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HomeMy WebLinkAboutR-2000-005 Chestnut Manor short-term loan for repairs ($17,000)RESOLUTION NO. R-2000-0 555 A RESOLUTION authorizing and directing the City Manager to execute a loan agreement with Chestnut Manor Limited Partnership for a $17,000 loan from 2000 Community Development Block Grant funds for costs associated with the rehabilitation and repair of apartment units of Chestnut Manor for low-income senior housing. WHEREAS, the City of Yakima is a recipient of 2000 federal Community Development Block Grant ("CDBG") funds which may be used, among other things, for low-income senior housing projects; and WHEREAS, the Chestnut Manor Limited Partnership is a non-profit organization that owns and operates Chestnut Manor, a low-income senior housing project; and WHEREAS, 12 of the 46 rental units of Chestnut Manor are vacant and in need of repairs in order to be suitable for occupancy; and WHEREAS, the emergency lighting and hot water systems of Chestnut Manor are also in need of repair; and WHEREAS, the Chestnut Manor Limited Partnership is requesting a loan of $17,000.00 from CDBG funds for costs associated with said necessary repairs; and WHEREAS, at meetings on December 17 and December 21, 1999, the Neighborhood Development Committee reviewed the loan proposal and recommended the loan proposal be approved but contingent upon the Chestnut Manor Limited Partnership repaying a portion of the loan from an expected retroactive tax relief payment from the Washington State Department of Revenue, and repayment of the entire loan balance upon receipt of certain low-income housing tax credits from the Washington State Housing Finance Commission; and WHEREAS, the City Council has determined that it is in the best interest of the City to approve the $17,000.00 loan proposal of the Chestnut Manor Limited Partnership for costs associated with the rehabilitation and repair of apartment units of Chestnut Manor for low-income senior 'housing, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute a loan agreement between the City of Yakima and the Chestnut Manor Limited Partnership for a $17,000.00 loan from 2000 Community Development Block Grant funds for costs associated with rehabilitation and repair of apartment units of Chestnut Manor for. low-income senior housing. The final form of the loan agreement shall be reviewed and approved by the City Attorney. ADOPTED BY THE CITY COUNCIL this 18th day of January, 2000. ATTEST: 6UL-8—"' City Clerk AGREEMENT This Agreement is made this 27th Day of January, 2000 by and between, Contractor, Tomlinson Black Management and hereinafter called Contractor and having his principle place of business at 5110 Tieton Drive, Yakima, WA 98902 and, Homeowners, Chestnut Manor Association whose principle address is 27 South 4th Street, Yakima, Washington 98901 and the City of Yakima, hereinafter called City whose principal address is 129 North Second Street, Yakima, Washington 98901. WITNESSETH The Contractor and the Owner and the City for the consideration hereinafter named and for other good and valuable consideration agree as follows: 1. CONTRACT. This contract shall consist of the Bid and Proposal, this Agreement, the Housing Rehabilitation General Specifications, the Work Write-up and Plans. 2. CHANGES. No changes in the work covered by this contract shall be made without having prior written approval of the Owner and the City in writing. 3. TIME OF PERFORMANCE AND LIQUIDATED DAMAGES. The Contractor shall commence work to be performed under this contract by February 1, 2000 and shall diligently pursue and execute the work described herein completing such work by May 31, 2000. The time for the completion of the work as permitted by this contract is admitted to have been sufficiently advanced to allow resulting benefit to the Contractor from earlier completion of work. Time, therefore, shall be of the essence of this contract. If the Contractor shall fail to complete the work within the time specified in this contract, he shall pay the City as liquidated damages in the amount of $25.00 dollars per calendar day that the work remains uncompleted beyond the specified completion date herein, unless there shall have been an extension of time granted by the City. In the event of an extension of time, the Contractor shall pay the City as liquidated damages the specified amount per calendar day for each day the work remains uncompleted beyond the date fixed by the extension of time. The Contractor does hereby authorize the City to deduct such liquidated damages from the amount due, or to become due, the Contractor. The Contractor further agrees than any such deduction shall not in any degree release him from further obligations and liabilities in respect to the fulfillment of the entire contract. Liquidated damages shall not be assessed the Contractor for unworkable days caused by weather conditions, or omissions of the Owner, or for any other days for which any extension of time has been granted. 4. PAYMENT. Progress payments are made as portions of the work are completed to the satisfaction of the City and Owner as determined by inspection. Attached is a draw request which the Contractor may use to apply for payment on completion of each stage of the contract to the satisfaction of the Owner and the City. 1 Progress payments shall be made within twenty days and the final payment within thirty days after the City completes a satisfactory inspection and received Contractor's invoice, written release of lien or claims for lien by Contractor, subcontractors, laborers, and material suppliers for work completed or materials installed on the premises. The contractor may request the contract price in one lump sum from the city within thirty (30) days after the completion of all work to satisfaction of the city and owner as determined by inspection. 5. SECURITY FUND. In the event the total contract price of this contract shall exceed ten thousand dollars, and in lieu of a performance bond or other security, the Contractor shall pay to the City an amount of money equal to two percent of the total contract price. Such amount shall be due and payable prior to any work starting and shall be non-refundable. The City shall deposit such amount into a security fund together with like amounts from like contracts to be applied by the City alone in the event of breach of any of the terms of the contract by Contractor. The Owner shall have no right to money contributed to such fund. The purpose of such fund is to create a system of performance security for the entire City rehabilitation loan program. Provided, that application of funds from the security fund in the event of Contractor's breach shall in no way mitigate or negate Contractor's liability for damages. 6. PRICE. For the consideration mentioned herein the Contractor proposes to furnish all the material and do all the work described in the Work Write-up and Plans in accordance with all the provisions of this contract for the lump sum price of: Seventeen Thousand Dollars & No/ 1OOths ($17,000.00) 7. INSURANCE. Contractor shall furnish to the City and Owner evidence of comprehensive liability insurance coverage protecting the Owner and the City for not less than the total amount of $300,000.00 in the event of bodily injury and death arising out of work performed under this contract and the sum of $100,000.00 in the event of property damage arising out of work performed under this contract. Contractor shall carry and require that there be carried Workman's Compensation Insurance in accordance with Washington law for all his employees and those of his Subcontractors. 8. PERMITS. Contractor shall obtain at his own expense all permits and licenses necessary for work under this contract. 9. CODE CONFORMANCE. Contractor shall perform and cause to be performed all work in conformance with all applicable law. 10. NON DISCRIMINATION IN GOVERNMENT EMPLOYMENT. Executive Order 11246 Subpart B - Contractor's Agreements Sec. 202. Except in contracts exempted in accordance with Section 204 of this Order, all Government contracting agencies shall include in every Government contract hereinafter entered into the following provisions: During the performance of this contract, the Contractor agrees as follows: 2 (1) The Contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and the employees are treated fairly during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment, advertising; lay-off, or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. (2) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. (3) The Contractor 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 agency contracting officer, advising the labor union or worker's representative of the Contractor's commitments under Section 202 of Executive Order No. 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. The Contractor will comply with all provisions of Executive Order No. 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. The Contractor will furnish all information and reports required by Executive Order No. 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for the purposes of investigation to ascertain compliance with such rules, regulations, and orders. (6) In the event of the Contractor's noncompliance with the non- discrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be canceled, terminated, or suspended in while or in part and the Contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 11246 of September 24, 1965, and such other sanctions may be imposed and remedies involved as provided in Executive Order No. 11246 of September 24, 1965, and such other sanctions may be imposed and remedies involved as provided in Executive Order No. 11246 of September 24, 1965 or by rule, regulation or order of the Secretary of labor, or as otherwise provided by law. (7) The Contractor will include the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order No. 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The Contractor will take such action with respect to any subcontractors or purchase order as the contracting agency may direct as a means of enforcing such provision including sanctions for noncompliance; Provided, however, that in the event the Contractor becomes involved in or threatened with, litigation with a subcontractor or vendor as a result of such direction by the contracting agency, the Contractor may request the United States to enter into such litigation to protect the interests of the United States. 11 EMPLOYMENT OPPORTUNITIES FOR BUSINESS AND LOWER INCOME PERSONS IN CONNECTION WITH ASSISTED PROJECTS. TITLE 24 (A)The work to be performed under this contract is on a project assisted under a program 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 lower income residents of the project area and 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 area of the project. (B)The parties to this contract 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 thereunder prior to the execution of this contract. The parties to this contract certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements. (C)The Contractor will send to each labor organization or representative of workers with which he has a collective bargaining agreement or other contract or understanding, if any, a notice advising the said labor organization or workers' representative of his commitments under this Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training. (D) The contract will include this Section 3 clause in every subcontract for work in connection with the project and will, at the direction of the applicant for or recipient 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 thereunder prior to the execution of the contract, shall be a condition of the Federal financial assistance provided to the project, binding upon the applicant or recipient for such assistance, its successors, and assigns. Failure to fulfill these requirements shall subject the applicant or recipient, its Contractors and subcontractors, its successors, and assigns to those sanctions specified by the grant or loan agreement or contract through which Federal assistance is provided, and to such sanctions as are specified by 24 CFR Part 135. 4 12. If this contract is for a structure that will contain 5 of more dwelling units after rehabilitation, the Contractor will, and will require his subcontractors to abide by the Federal Labor Standards provisions, or use supplemental Terms and Conditions for a Federal Rehabilitation Loan Under Section 312 of Housing Act of 1964, as amended, for residential properties containing 12 or more dwelling units, and HUD 3200, Federal Labor Standards Provisions as Modified by form HUD 3200A, Addendum to Federal Labor Standards Provisions. 13. LEAD BASE PAINT. Contractor will not use lead base paint materials on any surface interior or exterior. Contractor will take all safety precautions and strictly enforce them when removing lead base paint. This building has been inspected and provisions made to correct "defective paint conditions in accordance with Title 24, Subpart C 35.24 (B) (2). 14. CONDITION OF THE PREMISES. Contractor shall keep the premises clean and orderly and remove all debris immediately upon completion of work. Materials and equipment that have been removed and replaced as part of the work herein shall belong to the Contractor. 15. NON ASSIGNMENT. Contractor shall not assign this contract or any part thereof without the written consent of the Owner and the City. Request for assignment shall be sent to the City in care of the Director of Community and Economic Development. 16. GUARANTEE. Contractor shall perform or cause to be performed all work under this contract in a good and workmanlike manner. Furthermore, Contractor guarantees that all work performed under this contract shall be free of defects in labor or materials for one year from date of completion. Contractor shall furnish Owner with all suppliers and manufacturer's written guarantees and warranties covering materials and equipment furnished under this contract. 17. INSPECTION. Contractor shall permit officials of the United States and the City to inspect work performed hereunder as well as to inspect Contractor's books, records, correspondence, drawings, receipts, vouchers, payrolls, agreements and other papers which relate to work performed under this contract. Contractor shall preserve the aforementioned records for two years after final payment hereunder. 18. OWNER'S COOPERATION. Owner shall permit Contractor to use, at no cost, existing utilities on the premises including but not limited to light, heat, electricity and water which are necessary to carry out the completion of work under this contract. Owner shall cooperate with Contractor to facilitate the performance of work in all reasonable ways, including but not limited to, the removal of rugs, coverings, furniture and appliances, as necessary. 19. BREACH. Time is of the essence in performance of this contract. Upon breach of any conditions within this contract, the City and the Owner may send to the Contractor written notice at his address listed herein by registered mail, return receipt request, setting out with particularity the nature in the breach. If within ten days after mailing such notice, Contractor has not satisfactorily remedied all breaches, the City and the Owner may declare this contract in default. In addition to all other 5 remedies afforded by law, the City shall, upon Contractor's default, withhold all payments to Contractor and the City and Owner may assign a new Contractor to complete this contract. In the event of legal action against the Contractor, arising out of this contract, the City and Owner shall be entitled to the award of reasonable attorney's fees. 20. HOLD HARMLESS. The Contractor shall defend, indemnify, and hold harmless the Owner and the City and any of its officials and employees from any and all liability arising out of the performance of this contract. Provided, that the indemnity provision of this section shall not apply to damages arising out of bodily injury or property damage from sole negligence of the City, its agents or employees. Provided, further; that this section shall apply to damages arising out of bodily injury to persons or damage to property caused by or resulting from the concurrent negligence of the Contractor, his agents or employees and the City, its agents and employees. 21. ANTI -KICK BACK PROVISION. That the Contractor shall comply with the applicant regulations of the Secretary of Labor, United States Department of Labor made pursuant to the so-called "Anti -Kickback Act," of June 12, 1934, (48 Stat. 948; 62 Stat. 862, Title 18 U.S.C., Sec. 874; and Title 40 U.S.C., Section 276(c) and any amendments or modifications thereof, shall cause appropriate provisions to be inserted in subcontracts to ensure compliance therewith by all subcontractors subject thereto, and shall be responsible for the submission of statements required of subcontractors thereunder except as said Secretary of Labor may specifically provide for reasonable limitations, variations, tolerances and exemptions from the requirement thereof. 22. ARBITRATION. All claims and disputes arising out of this contract or the breach thereof except for claims which have been waived by the making or acceptance of final payment shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining. This contract to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrator shall be final and binding on all parties, and judgment may be entered upon it in any court having jurisdiction. Notice of the demand for arbitration shall be filed in writing with the other parties to this contract. The demand for arbitration shall be made prior to final payment. The City shall pay for and arrange arbitration proceedings requested under this section. 6 CONTRACTOR'S ACCEPTANCE Contractor's ; gnature Jeff E(n ght om inson Black Management Date OWNER'S ACCEPTANCE William R. Weddle, President Chestnut Manor Limited Partnership, Homeowner Date Homeowner Acceptance by the City ,764--"9 e4:7"--6% William Cobabe Neighborhood Development Services Manager Date Date W Liam CookDate Dire r of Community and Economic Development Richard A . Zais, "Jr. City Manager Contract No. 2000-12 Resolution No. R-2000-5 • • BUSINESS OF THE CITY COUNCIL YAIIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting Of January 18, 2000 ITEM TITLE: Chestnut Manor Short-term Loan SUBMITTED BY: William Cook, Director of Community and Economic Development CONTACT PERSON/TELEPHONE: William Cobabe, Neighborhood Development Services, Manager (509) 575-6101 SUMMARY EXPLANATION: In 1994 the City of Yakima conveyed title of Chestnut Manor to the non-profit corporation known as Chestnut Manor Association, which was formed to operate Chestnut Manor for low- income senior housing. The Office of Neighborhood Development Services (ONDS) fostered the creation of Chestnut Manor Association. During October of 1997 Chestnut Manor reorganized and conveyed from Chestnut Manor Association to Chestnut Manor Limited Partnership in order to make the benefits of low-income housing tax credits (LIHTC) from the Washington State Housing Finance Commission available to finance improvements to Chestnut Manor while maintaining affordable rental prices for residents. In the spring of 1998, Chestnut Manor was awarded approximately $700,000.00 in tax credits with two years to complete the finance package and construction. The financial package was ready for closing with Key Bank being the tax credit investor and construction lender in mid-August of 1999. At about the same time loan closing with Key Bank was being scheduled, Chestnut Manor was scheduled for a foreclosure sale due to past due property taxes although the association was of the opinion the property was exempt from property taxes. Unfortunately, the amount of past due property taxes was greater than Chestnut Manor Association expected. The finance package with Continued on Next Page Resolution X Ordinance Other (Specify) Contract Mail to (name and address): Funding Source APPROVED FOR SUBMITTAL: Phone: City Manager STAFF RECOMMENDATION: LApprove $17,000.00 Short-term Loan BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Key Bank did not allow enough contingency to cover the past due taxes. Chestnut Manor Association, therefore, returned the LIHTC to the State and will re -submit in the spring of 2000. Chestnut Manor Association has been working with the Department of Revenue since 1997 to be 100% exempt from property taxes and have submitted a request for retroactive tax relief for each year from 1994 through 1999, which is pending. Chestnut Manor should receive a 100% tax refund within 90 days. On December 3, 1999 Yakima Federal Savings and Loan Association increased its existing loan on Chestnut Manor to pay the current past due tax liability, to be repaid from rental income or from tax refund, whichever occurs first. Chestnut Manor Association is very confident that they will be awarded LIHTC in 2000 with the project scoring extremely high again. Key Bank will participate again, so the process should be much faster once the property tax liability issue is resolved. Chestnut Manor's current problem is a high vacancy rate, and therefore, the lack of rental income to cover the $1,402.00 increase in Yakima Federal Savings and Loan mortgage loan to pay past due taxes ($59,068.54), plus impounds for future property tax. In anticipation of the LIHTC, a number of the apartment units were allowed to become vacant, so they could be rehabilitated as soon as the financing closed. At this time, 12 of the 46 units are vacant and need minor repairs and/or floor covering to be rentable. In addition, half of the hot water system is down. The estimated cost of needed repairs is $17,000.00. The result of making the repairs will be that rental income would then be sufficient to pay the Yakima Federal loan as increased, pending Department of Revenue action. Chestnut Manor, at this time, does not have the available funds for the repairs. ONDS proposed a short term, $17,000.00, 0% interest loan to Chestnut Manor Association. This loan proposal was discussed at the meeting of the City Council's Neighborhood Development Committee on Friday, December 17, 1999 and forward to a special meeting for additional discussion on December 21, 1999. The City Council Neighborhood Development Committee recommended that Council approve this loan contingent upon 1) when Chestnut Manor receives property tax refund from Department of Revenue, a part of the loan be paid, and 2) when the resubmitted LIHTC financing package closes, the balance of the loan will be paid in full. Approval of this resolution will authorize and direct the City Manager to execute a contract with the Chestnut Manor Association, which includes the above contingents. If this loan request is denied and the necessary repairs are not completed to make the vacant units rentable to increase income, Chestnut Manor may be in jeopardy of a foreclosure by Yakima Federal Savings and Loan, which would cause ,,displacement of over 34 people. • • 1