HomeMy WebLinkAboutCC RESO 14,726RESOLUTION NO. 14.726
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NATIONAL CITY, CALIFORNIA AUTHORIZING AND APPROVING
A GRANT AGREEMENT WITH THE U. S. DEPT. OF HOUSING &
URBAN DEVELOPMENT PURSUANT TO THE HOUSING DEVELOPMENT
GRANT PROGRAM FOR THE CONSTRUCTION OF KIMBALL TOWERS,
NATIONAL CITY, CALIFORNIA (PROJECT NO. CA003HG401)
WHEREAS, the City Council of the City of National City,
California, by adoption of Resolution No. 14,393 on August 7, 1984,
authorized filing of an application with the U. S. Dept. of Housing & Urban
Development (HUD) for a housing development grant in the amount of $3
million; and
WHEREAS, HUD, on November 29, 1984 announced preliminary
funding approval of the Project and the City Council of the City of National
City, California, on December 11, 1984, by adoption of Resolution No. 14,503
authorized acceptance of such preliminary funding approval; and
WHEREAS, HUD has offered a Grant Agreement and the City
Council wishes to proceed with the Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of National City that the Agreement entitled "U.S. Dept. of
Housing & Urban Development, Housing Development Grant Program, Grant
Agreement, Kimball Towers, National City, California, Project No.
CA003HG401" between the Secretary of Housing and Urban Development and
the City of National City consisting of forty-nine pages including Exhibits A
through E and related evidentiary material is hereby in all respects approved
and the Mayor of the City is hereby authorized to execute said Agreement
on behalf of the City of National City.
A copy of said Grant Agreement is on file in the office of the
City Clerk and reference is hereby made to all particulars contained therein.
PASSED AND ADOPTED this 27th day of August, 1985.
ATTEST:
Io a Campbell, CitClerk
APPROVED AS TO FORM:
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
HOUSING DEVELOPMENT GRANT PROGRAM
GRANT AGREEMENT
Grantee Name Project Name
NATIONAL CITY, CALIFORNIA KIMBALL TOWERS
Preliminary Approval Date Project Number
NOVEMBER 29, 1984
CA003HG401
PREAMBLE
This GRANT AGREEMENT is made and entered into by and between
THE SECRETARY of HOUSING AND URBAN DEVELOPMENT, acting by and
through the Assistant Secretary for Housing, as representative of
the United States of America, hereinafter referred to as "HUD",
and CITY OF NATIONAL CITY , hereinafter referred to
as the "GRANTEE", pursuant to section 17 of the U.S. Housing Act
of 1937, (Act), 42 U.S.C. 1437o and the Department of Housing and
Urban Development Act, 42 D.S.C. 3531, et seg.
RECITALS
The Grantee has applied to HUD for grant assistance under
the HOUSING DEVELOPMENT GRANT, hereinafter referred to as 'HDG",
program to undertake activities which are consistent with the
provisions of section 17 of the Act and HDG regulations at
24 CFR Part 850.
HUD, in reliance upon the representations set forth in the
Application, has, through a letter of notification, approved the
award of grant funds to the Grantee, to be expended by the
Grantee in conformity with the requirements and provisions of
this Grant Agreement.
IN CONSIDERATION of the mutual promises and covenants
contained in this Grant Agreement, HUD and the Grantee agree as
follows:
TABLE OF CONTENTS
HOUSING DEVELOPMENT GRANT PROGRAM
GRANT AGREEMENT
Introduction Page
Preamble i
Recitals i
Table of Contents
Schedule of Exhibits iv
PART I - PROJECT SPECIFIC PROVISIONS
Article I - Scope and Parties 1
Section 1.01 Scope of Agreement 1
Section 1.02 Participating Parties 2
PART II - GENERAL PROVISIONS
Article II - Definitions and Contents •4
Section 2.01 General Definitions 4
Section 2.02 Contents of the Agreement 6
Article III - Compliance with Federal Rules and Regulations 7
Section 3.01 Delegation and Acceptance of Responsibilities 7
Section 3.02 Compliance with HUD Regulations 7
Article IV - Grantee Representations, Warranties, Obligations 8
Section 4.01 Legal Capacity 8
Section 4.02 Project Commencement, Completion and Operation 9
Section 4.03 Obligation to Cure Title Defects 9
Section 4.04 Notice/Action On Default/Substantial Violation 9
Section 4.05 Housing Assistance Plan 10
Section 4.06 Other Program Requirements 10
Article V - Owner/Grantee Agreement 12
Section 5.01 General
Section 5.02 Development Phase
Section 5.03 Management Phase
Article VI - Third Party Contracts
Section 6.01 Labor Standards
Section 6.02 Assurance of Governmental Approvals
Section 6.03 Completion of the Project
Section 6.04 Maintaining Records, Right to Inspect and Copy
Section 6.05 No Assignment or Succession
ii
12
12
13
15
15
16
16
16
16
Section 6.06
Section 6.07
Section 6.08
Article VII -
TABLE OF CONTENTS (continued)
HUD Approval of Amendments
Disclaimer of Relationships
Conflict of Interest
Evidentiary Materials
Section
Section
Section
Section
Section
Section
Section
Section
Section
7.01 Commitments of Participating Parties
7.02 Form of Documentary Evidence - General
7.03 Opinions of Grantee Counsel - Form
7.04 Evidence of Debt - Form
7.05 Evidence of Agreements and Contracts - Form
7.06 Evidence of Loans - Closings - Bond Sale -
7.07 Evidence of Liquid Assets - Form
7.06 Evidence of Finances - Form
7.09 Evidence of Title - Form
Article VIII
- Amount and Authorized Uses of Grant Funds
Section
Section
Section
Section
8.01 Grant Assistance Provided
8.02 Authorized Uses of Grant Funds
8.03 Adjustments to Grant Funds
8.04 Use of Program Income
Article IX - Disbursement of Grant Funds
Section 9.01 Incurring Costs for Project Activities
Section 9.02 Electronic Transfer and Letter of Credit
Section 9.03 Authorization by HUD for Grantee to Draw
Article X - Post Grant Agreement Certifications
Section 10.01 Certification Upon Draw of Funds
Section 10.02 Certification of Completion - Grantee
Section 10.03 Certification of Completion - Non -Grantee
17
17
17
17
17
18
18
19
20
Form 20
21
21
22
22
22
22
23
23
24
24
25
Funds 26
28
28
29
29
Article XI - Audits, Reports, Records, Inspection and Review 29
Section
Section
Section
Section
Section
Section
11.01 Duty to Maintain, Rights to Inspect and Copy
11.02 Audits
11.03 Reports
11.04 Records
11.05 Site Visits
11.06 Performance Review
Article XII - Default, Substantive Violation
and Remedies
Section 12.01 Default
Section 12.02 Corrective Action
Section 12.03 Substantial Violation by Owner
iii
29
30
30
30
31
31
32
32
32
33
TABLE OF CONTENTS (continued)
Article XIII - Project Closeout
Section 13.01 Iritiation of Closeout
Section 13.02 Final Audit
Section 13.03 Cost Certification and Refund
Article XIV - Termination
Section 14.01 Termination for Mutual Convenience
Section 14 02 Termination for Cause and Grant Reduction
Section 14.03 Claim for Money
Article XV - Miscellaneous
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
15.01 Submissions and Notices
15.02 Assignment
15.03 Successors Bound
15.04 Remedies Not Impaired
15.05 Cumulative Remedies
15.06 Severability
15.07 Entire Agreement
15.08 Execution in Counterparts
15.09 Table of Contents; Titles and Headings
15.10 Amendment of this Grant Agreement
15.11 Disclaimer of Relationships
15.12 Governing Law
15.13 Waiver by HUD
15.14 Effective Date
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
SIGNATURE PAGE
SCHEDULE OF EXHIBITS
APPLICATION
DESCRIPTION OF GRANTEE ACTIVITIES
DESCRIPTION OF NON -GRANTEE ACTIVITIES
REQUIRED EVIDENTIARY MATERIALS
PROJECT PERFORMANCE SCHEDULE
iv
33
33
34
34
35
35
35
35
36
36
36
36
36
36
37
37
37
37
37
37
37
38
36
39
40
41
42
44
45
PART I - PROJECT SPECIFIC PROVISIONS
ARTICLE 1
SCOPE AND PARTIES
Section 1.01 Scope of Agreement
(a) The maximum HDG amount is $ 3,000,000
(b) Project Construction/Rehabilitation Start: 10/85
(c) Estimated Completion Date: 10/86
(d) Minimum Project Term: 20 years
(e) Project Description
1. Project Address:
Street/Area: 13th Street and "D" Avenue
City/State National City, California 92050.
2. Type and Number
(i) New Construction
OBR 1BR 2BR 3BR 4/More Total
Lower Income
Elderly 120 120
Family
SubTotal 120 120
Other Units 30 30
Total 150 150
(ii) Substantial Rehabilitation
OBR 1BR 2BR 3BR 4/More Total
Lower Income
Elderly
Family
SubTotal
Other Units
Total
1
3. Percentage of Commercial Space
(a) Projects Gross Floor Area (GFA) 106,000
(b) Net Rentable Commercial Area -0-
(c) Commercial Percent of GFA -0-
(f) Project Leveraging Ratio: 1.66
(g) Relocation Benefits:
Will be provided under the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of
1970 (Uniform Act), and/or
Will be provided under the HDG regulations at 24
CFR Part 850, or
xX Will not apply
Section 1.02 Participating Parties
The term "Participating Party" consists of the persons,
firms, corporations and entities identified in the Application
and named below:
"Grantee" shall mean:
Name: City of National City, California
Address: 1243 National City Blvd
National City, California
Contact: Thomas G. McCabe, City Mgr. (619) 477-1181 Ex. 21
"Owner" shall mean:
Name: Community Development Commission of tjte National City, CA.
Address: 1243 National City Blvd.
National City, California 92050
Contact: Arnold A. Peterson, Exec. Director (§19) 477-2380
"Lender" shall mean:
Name:
Address:
Contact:
NONE
2
"Bond Purchaser" shall mean:
Name:
Address:
Contact
'Issuer" shall mean:
Name:
"
Address:
Contact:
" shall mean:
"
Name:
Address:
" shall mean:
Name:
Address:
3
PART II - GENERAL PROVISIONS
ARTICLE II
DEFINITIONS AND CONTENTS
Section 2.01 General Definitions
Unless specifically provided otherwise or the context
requires, when used in this Grant Agreement:
(a) "Act" means the U.S. Housing Act of 1937, 42 U.S.C.
1437o, as amended.
(b) "Application" means the Application for Federal
Assistance, and such other submittals, as are specified in
Exhibit A of this Grant Agreement.
(c) "Default" means any default set forth in section 12.01
of this Grant Agreement.
(d) "Development" means the construction or substantial
rehabilitation of the Project in accordance with Exhibits A, B
and C of this Grant Agreement.
(e) "Electronic Transfer" means the transfer of funds from
the U.S. Treasury to the Grantee pursuant to section 9.02 of this
Grant Agreement.
(f) "Eligible Costs" means costs for the activities
specified in Exhibit B and Exhibit C of this Grant Agreement,
provided that such costs (i) are not incurred in connection with
any activity which, under 24 CFR Part 850, are ineligible under
the HDG program, and (ii) conform, as applicable, to the
requirements of OMB Circular A-87 (Cost Principles for State and
Local Governments), as may be amended.
(g) "Environmental Requirements" means the requirements
described in 24 CFR Part 58.
(h) "Grant Funds" means those funds to be provided by HUD to
the Grantee pursuant to the terms of this Grant Agreement, as
specified in section 1.01 of this Grant Agreement.
(i) "Grantee" means the entity specified as Grantee in the
Preamble and section 1.02 of this Grant Agreement.
(j) "Grantee Activities" means those activities of the
Project to be carried out by the Grantee, or agent or agency of
the Grantee, which activities are described in Exhibit B of this
Grant Agreement.
(k) "HDG Program" means the Housing Development Grant
Program established by HUD pursuant to section 17 of the Act.
(1) 'HMG Regulations" means the regulations at 24 CFR Part
850.
(m) "HUD" means the U.S. Department of Housing and Urban
Development.
(n) "Letter of Credit" means the letter of credit to be
issued or amended by the U.S. Department of Treasury pursuant to
section 9.02 of this Grant Agreement and is distinguished from a
Letter of Credit which may be part of an equity contribution
required by Exhibit D of this Grant Agreement.
(o) "Lower Income Units" means units identified in section
1.01(e)(2) of this Grant Agreement with rents, determined in
accordance with 24 CFR 850, which will not exceed 30 percent of
adjusted income of a household, as defined by 24 CFR Part 850.3,
whose income equals 50 percent of median income applicable to the
area in which the Project is located, as determined by HUD.
(p) "Non -Grantee Activities" means those activities of the
Project to be carried out by the Participating Parties, other .
than the Grantee or agent or agency of the Grantee, which
activities are described in Exhibit C of this Grant Agreement.
(q) 'Owner" means one or more individuals, corporations,
partnerships or other legal entities that hold (or will hold by a
time specified in Exhibit E of this Grant Agreement) valid legal
title to, or have (or will have by a time specified in Exhibit E
of this Grant Agreement) a long-term leasehold interest in, the
Project to be developed pursuant to this Grant Agreement and
which is more specifically identified in section 1.02 and Exhibit
A of this Grant Agreement.
(r) 'Participating Party" means any person, firm,
corporation, or public or private entity that has agreed to
provide financial or other resources to carry out the Project and
is identified in section 1.02 of this Grant Agreement.
Identification in section 1.02 as a "Participating Party" means
that HUD, in selecting the Grantee for the award of this grant,
relied in material part upon a representation by the Grantee that
the party so identified will complete a specified portion of the
Project or a specific activity necessary for the completion of
the Project.
(s) "Program Income" means the gross income earned by the
Grantee from grant -supported activities and includes (i) any
income earned by the Grantee or agent or agency of the Grantee,
from the use and disposition of real or personal property
acquired in whole or in part with Grant Funds; (ii) repayment to
the Grantee (including principal and interest) of any loan made
in whole or in part with grant funds; (iii) repayment -to the
Grantee of Grant Funds as a result of the Owner's uncorrected
Substantive violation of obligations under the Owner -Grantee
Agreement as described in Article XII of this Grant Agreement or
5
(iv) any income from an activity where it is specifically
declared in Exhibit A of this Grant Agreement that the income
from such activity shall be deemed to be Program income.
(t) "Project" shall mean one or more buildings containing
similarly constructed residential units, the site(s) on which the
building or buildings is/are located, and any functionally
related facilities, as more specifically described in section
1.01(e) and Exhibit A of this Grant Agreement.
(u) "Project Term" shall mean the number of years during
which the number of units specified as lower income in section
1.01(e)2 of this Agreement must be occupied or available for
occupancy by lower income households. The Project Term shall
begin on the date on which units in the Project are available for
occupancy, and shall continue through the number of years
specified in section 1.01(d) of this Agreement from the date on
which 50 percent of total units in the Project are occupied.
(v) "Secretary" means the Secretary of Housing and Urban
Development or any other official of HUD to whom the Secretary •
has delegated authority to act with respect to matters covered by
this Grant Agreement.
(w) "Substantive Violation" means a breach of the Owner's
obligations under the Owner/Grantee Agreement as set forth in
section 12.03 of this Grant Agreement.
Section 2.02 Contents of the Agreement
This agreement consists of Parts I and II of the Grant
Agreement and the following exhibits, which are attached hereto,
incorporated herein and made a part hereof:
(a) Exhibit A: Application for Federal Assistance (SF 424),
-and the attachments thereto, which are incorporated herein by
reference, and a listing of any minor adjustments to the
Application which may have been made by HUD during processing.
(b) Exhibit B: Description of Grantee Actvities
(c) Exhibit C: Description of Non -Grantee Activities
6
(d) Exhibit D: Required Evidentiary Materials
I. Governmental Approvals
II. Evidence of Title
III. Owner/Grantee Agreement, with attachments
(a) Public/Private Security Instruments
(b) EDG Security Instrument
(c) Affirmative Marketing Plan
(d) Minority/Women-Owned Business Plan
(e) Grantee Rent Mechanism
(f) ARP Investment Plan
(g) Opinion of Counsel
IV. Legally Binding Commitments
(e) Exhibit E: Project Performance Schedule
1. Submission of Evidentiary Materials
2. Start and Completion Dates
ARTICLE III
COMPLIANCE WITH FEDERAL RULES AND REGULATIONS
Section 3.01 Delegation and Acceptance of Responsibilities
By its execution of this Grant Agreement, the Grantee
represents and warrants that it has the legal capacity to assume
responsibilities for compliance with all applicable Federal rules
and agrees and undertakes to assume and carry out all such
responsibilities in accordance with all the requirements which
are or may be established pursuant thereto.
Section 3.02 Compliance with HDG Regulations
The Grantee shall comply with the BDG regulations, as they
may be amended, including the certifications specified therein.
7
ARTICLE IV
GRANTEE REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
Section 4.01 Legal Capacity
The Grantee has, by and through consultations among all
necessary members of the Grantee's governing body and its
officers, examined the following and by its execution of this
Grant Agreement, the Grantee represents and warrants to BUD that:
(a) The Grantee is duly organized and validly existing under
law and has all the requisite power and authority to enter into
this Grant Agreement.
(b) This Grant Agreement has been executed and delivered by
the Grantee in such a manner and form as to comply with all
applicable laws and to make this Grant Agreement the valid and
legally binding act and agreement of the Grantee.
(c) If the Grantee is a State acting on behalf of a unit of
general local government, the unit of general local government
has concurred in the development of this Project.
(d) There is no action, proceeding or investigation now
pending, nor any basis therefor, known or believed to exist by
the Grantee, which (i) questions the validity of this Grant
Agreement, or any action taken or to be taken under it, or (ii)
is likely to result in any materially adverse change in the
authorities, properties, assets, liabilities, or conditions
(financial or otherwise) of the Grantee which would materially
and substantially impair the Grantee's ability to perform any of
the obligations imposed upon the Grantee by this Grant Agreement.
(e) The representations, statements, certifications and
other matters contained in the Application were, to the best of
the Grantee's information and belief, true and complete in all
material aspects as of the date of filing of the Application and
at the time of execution of this Grant Agreement.
(f) As to the capacity of the Grantee to carry out
obligations under this Grant Agreement, (i) the Grantee is not in
material violation of its Charter, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, statute,
ordinance, rule or regulation, and (ii) execution and performance
of this Grant Agreement will not result in any such violation.
(g) The Grantee has obtained, or has reasonable assurances
that it will obtain, all Federal, State and local government
approvals and reviews required by law to be obtained by the
Grantee for the Project; and all Participating Parties have
obtained or the Grantee has reasonable assurances that such
Participating Parties will obtain, all such approvals and reviews
required by law to be obtained by the Participating Parties for
the Project. Toward that end, the Grantee assures that to the
best of the Grantee's information and belief, no Participating
Party has taken or will, with the Grantee's consent, take any
action that might have an adverse environmental effect, limit the
choices among competing environmental alternatives or might alter
the environmental premises on which the Grantee's environmental
findings were based.
Section 4.02 Project Commencement, Completion and Operation
(a) The Grantee shall use its best efforts to assure the:
(i) Performance of all Grantee obligations under this Grant
Agreement including, commencement and completion of the Grantee
Activities described in Exhibit B of this Grant Agreement in
accordance with Exhibit E of this Grant Agreement;
(ii) Commencement and completion of Project Development by
the Owner by the times specified in section 1.01(b) and (c), in
accordance with Exhibit E of this Grant Agreement; and
(iii) Operation and management of the Project by the Owner
in accordance with HUD regulations and the Owner/Grantee
Agreement described in Article V of this Grant Agreement.
(b) The Grantee agrees that the undertakings and assurances
of the above subsection (a) mean that the Grantee shall, to the
maximum extent permitted by law, use and apply all of its
governmental and proprietary powers to assure fulfillment of the
Grantee Activities and commencement, completion and continued
operation of the Project by the Owner, including, but not limited
to, those powers governing taxes, other revenues, credit, eminent
domain, appropriations, if necessary, for the purpose of
providing any shortfall between the funds available under this
Grant Agreement and funds necessary to complete all the Grantee
activities described in this Grant Agreement, and other legal
action necessary to enforce the Owner's obligations under HUD
regulations and the Owner/Grantee Agreement.
Section 4.03 Obligation to Cure Title Defects
The Grantee shall, to the maximum extent permitted by law,
use and apply all its governmental powers governing taxes, other
revenues, credit, eminent domain and appropriations, if
necessary, to assure the availability of real property, which is
needed to complete Grantee Activities, free and clear of adverse
and inhibiting title defects which will or may have a materially
adverse effect on the use of such real property for the Project.
Section 4.04 Notice/Action On Default/Substantive Violation
(a) Promptly on discovery of Default or Substantive
Violation, as defined in Article XII of this Grant Agreement, the
Grantee shall give HUD written notice.
9
(b) Promptly on the discovery of such Default or Substantive
Violation, the Grantee shall pursue, to the fullest extent
possible and in accordance with Article XII of this Grant
Agreement, all remedies available to the Grantee to remove or
cure the Default or Substantive Violation, or to seek redress of
or relief from its effects, including reimbursement of any Grant
Funds expended bn the Project and to prevent or mitigate any
adverse effects on the Project. The Grantee shall keep HUD fully
informed as to the status of such actions.
Section 4.05 Housing Assistance Plan
The Grantee assures that the Project is consistent with the
Housing Assistance Plan effective at the time of execution of
this Grant Agreement.
Section 4.06 Other Program Requirements
The Grantee shall comply with the following requirements:
(a) Equal Opportunity:
(i) Title VIII of the Civil Rights Act of 1968, 42 U.S.C.
3601-19 (Public Law 90-284), and implementing regulations;
Executive Order 11063 and regulations at 24 CFR Part 107; and
Title VI of the Civil Rights Act of 1964 (Public Law 88-352) and
regulations issued at 24 CFR Part 1; (ii) Executive Order 11246
and regulations at 41 CFR Chapter 60; (iii) Section 3 of the
Housing and Urban Development Act of 1968, as amended; (iv) The
Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and the
prohibitions against discrimination against handicapped
individuals under Section 504 of the Rehabilitation Act of 1973,
29 U.S.C. 794 and implementing regulations at 24 CFR Part 8.
(b) Environment and Historic Preservation:
Section 104(f) of the Housing and Community Development Act
of 1974, and 24 CFR Part 58, procedures for compliance with the
National Environmental Policy Act of 1969 (U.S.C. SS4321-4361),
and additional laws and authorities listed at 24 CFR 58.5.
(c) OMB Circulars:
OMB Circulars Nos. A-87 (Cost Principles for State and Local
Governments), A-102 (Uniform Administrative Requirements for
Grants -in -Aid to State and Local Governments) and A-122, as
Revised (Cost Principles for Nonprofit Organizations) as they
relate to the acceptance and use of Grant Funds.
10
(d) Lead -Based Paint:
Lead -Based Paint Poisoning Prevention Act, 42 U.S.C.
SS4821-4826, and implementing regulations at 24 CFR Part 35.
(e) Relocation:
Development of the Project will not cause the involuntary
displacement of very low-income households by other than very
low-income households. Relocation caused by the Project will be
conducted as indicated in section 1.01(g) of this Grant
Agreement.
(f) Conflicts of Interest:
No person (i) who is an employee, agent, consultant, officer
or elected or appointed official of the unit of general local
government in which the Project is located (and the State where
the State is the applicant) (or of any designated public
agencies) that receives a EDG and who exercises or has exercised
any functions or responsibilities with respect to assisted •
development activities or (ii) who is in a position to
participate in a decision making process or gain inside
information with regard to such activities, may obtain personal
or financial interest or benefit from the activity, or have an
interest in any contract, subcontract or agreement with respect
thereto, or the proceeds thereunder, either for themselves or
those with whom they have family or business ties, during their
tenure or for one year thereafter. Exceptions may be granted to
this prohibition under the EDG regulations at 24 CFR Part 850.
(g) Use of Debarred, Suspended or Ineligible Contractors:
The provisions of 24 CFR Part 24 relating to the employment,
engagement of services, awarding of contracts, or funding of any
contractors or subcontractors during any period of debarment,
suspension or placement in ineligibility status apply.
(h) Flood Insurance:
The Project site shall not be located in an area that has
been identified by the Federal Emergency Management Agency (FEMA)
as having special flood hazards, unless the community in which
the area is situated is participating in the National Flood
Insurance Program and the regulations thereunder (44 CFR Parts
59-79) or less than a year has passed since FEMA notification
regarding such hazards, and the grantee will assure that flood
insurance on the structure is obtained in compliance with Section
102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4001 et sea.).
11
ARTICLE V
OWNER/GRANTEE AGREEMENT
Section 5.01 General
The Grantee shall enter into an agreement with the Owner,
designated as the Owner/Grantee Agreement, which shall specify
the means to be used by the Grantee to enforce the Owner's
obligations under the Owner/Grantee Agreement, such as a covenant
running with the land, rent regulatory agreement or other means
acceptable to HUD, and which, in addition and at a minimum, shall
require the Grantee to monitor the Owner's performance; to take
legal action, as appropriate, to enforce compliance with the
Owner's responsibilities under the Owner/Grantee Agreement; and
include the requirements of section 5.02, section 5.03, Article
VI and Exhibits B, C and D of this Grant Agreement. Other terms,
not in conflict with HDG requirements, agreed upon by the Owner
and Grantee, may be included in the Owner/Grantee Agreement.
Section 5.02 Development Phase
With respect to the Development phase of this Project, the
Owner/Grantee Agreement shall include the following requirements:
(a) The Grantee shall carry -out the Grantee obligations
under this Grant Agreement, including the Grantee Activities set -
forth in Exhibit B of this Grant Agreement and the Owner shall
carry -out the Non -Grantee Activities set -forth as the Owner's
responsibilities in Exhibit C of this Grant Agreement.
(b) The Owner shall execute a security instrument which
shall secure the Owner's compliance with its obligations under
the Owner/Grantee Agreement and BUD regulations. The terms of
the security agreement shall be set by the Owner and the Grantee
and be approved by HUD, but at a minimum the instrument shall
-evidence, in accordance with section 7.04 and Exhibit D of this
Grant Agreement, that the !MG is a debt on the Project, which may
be called in the event of Substantive Violation, in accordance
with section 12.03 of this Grant Agreement. Such security
instrument shall be attached to the Owner/Grantee Agreement.
(c) Development of the Project shall commence at the time
specified in section 1.01(b) of this Grant Agreement and shall be
completed by the time specified in section 1.01(c) of this Grant
Agreement, in accordance with Exhibit E of this Grant Agreement.
(d) The project shall be developed in accordance with
applicable State and local building codes or, in the absence of
these codes, with a nationally recognized model building code.
(e) No activity having potential environmental effects shall
be undertaken until the Grantee has completed an environmental
assessment of the Project in accordance with 24 CFR Part 58.
12
(f) Consistent with Executive Orders 11625, 12432 and 12138,
and Exhibit D of this Grant Agreement, the Grantee shall, with
the Owner, prepare, implement and maintain a minority and women -
owned business development plan which shall contain specific •
measurable goals and an affirmative strategy to promote awareness
and participation by such business in the contracting and
procurement activities generated by the Project. The plan shall
be attached to the Owner/Grantee Agreement and shall remain in
effect throughout the construction period.
(g) The Owner shall comply with Title VIII of the Civil
Rights Act of 1968, 42 D.S.C. 3601-19 (Public Law 90-284) and
implementing regulations; Executive Order 11063 and regulations
at 24 CFR Part 107; Title VI of. the Civil Rights Act of 1964
(Public Law 88-352) and regulations at 24 CFR Part 1=the Age
Discrimination Act of 1975 (42 U.S.C. 6101-07); Section 504 of
the Rehabilitation Act of 1973, 29 U.S.C. 794 and implementing
regulations at 24 CFR Part 8; Executive Order 11246 and
regulations at 41 CFR Chapter 60; and the requirements of Section
3 of the Housing and Urban Development Act of 1968.
(h) The Owner shall agree that any duly authorized
representative of HUD shall, at all reasonable times, have access
to any portion of the Project in which the Owner is involved.
Section 5.03 Management Phase
With respect to the Management phase of the Project, the
Owner/Grantee Agreement shall include the following requirements:
(a) During the Project Term, units in the Project shall not
be converted to condominium ownership or to a form of cooperative
ownership that is not eligible to receive a HDG.
(b) During the Project Term, the Owner shall not
discriminate against prospective tenants on the basis of their
receipt of or eligibility for housing assistance under any
Federal, State or local housing assistance program or, except for
an elderly housing project or units specifically identified in
section 1.01(e)2 of this Grant Agreement as designated for the
elderly, on the basis that they have a minor child or children
who will be living with them.
(c) The number of units by bedroom distribution specified in
Section 1.01(e)2 of this Grant Agreement shall be occupied or
available, through the Owner's best efforts, for occupancy by
lower or very low income households during the Project Term.
(d) Lower income units shall be leased only to tenants who
are lower or very low income at the time of initial occupancy.
(e) Lower income rents and tenant income shall be determined
in accordance with HUD regulations at 24 CFR Part 850, Subpart F.
13
(f) In the event that reexamination of household income
indicates that the tenant no longer qualifies as a lower income
household, the Owner shall take appropriate action in accordance
with HUD regulations at 24 CFR Part 850, Subpart F.
(g) The Grantee shall have established a rent mechanism to
assure that the type and number of units specified in section
1.01(e)(2) of this Grant Agreement are occupied or available for
occupancy by lower income households during the Project Term.
The rent mechanism shall be attached to the Owner/Grantee
Agreement and shall include, at a minimum, provisions that: (1)
the Grantee shall review and approve any schedule of rents
proposed by the Owner for lower income units, (2) the Grantee
acknowledges that any rent schedule, which shall include utility
allowances, if utilities are tenant paid, submitted by the Owner,
(within the permissible maximum allowed by this Grant Agreement
and HDG regulations), will be deemed approved unless the Grantee
informs the Owner, within 60 days after receiving the schedule,
that it is disapproved because the schedule is not consistent
with the rent mechanism, and (3) the initial monthly allowance
for utilities and services to be paid by lower income households
shall be as approved by HUD, in approval of the Application, with
subsequent calculations of this allowance approved by the Grantee
in connection with its review and approval of rent schedules.
(h) Procedures to be followed by the Owner to determine
tenant eligibility and actions to be taken in the event a tenant
is determined to be over income shall be established and attached
to the Owner/Grantee Agreement.
(i) The Owner shall, at least annually on the date specified
in the Grantee rent mechanism (and at any other time as required
by the Grantee in the rent mechanism), recalculate the maximum
monthly rent to be charged. The first rent recalculation shall
be submitted by the Owner to the Grantee no later than 60 days
prior to initial occupancy.
(j) Marketing shall be done in accordance with the HUD -
approved Affirmative Fair Housing Marketing Plan, Form HUD-935.2,
and all fair housing and equal opportunity requirements. The
Affirmative Fair Housing Marketing Plan shall be attached to the
Owner/Grantee Agreement.
(k) Local residency requirements shall not be permitted.
Local residency preferences will be allowed to the extent that
they are not inconsistent with affirmative fair housing marketing
objectives and the the Owner's HUD -approved Affirmative Fair
Housing Marketing Plan. With respect to any residency
preference, persons expected to reside in the community as a
result of current or planned employment will be treated as
residents.
14
(1) A11 management and maintenance functions shall be
performed in compliance with applicable equal opportunity
requirements, as specified in subsection 5.02(g).
(m) The Grantee and Owner shall agree that nothing contained
in the Owner/Grantee Agreement shall preclude enforcement by the
Federal Government of this Grant Agreement, civil rights
statutes, or other provisions of law that apply to the EDG
program.
(n) The Owner shall agree that any duly authorized
representative of HUD shall, at all reasonable times, have access
to any portion of the Project in which the Owner is involved.
(o) In the event that the HDG will be invested in an account
for the purpose of making a periodic assisted rental payment
(ARP), the Owner shall have agreed to an investment plan in
accordance with section 9.03(e) of this Grant Agreement, which
shall be attached to the Owner/Grantee Agreement.
(p) Upon completion of the Project and resolution of any •
findings of the final audit, the Owner shall submit to the
Grantee, a written certification, executed by an authorized
representative of the Owner, stating that all Development related
activities required to be completed by the Owner in accordance
with Exhibit C of this Grant Agreement have been completed
consistent with the terms of this Grant Agreement, and specifying
the date of completion and the actual cost to the Owner of labor,
materials and necessary services for the construction of physical
improvements for the Project in the format prescribed by HUD.
ARTICLE VI
THIRD PARTY CONTRACTS
Section 6.01 Labor Standards
All laborers and mechanics (except laborers and mechanics
employed by a State and local government acting as the principal
contractor on the Project) employed in the development of a
Project assisted under the HDG program shall be paid wages at
rates not less than those prevailing on similar construction in
the locality, as determined by the Secretary of Labor in
accordance with the Davis -Bacon Act, as amended, 40 U.S.C. 276a-
276a-5, and contracts involving their employment shall be subject
to the provisions, as applicable, of the Contract Work Hours and
Safety Standards Act, as amended, 40 D.S.C. 327-333. Grantees,
Participating Parties, contractors and subcontractors shall
comply with regulations issued under the Act and with other
Federal laws and regulations pertaining to labor standards.
15
Section 6.02 Assurance of Governmental Approvals•
The Grantee shall include or cause to be included in all its
contracts with Participating Parties a warranty that the Grantee
and each Participating Party has obtained, or has reasonable
assurance that it will obtain, all Federal, State and local
governmental approvals and reviews required by law to be obtained
by the Grantee and the Participating Party for the Project. Any
such approvals which have not been obtained shall be specified in
such contract. Further, the Grantee shall include or cause to be
included in all its contracts with Participating Parties a
warranty that the Participating Party has not and shall not take
any action which might have an adverse environmental effect,
would limit the choices among competing environmental
alternatives or might alter environmental premises on which the
Grantee's environmental findings were based.
Section 6.03 Completion of the Project
The Grantee shall include or cause to be included in all its
contracts with Participating Parties a provision by each
Participating Party that the Participating Party acknowledges
that HUD, in selecting the Grantee for the award of this HDG,
relied in material part upon the assured completion of the
Project and that the Participating Party assures the Grantee that
the activities to be completed by the Participating Party shall
be completed, in accordance with Exhibits A, C, D and E of this
Grant Agreement.
Section 6.04 Maintaining Records, Right to inspect and Copy
The Grantee shall include, or cause to be included in all
contracts with the Owner, or any other Participating Party with
an identity of interest with the Owner or receiving funds
directly from the Grantee provisions requiring that:
(a) each such Participating Party keep and maintain books,
accounts, reports, files, records and other documents relating to
the receipt and disbursement of such Grant Funds; and
(b) any duly authorized representative of HUD or the
Comptroller General of the United States shall, at all reasonable
times, have access to and the right to inspect, copy, audit, and
examine all such books, records and other documents of such
Participating Party in accordance with HUD guidelines, until the
completion of all close-out procedures respecting this grant and
the final settlement and conclusion of all HDG issues.
Section 6.05 No Assignment or Succession
The Grantee shall include in all its contracts with
Participating Parties receiving Grant Funds an acknowledgement by
the Participating Party that a transfer of Grant Funds by the
Grantee to the Participating Party shall not be or be deemed to
16
be an assignment of Grant Funds, and that the Participating Party
shall not succeed to any rights, benefits or advantages of the
Grantee under this Grant Agreement, or attain any privileges,
authorities interests or rights in or under this Grant Agreement.
Section 6.06 HUD Approval of Amendments
The Grantee shall include, or cause to be included, in all
contracts which are required to be submitted to and approved by
HUD in accordance with Exhibit D of this Grant Agreement a
provision that during the term of this Grant Agreement such
contract shall not be amended in any material respect after such
approval and acceptance, without the prior written approval of
HUD. 'Material" shall be defined as anything, in the control of
the Grantee or any Participating Party, which cancels or reduces
any developmental or financial obligation of any Participating
Party by more than ten (10%) percent, changes the sites or
character of any development activity, or increases any time for
performance by a party by more than thirty (30) days.
Section 6.07 Disclaimer of Relationships •
The Grantee shall include, or cause to be included in all
its contracts with Participating Parties, and in all contracts
with any party involving the use of Grant Funds, a provision that
nothing contained in this Grant Agreement, or in the contract
between the parties, nor any act of BUD, the Grantee or any of
the parties, shall be deemed or construed by any of the parties,
or by third persons, to create any relationship of third -party
beneficiary, principal and agent, limited or general partnership,
joint venture, or any association or relationship involving HUD.
Section 6.08 Conflict of Interest
The Grantee shall include, or cause to be included in all
its contracts with Participating Parties, and its contracts with
any party involving the use of Grant Funds, a conflict of
interest provision in accordance with section 4.06(f) of this
Grant Agreement.
ARTICLE VII
EVIDENTIARY MATERIALS
Section 7.01 Commitments of Participating Parties
(a) In selecting the Grantee for the award of this grant,
HUD has relied, in material part, upon the representations of the
Grantee and the Participating Parties that the Grantee_.and the
Participating Parties (i) will carry out certain activities
connected with this Project; (ii) will complete those activities;
(iii) have or will have the financial capacity to assure the
carrying out of the activities to their completion; and (iv) will
17
invest, or caused to be invested, a specific amount in the
Project. HUD has also relied upon the Grantee and the
Participating Parties' representations that such Participating
Parties will, prior to any use of the Grant Funds for the
Project, enter into legally binding agreements evidencing the
commitments which were so relied upon by HUD.
(b) Evidentiary materials to be submitted to and approved by
HUD as specified in Exhibit D of this Grant Agreement shall
include: (i) a complete index describing the material submitted;
(ii) the legally binding and enforceable commitment of the
Participating Party, in unequivocal terms, to undertake and
complete specified activities connected with the Project and to
expend on the Project a specified minimum amount of funds or
other form of investment; and (iii) clear and convincing
evidence, in accordance with the requirements of this section
that the Participating Party has on hand or will have available
to it any finances or other things of value necessary to carry
out the promises of completing the activities and making the
specified investment.
(c) Evidentiary materials specified in Exhibit D of this
Grant Agreement shall be in the form specified in this Article
VII and as may be more specifically described in Exhibit D.
(d) Evidentiary materials specified in Exhibit D of this
Grant Agreement shall be submitted to HUD in accordance with
section 15.01 of this Grant Agreement, unless more specific
directions are given in Exhibit D of this Grant Agreement.
(e) Evidentiary materials which have been submitted to and
approved by HUD shall not be amended in any material respect
without prior written approval by HUD, in accordance with section
6.06 of this Grant Agreement
Section 7.02 Form of Documentary Evidence - General
All documentary evidence submitted to HUD shall be in the
form of either a (i) duplicate original, or (ii) photographic
copy of the fully executed original, of the documents.
Section 7.03 Opinions of Counsel - Form
(a) When the opinion of an attorney is required to be
submitted to HUD under Exhibit D to this Grant Agreement, the
opinion shall be in writing and shall be that of the Grantee's
counsel, unless otherwise specified.
(b) In the formulation or rendering of an opinion, the
Grantee's counsel may rely upon the certification of other
persons, or the written statements or opinions of other counsel;
provided, a copy of each such certification statement or opinion
is attached to the opinion of the Grantee's counsel.
18
(c) If the Grantee's counsel predicates the opinion upon
"information and belief", then in all such cases the opinion of
the Grantee's counsel shall contain, or have attached thereto, a
statement or description of all of the information upon which the
belief of the counsel is predicated.
(d) The Grantee's counsel shall certify to the following:
(i) An examination of the authority of all parties to the
documents and all of the persons executing the documents on
behalf of .he parties has been made and that the parties and said
persons were authorized to enter into and execute the documents,
and
(ii) The commitments and/or agreements evidenced by said
documents are legally binding under State and local law and
conform to the requirements of this Grant Agreement.
Section 7.04 Evidence of Debt - Form
(a) Owner's evidence of debt securing the amount of the •
grant under this Grant Agreement and the Owner's obligations
under the Owner/Grantee Agreement and HUD regulations in
conformance with section 5.02(b), Article VI and Exhibit D of
this Grant Agreement; shall state the amount of the debt, the
term of the debt, and the parties to the debt; shall describe the
security provided; shall state that, in accordance with section
12.03 of this Grant Agreement, the total amount of HDG assistance
outstanding shall be repaid to the Grantee in the event of
Substantive Violation of specific obligations of the Owner under
HUD regulations and the Owner/Grantee agreement; shall state that
the amount of EDG to be repaid shall be reduced by ten percent
(10%) for each full year in excess of 10 years that intervened
between the beginning of the term of the Owner/Grantee Agreement
and the Substantive Violation; shall indicate that the amount of
interest to be paid in addition to repayment of the debt in the
event of Substantive Violation will be determined by HUD by
adding two percent (2%) to the average yield on outstanding
marketable long-term obligations of the United States during the
month preceding the date on which initial Grant Funds were
released; may, at the Grantee's option, include provisions for
repayment even when there is no Substantive Violation or debt
forgiveness at the end of 20 years or such longer period as may
be required by the Exhibit D of this Grant Agreement and shall be
executed on behalf of the Owner by authorized individual(s).
(b) The Owner's evidence of debt shall have attached an
opinion of the Grantee's counsel and an opinion of the Owner's
counsel, made in accordance with section 7.03 above, that the
document complies with section 7.02, constitutes a debt on the
Project, obligates the Owner to repay the debt in the event of
Substantive Violation of the Owner's obligations to the Project
pursuant to section 12.03 of this Grant Agreement, and it has
been executed by authorized individual(s).
19
(c) Evidence of the debt may be in the form of a deed of
trust or mortgage on all land, buildings, fixtures, equipment and
other assets of the Owner comprising the Project, running in
favor of the Grantee, or other form satisfactory to HUD, and
contain sufficient evidence, satisfactory to HUD, which may
include evidence of recordation, to enable HUD to determine the
matters specified above at subsection (a) of this Section 7.04.
(d) The security position of the Grantee may be subordinated
to the first mortgage security interest of the Lender or Bond
Purchaser in an amount not to exceed that to be provided by the
Lender or Bond Purchaser in Exhibit C of this Grant Agreement,
plus further advances by the Lender or Bond Purchaser that are
invested in the Project and required for its completion.
(e) The deed of trust or mortgage shall also contain
standard provisions to protect the interest of the second
mortgagee, including, for example, a provision that a default
under the first mortgage which could permit a foreclosure by the
first mortgagee shall constitute a default under the second
mortgage and the !MG or the unpaid principal balance and interest
of the EDG loan shall become immediately due and payable upon the
taking of any action by the first mortgagee that, in the opinion
of the Grantee or HUD, is or may be adverse to or impair the
security interest of the Grantee.
Section 7.05 Evidence of Agreements and Contracts - Form
(a) Evidence of contractual commitments submitted to HUD
shall include all of the documents evidencing the contractual
commitment, with an opinion of Grantee's counsel attached.
(b) The opinion of Grantee's counsel shall state that the
documents constitute a valid and legally enforceable agreement or
contract under the laws of the Grantee's State and that the
documents conform to the provisions of this Grant Agreement.
Section 7.06 Evidence of Loans - Closings - Bond Sale - Form
Evidence of a loan having been made shall be submitted in
the form of copies of notes, deeds, bonds, indentures and other
documents which comply with section 7.02 above, and which shall
contain sufficient evidence satisfactory to HUD to enable HUD to
determine: that the loan has been closed; the principal amount of
the loan, its purposes (interim or permanent), and the authorized
uses of loan funds; the identity of the security for the loan;
the term of the loan; the interest rate of the loan; the
repayment provisions; the identity of all parties to the loan;
and shall have an opinion of the Grantee's counsel made in
accordance with section 7.03 above. In addition, if bonds are
sold to finance the Project, the evidence shall include a
statement from the trustee or depository of the proceeds
20
certifying that the bonds have been sold and that the proceeds
are immediately available for the Project and shall have an
opinion of the Grantee's counsel made in accordance with section
7.03 above.
Section 7.07 Evidence of Liquid Assets - Form
Whenever a Participating Party is required to provide
evidence of liquid assets for an activity in an amount
satisfactory and acceptable to HUD, a Lender or Bond Purchaser
such evidence shall be in the form specified at section 7.02
above; shall be on the letterhead of the institution bolding the
liquid assets, shall identify the Participating Party; and shall
state that the Participating Party has on hand or immediately
available to the Participating Party, liquid assets of a value
and in an amount satisfactory and acceptable to HUD, a Lender or
Bond Purchaser and that the availability and use of the liquid
assets for the activity to be carried out by the Participating
Party in connection with the Project is assured to the
satisfaction of HUD, the Lender or Bond Purchaser. The document
shall be executed by an authorized officer of the institution
holding the liquid assets; and shall have attached an opinion of
the Grantee's, Lender's or Bond Purchaser's counsel, that the
documents comply with section 7.02 above and that the officer of
the institution holding the liquid assets was authorized to
execute the same.
Section 7.08 Evidence of Finances - Form
(a) Whenever evidence is required in the form of a statement
and opinion of the Grantee's counsel or other party acceptable to
HUD that a Participating Party has available a specific amount of
finances for purposes of carrying out the commitment of that
Participating Party, such evidence shall be in the form of an
opinion of the Grantee's counsel or such other party acceptable
to HUD made in accordance with section 7.03 above.
(b) The opinion of the Grantee's counsel or other party
acceptable to HUD shall certify that such party has examined the
availability of the Participating Party's liquid assets and/or
debt financing; shall state the amount and the source of the
liquid assets on hand or immediately available to the
Participating Party for use in the Project; and shall state the
amount and the source of debt financing which is available, or
irrevocably committed, to the Participating Party for use in the
Project. To the extent applicable, the evidence of these funds
shall be consistent with the provisions of sections 7.05, 7.06
and 7.07 above.
(c) The opinion of the Grantee's counsel or that of such
other party acceptable to HUD shall be that the Participating
Party has on hand, immediately available or irrevocably committed
to the Participating Party, for use in carrying out the
commitments of the Participating Party to the Project, liquid
21
assets and/or debt financing in a sum equal to the specified
amount of finances required in this Grant Agreement.
Section 7.09 Evidence of Title - Form
Whenever, in Exhibit D of this Grant Agreement, a
Participating Party or the Grantee is required to acquire fee
simple or leasehold title to real property, and proof of such
acquisition is required, evidence shall be in the form of an
opinion of the Grantee's counsel, in accordance with section
7.03. The opinion shall certify that on a specified date, either
an original ALTA policy of land coverage or mortgage title
insurance, or other records identified in the opinion, were
examined by the Grantee's counsel; and that said policy or other
records identified the Participating Party, or wholly -owned
subsidiary of the Participating Party, or the Grantee or its
agent or agency, as required, as owner or lessee of record, in
fee simple or leasehold, of said property. The opinion shall
further state that on the date specified by the Grantee's
counsel, the record fee simple or leasehold title to said real
property was vested in the Participating Party, or such
subsidiary thereof, or in the Grantee or its agent or agency as
required. In lieu thereof, evidence may be in the form of
documents which comply with section 7.02 and which contain
sufficient evidence, including evidence of recordation, to enable
HUD to determine, to the satisfaction of HUD, that the
Participating Party or the Grantee did acquire the title, as
required.
ARTICLE VIII
AMOUNT AND AUTHORIZED USES OF GRANT FUNDS
Section 8.01 Grant Assistance Provided
In consideration of the obligations undertaken by the
Grantee pursuant to this Grant Agreement, and in consideration of
the obligations to be undertaken by the Participating Parties, as
represented by the Grantee in the Application, HUD agrees,
subject to the terms and conditions set forth in this Grant
Agreement, to provide the Grantee with Grant Funds in an amount
specified in section 1.01 of this Grant Agreement.
Section 8.02 Authorized Uses of Grant Funds
(a) Grant Funds shall be used only for residential purposes,
and to provide the number of the units and bedroom distribution
specified in section 1.01(e)(2) of this Grant Agreement.
22
(b) Grant Funds shall be used only for the purpose(s)
described in Exhibits B and C of this Grant Agreement, subject to
the project amendment provisions of the HDG regulations and this
Grant Agreement.
(c) In accordance with the BDG regulations at 24 CFR 850.17,
Grant Funds shall not be used for (i) administrative costs
incurred by the Grantee in connection with the BDG project or
(ii) for the Development of housing previously assisted under any
other Federal housing program or previously owned by BUD, in
accordance with the BDG regulations at 24 CFR 650.
Section 8.03 Adjustments to Grant Funds
The amount of Grant Funds which HUD has agreed to provide to
the Grantee under this Grant Agreement has been determined by HUD
in reliance upon the cost estimates of the Grantee with respect
to activities set forth in the Application and the firm
investment commitments of the Participating Parties. HUD
reserves the right to reduce the grant amount (i) to comply with
BDG regulation 24 CFR 850; and (ii) to conform to any revision to
which the Grantee and BUD may agree with respect to Exhibits B,
C, D or E of this Grant Agreement. There will be no increase in
the amount of HDG provided under this Grant Agreement.
Section 8.04 Use of Program Income
(a) Program Income received by the Grantee prior to
completion of all Development activities funded with HDG amounts
must be used to reimburse costs incurred for the Project
activities and must be used prior to, and in place of, any draw
from Grant Funds.
(b) HUD may require all Program Income received by the
Grantee prior to completion of all grant funded activities to be
deposited in escrow under arrangements approved by HUD.
(c) Except as provided in subsection (d) of this section
8.04 and Exhibit D of this Grant Agreement, Program Income
received after completion of assisted activities shall be treated
as miscellaneous revenue, and shall be used by the Grantee to
support the construction, rehabilitation or operation of real
property to be used primarily for low and moderate income
residential rental purposes.
(d) Amounts recovered by a grantee due to a breach of an
Owner's obligations under the Owner/Grantee Agreement must be
used under the HDG or Rental Rehabilitation Program, pursuant to
section 17 of the Act, at the Grantee's option.
23
ARTICLE IX
DISBURSEMENT OF GRANT FUNDS
Section 9.01 Incurring Costs for Project Activities
(a) Use of Grant Funds is conditioned on the Grantee having
incurred costs to be paid in accordance with this Grant
Agreement. Costs eligible to be paid with Grant Funds shall be
governed by the following:
(i) Except with respect to eligible relocation costs, the
Grantee shall not have incurred costs prior to the Preliminary
Approval Date, as specified on'Page i of this Grant Agreement.
This provision does not prohibit a Participating Party, other
than the Grantee, from having expended funds prior to preliminary
approval. However, no action shall have been taken by any
Participating Party prior to preliminary approval which might
have an adverse environmental effect, would limit choices among
competing environmental alternatives, or might alter the premises
on which the Grantee's environmental findings were based.
(ii) After the preliminary approval date, except as provided
in 24 CFR 58.22 with respect to relocation costs, 24 CFR 58.34
with respect to exempt activities and subsection (c) of this
section, a Grantee shall not spend any local funds or commit any
Grant Funds until the environmental requirements of 24 CFR Part
58 have been fully satisfied and the Secretary has issued the
environmental releases required by 24 CFR Part 58.
(iii) After the Grantee has satisfied all Environmental
Conditions and HUD has issued the required environmental
releases, then at any time after the preliminary approval date
for this Project, the Grantee and any Participating Party may
incur eligible costs to be paid out of Grant Funds.
(b) The authorization to incur costs in subsection (a) above
is not an authorization to reimburse those costs and does not
mean or imply that such costs will be reimbursed out of the Grant
Funds. The Grantee and the Participating Parties may, at their
own risk, and upon their own credit and expense, incur costs as
authorized in subsection (a) above, but their authority to be
reimbursed out of Grant Funds shall be governed by the provisions
of this Grant Agreement applicable to the payment of costs and
the release of funds by HUD.
(c) Neither the Grantee nor any Participating Party shall
incur costs in connection with any activity to be paid for, in
whole or in part, with Grant Funds, even if such costs will not
be reimbursed from Grant Funds, unless such costs could be
incurred under subsection (a) above if such costs were to be paid
with Grant Funds or for activities exempt under 24 CFR 58.34.
24
(d) Prior to issuance by HUD of environmental releases
required by 24 CFR Part 58, neither the Grantee nor any
Participating Party shall use any funds, including local funds,
to take any action relating to the Project if such action might:
(i) have an adverse environmental effect, (ii) limit choices
among competing environmental alternatives, or (iii) alter the
environmental premises on which the Grantee's environmental
findings were based.
Section 9.02 Electronic Transfer and Letter of Credit
(a) After the Grantee submits five fully executed copies of
this Grant Agreement, and demonstrates to HUD, initially through
certification and subsequently through performance, its
willingness and ability to establish procedures that will
minimize the time elapsing between the transfer of Grant Funds to
it and its disbursement of such Grant Funds, HUD will authorize a
Letter of Credit to be issued to the Grantee by the Department of
the Treasury, (hereinafter referred to as "Treasury"), under
section 17 of the Act or shall cause the Letter of Credit
previously issued to the Grantee by Treasury with respect to the
Community Development Block Grant Program or Urban Development
Action Grant Program under Title I of the Housing and Community
Development Act of 1974 to be increased, in accordance with
procedures established by Treasury, in an amount not to exceed
the amount of Grant Funds referenced in section 1.01 of this
Grant Agreement. After HUD has approved the evidentiary
materials required by Exhibit D of this Grant Agreement, HUD will
authorize the Grantee to draw funds against the Letter of Credit
in accordance with the leveraging ratio specified in section
1.01(f) of this Grant Agreement.
(b) A Grantee not meeting the requirements of subsection (a)
relating to the timely disbursement of Grant Funds will receive
HDG payments by Treasury check on a reimbursement basis.
(c) The timing and amount of cash withdrawals from the
Treasury by the Grantee shall be in accordance with the U.S.
Department of Treasury regulations on withdrawal of cash from the
Treasury for advances under Federal programs (31 CFR 205), as
incorporated in HUD Handbook 1900.27 Rev., Letter of Credit
Procedures -Treasury Financial Communications System.
(d) Program Income shall be disbursed before additional
draws from Grant Funds are made.
(e) Unless otherwise specified in this Grant Agreement,
Grant Funds shall not be drawn down at a rate in excess of that
contained in the approved leveraging ratio for the Project, as
specified in section 1.01(f) of this Grant Agreement.
(f) Authorization to draw funds under a Letter of Credit and
to pay costs out of Grant Funds shall be governed by the
provisions of this Grant Agreement, HUD regulations and the
25
procedure established by HUD and the Treasury. The Grantee shall
not draw upon the Letter of Credit until HUD has authorized the
Grantee to draw pursuant to section 9.03 of this Grant Agreement.
(g) Payment by Treasury of an improper or unauthorized draw
to the Grantee shall not constitute a waiver of the right of HUD
to challenge the validity of such draw, to enforce all rights and
remedies set forth in this Grant Agreement, or take corrective
action pursuant to the HDG regulations, which action may include,
without limitation, suspension, termination or recapture of the
Grantee's funding under this Grant Agreement.
(h) The disposition of any excess Grant Funds that remain
available under the Letter of Credit following completion of the
Project, or termination of this Grant Agreement, shall be in
accordance with section 13.03 of this Grant Agreement and close-
out procedures then in effect or established by HUD, and the
Grantee shall not have any rights to such Grant Funds.
Section 9.03 Authorization by HUD for Grantee to Draw Grant
(a) Grant Funds shall not be drawn prior to HUD's issuance
of the environmental releases required by 24 CFR Part 58, written
approval by HUD of the Owner/Grantee Agreement, Affirmative Fair
Housing Marketing Plan, security instruments and other legally
binding commitments specified in Exhibit D of this Grant
Agreement, and written authorization from HUD to draw Grant Funds
through Electronic Transfer pursuant to a Letter of Credit.
(b) A11 certifications and other material required by this
Grant Agreement to be submitted to HUD as conditions precedent to
the Grantee's authority to pay costs out of Grant Funds shall be
submitted by the Grantee prior to any draw of Grant Funds under
the Electronic Transfer pursuant to a Letter of Credit.
(c) Unless Exhibit B or C of this Grant Agreement authorizes
the phasing of the Grantee's draw of grant funds, then upon
issuance of the environmental release, upon a finding by HUD that
the Grantee has submitted, in a timely manner and in acceptable
form and content, all of the evidentiary materials specified in
Exhibit D of this Grant Agreement, upon approval by HUD of those
materials which, under section 9.03(a) and Exhibit D of this
Grant Agreement, require HUD approval, and a finding by HUD that
no Default or uncorrected Substantive Violation, as defined in
Article XII of this Grant Agreement, has occurred, HUD shall
promptly issue to the Grantee a written authorization to draw
funds by Electronic Transfer under a Letter of Credit for the
purposes authorized by this Grant Agreement.
(d) If Exhibit B or C of this Grant Agreement authorizes the
phasing of the Grantee's draw of funds, upon issuance —by HUD of
the environmental release, upon a finding by HUD that the Grantee
has submitted, in a timely manner and in acceptable form and
content, all of the evidentiary materials specified in Exhibit D
26
of this Grant Agreement to be submitted and accepted by HUD for
any particular phase of the draw of Grant Funds; upon approval by
HUD of those materials which, under section $.03(a) and Exhibit D
of this Grant Agreement, require HUD approval, and a finding by
HUD that no Default or uncorrected Substantive Violation, as
defined in Article XII of this Grant Agreement, has occurred, HUD
shall promptly issue the Grantee written authorisation to draw
funds by Electronic Transfer under a Letter of Credit in
accordance with any requirement or authorisations described in
Exhibit B or C for the particular phase of the draw of Grant
Funds.
(e) In the event that the BDG will be invested in an account
for the purpose of making an assisted rental payment (ARP) to
make the Project feasible, while maintaining the limited rents on
Lower income units for the Project Term, the following
restrictions shall apply:
(I) Grant Funds shall not be drawn until 60 days
s r
iorto
initial occupancy and then, upon issuance by HUD oftherequired
environmental release, upon a finding that the Grantee has
submitted in a timely manner and In acceptable form and content,
all of the evidentiary materials specified in Exhibit D of this
Grant Agreement and upon approval by BUD of those materials
which, under section 9.03(a) and Exhibit D of this Grant
Agreement, require BUD approval, and a finding by BUD that no
Default or uncorrected Substantive Violation as defined by
Article XII of this Grant Agreement, has occurred, HUD shall
issue to the Grantee written authorisation to draw Grant Funds by
Electronic Transfer under Letter of Credit for purposes
authorised under this Grant Agreement.
(ii) Grant Punds, as identified in Exhibit D of this Grant
Agreement, shall be invested by the Grantee in a separate
interest bearing ARP account, or by a trustee on behalf of the
Grantee or transferred to the Amer for investment by a trustee,
in accordance with an investment plan, approved by BUD prior to
execution of this Grant Agreement, for the purpose of making
periodic payments for the benefit of the Project. The investment
plan shall describe the amount to be invested, the type and
quality of the investment(s), the anticipated interest rate to be
earned on the ARP account and the time period of the
investment. The Investment plan shall set forth a disbursement
schedule for making periodic payments, which shall include
assumptions used to arrive at payment amounts. These assumptions
shall include but need not be limited to projected rental income
and operating expenses, projected changes in rental income and
expenses, occupancy rate, and the Owner's cash on egsh return and
commercial income, If any. The disbursement schedule may provide
for either constant or declining payments, which must include the
use of both principal and interest and fully deplete the ARP
account by the end of the ARP account term. The Owner may pledge
or assign Its rights in the trust account either to secure or to
effect direct payment of the permanent financing.
27
r
(iii) Any undisbursed balance in the ARP account at the end
of the ARP account term shall be returned to the Grantee, to be
used by the Grantee in accordance with section 8.04 of this Grant
Agreement. Any outstanding HDG loan balance owed by the Owner to
the Grantee may be reduced by the amount of the Grant Funds
returned to the Grantee.
(f) Prior to the Grantee's payment of any costs with Grant
Funds, and prior to the Grantee's draw of any Grant Funds by
Electronic Transfer under a Letter of Credit, there shall not be
any outstanding and unresolved notice suspending the Grantee's
authority to draw funds either by Electronic Transfer or Letter
of Credit, breach of the Grantee's obligation to report a Default
or Substantive, uncorrected Violation pursuant to section 4.04 of
this Grant Agreement.
(g) The Grantee shall maintain a financial management system
that complies with Attachment G of OMB Circular A-102, "Standards
for Grantee Financial Management System".
ARTICLE X
POST GRANT AGREEMENT CERTIFICATIONS
Section 10.01 Certifications Upon Draw of Funds
Execution by the Grantee of each request for a draw of Grant
Funds either by Electronic Transfer or Letter of Credit shall
constitute a certification that:
(a) All the representations and warranties of the Grantee as
set forth .in Article IV of this Grant Agreement continue to be
valid, true and in full force and effect.
(b) The Grantee is in compliance with all of the Grantee's
obligations specified in this Grant Agreement which, by their
terms, are applicable at the time of the draw of Grant Funds.
(c) A11 conditions precedent to the Grantee's authority to
draw the Grant Funds shall have been satisfied, in accordance
with section 9.03 of this Grant Agreement.
(d) The Grant Funds to be drawn will be used for eligible
costs actually incurred or to be incurred in accordance with the
provisions of this Grant Agreement, including Exhibits B and C of
this Grant Agreement.
(e) All Program Income which has been received by the
Grantee has been deposited or used in accordance with section
8.04 of this Grant Agreement.
28
Section 10.02 Certification of Completion - Grantee
Upon completion of the Project and resolution of any
findings of the final audit, the Grantee shall submit to HUD a
written certification, executed by the chief executive officer of
the Grantee, stating that all Grantee Activities have been
completed consistent with the terms of this Grant Agreement, and
specifying the date of completion and the cost for each activity.
Section 10.03 Certification of Completion - Non -Grantee
Upon completion of the Project and resolution of any
findings of final audit, the Grantee shall submit a written
certification, executed by the chief executive officer of the
Grantee, stating that all Non -Grantee Activities have been
completed, consistent with the terms of this Grant Agreement,
specifying the date of completion and the cost for each Non -
Grantee Activity. The certification shall have attached to it a
statement from each Participating Party responsible for
completing Non -Grantee Activities, that the information in the
certification with respect to Non -Grantee Activities carried out
by that Principal Participating Party is complete and accurate.
ARTICLE XI
AUDITS, REPORTS, RECORDS, INSPECTION AND REVIEW
Section 11.01 Duty to Maintain, Rights to Inspect and Copy
(a) The Grantee shall keep and maintain such books, records,
and other documents as required under the procedures and
regulations now or hereafter applicable to grants under the HDG
program, and as may be reasonably necessary to reflect and
disclose fully the amount and disposition of Grant Funds, the
total cost of activities paid for, in whole or in part, with
Grant Funds, and the amount and nature of all investments,
related to activities, which are supplied or to be supplied by
other sources.
(b) All such books, records and other documents relevant to
the EDG shall be available at the offices of the Grantee (except
that books, records and other documents of the Owner, and other
Participating Party with an identity of interest with the Owner
or receiving funds directly from the Grantee, which are relevant
to the HDG and subject to this section 11.01 may be maintained at
the offices of such Participating Party) for inspection, copying,
audit and examination at all reasonable times by the duly
authorized representative of the Secretary or HUD Inspector
General or the Comptroller General of the United States.
29
Section 11.02 Audits
(a) The Grantee's financial management system shall provide
for audits to be made by the Grantee or at its direction, in
accordance with audit guidelines prescribed by HUD.
(b) The Grantee shall provide for audits in accordance with
24 CFR Part 44.
(c) HUD may conduct other necessary or appropriate audits.
(d) Upon notification from HUD to initiate closeout
procedures, the Grantee shall arrange for a final audit of its
grant accounts and records in accordance with HUD regulations and
other HUD audit requirements.
Section 11.03 Reports
(a) General: The Grantee shall submit such reports,
including lit g tion reports, as HUD may require.
•
(b) Progress Reports: Beginning on the Preliminary Approval
Date, as specified on Page i of this Grant Agreement, the Grantee
shall submit semi-annual progress reports, as specified by HUD.
Reports shall be required until project closeout is completed and
shall contain such information as BUD may prescribe, including
information concerning the Project's Development schedule,
Development and Project costs, and occupancy.
(c) Relocation and Acquisition Reports: The Grantee shall
report at least annually on a form prescribed by HUD on the
number of persons and businesses relocated, numbers remaining in
the relocation workload, a general breakdown of relocation costs,
and on real property acquired, all as relating to the Project.
(d) Equal Opportunity Reports: The Grantee shall submit
reports required by HUD to demonstrate compliance with HUD
regulation 24 CFR Part 850.35(a), (b) and (c).
Section 11.04 Records
(a) General: The Grantee shall retain financial records,
supporting documents, statistical records, the environmental
review records required by 24 CFR 58, and all other records
pertinent to the EDG for a period of three years from the date of
the submission of the last progress report, as prescribed by BUD
regulations, except (i) records that are the subject of audit
findings shall be retained until the audit findings have been
resolved, if that date is later; and (ii) an annual record of
Project occupancy shall be maintained by the Grantee for the
duration of the Owner/Grantee Agreement described in Article V of
this Grant Agreement and each annual record shall be retained for
three years and shall be available to BUD on request.
30
(b) Nondiscrimination and equal opportunity records: Records
maintained by the Owner pertaining to race, color, religion, sex
or national origin of tenants and applicants for tenancy in
assisted projects shall be retained by the Owner for a period of
at least 25 months following the date the record was made.
Section 11.05 Site Visits
(a) Any duly authorized representative of HUD shall, at all
reasonable times, have access to the entire Project.
(b) The rights of access and inspection provided in this
section shall continue during the Project Term. After closeout,
site visits may be limited by HUD to a review of Project
occupancy.
Section 11.06 Performance Review
(a) HUD will monitor the Grantee's performance to determine
whether the Grantee is complying and has complied with the
requirements of this Grant Agreement. •
(b) In conducting its performance review, HUD will rely
primarily on information obtained from the Grantee's records and
reports, findings from on -site monitoring, and audit reports.
HUD may also consider relevant information gained from other
sources, including litigation and citizen complaints.
(c) A final review of the Grantee's compliance with the
Grant Agreement, applicable laws, and regulations relating to the
Development of the Project will be made during the final audit.
HUD may continue to monitor the Grantee's performance relating to
occupancy after Project closeout.
(d) If HUD determines that the Grantee has not met the
requirements of this Grant Agreement, in accordance with HDG
-regulations at 24 CFR Part 850, the Grantee will be given notice
of that determination and an opportunity to demonstrate, within a
reasonable time as prescribed by HUD and on the basis of
substantial facts and data, that it has done so.
(e) If the Grantee fails to demonstrate to HUD's
satisfaction that it has met the requirements of this Grant
Agreement, HUD will take appropriate corrective or remedial
action in accordance with Article XII of this Grant Agreement.
31
ARTICLE XII
DEFAULT, SUBSTANTIVE VIOLATION AND REMEDIES
Section 12.01 Default
A Default shall consist of any use of Grant Funds for any
purpose other than as authorized in Parts I and II or Exhibits A,
B or C of this Grant Agreement; breach of the performance
schedule in Exhibit E of this Grant Agreement; or any breach of
any covenant, agreement, provision or warranty of:
(a) the Grantee made in this Grant Agreement;
(b) the Grantee made in any agreement entered into between
the Grantee and any Participating Party relating to the Project
and specified in Exhibits B, C and D of this Grant Agreement,
which, in the opinion of BUD, adversely affects the performance
obligations of the Grantee or the Participating Parties as set -
forth in this Grant Agreement;
(c) any Participating Party made in any agreement specified
in Exhibit C and D of this Grant Agreement, which, in the opinion
of HUD, adversely affects the performance obligations of the
Grantee or the Participating Parties as set -forth in this Grant
Agreement.
Section 12.02 Corrective Action
Upon occurrence of any default specified in Section 12.01,
HUD may take one or more of the following actions:
(a) +direct the Grantee to submit progress schedules for
completing approved activities;
(b) issue a letter of warning advising the Grantee of the
deficiency, establishing a date by which corrective actions must
be completed, and putting the Grantee on notice that more serious
actions will be taken if the deficiency is not corrected or is
repeated;
(c) inform the Grantee that a certification of compliance is
no longer acceptable, and that additional information or
assurances are required;
(d) direct the Grantee to establish and maintain a
management plan that assigns responsibilities for carrying out
remedial actions;
(e) direct the Grantee to suspend, discontinue or not incur
costs for the affected activity;
(f) direct the Grantee to reimburse the Grantee's program
account or letter of credit in any amount improperly expended;
32
(g) change the method of payment from an advance payment
basis to a reimbursement basis; or
(h) direct the Grantee to cancel the Project before
expending any or additional funds, or
(i) other action, as appropriate, in accordance with
sections 14.02 and 14.03 of this Grant Agreement.
Section 12.03 Substantive Violation by Owner
(a) A Substantive Violation shall consist of breach of the
provisions in the Owner/Grantee Agreement, executed pursuant to
Article V of this Grant Agreement and/or security instrument
executed pursuant to section 7.04 of this Grant Agreement,
relating to the requirements of EDG regulation 24 CFR 850.151(b),
(c), (d) and (e) as set -forth in section 5.03 (a) through (f) of
this Grant Agreement, which breach remains uncorrected after the
Grantee has provided the Owner a reasonable opportunity for
corrective action.
(b) Upon a determination of a Substantive Violation of the
Owner/Grantee Agreement, the Grantee shall notify the Owner, with
a copy to HUD, of the: (i) nature of the violation, (ii) actions
required to be taken and the remedies to be applied to cure the
violation, and (iii) time by which the Owner shall take all the
required actions to cure the violation.
(c) In the event of an uncorrected Substantive Violation by
the Owner of obligations specified in subsection (a) above, the
Owner shall repay to the Grantee the amount equal to the total
amount of EDG assistance outstanding, as of the date the Owner is
notified of the violation, plus interest, which is determined by
HUD by adding two percent to the average yield on outstanding
marketable long-term obligations of the United States during the
month preceding the date on which the initial Grant Funds were
released.
(d) The principal amount to be repaid under this section
shall be reduced by 10 percent for each full year in excess of 10
years that intervene between the beginning of the term of the
Owner/Grantee Agreement and the violation.
ARTICLE XIII
PROJECT CLOSEOUT
Section 13.01 Initiation of Closeout
(a) HUD will direct the Grantee to initiate closeout
procedures when HUD determines, in consultation with the Grantee,
that there are no impediments to closeout and that the following
criteria have been or will be shortly met:
33
(i) All costs to be paid with Grant Funds have been
incurred, with the exception of any unsettled third -party claims
against the Grantee or Owner.
(ii) For activities which include loan accounts, subsidy
payment accounts or similar mechanisms, closeout may be initiated
once the full amount of funds for these activities have been
drawn by the Grantee and their use for the purposes described in
this Grant Agreement has begun.
(iii) The last progress report covering the Development
phase required by section 11.03(b) of this Grant Agreement has
been submitted and has been updated to the extent determined
necessary by HUD. The failure of the Grantee to submit or update
a report as required will not preclude HUD from effecting a grant
closeout when this action is determined to be in the Federal
interest.
(iv) Other responsibilities of the Grantee with respect to
Grant Funds under this Grant Agreement and applicable law and
regulations appear to have been carried out satisfactorily, and.
there is no further Federal interest in keeping the Grant
Agreement open for the purpose of securing performance by parties
to legally binding commitments.
(v) The Grantee has satisfied or agrees to satisfy specific
conditions or requirements including, but not limited to, the
Grantee's obligation to take appropriate legal action to enforce
the Owner's compliance with the Owner/Grantee Agreement executed
pursuant to Article V of this Grant Agreement.
Section 13.02 Final Audit
Upon notification from HUD to initiate closeout procedures,
the Grantee agrees to arrange for a final audit of its grant
account and records in accordance with the HDG regulations and
other HUD requirements.
Section 13.03 Cost Certification and Refund
(a) Upon resolution of any findings of the final audit, the
Grantee agrees to prepare a certificate of completion and final
cost, in accordance with section 10.02 of this Grant Agreement
and in the manner prescribed by HUD, and submit it to the
responsible HUD Field Office.
(b) The Grantee agrees to refund to HUD any Grant Funds
advanced in excess of the final grant amount, as shown on the
certificate of completion approved by HUD. HUD will allow the
Grantee a reasonable period of time, as determined by HUD, to
recover such excess funds as may have been advanced tO a third
party.
34
ARTICLE XIV
TERMINATION
Section 14.01 Termination for Mutual Convenience
Grant assistance provided under this Grant Agreement may be
canceled, in whole or in part, by agreement of HUD and the
Grantee, before completion of the Project, if both parties agree
that the continuation of the Project is infeasible or would not
produce beneficial results commensurate with the further
expenditure of funds. HUD will decide whether an environmental
review of the cancellation is required. HUD and the Grantee will
agree upon termination conditions, including the effective date
and, in the case of partial terminations, the portion to be
terminated. The Grantee agrees that it will not incur new
obligations for the Project after the effective date, and will
cancel as many outstanding obligations as possible. HUD will
allow full credit to the Grantee for the noncancelable
obligations properly incurred by the Grantee in carrying out the
Project before the HDG is terminated. •
Section 14.02 Termination for Cause and Grant Reduction
When HUD determines that a Grantee has failed to meet one or
more of the requirements of this Grant Agreement, including but
not limited to the failure to submit the evidentiary material
required by Article VII and Exhibit D of this Grant Agreement,
and has failedto take the corrective actions required by Article
XII of this Grant Agreement, HUD may, upon reasonable written
notice, reduce or recapture the HDG or take other appropriate
action. Other appropriate action includes, but is not limited
to, any remedial action legally available, such as affirmative
litigation seeking declaratory judgment, specific performance,
damages, temporary or permanent injunctions and any other
available remedies.
Section 14.03 Claim for Money
When HUD makes a final determination that it has a
judicially enforceable claim for money against the Grantee in a
situation where the HDG amount has been disbursed to the Grantee
for ineligible uses of funds, HUD will follow the procedures
described in the Federal Claims Collection Standards (4 CFR Parts
101-105) in order to:
(a) demand in writing that the Grantee reimburse HUD in the
amount of the ineligible costs, using funds from nonfederally
derived sources, and
(b) initiate affirmative litigation to recover the amount of
Grant Funds used for ineligible purposes if necessary for
collection. HUD's final determination to seek recovery under
this section of Grant Funds expended for ineligible purposes
35
shall constitute a claim within the meaning of 31 U.S.C. 3711, et
seq. and interest shall be charged on delinquent claims as
required by the Federal Claims Collection Standards.
ARTICLE XV
MISCELLANEOUS
Section 15.01 Submissions and Notices
All submissions of evidentiary material required by Exhibit
D of this Grant Agreement, notices, requests, approvals, waivers,
rejections, agreements, disclosures, consents and objections of
any kind made pursuant to this Grant Agreement shall be in
writing, delivered to the office of the addressee as follows:
(a) Communications to HUD shall be mailed simultaneously to
(A) The Director, Housing Development Grant Divison, U.S.
Department of Housing and Urban Development, 451 7th Street, S.W.
Washington, D.C. 20410, and (B) The HUD Field Office authorized.
to receive the Application of the Grantee; and (C) such other
persons or at such other addresses as may be furnished by HUD.
(b) Communications to the Grantee shall be addressed to the
Grantee, at the address set forth on Page 2 of this Grant
Agreement, or such other address furnished by the Grantee to HUD.
Section 15.02 Assignment
No right, benefit, or advantage of the Grantee under this
Grant Agreement and no burden imposed on the Grantee hereunder
may be assigned without prior approval of HUD. Authorization by
HUD for the transfer of Grant Funds by the Grantee to a
Participating Party shall not be deemed an authorization for an
assignment, and such Participating Party shall not succeed to any
rights, benefits or advantages of the Grantee.
Section 15.03 Successors Bound
This Grant Agreement shall bind, and the rights, benefits
and advantages shall. inure to.the Grantee's successors.
Section 15.04 Remedies Not Impaired
No delay or omission by HUD in exercising any right or
remedy available under this Grant Agreement shall impair any such
right or remedy or constitute a waiver of any Default, or
acquiescence therein.
Section 15.05 Cumulative Remedies
All rights and remedies of HUD under this Grant Agreement
shall be cumulative.
36
Section 15.06 Severability
The invalidity of any article, section, subsection, clause
or provision of this Grant Agreement shall not affect the
validity of the remaining articles, sections, subsections,
clauses or provisions hereof.
Section 15.07 Entire Agreement
This Grant Agreement constitutes the entire agreement
between HUD and the Grantee and supersedes all prior oral or
written agreements between the parties hereto with respect to the
subject grant. Notwithstanding the provisions of section 2.02 of
the Grant Agreement, in the event of any inconsistency between
the provisions of this Grant Agreement and the Application, then
the provisions of this Grant Agreement shall prevail.
Section 15.08 Execution in Counterparts
This Grant Agreement may be executed in any number of
counterparts. All such counterparts shall be deemed to be
originals and together shall constitute one and the same
instrument.
Section 15.09 Table of Contents; Titles and Headings
Any table of contents, the -title of any Articles, and
headings of the sections and subsections set forth herein are not
a part of this Grant Agreement and shall not be deemed to affect
the meaning or construction of any of its provisions.
Section 15.10 Amendment of this Grant Agreement
This Grant Agreement, or any part hereof, may be amended
only in writing, executed by HUD and the Grantee.
Section 15.11 Disclaimer of Relationships
The Grantee acknowledges that the obligation of HUD is
limited to providing Grant Funds in the manner and on the terms
set forth in this Grant Agreement. Nothing in this Grant
Agreement, nor any act of either HUD or of the Grantee, shall be
deemed or construed by either of them, or third persons, to
create any relationship of third party beneficiary, principal and
agent, limited or general partnership, or joint venture, or of
any association or relationship whatsoever involving HUD.
Section 15.12 Governing Law
This Grant Agreement, as it may effect the rights, remedies
duties, and obligations of HUD shall be governed by and construed
in accordance with Federal law. Insofar as Federal law does not
37
MeV "Mgr eat
apply, the provisions of this Grant Agreement shall be governed
by and construed in accordance with the laws of the State in
which the Project is located.
Section 15.13 Waiver by HUD
The Secretary reserves the right and shall have exclusive
right to waive, at the sole discretion of the Secretary and to
the extent permitted by law, any requirement or provision under
this Grant Agreement. No act by or on behalf of BUD shall be, or
be deemed to be or construed to be, any waiver of any such
requirement or provision, unless the same be in writing, signed
by the Secretary and expressly stated to constitute such waiver.
Section 15.14 Effective Date
(a) This Grant Agreement shall, when executed and dated by
HUD, constitute an offer by BUD to the Grantee to make the stated
BDG and to enter into this Grant Agreement. When delivered to
the Grantee so executed and dated, the same shall constitute a
tender of said offer, which shall be promptly accepted, if at .
all, by the Grantee and which shall not be altered without BUD
approval. HUD may revoke the tender and rescind the offer at any
time prior to its acceptance by the Grantee, by written notice of
BUD to the Grantee, given as specified at section 15.01 of this
Grant Agreement.
(b) This Grant Agreement shall be deemed to have been
accepted, and shall become effective, as of the date this Grant
Agreement is executed and dated by the Grantee.
38
Grantee NATIONAL CITY, CALIFORNIA Grant NumberrA003HG401
EXHIBIT A
APPLICATION
This Exhibit includes: (1) the Grantee's Application for
Federal Assistance (SF 424), and any attachments thereto, which
were relied upon by HUD in making this award and which are
incorporated herein by reference and (2) a listing of any minor
adjustments to the Application which may have been made by HUD
during processing.
NONE
•
EXHIBIT A Page 1 of _1
39
Grantee NATIONAL CITY, CALIFORNIA Grant Number CA003HG401
EXHIBIT B
DESCRIPTION OF GRANTEE ACTIVITIES
The "Grantee Activities" shall include the following:
1. The Grantee shall provide $3,00n,000 in Housing Development Grant funds
as a grant to the Owner for project development costs.
2. As a part of the mechanism to assure affordable rents as prescribed in
Section 5.03(g) of this Grant Agreement, the Grantee shall also describe the
method for determining that priority in occupancy will be given to very low
income tenants (as defined by HUD's Section 8 income limits) in 60 of the
120 lower income units. Further, the mechanism shall prescribe a method
of establishing tenant deductions consistant with program requirements to
determine rent from the very low income tenants at 30 percent of their
adjusted income of the HUD maximum rents, whichever is less.
3. The Grantee shall enter into an Owner -Grantee Agreement in accordance
with Article V of this Grant Agreement.
4. Grantee shall provide HUD with the means by which HOG restrictions
shall he enforced for the full Project Term.
EXHIBIT B
40
Page 1 of 1
Grantee
NATIONAL CITY, CALIFORNIA Grant Number CA003HG401
EXHIBIT C
DESCRIPTION OF NON —GRANTEE ACTIVITIES
The 'Non —Grantee Activities" shall include the following:
1. The Owner shall enter into an Owner -Grantee Agreement in accordance with
Article V of this Grant Agreement.
2. The Owner shall receive not more than $3,000,000 in Housing Development Grant
funds as a grant from the Grantee to be used for project development costs.
Notwithstanding the absence of a requirement to repay the HDG funds, the Grant
shall be considered a debt secured by a lien on the property and subject to
repayment under conditions specified in 24 CFR 850.155.
3. The Owner shall commit its 3.2 acre site known as parcel 2, Map No. 8R07 •
for the purpose of constructing 150 rental units. The appraised value of said
site is 3800,000.
4. The Owner shall provide $4,190,000 from the Senior Housing Construction
Fund plus the appraised value of the site ($800,000) to be used as equity
toward the development of the project.
5. The Owner shall construct a 150 unit elderly rental project in accordance
with Section 1.01 of this Grant Agreement of which 120 shall be made available
to lower income tenants for 20 years. Sixty of the 120 lower income units shall
be offered on a priority basis to elderly persons/families (as defined by 24 CFR
Part 813) with incomes below 50 percent of the median income of the area (i.e.
below the Section 8 limit for very low income families). The Owner also agrees
to charge the very low income tenants not more than 30 percent of their respective
adjusted incomes for rent or the HUD maximum rents whichever is less
6. The Owner agrees to absorb without further assistance from HUD or the
Grantee any loss in revenue resulting from the payment of tenant rents
which are less than the HUD imposed maximum rents as shown in Exhibit M-5 of
the HDG Application. The amount of such loss is estimated at $72,000 annually
as shown in Exhibit M-2 of the HDG Application.
7. The Owner commits at least 20 percent of the surplus tax increment funds
as a contingency to support project operations in the event that insufficient
revenues are available as a result of the losses in rental revenue described
in item 6 above.
EXHIBIT C
41
Page 1 of 1
Grantee: NATIONAL CITY, CALIFORNIA Grant Number: CA003HG401
EXHIBIT D
REQUIRED EVIDENTIARY MATERIALS
The evidentiary materials to be submitted by theiGrantee to
HUD Headquarters and appropriate Field Offices, in one complete
package or binder, shall include the applicable provisions of
Article VII of this Grant Agreement and shall consist of the
following:
I
All governmental approvals and permits necessary for the
commencement of the Grantee and Non -Grantee activities shall have
been obtained or provided. Evidence of this requirement shall be
a written certification from the Grantee, signed by the chief
executive officer, in accordance with section 7.02 of this Grant
Agreement.
II
Title to all land necessary for the Project shall be held by
the Grantee or the appropriate Participating Party. Evidence of
this commitment shall be in accordance with section 7.02 and
section 7.09 of this Grant Agreement.
III
The Owner/Grantee Agreement, which shall include all of the
requirements of Article V, the applicable requirements of Article
VI and the provisions of Exhibits B, and C ascribed to the Owner
and Grantee to be performed within the performance schedules set
forth in Exhibit E and shall also include the following
attachments:
(a) In accordance with 7.04, mortgages or other security
instruments securing the Owner's obligations under the
Owner/Grantee Agreement pursuant to Article V of this Grant
Agreement and repayment of the HDG in the event of the Owner's
Substantive Violation of the obligations, as described in section
12.03 of this Grant Agreement.
(b) The Affirmative Fair Housing Marketing Plan for the
Project, Form HUD-935.2, prepared by the Owner and submitted by
the Grantee to HUD for approval.
(c) A plan for minority and women -owned business enterprise.
(d) The Grantee's rent mechanism, in accordance with section
5.03(g), which shall have been approved by HUD.
(e) The investment plan, with the schedule of disbursements
in accordance with section 9.03(e) of this Grant Agreement, in
the event the HDG is to be invested in an account for the purpose
of making a periodic assisted rental payment (ARP)
42
Grantee:
NATIONAL CITY, CALIFORNIA
Grant Number:
Exhibit D (continued)
CA003HG401
(f) An opinion of counsel that the agreement is legally
binding under State and local law and conforms to the
requirements of this Grant Agreement.
IV
In accordance with section 7.06, mortgages and other
security instruments securing the public and private financing.
V
Legally binding commitments to be submitted to HUD for
approval shall include:
The Owner and the Grantee shall have entered into an agreement in accordance
with Article V of this Grant Agreement which shall be part of this paragraph
and which shall obligate:
1. The Owner to provide $4,990,000 in equity as follows:
a. Cash S4,190,000
b. Appraised Value of Land 800,000
TOTAL S4,990,000
The Grantee's Attorney or acceptable banking institution shall provide
written certification that cash and land are available or irrevocably
canmitted to the Owner's Non -Grantee Activities as specified in Exhibit C
of this Grant Agreement. Such certification shall identify the kinds of
assets and the nature of the irrevocable commitment(s) in accordance with
Section 7.08 of•this Grant Agreement.
2. The Grantee to grant HOG funds in an amount not to exceed S3,000,000
to the, Owner which shall be considered a debt secured by a lien on the
property and subject to repayment under conditions specified in 24 CFR
850.155. Evidence of this commitment shall be in accordance with Section
7.04 of this Grant Agreement.
3. The Grantee's mechanism to assure affordable rents, referenced in
Section 5.03(g) of this Grant Agreement, shall also describe the Grantee's
method of determining that priority will be given to tenants who are deter-
mined to be below HUD's Section 8 income levels. Further, the mechanism
shall prescribe a method of establishing tenant deductions to determine rent
for the very low income tenants at 30 percent of their adjusted income.
EXHIBIT D
43
Page 2 of 3
Grantee: NATIONAL CITY, CALIFORNIA Grant Number: CA003HG401
Exhibit D (continued)
4. The Owner to comply and conform to a process defined by the Grantee
in the Owner -Grantee Agreement agreement, of annually submitting information
regarding the very low income tenants as needed for the Grantee to review
and approve changes in allowances for utilities and other tenant -paid services
and for assuring that the rents charged and collected by the Owner are in
accordance with Exhibit B, item 2 of this Grant Agreement. Evidence of this
commitment shall be in accordance with Sections 7.02 and 7.05 of this Grant
Agreement.
5. The Owner to absorb without further assistance from HUD or the Grantee
any loss in revenue resulting from the payment of tenant rents which are less
than the HUD imposed maximum rents as shown in Exhibit M-5 of the HDG
application. The amount of such loss is estimated at $72,000 per year.
Evidence of this commitment shall be in accordance with Sections 7.02 and
7.05 of this Grant Agreement.
6. The Owner to commit at least 20 percent of the surplus tax increment funds
as a contingency to support project operations as specified in Exhibit C,
item 7 of this Grant Agreement. Evidence of this commitment shall he in
the form of at Resolution executed by appropriate local officials.
7. The Owner to provide that 60 of the lower income units shall be offered
on a priority basis to elderly persons/families (as defined by 24 CFR Part 813)
with incomes below 50 percent of the median income of the area (i.e., below
the Section 8 limit for very low income families). The Owner to charge the
very low income tenants not more than 30 percent of their respective adjusted
incomes for rent or the HUD maximum rents whichever is less. Evidence of this
commitment shall be in accordance with Section 7.05 of this Grant Agreement.
8. Grantees to enforce HDG restrictions for the full Project Term. Evidence
of this commitment shall be a deed restriction covenant, running with the
land or other mechanism satisfactory to HUD, which shall survive other
interests in the Project for the full Project Term.
EXHIBIT 0 43(a) Page 3 of 3
GRANTEE NATTONAT TTY. CALIFORNIA GRANT NUMBER CA003HG401
EXHIBIT E
PROJECT PERFORMANCE SCHEDULE
I
(a) The evidentiary materials described in Exhibit D of this
Grant Agreement must be submitted to the Secretary by the Grantee
not later than January. 1986 •
(b) Upon notification to the Grantee of the approval by the
Secretary of the evidentiary materials required by subparagraph
(a) above, Grantee shall be authorized to draw down Grant Funds
in accordance with section 9.03 of this Grant Agreement
consistent with Letter of Credit or Electronic Transfer
procedures and other provisions of this Grant Agreement.
II
The Grantee Activities described in Exhibit B of this Grant
Agreement and the Non -Grantee Activities described in Exhibit C
of this Grant Agreement shall be commenced and completed in
accordance with the following schedule:
Grantee Activity Date
Execute Grantee Agreement 10/85
Non -Grantee Activity
Commence Construction
•
Complete Construction
Initial Occupancy
Fifty Percent Occupancy
Complete Occupancy
Date
10/85
10/86
10/86
11/86
12/86
EXHIBIT E Page 1 of 1
44
SIGNATURE PAGE
THIS GRANT AGREEMENT is hereby executed and delivered by the
Parties hereto on the dates set forth below their respective
signatures, as follows:
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
1
BY:
DATE:
qf
ACTING GENERAL DEPUTY ASSISTANT SECRETARY FOR HOUSING
THE CITY OF NATIONAL CITY, CALIFORNIA
BY:
TITLE
DATE:
Kile morgan, Mayor
T� (3) fully executed copies of this Grant Agreement must
be delivered to the Director, Housing Development Grant Division,
U.S. Department of Housing and Urban Development, 451 7th Street,
S.W., Washington, D.C. 20410, and two (2) fully executed copies
of this Grant Agreement must be delivered to the HUD field Office
in accordance with section 15.01 of this Grant Agreement.