Loading...
HomeMy WebLinkAbout2018-120-E Housing - Empowerment acquisition of rental propertiesDocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 NORTH CAROLINA AFFORDABLE HOUSING BOND DEVELOPMENT AGREEMENT ORANGE COUNTY This is an AGREEMENT between Orange County, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County ") and Empowerment, Inc., a North Carolina Non - Profit Corporation (hereinafter referred to as "Owner" or "Empowerment "). The effective date of this Agreement is WITNESSTH WHEREAS, the County, in the implementation of the 2016 Orange County Affordable Housing Bond program solicited application for funding for affordable housing projects from interested non - profits organizations; and WHEREAS, Empowerment submitted applications for funding to assist in the acquisition of rental properties as described herein and in their applications submitted for FY 2016 Orange County Affordable Housing Bond program funds, both on file in the County's Housing and Community Development Office (hereinafter "the Project "); and WHEREAS, the Orange County Board of Commissioners awarded Empowerment, Inc. $211,300 in FY 2016 Affordable Housing Bond Program funding and $ 264,400 in 2017 Capital Improvement Plan Affordable Housing Land Banking Funds for a total amount of $ 475,700 to assist in the acquisition of rental properties on June 6, 2017 (hereinafter "Project Funds "); and; WHEREAS, Empowerment agrees to utilize the Project funds for the purpose of acquiring the Property described in its two FY 2016 Orange County Affordable Housing Bond Program applications dated March 30, 2017, which are hereby incorporated into this agreement by reference; and WHEREAS, Empowennent intends to use the funds to purchase Project dwellings units located at 116 Cole Street (PIN # 9788 -04 -6303) (lease to families earning up to 50% of HUD area median income) and 606 Bynum Street (PIN # 9788 -07 -1809) (lease to two families earning up to 60% of HUD area median income) both properties are located in Chapel Hill, North Carolina (herein after referred to as "the Project dwelling units" or "the Project "). The Project dwelling units are located on properties more particularly described in EXHIBIT A, Legal Description, attached hereto and made a part of this Agreement (hereinafter referred to as "the Property ") (All Exhibits attached to this Agreement are hereby made a part of this Agreement and are incorporated into this Agreement, as it now reads or as it may be modified by the parties); and WHEREAS, notwithstanding any provision of this Agreement, the County and Empowerment hereto agree and acknowledge that this Agreement does not constitute a 1 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review. 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 BOND FUNDS A. The Owner shall perform the projects or tasks related to its allocation of Bond funds as provided in Exhibit B, Scope of Services and within the proposed budget outlined in Exhibit C, Budget and as contained herein. 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 the County to the Owner for performance of the services described in Exhibit B by check made payable to the Owner. D. Bond funds will be a fixed subsidy provided in the form of a deferred loan. II. AMOUNT OF BOND FUNDS/ LOAN TERMS A. Amount. The County shall make available to the Owner Project Funds in the amount of up to Four Hundred and Seventy -five Thousand Seven Hundred dollars ($475,700) in an at an interest rate of zero percent (0 %) pursuant to this Agreement. Said funds shall be disbursed by the County to the Owner for performance of the services described in Exhibit B. 1. The Orange County Affordable Housing Bond Loan funding will be provided to Empowerment shall be as a fixed subsidy in the form of a zero interest 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. 2. The Deed of Trusts, recorded in the Orange County Registry, and Promissory Notes shall constitute a lien on the Properties, subordinate only to the Declaration of Restrictive Covenants, the form of which is attached as EXHIBIT D and described more particularly in Section VI below, Affordability Requirements (hereafter "Declaration "), with County as the secured party/beneficiary. B. Said funds shall be disbursed by the County to the Owner for performance of services described in Exhibit B. DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 III. LIEN POSITION Orange County hereby acknowledges that the terms and conditions of its (i) 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 Empowerment, Inc. shall not be subordinate to any other documents. The Declaration of Restrictive Covenants (EXHIBIT D) described in Paragraph VI of this Agreement should be recorded prior to the Deed of Trust. IV. TIME FOR COMMENCEMENT AND COMPLETION The Owner shall complete this Project within six (6) 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 Rights 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. V. DURATION OF THE AGREEMENT This Agreement will remain in effect during the "Period of Affordability ", the term of which is ninety- nine (99) years from acquisition of the Property and proper recording the Orange County Loan Documents in the Orange County Registry. The ninety -nine (99) year Period of Affordability requirement will be secured by a Deed of Trust, Promissory Note, and Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by the County. VI. AFFORDABILITY REQUIREMENTS A. Owner agrees to lease the Project dwelling units to low income families earning at 116 Cole up to 50% of HUD area median income and at 606 Bynum Street up to 60% of HUD 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. B. The Project dwelling units must remain affordable during the "Period of Affordability," starting from the date of recording of the Declaration and continuing for a period of ninety -nine years thereafter. The Owner retains full responsibility for compliance with the Affordability Requirements for 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 the Project dwelling units as provided in the Declarations on the Property recorded at Book , Page (Cole Street Property) and Book , Page Bynum Street Property), both in the Orange 3 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 County, North Carolina Registry ( "Declaration "), the form of which is attached as Exhibit D and hereby incorporated into this Agreement. The Declaration shall constitute and remain a lien on the Property during the Period of Affordability. C. Owner agrees to the Affordability Requirements as provided herein and the Resale Provisions provided in the Exhibit D, Declaration of Restrictive Covenants, Section 4B. D. It is the responsibility of the 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. E. Resale Provisions. The Declaration of Restrictive Covenants shall include at least the following elements in their resale provisions: 1. If the buyer no longer uses the Property as rental housing to families eligible to rent a dwelling unit under this Agreement or is unable to continue ownership, then the buyer must sell, transfer, or otherwise dispose of their interest in the Property only to an agency with similar interest in affordable housing and serve families with incomes not exceeding 80% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer. The non - profit fund, foundation, or corporation of like purposes must have established its tax - exempt status under Section 501 (c) (3) of the Internal Revenue Code. 2. If the Property is sold, transferred, or otherwise disposed of during the Period of Affordability to other than an agency with similar interest in affordable housing as provided in a. above, the Right of First Refusal provision of the then current 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 50150 by the seller of the Property and the County. If the initial County contribution does not have to be 4 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 3. The resale provision shall remain in effect for the full affordability period — 99 years. 4. Any proceeds from the recapture of funds under this provision will be used to facilitate the acquisition, construction, and rehabilitation of housing for the purposes of promoting affordable housing. VII. OWNER PERFORMANCE UNDER THIS AGREEMENT A. Owner agrees to lease the Project dwelling units to families whose income at 116 Cole Street does not exceed 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and at 606 Bynum Street by two families whose incomes does not exceed 60% of area median income by family size as determined by the U.S. Department of Housing and Urban Development and as may be amended from time to time. Monthly rents must not exceed the HUD Published Fair Market Rents in effect at the time of occupancy. Residential leases will not exceed one year in term. B. Owner shall be acquire the Property and rehabilitate the Project dwellings units rehabilitated (if needed). The Project shall be occupied no later than six months after project completion. In the event that Owner is unable to complete its obligations to acquire, rehabilitate, and occupy the Project dwelling units within this time or by extensions approved by the County under the terms of this Agreement, Owner will be required to repay the full amount of the County's outstanding loan as provided in the loan documents. a. Owner shall ensure that the Project dwelling units meet the Section 8 Housing Quality Standards (HQS) prior to leasing. All repair work must be completed in accordance with applicable building and zoning ordinances and N.C. Housing Finance Agency Energy Standards. b. Any tenants residing in the Project dwelling units at the time of acquisition of the Project dwelling units that are displaced due to the repair work must be notified in writing of the need for temporary relocation and must be adequately housed in the community. Owner must submit within 90 days of the date of this Agreement a detailed written report of the relocation plan for all tenants. All relocation activities will be fully funded by Owner. C. Owner is responsible for verifying the income of prospective tenants and maintaining eligibility data. Owner shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section VIII. C.3 of this Agreement. Owner must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial lease -up. Owner must furnish the County with an annual report on the Project dwellings units by July 31 of each year thereafter 5 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 certifying that all tenants earn less than 50% or 60% (depending on the dwelling unit) of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time. D. Each Project dwelling must have a value that does not exceed 100% of its appraised value. An independent, qualified appraiser must conduct the appraisal. E. Owner must submit an annual rental operations budget to the County each year at least sixty days prior to the July 1 beginning date for the fiscal year. F. 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. G. 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. H. 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, and any state or federal agency required to inspect and audit all data and reports of the County and Owner relating to its performance under the Agreement. I. County shall provide, upon request, copies of all laws, regulations and orders cited in this Agreement. J. Owner certifies by executing this Agreement that Owner has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147 - 86.58. By executing this Agreement Provider certifies that Provider has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147 - 86.81. By executing this Agreement Provider affirms Provider is and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. K. 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. Also, Owner certifies with respect to the Project that the Project will be conducted and administered in compliance with: 0 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 1. 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; 2. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93 -112), as amended, and implementing regulations when published in effect; 3. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations when published for effect; 4. The Fair Housing Act (42 U.S.C. 3601 -20); 5. Lead Based Requirements at 24 CFR Part 35 VIII. ADMINISTRATION AND REPORTING REQUIREMENTS A. 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. B. After completion, the Owner is responsible for verifying the income of prospective tenants and maintaining eligibility data. Owner shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section VIII.C.3 of this Agreement. The Owner must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial occupancy. The Owner must then furnish the County with an annual report on the Project dwelling units by July 31 of each year thereafter certifying that all tenants earn less than 80% of the area median income by family size, as determined by the US Department of Housing and Urban Development and as amended from time to time. C. Miscellaneous Provisions 1. 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: a. 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. b. 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 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 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 Bond funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis. c. 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). 2. 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 parry may exercise any right available to it at law or in equity with respect to such default. 3. Books and Records. The Owner shall maintain records of its loan requirements under this contract for a period of not less than the completion of the affordability periods for all Project dwelling units. a. 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. b. 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. c. 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. d. The Owner shall maintain records verifying the affordability of the dwelling units. 8 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 4. 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 parry 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: a. To the County: Orange County c/o Housing. Human Rights and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director b. To Owner: Empowerment, Inc. 109 N. Graham Street Chapel Hill, NC 27516 ATTN: Chair, Board of Directors Either the County or the Owner may change the person or address to which any future Notice shall be given as herein provided. 5. 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. 6. Conflict of Interest. The Owner shall be aware of and observe the requirements of the Orange County Affordable Housing Bond Program which provides that no member of the Orange County Board of Commissioners shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. The Owner shall also be aware of and observe the requirements which states that no member, officer, or employee of Orange County or its designees or agents, no member of the governing body of the locality who exercised any functions or responsibilities with respect to the program during his/her tenure or for one year thereafter, shall have any private interest, direct or indirect, in this contract or any subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the agreement. 7. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 8. 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 9 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 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 County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by County. 9. 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. 10. No Joint Venture or Agency. The County and the Owner each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or the Owner under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. 11. 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. 12. 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. In determining the basic services to be provided, should any documents be referenced in or attached to this Agreement, the terms herein shall have priority in any conflict between the terms of referenced documents and the terms of this Agreement. 13. 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 10 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and 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 and 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. 14. 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. Owner shall at all times remain in compliance with all applicable local, state, and federal laws, rules, and regulations including but not limited to all state and federal anti - discrimination laws, policies, rules, and regulations and the Orange County Non - Discrimination Policy and Orange County Living Wage Policy (each policy is incorporated herein by reference and may be viewed at http: / /www.orangecount"c. og v /departments /purchasing division/contracts.php.). Any violation of this requirement is a breach of this Agreement and County may immediately terminate this Agreement without further obligation on the part of the County. This paragraph is not intended to limit and does not limit the definition of breach to discrimination. 15. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. 16. 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. 17. 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. 18. 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. 19. 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 11 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 reasonably require. Any signage at the Property shall acknowledge the County's role and contribution. 20. 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 one and the same instrument. 21. 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 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. 22. 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. 23. 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 recorded Declaration of Restrictive Covenants. 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. [SIGNATURE PAGE TO FOLLOW] 12 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 SIGNATURE PAGE ATTEST: EMPOWERMENT DocuSigned by: By: aE�aseED�s as ORANGE COUNTY, NORTH CAROLINA �Q.,DocuSigned by: . 1M By. ( Zmt' 96M'e"Tfammersley, County Manager Printed Name Clerk/Deputy Clerk to the Board of Commissioners This document has been pre- audited in accordance with the N.C. Local Government and Fiscal Coptrpl Act. ocu igne by: LA Gary ona son, CTP, Chief Financial Officer Approved eas to form and legality A� nnette W'TIoore, Staff Attorney 13 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 EXHIBIT A Property Description PIN # 9788 -04 -6303: All that certain lots or parcels of land situated, lying and being on the West side of Cole Street, a short distance South of the Town of Chapel Hill, North Carolina, and known and designated as Lots 21 and 22 of Cole Heights Extension, as surveyed and plotted by F.M. Carlisle on November 10, 1945, and more particularly described as beginning at a stake in the West property line of Cole Street, the Northeast corner of lot No. 20, running thence with the land of said lot North 84 degrees 35' West 125.5 feet to stake; running thence North 8 degrees 35' East 67 feet West to an iron stake, a corner of Cole Heights property; running thence with the line of the said property South 73 degrees 55' East 126.2 feet West to a stake in the West property line of Cole Street; running thence along the West property line of said street South 8 degrees 35' West feet to the beginning. This tract is known as 116 Cole Street. PIN # 9788 -07 -1809: All that certain parcel or tract of land lying and being on the East Side of Elm (now Bynum) Street, a short distance North of the Town of Chapel Hill, North Carolina, and more particularly described as BEGINNING at a stake in the East property line of said street established by measuring North 11 deg. West 135 feet from the Northeastern intersection of Elm and Craig Streets; running thence North 86 deg. East 200 feet to a stake; thence North 11 deg. West 81 feet to a stake; running thence South 86 deg. West 200 feet to a stake in the East property line of Elm Street; running thence along the East property line of Elm Street South 11 deg. East 81 feet to the BEGINNING, and being the same land conveyed to Johnnie Barbee by deed of Artie Mae Cordal et als, dated June 10 1948, and recorded in the Office of the Register of Deeds of Orange County in Book 131, at Page 281. This tract is known as 606 and 608 Bynum Street. 14 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 EXHIBIT B Scope of Services Services to be provided are in accordance with the Orange County RFP 2016 Affordable Housing Bond Funds Application as amended dated March 30, 2017 from Habitat for Humanity of Orange County. • Acquisition of 116 Cole Street, Chapel Hill, NC • Acquisition of 606 Bynum Street, Chapel Hill, NC The properties shall meet Section 8 Housing Quality Standards (HQS) prior to leasing. 15 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 FXHIRIT C Proiect Budget 116 Cole Street Property Acquisition $ 191,300 Closing Costs $ 5,000 Up fit Costs $ 15,000 Total Costs $211,300 606 Bynum Street Property Acquisition $ 259,400 Closing Costs $ 5,000 Total Costs $ 264,400 DISTRIBUTION SCHEDULE Distribution is upon receipt of Purchase Agreement and acquisition of an approved Environmental Review. 16 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 Prepared by and return to: Annette Moore, Orange County Attorney's Office: P.O. Box 8181; Hillsborough, NC 27278 PIN # 9788 -04 -6303 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS ( "Declaration "), dated , by Empowerment, Inc., a North Carolina Non Profit Corporation, for itself and its successors and assigns ( "Owner" or "Empowerment "), is given as a condition precedent to the award of 2016 Orange County Affordable Housing Bond funds. RECITALS: WHEREAS, the Orange County Board of Commissioners awarded Empowerment, Inc. $211,300 in FY 2016 Affordable Housing Bond Program funding to assist in the acquisition of a rental properties on June 6, 2017 (hereinafter "Project Funds "); and WHEREAS, Empowerment agrees to utilize the Project funds for the purpose of acquiring the Property described in its' FY 2016 Orange County Affordable Housing Bond Program application dated March 30, 2017, which is hereby incorporated into this agreement by reference; and WHEREAS, Empowerment intends to use the Project Funds to acquire property, located at 116 Cole Street (PIN # 9788 -04- 6303), Chapel Hill, North Carolina, as rental housing for a low- income family earning up to 50% of HUD area median income (herein after referred to as "the Project dwelling unit" or "the Project ") and will remain affordable to low income families throughout the term of the 99 year period of affordability. The Project dwelling unit is located on the property more particularly described in EXHIBIT A, Legal Description, attached hereto and made a part of this Agreement (hereinafter referred to as "the Property ") (All Exhibits attached to this Agreement are hereby made a part of this Agreement and are incorporated into this Agreement, as it now reads or as it may be modified by the parties); and WHEREAS, notwithstanding any provision of this Agreement, the County and the Empowerment hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of funds or approval may occur only upon satisfactory completion of an environmental review. The parties further agree that the provision of such funds to the project is conditioned on Orange County's determination to 17 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 proceed with, modify, or cancel the project based on the results of a subsequent environmental review. WHEREAS, Empowerment as a condition precedent to the awarding of FY 2016 Orange County Affordable Housing Bond Program funds, shall 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 FY 2016 Orange County Affordable Housing Bond Fund Program and agreeing to the terms of the DEVELOPMENT AGREEMENT which is attached as Exhibit B hereto and made part of this Agreement between the County and Empowerment, Inc. 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 Property acquired, rehabilitated ( if necessary) and occupied by a low- income family earning up to 50% of HUD area median income). B. 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), 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. 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 18 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT. 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. C. 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). D. 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 Long Term Housing Affordability Policy 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 19 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 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 § 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 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 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 during the term of this Declaration to other than an agency with similar interest in affordable housing serving families with incomes not exceeding 60% 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." The right of first refusal granted to the County pursuant to this Section 4 shall be in force commencing immediately. 3. Sales After Failure to Exercise Rights of Refusal._If Orange County does not advise the Owner in a timely fashion of its intent to purchase the Property, then the Owner shall be free to transfer the property in accordance with this Section of the Declaration. 4. Assignability. Orange County may assign its right of first refusal without Owner's consent. B. Resale Provisions 1. 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 21 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 not exceeding 50% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer. The non - profit 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 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. If the initial County contribution does not have to be repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 3. In the event that Net Sales Proceeds are insufficient to repay the County Bond Funds, including principal plus interest, the amount to be recaptured shall be any funds remaining after payment of all liens senior to the County's lien and closing costs. In no event shall the borrower be required to use funds other than net proceeds to repay the Bond 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 Orange County Long Term Affordability Policy requirements. 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 BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING AFFORDABLE HOUSING BOND 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 22 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 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 Empowerment: Empowerment, Inc. 109 N. Graham Street Chapel Hill, NC 27514 ATTN: Executive Director 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. 23 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 Err�U%W,grgpent Inc. k6rus jja.i(" NORTH CAROLINA ORANGE COUNTY President I, , 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 is Secretary and that is President of Empowerment, Inc., a North Carolina Non 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. Witness my hand and notarial seal, this the day of My commission expires: 24 20 Notary Public DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 Exhibit A Legal Description 25 DocuSign Envelope ID: 764A29F1 -E414- 4251- 9AE2- 7ABF3F9D9344 Exhibit B Development Agreement 26