HomeMy WebLinkAbout2016-470 Housing - Weaver Community Housing Assoc. - Development Agreement �u5�rl�
NORTH CAROLINA
DEVELOPMENT AGREEMENT
ORANGE COUNTY
This is an AGREEMENT between ORANGE COUNTY, a body politic and corporate, a
local political subdivision of the State of North Carolina, (hereinafter referred to as the
"County"), WEAVER COMMUNITY HOUSING ASSOCIATION, a North Carolina non-
profit corporation (hereinafter referred to as "Owner"). The effective date of this agreement is
WITNESSTH
WHEREAS, the Orange County HOME Consortium has designated Thirty Thousand
Three Hundred Seventy-Four dollars ($30,374) in FY 2014-15 HOME funds to assist in the
rehabilitation of six (6) units, two building low-income apartment complex in Carrboro, North
Carolina known as Cedar Rock Cooperative, which are hereinafter designated collectively as
"Property" or"Properties"; 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, the Owner owns and manages the Cedar Rock Cooperative located at 703
and 705, North Greensboro Street in Carrboro, North Carolina (hereinafter referred to as "the
Project'), as rental housing for low-income families earning up to 60% of the Area Median
Income which will remain affordable for low income families throughout the Period of
Affordability which is described below. The Project dwelling units are located on the property
more particularly described in EXHIBIT A, which is attached hereto and made a part of this
Agreement (hereinafter referred to as "the Property"); and
WHEREAS, the Owner agrees to utilize HOME funds provided for the purpose of
rehabilitating the Property as described in its HOME Program application dated, February 24,
2014, which is hereby incorporated into and made part of this Agreement (hereinafter referred to
as "the Project'); and
WHEREAS, notwithstanding any provision of this Agreement, the County and the
Owner 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
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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
A. The Owner shall perform the projects or tasks related to its allocation of HOME funds as
provided in Exhibit B, Scope of Work and within the proposed budget outlined in Exhibit
C, Project Budget. 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.
B. The 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 Orange County staff.
C. Said funds shall be disbursed by check payable to the Owner.
D. HOME funds will be a fixed subsidy provided in the form of a grant.
II. AMOUNT OF HOME FUNDS
The County shall make available to the Owner up to Thirty Thousand Three Hundred
Seventy Four Dollars ($30,374) pursuant to this Agreement. Said funds shall be disbursed
by the County to the Owner for performance of the services described in Exhibit B.
III. TIMELINESS
Owner shall complete the Project within twelve (12)months from the date of this Agreement.
However, in the event of any alterations or additions or 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 during the Period of Affordability, which is ninety-nine
years.
V. AFFORDABILITY REQUIREMENTS
A. Owner agrees to lease the Project dwelling units to low and moderate income families
earning less than 60% of the area median income during the Period of Affordability.
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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.
B. Each of the Project dwelling units must remain affordable throughout the Period of
Affordability. 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 the event of a sale
of the Property to a non-qualified buyer, the Resale Provisions as provided herein shall
apply.
C. The Owner shall assure compliance with Affordability Requirements of the Agreement
for the Project dwelling units by recording a Declaration of Restrictive Covenants, the
form of which is attached as Exhibit D, and shall be incorporated into this document.
This Declaration shall constitute and remain a lien on the Property during the Period of
Affordability. The Declaration of Restrictive Covenants shall include at least the
following elements in their Resale Provisions for the Improvements:
1. If Owner no longer uses the Property as rental property or is unable to continue with
Ownership, then the Owner must sell, transfer, or otherwise dispose of its interest in
the Property only to an agency with similar interest in affordable housing and serve
families with incomes not exceeding 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.
2. However, if the Property is sold,transferred, or otherwise disposed of to other than an
agency with similar interest in affordable housing during the term of affordability, the
Right of First Refusal provision of the County's Long-Term Housing Affordability
Policy must be followed and the net sales proceeds (sales price less: (1) selling cost,
(2) the unpaid principal amount of the original first mortgage and (3) the unpaid
principal amount of the initial County contribution and any other initial government
contribution secured by a deferred payment promissory note and deed of trust) or
"equity" will be divided 50/50 by the seller of the Property and the County.
3. The resale provision shall remain in effect for the full Period of Affordability period.
D. Owner agrees to retain full responsibility for compliance with the Affordability
Requirements in this Agreement and the Resale Provisions provided in Section 4 of
Declaration of Restrictive Covenants,the form of which is attached as Exhibit D.
E. 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 § 47134 or any comparable
preservation law in effect at the time of the recording of the notice of preservation. It is
the intent of this Agreement that the 99 year duration of this Declaration of Restrictive
Covenants be accomplished and that any future Owner of the Property, Owner, 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, Owner and Orange County agree to do what
each must do to accomplish the 99-year duration of this Declaration of Restrictive
Covenants.
VII. OWNER PERFORMANCE UNDER THIS AGREEMENT
A. 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.
B. 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.
C. 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.
D. 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.
E. County shall provide, upon request, copies of all laws, regulations and orders cited in this
Agreement.
F. 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.
G. Owner hereby assures and certifies that it will comply with the regulations, policies,
guidelines and requirements with respect to the acceptance and use of Bond funds in
accordance with the policies of the County.
H. Owner certifies with respect to the Project that the Project will be conducted and
administered in compliance with:
1. 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;
2. 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;
3. Section 109 of the Housing and Community Development Act of 1974, as amended;
and the regulations issued pursuant hereto;
4. Section 3 of the Housing and Urban Development Act of 1968, as amended;
5. Executive Order 11246-Equal Opportunity, as amended by Executive Orders 11375
and 12086, and implementing regulations issued at 41 CFR Chapter 60;
6. Executive Order 11063-Equal Opportunity in Housing, as amended by Executive
Order 12259, and implementing regulations at 24 CFR Part 107;
7. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and
implementing regulations when published in effect;
8. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing
regulations when published for effect;
9. The Fair Housing Act(42 U.S.C. 3601-20);
10. Lead Based Requirements at 24 CFR Part 35
VIII. 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.
IX. MISCELLANEOUS PROVISIONS
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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:
1. 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.
2. 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:
a. 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.
b. 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.
1. 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.
2. 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 1% of the contract amount, The Owner shall also reimburse County its
reasonable costs incurred in performing the audit.
3. 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.
4. 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 Owner: Weaver Community Housing Association
703-A North Greensboro Street
Carrboro,NC 27510
ATTN: President, Board of Directors
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Either the County or 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. Protection of County's Security Interest. The Owner shall promptly notify the County
of any institution of, adverse determination in, or action or proceeding commenced which
purports to affect the Subject Property or the County's security interest or rights under
this Instrument, including eminent domain, insolvency, code enforcement, civil or
criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or
reorganizations or proceedings involving a bankruptcy or decedent. Failure to comply
with this Section shall be a breach of this Agreement as provided in Section IX (e).
Nothing in this Section shall require the County to incur any expense or take any action.
J. 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.
K. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
L. 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.
M. 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,
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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.
N. 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.
O. 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.
a. 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. By
executing this Agreement Provider affirms that Provider and any subcontractors of
Provider are and shall remain in compliance with Article 2 of Chapter 64 of the North
Carolina General Statutes. By executing this Agreement Provider certifies that Provider
has not been identified, and has not utilized the services of any agent or subcontractor,
on the list created by the State Treasurer pursuant to G.S. 147-86.58.
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.
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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 or the Owner shall be deemed or construed by
the parties or any third party to create any relationship of third party beneficiary,
including third parry 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.
AA. Signatures. This Agreement together with any amendments or modifications may be
executed electronically. All electronic signatures affixed hereto evidence the intent of the
Parties to comply with Article I I A and Article 40 of North Carolina General Statute
Chapter 66.
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.
ORANGE COUNTY,NORTH CAROLINA
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Bonnie Hammersley, Coun 4�
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ATTEST: 17
Donna Baker Sz
Clerk to the Board of Commissioners
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This docurVent has been pre-audited in accordance with the N.C. Local Gov and Fiscal
Control
Gary on son, CFO/Finance Services Director
Approv to fo egality
Annette Poore, Staff Attorney
WEAVER COMMUNITY HOUSING
ASSOCIATION
AhjLks Lyaj [� , President
ATTEST S ✓t-� J-�o��•,,1
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EXHIBIT A
Property Description
Being all of Lots 2 and 3, "CEDAR ROCK", according to that certain plot of survey recorded in
Plat Book 41, at Page 77, Orange County Registry, to which plat reference is made for a more
particular description,together with an easement over the common areas for access and parking
as more fully described in the Declaration of Covenants, Conditions, and Restrictions recorded in
Book 510, at Page $7, Orange County Registry.
PIN# 9778-78=6601
PIN# 9778-79=6666
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EXHIBIT B
Scope of Services
Re-siding six (6) low-income housing units,two building complex
All work must be done in accordance with applicable local and state building codes.
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EXHIBIT C
Project Budget
Replacement Sliding Building 703 $15,187
Replacement Sliding Building 705 $15,187
Total $30,374
Source of Funds
Orange County HOME Funds $30,374
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 Total Renovation Cost specified in the above budget, and there are only minor
changes to the Plans and Specifications.
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Exhibit D
Prepared by and return to: Annette Moore, Orange County Attorney's Office:
P.O. Box 8181; Hillsborough,NC 27278
DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated
, by Weaver Community Housing Association, a not for profit corporation,
for itself and its successors and assigns ("Owner"), is given as a condition precedent to the award
of Orange County HOME Investment Partnership Program funds.
RECITALS:
WHEREAS, the Orange County HOME Consortium has designated approximately
$30,374 in FY 2014-15 HOME funds to assist in the rehabilitation of six (6) units, two building
low-income apartment complex in Carrboro, North Carolina known as Cedar Rock Cooperative,
which are hereinafter designated collectively as "Property"or"Properties"; 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, the Owner owns and manages the Cedar Rock Cooperative located at 703
and 705, North Greensboro Street in Carrboro, North Carolina (hereinafter referred to as "the
Project"), as rental housing for low-income families earning up to 60% of the Area Median
Income which will remain affordable for low income families throughout the Period of
Affordability which is described below. The Project dwelling units are located on the property
more particularly described in EXHIBIT A, which is attached hereto and made a part of this
Agreement(hereinafter referred to as"the Property"); and
WHEREAS, the Owner agrees to utilize HOME funds provided for the purpose of
rehabilitating the Property as described in its HOME Program application dated February 24,
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2014 which is hereby incorporated into and made part of this Agreement and hereinafter referred
to as "the Project"; and
WHEREAS, notwithstanding any provision of this Agreement, the County and the
Owner 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, Orange County requires and Owner agrees to the requirement, as a
condition precedent to the awarding of Orange County HOME Investment Partnership Program
funds, that Owner execute, deliver and record this Declaration in the Office of the Register of
Deeds of Orange County in order to create certain covenants pertaining to the Property and
running with the land for the purpose of enforcement of the affordability requirements of the
Orange County HOME Investment Partnership Program.
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, Owner 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 Owner.
SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER
Owner hereby represents, covenants and warrants as follows:
A. It is contemplated that the Property and the Project will be used, during the ninety-nine
(99) years after Project Completion (defined as the last of the following events: the
Property is acquired, rehabilitated, if necessary, and the last of the nine dwelling units is
occupied by a low-income family), for owner-occupied housing to families earning up to
60% 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 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
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interest therein, that such acquisition is subject to the requirements of this Declaration
and to the requirements of the DEVELOPMENT AGREEMENT and the HOME
INVESTEMENT PARTNERSHIP PROGRAM. Owner agrees that County may void
any sale, transfer, or exchange of the Property or any portion of this 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
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 1 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
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 (99) years after Project Completion, unless Orange
HOME Investment Partnership Program affordability restrictions are terminated due to the sale
of the Property to a non-qualified buyer as provided herein and Orange County agrees to the
termination of the Declaration.
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
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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 § 47134 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 ninety-nine (99) year duration of this Declaration of Restrictive Covenants be
accomplished and that any future owner of the Property, Owner, 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, Owner and Orange County agree to do what each must do to
accomplish the ninety-nine (99) year duration of this Declaration of Restrictive
Covenants.
SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS
A. Rights of Refusal
1. 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.
2. Right of First Refusal. If Owner contemplates a Transfer to any entity 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 ("Notice")." This Notice shall be accompanied by
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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."
3. Sales after Failure to Exercise Rights of Refusal. If Orange County does not advise
Owner in a timely fashion of its intent to purchase the Property, then owner shall be
free to transfer the property in accordance with the provisions in this Section.
4. Assignability. Orange County may assign its right of first refusal without Owner's
consent.
B. Resale Provisions
1. If the buyer no longer uses the Property as a principal residence or is unable to
continue ownership, then the buyer must sell, transfer, or otherwise dispose of their
interest in the Property only to a qualified homebuyer, i.e., a low-income household,
one whose combined income does not exceed 80% of the area median household
income by family size, as determined by the U.S. Department of Housing and Urban
Development at the time of the transfer,to use as their principal residence.
2. However, if the property is sold during the term of affordability, the Right of First
Refusal provision of the New and Existing First-Time Homebuyer Program portion of
the County's Long-Term Housing Affordability Policy must be followed and the Net
Sales Proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of
the original first mortgage and (3) the unpaid principal amount of the initial County
contribution and any other initial government contribution secured by a deferred
payment promissory note and deed of trust) or "equity" will be divided 50/50
between the Seller of the Property and the County.
3. In the event that Net Sales Proceeds are insufficient to repay the HOME Funds, including
principal plus interest, the amount to be recaptured shall be any funds remaining after
payment of all senior non-HOME debt and closing costs. In no event shall the borrower
be required to use funds other than net proceeds to repay the HOME Funds.
4. 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 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 HOME Investment Partnership Program, AND
BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING 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 the County: Orange County
c/o Housing and Community Development
Department
P.O. Box 8181
Hillsborough,NC 27278
ATTN: Director
ii. To Owner: Weaver Community Housing Association
703-A North Greensboro Street
Carrboro,NC 27510
ATTN: President, Board of Directors
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.
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.
WEAVER COMMUNITY HOUSING
ASSOCIATION
X��
Ang Lts Lt;ea(( , President
ATTEST:
Secretary
NORTH CAROLINA
01 oUNTY
Notary Public in and for the above named County and
State, do hereby ce ify that on this day personally appeared before me <4,,,,, + ",4,.r► with
whom I am personally acquainted, who, being by me duly sworn, says that he is Secretary and
that A,,h,j S Lys, V is President of Weaver Community Housing Association, a North Carolina
not for profit 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 and attested to by its Secretary.
Witness my hand and notarial seal,this the day of 414 20 Iz
Not y Pu lic
My commission expires:
CHADLEY S. FRITZ
Notary Public
Durham County
North Carolina
My Commission Expires Jan 16, 2017
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Exhibit A
Legal Description
Being all of Lots 2 and 3, "CEDAR ROCK", according to that certain plot of survey recorded in
Plat Book 41, at Page 77, Orange County Registry, to which plat reference is made for a more
particular description,together with an easement over the common areas for access and parking
as more fully described in the Declaration of Covenants, Conditions, and Restrictions recorded in
Book 510, at Page 687, Orange County Registry.
PIN# 9778-78-6661
PIN# 9778-79-6606
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