County Loan
Documents"), for The ARC Orange Apartments in Chapel Hill shall be and are expressly
subordinated only to the HUD Deed of Trust and Assignment of Rents, Profits and Income in the
form in Exhibit D and the Declaration of Restrictive Covenants described in paragraph 5 of this
Agreement,the form of which is attached as Exhibit E and incorporated by reference.
IV. TIMELINESS
The Owner shall complete the Project within eighteen (18) months from the date of this
Agreement. However, in the event of any alterations or additions or of circumstances beyond the
control of the Owner, which in the opinion of the Director of the County's Department of
Housing, Human Relations and Community Development will require additional time for
completion of the Project, then in that case, the time of completion shall be extended by the
County Manager in writing for a period of time not to exceed six (6) months. Any further
extensions will require the approval of the Orange County Board of County Commissioners.
IV. DURATION OF THE AGREEMENT
This Agreement will remain in effect for the Period of Affordability established below.
V. AFFORDABILITY REQUIREMENTS
Owner agrees to lease the Project dwelling units up to eight (8) low income families
earning less than 50% of the area median income throughout the term of the 99 year period of
affordability. Area Median Income by family size is determined by the U.S. Department of
Housing and Urban Development and amended from time to time. Residential leases will not
exceed one year in term.
Each of the Project dwelling units must remain affordable for a period of ninety-nine
years. The Owner retains full responsibility for compliance with the affordability requirement
for each of the Project dwelling 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 this
Agreement pertain. The Owner shall assure compliance with affordability of each of the Project
dwelling units as provided in the Declaration on the Property. The Declaration shall constitute
and remain a lien on the Property during the period of affordability.
Owner agrees to the Affordability Requirements as provided in Section 3b and Resale
Provisions as provided in Section 4B of the attached Declaration of Restrictive Covenants in
Exhibit E.
VI. OWNER PERFORMANCE UNDER THIS AGREEMENT
Owner agrees and authorizes the County to conduct on-site reviews, examine client and
contractor records, client applications and to conduct any other procedures or practices to assure
compliance with these provisions.
Owner agrees to not violate any State or Federal laws, rules or regulations regarding a direct or
indirect illegal interest on the part of any employee or elected official of the Owner in the Project
or payments made pursuant to this Agreement.
Owner agrees that to the best of its knowledge, neither the Project nor the funds provided
therefore, and the personnel employed in the administration of the program shall be in any way
or to any extent engaged in the conduct of political activities in contravention of Chapter 15 of
Title 5, United States Code, referred to as the Hatch Act.
Owner shall adopt the audit requirements of the Office of Management and Budget (hereinafter
"OMB") Circular A-110, "Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Nonprofit Organizations," and Circular A-122, "Cost Principles for
Nonprofit Organizations," and OMB Circular A-133, "Audits of Institutions of Higher Education
and Other Non-Profit Institutions." Owner shall submit to the County copy of said audit report.
Owner shall permit the authorized representatives of the County, HUD and the Comptroller
General of the United States to inspect and audit all data and reports of the Owner relating to its
performance under the Agreement.
County shall provide, upon request, copies of all laws, regulations and orders cited in this
Agreement.
Owner and County shall at all times observe and comply with Title 24 CFR Part 92 and all
applicable laws, ordinances or regulations of the Federal, State, County, and local government,
which may in any manner affect the performance of this Agreement, and Owner shall perform all
acts with responsibility to the County in the same manner as the County is required to perform
all acts with responsibility to the Federal government.
Owner hereby assures and certifies that it will comply with the regulations, policies, guidelines
and requirements with respect to the acceptance and use of HOME funds in accordance with the
policies of the County. Also, Owner certifies with respect to the Project that:
1. The Project will be conducted and administered in compliance with:
Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352,42 U.S.C. Sec 2000d et seq.) and
implementing regulations issued at 24 CFR Part I;
Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-208, 42 U.S.C. Sec 2000d at seq.), as
amended; and that the Owner will administer all programs and activities related to housing and
community development in a manner to affirmatively further fair housing;
Section 109 of the Housing and Community Development Act of 1974, as amended; and the
regulations issued pursuant hereto;
Section 3 of the Housing and Urban Development Act of 1968, as amended;
Executive Order 11246-Equal Opportunity, as amended by Executive Orders 11375 and 12086,
and implementing regulations issued at 41 CFR Chapter 60;
Executive Order 11063-Equal Opportunity in Housing, as amended by Executive Order 12259,
and implementing regulations at 24 CFR Part 107;
Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and implementing
regulations when published in effect;
The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations
when published for effect;
The Fair Housing Act(42 U.S.C. 3601-20);
VII. ADMINISTRATION AND REPORTING REQUIREMENTS
Owner shall submit to the County a quarterly Progress Report no later than the fifth day of the
months of January,April; July; October until the activity has been reported completed.
Miscellaneous Provisions
a. Uniform Administrative Requirements. The Owner must comply with the
applicable uniform administrative requirements of 24 CFR §92.505.
b. Other Program Requirements. The Owner 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, The Owner 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 the
Owner for the assisted units as follows:
In the event that the Owner is unable to proceed with any aspect of the Project in a timely
manner, and County and the Owner determine that reasonable extension(s) for completion will
not remedy the situation, then The Owner will retain responsibility for requirements for any
dwelling units assisted and County will make no further payments to the Owner.
In the event that the Owner, 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 the Owner 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 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 (30) days of County and the Owner's agreement of the
Owner's inability to continue as a viable organization. The Owner 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, 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.
f. Books and Records. The Owner 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. The Owner shall ensure access to records and financial statements, as necessary,
to provide effective monitoring and evaluation of project performance. Additionally, The Owner
shall submit a copy of its annual audit to the County.
ii. Upon reasonable advance notice, County or its authorized representatives may
from time to time inspect, audit, and make copies of any of The Owner records that relate to this
contract. If any audit by County discloses that payments to The Owner were in excess of the
amount to which The Owner was entitled under this contract, The Owner shall promptly pay to
County the amount of such excess. If the excess is greater than I% of the contract amount, The
Owner shall also reimburse County its reasonable costs incurred in performing the audit.
iii. The Owner 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; name of family members; ethnic data;
family type—e.g. female head of household; disability status; and monthly rent.
iv. The Owner 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, unless
changed as hereinafter provided, be as follows:
i. To the County: Orange County
c/o Housing, Human Rights and Community
Development Department
P.O. Box 8181
Hillsborough,NC 27278
ATTN: Director
ii. To The Owner: The Arc Orange County Housing Corporation#4
5509-A West Friendly Ave., Suite 101
Greensboro,NC 27410
Neither the County nor Owner 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 the Owner in this
Agreement shall occur without the prior written consent of the County; neither may The Owner
assign this Agreement without the prior written consent of County.
i. Conflict of Interest. The Owner 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. The Owner
further covenants that in performance of this Agreement no person having such a financial
interest shall be employed or retained by the Owner 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, The Owner 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 The Owner, its employees, agents, officers, and
contractors in connection with this contract. In the event any such action or claim is brought
against County, The Owner shall, upon County's tender, defend the same at The Owner's sole
cost and expense, promptly satisfy any judgment adverse to County or to County and The Owner
jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees
suffered or incurred by the County.
1. Subcontracting. The Owner shall not subcontract work under this Agreement, in
whole or in part, without the County's prior written approval. The Owner 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 The Owner specified in
this contract. Notwithstanding County's approval of a subcontractor, The Owner shall remain
obligated for full performance of this contract and County shall incur no obligation to any
subcontractor. The Owner shall indemnify, defend, and hold County harmless from all claims of
its contractors.
M. No Joint Venture or Agency. The County, The Owner each agree and
acknowledge that nothing contained herein or otherwise, including, without limitation, any act of
the County, The Owner 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 The Owner 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 The Owner 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 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,
The Owner 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, The Owner
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.
q. Equal Opportunity. The Owner 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. 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, The Owner 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. The Owner 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, The Owner 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,
The Owner 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 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.
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 the day and year first above written.
ORANGE COUNTY, ORTH CAROLINA
sa
17
Frank W. Clifton, Jr. County Manager
A Kati°
D nna Baker
Clerk to the Board of Commissioners
AMoed o f orm and legality
AnJ6tte Moore, Staff Attorney
This document has been preaudited in accordance with the N.C. Local Government and Fiscal
Control Act.
Clarence Grier, Finance Director
THE ARC ORANGE COUNTY HOUSING
CORPORATION#4
l , President
ATTEST
EXHIBIT A
Property Description
Beginning at a set 5/8" rebar located on the north right of way of West Barbee Chapel Road
(73' R/W per PB 86 PG 178) said set 5/8" rebar also being located within and near the center of
a Bike Easement & Greenway Easement (DB 2162 PG 160) and further being located on the
west side of a variable width Open Space (per PB 90 PG 43); thence with the north right of way
of West Barbee Chapel Road (73' R/W per PB 86 PG 178) the following two (2) courses and
distances: (1)N 88'21'49" W, 119.58' to a set 5/8" rebar and (2) N 86'00'19" W, 21.68' to a
set 5/8" rebar located at the intersection of West Barbee Chapel Road (73' R/W per PB 86 PG
178) and Weaver Mine Trail (55" R/W per PB 86 PG 178); thence with a curve to the right
having a radius of 15.00' and a bearing and chord distance of N 33'43'24" W, 22.96' to a set
5/8" rebar located on the east side of Weaver Mine Trail (55" R/W per PB 86 PG 178); thence
with the east side of Weaver Mine Trail (55" R/W per PB 86 PG 178), N 16'12'01" E, 72.45*
to a set 5/8" rebar located on the east side of Weaver Mine Trail (55" R/W per PB 86 PG 178);
thence with a curve to the right having a radius of 772.50' and a bearing and chord distance of
N 20057'l 6" E, 128.05' to a set 5/8" rebar located on the east side of Weaver Mine Trail (55"
R/W per PB 86 PG 178); thence leaving the east side of Weaver Mine Trail (55" R/W per PB
86 PG 178) and running along a new line, S 65'48'10" E, 161.36' to a set 5/8"rebar located on
the west side of a Bike Easement & Greenway Easement (DB 2162 PG 160) and the west side
of a variable width Open Space (per PB 90 PG 43); thence with the west side of a variable
width Open Space (per PB 90 PG 43) and running within the Bike Easement & Greenway
Easement (DB 2162 PG 160) a curve to the left having a bearing and chord distance of S
23004'12"W, 150.68' to a 5/8" rebar located on the west side of a variable width Open Space
(per PB 90 PG 43) and within the Bike Easement & Greenway Easement (DB 2162 PG 160);
thence with the west side of a variable width Open Space (per PB 90 PG 43) and running within
the Bike Easement & Greenway Easement (DB 2162 PG 160) S 01'38'11" W, 8.41' to a set
5/8" rebar being the point of beginning; containing 0.655 acres and being a part of Pin#
9798642896, Chapel Hill Township according to a survey prepared for ARC Orange
Apartments, by Brad K. Curry, (PLS, L-3989) dated August 25, 2011.
EXHIBIT B
Scope of Work
The Arc of North Carolina and The Arc of Orange County propose to use the Orange County
HOME Funds for the purpose of covering the costs of the following project soft cost expenses:
Architect Fees
Design(including work for Chapel Hill SUP process) $ 60,000
Housing Consultant(including work for Chapel Hill SUP process) 21,500
Contractor's Performance/Payment Bond Premium 7,000
Owner's Fees 23,200
Surveys, Soils Tests, Phase I ESA, Civil Engineering,
Energy Efficiency Consultant, Cost Analyses, Printing,
Town Fees
Contractor's Water and Sewer Tap Fees 28,300
Legal Fees 10,000
TOTAL $ 150,000
All of the above costs will be certified by an auditor when the project is complete.
EXHIBIT C
Project Budget
The Arc Orange Apartments-Project Budget
25-Apr-13
Uses of Funds Sources of Funds
General Contractor's Costs 890,179 HUD 811 Capital Advance= 940,900
Includes: Bond Premium 7,000
Water/Sewer Tap Fees 28,300 Orange County HOME Funds = 150,000
Other Fees by Owner(Topo, Soils Tests, Phase I...) 23,200
Architect's Fee-Design 60,000 Total Sources = 1,090,900
Architect's Fee-Supervisory 20,000
Total for All Improvements 993,379
Construction Time 6-8 months
Insurance 3,000
Contingency 19,866
Organization 2,000
Title and Recording 2,500
Cost Certification Audit Fee 2,500
Legal 8,000
Developer's Fee(see breakdown below) 59,723
Total Estimated Development Cost 1,090,968
The Arc Orange Apartments
HUD Project No. 053-HD252
USE OF DEVELOPER'S FEE
Appraisal 1,200
Housing Consultant 35,000
Min. Capital Investment 4,705
Working Capital Escrow 18,818
Total 59,723
Source of Funds
Orange County HOME Funds $150,000
Owner may not request disbursement of funds under this Agreement until the funds are needed for payment of
eligible costs. The amount of each request must be limited to eligible costs as determined by the County's Housing,
Human Rights and Community Development Department("OCHHRCD").
Funds may be shifted between line items of the Project without prior approval of the County only to the extent of
"Minor Adjustments," defined as actions which do not result in a change in the Project and so long as such Minor
Adjustments do not exceed ten percent(10%) of the line item total from which the funds are being removed or to
which the funds are being added,there is no increase to the above budget, and there are only minor changes to the
Plans and Specifications.
Exhibit D
DEED OF TRUST
AND
ASSIGNMENT OF RENTS, PROFITS AND INCOME
THIS INDENTURE, made this day of , by and between
The Arc Orange County Housing Corporation #4, Inc. , a corporation
organized and existing under the laws of the State of North Carolina
having its principal office and place of business at 5509A W. Friendly
Avenue, Suite 101, Greensboro, NC, hereinafter called Grantor, and
, Trustee, and the United States of America acting by and through the
Secretary of Housing and Urban Development hereinafter called
Beneficiary.
The Grantor is justly indebted to the Beneficiary in the
principal (capital advance amount) sum of Nine hundred forty thousand
nine hundred Dollars ($940,900. 00) , evidenced by its Note of even date
herewith, said principal being payable as provided in said Note with a
final maturity of , which Note is identified as being
secured hereby by a certificate thereon. Said Note and all of its
terms are incorporated herein by reference and this conveyance shall
secure any and all extensions thereof, however evidenced.
NOW,. THEREFORE, for the better securing of the payment of said
principal sum of money and the performance of the covenants and
agreements herein contained and in consideration of the aforesaid
indebtedness and the sum of - - - Ten and 00/100 - - - Dollars
($10. 00) cash in hand paid, the receipt of which is hereby
acknowledged, the Grantor has bargained, sold, given, granted and
conveyed and does by these presents bargain, sell, give, grant and
convey to the Trustee, his successors and assigns, all that certain
lot or parcel of land situated in the Town of Chapel Hill, County of
Orange, State of North Carolina, and more particularly designated and
described as follows:
See attached Schedule A, which is fully incorporated herein by
reference, for legal description.
TOGETHER WITH all buildings and improvements thereon and all and
singular the tenements, hereditaments and appurtenances thereunto
belonging, and the rents, issues and profits thereof;
1/00
2
including all after-acquired title, franchise, licenses or easements;
and together with all right, title and interest of the Grantor from
time to time in and to any and all heating, lighting, plumbing,
cooking, incinerating, ventilating, air-conditioning, laundry and
refrigerating equipment; all elevators and motors, cabinets, engines
and machinery, sprinkler systems, all storm and screen doors, screens,
awnings, window shades, blinds, and floor coverings and other property
now or hereafter owned by the Grantor, or any successor in title, and
attached to or used in connection with the real estate hereinabove
described; together with all building materials and equipment now or
hereafter delivered to said premises and intended to be incorporated
in the buildings or other improvements; AND ALSO all furnishings and
articles of personal property now or hereafter attached to or in and
about the building or buildings now erected on the lands herein
described, which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for which
they were or are to be erected, including all goods, chattels and
personal property as are ever used or furnished in operating a
building, or the activities conducted therein, similar to the one
herein described and referred to, and all renewals or replacements
thereof or articles in substitution therefor, whether or not the same
are, or shall be attached to said building or buildings in any matter.
The parties hereto agree that all the foregoing property to the
extent permitted by law shall be deemed to be affixed to and a part of
the realty.
TO HAVE AND TO HOLD the same, with all the right, privileges and
appurtenances thereunto belonging, to the Trustee, his successors and
assigns, forever for the purposes and uses herein set forth. The
Grantor covenants with the Trustee that it is seized of the premises
in fee and has the right to convey the same in fee; that the same are
free and clear of all encumbrances and that it will warrant and
forever defend the premises unto the Trustee from and against the
lawful claims of all persons whomsoever.
IN TRUST, HOWEVER, for the following purposes:
1. That the Grantor will pay the Note at the times and in the
manner provided therein;
2. That the Grantor will not permit or suffer the use of any
of the property for any purpose other than the use for which the same
was intended at the time this Deed of Trust was executed;
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3. That the Regulatory Agreement, executed by the Grantor and
the Beneficiary, which is being recorded simultaneously herewith, is
incorporated in and made a part of this Deed of Trust. Upon default
under the Regulatory Agreement, the Beneficiary, at his/her option,
may declare the whole indebtedness secured to be due and payable;
4. That all rents, profits and income from the property
covered by the Deed of Trust are hereby assigned to the Beneficiary
for the purpose of discharging the debt hereby secured. Permission is
hereby given to Grantor so long as no default exists hereunder, to
collect such rents, profits and income for use in accordance with the
provisions of the Regulatory Agreement;
5. That upon default hereunder Beneficiary shall be entitled
to the appointment of a receiver by any court having jurisdiction
without notice, to take possession and protect the property described
herein and operate same and collect the rents, profits and income
therefrom;
6. That at the option of the Grantor the principal balance
secured hereby may be adjusted on terms acceptable to the Beneficiary,
if partial prepayment results from an award in condemnation in
accordance with provisions of Paragraph 8 herein, or from an insurance
payment made in accordance with provisions of Paragraph 7 herein,
where there is a resulting loss of project income;
7. That the Grantor will keep the improvements now existing or
hereafter erected on the deeded property insured against loss by fire
and such other hazards, casualties, and contingencies, as may be
stipulated by the Beneficiary, and all such insurance shall be
evidenced by standard Fire and Extended Coverage Insurance Policy or
Policies, in amounts not less than necessary to comply with the
applicable Coinsurance Clause percentage, but in no event shall the
amounts of coverage be less than eighty (80a) percent of the Insurable
Values or not less than the principal sum of the Deed of Trust,
whichever is the lesser, and in default thereof the Beneficiary shall
have the right to effect insurance. Such policies shall be endorsed
with standard Mortgagee Clause with loss payable to the Beneficiary,
and shall be deposited with the Beneficiary;
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That if the premises covered hereby, or any part thereof, shall
be damaged by fire or other hazard against which insurance is held as
hereinabove provided, the amounts paid by any insurance company to the
extent of the principal sum remaining, shall be paid to the
Beneficiary, and, at his/her option, may be applied to the debt or
released for the repairing or rebuilding of the premises;
8. That all awards of damages in connection with any
condemnation for public use of or injury to any of said property are
hereby assigned and shall be paid to Beneficiary, and Beneficiary is
hereby authorized, in the name of Grantor, to execute and deliver
valid acquittance thereof and to appeal from any such award;
9. That Grantor is lawfully seized and possessed of said real
estate and has the right to convey the same.
10. That the Grantor will keep said premises in good repair,
and will not do, or permit to be done, upon said premises, anything
that may impair the value thereof, or of the security intended to be
effected by virtue of this instrument; that it will not make any
structural alterations to the building without the written consent of
the Beneficiary; to pay to the Beneficiary, as hereinafter provided,
until the final maturity date, a sum sufficient to pay all taxes and
special assessments that heretofore or hereafter may be lawfully
levied, assessed or imposed by any taxing body upon the said land, or
upon the Grantor or Beneficiary on account of the ownership thereof to
the extent that provision has not been made by Grantor for the payment
of such taxes and special assessments as hereinafter provided in
subparagraph 17;
11. In case of the refusal or neglect of the Grantor to make
such payments, or to satisfy any prior lien or encumbrances, or to
keep said premises in good repair, the Beneficiary may pay such taxes,
assessments, and insurance premiums, when due, and may make such
repairs to the property herein mortgaged as in the Beneficiary's
discretion he/she may deem necessary for the proper preservation
thereof, and any moneys so paid or expended shall become so much
additional indebtedness, secured by this Deed of Trust, to be paid out
of the proceeds of the sale of the secured premises, if not otherwise
paid by the Grantor, and shall bear interest at the rate to be
specified from the date of advance until paid, and shall be due and
payable on demand;
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12. It is expressly provided, however (all other provisions of
this Deed of Trust to the contrary notwithstanding) , that the
Beneficiary shall not be required nor shall he/she have the right to
pay, discharge, or remove any tax, assessment, or tax lien upon or
against the premises described herein or any part thereof or the
improvements situated thereon, so long as the Grantor shall, in good
faith, contest the same or the validity thereof by appropriate legal
proceedings brought in a court of competent jurisdiction, which shall
operate to prevent the collection of the tax, assessment, or lien so
contested and the sale or forfeiture of the said premises or any part
thereof to satisfy the same, but in the event of a tax contest, the
Grantor shall deposit with the Beneficiary an amount estimated by the
Beneficiary sufficient to satisfy all taxes, penalties, interest and
costs which may reasonably accrue during such contest;
13. That it will not voluntarily create or permit to be created
against the property subject to this Deed of Trust any lien or liens
inferior or superior to the lien of the Deed of Trust and further that
it will keep and maintain the same free from the claim of all persons
supplying labor or materials which will enter into the construction of
any and all buildings now being erected or to be erected on said
premises;
14. That the improvements about to be made upon the premises
above described and all plans and specifications comply with all
municipal ordinances and regulations made or promulgated by lawful
authority and that the same will upon completion comply with such
municipal ordinances and regulations and with the rules of applicable
fire rating or inspection organization, bureau, association, or
office. In the event the Grantor shall at any time fail to comply
with such rules, regulations, and ordinances which are now or may
hereafter become applicable to the premises above described, after due
notice and demand by the Beneficiary, thereupon the principal sum and
all arrears of interest and other charges provided for herein, shall
at the option of the Beneficiary become due and payable;
15. The Grantor covenants and agrees that so long as this Deed
of Trust and the said Note secured hereby are outstanding, it will not
execute or file for record any instrument which imposes a restriction
upon the sale or occupancy of the mortgaged property on the basis of
race, color, national origin, sex, familial status, handicap, age or
creed, unless permitted by the Housing Act of 1959 or the National
Affordable Housing Act and the HUD regulations promulgated thereunder.
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16. That the funds to be advanced herein are to be used in the
construction of certain improvements on the lands herein described, in
accordance with a Capital Advance Agreement between the Grantor and
Beneficiary dated , which Capital Advance Agreement
(except such part or parts thereof as may be inconsistent therewith)
is incorporated herein by reference to the same extent and effect as
if fully set forth and made a part of this Deed of Trust; and if the
construction of the improvements to be made pursuant to said Capital
Advance Agreement shall not be carried on with reasonable diligence,
or shall be discontinued at any time for any reason other than strikes
or lock-outs, the Beneficiary, after due notice to the Grantor or any
subsequent owner, is hereby invested with full and complete authority
to enter upon said premises, employ watchmen to protect such
improvements from depredation or injury and to preserve and protect
the personal property therein, and to continue any and all outstanding
contracts for the erection and completion of said buildings, to make
and enter into any contracts and obligations wherever necessary,
either in his/her own name or in the name of the Grantor, and to pay
and discharge all debts, obligations and liabilities incurred thereby.
All such sums so advanced by the Beneficiary (exclusive of portions of
the principal of the indebtedness secured hereby) shall be due and
payable on demand with interest at the rate specified by the
Beneficiary. The principal sum and other charges provided for herein
shall, at the option of the Beneficiary or holder of this Deed of
Trust and the Note securing the same, become due and payable on the
failure of the Grantor to keep and perform any of the covenants,
conditions, and agreements of said Capital Advance Agreement. This
covenant shall be terminated upon completion of the improvements to
the satisfaction of the Beneficiary and the making of the final
advance as provided in said Capital Advance Agreement.
17. That, the Grantor, will pay to the Beneficiary as required,
until the final maturity date, a sum equal to the ground rents, if
any, and the taxes and special assessments next due on the premises
covered by this Deed of Trust, plus the premiums that will next become
due and payable on policies of fire and other property insurance
covering the premises covered hereby, plus water rates, taxes, and
special assessments next due on the premises covered hereby (all as
estimated by the Beneficiary) less all sums already paid therefor
divided by the number of months to elapse before one (1) month prior
to the date when such ground rents, premiums, water rates, taxes and
special assessments will become delinquent, such sums to be held by
Beneficiary to pay said ground rents, premiums, water rates, taxes and
special assessments.
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18. Any excess funds accumulated under the preceding paragraph
remaining after payment of the items therein mentioned shall be
credited to subsequent payments of the same nature required
thereunder; but if any such item shall exceed the estimate therefor
the Grantor shall without demand forthwith make good the deficiency.
Failure to do so before the due date of such item shall be a default
thereunder. If the property is sold under foreclosure or is otherwise
acquired by the Beneficiary after default, any remaining balance of
the accumulations under the preceding paragraph shall be credited to
the principal of the Deed of Trust as of the date of commencement of
foreclosure proceedings or as of the date the property is otherwise
acquired; and
19. That the Beneficiary shall have the right to inspect the
secured premises at any reasonable time.
20. That so long as the Deed of Trust and Note secured hereby
are outstanding, it will not (a) rent dwelling accommodations in the
secured premises in excess of the rates approved by the Beneficiary or
for periods of less than one month; (b) rent the premises as an
entirety; (c) -rent the premises or any part thereof to any person for
the purpose of subleasing; (d) rent the premises or permit its use for
hotel or transient purposes; (e) require of any tenant as a condition
of occupancy life-lease contracts, fees or other payments over and
above those for rents, utilities, and collateral services.
21. If the Grantor shall well and truly perform all the terms
and conditions of this Deed of Trust and the Note secured hereby then
this conveyance shall be null and void and shall be properly canceled
of record.
22. In the event of default in making any payment provided for
herein or in the Note secured hereby for a period of thirty (30) days
or in case of a breach of any other covenant contained herein
stipulated, then the whole of said principal sum shall at the election
of the Beneficiary, without notice, become immediately due and
payable, in which event the Beneficiary shall have the right
immediately to foreclose this Deed of Trust. It shall be lawful for
and the duty of the Trustee, and he is authorized and empowered, to
sell the lands and premises hereinbefore under power of sale
foreclosure in accordance with applicable North Carolina law. In the
alternative, the foreclosure may be conducted by an appropriate
official under applicable Federal law. The Grantor agrees that in the
event of a sale hereunder the Beneficiary shall have the right to bid
at such sale and become the purchaser thereat.
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23. It is expressly agreed, that no sale of the premises
described above and no forbearance on the part of the Beneficiary and
no extension of time for the repayment of the debt secured hereby
given by the Beneficiary shall operate to release, discharge, modify,
change or affect the original liability of the Grantor herein, either
in whole or in part.
24. That if foreclosure proceedings are instituted under this
Deed of Trust, the Trustee is authorized to take possession of the
premises above described and collect any rental, accrued or to accrue;
or he may let the premises or any part thereof, receive the rents,
income and profits therefrom, and hold the proceeds subject to the
order of the court for the benefit of the Beneficiary, pending the
final decree in the foreclosure proceedings, and during any period
allowed by law for the redemption from any sale ordered in such
proceeding; and the Trustee may act irrespective of the value of the
property described or its adequacy to secure or discharge the
indebtedness then owing;
25. That in case the Beneficiary shall for any reason desire to
replace the Trustee or any of its successors as trustee hereunder,
said Beneficiary, its successors or assigns shall have and is hereby
granted full power and authority to remove said Trustee and to appoint
their or its successor by instrument in writing, duly acknowledged or
proved as to entitle the same to record in this state, and such new
Trustee shall thereupon become successor to the title of the said
property and the same shall become vested in him in trust for the
purposes and objects of these presents with all the powers, duties,
and obligations conferred on the said Trustee, in the same manner and
to the same effect as though he or it were named herein as Trustee;
26. That no waiver of any covenant herein or of the Note
secured hereby shall at any time thereafter be held to be a waiver of
the terms hereof or of the Note secured hereby;
27. The covenants herein contained shall bind, and the benefits
and advantages shall inure to the legal representatives, successors or
assigns of the parties hereto. Whenever used, the singular number
shall include the plural, the plural the singular, and the use of any
gender shall be applicable to all genders.
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28. This Deed of Trust is given wholly or partly to secure
future obligations which may be incurred hereunder. The amount of
present obligations secured is -0-. The maximum principal amount,
including present and future obligations, which may be secured hereby
at any one time is $940,900. 00. The period within which such future
obligations may be incurred is from the date hereof to and including
, plus such extensions as may be given by the holder or holders, but
provided that in any event such extensions shall not be any more than
fifteen (15) years from the date of this Deed of Trust.
IN WITNESS WHEREOF, the Grantor has caused these presents to be
signed in its name by its President, and its
corporate seal to be hereto affixed and attested by its
Secretary, the day and year above written, pursuant to authority given
by resolution duly passed by the board of directors of said
Corporation.
(CORPORATE SEAL) he Arc Orange County Housing
Corporation #4
Name of Party of First Part
ATTEST:
President
Secretary
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STATE OF NORTH CAROLINA
COUNTY OF
I, a Notary Public of the County and State aforesaid, certify
that personally came before me this day and
acknowledged that he is Secretary of
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 by as its
Secretary.
WITNESS my hand and official stamp or seal this day of
Notary Public
My Commission Expires:
STATE OF NORTH CAROLINA
COUNTY OF
The foregoing certificate of a
Notary Public of the County of duly authenticated by
his notarial seal or stamp thereto attached is adjudged to be correct.
This the day of ,
Register of Deeds
Exhibit E
Prepared by: Annette Moore,Esquire,Orange County Staff Attorney,P.O.Box 8181,Hillsborough,NC 27278
After recording return to: Annette Moore,Esquire,Orange County Staff Attorney,P.O.Box 8181,Hillsborough,
NC 27278
DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS (hereinafter referred to as
"Declaration"), dated , by The Arc Orange County Housing Corporation #4
for itself and its successors and assigns (hereinafter referred to as "Owner" or "The Arc"), is
given as a condition precedent to the award of Orange County HOME Partnership funds.
RECITALS:
WHEREAS, the Orange County HOME Consortium has designated approximately
$150,000 in FY 2010 HOME funds to assist in the construction of six (6) rental units known as
The ARC Orange Apartments 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, 2011 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 11 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, a HUD 811 Capital Advance along with HOME funds is financing the
construction of The ARC Orange Apartments in Chapel Hill (hereinafter referred to as "the
Project"), a new six (6) unit affordable housing development owned by The ARC and serving up
to eight(8) low income individuals earning less than 50% of the Area Median Income and which
will remain affordable for low income families throughout the term of the 99 year period of
affordability. The ARC Orange Apartments will be located on West Barbee Chapel Road in
Chapel Hill, NC. The Project dwelling units are located on the property more particularly
described in EXHIBIT A attached hereto and made a part of this Agreement(hereinafter referred
to as"the Property"); and
WHEREAS, The ARC agrees to utilize HOME funds provided for the purpose of
constructing the Property as described in its HOME Program application dated February 26,
2010 as amended April 26, 2012 which is hereby incorporated into this Agreement and
hereinafter referred to as "the Project"; and
WHEREAS, notwithstanding any provision of this Agreement, the County and the ARC
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.
WHEREAS, the ARC has signed this Declaration agreeing to the terms of this
Declaration, its obligations pursuant to this Declaration and agreeing to the terms of the HOME
PROGRAM DEVELOPMENT AGREEMENT between the County and The ARC of even date;
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set
forth and of other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, The ARC intends, declares, and covenants that the regulatory and restrictive
covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and
are covenants pertaining to the Property and running with the land for the term stated herein
and are binding upon all subsequent owners of the Property and for such term, except as
specifically provided herein, and are not merely personal covenants of The ARC.
SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER
The ARC hereby represents covenants and warrants as follows:
a. It is contemplated that the Property and the Project will be used, during the ninety-nine
years after Project Completion (defined as the last of the following events: the Property is
acquired, rehabilitated, if necessary, and the last of the six (6) Project dwelling units
occupied by a low-income family), for rental housing to families earning up to 50% of
HUD area median income. In the event Owner sells, transfers or exchanges the Property
or any portion of the Property,the following shall pertain:
1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B
hereto), the Orange County HOME Investment Partnership Program and this
Declaration, Owner may sell, transfer, or exchange the Property to a non-profit fund,
foundation, or corporation of like purpose which is organized and operated exclusively
for charitable and educational purposes and which has established its tax exempt status
under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County;
provided, however, Owner shall obtain the written agreement, in form satisfactory to
Orange County, of any buyer or successor or other person acquiring the Property or
any interest therein, that such acquisition is subject to the requirements of this
Declaration and to the requirements of the DEVELOPMENT AGREEMENT and the
Orange County HOME Investment Partnership Program. Owner agrees that Orange
County may void any sale, transfer, or exchange of the Property or any portion of the
Property if the buyer or successor or other person fails to assume in writing the
requirements of this Declaration and the requirements of the DEVELOPMENT
AGREEMENT and the Orange County HOME Investment Partnership Program.
2.Any assignment, sale, transfer, conveyance or other disposition of the Property or any
part of the Property other than as described in subparagraph I above, whether
voluntary or involuntary or by operation of law shall be subject to the provisions of
SECTION 4 of this Declaration.
b. Owner will, at the time of execution, delivery and recording of this Declaration, have
good and marketable title to the Property, free and clear of any lien or encumbrance
(except encumbrances created pursuant to this Declaration or other permitted
encumbrances).
C. Owner warrants that it has not and will not execute any other declaration with provisions
contradictory to, or in opposition to, the provisions hereof, and that in any event, the
requirements of this Declaration are paramount and controlling as to the rights and
obligations herein set forth and supersede any other requirements in conflict herewith.
SECTION 2 TERM OF DECLARATION
a. This Declaration, and the Terms of Affordability specified herein, apply to the Property
immediately upon recordation, and Owner shall comply with all restrictive covenants
herein. This declaration shall terminate ninety-nine years after Project Completion, unless
Orange County HOME Investment Partnership Program affordability restrictions are
terminated due to the sale of the Property to a non-qualified buyer as provided herein.
SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH
THE LAND
a. Upon execution of this Declaration by Owner, Owner shall cause this Declaration and all
amendments hereto to be recorded and filed in the Office of the Register of Deeds of
Orange County.
b. Owner intends, declares and covenants, on behalf of itself and all future Owners of the
Project during the term of this Declaration, that this Declaration and the covenants and
restrictions set forth in this Declaration regulating and restricting the use, occupancy and
transfer of the Property (1) shall be and are covenants running with the land,
encumbering the Property for the term of this declaration, binding upon Owner's
successors in title and all subsequent Owners of the Property; (2) are not merely personal
covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange
County and any past, present or prospective owner of the Property) and its respective
successors and assigns during the term of this Declaration. Owner hereby agrees that any
and all requirements or privileges of estate are intended to be satisfied, or in the alternate,
that an equitable servitude has been created to insure that these restrictions run with the
Property. For the term of this Declaration, each and every contract, deed or other
instrument hereafter executed conveying the Property or portion thereof shall expressly
provide that such conveyance is subject to this Declaration, provided, however, the
covenants contained herein shall survive and be effective regardless of whether such
contracts, deed, or other instrument hereafter executed conveying the Property or portion
thereof provides that such conveyance is subject to this Declaration. It is further the
responsibility of Owner 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 § 4713-4 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
that the 99 year duration of this Declaration of Restrictive Covenants be accomplished
and that any future owner of the Property, The ARC, 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, The ARC and Orange County agree to do what each must do to
accomplish the 99-year duration of this Declaration of Restrictive Covenants.
SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING
REQUIREMENTS
a. Rights of Refusal
a. Grant and Effect. Orange County is granted a right of first refusal to purchase
the Property as described in this Section. Any assignment, sale, transfer,
conveyance, or other disposition of the Property or any part thereof whether
voluntarily or involuntarily or by operation of law ("Transfer") shall not be
effective unless and until the below-described procedure is followed.
b. Right of First Refusal. If Owner contemplates a Transfer to other than an
agency with similar interest in affordable housing serving 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. Owner shall send to Orange County, at the address
noted in the Notice section of this Declaration, not less than 90 days prior to the
contemplated closing date of the Transfer, a "Notice of Intent to Sell." This
Notice of Intent to Sell shall be accompanied by a copy of a completed, fully
executed bona fide offer to purchase the Property on the then current North
Carolina Bar Association "Offer to Purchase and Contract" form. If Orange
County elects to exercise its said right of refusal, it shall notify the Owner of its
election to purchase within 30 days of its receipt of the Notice and shall purchase
the Property or portion thereof within 90 days of the receipt of the "Notice of
Intent to Sell."
C. Sales After Failure to Exercise Rights of Refusal. If Orange County does not
advise Owner in a timely fashion of an intent to purchase the Property, then
Owner shall be free to transfer the property in accordance with this Section.
d. Assignability. Orange County may assign its right of first refusal without Owner's
consent.
B. Resale Provisions
a. If the Owner no longer uses the Property as affordable rental property, then
Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an
agency with similar interest in affordable housing and to 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.
b. However, if the property is not sold, transferred, or otherwise disposed of to an
agency with similar interest in affordable housing during the term of affordability,the net
sales proceeds (sales price less: (1) selling cost, and (2) the unpaid principal amount of
the initial Orange County contribution and any other initial government contribution
secured by a deferred payment promissory note and deed of trust) or "equity" will be
divided 50150 by the seller of the Property and Orange County.
c. The resale provisions shall remain in effect for the full affordability period—99 years.
C. Owner covenants that it will not knowingly take or permit any action that would result in
a violation of the affordability requirements of Orange County or of the Orange County HOME
Investment Partnership Program. Orange County, together with Owner, may execute and record
any amendment or modification of this Declaration and such amendment or modification shall be
binding on third parties granted rights under this Declaration.
D. Owner acknowledges that the primary purpose for requiring compliance by Owner with
restrictions provided in this Declaration is to assure compliance with the affordability
requirements of Orange County and the Orange County HOME Investment Partnership Program,
AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING ORANGE
COUNTY HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE
PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE
ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO
ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY
SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN
A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE
COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's
obligations hereunder cannot be adequately compensated by monetary damages in the event of
any default hereunder.
E. This Declaration may be enforced by Orange County or its designee in the event Owner fails
to satisfy any of the requirements of this Declaration by proceedings at law or in equity against
any person or persons violating or attempting to violate any covenant. If legal costs are incurred
by Orange County, such legal costs, including attorney fees and court costs (including costs of
appeal), are the responsibility of, and may be recovered from the Owner.
SECTION 6 MISCELLANEOUS
a. 'Severability. The invalidity of any clause,part, or provision of this Declaration shall not
affect the validity of the remaining portions thereof.
b. 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 hereinabove 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 Orange County: Orange County
c/o Housing, Human Rights, and Community
Development Department
P.O. Box 8181
Hillsborough,NC 27278
ATTN: Director
ii. To The Owner: The Arc Orange County Housing Corporation 4:
5509-A West Friendly Ave., Suite 101
Greensboro,NC 27410
C. Governing Law. This Declaration shall be governed by the laws of the State of
North Carolina and, where applicable,the laws of the United States of America.
d. Orange County agrees it will not impose any requirements which interfere or conflict
with HUD Section 811 requirements concerning the project's development or operations.
e. No default under the Orange County Loan may be declared without HUD approval.
f. HUD approval of a Transfer of Physical Assets (TPA) constitutes approval of the
TPA by Orange County.
IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly
authorized representative, on the day and year first above written.
THE ARC ORANGE COUNTY HOUSING
CORPORATION 4
By:
NORTH CAROLINA
COUNTY
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 that he/she is
of The Arc Orange County Housing Corporation 94, a North Carolina
corporation, and that by authority duly given and as the act of the corporation, the foregoing
instrument was signed by him on behalf of the corporation.
Witness my hand and notarial seal,this the day of 20
Notary Public
My commission expires:
EXHIBIT A
Property Description
4
EXHIBIT B
Development Agreement