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HomeMy WebLinkAboutR-1994-043 Chestnut ManorRESOLUTION NO. R-94- 43 A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute a Purchase and Sale Agreement for the Chestnut Manor property located at 27 South 4th Street in Yakima, Washington together with all other necessary actions to accomplish the transfer of title of the Chestnut Manor property to Chestnut Manor, a Washington non-profit corporation. WHEREAS, in June 1991, the City of Yakima acquired title to the Chestnut Manor property located at 27 South 4th Street in Yakima, Washington in conjunction with the Housing Trust Fund Program; and WHEREAS, the City Council contemplated that the Chestnut Manor property would subsequently be sold to a non-profit organization to own and operate the property in the future; and WHEREAS, the City Council of the City of Yakima deems it to be in the best interest of the City of Yakima that the Chestnut Manor property be sold and conveyed to Chestnut Manor, a Washington non-profit corporation, for a total sale price of not less than $828,000.00, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager of the City of Yakima is hereby authorized and directed to execute a real estate Purchase and Sale Agreement with Chestnut Manor, a Washington non-profit corporation, wherein the City of Yakima will convey the following -described real property to said non-profit corporation for a purchase price of not less than $828,000.00, subject to the City being released from all liens and mortgages, the Housing Trust Fund Program, and all grant obligations and liabilities, and the City Manager is hereby authorized and directed to take all necessary and prudent actions to effectuate said conveyance and sale of the property in accordance with the terms of this resolution to Chestnut Manor, a Washington non-profit corporation, to wit: Lots 18, 19, 20 and 21, Block 91, TOWN OF NORTH YAKIMA, now Yakima, Washington, according to the official plat thereof, recorded in Volume "A" of Plats, Page 10 and rerecorded in Volume "E" of Plats, Page 1, records of Yakima County, Washington. Situated in Yakima County, State of Washington. (Yakima County Assessor's Parcel No. 191319-24467) (is)res/chestnut manor.rp The real estate Purchase and Sale Agreement, together with all other documents :requiring execution by the City of Yakima, shall be signed by the City Manager and approved as to form by the Yakima City Attorney. The property sale proceeds shall be applied to satisfy all existing debts, liens, mortgages, and obligations of the City. ADOPTED BY THE CITY COUNCIL this 12ti'day of 1 i ATTEST: City Clerk (1s)res/chestnut manor.rp may-�cm� , 1994. Aslstant Mayor PURCHASE AND SALE AGREEMENT This Agreement is made and entered into this 9th day of November , 1994, by and between the CITY OF YAKIMA, WASHINGTON, a municipal corporation of the State of Washington, (referred to below as "the City" or as "Seller") and the CHESTNUT MANOR ASSOCIATION, a non-profit corporation (referred to below as "CMA" or "Purchaser"), WITNE.SSETII: WHEREAS, the City has, over the course of the last five years, through its Department of Community and Economic Development, particularly its Office of IIousing & Neighborhood Conservation, pursued a major project to redevelop the real property known as the Chestnut Manor apartment building at 27 South 4th Street in Yakima (referred to below as "Chestnut Manor") to provide affordable, decent, resident -operated housing for low-income, elderly citizens, and WHEREAS, in order to pursue this project effectively the City purchased Chestnut Manor in 1991, and WHEREAS, the State of Washington, Department of Community, Trade and Economic Development (formerly Department of Community Development and referred to below as "DCTED/IIAP"), under Housing Assistance Program (HAP) Contract Number 1-90-491-45, provided three hundred twenty-five thousand dollars ($325,000.00) from the state IIousing Trust Fund as grant assistance to the City for the purchase of Chestnut Manor, and WHEREAS, HAP Contract Number 1-90-491-45 in effect provided that if the City transferred the Chestnut Manor to another owner, the City would owe the state at Least three hundred twenty-five thousand dollars ($325,000.00), and secured this obligation with a deed of trust giving the state a lien on Chestnut Manor, and WHEREAS, in order to purchase Chestnut Manor, the City also assumed a loan from Everett Mutual Savings Bank (referred to below as "EMSB"), secured by a deed of trust giving EMSB a lien on Chestnut Manor, and WHEREAS, the outstanding balance on EMSB loan is approximately three hundred thirty-eight thousand dollars ($33$,000.00), and WHEREAS, the City has expended two hundred fifty thousand dollars ($250,000.00), from its Urban Development Action Grant (referred to below as "UDAG") funds to make repairs and needed improvements to Chestnut Manor, and WHEREAS, the City has fostered the creation of a non-profit corporation named the Chestnut Manor Association (referred to below as "CMA") with a Board of Directors of which a majority are residents of Chestnut Manor, to own and operate Chestnut Manor to provide affordable, decent housing for low-income, elderly citizens, and WHEREAS, in order that Chestnut Manor may be purchased from the City by CMA, DCTED/HAP has agreed to completely release the City and its officers and agents from any and all obligations or liabilities created by I -IAP Contract Number 1-90- 491-45, on the condition that CMA assume those obligations and liabilities, and lap\real estate\chestnut manor\seller's purch/sale 11/9/9.1 11:25 AM PURCHASE AND SALE AGREEMENT: CI-IESTNUT MANOR Page 1 of 6 WIIEREAS, CMA intends to assume from the City any and all obligations or liabilities created by HAP Contract Number 1-90-491-45, in order to purchase Chestnut Manor from the City, and WIIEREAS, CMA intends and has arranged to borrow three hundred thirty-five thousand dollars ($335,000.00) from Yakima Federal Savings & Loan (referred to below as "YFS&L") to partially finance purchase of Chestnut Manor by CMA, and WHEREAS, the City has qualified for three hundred twenty-five thousand dollars ($325,000.00) in assistance from the federally funded HOME program which may be, and the City intends to be give this money to CMA to assist it to purchase and operate Chestnut Manor, and WHEREAS, CMA intends to use the proceeds of the YFS&L loan and the money received from the federal HOME program through the City to purchase Chestnut Manor from the City and to operate Chestnut Manor thereafter as affordable, decent, resident -operated housing for low-income, elderly citizens, and WHEREAS, the City and the CMA have agreed to terms for sale of Chestnut Manor by the City to CMA which will extinguish any and all City obligations or liabilities to DCTED/1IAP under IIAP Contract Number 1-90-491-45, by CMA's assumption of those obligations and liabilities, and which will provide the City with cash funds sufficient to pay off the balance of the EMSB loan and to restore two hundred fifty thousand dollars ($250,000,00) to the City's UDAG funds, NOW THEREFORE, IT IS MUTUALLY AGREED by and between the parties hereto as follows: Section 1. Purchase and Sale of the Property. Seller hereby agrees to sell and Purchaser hereby agrees to purchase, subject to and on the terms and conditions hereinafter set forth and for the price hereinafter fixed, certain real property situated in Yakima, Yakima County, State of Washington, and legally described as follows: Lots 18, 19, 20 and 21, Block 19, TOWN OF NORTII YAKIMA, now Yakima, Washington, according to the official plat thereof, recorded in Volume "A" of Plats, page 10 and rerecorded in Volume "E" of Plats, Page 1, records of Yakima County, Washington. together with all of Seller's right, title, and interest in and to the buildings, improvements, appurtenances, and fixtures located thereon. The sale property and all improvements attached thereto shall collectively be referred to below as the "Property." It is understood that the sale and conveyance made pursuant to this Agreement shall be subject to any and all applicable federal, state, and local laws, orders, rules, and regulations. Section 2.. Purchase Price. The purchase price for the Property shall be the total sum of NINE HUNDRED THIRTEEN THOUSAND DOLLARS ($913,000.00) ("Purchase Price"). lap\real estate\chestnut manor\seller's purch/sale 11/9/94 11:25 AM PURCHASE AND SALE AGREEMENT: CI-IESTNUT MANOR Page 2 of 6 Section 3. Payment of the Purchase Price. The Purchase Price shall be paid by Purchaser to Seller as follows: (a) Purchaser shall completely assume any and all obligations or liabilities to the State of Washington, Department of Community, Trade and Economic Development (formerly Department of Community Development), incurred by Seller in conjunction with IIAP 1-90-491-45, including a contingent liability in the amount of THREE HUNDRED TWENTY-FIVE TIIOUSAND DOLLARS ($325,000.00). Purchaser's complete assumption of said obligations and liabilities under this agreement shall entitle purchaser to a credit of THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($325,000.00) toward the Purchase Price. (b) Purchaser shall pay Seller FIVE IIUNDRED EIGHTY-EIGI-IT THOUSAND DOLLARS ($588,00Q.00) in cash. Section 4. Conditions Precedent to Sale Seller shall not be obligated in any way under this agreement unless and until the State of Washington, Department of Community, Trade and Economic Development (formerly Department of Community Development) completely releases the Seller and its officers and agents from any and all obligations created by IIAP Contract Number 1-90-491-45. This term is understood as a condition precedent to any obligations or liabilities resting on Seller under this agreement. Section 5. Clear Title. At or before time of closing, Seller shall clear any and all defects in the title and all liens, encumbrances, covenants, rights of way, easements, or other outstanding rights disclosed by the preliminary title report, except those matters set forth in Section 7. Section C-. Escrow. Purchaser has already opened an escrow account with Fidelity Title Insurance Company, 406 North 2nd Street, Yakima, Washington 98901 ("Title Company"). On or before the date of closing of escrow, Purchaser shall deposit with Title Company the Purchase Price and all other closing costs. On or before the date of closing of escrow, Seller shall deposit in escrow a duly executed Statutory Warranty Deed for the Property. Title Company shall be instructed that when it is in a position to deliver to Seller the Purchase Price, and to issue an American Land Title Association standard form of mortgagee's policy of title insurance insuring Seller's security interest in the Property in an amount and subject to terms to be approved by Seller, Title Company shall: (a) deliver and record the Statutory Warranty Deed to Purchaser; (b) deliver to Seller the Purchase Price; and (c) issue and deliver to Seller the standard mortgagee's policy of title insurance At closing, Purchaser shall pay the following costs: (a) The escrow fee; (b) The cost of recording the Statutory Warranty Deed; lap\real estate\chestnut manor\seller's purch/sale 11/9/94 11.25 AM PURCIIASE AND SALE AGREEMENT: CIIESTNUT MANOR Page 3 of 6 (c) Any applicable real estate real estate taxes (whether general or special) assessed against the Property and due and payable for the year of closing; and (d) The premium for the issuance of the standard mortgagee's policy of title insurance. Section 7. Title. Upon closing of escrow as set forth in Section 6, title to the Property shall be conveyed by Seller to Purchaser by a duly executed Statutory Warranty Deed. Title to the Property shall be in fee simple and clear of all liens, encumbrances, exceptions, and reservations subject to the following: (a) Terms and conditions of Ordinance Number 3255, regarding future vacation of alleyways located within Block 91 of said Town of North Yakima, recorded April 12, 1991, in Volume 1321 of Official Records, under Auditor's File Number 2920241. (b) Lease and terms and conditions thereof, executed by the City of Yakima Housing Service Center, as Lessor and American Meter Machine Corporation as Lessee, for a term of 5 years, dated June 19, 1991, and recorded June 26, 1991 in Volume 1328 of Official Records, under Auditor's File Number 2927818. (c) The Deed of Trust and the terms and conditions thereof, wherein the City of Yakima, Office of I -lousing and Neighborhood Conservation, is Grantor, and Fidelity Title Company is Trustee, and State of Washington, Department of Community Development, beneficiary, in the original amount $325,000.00 dated January 22, 1992, and recorded January 23, 1992 in Volume 1347 of Official Records, page 184 under Auditor's File Number 2947973. (d) Non -delinquent real property taxes (whether general or special); (e) Rights reserved in federal patents or state deeds; (f) Building or use restrictions consistent with current zoning, other than government platting and subdivision requirements; (g) Utility easements; (h) Items disclosed in the preliminary title report and expressly approved in writing or waived in writing by Purchaser. Section 8. Closing: Possession. Escrow for the Property shall close on or before November 15, 1994. Purchaser shall have the right to take possession of the property on the date of closing. Section 9. Notices. Any notices required or desired to be given under this Agreement shall be in writing and personally served, given by overnight express delivery, or given by mail. Any notices given by mail shall be sent, postage prepaid, by certified mail, lap\real estate\chestnut manor\seller's purch/sale 11/9/94 11.25 AM PURCHASE AND SALE AGREEMENT: CHESTNUT MANOR Page 4 of 6 return receipt requested, addressed to the party to receive at the following address or at such other address as the party may from time to time direct in writing: Seller: City of Yakima c/o City Manager 129 North Second Street Yakima, WA 98901 Purchaser: Chestnut Manor Association 27 S. 4th St. Yakima, WA 98901 Title Company: Fidelity Title Company 406 North 2nd Street Yakima, WA 98901 Express delivery notices shall be deemed to be given upon receipt. Postal notices shall be deemed to be given three (3) days after deposit with the United States Postal Service. Copies of all notices to Seller or Purchaser shall be given to Fidelity Title Company, and copies of all notices to Fidelity Title Company shall be given to the other party to this Agreement. Section 10. Assignment. Purchaser shall not transfer or assign this Agreement, or any interest therein, without the consent in writing of Seller, and it is agreed that any such transfer or assignment, whether voluntary, by operation of law or otherwise, without such consent in writing, shall be absolutely void and shall, at the option of Seller, terminate this Agreement. Section 11. Waiver of Breach. A waiver by either party hereto of a breach of the other party hereto of any covenant or condition of this Agreement shall not impair the right of the party not in default to avail itself of any subsequent breach thereof. Leniency, delay or failure of either party to insist upon strict performance of any agreement, covenant or condition of this Agreement, or to exercise any right herein given in any one or more instances, shall not be construed as a waiver or relinquishment of any such agreement, covenant, condition or right. Section 12. Time of the Essence. Time is of the essence of this Agreement. Section 13 . Itw Governing. This Agreement shall be governed in all respects by the laws of the State of Washington. Section 14. Successors and Assigns. Subject to the provisions of Section 11, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors, and assigns. lap\real estate\chestnut manor\seller's purch/sale 11/9/94 11:25 AM PURCIIASP AND SALE AGREEMENT: CIIESTNUT MANOR Page 5 of 6 Section 15. Entire Agreement. It is understood and agreed that all understandings and agreements, whether written or oral, heretofore had between the parties hereto are merged in this Agreement, which alone fully and completely expresses their agreement, that neither party is relying upon any statement or representation not embodied in this Agreement, made by the other, and that this Agreement may not be changed except by an instrument in writing signed by both parties. Section 16. Litigation. In the event that any suit or action is instituted by either party to enforce compliance with or interpret any of the terms, covenants, or conditions of this Agreement, the prevailing party shall be entitled to collect, in addition to necessary court costs, such sums as the court may adjudge as reasonable attorney fees. The venue for any such action to enforce or interpret this Agreement shall lie in the Superior Court of Washington for Yakima County, Washington. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first herein written. PURCHASER Witness: CI-IESTNUT MANOR ASSOCIATION -2/6' �i ELAINE McKOWAN, CHAIRPERSON Seller's acceptance: 1day of November, 1994. Seller agrees to sell the Property on the terms and conditions specified herein. Se11er acknowledges receipt of a copy of the Agreement, signed by both parties. SELLER Attest: CITY OF YAKIMA, WASHINGTON )e,94-e;,,±cL 'th'Y CONTRACT NO. City Clerk DICK ZAIS, CITY MANAGER lap\real estate\chestnut manor\seller's purch/sale 11/9/94 11:25 AM CHESTNUT MANOR PURCI-IASE AND SALE AGREEMENT Page 6 of 6 STATUTORY WARRANTY DEED THE GRANTOR, the CITY OF YAKIMA, a Washington municipal corporation, for and in consideration of Ten Dollars ($10.00) and other good and valuable consideration, in hand paid, conveys and warrants to the CHESTNUT MANOR ASSOCIATION, a Washington non-profit corporation, GRANTEE, the following -described real estate, situated in the County of Yakima, State of Washington: Lots 18, 19, 20 and 21, Block 19, TOWN OF NORTH YAKIMA, now Yakima, Washington, according to the official plat thereof, recorded in Volume "A" of Plats, page 10 and rerecorded in Volume "E" of Plats, Page 1, records of Yakima County, Washington. (Yakima County Assessor's parcel number 191319-24467) subject to the following: (a) Terms and conditions of Ordinance Number 3255, regarding future vacation of alleyways located within Block 91 of said Town of North Yakima, recorded April 12, 1991, in Volume 1321 of Official Records, under Auditor's File Number 2920241. Lease and terms and conditions thereof, executed by the City of Yakima Housing Service Center, as Lessor and American Meter Machine Corporation as Lessee, for a term of 5 years, dated June 19, 1991, and recorded June 26, 1991 in Volume 1328 of Official Records, under Auditor's File Number 2927818. (c) The Deed of Trust and the terms and conditions thereof, wherein the City of Yakima, Office of Housing and Neighborhood Conservation, is Grantor, and Fidelity Title Company is Trustee, and State of Washington, Department of Community Development, beneficiary, in the original amount $325,000.00 dated January 22, 1992, and recorded January 23, 1992 in Volume 1347 of Official Records, page 184 under Auditor's File Number 2947973. (d) Non -delinquent real property taxes (whether general or special); (e) Rights reserved in federal patents or state deeds; (f) Building or use restrictions consistent with current zoning, other than government platting and subdivision requirements; (g) Utility easements; (h) Items disclosed in the preliminary title report and expressly approved in writing or waived in writing by Purchaser. GRANTOR and GRANTEE understand and agree that this conveyance is made and accepted, and the realty is granted, on and subject to the following covenants, restrictions and conditions which shall apply to and run with the conveyed land; all successive future owners and occupants shall have the same right to invoke and enforce the following covenants, restrictions and conditions as the original parties to this document:. (b) STATUTORY WARRANTY DEED — Paee 1 of 2 GRANTEE shall operate, use and maintain CHESTNUT MANOR exclusively to provide safe, sanitary, affordable, resident -operated apartment housing for low income elderly residents of the City of Yakima, and all such persons shall enjoy equal opportunity to become residents of CHESTNUT MANOR, regardless of race, creed, national origin or any other characteristic prohibited by federal, state or local laws as a basis for discrimination. GRANTEE shall preserve CHESTNUT MANOR as an historic structure, in full compliance with all applicable federal, state and local laws, regulations, rules and guidelines applicable to it as an historic structure. GRANTEE shall not reconvey CHESTNUT MANOR without the consent of the City of Yakima, which consent shall be conditioned on a finding made by the City Council that such reconveyance is in the best interests of the City and its inhabitants, and which consent may be conditioned on the seller's payment to the City of all or a portion of the total amount of money the City has paid for the acquisition, maintenance and improvement of CHESTNUT MANOR, (including the Housing Trust Fund award of $325,000) less the total of all payments for rental of CHESTNUT MANOR apartments then received by the City. The acceptance of this deed by the GRANTEE shall constitute an acceptance by the GRANTEE of all the stated covenants, conditions, and restrictions on the property conveyed by this deed. GRANTEE agrees that all the covenants, restrictions and conditions contained in this deed shall be inserted in full in all future deeds of the above- described property conveyed by this deed. DATED this day of Y1 ° iJ ,1994. STATE OF WASHINGTON ) ) :ss. County of Yakima ) Dick Zais Manager, City of Yakima I certify that I know or have satisfactory evidence that Dick Zais is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the Manager of the City of Yakima to be the free and voluntary act of the City of Yakima for the uses and purposes mentioned in the instrument. Dated: / q/9/ Notary Public in and klr the State of Washington, residing at ___Yak.irrma My commission expires: 3/30/9 STATUTORY WARRANTY DEED — Page 2 of 2 ITEM TITLE: YAKIMA, WASHINGTON AGENDA STATEMENT Attachment 1 ITEM NO. /8 FOR MEETING OF : May i-4: 1991 • 1 Proposed Ordinances for: Elderly Co-op Homeownership Program and Appropriation Amending the 1991 Community Development Fund Budget SUBMITTED BY: Glenn K. Rice, Director of Community & Economic Development CONTACT PERSON/TELEPHONE: (Pixie Grant Manager (575 X101) SUMMARY EXPLANATION: The attached report outlines the proposed direction needed to start the elderly Co-op Homeownership Program. The program has received acquisition funding from the State of Washington's Housing Trust Fund. The 1991 Housing budget needs to be amended to incorporate the receipt of the state funds, revenue and expenditures used during the building's transition from tenants to owners. This program will assist 50 persons in achieving affordable and decent housing at no cost from either the Block Grant Program or the City. The program funding resources pay for both the acquisition and the transition. The only obligation to the City of Yakima will be the holding of the existing debt service on the building during transition. This action is necessary to satisfy the 1990 auditor's findings regarding this transaction. 1 EXHIBITS Resolution , X Ordinance Contract Minutes Plan/Map Notification List X Other (Specify) Report APPROVAL FOR SUBMITTAL CITY MANAGER STAFF RECOMMENDATION: Approve the following Ordinances: (A.) Purchase of the Chestnut Manor for the Elderly Co-op Homeownership Program. (B.) Appropriation amending the 1991 Community Development Fund Budget. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: A: Ordinance adopted. Ordinance No. 3359. B: First Reading of Ordinance; second reading scheduled for May 21, 09 1. Oi d. 2to . ,.33.3 AN ORDINANCE ORDINANCE NO. 3363 amending the 1991 budget for the City of Yakima; and making an appropriation of $739,867 in the Community Development Fund for expenditure during 1991 for an Elderly Horne Ownership Program. WHEREAS, the amount of $739,867 must be appropriated within the Community Development Fund in order to provide funding for an Elderly Home Ownership Program, and WHEREAS, at the time of the adoption of the 1991 budget it could not reasonably have been foreseen that the appropriation provided for by this ordinance would be required; and the City Council finds that an emergency exists of the type contemplated by RCW 35.33.091 and that it is in the best interests of the City to make the appropriation herein provided, now, 'therefore, BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1. _The amount of $739,867 is hereby appropriated from the Unappropriated Fund Balance in the Community Development Fund to account numbers as shown in Schedule las a 1991 appropriation. Sectlonj, This ordinance is one making an appropriation and shall take effect immediately upon its passage, approval and publication as; provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this 21st day of ma's'1991. ATTEST: MetAr..,, - - )e8 -G -e ) otic CITY CLERK First Reading: 5/14/91 Publication Date: Effective Date: LEGAUbd Ordinances A06 1 /7 X k-vtd1' MAYOR Certified to be: a true and correct copy of the original filed in my office. CITY CLERK By_ "- -- pep. • SCHEDULE 1 Community Development Fund Resources Account Number 124.124.332.0000.334.06.2HT 124.124.332.0000.391.90.0 M M 124.124.332.0000.362.60.RCM 124.124.332.0000.362.90.A35 Total Resources Appropriations 124.124.332.0000.594.59.620 124.124.332.0000.559.20.311 124.124.332.0000.559.20.410 124.124.332.0000.559.20.410 124.124.332.0000.559.20.421 124.124.332.0000.559.20.460 124.124.332.0000.559.20.471 124.124.332.0000.559.20.472 124.124.332.0000.559.20.474 124.124.332.0000.559.20.475 124.124.332.0000.559.20.480 124.124.332.0000.591.00.700 124.124.332.0000.592.00.800 Total Appropriations Account Name State Housing Trust Grant Mortgage Assumption Rent -Chestnut Manor Rents -Coin Operated Services (laundry) Buildings Office Supplies Legal Services Administration Telephone Insurance Pacific Power Cascade Natural Gas Water Refuse Repairs and Maintenance Debt Service/Principal Debt Service/Interest Amount $325,000 $354,972 $60,720 $720 $741,412 $680,832 $2,400 $2,850 $11,400 $600 $3,300 $3,720 $4,800 $2,160 $720 $5,240 $1,189 $20,656 $739,867 To record acquisition and six months of operations for Chestnut Manor. EXHIBIT A FORM OF ASSUMPTION AGREEMENT The following is hereby mutually agreed as between Everett Mutual Savings Bank ("Lender"), Bert V. Cronin, Jr. and Roxanne R. Cronin ("Borrower"), and City of Yakima, Washington ("Borrower's Successor in Interest"). That property commonly known as Chestnut Manor and secured by that certain Deed of Trust dated October 27, 1988 recorded in Yakima County, under Auditors File No. 2844800 ("Deed of Trust"), has been conveyed to the City of Yakima from Bert V. Cronin, Jr. and Roxanne R. Cronin, with the full knowledge and consent of Everett Mutual Savings Bank. Said Deed of Trust secures a Promissory Note made by Borrower to Lender, dated October 27, 1988, as amended by the Modification Agreement dated January 31, 1991 ("Note'''). The principal balance outstanding after the receipt of the June 1, 1991 payment on the Note :is $354,971.22. The Note bears interest at the rate of 10.75% per annum and matures on October 1, 1992. Borrower's Successor in Interest shall make consecutive monthly payments, in the amount of $3,640.61, of principal of and interest on the Note, payable on the first day of each month beginning August. 1, 1991, untilthe outstanding principal balance of the Note is paid in full; provided, that any remaining outstanding principal balance shall be paid on October 1, 1992, unless the Note is sooner prepaid in accordance with its terms. EVERETT MUTUAL SAVINGS BANK has waived its option to accelerate upon the conveyance described herein, as provided in paragraph 19 of the Deed of Trust, and releases BERT V. CRONIN, JR. and ROXANNE R. CRONIN, from all obligations as stipulated in the Deed of Trust and the Note. DATED this day of EVERETT MUTUAL SAVINGS BANK By Its BERT V. CRONIN -12- , 3.991® CITY OF YAKIMA By CZZ, Its RO ANNIE R. C ONIN ASR281 91/05/06 ORDINANCE NO. 3359 AN ORDINANCE OF THE COUNCIL OF THE CITY OF YAKIMA, WASHINGTON, AUTHORIZING THE PURCHASE OF AN APARTMENT BUILDING IN THE CITY FOR THE PURPOSE OF HISTORIC PRESERVATION TO BE USED FOR THE DEVELOPMENT OF A PROGRAM FOR OWNERSHIP OF SUCH APARTMENTS BY LOW-INCOME ELDERLY OR HANDICAPPED RESIDENTS AND ESTABLISHING THE ELDERLY HOMEOWNERSHIP PROGRAM. WHEREAS, RCW 35.21.395 authorizes cities to purchase, maintain and manage property for the purpose of historic preservation and to enter into contracts and issue obligations for such purpose; and WHEREAS, the Council of the City of Yakima (the "Council") heretofore has adopted the Yakima Downtown Futures Plan: 1990 - 2000, which emphasized the goal of historic preservation; and WHEREAS, the Council hereby finds that purchase and operation by the City of the apartment building located at 27 South Fourth Street in the City ("Chestnut Manor" or the "Property") is necessary to further the goal of historic preservation; and WHEREAS, the Council hereby finds that there is a need for affordable housing for low-income residents, particularly the elderly and handicapped, in the City, and an even greater need for home ownership opportunities for such persons; and WHEREAS, the City has received an award of $325,000 from the Housing Trust Fund of the State of Washington (the "State") to be used in furtherance the City's program of homeownership for the elderly and handicapped; and WHEREAS, the City of Yakima (the "City") is a city of the first class of the State of Washington; and WHEREAS, RCW 35.23.440(20) and RCW 35.22.580 together authorize first class cities to mortgage property; and WHEREAS, the present owner has offered to sell Chestnut Manor to the City at a price of not to exceed $690,000, upon an initial payment of $325,000 and assumption of an existing note secured by a deed of trust on the Property; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF YAKIMA, AS FOLLOWS: Section 1, Findings. (a) The Council hereby finds and determines that: (1) Chestnut Manor was constructed in 1905 as a livery and since has been used as an apartment building, and is one of the few surviving structures in the City dating from the early 1900s; (2) by letter of November 15, 1990, the State Office, of Archaeology and Historic Preservation encouraged the protection and preservation of Chestnut Manor; and (3) preservation of Chestnut Manor as a historic structure is a goal of the City. (b) The Council further finds and determines that: (1) there is a need for decent, safe and affordable housing in the City for low-income residents; (2) there is a need for affordable home ownership opportunities in the City for low-income elderly or handicapped residents, and creation of such opportunities is a goal of the City; and (3) Chestnut Manor is a property suitable for implementation of a homeownership program for :low-income elderly or handicapped residents, and such program will preserve Chestnut Manor as as historic structure. Section 2. Authorization of Purchase. The purchase of Chestnut Manor by the City at a price of not to exceed $690,000 and application of the $325,000 Housing Trust Fund award to such purchase price is hereby authorized. Execution by the appropriate City official(s) of an Assumption Agreement, substantially in the form attached hereto as Exhibit A and by this reference incorporated herein, also is authorized. The note to be so assumed by the City (the "Note") shall have an outstanding principal -2- k:\asr\25739-83.001\29nche,snut.11l balance of not to exceed $365,000, bear interest at a rate of 10.75% per annum and mature on October 1, 1992. Under the Note, principal and interest are payable in monthly installments of $3,640.61, commencing July 1, 1991, with the remaining unpaid principal balance due at maturity, or earlier prepayment. Under the Real Estate Purchase and Sale Agreement, a form of which is attached hereto as Exhibit B, the seller will agree to pay in full, on or before the date of acquisition of the Property by the City, seller's debt obligations to the Department of Community and Economic Development of the City. The appropriate City official(s) is hereby authorized to execute the Real Estate Purchase and Sale Agreement substantially in the form attached hereto as Exhibit B. Section 3. The Program. In order to conserve the supply of decent, safe, sanitary and affordable housing for low-income residents of the City, particularly low-income elderly or handicapped residents, the City hereby establishes the Elderly Homeownership Program. The Office is hereby directed to operate, manage and, when the Office deems appropriate, to sell Chestnut Manor in furtherance of the goals of the Elderly Homeownership Program and of historic preservation. Chestnut Manor shall be sold at a price of not less than the City's then outstanding balance on the Property on terms to be determined by the Office; provided, that Chestnut Manor shall be sold only to a purchaser or purchasers who are low-income elderly or handicapped residents, or an organization composed of such persons, and who covenant (a) that they will preserve the Property as an historic structure, in full compliance with all applicable federal, state and local laws, -3- k: \asr\25739-83.001 \29n Chesnut. l l l regulations, rules and guidelines applicable to historic structure, (b) that they will not reconvey the Property without the consent of the City, which consent shall beconditioned on its finding 1:hat such reconveyance is in the best interests of the City and its inhabitants and which may be conditioned on the seller's payment to the City of all or a portion of the total amount of money that the City then has paid for the acquisition,, maintenance and improvement of the Property (including the Housing Trust Fund award of $325,000) less the total of all payments for rental of apartments then received by the City, and (c) that all apartments in Chestnut Manor will be owned and occupied by low-income elderly or handicapped residents at all times prior to such reconveyance, if any. Section 4. Authorization to Officials and Agej ts: Ratification of Prior Actions. The appropriate City officials, agents and representatives are hereby authorized and directed to execute the Real Estate Purchase and Sale Agreement and the Assumption Agreement, substantially in the form attached hereto, and to do everything necessary for the prompt acquisition of Chestnut Manor and for the implementation of the Elderly Homeownership Program, as provided in this ordinance. All actions heretofore taken by the City's officials, agents and representatives in connection with the purchase of Chestnut Manor and the development of the Elderly Homeownership Program are hereby ratified, approved and confirmed. -4- k:\asr\25739-83.001\29nchesnut.111 Section 5. Effective Date. This ordinance shall be in full force and effect from and after thirty (30) days after the date of its publication, adoption and approval as required by law. ADOPTED by the City Council of the City of Yakima, Washington, at a regular meeting thereof held this 14th day of May, 1991. CITY OF YAKIMA, WASHINGTON ATTEST: �2 >Cmc City Clerk Publication Date 5/17/91 Effective Date 6/16/91 1 Mayor Certified to be a true and correct copy of the original filed In my office. CITY CLERK fly y-----' '-__-_- Deputy -5- k:\asr\25739-83.001\29nchesnut.111 CLERK'S CERTIFICATE I, the undersigned, the duly chosen, qualified and acting Clerk of the City of Yakima, Washington (the "City"), and keeper of the records of the City Council of Yakima (the "Council"),, DO HEREBY CERTIFY: 1. That the attached ordinance is a true and correct copy of Ordinance No. 3359 of the Council (herein called the "Ordinance:"), as finally adopted at a regular meeting of the Council held on the 14th day of May, 1991, and duly recorded in the offices of the City. 2. That said meeting was a regular meeting duly convened and held in all respects in accordance with law, and, to the extent required by law, due and proper notice of such meeting was given; that a quorum was present throughout the meeting and a legally sufficient number of the members of the Council voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City this 15th day of May, 1991. xf City Clerk — 6 — k:\asr\25739-83.001\29nchesnut.11l Attachment II CITY OF YAKIMA OFFICE OF HOUSING AND NEIGHBORHOOD CONSERVATION CHESTNUT MANOR HISTORY The Chestnut Manor was developed through a discovery of the need for affordable housing of our elderly community residents that came from the homeownership program application process. Elderly residents on fixed income were reflecting rent and utility costs that exceeded 60 to 80% of their monthly income. This excessive cost factor forced our elderly population into substandard and unaffordable housing. In recognition of this housing cost adversely affecting our elderly population, it was determined a substantial number of units were needed that were affordable in cost, being long term tenancy and decent in habitability. Given this first step in recognition, a second factor faced our community in the removal of 49 units of housing in our downtown area for a parking lot. The removal of this building (Chestnut Manor) was also considered detrimental due to its historical significance. It was the recommendation of the Housing Division that the City Council purchase the Chestnut Manor to develop low-income, long term, decent elderly housing, with a state grant from the Washington State Housing Trust Fund. In 1989, members of City Council approved the submission of the application for the Elderly Co-op Program to the Washington State Housing Trust Fund. This program was approved by the State and the City was allocated $325,000 to use in the acquisition of the Chestnut Manor Apartment. The building would be owned by the city and operated by the Division of Housing during the transition period from its existing rental status to its establishment of the elderly occupied co-op. This has been reviewed by our legal counsel under the current state RCW status and has been determined to be adequate use and purpose for the City. The transition period for the placement of occupants in the building was anticipated to be 18 to 24 months to avoid any displacement of current tenants and the development of the buildings ownership, financial and legal paper work. The purchase of this building was through a cash payment from the Washington Housing Trust Fund and the existing indebtedness assumed by the City and refinanced by the new occupants. The offer of purchase on this property has been agreed to by the owner at a cost of $680,000, ($325,000 Housing Trust Fund, $355,000 loan assumption), and was acquired in the summer of 1991. The financial structure of this transaction offered long term occupancy to forty-six low income elderly families. Each occupant will pay no more than 30% of their gross monthly income for their unit which includes utilities. The building originated the development of a non-profit 501 c(3) corporation that would own and operate the building. This non-profit, called the "Chestnut Manor Association', is administered by tenants and professionals for the overall administration and operation. Since this time of acquisition three separate elements have been in process to complete the project. The project elements have different phases that are actively working independently toward the common goal of a successful project. Each individual element is outlined below. OPERATION: The building is in current operation managed by Preferred Property Management under an agreement with the Chestnut Manor Association. The building produces revenue sufficient for independent operation and is not subsidized by any other revenue resource. The current occupancy is being transitioned to perrnanent elderly residency. This operation and managment is overseen by a Board that was elected at large by the tenant population, with three professionals for technical assistance. The Board meets once a month to review operations and make decisions. The building was completely rehabilitated using interium financing from the City's UDAG repayment f nds. FINANCIAL RESTRUCTURE: The 'Chestnut Manor Association' has made a loan request, from the Washington Community Reinvestment Association, in the amount of $325,000 to pay off existing indebtedness of $354,000. This amount with the State's commitment to contiinue their grant ($325,000) as a deferred lien and a grant from the City's HOME Program in the amount of $325,000, will complete the financial transaction to purchase the building from the City. The City will be repayed the $250,000 that was extended for construction upon final closing of the title transfer. The final purchase price and its market value are very comparable, but the type of financing makes the occupancy affordable. (Grants and deferred loans) TITLE TRANSFER AND OWNERSHIP: The Ownership and title transfer were assigned to our attorneys in Seattle (Preston, Thorgrimson, Shidler, Gates and Ellis). Many avenues of testing theory's with state law and future responsibility was researched. The ending theory that would be the most beneficial to the City, State grant intent and long term occupancy was finally decided. This building would be established under a 501 c(3), a non-profit state corporation. The advantage of this structure will be tax exempt state and federal, long term occupancy and affordability. This organizational structure is acceptable to the new financer. The new financer will be the Washington State Reinvestment Association (WCRA). The preliminary commitment has been received and anticipate approval in early April. Upon approval the State will issue new documents to secure the grant change in responsibility. Given the agreement of all parties and the approval of all the financial requests the City will now be in the position to pass on the legal and financial responsibilities to the new owners. Although, this was an ambitious project it was also very innovative and has received many Federal and State comments of the City's commitment to provide affordable housing for our community.