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HomeMy WebLinkAbout014 of 1989 - Cooperative Agreement with US Department of Housing and Urban DevelopmentR89-1 C 89-14 RESOLUTION NO 14 OF 1989 AUTHORIZING THE EXECUTION OF A COOPERATIVE AGREEMENT BETWEEN SALT LAKE CITY CORPORATION AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WHEREAS, Title 11, Chapter 13, Utah Code Annotated, 1953, as amended, allows public entities to enter into cooperative agreements to provide joint undertakings and services; and WHEREAS, the attached agreement has been prepared to accomplish said purposes; THEREFORE, BE IT RESOLVED by the City Council to Salt Lake City, Utah; 1. It does hereby approve the attached grant agreement (which is generally described below) including such modifications thereto as may be determined necessary to comply with all applicable statutes, rules or regulations of such grant agreement and to make any necessary or reasonable changes in plans or documents: A grant agreement for loan guarantee assistance under Section 108 of the Housing and Community Development Act of 1974 (Public Law 93-383), as amended, between Salt Lake City Corporation and the U.S. Department of Housing and Urban Development, the proceeds of which will be applied in a manner consistent with the terms and conditions outlined in Exhibit C. 2. Palmer A. DePaulis, Mayor of Salt Lake City, Utah is hereby authorized to execute said agreement, including such modifications thereto as may be determined necessary to comply with all applicable statutes, rules or regulations, on behalf of Salt Lake City Corporation and to act in accordance with its terms. Passes by the City Council of Salt Lake City, Utah this 17th day of y, 1989. SALT LAKE CITY COCIL Amends Resolution 136 of 1988 Exhibit C DESCRIPTION OF SECTION 108 LOAN ACTIVITIES AND HOW EACH MEETS ONE OF THE BROAD NATIONAL OBJECTIVES Activity: Acquisition of low/moderate income housing National Objective: Activity benefiting low and moderate income persons where at least a majority of the beneficiaries are low and moderate income persons. The 108 Loan and purchase of the Canterbury Apartments is part of a commitment by Salt Lake City to provide affordable housing other than through traditional programs offered by the Housing Authority or other HUD subsidized projects. A major strategy in this plan was the formation of the Housing Development Corporation (HDC) which was created as a nonprofit agency charged with assembling a portfolio of elderly and family units to provide low/moderate assisted housing and stable rents. The program has evolved into four major elements: 1. Issuance of low yield City backed Housing Authority bonds in December 1985 to allow the HDC to construct elderly housing. The purpose of these bonds was to provide below market rents to assist the sizable local population of elderly with incomes between 50% and 80% of median not qualifying for Housing Authority subsidized programs. This group has limited earning power and cannot afford market rents. In addition, they need a secure environment among their peers to retain an independent life style. Dramatic changes in the rental market due to stifled economic growth changed the demand for new units and rendered the program inoperable without further subsidy, necessitating elements 3 and 4 below. 2. Construction of the Riverside Apartments (already under way when the rental market collapsed) with 41 elderly, specially designed units utilizing HDC bonds. This project is highly successful but not capable of carrying sufficient debt service to allow HDC bond money to be dedicated exclusively to low-income housing. 3. Acquisition of existing elderly housing with sufficient funds not requiring debt service to maintain low rental rates and also provide surplus income for program debt service. A Secretary's Discretionary grant of $500,000 is being sought to supplement an allocation of $300,000 from C-1 CDBG funds and $864,000 from HDC bonds to assist in the purchase of the 68 unit Ben Albert Apartments at a cost of $1,664,000. Annual surplus income under the proposed purchase arrangement and rent structure will provide approximately $67,880 annually for direct infusion into the HDC debt service budget. 4. Purchase of the 78 unit Canterbury Apartments for low/moderate income families through a Section 108 Loan Guarantee at a cost of $1,675,000. Approximately $20,000 of the loan will be used to make repairs and minor improvement to the property and $55,000 has been allowed for closing costs and loan servicing and/or interim financing charges. Annual surplus income from the Canterbury Apartments is estimated at $120,000 per year after the loan has been repaid. The Housing Development Corporation can meet program goals by investing their remaining bond proceeds to assure low-income housing only if investments not requiring full debt service can be acquired. Under the bond repayment schedule the need for surplus funds will grow to approximately $100,000 annually in about five years. The course of action described above will substantially meet that obligation and the Section 108 Loan is an essential ingredient in implementing the HDC program by providing future cash flow. This complex is in a mixed, single-family detached and multiple unit neighborhood. The project is aesthetically designed and quality constructed with the principal amenity being an outdoor swimming pool and club house. The cost per unit is $20,513 which is about 40% below current new construction costs. Characteristics of the complex are as follows: 1. 78 units in 6 buildings 2. Total 73,930 sq. ft. 3. 839 sq. ft. in 2-bedroom units 4. 1,075 sq. ft. in 3-bedroom units 5. 156 parking stalls (total) 6. 78 covered stalls 7. Built in 1985 8. 2 1/2 story walk-up 9. Stucco and aluminum siding 10. Asphalt shingles 11. Swimming pool and clubhouse Approximately 44% of the present tenant mix is moderate income and an additional 20% is in the low income category. There are 42 two -bedroom and 36 three -bedroom units with average rents of $310 and $385 respectively. Section 8 fair market rents have been established at $455 for the two -bedroom units and $564 for the three -bedroom units. Using the 30% median income cap, rents could be $626 and $696 respectively, thus rendering these units as "affordable housing". C-2 City involvement in securing undervalued housing in the current depressed market is intended to assure that rents will remain affordable for low and moderate income persons as rents increase in the future. Since the complex will have no debt service after six years when the Section 108 Loan has been repaid, annual surplus income can then be directed to broader community -wide programs for low and moderate income elderly and family projects. After purchase by the City, ownership and title of the Canterbury Apartments will remain with Salt Lake City. A separate management agreement will be entered into between the City and the Redevelopment Agency to administer, operate and maintain the property. The total management fee shall not exceed 5% of gross project cash flow, which will be payable to the Redevelopment Agency and/or any management which the Redevelopment Agency may contract with. The contract with the Redevelopment Agency will provide that $120,000 of the cash flow from the apartments, in excess of the amounts reasonably necessary to operate and maintain the complex, will be directed to repay the loan. A Community Development Block Grant allocation (entitlement funds) of $300,000 per year for approximately 6 years will also be used to assist the loan repayment. The loan will be repaid solely from project cash flow and CDBG funds. Any surplus cash flow from the apartments over the debt service and operating and maintenance requirements will be deposited in a reserve account to be used by the City at its discretion either for additional payments on the Section 108 Loan or for low/moderate or elderly assisted housing. When the 108 Loan has been repaid, the City presently intends, subject to future actions, to enter into a contract with the Housing Development Corporation (HDC) which will provide that all cash flow in excess of the amounts needed to manage the Canterbury will be used to service HDC housing bonds. Funding Approval Under Title 1 of the Housing and Community Development Act of 1974 (Public Law 93-383) as Amended HI-00515R U.S. Departmen}'- lousing and Urban Development Community Development Block Grant Program 174-/, r 1. Name of Grantee Salt Lake City, Utah 3. Grantee's Address (Include Street, City, County. State and Zip Code) APPROVED 324 So. State Street Salt Lake City, Utah JAN 19 1989 CITY RECORDER 2. Grant No. B-88-MC-49-0004 4. Date of Submission 5. Date of HUD Receipt of Submission Date Grantee Notified Start of Program Year July 1, 1988 6. 0 Original Funding Approval Igl Admendment. Admendment No. All section references below are to the Housing and Community Development Act of 1974, as amended, unless otherwise indicated. 7. Category of Community Development Block Grant for This Funding Action (Check only one) a. ® Entitlement (Sec. 106(b)) b. ❑ HUD Administered Small Cities (Sec. 106) (d) (2) (B) c. ❑ Secretary's Discretionary (Sec. 107) 8. Amount of Community Development Block Grant FY a. Amount of CDBG Funds Currently Reserved for this Grantee $ $ b. Amount of CDBG Funds Now Being Approved for this Grantee $ $ c. Amount of Reservation to be Cancelled (Line 8a minus 8b) $ $ FY FY HUD ACCOUNTING USE ONLY BATCH 1 TAC 1 5 3 1 7 6 CATEGORY 38 4 PROGRAM 9 Y REG 12 13 14 A AMOUNT 1 41 45 50 AREA 16 DOCUMENT NO. 7 0 8 2 18 EFFECTIVE DATE 54 PROJECT NUMBER 23 30 AMOUNT 2 60 61 65 70 35 SCHEDULE NO. 74 79 9. Distribution of Community Development Block Grant FY a. Grant amount withheld for payment of principal and interest on loans guaranteed pursuant to Sec. 108 $ b. Grant amount deducted by HUD to settle outstanding Urban Renewal Loans (Sec. 112 (a)(1)) c. Sum of lines 9a, and 9b d. Amount of CDBG Funds available for disbursement (Line 8b minus 9c) FY FY rr j 1'1irnnnnrn� 10. Amount of Surplus Urban Renewal Funds approved and balance available (SeV1I(ht) ' . a. Amount of surplus U.R. Funds reserved for this grantee RETURN TO 324 SO. STATE b. Amount of surplus U.R. Funds now being approved 5th FLOOR c. Balance of surplus U.R. Funds available for future use (Line 10a minuSI j,, [ITAH 84111 ;4L Previous Editions are Obsolete HUD•7082 (12-83) 24 CFR 570 HUD ACCOUNTING USE ONLY BATCH 1 TAC 1 5 3 1 7 6 CATEGORY 38 4 PROGRAM A REGI 9 12 13 14 AMOUNT 41 45 50 AREA 16 DOCUMENT NO. 7 0 8 2 18 EFFECTIVE DATE 54 PROJECT NUMBER 23 30 35 SCHEDULE NO. 65 70 . 74 AMOUNT2 60 61 79 11. Maximum amount of loon guarantee commitment amiable and amount now being approved. a. Grantee's latest entitlement amount — $ 3,794,000 x 3 $ 11,382,000 b. Principal amount of outstanding loans pursuant to Section 108 $ c. Amount of outstanding loan guarantee commitments approved pursuant to Section 108 d. Maximum amount 'of loan guarantee commitment available (Line 11a minus 11b, and 11c) $ 11,382,000 e. Amount Of loan guarantee commitment now being approved $ 1,825,000 12. Recipient of loan guarantee (Check applicable box) a. m Grantee identified in block No. 1 b. 0 Public Agency designated to receive loan guarantee (Name and address) 13. Sowell conditions (Check appbcable box) a. 0 Not applicable b. ® Attached U.S. Department of Housing and Urban Development Nancy C. Silvers �( By Deputy Assistant Secreta for Program Management/ Title DEC 23 Ig88: Date HUD-7082 (1283) Title Grant Agreement and Loa Guarantee Acceptance Provisions U.S. Department of Hous0 i and Urban Development Community Development Block Grant Program r Grant Agreement This Grant Agreement is made by and between the Department of Housing and Urban Development (HUD) and Salt Lake City, Utah (the Grantee) pursuant to the authority of Title I of the Housing and Community Devel- opment Act of 1974 (Public Law 93-383), as amended. The Grantee's submissions for Title 1 assistance and the HUD regulations at 24 CFR Part 570 (as now in effect and as may be amended from time to time), which are incorporated by reference, together with the HUD Funding Approval Form 7082 and any special conditions, which are hereto attached, constitute part of the Agreement. In reliance upon and in consideration of the mutual representations and obligations hereunder, HUD and the Grantee agree as follows: Subject to the provisions of this Grant Agreement, HUD will make the funding assistance for Fiscal Year 19 specified in the attached HUD Funding Approval Form 7082 available to the Grantee upon execution of the Agreement by the parties. The obligation and utilization of the funding assistance provided is subject to the requirements of the regulations and any special conditions set forth in the HUD Funding Approval Form 7082, including the requirement for a release of funds by HUD under the Environmental Review Procedures at 24 CFR Part 58 for any activities requiring such release. The Grantee agrees to comply with all applicable requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601) as specified in regulations issued by the Secretary and published in 24 CFR Part 42. The Grantee further agrees to assume all of the responsibilities for environmental review, decision making and actions, as specified and required in regulations issued by the Secretary pursuant to section 104(f) of the Act and published in 24 CFR Part 58. The Grantee further agrees to accept responsibility for adherence to the Agreement by subrecipient entities to which it makes funding assistance hereunder available. U.S. Department of Housing a d Urban Development Nancy C. Silvers By Deputy Assistant Secreta for Program Managemen DEC 2 3 1988 y Date The Grantee alt Lake City, Utah APPROVED JAN 19 1989 CITY RECORDER CITY RECC4'IDER'S RETURN TO 324 SO. STATE 5th FLOOR S.LC., UTAH 84111 Loan Guarantee Acceptance Provisions (Use only fdr Section 108 Loan Guarantee Assistance to designated public agency) ri 11' The public agency hereby accepts the Grant Agreement executed by the Department of Housing and Urban Development on with respect to grant number , as Grantee designated to receive loan guarantee assistance, and agrees to comply with the terms and conditions of the Agreement, applicable regulations, and other requirements of HUD now or hereafter in effect, pertaining to the assistance provided it Name of Public Agency/Grantee Signature of Authorized Official Title Title HUD-7082.1 (12-83) 24 CFR 570 • Instructions for Completing Funding Approval Form HUD-7082 U.S. Department of Hout w and Urban Development Community Development Block Grant Program Ji Block No. 1. Enter the Grantee's name as shown in Item 4 of Standard form 424. 2. Enter the number shown in Item 30 of Standard Form 424, and indicate the Fiscal Year for which the funding is to be made. NOTE: If reallocated funds are being made available as a supple- ment to an existing grant, enter in addition to the grant number for the current fiscal year, the grant number for the grantee applicable to the reallocated fund (i.e. if the grantee's FY 1985 grant number is B-85-MC-99-0001 and the grantee will also receive allocated funds appropriated in FY 1984, also enter B-84-MC-99-0001). 3. Enter the Grantee's complete address as shown in Item 4 of Standard Form 424. 4. Enter the date of submission or amendatory shown in Item 23 of Standard Form 424. 5. (a) Enter the month, day and year that the submission or amendatory was received. provided that it was judged to be complete. If the submission was,incomplete, enter the date ' that the additions which made•it complete were received. '(b) Enter the date that the Grantee'is notified of funding approval.'This will be the date appearing on the letter trans - miffing the•1-IUD-7082 to the Grantee and is considered the pointof obligation for accounting purposes. , (c); .Enter date program year starts. ( ' 6. Check the appropriate box.Check "Original Funding Approval" for the first funding approval form executed under the 'grant number shown in Block No. 2. Check "Amendment" for sub- sequent funding approval forms executed under the same grant number. Number amendments under the grant numtierconsecu- tively starting with "I." 7. Check the appropriate box. 8. The amounts entered in this block shall pertain only to funds appropriated to CD Block Grants. They shall not include amounts pertaining to surplus urban renewal funds, which are handled separately in Block No. 10. If grantee is to receive reallocated funds from prior Fiscal Year(s) in addition to its formula amount from the current Fiscal Year, complete one column for each separate Fiscal Year; otherwise leave the first two Fiscal Year columns blank. (a) Enter the amount of CDBG funds currently reserved for this Grantee under the grant number shown in Block No. 2. If amendment, enter the amount of CDBG funds which have been reserved since the completion of the previous Funding Approval form. (b) Enter the amount of CDBG funds now being provided to this Grantee. If amendment, enter only the increase (+) or decrease (-) in the amount of CDBG funds approved for use by this Grantee under the grant number shown in Block No.2. (c) Subtract the amount on line 8B from the amount on line 8a and enter the difference on this line. 9. The amount entered in this block shall pertain only the distri- bution of the grant amount shown on line 8b. If grantee is to receive reallocated funds from prior Fiscal Year(s) in addition to its formula amount from the current Fiscal Year, complete one column for each separate Fiscal Year; otherwise leave the first two Fiscal Year columns blank. (a) Enter the amount to be withheld for payment of principal and interest due the purchaser of notes or other obligations guaranteed pursuant to section 108, or, if applicable, for repayment due the United States as a result of guarantees made pursuant to section 108. (b) Enter the amount deducted by HUD pursuant to 24 CFR 570.802 to be used for repayment of urban renewal loans. Attach schedule, indicating the following for each loan: Project Number: Amount of CDBG funds to be applied to loan repayment: (c) Add the amounts on lines 9a and 9b and enter the sum on this line, (d) Subtract the amount on line 9c from the amount on line 8b and enter the difference on this line. This is the amount of CDBG funds made available by this Funding approval form for disbursement through the grant payment system (e.g., letter of credit). 10. Complete only if surplus grant funds remained after the financial settlement of urban renewal and/or NDP project(s), and those funds have been reserved to this Grantee Reference:24 CFR 570.801. (a) Enter the amount of surplus U.R. funds reserved for this Grantee. Verify this amount with the Regional Accounting Division. On the first Funding Approval form in which this block is completed, enter the total amount of surplus U.R. funds reserved for this Grantee via Form HUD-718. On sub- sequent Funding Approval forms, whether original oramend- ment, enter the balance of surplus U.R. funds available for future use, as shown on line 10c of the previous Funding Approval form, plus any additional amount of surplus U.R. funds reserved for this Grantee via Form(s) HUD-718. (b) Enter the amount of surplus U.R. funds now being approved for use by this Grantee. This amount will be dis- bursed through the grant payment system being used for CDBG funds (e.g., letter of credit). If aletter of credit is being used to disburse CDBG funds, the same letter of credit will be used to disburse surplus U.R. funds. • (c) Subtract the amount on line 10b from the amount.on line 10a and enter the difference an this line., 1 : 11. (a) Enter an amount equal to three times the Grantee's cur- rent entitlement amount. • (b) Enter the principal amount of outstanding loans guaran- teed pursuant to Section 108. (c) Enter the amount of outstanding commitments to guaran- tee loans made pursuant to Section 108 (approved commit- ments minus outstanding loans guaranteed). (d) Subtract the amounts on line 11b and 11c from the amount on line lla and enter the difference on this line. (e) Enter the amount of the loan guarantee commitment now being approved for this Grantee. NOTE: the amount approved cannot exceed the amount on line 11e. 12. Check the appropriate box. If applicable, enter the name and complete address (Street, City, County, State and ZIP Code) of any public agency designated and attach special Acceptance Provision. 13. Add Special Conditions, if applicable. HUD-7082 (12-83) 13. Special Conditions: (continued) (a) In the event the applicant shall fail to submit a promissory note or other obligation to HUD for inspection and guarantee before May 1, 1989, this commitment shall terminate and expire as of such date. (b) The applicant shall, as a condition for receiving the loan guarantee assistance, provide additional information concerning compliance with the requirements specified in 24 CFR §570.208 regarding the national objectives of the Community Development Block Grant program with respect to the North West Community Park project. No guaranteed loan funds may be obligated or expended with respect to activities included in the North West Community Park project prior to receipt of a written determination by the HUD Denver Office that such activities comply with one or more of the national objectives. I