HomeMy WebLinkAbout2020-234-E Housing - EmPOWERment Inc. Hillmont development agreement DocuSign Envelope ID:002619DF-54F2-4EEA-B4A8-14714544BAC0
NORTH CAROLINA
DEVELOPMENT AGREEMENT
ORANGE COUNTY
This is an AGREEMENT between ORANGE COUNTY, a body politic and corporate, a
political subdivision of the State of North Carolina, (hereinafter referred to as the "County"),
EmPOWERment, Inc., a North Carolina non-profit corporation (hereinafter referred to as
"Owner"). The effective date of this agreement is March 10, 2020.
WITNESSTH
WHEREAS, the Orange County HOME Consortium has designated up to Eighty-Five
Thousand Dollars ($85,000) in FY 2019-20 HOME funds and up to Sixty Thousand Two
Hundred and One Dollars ($60,201) in FY 2018-19 HOME Community Housing Development
Organizations (CHDO) Set-Aside funds for eligible CHDO set-aside activities to assist in the
acquisition of two units for affordable rental purposes in the Hillmont Apartment Complex in
Town of Carrboro; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 2011 and as such is the lead entity in a representative
capacity for all members of the Orange HOME Consortium for the purposes of carrying out the
HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable
Housing Act(Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the "Act"),
and as further defined in the Federal Program Requirements provided by the U.S. Department of
Housing and Urban Development; and
WHEREAS, EmPOWERment is a designated Community Housing Development
Corporation ("CHDO") as defined in 24 C.F.R. Part 92, Subpart A, Section 92.2 interested in
serving as a sponsor,developer,and/or advocate for low and moderate-income residents of Orange
County; and
WHEREAS, the Owner intends to acquire property, located at 124 Fidelity Street,
Carrboro, North Carolina (hereinafter referred to as "the Project"), as rental housing for low-
income families 80%or less of the Area Median Income that will remain affordable for low income
families throughout the term of the 99 year Period of Affordability. The Project dwelling units are
located on the properties more particularly described in Exhibit A attached hereto and made a part
of this Agreement(hereinafter referred to as "the Properties"); and
WHEREAS,the Owner agrees to utilize HOME and CHDO Set-Aside funds provided for
the purpose of acquiring the Properties as described in its HOME Program Funding Application
dated February 5, 2019, which is hereby incorporated into and made part of this Agreement; and
WHEREAS,notwithstanding any provision of this Agreement,the County and the Owner
hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or
site approval, and that such commitment of funds or approval may occur only upon satisfactory
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completion of an environmental review and receipt by Orange County of a Release of Funds from
the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable.
The parties further agree that the provision of such funds to the project is conditioned on Orange
County's determination to proceed with, modify, or cancel the project based on the results of a
subsequent environmental review.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations
contained herein, it is agreed between the parties hereto as follows:
I. USE OF HOME FUNDS/SUBSIDY TYPE
A. The Owner shall perform the projects or tasks related to its allocation of HOME and HOME
CHDO funds as provided in Exhibit B, Scope of Services and within the Project Budget
outlined in Exhibit C. All Exhibits are attached hereto and are hereby made a part of this
Agreement, as it now reads or as it may be modified by the parties.
B. The Owner may not request disbursement of funds under this Agreement until the funds
are needed for payment of eligible costs. The amount of each request must be limited to
eligible costs as determined by Orange County staff.
C. Said funds shall be disbursed by check payable to the Owner.
D. HOME and HOME CHDO funds will be a fixed subsidy provided in the form of a grant.
II. AMOUNT OF HOME FUND/GRANT TERMS
A. The County shall make available to the Owner up to One Hundred Forty-Five Thousand
Two Hundred and One Dollars ($145,201) pursuant to this Agreement, Eighty-Five
Thousand Dollars($85,000)of which are FY 2019-20 HOME funds and Sixty Thousand
Two Hundred and One Dollars ($60,201) of which are FY 2018-19 HOME CHDO Set-
Aside funds. Said funds shall be disbursed by the County to the Owner for performance of
the services described in Exhibit B.
III. LIEN POSITION
Not Applicable
IV. TIMELINESS
Owner shall complete the Project within six(6)months from the date of this Agreement. However,
in the event of any alterations or additions or circumstances beyond the control of the Owner,
which in the opinion of the Director of the County's Department of Housing 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.
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V. DURATION OF THE AGREEMENT
This Agreement will remain in effect for the Period of Affordability as provided in Section VI,
Affordability Requirements.
VI. AFFORDABILITY REQUIREMENTS
A. Period of Affordability
1. Owner agrees to lease the Project dwelling units to families whose income is no more
than 80% of the area median income throughout the Period of Affordability, which is
ninety-nine (99) years. Area Median Income by family size is determined by the U.S.
Department of Housing and Urban Development and amended from time to time.
Monthly rents must not exceed the HOME Program Rents in effect at the time of
occupancy. Residential leases will not exceed one year in term.
2. The Project dwelling units must remain affordable during the Period of Affordability.
Owner retains full responsibility for compliance with the affordability requirement for
the Project dwelling units. Owner shall assure compliance with affordability of the
Project dwelling units on the Properties by having recorded a Declaration of Restrictive
Covenants ("Declaration") on the Properties, the form of which is attached as Exhibit
D and hereby incorporated into this Agreement. This Declaration shall constitute and
remain a lien on the Properties during the Period of Affordability.
3. Owner agrees to the Affordability Requirements as provided herein and the Resale
Provisions provided in the Exhibit D, Declaration of Restrictive Covenants, Section
413.
4. It is further the responsibility of Owner to rerecord the Declaration 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 Properties or portion thereof including any
leasehold interest in the Properties or portion thereof. Orange County retains the right
to, periodically and every 30 years after the first recording of the Declaration on the
Properties to register, with the Register of Deeds of Orange County, a notice of
preservation of the Restrictive Covenants on the Properties 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 Agreement
that the Project remain affordable throughout the entire duration of this Declaration and
that any future Owner of the Properties, 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 Properties 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 Owner, future Owner and Orange County agree to do what each must do
to accomplish the 99-year duration of this Declaration of Restrictive Covenants.
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B. Resale Provisions
1. Resale Provisions. The Declaration of Restrictive Covenants shall include at least the
following elements in their resale provisions:
a. If the buyer no longer uses the Properties 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 Properties
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.
b. If one or both of the Properties 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 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.
2. The resale provision shall remain in effect for the full affordability period—99 years.
3. 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 a family whose income does not exceed
80% of the area median income by family size, as determined by the U.S. Department of
Housing and Urban Development and as 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. If necessary to bring the Properties into compliance with applicable property standards for
rental project described in 24 C.F.R. 92.251, Owner shall rehabilitate the Project dwelling
units. The Project dwelling units shall be occupied no later than six months after project
completion. In the event that Owner is unable to complete its obligations to acquire,
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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.6 of this Agreement. Owner
must provide the County an initial occupancy report verifying the income eligibility the
tenant at the time of initial lease-up. Owner must furnish the County with an annual report
on each Project dwelling unit by July 31 of each year thereafter certifying that the tenant
is earning no more than 80% of the area median income by family size, as determined by
the U.S. Department of Housing and Urban Development and as amended from time.
D. Each Project dwelling unit 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 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.
I. Owner shall comply with audit requirements contained in 2 CFR, Subpart F which
requires Owner to have an annual audit conducted within nine (9) months of the end of
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their fiscal year, if Owner has an aggregate expenditure of more than $750,000 in federal
funds in a fiscal year. Owner shall submit to the County copy of said audit report. Owner
shall permit the authorized representatives of the County, HUD and the Comptroller
General of the United States to inspect and audit all data and reports of Owner relating to
its performance under the Agreement. Any deficiencies noted in audit reports must be
fully cleared by the Owner within thirty(30) days after receipt of same.
If Owner is not required to perform an audit per the 2 CFR, Subpart F requirements,it must
have and maintain adequate internal financial/cash management principles and reporting
policies.
J. County shall provide, upon request, copies of all laws, regulations and orders cited in this
Agreement.
K. 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.
L. Owner and County shall at all times observe and comply with Title 24 CFR Part 92 and all
applicable laws, ordinances or regulations of the Federal, State, County, and local
government, which may in any manner affect the performance of this Agreement, and
Owner shall perform all acts with responsibility to the County in the same manner as the
County is required to perform all acts with responsibility to the Federal government.
M. Owner hereby assures and certifies that it will comply with the regulations, policies,
guidelines and requirements with respect to the acceptance and use of HOME funds in
accordance with the policies of the County. Also, Owner certifies with respect to the
Project that 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 Owner will administer all programs and activities
related to housing and community development in a manner to affirmatively further
fair housing;
3. Section 109 of the Housing and Community Development Act of 1974, as
amended; and the regulations issued pursuant hereto;
4. Section 3 of the Housing and Urban Development Act of 1968, as amended;
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5. Executive Order 11246-Equal Opportunity,as amended by Executive Orders 11375
and 12086, and implementing regulations issued at 41 CFR Chapter 60;
6. Executive Order 11063-Equal Opportunity in Housing, as amended by Executive
Order 12259, and implementing regulations at 24 CFR Part 107;
7. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and
implementing regulations when published in effect;
8. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and
implementing regulations when published for effect;
9. The Fair Housing Act (42 U.S.C. 3601-20);
10. Title II of the American Disabilities Act;
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.6 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 the tenant is earning no more 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. Uniform Administrative Requirements. The Owner must comply with the
applicable uniform administrative requirements of 24 CFR §92.505.
2. Other Program Requirements. Owner must carry out each activity in compliance
with all Federal laws and regulations described in 24 CFR, Part 35 subparts A, B, J, K,
M, and R, as applicable; 24 CFR, Part 92, subpart F for rental projects, including but
not limited to the applicable property standards at 92.251;and 24 CFR,Part 92, subpart
H except that the subrecipient does not assume the responsibilities for environmental
review or intergovernmental review. Applicable property standards shall apply
throughout the period of affordability.
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3. Affirmative Marketing. If HOME funds will be used for housing containing five (5)
or more assisted units, The Owner must prepare and submit an Affirmative Marketing
Plan to the County.
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 the Owner for the assisted unit 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 the dwelling unit 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
organization, its filing a petition for bankruptcy or similar proceedings, or is
adjudged bankrupt or fails to comply or perform with provisions of this agreement,
then the Owner shall,upon the County's request,convey to the County the Property
assisted with HOME funds. Conveyance shall be at the sole discretion of County
and on a Project dwelling unit by Project dwelling unit basis. Conveyance shall be
on the terms set forth herein:
i. 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.
ii. 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).
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.Notwithstanding
and in addition to the above, in accordance with 24 CFR 85.43,this Agreement may be
suspended or terminated by the County if Owner materially fails to comply with any
term of the Agreement. Remedies for breach of the provisions of this Agreement
include but are not limited to repayment of any funds deemed to be expended in an
ineligible manner. Repayment of HOME fund is required if the housing does not meet
the affordability requirements for the Period of Affordability.
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6. Books and Records. The Owner shall maintain records of its grant requirements under
this contract for a period of not less than five(5)full fiscal years following the contract
completion date.
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.
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 Owner: EmPOWERment, Inc
109 N. Graham Street
Chapel Hill,NC 27516
ATTN: Chair, Board of Directors
Either the County or Owner may change the person or address to which any future
Notice given as herein provided.
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8. 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.
9. Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR 92.356(f)
and 24 CFR 570.611, as applicable with respect to conflicts of interest, and covenants
that it presently has no financial interest and shall acquire any financial interest, direct
or indirect, that would conflict in any manner or degree with the performance of
services required under this Agreement. The Owner further covenants that in
performance of this Agreement no person having such a financial interest shall be
employed or retained by the Owner hereunder. These conflicts of interest provisions
apply to any person who is an employee, agent, consultant, or elected official or
appointed official of the County, or any designated public agencies or subrecipients
that are receiving funds under the County HOME Investment Partnership Program.
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 Owner shall indemnify and hold
County, its officers, agents, and employees, harmless from and against any and all
claims, actions, liabilities, costs, including attorney fees and other costs of defense,
arising out of or in any way related to any act or failure to act by the Owner, its
employees, agents, officers, and contractors in connection with this contract. In the
event any such action or claim is brought against County, the Owner shall, upon
County's tender,defend the same at the Owner's sole cost and expense,promptly satisfy
any judgment adverse to County or to County and the Owner jointly,and reimburse the
County for any loss, cost, damage, or expense, including attorney fees suffered or
incurred by the County.
12. 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. By executing this
Agreement Owner affirms that they and any subcontractors of Owner are and shall
remain in compliance with Article 2 of Chapter 64 of the North Carolina General
Statutes. Owner also certifies that they have not been identified, and have not utilized
the services of any agent or subcontractor, on the list created by the State Treasurer
pursuant to G.S. § 147-86.58.
13. No Joint Venture or Agency. The County, the Owner each agree and acknowledge
that nothing contained herein or otherwise, including,without limitation, any act of the
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County, the Owner 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 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.
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, The Owner agree to
substitute for such provision of this Agreement or the application thereof determined
to be invalid or unenforceable, such other provision as most closely approximates, in a
lawful manner, such invalid, illegal or unenforceable provision. If the County, the
Owner cannot agree, they shall apply to a court of competent jurisdiction to substitute
such provision as the court deems reasonable and judicially valid, legal and
enforceable. Such provision determined by the court shall automatically be deemed
part of this Agreement ab initio.
17. 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.
18. Headings. Headings are for convenience only and shall not be used to interpret or
construe its provision.
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.
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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 Properties 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 Properties.
22. Publicity: Signage. The Owner agrees to provide such publicity with respect to the
County's participation in the development of the Properties as the County shall
reasonably require. Any signage at the Properties 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 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.
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 Properties including,
without limitation, inspection of the Properties 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.
27. Training. The Owner agrees to attend training and/or technical assistance workshops
provided by the County related to the administration of this Agreement and that the
Department of Housing and Community Development deems mandatory.
28. Entire Agreement and Signatures: The parties have read this Agreement and agree
to be bound by all of its terms, and further agree that it constitutes the complete and
exclusive statement of the Agreement between the parties unless and until modified in
writing and signed by the parties. Modifications may be evidenced by telefacsimile
signature. This Agreement together with any amendments or modifications may be
executed electronically. All electronic signatures affixed hereto evidence the consent
DocuSign Envelope ID:002619DF-54F2-4EEA-B4A8-14714544BAC0
of the Parties to utilize electronic signatures and the intent of the parties to comply with
Article I IA and Article 40 of North Carolina General Statute Chapter 66.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands
and seals on the day and year first above written.
[SIGNATURE PAGE TO FOLLOW]
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SIGNATURE PAGE
FOR EMPOWERMENT, INC
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DEDocuSigned by:
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Delores Bailey, Executive Director
Printed Name and Title
FOR ORANGE COUNTY,NORTH CAROLINA
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tionme B. Hammersley, County Manager
This document has been pre-audited in accordance with the N.C. Local Government and Fiscal
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DocuSigned by:
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Gary Donaldson, C TP, Chief Financial Officer
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DocuSigned by:
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Anne Marie osco, Staff Attorney
DocuSign Envelope ID:002619DF-54F2-4EEA-B4A8-14714544BAC0
EXHIBIT A
Property Description
Hillmont Condominiums#24
Being all of Unit B-14, "HILLMONT CONDOMINIUM," as depicted on the plat recorded in
Plat Book 32, Page 13, Orange County Registry, to which reference is hereby made for a more
particular description of same.
PIN: #9778-56-1748.038
Hillmont Condominiums#45
Being all of Unit A-15, "HILLMONT CONDOMINIUM," as depicted on the plat recorded in
Plat Book 32, Page 13, Orange County Registry, to which reference is hereby made for a more
particular description of same.
PIN: #9778-56-1748.015
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EXHIBIT B
Scope of Services
Acquisition of Hillmont Condominium units 424 (identified as Unit B-14 on the plat recorded in
Book 32, Page 13, Orange County Registry) and#45 (identified as Unit A-15 on the plat
recorded in Book 32, Page 13, Orange County Registry), located at 124 Fidelity Street, Carrboro,
North Carolina 27510
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EXHIBIT C
Project Budget
Acquisition of Property $145,201.00
Total $145,201.00
Source of Funds
Orange County FY 2019-20 HOME Funds $85,000.00
Orange County FY 2018-19 HOME CHDO Set-Aside Funds $60,201.00
Total $145,201.00
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.
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EXHIBIT D
Prepared by and after recording 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
, 2018, by EmPOWERment, Inc. for itself and its successors and assigns ("Owner" or
"EmPOWERment"), is given as a condition precedent to the award of Orange County HOME
Investment Partnership funds.
RECITALS:
WHEREAS, the Orange County HOME Consortium has designated up to Eighty-Five
Thousand Dollars ($85,000) in FY 2019-20 HOME funds and up to Sixty Thousand Two
Hundred and One Dollars ($60,201) in FY 2018-19 HOME Community Housing Development
Organizations (CHDO) Set-Aside funds for eligible CHDO set-aside activities to assist in the
acquisition of two units for affordable rental purposes in the Hillmont Apartment Complex in
Town of Carrboro; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 2011 and as such is the lead entity in a representative
capacity for all members of the Orange HOME Consortium for the purposes of carrying out the
HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable
Housing Act(Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the "Act"),
and as further defined in the Federal Program Requirements provided by the U.S. Department of
Housing and Urban Development; and
WHEREAS, EmPOWERment is a designated Community Housing Development
Corporation ("CHDO") as defined in 24 C.F.R. Part 92, Subpart A, Section 92.2 interested in
serving as a sponsor,developer,and/or advocate for low and moderate-income residents of Orange
County; and
WHEREAS, the Owner intends to acquire property, located at 124 Fidelity Street,
Carrboro, North Carolina (hereinafter referred to as "the Project"), as rental housing for low-
income families 80%or less of the Area Median Income that will remain affordable for low income
families throughout the term of the 99 year Period of Affordability. The Project dwelling units are
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located on the properties more particularly described in Exhibit A attached hereto and made a part
of this Agreement(hereinafter referred to as "the Properties"); and
WHEREAS,the Owner agrees to utilize HOME and CHDO Set-Aside funds provided for
the purpose of acquiring the Properties as described in its HOME Program Funding Application
dated February 5, 2019, which is hereby incorporated into and made part of this Agreement; and
WHEREAS,notwithstanding any provision of this Agreement,the County and the Owner
hereto agree and acknowledge that this Agreement does not constitute a commitment of funds or
site approval, and that such commitment of funds or approval may occur only upon satisfactory
completion of an environmental review and receipt by Orange County of a Release of Funds from
the U.S. Department of Housing and Urban Development under 24 CFR Part §58 if applicable.
The parties further agree that the provision of such funds to the project is conditioned on Orange
County's determination to proceed with, modify, or cancel the project based on the results of a
subsequent environmental review.
WHEREAS,Orange County requires and Owner agrees to the requirement, as a condition
precedent to the awarding of Orange County HOME Investment Partnership Program funds and
HOME CHDO Set-Aside funds, that Owner execute, deliver and record this Declaration in the
Office of the Register of Deeds of Orange County in order to create certain covenants pertaining
to the Properties and running with the land for the purpose of enforcement of the affordability
requirements of the Orange County HOME Investment Partnership Program.
NOW,THEREFORE,in consideration of the promises and covenants hereinafter set forth
and of other valuable consideration,the receipt and sufficiency of which is hereby acknowledged,
Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth
herein governing the use, occupancy, and transfer of the Properties shall be and are covenants
pertaining to the Properties and running with the land for the term stated herein
and are binding upon all subsequent owners of the Properties 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 Properties 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 80% of HUD area median
income).
B. In the event Owner sells, transfers or exchanges the Properties or any portion of the
Properties, the following shall pertain:
1. Subject to the requirements of the DEVELOPMENT AGREEMENT between Owner
and County dated March 10, 2020, which is hereby incorporated by reference and made
a part of this Declaration, and the HOME Investment Partnership Program and this
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Declaration, Owner may sell, transfer, or exchange the Properties 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 HOME
INVESTEMENT PARTNERSHIP PROGRAM. Owner agrees that County may void
any sale, transfer, or exchange of the Properties or any portion of this Properties if the
buyer or successor or other person fails to assume in writing the requirements of this
Declaration and the requirements of the DEVELOPMENT AGREEMENT and the
HOME INVESTMENT PARTNERSHIP PROGRAM. A copy of the
DEVELOPMENT AGREEMENT is on file with the Office of the Clerk to the Orange
County Board of County Commissioners.
2. Any assignment, sale,transfer, conveyance or other disposition of the Properties or any
part of the Properties 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 Properties, 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 Properties
immediately upon recordation and Owner shall comply with all restrictive covenants herein. This
declaration shall terminate ninety-nine (99)years after Project Completion,unless Orange HOME
Investment Partnership Program (Long Term Housing Affordability Policy) affordability
restrictions are terminated due to the sale of the Properties to a non-qualified buyer as provided
herein and Orange County agrees to the termination of the Declaration as provided in Section 4.13.
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
amendments hereto to be recorded and filed in the Office of the Register of Deeds of
Orange County.
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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 Properties(1)shall be and are covenants running with the land,encumbering
the Properties for the term of this declaration,binding upon Owner's successors in title and
all subsequent Owners of the Properties; (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 Properties) 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 Properties. For the
term of this Declaration, each and every contract, deed or other instrument hereafter
executed conveying the Properties 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 Properties 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 Properties or portion thereof including any leasehold interest in the
Properties 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 Properties
to register, with the Register of Deeds of Orange County, a notice of preservation of the
Restrictive Covenants on the Properties as provided in North Carolina General Statute §
47B-4 or any comparable preservation law in effect at the time of the recording of the
notice of preservation. It is the intent of this Section that the ninety-nine (99) year duration
of this Declaration of Restrictive Covenants be accomplished and that any future owner of
the Properties,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 Properties 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 REQUIREMENT
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A. Rights of Refusal
1. Grant and Effect. Orange County is granted a right of first refusal to purchase the
Properties as described in this Section. Any assignment, sale, transfer, conveyance, or
other disposition of the Properties 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 either or both of the Properties 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 Properties as affordable rental property, then Owner
must sell, transfer, or otherwise dispose of its interest in the Properties only to an
agency with similar interest in affordable housing and to serve families with incomes
not exceeding 80%of the area median household income by family size, as determined
by the U.S. Department of Housing and Urban Development at the time of the transfer.
The non-profit fund, foundation, or corporation of like purposes must have established
its tax-exempt status under Section 501 (c)(3) of the Internal Revenue Code.
2. However, if the Properties are 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
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secured by a deferred payment promissory note and deed of trust) or "equity" will be
divided 50150 by the seller of the Properties 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 Properties 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 HOME 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
HOME Funds.
4. The resale provisions shall remain in effect for the full affordability period—99 years.
C. Owner covenants that it will not knowingly take or permit any action that would result in
a violation of the Orange County Long Term Affordability Policy requirements or 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.
E. 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 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.
F. 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 5 MISCELLANEOUS
A. Severability. The invalidity of any clause, part, or provision of this Declaration shall not
affect the validity of the remaining portions thereof.
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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.
EmPOWERment Inc.
Chair, Board of Directors
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NORTH CAROLINA
ORANGE COUNTY
I, , Notary Public in and for the above named County and
State, do hereby certify that on this day personally appeared before me who, being by me duly
sworn, says that is Chair of the Board of Directors 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 Chair of Board of Directors.
Witness my hand and notarial seal, this the day of 20_.
Notary Public
My commission expires:
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EXHIBIT A
Property Description
Hillmont Condominiums#24
Being all of Unit B-14, "HILLMONT CONDOMINIUM," as depicted on the plat recorded in
Plat Book 32, Page 13, Orange County Registry, to which reference is hereby made for a more
particular description of same.
PIN: #9778-56-1748.038
Hillmont Condominiums#45
Being all of Unit A-15, "HILLMONT CONDOMINIUM," as depicted on the plat recorded in
Plat Book 32, Page 13, Orange County Registry, to which reference is hereby made for a more
particular description of same.
PIN: #9778-56-1748.015
26