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HomeMy WebLinkAbout2018-496-E Housing - Casa rental rehabilitationDocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 DEVELOPMENT AGREEMENT This is an AGREEMENT between ORANGE COUNTY, NORTH CAROLINA, a general local governmental unit of the State of North Carolina, (hereinafter referred to as the "County ") and CASA, a North Carolina non - profit corporation (hereinafter referred to as "CASA "). The effective date of this Agreement is August 24, 2018. WITNESSETH WHEREAS, the Orange County HOME Consortium has designated $46,529.40 in FY 2016 HOME Community Housing Development Organizations (CHDO) Set -Aside funds eligible CHDO set -aside activities; and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2008 and as such is the lead entity in a representative capacity for all members of the 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, CASA is a designated Community Housing Development Corporation ( "CHDO ") as defined in 24 CFR Part 92, Subpart A, Section 92.2 interested in serving as sponsor, developer, and/or advocate for low and moderate - income residents of Orange County; and WHEREAS, CASA intends to rehabilitate twenty -eight (28) rental units (hereinafter referred to as "the Project dwelling units" or "the Project ") that are located on properties more specifically described in Exhibit A, which is attached hereto and made a part of this Agreement (hereinafter referred to as "the Property "), with energy - efficient upgrades as described herein, specifically twenty -four (24) efficiency units located at 103 W. Main Street, Carrboro, North Carolina, (hereinafter "Club Nova Apartments ") which serves persons with disabilities earning up to 60% of the HUD area median income; and four (4) units at located at 112 -114 Johnson Street, Chapel Hill, North Carolina, (hereinafter, "Johnson Street Apartments "), which serves households earning up to 50% of the HUD area median income, as described in the Application for Funding and Certification as a Community Housing Development Organization (CHDO) dated August 4, 2018 "the "Application "), which Application is incorporated by reference into this Agreement. The Application is on file in the office of the Orange County Department of Housing and Community Development. WHEREAS, notwithstanding any provision of this Agreement, the County and CASA hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of 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 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 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 CASA shall perform the projects or tasks related to its allocation of HOME CHDO funds as provided in Exhibit B, Scope of Services, and within the proposed budget outlined in Exhibit C. All Exhibits are attached hereto and hereby made a part of this Agreement and are incorporated herein by reference, as it now reads or as may be modified by the parties. CASA shall 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 the amount needed for payment of eligible costs as determined by Orange County staff. IL AMOUNT OF HOME FUNDS /FORM OF SUBSIDY The County shall make available to CASA up to Forty -Six Thousand Five Hundred and Twenty -Nine Dollars and Forty Cents ($46,529.40) pursuant to this Agreement. Said funds shall be disbursed by the County to CASA for performance of the services described in Exhibit B. The HOME Program funds will be provided as a grant to each subject property as a fixed subsidy. III. TIMELINESS. CASA must complete The Project within twelve (12) months from the date of this Agreement. However, in the event of any alterations or additions or of circumstances beyond the control of CASA, which in the opinion of the Director of the Department of Housing 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. Notwithstanding the foregoing, the Project must begin within twelve (12) months of the date of this Agreement. IV. DURATION OF THE AGREEMENT. This Agreement will remain in effect for the Period of Affordability established below. V. AFFORDABILITY REQUIREMENTS. CASA agrees to lease the Properties located at Club Nova Apartment to disabled persons whose income does not exceed 60% of the HUD area median income by family size, and agrees to lease the Properties located at Johnson Street Apartments to households whose income does not exceed 50% of the HUD area median income by family size, as amended from time to time. Monthly rents must not exceed the HOME Program Rents in effect at the time of occupancy. Residential leases shall not exceed one year in term. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 Each of the Project dwelling units must remain affordable for a period of fifteen years. CASA retains full responsibility for compliance with the affordability requirement for each of the Project dwelling units, unless affordability restrictions are terminated due to the sale of the Property to a non - qualified buyer in which case the Resale Provisions of Section V of the Agreement pertain. CASA shall assure compliance with affordability of each of the Project dwelling units on the Johnson Street Apartments Property as provided in the Declaration of Restrictive Covenants recorded at Book 3235, Page 333, Orange County Registry ( "the Johnson Street Declaration ") and dated October 17, 2003, the obligations of which Johnson Street Declaration were assigned to and assumed by Community Alternatives Supportive Abodes, which as provided in the Assignment, Assumption, and Consent to Transfer Real Property recorded at Book 4867 at Page 28, Orange County Registry, and recorded December 3, 2009. Community Alternative Supportive Abodes filed Articles of Amendment with the North Carolina Secretary of State amending its legal name from Community Alternatives for Supportive Abodes to CASA on September 25, 2015. This Johnson Street Declaration shall constitute and remain a lien on the Johnson Street Apartments Property during the Period of Affordability. CASA shall assure compliance with affordability of each of the Project dwelling units on the Club Nova Apartments Property by having recorded a "Declaration of Restrictive Covenants," ( "the Club Nova Declaration ") the form of which is attached hereto as Exhibit D, on the Property. This Club Nova Declaration shall constitute and remain a first lien on the Club Nova Apartments Property during the period of affordability. It is further the responsibility of CASA to rerecord both Declarations 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 Declarations of Restrictive Covenants to register, with the Register of Deeds of Orange County, a notice of preservation of the restrictive covenants on the Property as provided in North Carolina General Statute § 4713-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section of this Agreement that the 15 year duration of these Declarations of Restrictive Covenants be accomplished and that any future owner of the Property, CASA, and Orange County will do what is necessary to ensure 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. CASA and the County agree to do what each must do to accomplish the 15 year duration of the Declarations of Restrictive Covenants. Resale Provisions CASA shall assure compliance with affordability of each of the Project dwelling units through the Declarations of Restrictive Covenants. The Declarations of Restrictive DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 Covenants shall include at least the following elements in their resale provisions for the Improvements: If Owner no longer uses the Property as rental property or is unable to continue 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 50% or 60% of the area median household income by family size, as applicable, and 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. However, if the Property is sold, transferred, or otherwise disposed of other than to an agency with similar interest in affordable housing during the period of affordability, the Right of First Refusal provision in 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 50150 by the seller of the Property and the County. The resale provision shall remain in effect for the full affordability period — 15 years. VI. OWNER PERFORMANCE UNDER THIS AGREEMENT A. CASA agrees to lease the Project dwelling units within the Club Nova Apartments to a disabled person whose income does not exceed 60% of the 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. CASA agrees to lease the Project dwelling units within the Johnson Street Apartments to a household whose income does not exceed 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as 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. CASA agrees to rehabilitate the Project dwelling units as described in Exhibit B to this Agreement and in accordance with the applicable requirements for rehabilitation projects pursuant to 24 C.F.R. §92, Subpart F, including §92.251. The Project shall be occupied no later than six months after completion of the rehabilitation. In the event that CASA is unable to complete its obligations to rehabilitate and occupy the Project dwelling units within this time or by extensions approved by the County under the terms of this Agreement, CASA will be required to repay the full amount of the County's outstanding loan as provided in the loan documents. 1. CASA shall ensure that the Project dwelling unit meets the Section 8 Housing Quality Standards (HQS) prior to leasing. All repair work must be completed in accordance DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 with applicable building and zoning ordinances and N.C. Housing Finance Agency Energy Standards. 2. Any tenants residing in the Project dwelling unit at the time of rehabilitation 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. CASA 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 CASA. 3. CASA shall ensure the property standards described in this Subsection VI.B. apply through the Period of Affordability. C. CASA is responsible for verifying the income of prospective tenants and maintaining eligibility data. CASA shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section VIII. C.6 of this Agreement. CASA must provide the County an initial occupancy report verifying the income eligibility the tenant at the time of initial lease -up. CASA must furnish the County with an annual report on the Project dwelling unit by July 31 of each year thereafter certifying that the tenant is: for Project dwelling units within the Club Nova Apartments, a disabled person earning less than 60% 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, and for Project dwelling units within the Johnson Street Apartments, a household earning less than 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time to time. D. The Project dwelling units must have a value that does not exceed 100% of its appraised value. An independent, qualified appraiser must conduct the appraisal. E. CASA 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. CASA agrees and authorizes the County and HUD 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. CASA 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 CASA in the Project or payments made pursuant to this Agreement. H. CASA 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. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 I. CASA 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." CASA shall submit to the County copy of said audit report. CASA 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 CASA relating to its performance under the Agreement. J. County shall provide, upon request, copies of all laws, regulations and orders cited in this Agreement. K. CASA certifies by executing this Agreement that CASA 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 CASA certifies that CASA 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 CASA affirms CASA is and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. L. CASA 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 CASA 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. M. CASA hereby assures and certifies that it will comply with the regulations, policies, guidelines and requirements with respect to the acceptance and use of HOME CHDO funds in accordance with the policies of the County. Also, CASA certifies with respect to the Project that it 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 CASA 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; DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 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. Title 24 C.F.R. 92.355 and 24 C.F.R. Part 35 for notification, inspection, testing, and abatement procedures concerning lead -based paint. Verification of lead work shall be on file for each participant. 11. Title 24 C.F.R. 92.300 and 301 for set - asides for Community Housing Development Organizations and project - specific assistance for Community Housing Development Organizations. VII. ADMINISTRATION AND REPORTING REQUIREMENTS A. CASA 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, CASA is responsible for verifying the income of prospective tenants and maintaining eligibility data. CASA shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section VII.C.6 of this Agreement. CASA must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial occupancy. CASA must then furnish the County with an annual report on the Project dwelling units by July 31 of each year thereafter certifying that the tenant of a Property dwelling unit located within the Club Nova Apartments is a disabled person whose income does not exceed 60% of the 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, and the of a Project dwelling unit within the Johnson Street Apartments is a household whose income does not exceed 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as may be amended from time to time. C. Miscellaneous Provisions 1. Uniform Administrative Requirements. CASA must comply with the applicable uniform administrative requirements of 24 CFR §92.505. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 2. Other Program Requirements. CASA must carry out each activity in compliance with all Federal laws and regulations described in 24 CFR, Part 92, subpart H except that the subrecipient does not assume the responsibilities for environmental review or intergovernmental review. 3. Affirmative Marketing. If HOME funds will be used for housing containing five (5) or more assisted units, CASA must prepare and submit an Affirmative Marketing Plan to the County. 4. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for the Project dwelling units. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of CASA for the assisted unit as follows: a. In the event that the CASA is unable to proceed with any aspect of the Project in a timely manner, and County and the CASA determine that reasonable extension(s) for completion will not remedy the situation, then CASA will retain responsibility for requirements for the dwelling units assisted and County will make no further payments to the CASA. b. In the event that CASA, prior to the contract completion date, is unable to continue to function due to, but, not limited to, dissolution or insolvency of the organization, its filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or perform with provisions of this agreement, then CASA shall, upon the County's request, convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole discretion of County and on a Project dwelling unit by Project dwelling unit basis. Conveyance shall be on the terms set forth herein: Conveyance shall occur within thirty (30) days of County and CASA's agreement of CASA's inability to continue as a viable organization. ii. CASA shall convey the Property to the County by general warranty deed, free and clear of all liens and encumbrances of record except those which create a beneficial interest in County (Declaration of Restrictive Covenants and Deed of Trust). 5. 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. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 6. Books and Records. CASA shall maintain records of its grant requirements under this contract for a period of not less than five (5) full fiscal years following the contract completion date. a. CASA shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, CASA shall submit a copy of its annual audit to the County. b. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of CASA's records that relate to this contract. If any audit by County discloses that payments to CASA were in excess of the amount to which CASA was entitled under this contract, CASA shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, CASA shall also reimburse County its reasonable costs incurred in performing the audit. c. CASA shall maintain files of all tenants, regardless of length of occupancy, residing in assisted units. Documentation shall verify eligibility for federal assisted housing at the point of initial tenancy and every subsequent year thereafter for the period of affordability. Information maintained shall include: tenant income level; name of family members; ethnic data; family type — e.g. female head of household; disability status; and monthly rent. d. CASA shall maintain records verifying the affordability of the dwelling units. 7. 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: a. To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director b. To CASA: CASA P.O. Box 12545 Raleigh, NC 27603 ATTN: Director, Real Estate Development Either the County or CASA may change the person or address to which any future Notice given as herein provided. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 8. No Assignment. No transfer or assignment of the interest of the CASA in this Agreement shall occur without the prior written consent of the County; neither may the CASA assign this Agreement without the prior written consent of County. 9. Conflict of Interest. CASA 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. CASA further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by CASA hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the County HOME Investment Partnership Program. 10. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 11. Indemnification. To the extent legally possible, the CASA 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 CASA, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, CASA shall, upon County's tender, defend the same at the CASA's sole cost and expense, promptly satisfy any judgment adverse to County or to County and CASA jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the County. 12. Subcontracting. CASA shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. CASA shall require any approved subcontractor to agree, as to the portion subcontracted, to comply with all applicable federal, state, and local laws, rules, ordinances, and regulations at all times and in the performance of the work and to comply with all applicable obligations of CASA specified in this contract. Notwithstanding County's approval of a subcontractor, CASA shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. CASA shall indemnify, defend, and hold County harmless from all claims of its contractors. By executing this Agreement CASA affirms that it and any subcontractors of CASA are and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. CASA also certifies that it 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. By executing this Agreement CASA certifies that CASA 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. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 13. No Joint Venture or Agency. The County and CASA each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or CASA under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. 14. Effect of Waiver or Forbearance. No failure by the County to insist upon the strict performance of any term or condition of this Agreement, or to exercise any right or remedy upon the breach by CASA of any of its obligations, agreements, or covenants hereunder, shall be a waiver of such affected term or condition or of such breach; nor shall any forbearance by the County to seek a remedy for any breach by CASA be a waiver by the County of its rights and remedies with respect to that or any other breach. 15. 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. 16. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and CASA agree to substitute for such provision of this Agreement or the application thereof determined to be invalid or unenforceable, such other provision as most closely approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the County and CASA cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. 17. Equal Opportunity. CASA shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. 18. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 19. 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. 20. 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. 21. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, CASA shall comply with all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds provided by the County, to rehabilitate the Property. 22. Publicity: Signage. CASA 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. 23. 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. 24. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County or CASA shall be deemed or construed by the parties or any third party to create any relationship of third party beneficiary, including third party principal or agent, or to create any right, claim or cause of action against the County, CASA or any of their respective officers, agents or employees by any third party. 25. 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. 26. 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. [SIGNATURE PAGE TO FOLLOW] DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands on the day and year first above written. ORANGE COUNTY, NORTH CAROLINA DocuSigned by: By: Bonnie Hammersley, County Manager CASA DocuSigned by: By: S� DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 EXHIBIT A Legal Descriptions Johnson Street Apartments Being all of Lot Nos. 68,69,70 and 71 of Cole Heights Extension, as surveyed and plotted by F.M. Carlisle, Jr., on November 10, 1945 said survey being of record in Plat Book 33, Page 59, Orange County Registry, to which reference is hereby made for a more particular description of same. TMBL 9.71.A.38 Club Nova Apartments Lying and being on the south side of West Main Street, Carrboro, Orange County, North Carolina and more particularly described as follows: BEING all of Unit Three, Club Nova Condominium, as referred to in the Declaration of Condominium recorded in Book 2779, Page 398, Orange County Registry, and First Amendment to such declaration recorded in Book 3407, Page 256, Orange County Registry (collectively, the "Declaration ") and more particularly depicted in and on Plat and Plan recorded in (Condominium) Plat Book 94, Page 26, Orange County Registry, which Declaration, Plat and Plan are incorporated herein by reference. TOGEHER WITH (i) a one -third (1/3) undivided interest in and to the Common Elements and Facilities (as defined in the Declaration) and (ii) all property rights and benefits of unit ownership set forth in the Declaration. Commonly known as: 103 D West Main Street, Carrboro, Orange County, NC PIN# 9778 -86- 2027.003 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 EXHIBIT B Scope of Services Rental rehabilitation of twenty -eight (28) units, specifically: Providing upgrades of energy - efficient water systems to twenty -four (24) units at Club Nova Apartments, 103 W. Main Street, Carrboro, NC, which house persons with disabilities earning no more than 60% of the HUD area median income; and Installation of new energy - efficient HVAC systems and a new roof to enhance energy efficiency and lower utilities at four two- bedroom duplex units at 112 -114 Johnson Street, Chapel Hill, NC, which serves tenants earning no more than 50% of the HUD area median income. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 EXHIBIT C Project Budget Rehabilitation of Property $ 46,529.40 Total $46,529.40 Source of Funds Orange County FY 2016 HOME CHDO Funds $46,529.40 Total $46,529.40 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 and Community Development Department ( "OCHCD "). 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. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 Exhibit D Prepared by and return to: Anne Marie Tosco, Orange County Attorney's Office: P.O. Box 8181; Hillsborough, NC 27278 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated , by CASA, and its successors and assigns (Owner), is given as a condition precedent to the award of Federal HOME Investment Partnership Program Community Housing Development Organization (CHDO) funds by Orange County, North Carolina, a body politic and corporate, a political subdivision of the State of North Carolina, (hereafter "the County ") together with any successor to its rights, duties, and obligations. RECITALS: WHEREAS, the Orange County HOME Consortium has designated $46,529.40 in FY 2016 HOME Community Housing Development Organizations (CHDO) Set -Aside funds eligible CHDO set -aside activities; and WHEREAS, the County is the lead entity of the Orange HOME Consortium, so designated in an agreement dated July 1, 2008 and as such is the lead entity in a representative capacity for all members of the Orange HOME Consortium for the purposes of carrying out the HOME Program in accordance with the Title H 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, CASA is a designated Community Housing Development Corporation (CHDO) as defined in 24 CFR Part 92, Subpart A, Section 92.2 interested in serving as sponsor, developer, and/or advocate for low and moderate - income residents of Orange County; and DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 WHEREAS, CASA intends to rehabilitate twenty -eight (28) rental units (hereinafter referred to as "the Project dwelling units" or "the Project ") that are located on properties more specifically described in Exhibit A, which is attached hereto and made a part of this Agreement (hereinafter referred to as "the Property "), with energy - efficient upgrades as described herein, specifically twenty -four (24) efficiency units located at 103 W. Main Street, Carrboro, North Carolina, (hereinafter "Club Nova Apartments ") which serves persons with disabilities earning up to 60% of the HUD area median income; and four (4) units at located at 112 -114 Johnson Street, Chapel Hill, North Carolina, (hereinafter, "Johnson Street Apartments "), which serves households earning up to 50% of the HUD area median income, as described in the Application for Funding and Certification as a Community Housing Development Organization (CHDO) dated August 4, 2018 "the "Application "), which Application is incorporated by reference into this Agreement. The Application is on file in the office of the Orange County Department of Housing and Community Development. WHEREAS, notwithstanding any provision of this Agreement, the County and CASA hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval, and that such commitment of 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, CASA has signed this Declaration agreeing to the terms of this Declaration, its obligations pursuant to this Declaration 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 CASA; 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 fifteen years after Project Completion (defined as the last of the following events: the Property is rehabilitated and the Project dwelling unit occupied by a low- income family), for rental 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 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 shall pertain: 1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit B hereto), the Orange County HOME Investment Partnership Program and this Declaration, Owner may sell, transfer, or exchange the Property to a non - profit fund, foundation, or corporation of like purpose which is organized and operated exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DEVELOPMENT AGREEMENT and the Orange County HOME Investment Partnership Program. Owner agrees that Orange County may void any sale, transfer, or exchange of the Property or any portion of the Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT and the Orange County HOME Investment Partnership Program. 2. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 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 a. This Declaration, and the Terms of Affordability specified herein, apply to the Property immediately upon recordation, and Owner shall comply with all restrictive covenants herein. This declaration shall terminate fifteen years after Project Completion, unless Orange County HOME Investment Partnership Program affordability restrictions are terminated due to the sale of the Property to a non - qualified buyer as provided Section 4B below. 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 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. b. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. Owner hereby agrees that any and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of the Declaration of Restrictive Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 4713-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the 15 year duration of this Declaration of Restrictive Covenants be accomplished and that any future owner of the Property, CASA , and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41 -29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, CASA, and Orange County agree to do what each must do to accomplish the 15 -year duration of this Declaration of Restrictive Covenants. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal a. Grant and Effect. Orange County is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law ( "Transfer ") shall not be effective unless and until the below - described procedure is followed. b. Right of First Refusal. If Owner contemplates a Transfer to other than an agency DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 with similar interest in affordable housing serving families with income 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." C. Sales After Failure to Exercise Rights of Refusal. If Orange County. does not advise Owner in a timely fashion of an intent to purchase the Property, then Owner shall notify Orange County who may assume the position of CASA. d. Assignability. Orange County may not assign its right of first refusal. B. Resale Provisions a. If the Owner no longer uses the Property as affordable rental property, then Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an agency with similar interest in affordable housing and to serve families with incomes not exceeding 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. b. However, if the property is not sold, transferred, or otherwise disposed of to an agency with similar interest in affordable housing during the term of affordability, the net sales proceeds (sales price less: (1) selling cost, and (2) the unpaid principal amount of the initial Orange County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or "equity" will be divided 50150 by the seller of the Property and Orange County. The resale provisions shall remain in effect for the full affordability period — 15 years. C. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the affordability requirements of Orange County or of the Orange County HOME Investment Partnership Program. Orange County, together with Owner, may execute and record any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 D. Owner acknowledges that the primary purpose for requiring compliance by Owner with restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County and the Orange County Home Investment Partnership Program, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING ORANGE COUNTY HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. E. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. SECTION 6 MISCELLANEOUS a. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. b. Notices. Any Notice shall be in writing and shall be given by depositing the same in the United States mail, post -paid and registered or certified, and addressed to the party to be notified, with return- receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: To Orange County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To CASA: CASA P.O. Box 12545 Raleigh, NC 27603 ATTN: Director, Real Estate Development 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. 22 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 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. Attest: NORTH CAROLINA 1.[611161011.1 CASA Printed Name and Title I, the undersigned, a Notary Public for the state and county aforesaid, certify that personally appeared before me this day and acknowledged that he /she is the of CASA and that s /he has by the authority duly given and as the act of the company, to execute the foregoing document on behalf of the company. Witness my hand and official stamp or seal this the day of 20 Notary Public Printed Name: My Commission Expires: 23 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 F,XHIRIT A Legal Description Lying and being on the south side of West Main Street, Carrboro, Orange County, North Carolina and more particularly described as follows; BEING all of Unit Three, Club Nova Condominium, as referred to in the Declaration of Condominium recorded in Book 2779, Page 398, Orange County Registry, and First Amendment to such declaration recorded in Book 3407, Page 256, Orange County Registry (collectively, the "Declaration ") and more particularly depicted in and on Plat and Plan recorded in (Condominium.) Plat Book 94, Page 26, Orange County Registry, which Declaration, Plat and Plan are incorporated herein by reference. TOGEHER WITH (i) a one - third (1 /3) undivided interest in and to the Common Elements and Facilities (as defined in the Declaration) and (ii) all property rights and benefits of unit ownership set forth in the Declaration. Commonly known as: 103 D West Main Street, Carrboro, Orange County, NC PIN# 9778 -86- 2027.003 24 DocuSign Envelope ID: 65EC9D62 -7FB9- 4747- A005- FC28FEF750E3 EXHIBIT B Development Agreement 25