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Res 068-2017 6/20/2017Resolution No. _68-2017_ Resolution of no objection from the City of Wichita Falls for a proposed application for The Duke II TX TC, LP. to the Texas Department of Housing and Community Affairs for 2017 Housing Tax Credits at 5500 Professional Drive, Wichita Falls commonly known as Highpoint Village II Apartments for the redevelopment of the property by developer The Duke II TX TC, LP.; and providing an effective date WHEREAS, the multi-family housing project, currently known as Highpoint Village II Apartments, located at 5500 Professional Drive in Wichita Falls, has been acquired by The Duke II TX TC, LP.; and, WHEREAS, The Duke II TX TC, LP. has proposed a redevelopment for affordable rental housing at 5500 Professional Drive to be renamed The Duke II in City of Wichita Falls, Wichita County, Texas; and, WHEREAS, The Duke II TX TC, LP. has briefed the City Council of the City of Wichita Falls on its plan for the redevelopment of The Duke II in the City of Wichita Falls, Wichita County, Texas; and, WHEREAS, The Duke II TX TC, LP. has advised the City Council for the City of Wichita Falls that it intends to apply to the Texas Department of Housing and Community Affairs for the 4% Housing Tax Credit Program for The Duke II, currently known as Highpoint Village II Apartments; and, WHEREAS, the City Council of the City of Wichita Falls does not object to the application of The Duke II TX TC, LP. to the Texas Department of Housing and Community Affairs for such Tax Credits. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 1. The governing body of the City of Wichita Falls supports economic reinvestment to help ensure continued, high quality affordable housing for its residents. 2. The findings and recitations set out in the preamble to this resolution are found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes. 3. The City Council of the City of Wichita Falls hereby expresses no objection to the proposed redevelopment of The Duke II (currently known as Highpoint Village II Apartments), located at 5500 Professional Drive in the City of Wichita Falls TDHCA Application, and this formal Resolution is recorded in the minutes of the City of Wichita Falls on file with its City Clerk’s Office. 4. The City Council further directs the City Clerk to send a certified and true copy of this Resolution to representatives of The Duke I I TX TC, LP, for inclusion in its TDHCA Application, to the Texas Department of Housing and Community Affairs. 5. This resolution shall take effect immediately from and after its passage. PASSED AND APPROVED this 20th day of June, 2017. ______________________________ M A Y O R ATTEST: ____________________ City Clerk Exhibit A - Location Map – The Duke II TX TC, LP. (known as Highpoint Village II Apartments) Exhibit B - Aerial Site Plan – The Duke II TX TC, LP. (known as Highpoint Village II Apartments) Exhibit C – Site Overview and Photos of The Duke II TX TC, LP. (known as Highpoint Village II Apartments) Exhibit C – Site Overview and Photos of The Duke II TX TC, LP. (known as Highpoint Village II Apartments) PAYMENT-IN-LIEU-OF-TAX AGREEMENT This Payment-In-Lieu-Of-Tax Agreement (the “Agreement”) dated as of June __, 2017 is entered into by and between the City of Wichita Falls, Texas (“City”), The Duke I TX TC, LLC (“Duke I”), The Duke II TX TC, LLC (“Duke II”), Archer Courts TX TC, LLC (“Archer” and together with Duke I and Duke II as the “Owners”) and Nortex Housing Finance Corporation (“Nortex”), upon terms and conditions set forth herein. RECITALS WHEREAS, the Owners are seeking to bring low income housing to Wichita Falls by acquiring ownership of Highpoint Village I and II and Country Park Apartments, more fully described on Exhibit A (hereinafter “the Property”); and, WHEREAS, Nortex will partner with the Owners to provide financing for the Property, and to participate in the owner ship structure for each development comprising the Property; WHEREAS, the participation of Nortex with the Owners is anticipated to generate a property tax exemption for the Property; WHEREAS, the resolution of no objection of City to Nortex’s application to the Texas Department of Housing and Community Affairs is critical for the Owners to obtain 2017 Housing Tax Credits; and, WHEREAS, the Owners’ intent is not to cause financial harm to City as a result of its activities; and, WHEREAS, the Owners wish to make a tax-equivalent payment in support of City’s mission, goals, and objectives; and, WHEREAS, City finds that this Agreement serves the public purpose of promoting economic growth. NOW, THEREFORE, it is agreed by the parties hereto that: 1. For such time as the Property qualifies for exemption from property taxes, the parties hereto approve the PILOT payment schedule as shown on Exhibit B, and the Owners agree to make 40 annual payments to City based on the payment amounts shown therein. In the event that the Owners continue to own the Property for more than 40 years, and subject to the terms and conditions hereof, the Owners agree to continue to make annual PILOT payments to City based upon a continuation of the 2% annual increase shown in Exhibit B for every subsequent year the Owners own the Property and the Property receives an exemption from taxes. Exhibit D 2. The first PILOT payment is due from the Owners to City on or before October 1, 2018. Annual PILOT payments will be due on or before October 1 e ach following year for which payment is being made. If the Owners fail to pay the PILOT payment to the City within such time, and such failure continues for ten days after written notice of such default to the Owners by the City, the City shall have the ri ght to exercise any and all legal remedies available to it to obtain such payment. The Owners agree to pay the statutory amounts for penalties, interest, attorney’s fees, and costs of collection applicable to suits to recover delinquent ad valorem taxes un der Texas Tax Code Chapter 33 for failure to remit timely PILOT payments to City as a contractual obligation even though the Property will be exempt from local ad valorem taxation. 3. All payments shall be made payable to City of Wichita Falls and shall be sent to the Director of Finance, City of Wichita Falls, 1300 7 th Street, Wichita Falls, Texas 76301. 4. Severability. To the extent permitted by law, a holding by any court that any part or any provision in this Agreement is invalid, illegal or unenforceable in any respect shall not affect any other provision, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been a part of the Agreement. 5. Non-Waiver of Rights. This Agreement may not be amended except in a writing specifically referring to this Agreement and signed by the parties hereto. Any right created under this Agreement may not be waived, except in a writing specifically referring to this Agreement and signed by the party waiving the right. Provided, howev er, termination of this Agreement shall not relieve the Owners, or its successors, from any payments due City prior to such termination. 6. Liquidated Damages; No Lien. If for any reason the Owners should fail to make the PILOT payment in accordance with paragraph 3, the parties agree that (i) the amount of taxes that would have been imposed upon the Property plus (ii) the amount of any interest calculated in accordance with paragraph 2; plus (iii) City’s reasonable attorney’s fees and costs of collection should any action be required in order to compel payment of all such amounts shall serve as liquidated damages from the Owners to City. Nothing in this Agreement shall be construed as creating a lien against the Property, nor shall the City be entitled to place on a lien on the Property for any unpaid portion of the PILOT payment or any related expenses and payables. 7. Notices. Any notice provided or permitted to be given pursuant to this Agreement must be in writing and may be served by depositing same in the United States mail, addressed to the party to be notified, postage prepaid, certified mail, with return receipt requested, by fax (with confirmation of receipt), by personal delivery service or nationally recognized air courier service. For purposes of not ice, the addresses of the parties shall be as set forth below: Director of Finance City of Wichita Falls 1300 7th Street Wichita Falls, Texas 76301 Nortex Housing Finance Corporation 2112 Indian Heights Boulevard Wichita Falls, Texas 76302 The Duke I TX TC, LLC The Duke II TX TC, LLC Archer Courts TX TC, LLC c/o Millennia Housing Development, Ltd. 8111 Rockside Road, Cleveland, Ohio, 44125 8. Governing Law and Venue. This agreement shall be governed by the laws of the State of Texas. Venue for any action concerning this Agreement shall be in the District Courts of Wichita County, Texas. 9. Assignment. The Owners may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of City, which consent shall not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by City that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of the Owners under this Agreement. Any attempted assignment without City’s prior consent shall constitute grounds for termination of this Agreement and following ten (1 0) calendar days of receipt of written notice from City to the Owners and Nortex. 10. Entire Agreement. This Agreement constitutes the entire understanding between the parties and supersedes any prior negotiations, discussions, agreements, and understandings between the parties with respect to the subject matter of this Agreement. 11. Termination. This Agreement shall continue for a term concurrent with the exemption of the Property. Notwithstanding anything herein to the contrary, at such time as the Property no longer receives an exemption from ad valorem taxes, this Agreement shall automatically terminate, and be of no further force and effect. 12. No Continuation by Nortex. In the event that an affiliate of Millennia Housing Development, Ltd. no longer participates in the ownership of the Owners: (i) Nortex shall promptly notify the City; and (ii) Nortex and the Owners shall not continue to seek and/or receive an exemption for the Property without the express consent of the City. 13. Role of Nortex. Nortex is entering into this Agreement for the limited purposes set forth herein. The parties hereto agree that the PILOT payments are the sole obligations of the Owners and that neither Nortex nor any affiliates of Nortex shall have any obligation to make such PILOT payments. Executed to be effective as of the date set forth above. CITY OF WICHITA FALLS, TEXAS NORTEX HOUSING FINANCE CORPORATION By: ________________________ By: ___________________________ Darron Leiker, City Manager Paul Wylie, President Attest: Attest: _______________________ ___________________________ City Clerk The Duke I TX TC, LLC By: Name: Title: The Duke II TX TC, LLC By: Name: Title: Archer Courts TX TC, LLC By: Name: Title: EXHIBIT A EXHIBIT B