NEWTOWN-TEMPE CHDO AMENDMENT NO 1.PDF
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Contract No. C-22-20-020-3-01 Amendment No. 1 Page 1 of 9 Newtown Community Development Corporation and the City of Tempe AMENDMENT No. 1 TO THE AGREEMENT BETWEEN MARICOPA COUNTY ADMINISTERED BY ITS HUMAN SERVICES DEPARTMENT AND NEWTOWN COMMUNITY DEVELOPMENT CORPORATION A COMMUNITY HOUSING DEVELOPMENT ORGANIZATION AND CITY OF TEMPE I. Maricopa County (“County”) administered by its Human Services Department, Newtown Community Development, a Community Housing Development Organization (“CHDO”), and the City of Tempe (“Administrator”) entered into a financial agreement (“Agreement”), which was fully executed on or about January 23, 2020. The term of the Agreement is December 1, 2019 through September 30, 2023. The purpose of the Agreement is for the CHDO, acting in the capacity of a developer, to construct up to four (4) 600 square foot, 1-bedroom, 1-bath, single family homes for low-income households in the Tempe area, hereinafter referred to as Work Statement 2019-A. The County provided the CHDO with $354,896.75 in 2019 HOME Investment Partnerships Program (HOME) funds from the U.S. Department of Housing and Urban Development (HUD). The County, the CHDO, and the Administrator collectively are referred to here as the “Parties.” II. The Parties agree to enter into this Amendment No. 1 to amend the Agreement as follows: A. Add an additional Work Statement hereinafter referred to as “Work Statement 2019-B”, attached and incorporated into the Agreement. The Work Statement 2019-B is for the CHDO to construct three (3) single-family homes for qualified low- income eligible buyers. B. The County shall provide $175,000 for the Work Statement activities. The funding for Amendment No. 1 is provided by HOME Investment Partnerships Program (HOME) funds from the U.S. Department of Housing and Urban Development (HUD) funds, CFDA 14.239. All work performed or costs incurred or expensed shall be reimbursable through September 30, 2023. C. The Agreement funding amount shall be increased from $354,896.75 to $529,896.75. D. Revise Section I (General Provisions) to address the following: 1. Paragraph 53.0 (CONTRACTOR EMPLOYEE WHISTLEBLOWER RIGHTS AND REQUIREMENT TO INFORM EMPLOYEES OF WHISTLEBLOWER RIGHTS), by deleting Subparagraph 53.3 and replacing it with the following: 53.3 The CHDO shall insert the substance of this clause, including this Paragraph 26.0, in all subcontracts over the simplified acquisition threshold ($250,000 as of June 2021). Contract No. C-22-20-020-3-01 Amendment No. 1 Page 2 of 9 Newtown Community Development Corporation and the City of Tempe 2. Add the following paragraphs: 55.0 FORCE MAJEURE 55.1 Neither Party shall be liable for failure of performance, nor incur any liability to the other Party on account of any loss or damage resulting from any delay or failure to perform all or any part of this Agreement if such delay or failure is caused by events, occurrences, or causes beyond the reasonable control and without negligence of the Parties. Such events, occurrences, or causes will include Acts of God/Nature (including fire, flood, earthquake, storm, hurricane, or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, riots, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, lockout, blockage, embargo, labor dispute, strike, pandemic, and interruption or failure of electricity or telecommunication service. 55.2 Each Party, as applicable, shall give the other Party notice of its inability to perform and particulars in reasonable detail of the cause of the inability. Each party must use best efforts to remedy the situation and remove, as soon as practicable, the cause of its inability to perform or comply. 55.3 The Party asserting Force Majeure as a cause for non- performance shall have the burden of proving that reasonable steps were taken to minimize delay or damages caused by foreseeable events, all non-excused obligations were substantially fulfilled, and the other Party was timely notified of the likelihood or actual occurrence that would justify such an assertion, so that other prudent precautions could be contemplated. 56.0 WRITTEN CERTIFICATION UNDER A.R.S. § 35-393.01 If the CHDO and the Administrator engage in for-profit activity and has 10 or more employees and, if this Agreement has a value of $100,000 or more, then the CHDO and the Administrator certify they are not currently engaged in and agree for the duration of this Agreement to not engage in, a boycott of goods or services from Israel. This certification does not apply to a boycott prohibited by 50 U.S.C. § 4842 or a regulation issued pursuant to 50 U.S.C. § 4842. 57.0 SURVIVAL The indemnification, hold harmless, defense, and non-liability provisions of this Agreement shall have full force and effect notwithstanding any other provisions in this Agreement, provided that their fundamental purpose of the Lease is not defeated by such severability, and shall survive the termination or expiration of this Agreement. E. Revise Section II (Special Provisions), Paragraph 19.0 (General Conditions), by deleting Subparagraph 19.4 and replacing it with the following: 19.4 ADMINISTRATIVE CHANGE ORDERS The Chairman of the Board of Supervisors is authorized upon the Contract No. C-22-20-020-3-01 Amendment No. 1 Page 3 of 9 Newtown Community Development Corporation and the City of Tempe recommendation of the Human Services Department Director and Legal Counsel to make changes within the general scope of the Agreement on behalf of the County through Administrative Change Orders. Administrative Change Orders shall be approved and fully executed by the Chairman of the Board of Supervisors and the Contractor. 19.4.1. Administrative Change Orders may address any of the following areas: 19.4.1.1 Modifications to the project timeline if the last day of the project timeline is within the Agreement term; 19.4.1.2 Modifications to Budget line items if the Agreement Amount remains unchanged; 19.4.1.3 Modifications required by federal, state, or County regulations, ordinances, or policies; and 19.4.1.4 Modifications to administrative requirements such as changes in reporting periods, frequency of reports, or report formats required by HUD or local regulations, policies, or requirements. 19.4.2. It is the responsibility of the CHDO to ensure the latest documents are consulted and followed. F. Revise Section IV (Compensation) by deleting Paragraph 3.0 (Timeliness) and replacing it with the following: 3.0 TIMELINESS 3.1 The CHDO shall submit monthly requests for reimbursement by the 15th calendar day of the month following the month close out. 3.2 The CHDO shall submit the final reimbursement for each Work Statement not later than 15 calendar days after the reimbursable period ends. 3.3 The CHDO shall submit to the County a Request for Reimbursement of all expenditures within the same fiscal year in which the expenditures are incurred. The fiscal year runs July 1st through June 30th and all Requests for Reimbursement shall be submitted no later than July 30th for the preceding fiscal year. 3.4 All requests for reimbursements shall be submitted to: HSDFINANCE@MARICOPA.GOV. III. Section II above contains all the changes made by this Amendment No. 1. All other terms and conditions of the Agreement shall remain the same and in full force and effect as approved. IV. The Parties have authorized the undersigned to execute this Amendment No. 1 on their behalf, and it shall be effective upon approval and signature by both Parties. (Signatures contained on the following page) Contract No. C-22-20-020-3-01 Amendment No. 1 Page 4 of 9 Newtown Community Development Corporation and the City of Tempe IN WITNESS, the Parties have approved and signed this Amendment No. 1: FOR CITY OF TEMPE: FOR MARICOPA COUNTY: ___________________________________ Andrew Ching Date City Manager ____________________________________ Jack Sellers Date Chairman, Board of Supervisors Attestation: ___________________________________ City Clerk Date Attestation: ____________________________________ Clerk of the Board Date IN ACCORDANCE WITH A.R.S. §§ 9-240 and 11-952, THIS AMENDMENT NO. 1 HAS BEEN REVIEWED BY THE UNDERSIGNED ATTORNEY WHO HAS DETERMINED THIS AMENDMENT IS PROPER IN FORM AND WITHIN THE POWERS AND AUTHORITY GRANTED TO THE CITY OF TEMPE UNDER THE LAWS OF THE STATE OF ARIZONA. APPROVED AS TO FORM: ___________________________________ City Attorney Date IN ACCORDANCE WITH A.R.S. §§ 11-201, 11-251, AND 11-952, THIS AMENDMENT NO. 1 HAS BEEN REVIEWED BY THE UNDERSIGNED ATTORNEY WHO HAS DETERMINED THIS AMENDMENT IS PROPER IN FORM AND WITHIN THE POWERS AND AUTHORITY GRANTED TO MARICOPA COUNTY UNDER THE LAWS OF THE STATE OF ARIZONA. APPROVED AS TO FORM: ____________________________________ Deputy County Attorney Date FOR NEWTOWN COMMUNITY DEVELOPMENT CORPORATION __________________________________ Stephanie Brewer Date Executive Director Contract No. C-22-20-055-3-01 Work Statement 2019-B Page 5 of 9 Newtown Community Development Corporation and the City of Tempe MARICOPA COUNTY HOME Investment Partnerships Program Program Year 2019 Work Statement 2019-B Project: Tempe Micro Estates/New Construction/Resale Type of Property: Single Family Residential-3 Units 1.0 FUNDING-HOME ASSISTED UNITS SOURCE 2019 HOME Funds Maricopa Urban County Program Income 150,000 Maricopa Urban County HOME Entitlement 25,000 TOTAL $175,000 2.0 PROJECT DESCRIPTION 2.1. Newtown CDC (CHDO), acting in the capacity of a developer, will use HOME funds to provide construction assistance for three (3) HOME-assisted units, known as Tempe Micro Estates. The development consists of a total of 13 single-family homes (7 of which will be HOME-assisted) and a community room with laundry, cooking and restroom facilities in addition to other features. 2.2. The homes will be constructed on land conveyed to Newtown by the City of Tempe through a Disposition and Development Agreement. The total project cost, including the four (4) previously HOME-assisted units, is estimated at $3.4 million. The completed HOME-assisted units will be sold to eligible low-income first-time homebuyers. 2.3. The CHDO will execute a Deed of Trust and Note provided by the City and naming the City as Beneficiary in order to secure any funds provided to CHDO as reimbursement for acquisition costs. 2.4. Completed units shall be sold through the CLT program in which the buyer purchases the improvements only and enters into a 99-year CLT Ground Lease with the CHDO. The CLT Ground Lease contains provisions that require the housing to be used as the buyer’s principal residence and restricts resale/transfer only to Low-Income buyers. In addition, the CLT Ground Lease has a shared- appreciation provision that limits the sale price of the housing and helps ensure affordability for future buyers. A Memorandum of Ground Lease and Right of First Refusal are recorded. A “Performance” Deed of Trust is also recorded with the CHDO as the beneficiary; this ensures the CHDO is notified in the event the owner of the improvements attempts to refinance or transfer the property. 2.5. The shared appreciation provision conforms to Maricopa HOME Consortium Recapture/Resale Provisions: “Fair Return” for leasehold properties is defined as the lessees purchase price, plus 25% of the lessee’s share of the increase in leasehold value at time of resale based on a leasehold valuation performed by a duly licensed appraiser. 2.6. Declaration of Affirmative Land Use Restrictions (LURA): Upon sale to an eligible buyer, a Declaration of Affirmative Land Use Restrictive Covenant for HOME Project is executed between the Administrator and CHDO and recorded against Contract No. C-22-20-055-3-01 Work Statement 2019-B Page 6 of 9 Newtown Community Development Corporation and the City of Tempe the land to secure the Period of Affordability as required by HUD. The Period of Affordability is based on the total amount of HOME funds invested in the housing. 2.7. Eligible buyers will be required to complete an approved homebuyer education class and homeownership counseling. Eligible buyers will also be required to complete a CLT orientation, at which time the ground lease, resale restrictions, shared equity, and all other provisions of the CLT program are fully explained. 2.8. Beneficiaries: Three (3) first time homebuyers at or below 80% of the AMI, in addition to the four (4) first time homebuyers at or below 80% AMI in the 2019 Work Statement. CHDO will secure affordability through the Resale Provisions. Beneficiaries’ income eligibility will be verified by CHDO staff and will comply with 24 CFR 92.203(d)(1). 2.9. Consolidated Plan – Project will increase homeownership opportunities for low- income households, which is rated as a high priority in the Consolidated Plan. 3.0 OBJECTIVES AND OUTCOMES: OBJECTIVE OUTCOMES AVAILABILITY/ ACCESSIBILITY AFFORDABILITY SUSTAINABILITY DECENT HOUSING Single Family Housing Rehab and Emergency Rehab, Homebuyer Assistance Homebuyer Activities, Acq/Rehab of rental housing, Acq/New Construction of rental housing, expansion of assisted rental units in the private marketplace Housing Activities in a targeted revitalization area 4.0 LOGIC MODEL: PERFORMANCE INDICATORS for 2019 1A WORK STATEMENT OUTPUTS INPUTS/RESOURCES ACTIVITIES PARTICIPATION OUTCOMES OBJECTIVES CHDO staff, Funding, Contractors Construct 3 units of affordable housing. 3 households. Increased affordable homeowner- ship for low- income families. Quality, housing, improved, neighborhood , and quality of life. 5.0 SITE INFORMATION: 1450, 1460, and 1490 S Rita Lane, Tempe AZ 85281 Contract No. C-22-20-055-3-01 Work Statement 2019-B Page 7 of 9 Newtown Community Development Corporation and the City of Tempe 6.0 PERFORMANCE REPORTING GOALS-TIMELINE OF ACTIVITIES ILESTONES: Tasks to be Performed COMPLETION DATE Application/market study 12/06/2018 Execute 3 party Amendment with County and Tempe for HOME funds 01/01/2020 Development Plan Approval-City of Tempe 08/30/2019 Environmental Assessment revised 07/22/2020 Submit complete application for construction permits 10/30/2019 RFP for construction activities 10/30/2019 Homeownership counseling/buyer preparation 09/30/2020 Execute Resale Homebuyer Agreement 11/28/2020 Construction of project 12/31/2021 Sale of Units (Pre-sale and during construction) 12/31/2021 Homebuyer financing secured 12/31/2021 Maricopa County Final Inspection 01/31/2022 Certificate of Occupancy 01/31/2022 Final Close-out /Project Completion Form 01/31/2022 Any change to the Timeline will need to be approved by the County. 7.0 ACTIVITY FOLLOW-UP AND LONG-TERM COMMITMENT: The Project will be monitored annually, and the units will be verified annually during the period of affordability. The affordability standard is applied to both the original homebuyer and subsequent purchaser and will be enforced by imposing deed restrictions, covenants running with the land, or other similar mechanisms. Contract No. C-22-20-055-3-01 Work Statement 2019-B Page 8 of 9 Newtown Community Development Corporation and the City of Tempe 8.0 HOME UNITS-ACTIVITY BUDGET SUMMARY: ACTIVITY HOME AMOUNT CASH MATCH OTHER RESOURCES AMOUNT TOTAL ACTIVITY BUDGET Acquisition 0 0 0 0 Legal Fees 0 0 1,615.38 1,615.38 Architecture / Engineering 0 0 57,076.92 57,076.92 Professional Fees 0 0 11,269.19 11,269.19 Permits & Fees 0 0 40,837.46 40,837.46 Construction (contract number C-22-20-055-3- 00) 354,896.75 126,224.19 864,035.60 1,345,156.54 Construction (Amendment 1: C-22- 20-055-3-01) 175,000 175,000.00 Construction Interest 0 0 38,154.23 38,154.23 Developer Costs 0 0 139,397.92 139,397.92 Other Soft Costs 0 3,230.77 3,230.77 TOTALS $529,896.75 $126,224.19 $1,155,617.47 $1,811,738.41 Note: A total of $2,500 per address will be withheld from the total amount of HOME funds obligated to each address. A total of $1,000 may be reimbursed upon completion of new construction (certificate of occupancy) and a signed purchase contract with a qualified buyer. The final $1,500 will be reimbursed when a completion form is submitted by CHDO to the County. 9.0 ACTIVITY MATCH: AMOUNT SOURCE $6,250 WISH/IDEA Funds 10.0 SALES PRICE: 10.1 To ensure the homes are affordable for the target income groups, the sales prices shall be calculated so that the Buyers' monthly housing expenses are 28% of their gross monthly household income. Monthly housing expenses include principal, interest, property taxes, home insurance, HOA fees, and monthly ground lease fees. Buyers' monthly housing expenses must be at least 24% and not exceed 35% of Buyer's gross monthly household income unless there are documented compensating factors. 10.2 Homebuyers may obtain only mortgage loans with a fixed term and interest rate and lender fees may not exceed 5% of the mortgage amount. The income of buyers shall be determined according to the requirements at 92.203. 10.3 In addition, the property shall have an estimated value that does not exceed 95 percent of the median purchase price for the area as described in 24 CFR 92.254(a)(2)(iii) or $375,000. Contract No. C-22-20-055-3-01 Work Statement 2019-B Page 9 of 9 Newtown Community Development Corporation and the City of Tempe 11.0 CHDO PROJECT PROCEEDS: All proceeds generated from CHDO development activities shall be considered project proceeds and subject to the project proceeds requirements set forth in HOME Program regulations. Project proceeds shall be tracked by the CHDO. Documentation supporting the amount of Project proceeds received and expended shall be submitted on the periodic progress report, if requested by the County. Project proceeds shall be retained and expended by the CHDO for construction of additional properties under this Agreement, or for other HOME eligible activities with prior approval from the Administrator. 12.0 AFFORDABILITY REQUIREMENTS: 12.1 The housing that is acquired with HOME funds must be single family housing. The family or individual acquiring the housing must qualify as Low Income and maintain the housing as the principal residence throughout the Period of Affordability, which shall be for a period of 15 years in accordance with HOME program requirements. 12.2 Resale provisions (Attachment D) will be used to ensure compliance with the period of affordability required by HUD at 92.254 of the HOME regulations. The affordability requirements will be secured by a CLT Ground Lease and a Declaration of Affirmative Land Use Restrictions and a Deed of Trust. 12.2.1 CLT Ground Lease. Completed units shall be sold through CLT program in which the buyer purchases the improvements only and enters into a 99- year CLT Ground Lease with CHDO. The CLT Ground Lease contains provisions that require the housing to be used as the buyer’s principal residence and restricts resale to only Low-Income buyers. In addition, the CLT Ground Lease has a shared-appreciation provision that limits the sale price of the housing and helps ensure affordability for future buyers. A Memorandum of Ground Lease and Right of First Refusal are recorded. A “Performance” Deed of Trust is also recorded with the CHDO as the beneficiary; this ensures the CHDO is notified in the event the owner of the improvements attempts to refinance or transfer the property. 12.2.2 Declaration of Affirmative Land Use Restrictions. Upon sale to an eligible buyer, a Declaration of Affirmative Land Use Restrictions is executed between the Administrator and CHDO and recorded against the land to secure the Period of Affordability as required by HUD. The Period of Affordability is based on the total amount of HOME funds invested in the housing. 13.0 CONVERSION TO RENTAL: Any HOME homebuyer units that have not been sold to an eligible homebuyer within nine (9) months of receipt of a Certificate of Occupancy must be converted to a HOME rental unit that complies with all HOME requirements for the period of affordability applicable to such rental units, according to 24 CFR 92.254(a)(3). If the vacant property is not converted, HOME funds must be repaid to the County.