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HomeMy WebLinkAboutR-2013-07 committment to provide a construction loan Mariposa Apt Homes at Pecan ParkRESOLUTION 2013 - Oq A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS EXPRESSING THE CITY OF LA PORTE'S COMMITMENT TO PROVIDE A CONSTUCTION LOAN FOR DEVELOPMENT OF THE MARIPOSA APARTMENT HOMES AT PECAN PARK; MAKING VARIOUS FINDINGS AND PROVISIONS RELATED TO THE SUBJECT;AND PROVIDING AN EFFECTIVE DATE THEREOF. Whereas, Mariposa Pecan Park LP ("Applicant") has proposed a development for affordable rental housing named Mariposa Apartment Homes at Pecan Park (the "Development") in the City of La Porte (the "City"); and Whereas, Applicant intends to submit an application to the Texas Department of Housing and Community Affairs ("TDHCA") for 2013 Housing Tax Credits for the Development; and Whereas, the City's Planning Department previously delivered that certain letter to TDHCA dated December 10, 2012 indicating the City's support of the Development as well as the Development's most significant contribution to the City's current revitalization efforts; and Whereas, 10 TAC §11.9(d) (3) (A) (i) of the TDHCA rules governing the Competitive Housing Tax Credit Program provides for an applicant to be awarded twelve (12) points for a commitment by a Unit of General Local Government of the lesser of the population of the Place, 33,800, multiplied by a factor of 0.15 in funding per Housing Tax Credit Unit; Whereas, 10 TAC §11.9(d) (3) (B) of the TDHCA rules governing the Competitive Housing Tax Credit Program provides for an applicant to be awarded one (1) point may be added to the points in §11.9(d) (3) (A) (i) of subparagraph (A) if the Applicant provides a firm commitment for funds in the form of a resolution from the Unit of General Local Government in the Application due on March 1, 2013; Whereas, the City desires to assist Applicant in being awarded the thirteen (13) points; Whereas, Chapter 380 of the Texas Local Government Code authorizes municipalities to establish and provide for the administration of programs for making of loans and grants of public funds for the purpose of promoting state and local economic development and to stimulate business and commercial activity in the municipality. BE IT RESOLVED BY THE LA PORTE CITY COUNCIL: 1)The governing body of the City hereby adopts this resolution to evidence its firm commitment to provide a construction loan of up to $775,000.00, with a maximum interest rate of 3% and a minimum term of five (5) years, to Mariposa Pecan Park LP. 2)The commitment of funding is subject to an award of Housing Tax Credits from the TDHCA and also subject to adoption by the La Porte City Council of a mutually agreed upon loan agreement between the City and Mariposa at Pecan Park LP. 3)As a condition precedent to receipt of loan proceeds, Applicant is required to complete the application process for and receive City approval on all necessary rezoning, permitting, plating and other applicable development requirements for the Development. PASSED AND ADOPTED this may of �l( , 2013. CIT In APPROVED: Assistant City Attorney Exhibit A (2) Community Input other than Quantifiable Community Participation. If an Application receives points under §§11.9(d)(1)(C)(iv) or (v) of this chapter, then, in order to ascertain if there is community support, an Application may receive up to four (4) points for letters that qualify for points under subparagraphs (A), (B), and/or (C) of this paragraph. No more than four (4) points will be awarded under this point item under any circumstances. All letters must be submitted within the Application. At no time will the Application receive a score lower than zero (0) for this item. (A) An Application may receive (2 points) for each letter of support submitted from a community or civic organization that serves the community in which the Development Site is located. Letters of support must identify the specific Development and must state support of the specific Development at the proposed location. To qualify, the organization must be qualified as tax exempt and have as a primary (not ancillary or secondary) purpose of the overall betterment, development, or improvement of the community as a whole or of a major aspect of the community such as improvement of schools, fire protection, law enforcement, city-wide transit, flood mitigation, or the like. The community or civic organization must provide some documentation of its tax exempt status and its existence and participation in the community in which the Development is located including, but not limited to, a listing of services and/or members, brochures, annual reports, etc. Letters of support from organizations that cannot provide reasonable evidence that they are active in the area that includes the location of the Development will not be awarded points. For purposes of this subparagraph, community and civic organizations do not include neighborhood organizations, governmental entities (excluding Special Management Districts), or taxing entities. Should an Applicant elect this option and the Application receives letters in opposition, then two (2) points will be subtracted from the score for each letter in opposition, provided that the letter is from an organization that would otherwise qualify under this subparagraph. (B) An Application may receive (2) points for a letter of support, from a property owners association created for a master planned community whose boundaries include the Development Site that does not meet the requirements of a Neighborhood Organization for the purpose of awarding points under paragraph (1) of this subsection. (C) An Application may receive (2) points for a letter of support from a Special Management Districts whose boundaries, as of the Full Application Delivery Date as identified in §11.2 of this chapter (relating to Program Calendar for Competitive Housing Tax Credits), include the Development Site and for which there is not a Neighborhood Organization on record with the county or state. (D) Input that evidences unlawful discrimination against classes of persons protected by Fair Housing law or the scoring of which the Department determines to be contrary to the Department's efforts to affirmatively further fair housing will not be considered. If the Department receives input that could reasonably be suspected to implicate issues of non-compliance under the Fair housing Act, staff will refer the matter to the Texas Workforce Commission for investigation, but such referral will not, standing alone, cause staff or the Department to terminate the Application. Staff will report all such referrals to the Board and summarize the status of any such referrals In any recommendations. (3) Commitment of Development Funding by Unit of General Local Government. (§2306.6710(b)(1)(E)) An Application may receive up to thirteen (13) points for a commitment of Development funding from the city or county in which the Development is proposed to be located. Development funding from instrumentalities of a city or county will not qualify for points under this scoring item unless such instrumentalities first award the funds to the city or county for their administration, at least 60 percent of the governing board of the instrumentality consists of city council members from the city in which the Development will be located (for Developments located in a city) or county commissioners from the county in which the Development will be located (for Developments not located in a city), or 100 percent of the governing board of the instrumentality is appointed by the elected officials of the city in which the Development is located (if the Development is located within a city) or county in which the Development is located (for Developments not located within a city). The government instrumentality providing Development funding under this scoring item may not be a Related Party to the Applicant. Development funding must be provided in the form of a construction and/or permanent loan with an interest rate fro higher than 3 percent per annum and term of at least 5 years, a grant, an in-kind contribution, a Page 16 of 25 Exhibit A contribution which will support the Development, such as vouchers, or combination thereof. Funds cannot have been provided to the Unit of General Local Government by the Applicant or a Related Party. HOME Investment Partnership Program or Community Development Block Grant funds administered by the State of Texas cannot be utilized for points under this scoring item except where the city, county, or instrumentality is an actual applicant for and subreciplent of such funds for use in providing financial support to the proposed Development. The Applicant must provide evidence in the Application that an application or request for the development funds has been submitted in the form of an acknowledgement from the applicable city or county. The acknowledgement must also state that a decision with regard to the awards of such funding will occur no later than AugustSel2tember 1. A firm commitment of funds is required by Commitment or the points will be lost (except for Applicants electing the point under subparagraph (B) of this paragraph). (A) Applications will qualify for points based on the amount of funds at the levels described in clauses (i) - (v) of this subparagraph. For the purpose of this calculation, the Department will use the population of the Place from which the Development's Rural or Urban Area designation is derived. For Developments located outside a census designated place, the Department will use the population of the nearest Place. (i) twelve (12) points for a commitment by a Unit of General Local Government of the lesser of the population of the Place multiplied by a factor of 0.15 in funding per Low Income Unit or $15,000 in funding per Low Income Unit; (ii) eleven (11) points for a commitment by a Unit of General Local Government of the lesser of the population of the Place multiplied by a factor of 0.10 in funding per Low Income Unit or $10,000 in funding per Low Income Unit; (iii) ten (10) points for a commitment by a Unit of General Local Government of the lesser of population of the Place multiplied by a factor of 0.05 in funding per Low Income Unit or $5,000 in funding per Low Income Unit; (iv) nine (9) points for a commitment by a Unit of General Local Government of the lesser of the population of the Place multiplied by a factor of 0.025 in funding per Low Income Unit or $1,000 in funding per Low Income Unit, or (v) eight (8) points for a commitment by a Unit of General Local Government of the lesser of the population of the Place multiplied by a factor of 0.01 in funding per Low Income Unit or $500 in funding per Low Income Unit. (vi) seven (7) points for a resolution of support from the Governing Body of the city (if located in a city) or county (if not located within a city) in which the Development is located stating that the city or county would provide development funding but has no development funding available due to budgetary or fiscal constraints and, despite reasonable efforts, has been unable to identify and secure any such funding. The resolution must be submitted with the Application and dated prior to March 1, 2013. A general letter of support does not qualify. (B) One (1) point may be added to the points in clauses (i) - (v) of subparagraph (A) if the Applicant provides a firm commitment for funds in the form of a resolution from the Unit of General Local Government in the Application. (4) Community Support from State Representative or Senator. (§2306.6710(b)(1)(F); §2306.6725(a)(2)) Applications may receive up to twelve (12) points or have deducted up to twelve (12) points for this scoring item. To qualify under this paragraph letters must be on the State Representative's or State Senator's letterhead, be signed by the State Representative or State Senator, identify the specific Development and clearly state support for or opposition to the specific Development. This documentation will be accepted with the Application or through delivery to the Department from the Applicant or the State Representative or Senator and must be submitted no later than the Input from State Senator or Representative Delivery Date as identified in §11.2 of this chapter (relating to Program Calendar for Competitive Housing Tax Credits). Once a letter is submitted to the Department it may not be changed or withdrawn. Therefore, it is encouraged that letters not be submitted earlier than the Page 17 of 25 Exhibit B Proposed terms of future loan agreement Loan amount: $775,000 Term: Five years. Interest rate: 3% Use: To be used for infrastructure such as site work, underground utilities, sidewalks, street entrances and so on — all allowable under TLGC Chapter 380. Collateral: Cash collateral from owner in a certificate of deposit to be held by the City in its bank, in the amount of 100% of the loan amount, to be deposited into an escrow account by the City. Authority: TLGC Chapter 380 - Cities have authority to make economic development type loans for the purpose of development of infrastructure. Conditions: All entitlements including rezoning, platting, permitting, all City approvals, allocation of Federal Housing Tax Credits to Developer in 2013 and funding of owner's debt and equity to develop the project are conditions precedent to funding the loan. Timing: Owner will request the loan be funded sometime after closing its debt and equity for the project. Owner estimates this to be the summer of 2014. Prepayment: No prohibition against prepayment. While TDHCA requires a five year term, Owner may prepay the loan and may do so.