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HomeMy WebLinkAbout09/06/2016 10 Rescission of Contract with Yakima Valley Partners Habitat for Humanity 7 Yrt .r,, -.. • • IC J xs .1 s. rt- Ays BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT Item No. 10. For Meeting of: September 6, 2016 ITEM TITLE: Resolution authorizing a mutual rescission with regards to contract agreements with Yakima Valley Partners Habitat for Humanity for the construction of four new low income housing units at 1220 S. 16th Avenue SUBMITTED BY: Joan Davenport, AICP, Community Development Director Archie Matthews, ONDS Manager (509) 576 -6761 SUMMARY EXPLANATION: On July 19, 2016, the Yakima City Council approved Resolution #R- 2016 -094 authorizing four contract agreements (Contract Numbers: 2016 -138, 2016 -139, 2016 -140, and 2016 -141) with Yakima Valley Partners, Habitat for Humanity up to $423,924 in federal housing and urban development HOME funds for the construction of four new low- income housing units. The property at 1220 S. 16th Avenue has subsequently been sold to another person; therefore, Habitat cannot secure the site specified and will be unable to fulfill the required terms and conditions of the HOME funding contracts to build the units. The contract must be rescinded. ITEM BUDGETED: Yes STRATEGIC PRIORITY: Neighborhood and Community Building if APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt resolution. BOARD /COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type D Resolution Habitat Contract Rescission 8/26/2016 Resolution D Letter from Habitat re: HOME contracts 8/26/2016 Backup Material D Response to Habitat re: HOME contracts 8/26/2016 Backup Material RESOLUTION NO. R -2016- A RESOLUTION authorizing the City manager to execute a mutual rescission with regards to HOME CFDA Contract #14.218 between the City of Yakima and Yakima Valley Partners Habitat for Humanity due to Habitat's inability to perform the terms and conditions therein. WHEREAS, the City received money from the federal government's HOME funding program under CFDA Contract # 14.218 in the amount of $423,924.00, which must be used to invest in affordable housing in the City of Yakima; and WHEREAS, on July 19, 2016, at its regularly scheduled City Council meeting, the City Council approved and authorized the City Manager to execute Contract #14.218 and accompanying unit - specific contracts (City Contracts 16 -138, 16 -139, 16 -140, and 16 -141) in favor of Habitat and providing HOME funds to Habitat to construct four low- income housing units at 1220 South 16 Avenue, Yakima, Washington; and WHEREAS, unbeknownst to the City at the time of contracting, Habitat did not own, or have under contract, the property at 1220 South 16 Avenue and that property has subsequently been sold to another person; and WHEREAS, the HOME CFDA Contract is a site - specific contract, requiring that the site be determined at the time of contracting; and WHEREAS, since Habitat cannot secure the site specified in the HOME CFDA Contract, it will be unable to build the low- income units in compliance with the contract and the contract must be rescinded; and WHEREAS, the City Council of the City of Yakima finds that it is in the best interests of its residents to authorize the City Manager to rescind the HOME CFDA Contract $14.218, and the corresponding contracts for each unit, with Yakima Valley Partners, Habitat for Humanity; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute the Mutual Rescission Agreement with Yakima Valley Partners, Habitat for Humanity rescinding HOME CFDA Contract 14.218 and the four contracts for individual units at 1220 South 16 Avenue, City Contract numbers 16 -138, 16 -139, 16 -140, and 16 -141. A copy of the rescission attached hereto. ADOPTED BY THE CITY COUNCIL this day of , 2016. Kathy Coffey, Mayor ATTEST: Sonya Claar Tee, City Clerk RECEIVED Yakima Valley Partners Inv • .. Habitat AUG 1 2 2016 for Humanity® OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES August 12, 2016 Archie M. Mathews, Manager Office of Neighborhood Development Services 112 South Eighth Street Yakima WA 98901 Re: Contract Number: 2016-142 with the City of Yakima for the New Construction of (4) single family homes located at 1220 S 16 Ave, Yakima WA Dear Archie: Please accept our sincere apology in placing you in a situation of possibly reporting back to Yakima City Council to our issue with the realtor for the property above mentioned. Yakima Valley Partners Habitat for Humanity (Habitat) and the City of Yakima's Community Development Department has enjoyed a great relationship for many years. Your personal commitment to Habitat has always been greatly respected and appreciated. Personally, I feel we have worked together in the past in a positive manner. We both share a commitment to helping very low income families to realize their dream of first time home ownership. As discussed during our meeting yesterday, the seller's realtor for this project came to my office and "dropped" the bomb shell that the seller had withdrawn his commitment to Habitat and accepted a higher offer on the same property. Habitat had conducted its due process and was totally taken by surprise by the seller's refusal to sell the property to us. We understand your reluctance at this point to continue. However if provided the opportunity we believe we can meet the contract's requirements with the construction of four (4) single family residences within the specified timelines on an alternate location. As such, this will give to needing families the opportunity for first time home 21 W Mead Ave, Ste 110, Yakima, WA 98902 Phone (509) 453-8077 Fax (844) 270-5407 www yakimahabrtat org ownership. We currently have one property that fits the project needs and are currently looking for additional build ready lots required to construct our homes on. It is anticipated we can continue to meet the time lines as noted in the contract with the City of Yakima, again just at different locations. We will be more than happy to explain to the City Manager, City Attorney and City Council as to what occurred. As you know, we cannot control the decisions of a seller if they elect to reject an already negotiated and accepted offer to take one which will earn them more profit. At this point, we would like to request an award adjustment that will allow Habitat to continue to fulfill its mission of providing much needed affordable housing opportunities in the City of Yakima to very low income families. We humbly ask you to allow Habitat to submit a revised project proposal for four (4) alternate properties compliant with HOME and City of Yakima requirements within 60-90 days and not to have grant funds reduced or withdrawn to Habitat. Thank you for taking the time to consider other possible options. Sincerely, lip /i4ity Isa el Garcia David Picatti Executive Director Board President ) .1,, i - ,,,,n,t, LEGAL DEWAR] MENT i ci,‘ 1 ,,.\,... I Yakima , Washington 98901-2830 , NOMPO * i August 25, 2016 Ms, Isabel Garcia Executive Director Yakima Valley P i ers Habitat for Humanity 21 W. Mead Ave., Suite 110 Yakima, WA 98902 Mr. David Picatti Board President Yakima Valley Partners Habitat for Humanity 21 W. Mead Ave., Suite 110 Yakima, WA 98902 Re: Contracts with the City of Yakima for the new construction of four single family homes located at 1220 South 16 Avenue, Yakima Dear Ms. Garcia and Mr. Picatti: Thank you for your letter of August 12, 2016 to Archie Matthews which was forwarded to me for review and response. The City was surprised to learn that Habitat did not have the property at 1220 South 16 under contract for purchase at the time the proposal for HOME funds was submitted. Unfortunately, the HO 1 funds contracts are site specific, and therefore, the money cannot simply transfer to another Habitat project. As such, the City cannot evaluate an alternate location as you request in your letter. Enclosed for your review and signature is a Mu . Rescission Agreement for each of HOME funds contracted under CFDA Contract #14.218 (including each of the four agreements for the individual units). The City is asking that you sign them, since you will no longer be able to comply with the terms and conditions of the previously-entered-into contracts for the project at 1220 South 16 Avenue, The City believes this is an efficient way to terminate the contracts between the two parties. The rescission does not preclude Habitat from providing proposals for future projects in conjunction with the City. Habitat has been a valuable partner in working towards a larger inventory of low-income housing for Yakima residents. Your work in the community has been remarkable, and the City looks forward to a continued working relationship on low-income housing projects in the future. Yakima * *** GiVii Division (509) 5'75-6030 • Prosecution Division (509 ) 5 ,l' 5-6033 . Fax (509) 5 75 -6160 11 ' # IS M. Isabel Garcia Mr. David Picatti August 25, 2016 Page 2 It is unfo I ate that the 1220 South 16 Avenue project did not work out. The City would appreciate it if you could sign the mu rescissions (one for each contract) and re them as soon as possible. This is currently set for review and approval on September 6, 2016, in front of the City Co cil. If you have any questions, please do not hesitate to contact me. The City looks fo ard to working with you again in the future. Sincerely, • Sara Watkins Senior Assistant City Attorney MUTUAL RESCISSON OF CONTRACT This Agreement of mutual rescission of a contract (hereinafter referred to as "Contract") made and entered into the 6th day of September, 2016, by and between Habitat for Humanity, a non-profit corporation operating in the City of Yakima (hereinafter referred to as "Habitat") and the City of Yakima, a municipal corporation (hereinafter referred to as "City"). RECITALS The parties hereby mutuay acknowledge and agree that: 1. On July 19, 2016, the parties entered into a Contract to allow Habitat to build four low-income housing units in the City, at 1220 South 18m Avenue, with federal HOME funds under CFDA Contract # 14.218. Although four units were planned for onnobouUun, all funds were granted pursuant to CFDA Contract # 14.218 with those funds allocated among the four projects in separate documents. A copy of the Contraots, including the proposals for the four pnojaoba, are attached hereto as Exhibit ''1" and fully incorporated herein. Those four prop000is, each under CFDA Contract #14.218, are recorded as City Contract numbers 18-138.16430.18440. and 16-141. all of which were approved pursuant toResolution 2016-094. 2. Habitat, prior to contraodng, intended to purchase real property on which it intended to build the low-income housing subject to the funding provided in the Contract. 3. Habitat, after entering into the Contract, was unable to purchase the property on which it intended to build low-income housing, and does not have other property available for such construction at this time. 4. The federa HOME CFDA Contrac #14.218 is site-specific to the 1220 South 16th Avenue, Yakima, Washington proposed project site, upon which four units were planned for construction under CFDA Contract #14.218. 5. Habitat, therefope, has no ability to construct the required low-income housing outlined in the Contract, as required under the terms and conditions of the Contract. It is acknowledged by Habitat that it will fail to compy with the terms and conditions ofthe Contract. 6. Habitat the City agree Contract be mutually rescinded as a result � Habitat's inability to obtain the real property contemplated at the time of the Contract. Now, Thanafore, in consideration of the mutual covenants of the partien, and the acknowledgements found herein, the parties hereby agree as follows: AGREEMENT 1. The Recitals found herein shall be fully incorporated into this Agreement, including Exhibit 1 attached hereto. 2. Habitat acknowledges that it has not, and will not be able to purchase the property at 1220 South l6th Avenue, Yakima, Washington. 3. The HOME CFDA Contract #14.218, and all project proposals for 1220 South 16th Avenue, Yakima that were attached to said CFDA Contract #14.218 (Contracts 16-138. 18'139. 16-140. and 10- 141) shall be rescinded as of the date of this agreement because Habitat will not be able to comply with the terms and conditions of the Contract. 4. This agreement of mutual rescission shall be binding upon the pardes, their successors, assigns and personal representatives. 5. Neither party shaN have any further rights or duties under the Contract. O. Habitat waives any claims to appeal this mutual termination which might be available under 2 C.F.R. sec. 200.339. 7. These conditions and this Agreement are mutually agreed upon by Habitat and the City, including the effective date of the termination. DATED this day of September, 2016. HABITAT FOR HUMANITY CITY OF YAKIMA Isabel Garcia, Executive Director Cliff Moore, City Manager ATTEST: ATTEST: Print Name: Sonya Claar-Tee, City Clerk Title: Habitat for Humanity Mutual Rescission of Contract - 2