Development Agreement - PHASE II - substantial final form
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WHEN RECORDED, RETURN TO:
City of Glendale
City Clerk
5850 West Glendale Avenue
Glendale, Arizona 85301
DEVELOPMENT AGREEMENT FOR
MULTI-FAMILY RENTAL DEVELOPMENT
UNDER THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
FY 2022-23
This Development Agreement for the multi-family rental development project known as Centerline on
Glendale (“Project”) under the Community Development Block Grant (“CDBG”) Program
(“Agreement”) is entered into this ___ day of , 2023 by and between the City of
Glendale, an Arizona municipal corporation (“City”), and, Centerline on Glendale Two, LLC, a
Wisconsin Limited Liability Company (“Developer”).
RECITALS
WHEREAS, the City has applied for and received federal funds pursuant to Title I of the Housing and
Community Development Act of 1974, as amended, 42 U.S.C. 5301, et seq. (“CDBG Program”) to assist
low-income persons and families in obtaining decent and affordable housing opportunities;
WHEREAS, the City has received an allocation of $2,368,223 of FY 2022-23 CDBG funds from a direct
entitlement made by the U.S. Department of Housing and Urban Development (“HUD”);
WHEREAS, the City has allocated a portion of its FY 2022-23 CDBG funds to support the development
of new affordable rental housing for projects that receive funds through the State of Arizona’s Low-
Income Housing Tax Credit (“LIHTC”) Program;
WHEREAS, Developer has received an allocation of LIHTC funding through the State;
WHEREAS, Developer is a for-profit corporation that will assist the City in the creation of low-income
persons and families in obtaining decent and affordable housing opportunities;
WHEREAS, the City believes that the activities of the Developer described in the Project comply with
the requirements of the CDBG Program regulations;
WHEREAS, it is necessary that the City and Developer to enter into an Agreement for the
implementation of eligible activities; and
WHEREAS, the City desires to enter into this Agreement and provide Developer with $239,587.68 in
CDBG Program funds to pay for the costs of implementing the Project.
The Parties enter into the following agreement:
AGREEMENT
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Agreement Amount. The City shall provide financial assistance in an amount not to exceed
$239,587.68 subject to the terms of this Agreement. Providing this Agreement amount constitutes
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the City's entire participation and obligation in the performance and completion of all work to be
performed under this Agreement.
2
Use of CDBG funds. Developer, in close coordination with the City, will perform all
professional, technical and construction services necessary to provide new construction of multi-
family rental units as detailed in Exhibit A.
3
Consistency with Home Investment Partnerships Program Requirements. As CDBG
Program regulations at 24 C.F.R. 570 do not address ongoing affordability, tenant selection
criteria, lease terms and other requirements related to development of new rental units, the City
and Developer agree to adhere to requirements stipulated in the Home Investment Partnerships
Program regulations at 24 CFR 92, as further notated in this Agreement unless otherwise
indicated.
4
Affordability. The Project is subject to ongoing compliance requirements for the length of the
affordability period identified in 24 C.F.R. § 92.252. The affordability period begins one day
after the date of initial occupancy of the last City-Assisted Unit will end twenty (20) years from
that date. To document initial and ongoing unit affordability, Developer shall create and submit
an Affordability Compliance Management Plan to the City for approval thirty days prior to the
initial rent-up of CDBG-assisted units. This Plan must provide procedures as to how Developer
will comply with the provisions in this Section 4 of the Agreement.
4.1
Rent limitations. Pursuant to 24 CFR 92.252 (a), initial rents of CDBG-assisted units
shall not exceed the HOME High Rents provided by HUD and in effect at the time of
initial occupancy and each year thereafter. The value of these rents accommodates the
cost of utilities. Developer shall provide the City will a list of utilities provided at the
project site, as well as the provider of those services.
4.2
Initial rent schedule and utility allowances. The City will provide Developer with the
CDBG rent schedule and approved Utility allowance schedule prior to initial marketing
of CDBG-assisted units. Developer will be required to obtain and use annually updated
rent schedules and utility allowances after initial rent up.
4.3
Period of Affordability. Developer agrees that CDBG-assisted units remain affordable
and subject to the affordability requirements of 24 CFR 92.252 (e) and contained in this
Agreement. The City and Developer agree that the period of affordability applicable to
this project is 20 years from the date established in the first paragraph of this Section 4.
4.4
Subsequent Rents During Period of Affordability. City and Developer agree that
CDBG rents established at the time of initial occupancy represent a floor in the rent that
can be charged during the period of affordability established herein despite adjustments
to Fair Market Rents and median household incomes made by HUD. Developer will
provide City with documentation of rents and occupancy on an annual basis in
compliance with ongoing affordability requirements. Developer agrees that changes in
CDBG rents will not affect existing leases in effect at the time of publication of new
CDBG rents and will provide tenants written notice of rent increases no later than 30
days before the expiration of existing leases.
4.5
Adjustment of CDBG rent. If, during the period of affordability, Developer’s analysis
of the project’s financial viability is in jeopardy due to HUD’s changes in Fair Market
Rents or median household income, Developer will notify the City within 30 days to
determine if an appeal to HUD is justified and necessary. If, in the sole discretion of the
City, that such an appeal is justified and necessary, Developer will cooperate with the
City to provide all necessary documentation and rationale as the basis of the appeal. The
City will facilitate the appeal process on behalf of Developer.
4.6
Tenant Income. For the Project to be eligible for CDBG Program assistance, tenants
occupying CDBG-assisted units must have a gross annual household income that does
not exceed 80% percent of area median income (“AMI”), adjusted for household size.
Verification of household income must be conducted by Developer in accordance with 24
C.F.R. § 92.203. Said tenants must also produce documentation certifying to the
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Developer his or her lawful presence in the United States, as required by A.R.S. §§ 1-501
or 1-502, as applicable.
4.7
Over-income Tenants. If, during the annual requalification process stipulated in 24
C.F.R. § 92.203 a tenant is determined to be over income, the Developer will designate
the next available comparable unit as a floating CDBG-assisted unit and apply all
regulatory requirements and those of this Agreement to that unit. The parties
acknowledge the Federal Low-Income Housing Tax Credit (“LIHTC”) program and
CDBG program are both providing funding for the construction of the Project. As both
programs have separate guidelines, if the guidelines of the programs conflict, but do not
prevent co-existence of the guidelines on the Project, then the most restrictive guidelines
will control the operation and use of the three (3) CDBG-assisted units. Developer will
notify the City of any requirements.
4.8
Fixed and Floating Units. Developer and City agree that CDBG-assisted units will be
floating. Initial assisted units must be identified prior to initial occupancy and may
change throughout the term of this Agreement. Replacement units must be comparable in
square footage, amenities and number of bedrooms to non-CDBG-assisted units. This
comparability of units will apply to all subsequent tenants after initial occupancy to
maintain unit conformity through the period of affordability.
4.9
Tenant Selection. Developer shall adopt, adhere to and submit to the City for review
and approval written tenant selection policies and procedures that comply with the
requirements of 24 CFR 92.253 (d), including: 1. limitation of tenancy to those
households at or below 80% of area median income, as established and revised annually
by HUD; 2. basis for selection related to the prospective tenant’s reasonable ability to
fulfill the terms of the lease agreement; 3. description of eligibility or preference criteria
for certain population segments (as applicable) that is in full compliance with the non-
discrimination requirements established in 24 CFR 92.350; 4. acceptance of Housing
Choice Voucher or HOME Tenant-Based Rental Assistance recipients as potential
tenants; 5. Provision of wait-list development criteria; and 6. Prompt written notification
for rejection of a tenant’s application and the reason(s) for the rejection.
4.10
Lease Requirements
4.10.1 Developer and Tenant must enter into a written lease agreement of not less than
one year unless a shorter period is mutually agreed upon and specified in the
lease.
4.10.2 Developer agrees that all lease agreements shall not contain any of the prohibited
terms of 24 CFR 92.253 (b), as provided in Exhibit F of this Agreement.
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Maximum Per Unit Subsidy. Developer will ensure that total CDBG funds invested in the
project will not exceed the per-unit dollar limitations established under HUD’s CPD Notice 15-
003 that replaces Section 221(d)(3) mortgage insurance program limits. These limits are
provided in Exhibit E.
6
Property Standards During Development. Developer will ensure that all units constructed will
meet the property standards set forth in 24 CF 92.251 at the time of project completion and
throughout the period of affordability as provided for in Section 5.3 contained herein.
6.1
Developer covenants that upon completion of construction the Project will comply with
all applicable State and local codes and ordinances.
6.2
Developer covenants that upon completion of construction, the Project will comply with
Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) as promulgated by 24 CFR
8, Titles II and III of the Americans with Disabilities Act (42 U.S.C. 12131-12189) as
promulgated by 28 CFR 35 and 36, and the Fair Housing Act (42 U.S.C. 3601-3619) as
promulgated by 24 CFR 100.201 and 205.
6.3
Developer will provide all documentation to City upon request in compliance of this
section, including, but not limited to: construction cost estimates, contracts, inspection
records and financial records.
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Ongoing Property Standards
7.1
Developer shall ensure that the CDBG-assisted units continue to remain safe, decent and
sanitary throughout the period of affordability. At a minimum, assisted units must
comply with HUD Housing Quality Standards (HQS) applicable to the Section 8 Housing
Choice Voucher Program.
7.2
The City will inspect, using HUD-prescribed instruments, each assisted unit, at least once
annually to document compliance with these property standards.
7.3
The City will provide ample notice to Developer to facilitate the inspection of each
assisted unit.
7.4
In the event of non-compliance, the City will provide written notification of the violation
to the Developer, and provide for a 30-day cure period, at which time, the Developer will
notify the City of completion of repairs, and schedule a reinspection.
7.5
Violations that, in the City’s sole discretion, constitute an immediate threat to the health
or safety of occupants, shall allow the City to require a shorter cure period.
7.6
Deficient units shall be re-inspected as many times as is necessary to ensure that all
identified violations have been corrected to the standards required in 24 CFR 92.251 (f).
8
Conditions of Religious Organizations.
8.1
Organizations that are religious or faith-based are eligible, on the same basis as any other
organization, to participate in the CDBG Program. Neither the federal government nor a
state or local government receiving funds under the CDBG Program will discriminate
against an organization on the basis of the organization’s religious character or affiliation.
8.2
Organizations that are directly funded under the CDBG Program may not engage in
inherently religious activities, such as worship, religious instruction, or proselytization, as
part of the assistance funded under this section.
8.3
If an organization conducts such activities, the activities must be offered separately, in
time or location, from the assistance funded under this part, and participation must be
voluntary for the beneficiaries of the assistance provided.
8.4
The completed Project must be used exclusively by the owner entity for secular purposes,
available to all persons regardless of religion. In particular, there must be no religious or
membership criteria for tenants of the Property.
8.5
An organization that participates in the CDBG Program will not, in providing CDBG
Program assistance, discriminate against a Program beneficiary or prospective Program
beneficiary on the basis of religion, religious belief or lack thereof.
8.6
The City will assure that any use of CDBG Program funds by a religious organization,
when commingled with funds of the religious organization, meet the requirements of 24
C.F.R. § 92.257.
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Non-Discrimination. In the selection of Tenants, Developer will comply with all non-
discrimination requirements of 24 C.F.R. § 92.350. Developer agrees to post notices containing
this policy against discrimination in conspicuous places available to applicants for employment
and employees. All solicitations or advertisements for employees, placed by or on the behalf of
Developer, will state that all qualified applicants will receive consideration for employment
without regard to race, color, religion, disability, sex, national origin, financial status, age, sexual
orientation, gender identity, or marital status.
10
Nondiscrimination and Equal Employment Opportunity.
10.1
Developer will not discriminate against any employee or applicant for employment
because of race, color, religion, sex, disability, national origin, financial status, age,
sexual orientation, gender identity, or marital status. Such action will include, but not be
limited to, the following: employment, upgrading, demotion, or transfer, recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. Developer agrees to
post in conspicuous places, available to employees and applicants for employment,
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notices to be provided by the City’s Representative setting forth the provisions of this
nondiscrimination clause.
10.2
Developer will, in all solicitations or advertisements for employees placed by or on
behalf of Developer, state that all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, disability, national origin,
financial status, age, sexual orientation, gender identity, or marital status.
10.3
Developer will send to each labor union or representative of workers with which he has a
collective bargaining agreement or other contract or understanding, a notice to be
provided by the City's Representative, advising the labor union or worker's representative
of Developer's commitments under Executive Order No. 11246 of September 24, 1965,
and will post copies of the notice in conspicuous places available to employees and
applicants for employment.
10.4
Developer will comply with all provisions of Executive Order 11246 of September 24,
1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.
11
Debarment and Suspension. As required by 24 C.F.R. Part 24.1, federal funds will not be used
directly or indirectly to employ, award contracts to, or otherwise engage the services of, or fund
any contractor, subcontractor, developer, business, consultant or any entity during any period of
debarment, suspension, or placement in ineligibility status, including the beneficiary of CDBG
investment.
12
Drug Free Workplace. Developer agrees to make diligent efforts to comply with 24 C.F.R. Part
24, Subpart F, as described in Attachment I of this Agreement.
13
Affirmative Marketing & Minority Outreach. Developer must adopt affirmative marketing
procedures and requirements for CDBG Program-assisted housing containing five (5) or more
housing units. “Affirmative marketing procedures” will consist of actions to provide information
and otherwise attract eligible persons from all racial, ethnic, and gender groups in the housing
market area to the available housing and will comply with the requirements and procedures of 24
C.F.R. § 92.351.
14
Environmental Review. No CDBG Program funds may be encumbered until the City has
completed an Environment Review pursuant to the provisions of the National Environmental
Policy Act of 1969 (“NEPA”) and the related authorities listed in HUD’s implementing
regulations at 24 C.F.R. § 50.1, et seq. and 24 CFR. § 58.1, et seq. Until the Environment
Review is complete, and a Release of Funds obtained from HUD, Developer will not undertake or
commit any CDBG Program funds to physical or choice-limiting actions, including property
acquisition, demolition, movement, rehabilitation, conversion, repair or construction prior to
environmental clearance. The results of the Environmental Review may result in a decision to
proceed with, modify or cancel the Project.
15
Displacement, Relocation, and Acquisition.
15.1
Developer must ensure that it has taken all reasonable steps to minimize the displacement
of persons (families, individuals, businesses, nonprofit organizations, and farms) as a
result of the Project.
15.2
Developer will consult the City prior to proceeding with any Project activity with CDBG
Program funds that may cause temporary or permanent displacement of the beneficiary of
CDBG Program investment. Such consultation shall assure compliance with appropriate
relocation requirements of 24 C.F.R. § 92.353 in accordance with the requirements of the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970
(“URA”) (42 U.S.C. §§ 4201-4655) and implementing regulations at 49 C.F.R. Part 24,
as amended and the Fair Housing Act (42 U.S.C. §§ 3601-19).
15.3
The Project is subject to the requirements of the Housing and Community Development
Act of 1974, and implementing regulation at 24 C.F.R. § 570. This includes the section
104 (d) requirements to provide relocation assistance and replace low- and moderate-
income housing as described at 24 C.F.R. § 570.606(c).
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15.4
The acquisition of the CDBGs is subject to the URA and the requirements of 49 C.F.R.
Part 24.1, et seq.
16
Labor Requirements.
16.1
Federal regulation 24 C.F.R. § 92.354 requires that any contract for the construction
(rehabilitation or new construction) of affordable housing with 8 or more units assisted
with funds made available under the CDBG Program must contain a provision requiring
that the wages prevailing in the locality, as predetermined by the Secretary of Labor
pursuant to the Davis-Bacon Act (40 U.S.C. §§ 276a-5), will be paid to all laborers and
mechanics employed in the development of affordable housing involved. Such
agreements must also be subject to the overtime provisions, as applicable, to the Work
Hours and Safety Standards Act (40 U.S.C. §§ 327-332).
16.2
Developer will comply with regulations issued under Federal Laws and Regulations
pertaining to labor standards and HUD handbook 1344.1 (Federal Labor Standards
Compliance in Housing and Community Development Programs), as applicable.
16.3
Developer will furnish all information and reports required by Executive Order 11246 of
September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor,
or pursuant thereto, and will permit access to its books, records, and accounts by the City
and the Secretary of Labor for purposes of investigation to ascertain compliance with
such rules, regulations, and order
17
Labor, Training & Business Opportunity (Section 3)
17.1
It is agreed that performance under this Agreement is on a Project assisted under a
program providing direct federal financial assistance from HUD and is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as
amended (12 U.S.C. § 1701u), as well as any and all applicable amendments thereto.
Section 3 requires that, to the greatest extent feasible, opportunities for training and
employment be provided to low and moderate income residents of the Project area, and
that contracts for work in connection with the Project be awarded to business concerns
which are located in, or owned in substantial part by persons residing in the Project area.
17.2
Developer will comply with the regulations issued pursuant thereto by HUD as set forth
in Title 24 of the Code of Federal Regulations and all applicable rules and orders of HUD
issued there under as well as any and all applicable amendments thereto prior to the
execution of this Agreement as well as during the term of this Agreement. Developer
certifies and agrees that it is under no contractual or other disability, which would prevent
it from complying with these requirements as well as any and all applicable amendments
thereto.
17.3
In construction contracts of $100,000 or more, Developer will include a clause that in
every subcontract performing work in connection with the Project and will, at the
direction of the City, take appropriate action under 24 C.F.R. Part 135. Developer will
not subcontract with any subcontractor where it has notice or knowledge that the latter
has been found in violation of regulations under Title 24 of the Code of Federal
Regulations and will not enter into any subcontract unless the subcontractor has first
provided it with a preliminary statement of ability to comply with these requirements as
well as with any and all applicable amendments thereto.
17.4
Compliance with the provisions of Section 3, the regulations set forth in Title 24 of the
Code of Federal Regulations and all applicable rules and orders of HUD issued
thereunder is a condition precedent to federal financial assistance being provided to and
continuing to be provided to the Developer. Such compliance will be binding upon the
applicant or recipient for such assistance, its successors, and assigns. Failure to fulfill
these requirements will subject Developer or recipient, its contractors and subcontractors,
its successors, and assigns to those sanctions specified by Title 24 of the Code of Federal
Regulations, as amended, and may be cause to terminate this Agreement.
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18
Conflict.
18.1
Developer acknowledges this Agreement is subject to A.R.S. § 38-511, which allows for
cancellation of this Agreement in the event any person who is significantly involved in
initiating, negotiating, securing, drafting, or creating the Agreement on City's behalf is
also an employee, agent, or consultant of any other party to this Agreement.
18.2
Developer agrees to abide by the provisions of 24 C.F.R. § 92.356 with respect to
conflicts of interest, and covenants that no person who exercises or have exercised any
functions or responsibilities with respect to activities assisted with CDBG Program funds
or who are in a position to participate in a decision making process or gain any inside
information with regard to these activities, may obtain a financial interest or benefit from
the Project, or have an interest in any contract, subcontract or agreement with respect
thereto, or proceeds derived from the Project, either for themselves or those with whom
they have family or business ties, during their tenure or for one year thereafter.
18.3
Developer covenants that no person on its Board of Directors or any member of its staff
has an identity of interest with any person or entities that might benefit directly or
indirectly financially from this Agreement.
18.4
Developer further covenants that in the performance of this Agreement no person, having
such a financial interest and/or influence with regard to the Project, will be employed or
retained by Developer.
18.5
No owner, developer or sponsor of a project assisted with CDBG funds (or officer,
employee, agent or consultant of the owner, developer or sponsor) whether private, for
profit or nonprofit (when acting as an owner, developer or sponsor) may occupy a
CDBG-assisted affordable housing unit in the Project. This provision does not apply to
an individual who receives CDBG funds to acquire or rehabilitate his or her principle
residence or to an employee or agent of the owner or developer of a rental housing
project who occupies a housing unit as the Project manager or maintenance worker.
18.6
If such conflict as outlined above does exist, Developer is bound to disclose officially in
writing, on Developer’s letterhead, the nature and extent of that conflict prior to
execution of this Agreement, or if discovered subsequently, to disclose such conflict as
soon as it occurs or is known.
18.7
Exceptions to above requirements are allowed under certain circumstances in accordance
with 24 C.F.R. §§ 92.356(d), (e) and (f)(2). Requests for exceptions must be made to the
City who, after determination as to whether an exception request is warranted, will render
a decision and/or seek the approval of HUD to render a decision.
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Records and Reports.
19.1
The City reserves the right to inspect, monitor, and observe work and services performed
by Developer at any and all reasonable times.
19.2
The City reserves the right to audit the records of Developer any time during the
performance of this Agreement and for a period of six (6) years after the period of
affordability has been satisfied under this Agreement.
19.3
Developer will provide the City with a copy of their single audit and management letter
pursuant to the requirements of 2 CFR 200 annually, but no later than 30 days after
completion of single audit.
19.4
Access will be immediately granted to the City, HUD, the Comptroller General of the
United States, or any of their duly authorized representatives to any books, documents,
papers, and records of Developer or its contractors which are directly pertinent to that
specific contract for the purpose of making audit, examination, excerpts, and
transcriptions.
20
Enforcement of the Agreement.
20.1
The City will enforce this Agreement in accordance with 24 C.F.R. § 85.43, by
suspension or termination of the Agreement should Developer fail to comply with any
term of the Agreement, or for convenience in accordance with 24 C.F.R. § 85.44.
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20.2
Developer acknowledges and agrees that it will be subject to sanctions set forth in CDBG
Program Regulation 24 C.F.R. Part 570, if determined to be applicable by the City.
20.3
The parties hereto agree that this Agreement will be construed and enforced according to
the laws of the State of Arizona and all applicable federal laws and regulations.
20.4
The City will secure this Agreement with the Deed of Trust and Assignment of Rents and
Promissory Note contained herein as Exhibits G and H, respectively.
21
Disbursement of Funds
21.1
Project expenses will be paid based on invoices for actual expenses paid. All such
expenses will be in conformance to the approved Project Budget. Developer will be
responsible for any cost overruns.
21.2
Developer covenants that all expenditures will comply with 2 CFR 200, and will be
allowable, allocable and reasonable. The City reserves the right to inspect records and
Project sites to determine that reimbursement and compensation requests meet the terms
of 2 CFR 200. The City also reserves the right to hold payment until adequate
documentation has been provided and reviewed.
21.3
Developer may submit a final invoice upon completion of the Project. Final payment will
be made after the City has determined that all services have been rendered, files and
documentation delivered, and units constructed and occupied by eligible tenants in full
compliance with CDBG regulations, including submission of a completion report and
documentation of eligible occupancy, property standards and long-term use restrictions.
21.4
Developer will be monitored by the City for compliance with the regulations of 24 C.F.R.
§ 92.252(a) (4) for the affordability period specified herein. Developer will provide
reports and access to Project files as requested by the City during the construction of the
Project and for six (6) years after completion and closeout of the Agreement or during the
affordability period, whichever is longer.
22
Duration of the Agreement. This Agreement shall be effective for 43 months commencing on
the date of this Agreement and expiring on September __, 2026 unless sooner terminated
pursuant to the provisions contained herein.
23
Procurement Standards.
23.1
Intentionally Deleted.
23.2
Developer will establish procurement procedures to ensure that materials and services are
obtained in a cost-effective manner. When procuring services to be provided under this
Agreement, Developer will comply, at a minimum, with the nonprofit procurement
standards at 24 C.F.R. §§ 84.40-48.
23.3
Any Developer that can be considered to be a religious organization will abide by all
portions of 24 C.F.R. § 92.257.
24
Uniform Administrative Requirements. To the extent applicable to a nongovernmental
recipient of federal funds, Developer will comply with 2 CFR 200, as amended, the Davis-Bacon
Act (40 U.S.C. 276a et seq.), as amended, and as supplemented by Department of Labor
regulations (29 C.F.R. Part 5, as amended), the Copeland Anti-Kickback Act (18 U.S.C. 874), as
amended, and as supplemented by Department of Labor regulations (29 C.F.R. Part 3, as
amended), the Agreement Work Hours and Safety Standards Act (40 U.S.C. 327 et seq.), as
amended, and as supplemented by Department of Labor regulations (29 C.F.R. Part 5, as
amended); Executive Order 11246 (Equal Opportunity), as amended, and as supplemented by
Department of Labor regulations (41 C.F.R., chapter 60, as amended); and the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et
seq., as amended and Section 104(d) of the Act), and in accordance with 24 C.F.R. Part 42, as
amended.
25
Immigration Law Compliance.
25.1
Contractor, and on behalf any subcontractor, warrants, to the extent applicable under
A.R.S. § 41-4401, compliance with all federal immigration laws and regulations that
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relate to their employees as well as compliance with A.R.S. § 23-214(A) which requires
registration and participation with the E-Verify Program.
25.2
Any breach of warranty under subsection 18.1 above is considered a material breach of
this Agreement and is subject to penalties up to and including termination of this
Agreement.
25.3
City retains the legal right to inspect the papers of any Contractor or subcontractor
employee who performs work under this Agreement to ensure that the Contractor or any
subcontractor is compliant with the warranty under subsection 18.1 above.
25.4
City may conduct random inspections, and upon request of City, Contractor will provide
copies of papers and records of Contractor demonstrating continued compliance with the
warranty under subsection 18.1 above. Contractor agrees to keep papers and records
available for inspection by the City during normal business hours and will cooperate with
City in exercise of its statutory duties and not deny access to its business premises or
applicable papers or records for the purposes of enforcement of this section.
25.5
Contractor agrees to incorporate into any subcontracts under this Agreement the same
obligations imposed upon Contractor and expressly accrue those obligations directly to
the benefit of the City. Contractor also agrees to require any subcontractor to incorporate
into each of its own subcontracts under this Agreement the same obligations above and
expressly accrue those obligations to the benefit of the City.
25.6
Contractor’s warranty and obligations under this section to the City is continuing
throughout the term of this Agreement or until such time as the City determines, in its
sole discretion, that Arizona law has been modified in that compliance with this section is
no longer a requirement.
25.7
The “E-Verify Program” above means the employment verification program
administered by the United States Department of Homeland Security, the Social Security
Administration, or any successor programs.
26
Insurance.
26.1
Developer must obtain, maintain and provide evidence of the following insurance
(“Required Insurance”) consistent with Exhibit L, Insurance Certificate.
26.2
Developer and Sub-contractors. Developer, and each Sub-contractor performing work or
providing materials related to this Agreement must procure and maintain the insurance
coverages described below (collectively “Contractor’s Policies”), until each Parties’
obligations under this Agreement are completed
26.3
Developer must at all times relevant hereto carry a commercial general liability policy
with a combined single limit of at least $1,000,000 per occurrence and $2,000,000 annual
aggregate.
26.4
Sub-contractors must at all times relevant hereto carry a general commercial liability
policy with a combined single limit of at least $1,000,000 per occurrence.
26.5
This commercial general liability insurance must include independent contractors’
liability, contractual liability, broad form property coverage, products and completed
operations, XCU hazards if requested by the City, and a separation of insurance
provision.
26.6
These limits may be met through a combination of primary and excess liability coverage.
26.7
Auto. A business auto policy providing a liability limit of at least $1,000,000 per
accident for Developer and $1,000,000 per accident for Sub-contractors and covering
owned, non-owned and hired automobiles.
26.8
Workers’ Compensation and Employer’s Liability. A workers’ compensation and
employer’s liability policy providing at least the minimum benefits is required by
Arizona law.
26.9
Equipment Insurance. Developer must secure, pay for, and maintain all-risk insurance as
necessary to protect the City against loss of owned, non-owned, rented or leased capital
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equipment and tools, equipment and scaffolding, staging, towers and forms owned or
rented by Developer or its Sub-contractors.
26.10 Notice of Changes. Developer’s Policies must provide for not less than 30 days’ advance
written notice to City Representative of:
26.11 Cancellation or termination of Developer or Sub-Contractor’s Policies;
26.12 Reduction of the coverage limits of any of Developer or and Sub-Contractor’s Policies;
and
26.13 Any other material modification of Developer or Sub-Contractor’s Policies related to this
Agreement.
Certificates of Insurance.
26.14 Within 10 business days after the execution of the Agreement, Developer must deliver to
City Representative certificates of insurance for each of Developer and Sub-Contractor’s
Policies, which will confirm the existence or issuance of Contractor and Sub-Contractor’s
Policies in accordance with the provisions of this section, and copies of the endorsements
of Developer and Sub-contractor’s Policies in accordance with the provisions of this
section.
26.15 City is and will be under no obligation either to ascertain or confirm the existence or
issuance of Developer and Sub-Contractor’s Policies, or to examine Developer and Sub-
Contractor’s Policies, or to inform Contractor or Sub-contractor in the event that any
coverage does not comply with the requirements of this section.
26.16 Developer’s failure to secure and maintain Developer Policies and to assure Sub-
Contractor Policies as required will constitute a material default under this Agreement.
26.17 Other contractors or vendors that may be contracted by Developer in connection with the
Project must procure and maintain insurance coverage as is appropriate to their particular
agreement.
26.18 This insurance coverage must comply with the requirements set forth above for
Contractor’s Policies (e.g., the requirements pertaining to endorsements to name the
parties as additional insured parties and certificates of insurance).
26.19 Policies. Except with respect to workers’ compensation and employer’s liability
coverages, the City must be named and properly endorsed as additional insureds on all
liability policies required by this section.
26.20 The coverage extended to additional insureds must be primary and must not contribute
with any insurance or self-insurance policies or programs maintained by the additional
insureds.
26.21 All insurance policies obtained pursuant to this section must be with companies legally
authorized to do business in the State of Arizona and acceptable to all parties.
26.22 Developer must also cause its Sub-contractors to obtain and maintain the Required
Insurance.
26.23 City may consider waiving these insurance requirements for a specific Sub-contractor if
City is satisfied the amounts required are not commercially available to the Sub-
contractor and the insurance the Sub-contractor does have is appropriate for the Sub-
contractor’s work under this Agreement.
26.24 Developer and Sub-contractors must provide to the City proof of Required Insurance
whenever requested.
27
Bonds. Upon execution of this Agreement, and if applicable, Developer must furnish payment
and performance bonds as required under A.R.S. § 34-608 and 24 C.F.R. Part 85.36(h). This
requirement is not applicable to the Project.
28
Compliance with Federal, State & Local Laws. Developer covenants and warrants that it will
comply with all applicable laws, ordinances, codes, rules and regulations of the state local and
federal governments, and all amendments thereto, including, but not limited to; Title 8 of the
Civil Rights Act of 1968 PL.90-284; Executive Order 11063 on Equal Opportunity and Housing
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Section 3 of the Housing and Urban Development Act of 1968; Housing and Community
Development Act of 1974, and all requirements of the CDBG Program as set forth in 24 C.F.R.
Part 570.
29
Suspension & Termination.
29.1
In accordance with 24 C.F.R. § 85.43, suspension or termination may occur if Developer
materially fails to comply with any term of the award, and that the award may be
terminated for convenience in accordance with 24 C.F.R. § 85.44.
29.2
If Developer is unable to meet the approved timelines as required by CDBG regulations
or complete the Project because of delays resulting from Acts of God, untimely review
and approval by the City and other governmental authorities having jurisdiction over the
Project, or other delays that are not caused solely by Developer, the City will grant a
reasonable extension of time for completion of the Project. It will be the responsibility of
Developer to notify the City promptly in writing whenever a delay is anticipated or
experienced, and to inform the City of all facts and details related to the delay.
Developer will also inform the City when it expects the delay to end and when it expects
the Project to be complete.
29.3
If Developer fails in any manner to fully perform and carry out any of the terms,
covenants, and conditions of the Agreement, or if Developer refuses or fails to proceed
with the Project with such diligence as will ensure its completion within the time fixed by
CDBG regulations, Developer will be in default and notice in writing will be given to
Developer’s Representative of such default by the City or an agent of the City. If
Developer fails to cure such default within such time as may be required by such notice,
the City may at its option terminate and cancel the Agreement at the expiration of the
cure period.
29.4
In the event of such termination, all CDBG funds awarded to Developer pursuant to this
Agreement will be immediately revoked and any approvals related to the Project will
immediately be deemed revoked and canceled. In such event, Developer will no longer
be entitled to receive any compensation for work undertaken after the date of the
termination of this Agreement, as the grant funds will no longer be available for this
Project.
29.5
In the event of such termination, Developer will be entitled to receive just and equitable
compensation for any work satisfactorily completed hereunder prior to the date of said
termination.
29.6
Notwithstanding the above, Developer will not be relieved of liability to the City for
damages sustained by the City by virtue of any breach of the Agreement by the
Developer. The City may withhold any payments to the Developer for the purpose of
setoff against such damages until such time as the exact amount of damages due the City
from Developer is determined whether by court of competent jurisdiction or otherwise.
29.7
The waiver or failure to enforce a breach of any term, covenant or condition hereof will
not operate as a waiver of any subsequent breach of the same or any other term, covenant,
or condition hereof.
30
Default-Loss of CDBG Funds.
30.1
In the event of such termination, all CDBG funds awarded to Developer pursuant to this
Agreement will be immediately revoked and any approvals related to the Project will
immediately be deemed revoked and canceled. In such event, Developer will no longer
be entitled to receive any compensation for work undertaken after the date of the
termination of this Agreement, as the CDBG funds will no longer be available for this
Project.
30.2
Such termination will not affect or terminate any of the rights of the City as against
Developer then existing, or which may thereafter accrue because of such default, and the
foregoing provision will be in addition to all other rights and remedies available to the
City under the law and the Note and Deed of Trust and Assignment of Rents (if in effect),
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including but not limited to compelling Developer to complete the Project in accordance
with the terms of this Agreement, in a court of equity.
30.3
The waiver of a breach of any term, covenant or condition hereof will not operate as a
waiver of any subsequent breach of the same or any other term, covenant, or condition
hereof.
30.4
The investor member of the Developer shall receive notice of any default hereunder in
accordance with Section 36 of this Agreement and shall have right, but not the obligation,
to cure any such default on the same terms as the Developer.
31
Indemnification Agreement. Developer will, during the term of this Agreement, indemnify,
hold, protect, and save harmless the City and any and all of its officers, elected officials, agents,
and employees from and against any all actions, audits, proceedings, claims and demands, loss,
liens, costs, expenses and liability of any kind and nature whatsoever, for injury to or death of
persons, or damage to property, including property owned by the City brought, made, filed
against, imposed upon or sustained by the City, its officers, agents, or employees in and arising
from attributable to or caused directly or indirectly by the negligence, wrongful acts, omissions or
from operations conducted by the Developer, its officers, agents or employees, or by any person
acting on behalf of Developer and with Developer’s knowledge and consent, expressed or
implied.
32
Prohibited Lobbying Activities. Developer, his/her agent or representative will not have any
lobbying contact, as defined by the Lobbying Disclosure Act (2 U.S.C. 1602), orally or in any
written form with any City elected official or any City employee other than the City Manager,
Deputy or Assistant City Manager or City Attorney’s office (for legal issues only), or their
respective designees, regarding the contents of this Agreement.
33
Prohibited Political Contribution. Developer, during the term of this Agreement, will not make
a contribution reportable under Title 16, Chapter 6, Article 1, Arizona Revised Statutes to a
candidate or candidate committee for any City elective office during the term of this Agreement.
The City reserves the right to terminate the Agreement without penalty for any violation of this
provision.
34
Contingent Fees. Developer promises that it has not employed or retained any company or
person, other than bona fide employees working solely for Developer, to solicit or secure this
Agreement, and that it has not paid or agreed to pay any company or person, other than bona fide
employees working solely for Developer, any fee, commission, percentage, brokerage fee, gifts or
any other consideration contingent upon or resulting from the award or making of this
Agreement. For breach of this promise, the City may cancel this Agreement without liability or,
at its discretion, deduct the full amount of the fee, commission, percentage, brokerage fee, gift or
contingent fee from the compensation due Developer.
35
Successors and Assigns. This Agreement is binding on the City and Developer, and its
successors and assigns. Neither the City nor Developer will assign or transfer its interest in this
Agreement without the written consent of the other.
36
Representatives.
Developer. Developer’s representative (“Developer’s Representative”) authorized to act on
Developer’s behalf with respect to the Project, and his or her address for Notice delivery is:
Centerline on Glendale Two, LLC
c/o Gorman & Company, LLC
Attn: Brian Swanton, President
200 North Main Street
Oregon, WI 53575
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With required copies to:
Reinhart Boerner Van Deuren s.c.
Attn: Stephen Elliott
1000 N. Water St. Ste. 1700
Milwaukee, Wisconsin 53202
And:
U.S. Bancorp Community Development
Corporation
1307 Washington Avenue, Suite 300
Mail Code: SL MO RMCD
St. Louis, MO 63103
Attn.: Director of LIHTC Asset Management
And:
Jill Goldstein, Esq.
Kutak Rock LLP
1650 Farnam Street
Omaha, NE 68102
City. City’s representative (“City’s Representative”) authorized to act on City’s behalf, and his or
her address for Notice delivery is:
City of Glendale
Attn: Matthew Hess
Community Revitalization Division
5850 West Glendale Avenue
Glendale, Arizona 85301
With required copies to:
City of Glendale
City of Glendale
City Manager
City Attorney
5850 West Glendale Avenue
5850 West Glendale Avenue
Glendale, Arizona 85301
Glendale, Arizona 85301
Concurrent Notices. All notices to City’s Representative must be given concurrently to City
Manager and City Attorney.
A notice will not be considered to have been received by City’s Representative until the time that
it has also been received by the City Manager and City Attorney.
City may appoint one or more designees for the purpose of receiving notice by delivery of a
written notice to Contractor identifying the designee(s) and their respective addresses for notices.
Changes. Developer or City may change its representative or information on Notice, by giving
Notice of the change in accordance with this section at least ten days prior to the change.
37
Other Provisions.
37.1
Developer is responsible for all applicable state and federal social security benefits and
unemployment taxes and agrees to indemnify and protect the City against such liability.
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37.2
Developer will maintain a procurement Code of Conduct for its organization, and ensure
compliance by all employees.
37.3
Alterations to the Project and Budget must be mutually agreed upon by the City and
Developer, and will be incorporated into this Agreement by written amendments signed
by both parties.
37.4
This Agreement represents the entire agreement between the parties and supersedes all
prior representations, negotiations or agreements whether written or oral.
37.5
Title and paragraph headings are for convenient reference and are not a part of this
Agreement.
37.6
In the event of conflict between the terms of this Agreement and any terms or conditions
contained in any attached documents, the terms in this Agreement will rule.
37.7
No waiver or breach of any provision of this Agreement will constitute a waiver of a
subsequent breach of the same or any other provision hereof, and no waiver will be
effective unless made in writing.
37.8
Should any provisions, paragraphs, sentences, words or phrases contained in this
Agreement be determined by a court of competent jurisdiction to be invalid, illegal or
otherwise unenforceable under the laws of the State of Arizona, such provisions,
paragraphs, sentences, words or phrases will be deemed modified to the extent necessary
in order to conform with such laws, or if not modifiable to conform with such laws, then
same will be deemed severable, and in either event, the remaining terms and provisions
of this Agreement will remain unmodified and in full force and effect.
37.9
Developer and its employees and agents will be deemed to be independent contractors,
and not agents or employees of the City, and will not attain any rights or benefits under
the civil service or pension ordinances of the City, or any rights generally afforded
classified or unclassified employee; further they will not be deemed entitled to state
compensation benefits as an employee of the City.
37.10 Funding for this Agreement is contingent on the availability of funds and continued
authorization for the Project and is subject to amendment or termination due to lack of
funds, or authorization, reduction of funds, and/or change in regulations.
38
Exhibits. The following exhibits, with reference to the term in which they are first referenced,
are incorporated by this reference.
Exhibit A
Project Scope
Exhibit B
Legal Description
Exhibit C
Project Schedule
Exhibit D
Project Budget
Exhibit E
Maximum Per Unit Subsidy Limits
Exhibit F
Prohibited Lease Provisions
Exhibit G
Developer Deed of Trust and Assignment of Rents
Exhibit H
Developer Promissory Note
Exhibit I
Certifications
Exhibit J
Federal Laws and Regulations
Exhibit K
Additional Requirements
Exhibit L
Insurance
(Signatures Appear on the Next Page)
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IN WITNESS WHEREOF, all parties concerned acknowledge that they have read, understand, approve,
and accept all of the provisions of this Agreement.
CITY OF GLENDALE, an Arizona
municipal corporation
Kevin R. Phelps
City Manager
ATTEST:
Julie Bower
City Clerk
(SEAL)
APPROVED AS TO FORM:
Michael D. Bailey
City Attorney
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Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
STATE OF ARIZONA
)
) ss.
County of Maricopa
)
On this the ________ day of _____________, 2023, before me, a Notary Public, personally
appeared Brian Swanton, as President of Gorman & Company, LLC, manager of GEC Centerline on
Glendale, LLC, manager of Centerline on Glendale MM, LLC, managing member of Centerline on
Glendale Two, LLC, known to me or satisfactorily proven to be the person whose name is subscribed to
this Declaration of Conditions, Covenants and Restrictions and acknowledged that he executed the same.
____________________________________
Notary Public
My Commission Expires:
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EXHIBIT A
PROJECT DESCRIPTION
[Gorman to provide comments]
1.
Purpose. The City has awarded Developer CDBG Program funds to pay for partial costs associated
with the development of the Centerline on Glendale Phase One project, a 186-unit multi-family
complex.
2.
Location. The Project site is located at a vacant, multi-parcel ±INSERT ACREAGE acre site
near the southeast corner of 67th Ave and Glendale Ave. in the City of Glendale, AZ 85301, as
defined in Exhibit B.
3.
Schedule. Project activities will include, but are not limited to: site acquisition; completion of all
pre-development activities (environmental review, release of funds, funding commitments, design
review, building permits, etc.); construction mobilization, construction, marketing and occupancy
of 186 units. Project completion expected by June 2025, as defined in Exhibit C.
4.
Funding. The City is providing $239,587.68 of the total budget. Developer is obtaining remainder
of Project funds from equity funding made available through an allocation of Low-Income Housing
Tax Credits, private permanent financing and gap financing from the State of Arizona and Maricopa
County, deferred developer fee and [final sources to be confirmed prior to execution]. The total
budget for the Project is $60,425,384. The budget and Project expenses are defined in Exhibit D.
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EXHIBIT B
LEGAL DESCRIPTION
[UPDATE WITH PLAT WHEN RECORDED]
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EXHIBIT C
PROJECT SCHEDULE
[Gorman to provide comments]
Project Milestone
Estimated Completion Date
Completion of Environmental Review
12/29/22
Design review and building permit
2/9/2023
Receipt of Release of Funds from HUD
2/16/23
Acquisition of property & commitment of funding
4/22/2023
Notice to Proceed
2/23/2023
Construction mobilization
2/23/2023
25% completion
10/31/23
50% completion
4/23/2024
75% completion
7/23/2024
100% completion
12/31/2024
25% occupancy (including CDBG-assisted units)
10/30/2024
50% occupancy
01/30/2025
100% occupancy
3/31/25
Project Completion & Closeout
6/30/25
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EXHIBIT D
PROGRAM BUDGET
REVENUE – TOTAL PROJECT FUNDING
Source
Amount
City of Glendale - CDBG
$239,587.68
LIHTC Equity
$25,498,290.00
Permanent Lender
$23,000,000.00
AZ Dept of Housing Gap Financing
$3,000,000.00
Maricopa County
$3,000,000.00
Deferred Developer Fee
$5,677,094.00
Total:
$60,414,971.68
NOTE – There will be a construction loan in the amount of $45,000,000
EXPENSES
Expenses
Glendale Funding
Other Resources
Total Program
Budget
Acquisition
$239,587.68
$2,410,928.32
$2,650,516.00
Hard Costs
$0
$38,210,166.00
$38,210,166.00
Soft Costs
$0
$18,299,071.00
$18,299,071.00
Reserves
$0
$1,265,631.00
$1,265,631.00
Total:
$239,587.68
$60,185,796.32
$60,425,384.00
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EXHIBIT E
MAXIMUM PER UNIT SUBSIDY LIMITS
Bedroom Size
Maximum Per-Unit Subsidy Limits
(effective March 17, 2022)
0 BR
$159,754
1 BR
$183,132
2 BR
$222,694
3 BR
$288,094
4 BR +
$316,236
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EXHIBIT F
PROHIBITED LEASE PROVISIONS
Pursuant to 24 CFR 92.253 (b), the following terms are prohibited from inclusion in leases of CDBG-assisted units
for the period of affordability agreed upon herein.
1. Agreement to be Sued. Tenant shall not be required to agree to be sued, admit guilt or consent to judgement
in favor of the landlord in legal proceedings brought forth in connection with the lease agreement.
2. Treatment of Property. Landlord shall not take, hold, or sell tenant’s personal property without notice and a
court decision on the rights of the respective parties.
3. Excusing Owner from Responsibility. Tenant shall not be required to hold landlord or landlord’s agents
harmless in any action or failure to act, whether unintentional or negligent.
4. Waiver of Notice. Tenant shall not be required to waive notification of a lawsuit instituted by landlord.
5. Waiver of Legal Proceedings. Tenant shall not be required to waive a court proceeding in an eviction
process.
6. Waiver of Jury Trial. Tenant shall not be required to waive any right to a trial jury.
7. Waiver of Right to Appeal Court Decisions. Tenant shall not be required to waive their rights to appeal a
court decision associated with the lease.
8. Tenant’s Payment of Legal Fees. Tenant shall not be required to pay any legal costs of landlord associated
with a court proceeding.
9. Mandatory Supportive Services. Tenant shall not be required to accept supportive services in connection
with their occupancy of the CDBG-assisted unit.
Developer acknowledges and agrees that inclusion of any of these provisions in a CDBG-assisted lease agreement,
regardless of intent, is unenforceable.
Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
Date
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EXHIBIT G
WHEN RECORDED, RETURN TO:
City of Glendale
City Clerk
5850 West Glendale Avenue
Glendale, Arizona 85301
DEED OF TRUST AND ASSIGNMENT OF RENTS
(Developer)
DATE:
TRUSTOR:
Centerline on Glendale Two, LLC
(ADDRESS):
200 N. Main St.
Oregon, Wisconsin 53575
BENEFICIARY:
City of Glendale
(ADDRESS):
5850 West Glendale Avenue
Glendale, Arizona 85301
TRUSTEE:
City of Glendale
(ADDRESS):
5850 West Glendale Avenue
Glendale, Arizona 85301
SUBJECT REAL PROPERTY in Maricopa County, State of Arizona, described in the Legal Description
attached as Exhibit A (“Property”).
This Developer Deed of Trust and Assignment of Rents (“Developer Deed of Trust”) is made between the
Trustor, Trustee and Beneficiary above named.
WITNESSETH: That Trustor irrevocably grants and conveys to Trustee in Trust, with Power of Sale, the
above described real property, together with: (1) all buildings, improvements and fixtures now or
hereafter placed thereon; (2) all existing leases, and all future leases executed with respect to such
property; (3) all rents, issues, profits and income thereof (all of which are hereinafter called "property
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income"); (4) all classes of property now, or at any time hereafter, attached to or used in any way in
connection with the use, operation or occupancy of such property; (5) all property, rights, permits and
privileges now or hereafter owned by Trustor or now or hereafter appurtenant to such property, which
entitle Trustor or such property to receive water or electrical power for use thereon; all property granted,
transferred and assigned to Trustee hereunder is hereafter referred to as the "Property," and Trustor
warrants that it is well and truly seized of a good and marketable title in fee simple to the real property
hereby conveyed; that the title to all property conveyed by this Developer Deed of Trust is clear, free and
unencumbered other than those encumbrances listed in Exhibit B (“Permitted Encumbrances”) , and
Trustor will forever warrant and defend the same unto Beneficiary, its successors and assigns, against all
claims whatsoever;
SUBJECT, HOWEVER, to the right, power, and authority hereinafter given to and conferred upon
Beneficiary to collect and apply such Property Income;
AND SUBJECT TO, any easements and restrictions listed in a schedule of exceptions to coverage in any
title insurance polity insuring Beneficiary's interest in the Property.
1.
For the Purpose of Securing:
1.1
Performance of each agreement of Trustor herein contained.
1.2
Payment of the indebtedness evidenced by promissory note or notes of even date
herewith, and any extension or renewal thereof, in the principal sum of $250,000.00
Dollars and executed by Trustor in favor of Beneficiary or order.
1.3
Payment of additional sums and interest thereon which may hereafter be loaned to
Trustor, or his successors or assigns, when evidenced by a promissory note or notes that
are secured by this Deed of Trust.
2.
To Protect the Security of this Deed of Trust, Trustor covenants and agrees:
2.1
To keep the Property in good condition and repair; not to remove or demolish any
building thereon; to complete or restore promptly and in good and workmanlike manner
any building which may be constructed, damaged, or destroyed thereon, and to pay when
due all claims for labor performed and materials furnished therefore; to comply with all
laws affecting said property or requiring any alterations or improvements to be made
thereon; not to commit or permit waste thereof; not to commit, suffer, or permit any act
upon said Property in violation of law; and to do all other acts which from the character
or use of the Property may be reasonably necessary, the specific enumerations herein not
excluding the general.
2.2
To keep all improvements now or hereafter erected on said property continuously insured
against loss by fire or other hazards specified by Beneficiary in an amount not less than
the total obligation secured hereby. All policies will be held by Beneficiary and be in
such companies as Beneficiary may approve and have loss payable first to Beneficiary, as
his interest may appear and then to Trustor. The amount collected under any insurance
policy may be applied upon any indebtedness hereby secured and in such order as
Beneficiary may determine or at option of Beneficiary the entire amount so collected or
any part thereof may be released to Trustor. Such application or release will not cure or
waive any default hereunder nor cause discontinuance of any action that may have been
or may thereafter be taken by Beneficiary or Trustee because of such default.
2.3
To appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses of
Beneficiary or Trustee, including cost of evidence of title and attorneys’ fees in a
reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may
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appear or be named, and in any suit brought by Beneficiary to enforce this Developer
Deed of Trust.
2.4
To pay before delinquent, all taxes and assessments affecting said Property; when due, all
encumbrances, charges and liens, on said Property or any part thereof, which appear to be
prior or superior hereto; all costs, fees, and expenses of this Trust, including, without
limiting the generality of the foregoing, the fees of Trustee for issuance of any Deed of
Partial Release and Partial Reconveyance or Deed of Release and Full Reconveyance and
all lawful charges, costs, and expenses in the event of reinstatement of, following default
in, this Deed of Trust or the obligations secured hereby.
2.5
Should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary or Trustee, but without obligation so to do and without notice to or demand
upon Trustor and without releasing Trustor from any obligation hereof, may: Make or do
the same in such manner and to such extent as either may deem necessary to protect the
security hereof, Beneficiary or Trustee being authorized to enter upon said Property for
such purposes; appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest
or compromise any encumbrance, charge, or lien which in the judgment of either appears
to be prior or superior hereto; and, in exercising any such powers, pay necessary
expenses, employ counsel, and pay his reasonable attorneys’ fees. All amounts so paid,
together with interest thereon at the same rate as is provided for in the note secured by
this Developer Deed of Trust or at the highest legal rate, whichever is greater, will be part
of the debt secured by this Developer Deed of Trust and a lien on the above Property.
2.6
To pay immediately and without demand all sums expended by Beneficiary or Trustee
pursuant to the provisions hereof, together with interest from date of expenditure at the
same rate as is provided for in the note secured by this Developer Deed of Trust or at the
highest legal rate, whichever is greater. Any amounts so paid by Beneficiary or Trustee
will become part of the debt secured by this Developer Deed of Trust and a lien on the
Property and immediately due and payable at option of Beneficiary or Trustee.
3.
It is Mutually Agreed:
3.1
That any award of damages in connection with any condemnation or any taking, or for
injury to the Property by reason of public use, or for damages for private trespass or
injury thereto, is assigned and will be paid to Beneficiary as further security for all
obligations secured hereby (reserving unto Trustor, however, the right to sue therefore
and the ownership thereof, subject to this Developer Deed of Trust), and upon receipt of
such moneys Beneficiary may hold the same as such further security, or apply or release
the same in the same manner and with the same effect as above provided for disposition
of proceeds of fire or other insurance.
3.2
That by accepting payment of any sum secured hereby after its due date, Beneficiary does
not waive his right either to require prompt payment when due of all other sums so
secured or to declare default for failure so to pay. Without affecting the obligation of
Trustor to pay and perform as herein required; without affecting the personal liability of
any person for payment of the indebtedness secured hereby; and without affecting the
lien or priority of lien hereof on the Property, Beneficiary may, at its option, extend the
time for payment of said indebtedness, or any part thereof, reduce the payment thereon,
release any person liable on any of said indebtedness, accept a renewal note therefore,
modify the terms of said indebtedness, take or release other or additional security, or join
in any extension or subordination agreement. Any such action by Beneficiary or the
Trustee at Beneficiary's direction may be taken without the consent of any junior
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lienholder, and will not affect the priority of this Developer Deed of Trust over any junior
lien. Time is of the essence for this Deed of Trust.
3.3
That at any time or from time to time, and without notice, upon written request of
Beneficiary and presentation of this Developer Deed of Trust and said note(s) for
endorsement, and without liability therefore, and without affecting the personal liability
of any person for payment of the indebtedness secured hereby, and without affecting the
security hereof for the full amount secured hereby on all Property remaining subject
hereto, and without the necessity that any sum representing the value or any portion
thereof of the Property affected by the Trustee's action be credited on the indebtedness,
the Trustee may: (a) release and reconvey all or any part of said Property; (b) consent to
the making and recording, or either, of any map or plat of the Property or any part
thereof; (c) join in granting any easement thereon; (d) join in or consent to any extension
agreement of any agreement subordinating the lien, encumbrance or charge hereof. Any
Trustor signing this Trust as a surety or accommodation party or that has subjected the
Property to this Trust to secure the debt of another, expressly waives the benefits of
A.R.S. § 12-1641.
3.4
That upon written request of Beneficiary stating that all sums secured hereby have been
paid, and upon surrender of this Developer Deed of Trust and said note(s) to Trustee for
cancellation and retention, and upon payment of its fees, Trustee will release and
reconvey, without covenant or warranty, express or implied, the property then held
hereunder, the recitals in such reconveyance, of any matters or facts, will be conclusive
proof of the truthfulness thereof. The grantee in such reconveyance may be described as
"the person or persons legally entitled thereto."
3.5
That as additional security, Trustor hereby gives to and confers upon Beneficiary the
right, power, and authority, during the continuance of this Trust, to collect the property
income, reserving to Trustor the right, prior to any default by Trustor in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, to collect
and retain such property income as it becomes due and payable. Upon any such default
Beneficiary may at any time, without notice either by person, by agent, or by receiver to
be appointed by a court, and without regard to the adequacy of any security for the
indebtedness hereby secured or the solvency of the Trustor, enter upon and take
possession of said Property or any part thereof, in his own name sue for or otherwise
collect such Property income, including that past due and unpaid and apply the same, less
costs and expenses of operation and collection, including reasonable attorney's fees of
Beneficiary and Trustee, upon any indebtedness secured hereby, and in such order as
Beneficiary may determine. The entering upon and taking possession of said Property,
the collection of such Property Income, and the application thereof as aforesaid, will not
cure or waive any default or notice of Trustee's sale hereunder or invalidate any act done
pursuant to such notice. Beneficiary will expressly have all rights provided for in A.R.S.
§§ 33-702(B) and 33-807.
3.6
That upon default by Trustor in the payment of any indebtedness secured hereby or in
performance of any agreement hereunder, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written notice thereof,
setting forth the nature thereof, and of election to cause to be sold the Property under this
Developer Deed of Trust. Beneficiary also will deposit with Trustee this Developer Deed
of Trust, said note(s), and all documents evidencing expenditures secured hereby.
3.7
Trustee will record and give notice of Trustee's sale in the manner required by law, and
after the lapse of such time as may then be required by law, Trustee will sell, in the
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manner required by law, said property at public auction at the time and place fixed by it
in said notice of Trustee's sale to the highest bidder for cash in lawful money of the
United States, payable at time of sale. Trustee at its discretion may postpone or continue
the sale from time to time by giving notice of postponement or continuance by public
declaration at the time and place last appointed for the sale. Trustee will deliver to such
purchaser its Developer Deed of Trust conveying the property so sold, but without any
covenant or warranty, expressed or implied. Any persons, including Trustor, Trustee or
Beneficiary, may purchase at such sale. The purchaser at the Trustee's sale will be
entitled to immediate possession of the Property as against the Trustee or other persons in
possession and will have a right to the summary proceedings to obtain possession
provided in Title 12, Chapter 8, Article 4, Arizona Revised Statues, together with costs
and reasonable attorneys’ fees.
3.8
After deducting all costs, fees, and expenses of Trustee and of this Trust, including cost
of evidence of title in connection with sale and reasonable attorney's fees of Beneficiary
and Trustee, Trustee will apply the proceeds of sale to payment of: all sums then secured
hereby and all other sums due under the terms hereof, with accrued interest; and the
remainder, if any, to the person or persons legally entitled thereto, or as provided in
A.R.S. § 33-812. To the extent permitted by law, an action may be maintained by
Beneficiary to recover a deficiency judgment for any balance due hereunder. In lieu of
sale pursuant to the power of sale conferred hereby, this Developer Deed of Trust may be
foreclosed in the same manner provided by law for the foreclosure of mortgages on real
property. Beneficiary will also have all other rights and remedies available to it
hereunder and at law or in equity. All rights and remedies will be cumulative.
3.9
That Beneficiary may appoint a successor Trustee in the manner prescribed by law.
Trustor and Beneficiary authorize Trustee, in the event any demand or notice is made or
tendered to it concerning this Developer Deed of Trust or the Property, to hold any
money and documents and to withhold action or performance until an action will be
brought in a court of competent jurisdiction to determine the rights asserted or the
property of the demand, notice or action requested and Trustee will be without liability or
responsibility for awaiting such court action. A Successor Trustee herein will without
conveyance from the predecessor Trustee, succeed to all the predecessor's title, estate,
rights, powers, and duties. Trustee may resign at any time by mailing or delivering notice
thereof to Beneficiary and Trustor and having so resigned will be relieved of all liability
and responsibility to Trustor, Beneficiary or otherwise hereunder. "Trustee" herein will
include all successor trustees. Trustee will not be liable for any action taken in its
discretion and in good faith, or upon advice of counsel, or upon any information supplied
or direction given by Beneficiary. Unless Trustee is adjudged grossly negligent or guilty
of intentional wrongdoing or breach of contract, Trustor and Beneficiary will, upon
demand, indemnify and hold harmless Trustee against all costs, damages, attorneys’ fees,
expenses and liabilities which it may incur or sustain in connection with this Developer
Deed of Trust or any foreclosure or sale hereof or any court or other action or proceeding
arising here from.
3.10
That this Developer Deed of Trust applies to, inures to the benefit of, and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns.
The term "Beneficiary" will mean the owner and holder of the note(s) secured hereby,
whether or not named as Beneficiary herein. In this Developer Deed of Trust, whenever
the contest so required, the masculine gender includes the feminine and neuter, and the
singular number includes the plural.
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3.11
That Trustee accepts this Trust when this Developer Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. Trustee may but is not
obligated to notify any party hereto of pending sale under any other deed of trust or of
any action or proceeding in which Trustor, Beneficiary, or Trustee will be a party, unless
brought by Trustee.
3.12
Notwithstanding anything herein to the contrary, if the Beneficiary takes title to the
Property through foreclosure or deed of lieu of foreclosure, the Property shall remain
subject to the provisions of Section 42(h)(6)(E)(ii) of the Internal Revenue Code or any
similar successor provision of the Code. This section shall apply notwithstanding the
order of recording of any of the loan documents secured by this Deed of Trust and the
extended use commitment, executed in connection with the allocation of federal low
income housing tax credits to the Developer for the Property pursuant to Section 42 of
such Code.
The undersigned Trustor requests that a copy of any notice of Trustee's sale hereunder be mailed to him at
his address set forth above.
(Signatures Appear on Next Page)
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CITY OF GLENDALE, an Arizona
municipal corporation
___________________________________
Kevin R. Phelps
City Manager
ATTEST:
______________________________
Julie Bower
City Clerk
(SEAL)
APPROVED AS TO FORM:
______________________________
Michael D. Bailey
City Attorney
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Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
STATE OF ARIZONA
)
) ss.
County of Maricopa
)
On this the ________ day of _____________, 2023, before me, a Notary Public, personally
appeared Brian Swanton, as President of Gorman & Company, LLC, manager of GEC Centerline on
Glendale, LLC, manager of Centerline on Glendale MM, LLC, managing member of Centerline on
Glendale Two, LLC, known to me or satisfactorily proven to be the person whose name is subscribed to
this Declaration of Conditions, Covenants and Restrictions and acknowledged that he executed the same.
____________________________________
Notary Public
My Commission Expires:
_____________________
Do not destroy this Deed of Trust OR the Note which it secures.
Both must be delivered to the Trustee for cancellation before release and conveyance will be made
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Exhibit A to Deed of Trust
Legal Description
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Exhibit B to Deed of Trust
Permitted Encumbrances
[List all recorded exceptions, exceptions for new financing documents and transaction documents –
e.g. plat, easement, Deeds of Trusts, covenants, subordination agreements etc. – all TBD at closing]
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EXHIBIT H
WHEN RECORDED, RETURN TO:
City of Glendale
City Clerk
5850 West Glendale Avenue
Glendale, Arizona 85301
PROMISSORY NOTE
(Developer)
Loan Amount: $239,587.68
Glendale, Arizona
Date: [Date should be finance closing date]
FOR VALUE RECEIVED, the undersigned promise(s) to pay to the order of the City of Glendale, an
Arizona municipal corporation (City), or its successors, the principal sum of Two Hundred Thirty-Nine
Thousand Five Hundred and Eighty-Seven Dollars and 68/100 Cents ($239,587.68). This Developer
Promissory Note (“Developer Note”) is made on a 30-year Deferred Payment, non-interest-bearing
basis on and is secured by a Developer Deed of Trust and Assignment of Rents (“Developer Deed of
Trust”) encumbering the property identified in the Developer Deed of Trust (“Property”).
This Note shall become due and payable in full upon any transfer, voluntary, involuntary, or by operation
of law, of the Property at any time within twenty (20) years from the date of this Note undersigned ceases
to use the Property to provide services to assist low-income persons and families in obtaining decent and
affordable rental opportunities in violation of the terms of the Declaration of Covenants, Conditions, and
Restrictions by Borrower in favor of Lender of even date herewith.
This Note is secured by a Developer Deed of Trust and Assignment of Rents executed by the undersigned
naming the City as Beneficiary; which Deed of Trust and Assignment of Rents and this Note are security
for the obligations of the undersigned contained in the Development Agreement for the Centerline on
Glendale Project, a new multifamily rental development project under the Development Agreement for
Multi-Family Rental Development Under the Community Development Block Grant Program
(“Agreement”) executed by the parties on ___________
, 2023.
Should default be made in the payment of any amount when due, or should the undersigned default on
any obligation owed to the City under the terms of this Developer Note or the Developer Deed of Trust
providing security, therefore, the whole sum of principal shall become immediately due and payable at
the option of the City.
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If suit or action is instituted by City to recover on this Developer Note, the undersigned will pay
reasonable attorneys’ fees and costs in addition to the amount due on the Developer Note.
Diligence, demand, protest and notice of demand and protest are hereby waived and the undersigned
hereby waives, to the extent which otherwise would apply to the debt evidenced by this Developer Note.
Consent is hereby given to the extension of time of payment of this Developer Note, without notice.
The undersigned reserves the right to repay at any time all of the principal amount of this Developer Note
in a single payment without the penalties, discount or premiums.
Payment and performance of the obligations set forth in this Developer Note and the loan documents
relating thereto (the “Loan Documents”) shall be non-recourse to Developer and Developer’s members,
and the Lender’s sole recourse with respect to the Developer shall be the right to foreclose under the
Developer Deed of Trust and other collateral forming part of the Loan Documents; provided that this
provision shall not restrict any exceptions to non-recourse liability set forth in the Loan Documents,
respecting such matters as fraud, waste and similar matters respecting actions of the general partner of
Developer.
IN WITNESS WHEREOF, this Developer Note and Developer Deed of Trust securing the Developer
Note, have been duly executed by the undersigned, as of the date above written.
CITY OF GLENDALE, an Arizona
municipal corporation
___________________________________
Kevin R. Phelps
City Manager
ATTEST:
______________________________
Julie Bower,
City Clerk
(SEAL)
APPROVED AS TO FORM:
______________________________
Michael D. Bailey
City Attorney
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48560603
Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
STATE OF ARIZONA
)
) ss.
County of Maricopa
)
On this the ________ day of _____________, 2023, before me, a Notary Public, personally
appeared Brian Swanton, as President of Gorman & Company, LLC, manager of GEC Centerline on
Glendale, LLC, manager of Centerline on Glendale MM, LLC, managing member of Centerline on
Glendale Two, LLC, known to me or satisfactorily proven to be the person whose name is subscribed to
this Declaration of Conditions, Covenants and Restrictions and acknowledged that he executed the same.
Notary Public
My Commission Expires:
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EXHIBIT I
CERTIFICATIONS
See attached Certifications:
1.
Policy of Nondiscrimination on the Basis of Disability.
2.
Section 319 of Public Law 101-121.
3.
Contracting with Small and Minority Firms, Women’s Business Enterprises and Labor Surplus
Area Firms.
4.
Drug-Free Workplace.
###
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POLICY OF NONDISCRIMINATION ON THE
BASIS OF DISABILITY
The undersigned representative agrees, on behalf of Client, to have or adopt a Policy of
Nondiscrimination on the Basis of Disability. Such Policy will state that the Developer does not
discriminate on the basis of disabled status in the admission or access to, or treatment or employment in,
its federally assisted programs or activities.
Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
_______________________________________
Date
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SECTION 319 OF PUBLIC LAW 101-121
The Undersigned certifies, to the best of his or her knowledge and belief, that:
1.
No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any
person for influencing or attempting to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member of Congress, in connection
with the awarding of any Federal contract, the making of any federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any federal contract, grant, loan, or cooperative agreement.
2.
If any funds other than federal appropriated funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress in connection with this
Federal contract, grant, loan, or cooperative agreement, the undersigned will complete and submit
Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.
3.
The undersigned will require that the language of this certification be included in the award documents
for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and
cooperative agreements), and that all agencies will certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction was
made or entered into. Submission of this certification is a prerequisite for making or entering into this
transaction imposed by 31 U.S.C. § 1352. Any person who fails to file the required certification will be subject
to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
_______________________________________
Date
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CONTRACTING WITH SMALL AND MINORITY FIRMS,
WOMEN’S BUSINESS ENTERPRISES AND LABOR SURPLUS AREA FIRMS
1.
It is a national policy to award a fair share of contracts to small and minority business firms.
Accordingly, affirmative steps must be taken to assure that small and minority businesses are
utilized when possible as sources of supplies, equipment, construction, and services. Affirmative
steps will include the following:
1.1
Qualified small and minority businesses on solicitation lists.
1.2
Assuring that small and minority businesses are solicited whenever they are potential
sources, and to the greatest extent possible that these businesses are located within the
metropolitan area.
1.3
When economically feasible, dividing total requirements into smaller tasks or quantities
so as to permit maximum small and minority business participation.
1.4
Where the requirement permits, establish delivery schedules which will encourage
participation by small minority businesses.
1.5
Using the services and assistance of the Small Business Administration, and the Office of
Minority Business Enterprises of the Department of Commerce and the Community
Services Administration as required.
1.6
If any subcontracts are to be let, requiring the prime contractor to take the affirmative
steps in §§ 1.1 through 1.5. Grantees will take similar appropriate action in support of
women's enterprises.
1.7
To the greatest extent feasible, opportunities for training and employment will be given to
low and moderate income persons residing within the metropolitan area.
2.
The above-described equal opportunity requirements are obligations of the City because federal
funds are being utilized to finance the Project to which this Project pertains.
3.
In executing any contract, the Developer agrees to comply with the requirements and to provide
appropriate documentation at the request of the City.
Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
_______________________________________
Date
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DRUG-FREE WORKPLACE
The Developer certifies that it will maintain a drug-free workplace in accordance with the requirements of
24 C.F.R. Part 24, Subpart F by:
1.
Publishing a statement notifying employees that the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance is prohibited in the Developer’s
workplace and specifying the actions that will be taken against employees for violation of such
prohibition.
2.
Establishing an ongoing drug-free awareness program to inform employees about:
2.1
The dangers of drug abuse in the workplace;
2.2
The Developer’s policy of maintaining a drug-free workplace;
2.3
Any available drug counseling, rehabilitation and employee assistance programs; and
2.4
The penalties that may be imposed upon employees for drug abuse violations occurring
in the workplace.
3.
Making it a requirement that each employee to be engaged in the performance of the grant be
given a copy of the statement required by paragraph 1.
4.
Notifying the employee in the statement required by paragraph 1 that, as a condition of
employment under the grant, the employee will:
4.1
Abide by the terms of the statement; and
4.2
Notify the employer in writing of his or her conviction for a violation of a criminal drug
statute occurring in the workplace no later than five calendar days after such conviction.
5.
Notifying the City in writing, within ten calendar days after receiving notice under paragraph 4.2
from an employee or otherwise receiving actual notice of such conviction. Employers of
convicted employees must provide notice including position title, to every grant officer or other
designee on whose grant activity the convicted employee was working, unless the Federal agency
has designated a central point for the receipt of such notices. Notice will include the identification
number(s) of each affected grant.
6.
Taking one of the following actions, within 30 calendar days of receiving notice under paragraph
4.2, with respect to any employee who is so convicted:
6.1
Taking appropriate personnel action against such an employee, up to and including
termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended;
or
6.2
Requiring such employee to participate satisfactorily in a drug abuse assistance or
rehabilitation program approved for such purposes by a federal, state, local health
requirements, law enforcement, or other appropriate agency.
7.
Making a good faith effort to continue to maintain a drug-free workplace through implementation
of the above-described paragraphs.
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Centerline on Glendale Two, LLC
By: Centerline on Glendale MM, LLC, its managing member
By: GEC Centerline on Glendale, LLC, its manager
By: Gorman & Company, LLC, its manager
By:
Brian Swanton, President
_______________________________________
Date
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EXHIBIT J
FEDERAL LAWS AND REGULATIONS
1.
Applicability of Uniform Administrative Requirements. The parties should comply with all
administrative requirements, cost principles, and audit requirements as provided in 2 CFR Part 200 in
compliance with the Final Guidance issued by U.S. Department of Housing and Urban Development on
Feb. 26, 2015 (Notice: SD-2015-01)
2.
Equal Opportunity.
2.1
The City agrees to comply with Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and the
HUD regulations under 24 CFR Part 1, which provides that no person in the United States will,
on the grounds of race, color, or national origin, be excluded from participation in, be denied the
benefits of, or be otherwise subjected to discrimination under any activity receiving Federal
financial assistance by way of grant, loan, or MOU and will immediately take any measures
necessary to effectuate this MOU. If any real property or structure thereof is provided or improved
with the aid of Federal financial assistance extended to the City, this assurance will obligate the
City, or in the case of any transfer of such property or structure is used for a purpose of which the
Federal financial assistance is extended or for another purpose involving the provision of similar
services or benefits.
2.2
The City agrees to comply with Title VIII of the Civil Rights Act of 1968 (P.L. 90-284), as
amended by the Fair Housing Amendments Act of 1988 (P.L. 100-430), and will administer all
activities relating to housing and community development in a manner to affirmatively further
fair housing within Constitutional limitations throughout the United States.
2.3
The City agrees to comply with Section 109 of the Housing and Community Development Act of
1974 and 1977, as amended, and in conformance with all requirements imposed pursuant to the
regulations of the Department of HUD (24 CFR Part 570.602) issued pursuant to that Section;
and in accordance with Equal Opportunity obligations of that Section, no person in the United
States will, on the grounds of race, color, national origin, or sex, be excluded from participation
in, be denied the benefits of, be subjected to discrimination under, any activity funded in whole
or in part with the Community Development funds. Section 109 of the Act further provides that
any prohibition against discrimination on the basis of age, under the Age Discrimination Act of
1975 (24 CFR Part 146), or with respect to an otherwise qualified handicapped person, as
provided in Section 504 of the Rehabilitation Act of 1973 (24 CFR Part 8), will also apply to any
activity funded in whole or in part with funds made available pursuant to the Act.
2.4
The City agrees to comply with Executive Order 11063 on equal opportunity in housing and
related facilities owned or operated by the Federal Government or provided with Federal financial
assistance.
2.5
The City agrees to comply with Executive Order 11246, as amended, requiring nondiscrimination
and affirmative action to ensure nondiscrimination in employment by government contractors and
subcontractors and under federally assisted construction contractors.
2.6
The City agrees to comply with Section 3 of the Housing and Urban Development Act of 1968
(12 U.S.C. 1701u), as amended, the HUD regulations issued pursuant thereto (24 CFR Part 135)
as follows:
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a.
The work to be performed under this MOU is on a project assisted under a activity
providing direct Federal financial assistance from the Department of Housing and Urban
Development and is subject to the requirements of Section 3 of the Housing and Urban
Development Act of 1968, as amended (12 U.S.C. 1701u); Section 3 requires that to the
greatest extent feasible, opportunities for training and employment be given to lower
income residents of the project area and MOUs for work in connection with the project
be awarded to business concerns that are located in or owned in substantial part by
persons residing in the area of the project.
b.
The parties to this MOU will comply with the provisions of said Section 3 and the
regulations issued pursuant thereto by the Secretary of Housing and Urban Development
set forth in 24 CFR Part 135, and all applicable rules and orders of the Department issued
there under prior to the execution of this MOU. The parties to this MOU certify and
agree that they are under no contractual or other disability that would prevent them from
complying with these requirements.
c.
The contractor will send to each labor organization or representative or workers, with
which he has a collective bargaining MOU or other MOU or understanding, if any, a
notice advertising the said labor organization or workers' representative of his
commitments under this Section 3 clause and will post copies of the notice in conspicuous
places available to employees and applicants for employment or training.
d.
The contractor will include this Section 3 clause in every subcontract for work in
connection with the project and will, at the direction of the applicant or Community of
Federal financial assistance, take appropriate action pursuant to the subcontract upon a
finding that the subcontractor is in violation of regulations issued by the Secretary of
Housing and Urban Development, 24 CFR Part 135. The contractor will not subcontract
with any subcontractor where it has notice or knowledge that the latter has been found in
violation of regulations under 24 CFR Part 135 and will not let any subcontract unless
the subcontractor has first provided it with a preliminary statement of ability to comply
with the requirements of these regulations.
e.
Compliance with the provisions of Section 3, the regulations set forth in 24 CFR Part
135, and all applicable rules and orders of the Department issued there under prior to the
execution of this MOU, will be a condition of the Federal financial assistance provided
to the project.
3.
Nondiscrimination in Federally Assisted Programs of the Department of Housing and Urban
Development – Effectuation of Title VI of the Civil Rights Act of 1964.
3.1
The City shall, as a recipient of HUD financial assistance, take reasonable steps to provide
meaningful access to Limited English Proficiency (LEP) persons. This requirement shall extend
to the City’s entire activity regardless of how much HUD assistance is received.
3.2
In order to determine what reasonable steps must be taken to provide meaningful access to LEP
persons, the City should apply HUD’s four-factor analysis.
a.
Identify the number or proportion of LEP persons eligible to be served or likely to be
encountered by the activity or City.
b.
Identify the frequency with which LEP persons come in contact with the activity.
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48560603
c.
Consider the nature and importance of the activity or service provided by the activity to
people’s lives.
d.
Identify the resources available to the City and the costs associated with providing
meaningful access to LEP persons.
3.3
The City must determine what language assistance measures are sufficient for the activity funded
with HUD funds. The City shall have flexibility in addressing the needs of the LEP persons
served; however, this cannot be used to minimize the obligation that the needs be addressed. The
City is not required to take measures that would be a cost burden or cost prohibitive to the City.
3.4
Efforts to take reasonable steps to provide meaningful access to LEP persons must be documented
in the City’s records and be made available upon request.
4.
Section 504. The City agrees to comply with any federal regulations issued pursuant to compliance with
Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination against the handicapped in
any federally assisted program.
5.
Subcontracting. All work or services covered by this MOU, which is subcontracted by the City, will be
specified by written MOU and subject to all provisions of this MOU. All subcontracts must be approved
by the City prior to execution.
6.
Interest of Certain Federal Officials. No member of or delegate to the Congress of the United States
shall be admitted to any share or part of this MOU or to any benefit to arise from the same.
7.
Interest of Members, Officers or Employees of the City, Members of Local Governing Body, or
Other Public Officials. No member, officer, or employee of the City or its designees or agents, no
member of the governing body of the locality in which the activity is situated, and no other public official
of such locality or localities who exercises any functions or responsibilities with respect to the activity
during his tenure or for one year thereafter, will have any interest, direct or indirect, in any MOU or
subcontract, or the proceeds thereof, for work to be performed in connection with the Activity assisted
under this MOU pursuant to the provisions of 24 CFR 570.611.
8.
Lobbying. CDBG Funds shall not be used for publicity or propaganda purposes designed to support or
defeat legislation proposed by federal, state, or local governments or to influence or attempting to
influence an officer or employee of any agency, a member or employee of Congress.
9.
Hatch Act. The City agrees to comply with all provisions of the Hatch Act and that no part of the activity
will involve political activities, nor will personnel employed in the administration of the activity be
engaged in activities in contravention of Title V, Chapter 15, of the United States Code.
10.
Labor Standards Provisions.
10.1
The City agrees to comply with the requirements of the Secretary of Labor in accordance with
the Davis-Bacon Act as amended, the provisions of MOU Work Hours and Safety Standards Act
(40 U.S.C. 327 et seq.) and all other applicable federal, state and local laws and regulations
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pertaining to labor standards insofar as those acts apply to the performance of this MOU. The
City agrees to comply with the Copeland Anti-Kick-Back Act (18 U.S.C. 874 et seq.) and its
implementing regulations of the U. S. Department of Labor at 29 CFR Part 5. The City shall
maintain documentation that demonstrates compliance with hour and wage requirements of this
part. Such documentation shall be made available to the Grantee for review upon request.
10.2
The City agrees that, except with respect to the rehabilitation or construction of residential
property containing less than eight (8) units, all contractors engaged under MOUs in excess of
$2,000.00 for construction, renovation or repair work financed in whole or in part with assistance
provided under this MOU, shall comply with federal requirements adopted by the City pertaining
to such MOUs and with the applicable requirements of the regulations of the Department of
Labor, under 29 CFR Parts 1,3,5 and 7 governing the payment of wages and ration of apprentices
and trainees to journey workers; provided that, if wage rates higher than those required under the
regulations are imposed by state or local laws nothing hereunder is intended to relieve the City of
its obligation, if any, to require payment of the higher wage. The City shall cause or require to be
inserted in full, in all such MOUs subject to such regulations, provisions meeting the requirement
of this paragraph.
11.
Compliance with Environmental Requirements. The City agrees to comply with any conditions
resulting from the City's compliance with the provisions of the National Environmental Policy Act of
1969 and the other provisions of law specified at 24 CFR §58.5 insofar as the provisions of such Act apply
to activities set forth in the Statement of Work.
12.
Compliance with Flood Disaster Protection Act.
12.1
This MOU is subject to the requirements of the Flood Disaster Protection Act of 1973 (P.L.
93-234). No portion of the assistance provided under this MOU is approved for acquisition or
construction purposes as defined under Section 3(a) of said Act, for use in any area identified by
the Secretary as having special flood hazards, which is located in a community not then in
compliance with the requirements for participation in the national flood insurance program
pursuant to Section 201(d) of said Act; and the use of any assistance provided under this MOU
for such acquisition or construction in such identified areas in communities then participating in
the national flood insurance program will be subject to the mandatory purchase of flood insurance
requirements of Section 102(a) of said Act.
12.2
Any contract or agreement for the sale, lease, or other transfer of land acquired, cleared, or
improved with assistance provided under this MOU shall contain, if such land is located in an
area identified by the Secretary as having special flood hazards and in which the sale of flood
insurance has been made available under the National Flood Insurance Act of 1968, as amended,
42 U.S.C. 4001 et seq., provisions obligating the transferee and its successors or assigns to obtain
and maintain, during the ownership of such land, such flood insurance required with respect to
financial assistance for acquisition or construction purposes under Section 102(2) of Flood
Disaster Protection Act of 1973. Such provisions will be required notwithstanding the fact that
the construction of such land is not itself funded with assistance under this MOU.
13.
Compliance with Environmental Laws.
13.1
This MOU is subject to the requirements of the Clean Air Act, as amended, 42 U.S.C. 1857 et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.; and the
regulations of the Environmental Protection Agency with respect thereto, at 40 CFR Part 15, as
amended from time to time.
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13.2
In compliance with said regulations, the City will cause or require to be inserted in full in all
Agreements and subcontracts with respect to any nonexempt transaction thereunder funded with
assistance provided under this MOU, the following requirements:
a.
A stipulation by the contractor or subcontractor that any facility to be utilized in the
performance of any nonexempt Agreement or subcontract is not listed on the list of
Violating Facilities issued by the Environmental Protection Agency (EPA) pursuant to 40
CFR §15.20.
b.
Agreement by the contractor to comply with all the requirements of Section 114 of the
Clear Air Act, as amended (42 U.S.C. 1857c-8), and Section 308 of the Federal Water
Pollution Control Act, as amended, (33 U.S.C. 1318) relating to inspection, monitoring,
entry, reports, and information, as well as all other requirements specified in said Section
114 and Section 308, and all regulations and guidelines issued thereunder.
c.
A stipulation that as a condition for the award of the MOU, prompt notice will be given
of any notification received from the director, Office of Federal Activities EPA, indicating
that a facility utilized or to be utilized for the MOU is under consideration to be listed on
the EPA list of Violating Facilities.
d.
Agreement by the contractor that he will include or cause to be included the criteria and
requirements in paragraphs (a) through (d) of this section in every nonexempt subcontract
and requiring the contractor to take such action as the Government may direct as means
of enforcing such provisions.
e.
In no event will any amount of the assistance provided under this MOU be utilized with
respect to a facility that has given rise to a conviction under Section 113(c)(1) of the Clean
Air Act or Section 309(c) of the Federal Water Pollution Control Act.
13.3
The Resource Conservation and Recovery Act. The City will comply with the Resource
Conservation and Recovery Act (“RCRA”), including, but not limited to, 42 U.S.C. § 6962, which
requires preference be given in procurement programs to the purchase of specific products
containing recycled materials identified in guidelines developed by the Environmental Protection
Agency (“EPA”) (40 CFR Parts 247 through 252).
13.4
The Toxic Substances Control Act. The City will comply with the Toxic Substances Control Act
(“TSCA”), 15 U.S.C. §2601 et seq.
13.5
The Federal Insecticide, Fungicide and Rodenticide Act. The City will comply with the Federal
Insecticide, Fungicide and Rodenticide Act (“FIFRA”), 7 U.S.C. §136 et seq.
13.6
The City will comply with all other applicable federal and state environmental laws and
regulations, including, but not limited to, §6002 of the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act (“RCRA”) (Pub. L. 94-580, 42 U.S.C. §6962).
Section 6962 requires that preference be given in procurement programs to the purchase of
specific products containing recycled materials identified in guidelines developed by the
Environmental Protection Agency (“EPA”) (40 CFR Parts 247 through 252). Accordingly, state
and local institutions of higher education, hospitals, commercial organizations and international
organizations when operating domestically, and non-profit organizations that receive direct
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Federal awards or other Federal funds will give preference in their procurement programs funded
with Federal funds to the purchase of recycled products pursuant to the EPA guidelines.
14.
Historic Preservation. This MOU is subject to the requirements of P.L. 89-665, the Archaeological and
Historic Preservation Act of 1974 (P.L. 93-291), Executive Order 11593, and the procedures prescribed
by the Advisory Council on Historic Preservation in 36 CFR Part 800. The City must take into account
the effect of a project on any district, site, building, structure, or object listed in or found by the Secretary
of the Interior, pursuant to 35 CFR Part 800, to be eligible for inclusion in the National Register of Historic
Places, maintained by the National Park Service of the U. S. Department of the Interior, and must make
every effort to eliminate or minimize any adverse effect on a historic property.
15.
Historic Barriers. This MOU is subject to the requirements of the Architectural Barriers Act of 1968 (42
U.S.C. 4151) and its regulations. Every building or facility (other than a privately owned residential
structure) designed, constructed, or altered with CDBG funds must comply with requirements of the
"American Standards Specifications for Making Buildings and Facilities Accessible to, and Usable by,
the Physically Handicapped.”
16.
Lead-Based Paint. This MOU is subject to the Lead-Based Paint Poisoning Prevention Act (42 U.S.C.
4821 et seq.), and Lead-Based Paint Regulations (24 CFR Part 35 and 24 CFR §570.608 and/or 92.335),
and related amendments thereto. The use of lead-based paint is prohibited whenever federal funds are
used directly or indirectly for the construction, rehabilitation, or modernization of residential structures.
All federally assisted residential structures and related property constructed prior to 1978, CDBG buyer
Programs, Tenant-Based Rental Assistance, and Special-Needs Housing (acquisition), will comply with
existing and new Lead-Based Paint Hazard Reduction Requirements, effective September 15, 2000. As
the Grantor or Participating Jurisdiction, the City of Glendale shall be consulted regarding the compliance
status.
17.
Acquisition/Relocation. This MOU is subject to providing a certification that it will comply with the
acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended, implementing regulations at 49 CFR Part 24, and 24 CFR
Part 511.14 and 570.606, which govern the acquisition of real property for the project and provision of
relocation assistance to persons displaced as a direct result of acquisition, rehabilitation, or demolition for
the project.
18.
Property Disposition. Real or personal property purchased in whole or in part with CDBG funds shall
not be disposed through sale, use, or location without the written permission of the City and/or HUD as
applicable. The proceeds from the disposition of real property will be considered Program Income and
subject to 24 CFR §570.504(c).
19.
Debarment, Suspension, Ineligibility and Voluntary Exclusion.
19.1
In order to participate in this MOU, the City must certify that it and/or its owners/officers have
not been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from covered transactions by a federal department or agency.
19.2
The City, shall include without modification the Certification language, entitled “Certification
Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion – Lower Tier Covered
Transactions” with all subgrantees or other contractors; in all lower tier covered transactions and
in all solicitations for lower tier covered transactions in accordance with 45 CFR part 76.
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19.3
If the City is unable to comply with this requirement, an explanation shall be immediately
provided to the City in accordance with paragraph 29 of this MOU.
20.
Federal Fire Prevention and Control Act of 1992. The Fire Administration Authorization Act of 1992
added a new Section 31 to the Federal Fire Prevention and Control Act of 1974. This Section requires that
approved smoke detectors be installed in all houses assisted under the Community Development Block
Grant Program. To comply with this requirement and locally adopted codes City shall install smoke
detectors in all sleeping areas and any hallway connecting these sleeping areas.
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EXHIBIT K
ADDITIONAL REQUIREMENTS
See attached requirements:
1.
Procurement – Not Applicable to the Project or Developer
2.
Disputes/Grievance Procedure
3.
Right to Refuse Service
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PROCUREMENT
1.
The Developer agrees to comply with federal procurement requirements and the City’s
procurement code for all expenditures of funds. Below is an overview of the procurement
requirements.
1.1
Purchases over $50,000 must be publicly bid.
1.2
Purchases between $10,001 and $50,000 must follow competitive purchasing procedures
based on written quotations.
1.3
Purchases of $5,000 to $10,000, whenever practical, must be based on oral quotations,
with file documentation of vendors contacted and quotations received.
1.4
Purchases under $5,000 do not require written or oral quotations.
1.5
Expenditures for employee salaries or items such as client subsidies would not generally
be subject to procurement requirements. (Such items do not generally constitute
purchases.)
2.
The Developer agrees to adopt a written procurement policy that, at a minimum, complies with
the above procurement requirements, and to follow accounting procedures that will assure
compliance with federal and city procurement codes.
3.
The Developer further agrees to retain sufficient supporting documentation to demonstrate
compliance with these requirements. Examples include, but are not limited, to the following:
3.1
Copies of bid documents;
3.2
Written quotations; and
3.3
Evidence of oral quotations.
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DISPUTES/GRIEVANCE PROCEDURE
1.
The Developer agrees to negotiate and resolve any disputes in the delivery of activities stated
herein and will inform the City in writing of such negotiations and resolutions.
2.
In the event the issue is not resolved, the City will confer with all parties to understand the issue,
if appropriate, offer guidance, and try and reach an amicable solution.
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RIGHT TO REFUSE SERVICE
The City reserves the right to refuse, terminate, or suspend service or accounts to an individual, company,
or agency, if the City believes that conduct or actions violate applicable law, is harmful to the interests of
the City of Glendale and its affiliates, or meets the criteria covered under City’s Right to Refuse
Assistance Policy. Legal counsel will be consulted before such action is undertaken, unless an emergency
exists.
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EXHIBIT L
INSURANCE CERTIFICATE
(See attached)