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DOC CODE: RESOLUTION
Pg 1 of 46, 08/21/2017 at 02:17:25 PM
Janice K.Vos Caudill, Pitkin County, CO
• RESOLUTION NO. 104
Series of 2017
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO,
APPROVING A PROPOSED MASTER DEVELOPMENT AGREEMENT BY AND BETWEEN
THE CITY OF ASPEN, COLORADO AND ASPEN HOUSING PARTNERS, LLC, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE A FINAL AGREEMENT ON BEHALF
OF THE CITY OF ASPEN, COLORADO.
WHEREAS, there has been submitted to the City Council a proposed Master Development
Agreement by and between the City Of Aspen, Colorado and Aspen Housing Partners, LLC, a copy
of which draft agreement is attached hereto.
NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ASPEN, COLORADO:
Section One
That the City Council of the City of Aspen hereby approves the entry into a Master
Development Agreement by and between the City Of Aspen, Colorado and Aspen Housing Partners,
LLC,a copy of which draft agreement is attached hereto and does hereby authorize the City Manager
• of the City of Aspen to execute a final agreement on behalf of the City of Aspen in substantially the
form attached hereto, subject to the approval of the City Manager and the City Attorney.
Dated ( 2017.
Steve Skadro Mayor
I, Linda Manning,duly appointed and acting City Clerk do certify that the foregoing is a true
and accurate copy of that resolution adopted by the City Council of the City of Aspen,Colorado, at a
meeting held July 24, 2017.
Linda Manning, City Clerk
•
MASTER DEVELOPMENT AGREEMENT
by and between
CITY OF ASPEN, COLORADO
and
ASPEN HOUSING PARTNERS,LLC
TABLE OF CONTENTS
Page
.ARTICLE I. DEFINITIONS I
ARTICLE 11. ENGAGEMENT; DEVELOPMENT PLAN, SCHEDULE AND BUDGET 5
2.1 Basic Intent.................................................................................................................... 5
2.2 Designation and Engagement of Developer.................................................................. 6
2.3 Development Plan......................................................................................................... 6
2.4 Project Schedule............................................................................................................ 7
2.5 Project Budget...........................................................................:................................... 7
2.6 Status Reports and Information..................................................................................... 7
ARTICLE III. DEVELOPER SERVICES AND DEVELOPER FEE 8
3.1 Developer Services........................................................................................................ 8
3.2 Funding of Development Services................................................................................ 9
3.3 Developer Fee ................................................................................................................ 9
3.4 Contractors and Consultants ......................................................................................... 9
3.5 Cooperation and Approval Standards ........................................................................... 9
3.6 Communications........................................:................................................................. t0
ARTICLE IV. DUE DILIGENCE MATTERS 10
4.1 Title Insurance Commitments..................................................................................... 10
4.2 Surveys........................................................................................................................ 10
4.3 Access to the Property and Other Investigations ......................:................................. 11
4.4 Special Terms Regarding Environmental Conditions................................................. 11
4.5 Removal of Site, Generally......................................................................................... 12
ARTICLE V. ENTITLEMENT/FEASIBILITY PERIOD 13
5.1 Entitlement/Feasibility Period, Generally................................................................. 13
5.2 Design.......................................................................................................................... 13
5.3 Public Outreach Process.............................................................................................. 13
5.4 Entitlement Process..................................................................................................... 13
5.5 No Guaranty of City Approval.................................................................................... 14
5.6 Debt Financing............................................................................................................ 14
5.7 Equity Financing......................................................................................................... 14
5.8 Minimize City Funds................................................................................................... 14
ARTICLE VI. CLOSING DOCUMENTS 14
6.1 Closing Documents, Generally ................................................................................... 14
6.2 Project Entity Agreement............................................................................................ 15
6.3 LURA.......................................................................................................................... 15
6.4 APCHA Covenant....................................................................................................... 15
6.5 Ground Leases............................................................................................................. 15
6.6 Right of First Refusal and Purchase Option................................................................ 16
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6.7 Cure Rights.................................................................................................................. 17
6.8 City Loan Documents.................................................................................................. 17
6.9 Property Management................................................................................................. 18
6.10 Admissions and Occupancy Policies; Role of APCHA.............................................. 19
6.11 Construction Contract ................................................................................................. 19 ,
6.12 Guarantees at the Closing............................................................................................ 19
6.13 Cash Flow Waterfall.................................................................................................... 19
ARTICLE VII. LIHTC PROGRAM SELECTION AND CLOSING 20
7.1 LIHTC Program Selection .......................................................................................... 20
7.2 Closing Contingencies................................................................................................. 20
7.3 Closing.....:.................................................................................................................. 21
ARTICLE VIII. TERMINATION 21
8.1 Termination by City for Event of Default................................................................... 21
8.2 Termination by Developer for Event of Default......................................................... 22
8.3 Events Beyond Control ...................................................................................:............ 22
8.4 Termination for Infeasibility....................................................................................... 22
8.5 Delivery of Work Product to City............................................................................... 24
ARTICLE IX. MISCELLANEOUS 24
9.1 Term......................................:..................................................................................... 24
9.2 Notices......................................................................................................................... 24
9.3 Further Assurances...................................................................................................... 25
9.4 Assignment.................................................................................................................. 26
9.5 Counterparts................................................................................................................ 26
9.6 i Interpretation and Governing Law.............................................................................. 26
9.7 Attorneys' Fees ........................................................................................................... 26
9.8 Severability.................................................................................................................. 26
9.9 Final Agreement..........................................................................................................26
9.10 Waivers........................................................................................................................26
9.11 Successors...................................................................................................................26
9.12 Headings...............................................................................:.............:........................26
9.13 Construction................................................................................................................ 26
9.14 Certain Approvals ....................................................................................................... 26
9.15 . Binding Effect............................................................................................................. 27
9.16 Cumulative Rights........................................................................4444...........................27
9.17 References to this Agreement ......................................................................................27
9.18 No Commissions.........................................................................................................27
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MASTER DEVELOPMENT AGREEMENT
THIS MASTER DEVELOPMENT AGREEMENT is entered into as of
2017 between THE CITY OF ASPEN,a home rule municipality within the State of Colorado
(the "City"), and ASPEN HOUSING PARTNERS, LLC, a Colorado limited liability company
(the"Developer").
RECITALS
A. On December 18,2015 the City issued a Request for Proposals(the"RFP")to select
a private master developer to assist the City with planning, entitling, financing, developing,
managing, operating and maintaining for-rent affordable housing units on three separate sites
owned by the City and located within the municipal boundaries of the City (collectively, the
"Project"). The three development sites owned by the City (the "Sites" and each a "Site") are
described on Exhibit°A of this Agreement.
B. Pursuant to the RFP,the City competitively selected the Developer as the developer
for the Project. The City and the Developer thereafter entered into that certain Summary of Terms
for Development Agreement for Affordable Housing as approved by City Council Resolution
#165, Series of 2016,November 14, 2016.
C. The City and the Developer now desire to enter into this Agreement in order to set
forth specific rights and responsibilities in connection with carrying out the Project.
D. Capitalized terms used in this Agreement are either defined under the heading
"Definitions" below, or elsewhere within the text of this Agreement.
AGREEMENT
In consideration of the foregoing recitals and the mutual covenants and agreements set
forth herein, which both parties agree to be good and valuable consideration, the parties agree as
follows:
ARTICLE I. DEFINITIONS
The following capitalized terms will have the meanings given for them below. Other
capitalized terms that are used in this Agreement but that are not defined below are defined in the
other provisions of this Agreement.
"Affiliate" means, with respect to any entity, any other person or entity that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such entity.
"AFR" is defined in Section 6.8.2.
"Agreement"means this Master Development Agreement(including all attached exhibits),
as'amended from time to time.
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"APCHA" means the Aspen/Pitkin County Housing Authority formed by an
intergovernmental agreement (as amended from time to time) between the City and the Board of
County Commissioners of Pitkin County, Colorado.
"APCHA Covenant"means a perpetual Occupancy Deed Restriction and Agreement to be
recorded against each Site for-the purpose of causing all Units developed on such Site pursuant to
this Agreement (including both the LIHTC Units and the Non-LIHTC Units) to qualify as
affordable housing rental Units in accordance with the APCHA Guidelines and the final approved
Development Plan.
"APCHA Guidelines" means the annual guidelines published by APCHA to govern the
operation of the APCHA affordable housing program, as amended from time to time.
"Applicable Public Housing Requirements"means any HUD Laws,LIHTC Laws,APCHA
Guidelines, and other federal, state and local regulatory requirements applicable to the Project and
the Units as affordable housing units during the period required by law, together with the LURA
and APCHA Covenant recorded on each Site.
"Cash Flow Waterfall" is defined in Section 6.13.
"CHFA" means the Colorado Housing and Finance Authority, a body corporate and
political subdivision of the State of Colorado, which has been designated as the Colorado state
allocating agency for Tax Credits pursuant to the LIHTC Laws.
"City" is defined in the first paragraph of this Agreement.
"City Funds"means the funds approved and made available by the City for paying a portion
of the development costs for the Project.
"City Loan" means a subordinate loan made by the City to the Project Entity as provided
in a separate commitment letter in the amount of the City Funds.
"Closing" means the date on which all of the principal commitments regarding
development of the Project (including, without limitation, the City Loan, the Ground Leases, the
Tax Credits and Investor financing, all other necessary construction and third-party financing, the
Project Entity Agreement, the LURA, the APCHA Covenant, and the Construction Contract) are
performed or converted to binding obligations of performance by the execution of the Closing
Documents.
"Closing Contingencies" is defined in Section 7.2.
"Closing Documents" is defined in Section°6.1.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Construction Contract" is defined in Section 6.11.
"Developer" is defined in the first paragraph of this Agreement.
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"Developer Fee" is defined in Section 3.3.
"Developer Pursuit Costs" means any and all actual out-of-pocket expenses incurred and
paid by Developer or any Affiliate of Developer in performing the Developer Services pursuant
to, and authorized in the manner set forth in, this Agreement, including without limitation (a) all
professional fees and reimbursable expenses paid to third-party consultants in pursuit of the Project
such as architects, landscape architects, engineers, planners, surveyors, lawyers, geotechnical
consultants, environmental consultants, and traffic engineers; (b) all costs incurred to conduct the
Public Outreach Process for the Project, such as facility rental charges, food and beverage charges,
and materials production expenses; (c) travel expenses for travel outside of the Roaring Fork
Valley; and d all application fees aid to any governmental entity in connection with.the Project
Y O PP P
such as, without limitation, the City of Aspen Community Development Department, CHFA,
APCHA, and/or HUD. Notwithstanding the foregoing„Developer Pursuit Costs will not include
Developer's general overhead expenses such as office rent and utilities, insurance premiums
(except any Project-specific insurance policies obtained by the Developer at the request of the City
or,with the City's approval), salaries or benefits paid to any principal of Developer or any Affiliate
of Developer, and income taxes.
"Developer Services" is defined in Section 3.1.
"Development Plan" is defined in Section 2.3.1.
"Entitlement/Feasibility Period" is defined in Section 5.1.
"Environment" means surface or subsurface soil or strata, surface waters and sediments,
navigable waters, wetlands, groundwater, sediments, drinking water supply, ambient air, species,
plants, wildlife, animals and natural resources. The term also includes indoor air, surfaces and
building materials, to the extent regulated under Environmental Laws.
"Environmental Condition" means the presence of Hazardous Materials in the
Environment at,on, in, under or about a Site.
"Environmental Law" means any present or future federal, state or local law, ordinance,
rule, regulation, permit, license or binding determination of any governmental authority relating
to, imposing liability or standards concerning, or otherwise addressing Hazardous Materials, the
environment, health or safety, including, but not limited to: the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. ("CERCLA"); the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. ("RCRA"); the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251 et seq. and any so-called "Superfund" or"Superlien" law, and
the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., as each is from time to
time amended and hereafter in effect.
"Event of Default" is defined in Section 8.1 (as to the Developer) and Section°8.2 (as to
the City).
"Events Beyond Control" is defined in Section 8.3.
3
"Final Entitlement" means that all zoning, subdivision, variance (if applicable), and other
approvals that are necessary under the Land Use Code for all of the Sites to be eligible for submittal
of a building permit application for construction of the Project pursuant to the final Development
Plan have been approved and/or issued and that all applicable appeal, initiative, and referendum
periods have either run without any such appeal, initiative, or referendum being filed, or, if any
such appeal, initiative, or referendum is filed for the purpose of challenging, reversing or
invalidating any such approval, that such appeal, initiative, or referendum has been finally
concluded or resolved with all such necessary approvals for the Project being preserved and/or
upheld.
"General Contractor"means the general contractor chosen by the Developer in accordance
with the terns of this Agreement to construct the Project.
"Ground Leases" is defined in Section 6.5.
"Hazardous Materials" means any solid, liquid, or gaseous material, chemical, waste or
substance that is regulated by a federal, state or local gover amental authority and includes those
substances listed or defined as "hazardous substance" under CERCLA, "hazardous waste" under
RCRA or otherwise classified as hazardous,dangerous or toxic under any Environmental Law and
will specifically include petroleum, oil and petroleum hydrocarbons, radon, radioactive materials,
asbestos, lead-based paint, urea formaldehyde foam insulation and polychlorinated biphenyls.
"HUD" means the U.S. Department of Housing and Urban Development.
"HUD Laws"means the United States Housing Act of 1937 (42 U.S.C. § 1437, et seq.), as
amended from time to time, and any regulations promulgated by HUD thereunder.
"Investor" means the Tax Credits investor limited partner(s) or non-managing member(s)
in the Project Entity as may be selected pursuant to Section 5.7.
"Land Use Code" means the City of Aspen Land Use Code set forth in Title 26 of the
City's Municipal Code, as it may be amended from time to time.
"LIHTC Laws" means all Colorado and federal laws and regulations governing the
allocation, issuance, use of and implementation of Tax Credits in the State of Colorado, including
without limitation Section 42 of the Code, and the Treasury Regulations promulgated pursuant
thereto, and Article 22 of Title 39, Colorado Revised Statutes, as amended from time to time, and
the regulations promulgated pursuant thereto.
"LIHTC Units" means those Units developed on each Site pursuant to this Agreement that
qualify as a low-income housing units pursuant to the LIHTC Laws.
"LURA" means a Land Use Restriction Agreement to be recorded against each Site of the
Project with respect to the LIHTC Units, as required by the LIHTC Laws.
"Management Agent" is defined in Section 6.9.
"Management Fee" is defined in Section 8.4.5.
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"Non-LIHTC Units"means those Units developed on each Site pursuant to this Agreement
that are not LIHTC Units.
"Project" is defined in Recital A of this Agreement.
"Project Budget" is defined in Section 2.5.
"Project Entity" means a limited liability company or limited partnership to be formed by
the Developer to develop,own,operate and maintain all three Sites in accordance with Section 2.4.
"Project Entity Agreement" means the limited partnership agreement or limited liability
company agreement governing the affairs and management of the Project Entity to be entered into
in accordance with this Agreement.
"Project Schedule" is defined in Section 6.2.
"Public Outreach Process" is defined in Section 5.3.
"RFP" is defined in Recital A of this Agreement.
"Required Remediation Work" is defined in Section 4.4.2.
"Site ESA" is defined in Section 4.4.2.
"Site Investigation" is defined in Section 4.3.
"Sites" or"Site" is defined in Recital A of this Agreement.
"Submittal Date" is defined in Section°5.4.
"Surveys" is defined in Section 4.2.
"Tax Credits" means low income housing tax credits allocated by CHFA for the Project
pursuant to the LIHTC Laws.
"Title Company" means Stewart Title of Aspen as agent for Stewart Title Insurance
Company.
"Units" means all rental housing units to be constructed on the Sites pursuant to this
Agreement.
ARTICLE II. ENGAGEMENT; DEVELOPMENT PLAN, SCHEDULE AND
BUDGET
2.1 Basic Intent. The intent of this Agreement is to create a mechanism for the
City and the Developer to develop the Sites for rental affordable housing purposes in a manner
consistent with the Development Plan and the Applicable Public Housing Requirements. The Sites
are not currently entitled for such development and due diligence has not yet been performed to
confirm the suitability of the Sites for such development. This Agreement establishes a process
5
by which(a) due diligence will be performed on the Sites to evaluate suitability for development
of the Project; (b) the Public Outreach Process will be followed to solicit and develop feedback
from neighbors of the Sites and the public at-large concerning the Project; (c) applications for all
necessary zoning, subdivision and other entitlements will be processed for the Sites pursuant to
the Aspen Land Use Code; (d) the costs for development of the Project will be determined and
sources and amounts of funding for such costs(including Tax Credits,City Funds, Investor equity,
and construction financing) will be identified and potentially agreed upon; and (e) if Final
Entitlement occurs,the Closing Documents agreed upon, and all costs and funding sources agreed
upon, the Project will be constructed on the Sites.
2.2 Designation and Engagement of Developer. The City confirms the
designation of the Developer as the developer for the entitlement of the Project and development
of the Sites in accordance with the Development Plan (as defined below) and this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement will be deemed or construed
to create a relationship of partners, co-venturers, or principal and agent between the City and the
Developer. The Developer will have no power or authority to create any obligation on the part of
the City, as obligor, guarantor, or surety,with respect to any obligation to third parties incurred by
the Developer.
2.3 Development Plan.
2.3.1 Current Development Plan. The current basic plan for development
of the Sites for the Project is attached to this Agreement as Exhibit B (as it may be revised
from time to time in accordance with the terms of this Agreement, the "Development
Plan").
2.3.2 Adjustment of Development Plan. As the City and Developer pursue
the further planning and implementation of the Project pursuant to this Agreement, they
may identify areas in which the Development Plan can be improved so as to make the
Project more economically feasible, to address reasonable concerns of other stakeholders
such as neighbors of the Sites, to.better achieve the underlying objective of developing
affordable housing within the City and/or to meet expectations or requirements of funding
sources. The City and Developer recognize that both the Project as a whole and each Site
are wholly dependent upon each of the projected funding sources being available in a
timely manner, and other conditions which are, in part, beyond the parties' control. The
parties therefore recognize that the Development Plan (and its goal of achieving a certain
number of affordable housing units)may prove to be predicated on assumptions which are
no longer well-founded,causing the Development Plan or segments thereof to be no longer
reasonably feasible, or requiring changes to the number or mix of Units at one or more of
the Sites. Where future amendments to the Development Plan are required by the foregoing
factors or more generally by infeasibility or other circumstances, the City and Developer
will work together to develop changes that accomplish the original goals set forth in the
Development Plan(including its goal of achieving a certain number of affordable housing
units)to the maximum extent reasonably feasible given available resources.The City must
approve any changes to the Development Plan, and the City's approval of any update to
the Development Plan will confirm the City's approval of the proposed actions by the
6
Developer described in it. Any update to the Development Plan will be deemed
incorporated into this Agreement as if attached in full.
2.4 Project Schedule. The projected schedule for starting and finishing all tasks
contemplated by this Agreement and the Development Plan is attached as Exhibit C (as it may be
supplemented and amended in accordance with the terms of this Agreement, the "Project
Schedule"). The Developer will revise and update the Project Schedule, subject to approval by the
City, to reflect evolving events and circumstances and provide an updated Project Schedule to the
City from time to time. If the City objects to any proposed change in the Project Schedule as
submitted by the Developer, the City will promptly advise the Developer in writing of the City's
basis for such objection and any suggested means of avoiding or otherwise remedying such change.
Each party agrees to advise the other promptly if it learns of any known or reasonably anticipated
event or condition that might affect the Project Schedule. Any approved update to the Project
Schedule will be deemed incorporated into this Agreement as if attached in full.
2.5 Project Budget. The current budget for the overall Project is attached as
Exhibit D (as it may be supplemented and amended in accordance with the terms of this
Agreement, the "Project Budget"). The Project Budget may include for approval by the City a
budget of proposed Developer Pursuit Costs,and any costs incurred pursuant to any such approved
Project Budget shall be authorized under this Agreement. In addition, Developer may submit
specific proposed Developer Pursuit Costs for authorization in addition to any other Developer
Pursuit Costs included in the Project Budget. All material proposed revisions to a Project Budget,
including without limitation any change of 10% or more to any line item (both sources and uses),
and including 'any appropriate qualifications and/or exclusions (e.g., for any Environmental
Condition), will be submitted by the Developer to the City for approval or when requested by the
City, which upon approval by the City will be deemed to'constitute a revised Project Budget. The
Developer shall advise the City of any proposed updates to the Project Budget at least twice
annually. If the City objects to any proposed change in the Project Budget as submitted by the
Developer, the City will promptly advise the Developer in writing of the City's basis for such
objection and the parties will work in good faith to resolve any disagreement concerning the
proposed change. Each party agrees to advise the other promptly if it learns of any known or
reasonably anticipated event or condition that might affect the Project Budget. Any agreed
modification to the Project Budget will be deemed incorporated into this Agreement as if attached
in full.
2.6 Status Reports and Information. The Developer will provide the City with
periodic progress reports as reasonably requested by the City on the status of all Project-related
activities,and which will include proposed modifications to the Development Plan,Project Budget
and Project Schedule, when necessary. Developer will attend progress meetings with the City
respecting such matters as the predevelopment phase of the Project progresses. Upon request from
the City, Developer will provide projected timetables and delivery schedules relating to certain
key activities such as the Submittal Date and the date of Closing. In addition, the Developer shall
submit to the City a monthly summary of Developer Pursuit Costs, along with a reconciliation
against any approved budget for such Developer Pursuit Costs.
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ARTICLE III. DEVELOPER SERVICES AND DEVELOPER FEE
3.1 Developer Services.The Developer,directly or through the Project Entity,will
initiate, coordinate, and carry out or contract for all design, Final Entitlement, permitting,
financing, and construction activities in connection with the development, construction and
completion of development of each Site pursuant to the Development Plan, as further provided in
and subject to the terms of this Agreement. The services and activities to be performed by
Developer subject to the terms of this Agreement (the "Developer Services") include, without
limitation, the following:
3.1.1 The Developer will oversee all due diligence activities to evaluate the
suitability of the Sites for the development of the Project, which process the parties
acknowledge is substantially complete as of the execution of this Agreement.
3.1.2 The Developer will be responsible for, and has completed as of the
execution of this Agreement, conducting the Public Outreach Process described in this
Agreement in order to solicit feedback on the proposed Project from community members,
neighbors and other identified stakeholders.
3.1.3 The Developer will be responsible for applying for and pursuing Final
Entitlement of the Project.
3.1.4 Developer will be responsible for pursuing the award and commitment
of all sources of construction, gap and permanent financing needed for development of the
Project in accordance with the Project Budget, other than the City Funds, as further
provided in this Agreement.
3.1.5 Developer will be responsible for applying for,obtaining and preserving
through Closing an allocation of Tax Credits from CHFA in accordance with the Project
Budget.
3.1.6 Developer will contract with and supervise the delivery of all work
product required for the Project from professional consultants such as architects, landscape
architects, engineers, planners, surveyors, lawyers, geotechnical consultants,
environmental consultants, and traffic engineers, each of which will be under the control
and direction of Developer.
3.1.7 The Developer will be responsible for soliciting and selecting third-
party lenders and the Investor for the Project. The Developer will provide the City with an
opportunity to review and comment on Developer's proposal for soliciting an Investor and
any lenders. The Developer will provide the City with copies of all Investor and lender
proposals received together with a summary analysis and assessment of the proposals, and
shall obtain the approval of the City before accepting or entering into any letter of intent
with respect any such proposal.
3.1.8 The Developer shall lease all units in the Project in accordance with the
Applicable Public Housing Requirements.
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3.2 Funding of Development Services. The Developer will be responsible for
funding all expenses incurred to provide the Developer Services and perform its obligations under
this Agreement, subject to the right to be reimbursed and/or compensated for such services through
payment of, as applicable, the Development Fee (if the Closing occurs) or the Management Fee
and reimbursement of the Developer Pursuit Costs pursuant to the applicable provisions of Article
VIII. The expenses incurred by Developer in providing the Developer Services will be accounted
for in a standard development accounting format, and the City will have full access to all such
Project accounting records at all times.
3.3 Developer Fee. As compensation for its undertaking and performance of
Developer Services, the Developer(or an Affiliate of Developer designated by Developer) will be
entitled to earn and receive a developer fee from the Project Entity of 12% of the "eligible basis"
costs for the Project as calculated pursuant to the requirements of CHFA (the "Developer Fee").
The Developer and the City intend that the Developer Fee will equal the maximum amount
available pursuant to the LII-ITC Laws and the CHFA program or 12%, whichever is less. Subject
to terms required by the Investor and any senior lender, 20%.of the Developer Fee will be earned
by the Developer for the Developer Services it performs up to the Closing and will be paid to the
Developer concurrently with the consummation of the Closing. The remainder of the Developer
Fee will be paid to the Developer over the course of the construction and leasing process for the
Project according to a payment schedule to be approved by the City and the Investor, subject to
commercially reasonable terms for potential deferment of portions of the Development Fee arising
from unanticipated cost overruns. No portion of the Developer Fee will be considered earned or
payable unless and until the Closing occurs. If this Agreement is terminated prior the Closing,
then the reimbursement and compensation of the Developer for performing the Developer Services
up to the time of termination will be governed by the applicable provisions of Article VIII.
3.4 Contractors and Consultants. The Developer or the Project Entity will be
responsible for the selection and engagement of contractors, consultants and other participating
parties necessary for carrying out the Developer Services. The Developer will notify the City in
advance of all proposed selections by the Developer of contractors, consultants or other
participating parties engaged or selected for participation in the Project, and all such selections
shall be subject to the City's approval,which shall not unreasonably be withheld. The City hereby
approves all of the consultants and contractors previously engaged by the Developer identified in
Exhibit E. The replacement of any consultant or contractor listed on Exhibit E shall be subject to
the terms of this Section 3.4.
3.5 Cooperation and Approval Standards. The City and the Developer will
cooperate with one another in a good faith effort to complete the Project. Such cooperation will
include reasonable efforts to respond to one another as expeditiously as possible with regard to
requests for information or approvals required hereby and prompt proactive sharing of information
pertinent to the carrying out and orderly progression of the Project. With regard to materials or
documents requiring the approval of one or more parties, if such materials or documents are not
approved as initially submitted, then the parties will engage in such communication as is necessary
under the circumstances to resolve the issues resulting in such disapproval. The City will promptly
review any matter submitted and advise the Developer in writing of approval or of why approval
is being withheld. The City's approval of any matter required hereunder will be in writing and
9
will not be unreasonably withheld, conditioned or delayed, except as otherwise specifically
provided in this Agreement.
3.6 Communications. To facilitate communication, the City and the Developer
each will designate a representative with responsibility for the routine administration of such
party's obligations under this Agreement. Initially such representatives will be Chris Everson,
Affordable Housing Project Manager, for the City and Jason Bradshaw, Manager, for the
Developer.
ARTICLE IV. DUE DILIGENCE MATTERS
4.1 Title Insurance Commitments: The Developer has obtained title insurance
commitments for the three Sites from the Title Company (as updated from time to time,the."Title
Commitments"). The Title Commitments will be used, if the Closing occurs, as the basis for the
issuance of leasehold title insurance policies to the Project Entity to insure its interests under the
Ground Leases and also to provide a lender's title insurance policy to the City with respect to the
City Loan and any construction lender with respect to its construction loan (including any
applicable HUD requirements). The Developer, with the assistance and advice of legal counsel
and other consultants, has reviewed the Title Commitments and determined that there do not
appear to be any matters of title affecting the Sites that would materially impair or prevent the
Project from being developed on the Sites, such as, for example and without limitation, restrictive
covenants that conflict with the Development Plan. The Developer will cause the Title
Commitments to be updated from time to time prior to the Closing. As a condition to the Closing,
the final form of the Title Commitments and the insurance coverage to be provided pursuant to the
title insurance policies to be issued pursuant to the Title Commitments will be subject to the
approval of the Project Entity(with respect to its owner's policy to be issued insuring its leasehold
interests pursuant to the Ground Leases, the City (with respect to its mortgagee's policy to be
issued with respect to the City Loan), any construction lender for the Project (with respect to its
mortgagee's policy to be issued with respect to the City Loan), and,to the extent applicable under
the Applicable Public Housing Requirements, any governmental entity participating in the
issuance of the Tax Credits or facilitating any other financing for construction of the Project.
4.2 Surveys. The Developer has obtained preliminary surveys of the Sites prepared
by Peak Surveying, Inc. in accordance with the 2016 Minimum Standard Detail Requirements of
ALTA/NSPS Land Title Surveys, including Items 1 - 5, 7(a), 8, 11 — 14, 16 -19 of Table A (as
updated and revised from time to time, the "Surveys"). The Developer, with the assistance and
advice of legal counsel and other consultants, has reviewed the Surveys and determined that there
do not appear to be any matters affecting the Sites as revealed by the Surveys that would materially
impair or prevent the Project from being developed on the Sites, such as, for example and without
limitation, any easements that conflict with the Development Plan that cannot be terminated or
relocated by the City as the owner of the Sites. The Developer will cause the Surveys to be updated
and supplemented from time to time in accordance with the requirements of CHFA; HUD, the
City, the Title Company, any lender for the Project, and based on the Developer's review of the
Surveys. Asa condition to the Closing',the final form of the Surveys will be subject to the approval
of the Project Entity, the City, the Title Company, any construction lender for the Project, and, to
the extent applicable under the Applicable Public Housing Requirements,any governmental entity
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participating in the issuance of the Tax Credits or facilitating any other financing for construction
of the Project.
4.3 Access to the Property and Other Investigations. For the duration of this
Agreement, the City will permit representatives of the Developer and all consultants and
professionals engaged by the Developer in the performance of the Developer Services to have
access to the Sites at all reasonable times for the purpose of obtaining and updating information
and conducting studies, evaluations, assessments, tests and investigations of the Sites for the
purpose of evaluating the suitability of the Sites for development of the Project and to assist with
the design of the Project on the Sites (the "Site Investigations"). The Site Investigations may
include,without limitation, surveying work, geotechnical sampling and testing,environmental site
assessments,asbestos testing,mold testing,and traffic studies. The Developer will make available
to the City copies of all work product generated by the Developer and its consultants and
professionals pursuant to the Site Investigations. The Developer, with the assistance of its
professional consultants, will review the results and work product of the Site Investigations to
determine if there are any matters affecting the Sites as revealed by the Site Investigations that
would materially impair or prevent the Project from being developed on the Sites. The Developer
will notify the City of any such matters that materially impair or prevent the Project from being
developed on the Sites. The Developer will cause the Site Investigations to be updated and
supplemented from time to time in accordance with the requirements of CHFA, HUD, the City,
any lender for the Project, and based on the Developer's review of the Site Investigations. As a
condition to the Closing, the condition of the Sites as revealed by the Site Investigations will be
subject to the approval of the Project Entity,the City, any construction lender for the Project, and,
to the extent applicable under the Applicable Public Housing Requirements, any governmental
entity participating in the issuance of the Tax Credits or facilitating any other financing for
construction of the Project.
4.4 Special Terms Regarding Environmental Conditions.
4.4.1 Environmental Assessment. As part of the Developer Services,
Developer will cause Phase 1 environmental site assessments to be completed for the Sites,
and will provide a copy to the City. If recommended by any Phase 1 environmental site
assessment or otherwise deemed warranted by the Developer or the City with respect to an
existing or suspected Environmental Condition identified in any Phase 1 environmental
site assessments or addenda thereto, the Developer will cause to be performed a Phase II
environmental site assessment with respect to any applicable Site along with any further
testing or other evaluation reasonably necessary to determine the existence, scope and
extent of any Environmental Condition, and will provide a copy of all such items to the
City. If a Phase II environmental site assessment is determined to be necessary as provided
above, then the Developer and its consultants will be afforded a reasonable period of time
to determine the extent of any Required Remediation Work that will be required with
respect to the applicable Site.
4.4.2 Required Remediation Determination. If a Phase I environmental
site assessment, a Phase 11 environmental site assessment or any further testing or
evaluation (collectively, a "Site ESA") identifies the presence of an Environmental
Condition, the Developer will determine, in consultation with the City and appropriate
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environmental consultants engaged for the Project by the Developer, the scope of
remediation,if any,required to be performed at the affected Site to comply with the remedy
standards under the applicable Environmental Laws for the intended use of the Site
pursuant to the Development Plan (the "Required Remediation Work").
4.4.3 Performance of Required Remediation and Alternatives. The City
and the Developer acknowledge that the third-party funding sources for the Project, as a
condition to the Closing and their funding of the Project, will likely require evidence that
any Required Remediation Work has been completed in accordance with applicable
Environmental Laws, which may include a requirement to obtain a certificate of
completion or a"no further action" clearance letter with respect thereto from the Colorado
Department of Public Health and Environment. If Required Remediation Work is
determined to be needed, then the Developer will determine if the Required Remediation
Work will need to be completed prior to the Closing to satisfy the requirements of all third-
party funding sources. If the third-party funding sources will permit the Required
Remediation Work to be completed after the Closing,then the Required Remediation Work
will become part of the Project and incorporated into the Development Plan for undertaking
as part of the construction work on the applicable Site after the Closing. If, however, the
third-party funding sources will require that the Required Remediation Work be completed
prior to and as a condition of the Closing,then the City will have the option to: (a)eliminate
the affected Site from the Project; or(b)agree with the Developer on a schedule, plan, and
funding arrangement for the purpose of completing the Required Remediation Work on the
affected Site prior to the Closing with the costs thereof treated as Project costs to be
subsequently reimbursed at the time of Closing(if feasible under the LIHTC Laws and all
requirements of third-party funding sources); or (c) agree with the Developer on an
alternative method for addressing the Required Remediation Work that is mutually
satisfactory to the Developer,the City,and all third-party funding sources; or(d)terminate
this Agreement pursuant to either Section 8.4.1 or Section 8.4.2, as applicable, and not
proceed with the Project. If the City chooses to eliminate a Site from the Project pursuant
to this Section 4.4.3, then all references in this Agreement to the "Sites" and the "Project"
shall be deemed to omit the Site so eliminated.
4.5 Removal of Site, Generally. The Developer and the City may mutually
determine at any time, based on the investigations of the Sites undertaken by the Developer
pursuant to this Article IV or any other information concerning the feasibility of the Project that
becomes available to the City and the Developer from time to time,that a Site should be eliminated
from the Project. The decision to eliminate a Site from the Project pursuant to this Section 4.5
must be memorialized in an amendment to this Agreement or other written agreement between the
parties. Neither party shall have any obligation to agree to eliminate a Site from the Project
pursuant to this Section 4.5. If the parties do agree to eliminate a Site from the Project pursuant to .
this Section 4.5, then all references in this Agreement to the "Sites" and the "Project" shall be
deemed to omit the Site so eliminated. This Section 4.5 shall not limit the City's right to eliminate
a Site from the Project on account of Required Remediation Work pursuant to Section 4.4.3.
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ARTICLE V. ENTITLEMENT/FEASIBILITY PERIOD
5.1 Entitlement/ Feasibility Period, Generally. There will be a two-year period
beginning upon the date of this Agreement for the Developer to obtain.Final Entitlement for the
Project and commitments for all third-party financing necessary to proceed with development of
the Project (the "Entitlement/Feasibility Period"). The Entitlement/Feasibility Period will
encompass and be subject to the following sections of this Article V.
5.2 Design. The Developer will, in consultation with the City and based on input
of the planning consultants, Project Architect, landscape designers, and engineersengaged by the
Developer for the Project, refine and advance the Development Plan for the Project, with it being
intended that the Development Plan will include final construction drawings and specifications for
construction of the Project on the Sites as of the Closing. The Development Plan, as refined and
advanced, will take into consideration community-wide, neighborhood and stakeholder feedback
based on a public outreach effort that will be led by the Developer as described below. The
Developer will cause the Development Plan to be updated and revised from time to time prior to
the Closing as necessary or appropriate to address or incorporate information obtained during
investigation of the Sites, changes in the Project Budget or as needed to be consistent with the
Project Budget, feedback from consultants engaged for the Project, and directives from the City
regarding its preferences for the Project. Each iteration of the Development Plan will be subject
to the approval of the City. All proposed revised versions of the Development Plan will be
submitted to the City for approval, from time to time, as they are being developed. The City will
communicate to the Developer its approval or disapproval of any proposed update to the
Development Plan within ten (10) days of submission. If the City disapproves of a proposed
update to the Development Plan, a written explanation will be provided to the Developer.
5.3 Public Outreach Process. Prior to the date of this Agreement, the Developer
commenced a public outreach process to solicit feedback from the community regarding the
Project (the "Public Outreach Process"). The Public Outreach Process included an at-large
community meeting and neighborhood-specific meetings for neighbors of the three Sites. The
Public Outreach Process was used to further develop the Development Plan and the Project Budget,
including, without limitation, the LIHTC Unit/Non-LIHTC Unit mix at each Site and the APCHA
rental categories for the Units. The work product developed from the Public Outreach Process
included a detailed summary of the community input received at each of the public outreach events
in a transparent format and included an executive summary of the same. Such work product was
delivered by the Developer to the City for the City's consideration and to enable the City to provide
guidance on the current Development Plan attached to this Agreement as Exhibit B.
5.4 Entitlement Process. Based on the current Developed Plan,the Developer will
prepare and submit applications to the City's Community Development Department for each Site
for the purpose of applying for Final Entitlement. The parties acknowledge that each of the Sites
will require a rezoning(along with other approvals)to proceed with the Project. The parties agree
that the Developer will apply to rezone each of the Sites as AH—Planned Development pursuant
to the Land Use Code. The date as of which the Developer has submitted applications to the City's
Community Development Department for the purpose of applying for Final Entitlement with
respect to all of the Sites will be the "Submittal Date" pursuant this Agreement.
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5.5 No Guaranty of City Approval. The City hereby reserves all police power
rights and discretionary approval rights pursuant to the Land Use Code. Nothing in this Agreement
is intended to create, or shall be construed as creating, any obligation on the part of the City, the
City Council,or any department of the City to grant Final Entitlement approval or any preliminary
approval or recommendation that is required to obtain Final Entitlement approval pursuant to the
Land Use Code. The Developer acknowledges that the applications submitted for the purpose of
obtaining Final Entitlement will be subject to all applicable requirements of the Land Use Code.
Without limiting any of the foregoing,it is agreed and acknowledged that the discretion of the City
Council to approve, approve with conditions, or deny any land use application for the Project in
accordance with the standards of the Land Use Code is hereby and will be preserved.
5.6 Debt Financing. As the Final Entitlement process progresses, the Developer
will pursue appropriate debt financing for a construction loan and permanent loan following
completion of construction of the Project. The debt financing may be pursued as a HUD-insured
loan under the HUD § 221(d)(4)program by which the federal Department of Housing and Urban
Development insures a combined construction/permanent loan facility that is provided by a private
commercial lender. The Developer agrees to pursue financing such that the terms,conditions and
net proceeds are competitive so as to require the lowest amount of City Funds reasonably
achievable to complete construction of the Project.
5.7 Equity Financing. Subject to Section 3.1.7, the Developer will have the right
to choose the Investor for the Project. However, the Developer will solicit three competitive bids
for providing equity to the Project Entity from nationally recognized equity providers for Tax
Credits projects to substantiate the proposed pricing being utilized by the Developer and the
Project Entity.
5.8 Minimize City Funds. The Developer agrees to structure the debt and equity
financing for development of the Project so as to require the lowest City Funds amount reasonably
achievable by minimizing development and construction costs and maximizing all debt and equity
sources.
ARTICLE VI. CLOSING DOCUMENTS
6.1 Closing Documents,Generally. The City and the Developer acknowledge that
development and operation of the Project and the Sites contemplates and encompasses certain
long-term continuing relationships between the City, the Developer, the Project Entity and/or
Affiliates of the Developer following completion of construction of the Project that are integral to
the realization of the goals of the Project. The terms and conditions of such continuing
relationships with respect to the Project are to be more fully described and set forth in various
documents and agreements that will be executed in connection with the Closing. The present
understandings between the City and the Developer with respect to such relationships as they relate
to the Project, and as will be memorialized and further detailed in separate agreements at the
Closing, are summarized in the following provisions of this Article VI. The Developer and/or the
Project Entity, as appropriate, the City, the Investor, any third-party lenders, APCHA, CHFA,
HUD (as applicable), and any other applicable parties will execute at Closing such documents as
will be necessary and appropriate to the implementation of the Project in accordance with this
Agreement and the LIHTC Laws, which will collectively be known as the "Closing Documents."
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The Closing Documents will conform to the particular commitments made in this Agreement and
will be in form and content satisfactory to the Developer, the City, the Developer's counsel, the
City's counsel, the Investor, the Investor's counsel, other lenders' counsel, bond counsel (as
applicable), the purchasers and the underwriters of any bonds, HUD (as applicable), and/or any
other requisite funding source.
6.2 Project Entity Agreement. Developer will cause the Project Entity to be
formed as a limited partnership or limited liability company in which Developer or an Affiliate of
Developer will be the sole general partner or manager with the authority to manage and make
decisions on behalf of the Project Entity, subject to approval of certain major decisions by the
limited partners or other members. The Developer or its Affiliate, in its capacity as the general
partner or manager of the Project Entity, will make only a de minimus equity contribution to the
Project Entity. At the request of the City, the Project Entity will be structured and the Project
Entity Agreement will be drafted to permit APCHA to be a special limited partner or member for
purposes of securing exemption from ad valorem real estate taxes for the Sites or to achieve other
agreed Project goals, but without APCHA having any participation in the allocation of net losses
or net income or distribution of net cash flow from the Project Entity. In recognition of the
magnitude of the City's financial investment in the Project in the form of the City Funds, the City
or an Affiliate of the City will be a special limited partner or special member in the Project Entity
for the purpose of giving the City the right to remove and replace the general partner or manager
(as applicable) in the event of uncured material defaults by such general partner or manager under
the Project Entity Agreement and/or to cure materials defaults by the Project Entity under any loan
agreements or the Ground Leases.
6.3 LURA. A LURA will be recorded against each of the Sites at the Closing for
the purpose of imposing income and rent restrictions against all of the LIHTC Units in the Project.
The income and rent restrictions of each LURA will be in place for the initial 15-year"compliance
period" required by the LIHTC Laws and an additional "extended-use period"of at least 15 years
or whatever period is required pursuant to the LIHTC Laws based on the Tax Credits program
ultimately used for the Project. Each LURA will comply in form and substance with all
requirements of the LIHTC Laws and will also be subject to the approval of the City, APCHA,the
Developer, the Investor, and any Project lenders (including any required and mutually acceptable
subordination provisions).
6.4 APCHA Covenant. An APCHA Covenant will be recorded against each of
the Sites at the Closing for the purpose of imposing income and rent restrictions against all of the
Units in the Project (both the LIHTC Units and the Non-LIHTC Units). The term of the APCHA
Covenants will be perpetual (unless released in the future with the approval of the City and
APCHA). The APCHA Covenants will be senior (i.e., non-subordinated) to all mortgages and
deeds of trust encumbering the Sites for the purpose of securing any of the loans made to finance
development of the Project. Each APCHA Covenant will comply in form and substance with all
requirements of the APCHA Guidelines, but will include special provisions to avoid conflicts
between the provisions of the LURA and the provisions of the APCHA Covenant.
6.5 Ground Leases. The City will hold fee title to each Site but will convey control
of each Site through a long-term ground lease to the Project Entity (the "Ground Leases"). The
form of the Ground Leases will be subject to the approval of the City and the terms required
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pursuant to the Applicable Public Housing Requirements and the reasonable requirement of the
Investor and any lender to the Project; provided,however,that the final form of the Ground Leases
must be acceptable to the City and the Developer. The basic terms of each of the Ground Leases
will be as follows:
6.5.1 The commencement date of the rental term under each Ground Lease
will occur as of the consummation of the Closing.
6.5.2 The initial rental term of each Ground Lease will be 40 years with an
option for the Project Entity to extend the term by an additional 10 years.
6.5.3 The base rent payable under each Ground Lease will be a nominal
amount of$10.00 per year.
6.5.4 The Project Entity, as the tenant under each Ground Lease, will be the
owner of all the improvements existing or constructed on the Sites and such improvements
will be deeded or otherwise conveyed to the Project Entity in a manner that satisfies the
requirements of the title insurer to insure the Project Entity's ownership interest in such
improvements.
6.5.5 The Project Entity, as the tenant, will be responsible for all operating
and ownership costs for the three Sites.
6.6 Right of First Refusal and Purchase Option. The City will have an option to
purchase the Investor's interests and the interests of the Developer or any affiliate in the Project
Entity or the Project or the Project Entity's rights to each Site under each Ground Lease and a right
of first refusal to purchase the Project or the Project Entity's rights to each Site under each Ground
Lease in compliance with the LIHTC Laws, and specifically Section 42(i)(7) of the Code. The
right of first refusal and purchase option will arise at the end of the initial 15-year compliance
period under the LIHTC Laws, and will be set forth in a separate agreement entered into at the
Closing in connection with the tax credit investment. The purchase price under the right of first
refusal will be equal to the sum of (a)all outstanding indebtedness and accrued but unpaid interest
owed to the senior lender for the Project; (b) any amount owed to the City as the junior lender
pursuant to the City Loan and any other junior secured debt; plus (c) the amount of all so-called
"exit tax" obligations that will be incurred by the Project Entity and its participants as a result of
the City exercising the option. The purchase price under the purchase option shall be the fair
market value of the interests or assets being purchased. The Developer or its designated Affiliate,
as the general partner or manager of the Project Entity, will use commercially reasonable efforts
(with no guaranty) to prevent the participants in the Project Entity from having negative capital
account balances that would increase the exit tax obligations. The capital accounts of the Project
Entity will be monitored in this regard. The Project Entity Agreement will include a provision
under which losses that would otherwise create negative capital accounts can be allocated to the
City as a special limited partner/member in the Project Entity and thereby reduce any exit tax
obligations, subject to compliance with all Treasury Regulations promulgated under the Internal
Revenue Code. The Developer will produce downstream capital account projections to be
included in subsequent iterations of the Project Budget delivered to the City pursuant to this
Agreement.
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6.7 Cure Rights. To the extent feasible given the requirements of the senior lender
to the Project, the City will be given notice and cure rights with respect to any defaults by the
Project Entity under its loan from the senior lender for the Project. The City will also have curative
rights as the special limited partner/member in the Project Entity in order to prevent defaults from
occurring under the senior loan. The terms of the senior loan will be subject to the City's approval
in its discretion. The City and the Developer acknowledge that the senior lender (for the
construction phase and permanent financing phase) and/or any loan insurer such as HUD (per
§°221(d)(4) of the HUD Laws) will have its own requirements with respect to the Ground Leases
to protect its interests in the event of a default by the Project Entity as the tenant,but the City will
not be required to accept such requirements.
6.8 City Loan Documents. The City will enter into a loan agreement with the
Project Entity at the Closing to the City Funds to the Project consistent with the final approved
Project Budget. The City Funds will provide the financing necessary to fund the development
costs for the Project in excess of the funds generated from the sale of the Tax Credits, senior loans,
and other approved sources, in an amount approved by the City. The City will not be responsible
for funding any cost overruns in excess of those detailed in the final approved Project Budget
except to the extent caused by the City's acts or omissions. The City Loan will include and/or
address, as applicable, the following basic terms:
6.8.1 Term. The City Loan will have a term of 50 years or other
commercially available term agreed to by the parties for the purpose of making the Project
financially feasible.
6.8.2 Interest Rate. The annual interest rate will be set at the "applicable
federal rate" (the"AFR") published by the IRS (i.e., the lowest rate permitted by the IRS)
or another rate agreed to by the parties as necessary to make the Project financially feasible.
If the Project cash flows will not support an interest rate at the AFR, then the interest rate
will be set at the highest rate that allows a "true debt"/"residual value" analysis to show
reasonable repayment.
6.8.3 Note and Leasehold Deed of Trust. The City Loan will be evidenced
by a promissory note and will be secured by a junior leasehold deed of trust on the Project
Entity's interest in the Sites under the Ground Leases. Such deed of trust will be junior to
the leasehold deeds of trust granted by the Project Entity from time to time to secure the
obligations under the construction and permanent financing for the Project, as any such
senior loans may be amended,extended,and/or refinanced from time to time. As the holder
of a junior deed of trust, the City will be required to enter into a commercially reasonable
subordination agreement with the senior lender(s)detailing the relative rights of the lenders
and confirming the City's junior position, along with its notice and cure rights and other
rights to take over the Project for the purpose of protecting the City's investment. The final
form of the leasehold deed of trust to be granted to the City and all related inter-creditor
agreements will be subject to the final approval of all parties thereto.
6.8.4 Repayment. The City Loan will be non-recourse to the Project Entity
and prior to maturity will be payable from, and only from, 75% of the annual excess cash
flow, if any, generated by the Project, in accordance with the waterfall set forth in
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Section 6.13. Payments on the City Loan will be applied first to accrued interest and then
to principal.
6.8.5 Funding of City Funds. The method and procedure for funding of the
City Funds into the Project will be subject to the approval of the City, the Project Entity,
the Investor and the construction lender. The'parties acknowledge: (a)that the delivery of
the City Funds for construction of the Project through the City Loan facility will be
structured in a manner that will permit the construction lender and the Project Entity to
verify the contribution of the City Funds in a manner that does not delay the Project; and
(b) the City Funds will need to be committed to the Project such that they are not subject
to annual appropriation or the voter approval limitations imposed by Section 20,
Article XX of the Colorado Constitution(i.e., the Colorado Taxpayer's Bill of Rights).
Subject to these considerations and the requirements of the construction lender, the
Developer acknowledges that the City Loan will be funded on a monthly construction
draws basis, after at least 50% of all other equity and debt sources have been funded. The
City will be provided, for its review, a copy of all monthly construction progress reports
and all monthly construction draws and applications for payment under the Construction
Contract pursuant to standard construction industry practices. The parties acknowledge
some flexibility may be needed in determining how and when the City Loan funds are
contributed to the Project over the course of construction and the City may need to fund
the City Loan pari passu with the construction loan or based on agreed completion
milestones instead of after all other sources have been funded.
6.8.6 Excess Funds. Notwithstanding the total amount of City Funds
committed to the City Loan as of the Closing, the City will be obligated to contribute only
that portion of the City Funds that is actually needed for completing construction of the
Project. All construction and related development expenses for the Project will be
accounted for by the Developer in a standard construction accounting format,with the City
having access during normal business hours upon reasonable prior notice to all accounting
and expense records for the Project. Upon completion of construction, the Developer shall
obtain a cost savings audit with respect to the Project. To the extent the actual costs
incurred to complete development of the Project, as reflect in the cost savings audit, less
the other sources of funds, are less than the amount of the City Funds approved as of the
Closing,the City will be permitted to retain such portion of the City Funds and the principal
amount of the City Loan will be reduced by the amount so retained by the City, and any
excess development funds upon conversion to permanent loan status will be applied to pay
down the City loan.
6.9 Property Management. ,The property management agent for each developed
Site of the Project (the "Management Agent") will be a management company selected by the
Developer, with the approval of CHFA and the City, with expertise in managing Tax Credits
projects and ensuring compliance with all LIHTC Laws. The Management Agent will be
responsible to the Project Entity for management of each developed Site in accordance with the
terms of a management agreement to be approved by all applicable parties (the "Management
Agreement") and including a management plan that will provide for (a) obtaining applications
from eligible households, (b) pre- screening applicants to determine their status as eligible
.residents, (c) selecting residents from among eligible applicants; (d) criteria for continued
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occupancy, and(e)obtaining final approval of all applications from APCHA. The City will (along
with the Investor and lenders) have a right to approve a successor Management Agent, if
applicable, which approval will not unreasonably be withheld, conditioned or delayed. The
Management Agent will receive an appropriate management fee under the Management
Agreement in an amount not to exceed the fee allowable under the LIHTC Laws.
6.10 Admissions and Occupancy Policies; Role of APCHA. The City and the
Developer acknowledge that the goal of achieving long-term sustainability of each Site as a mixed-
income community will be enhanced by administrative procedures and terms and conditions of
occupancy that reduce discernible distinctions in maintenance, operation and conditions of
continued occupancy, between the LIHTC Units and the Non-LIHTC Units to the greatest extent
feasible while assuring that the rental of the LIHTC Units complies with the LIHTC Laws. The
selection of applicants for admission to and continued occupancy of all the Units at each Site will
be the function of the Project Entity acting through the Management Agent; provided,that prior to
accepting any tenant application,the Project Entity and Management Agent shall submit the tenant
application file to APCHA for review and approval. APCHA approval of all tenants will be
required in accordance with APCHA's adopted guidelines. A combined form of application
meeting the requirements of both the LIHTC.Laws and APCHA's adopted guidelines will be
developed for the Project.
6.11 Construction Contract. The Developer will select the General Contractor for
the Project through a selection process meeting the requirements of Section 3.4. Prior to selection
of the General Contractor, the Developer will provide the City with the name of any proposed
General Contractor or a list of proposed General Contractors, and the City may advise the
Developer in writing of any objections it may have with respect to any proposed General
Contractor, which objections will be reasonably considered by the Developer. Developer will
negotiate a fixed price or guaranteed maximum price contract (the "Construction Contract')
between the Project Entity and the General Contractor. No less than twenty-one(2 1)days prior to
execution of the Construction Contract, the Developer will submit a final draft to the City for its
review and approval based on its compliance with this Agreement and the Applicable Public
Housing Requirements,and at the City's election, based upon a reasonableness analysis conducted
by the City. The Developer will require the General Contractor to (i) conduct the bidding process
for subcontractors in a fashion that ensures that all information pertinent to the evaluation of each
bid is provided to the General Contractor, and (ii) provide the City with full access to all books
and records and other information relating to the procurement process for General Contractor sub-
bids under the Construction Contract during normal business hours on reasonable advance notice.
6.12 Guarantees at the Closing. Developer or an Affiliate of Developer will
execute such guarantees as may reasonably be required by the Investor and third-party lenders
including, as applicable, construction completion, development deficit guarantees, operating
deficit guarantees, tax credit recapture guaranties and environmental indemnities. Developer
reserves the right to negotiate the terms of such guarantees with the Investor and such third-party
lenders on a commercially reasonable basis. The City will not be required to provide guarantees
to the Investor or to third-party lenders or to any other party.
6.13 Cash Flow Waterfall. The net cash flow generated from rental of the Units in
the completed Project after the payment of operating expenses(including deposits required to fund
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or restore any reserve accounts to specified amounts based upon the terms of the senior loan and
the requirements of the Investor)and debt service to the senior lender will,subject to modifications
based upon the terms agreed with the Investor, be distributed in the following order,.which will be
incorporated into the applicable Closing Documents (the "Cash Flow Waterfall"):
6.13.1 To the payment of an asset management fee to the Investor, and to pay
other amounts owing to the Investor according to the terms of the approved equity
investment;
6.13.2 To the payment of any unpaid balance of any deferred Development Fee
(which in all events must be paid within 12 years regardless of amount);
6.13.3 75% of the remaining cash flow shall be applied to the payment of the
City Loan; and
6.13.4 All remaining cash flow after required payments on the City Loan shall
be paid 90% to the general partner/manager of the Project Entity in payment of a Project
Entity management fee and 10%to the Investor.
ARTICLE VII. LIHTC PROGRAM SELECTION AND CLOSING
7.1 LIHTC Program Selection. After Final Entitlement has occurred or earlier
upon mutual agreement of the Developer and the City, the Developer, with the cooperation of the
City, will pursue an application for Tax Credits from CHFA. Such application will be for one of
the following: (i) a competitive application for 9% federal Tax Credits, or (ii) a competitive
application for 4% federal Tax Credits plus state Tax Credits; or(ii)a non-competitive application
for 4% federal Tax Credits without state Tax Credits,with the actual Tax Credits being applied for
being determined by the City, in consultation with the Developer,based on the option that requires
the City Funds contribution to be as low as possible while having a reasonable probability of being
approved by CHFA. If a competitive application for 9% federal Tax Credits or 4% federal Tax
Credits plus state Tax Credits is denied by CHFA,the City and the Developer may agree to pursue
a non-competitive application for 4% federal Tax Credits. The City may choose to forego a
competitive application altogether and instead initially pursue a non-competitive application for
only 4% federal Tax Credits. The Developer will not submit an application for Tax Credits to
CHFA until it has been authorized to do so by the City. Once the City has authorized the Developer
to submit an application for Tax Credits to CHFA, the Developer will submit such application as
soon as reasonably practicable and will also begin work on satisfying the other Closing
Contingencies such that, assuming the Tax Credits application is approved by CHFA and all
Closing Contingencies are actually satisfied, the Closing can occur within a commercially
reasonable time following approval of the Tax Credits application by CHFA.
7.2 Closing Contingencies. The consummation of the Closing will be conditioned
on the satisfaction of all contingencies necessary to commence and pay for construction of the
Project in accordance with the final approved Development Plan, Project Budget, and Project
Schedule in accordance with all applicable LIHTC Laws and Applicable Public Housing
Requirements ("Closing Contingencies"). Such Closing Contingencies include, but may not be
limited to the following items, which reflect certain expectations of the parties:
20
7.2.1 Final Entitlement for the Project has been obtained and building permits
have been issued for the commencement of construction of the Project on each Site;
7.2.2 CHFA has allocated Tax Credits for the Project in accordance with the
LIHTC Laws and the Tax Credits application submitted by the Developer;
7.2.3 The Project Entity has entered into the Construction Contract with the
General Contractor meeting all requirements of the LIHTC Laws;
7.2.4 All construction loan terms have been agreed to and the construction
lender for the Project is prepared to begin (subject to the satisfaction of typical draw
conditions) advancing construction loan proceeds for development of the Sites pursuant to
the terms of the construction loan;
7.2.5 The Investor has approved the transaction and is committed to fund its
investment in the Project Entity;
7.2.6 The loan documents for the City Loan have been agreed to and approved
by the City and the Project Entity and the City Funds are adequately appropriated and
committed to the Project;
7.2.7 The Title Company has issued pro forma title insurance policies
acceptable to the Project Entity, the construction lender, and the City and is irrevocably
committed to issue title insurance policies to the Project Entity (as the tenant), the
construction lender with respect to its first position deed of trust on the Ground Leases,and
the City with respect to its junior deed of trust on the Ground Leases to secure the City
Loan;
7.2.8 The successful completion of any Required Remediation Work if
required as a condition precedent to Closing by the Investor or any lender;
7.2.9 The receipt of all necessary government approvals required for
commencement of construction of the Project in addition to Final Entitlement; and
7.2.10 The form of all other Closing Documents have been approved and/or
agreed to by all applicable parties.
7.3 Closing. Unless this Agreement is earlier terminated pursuant to the applicable
provisions of Article VIII, the Closing will be consummated as soon as practicable following
satisfaction of the all the Closing Contingencies and the City and the Developer will execute all
Closing Documents, subject to approval by the City and the Developer, and take all actions
necessary to consummate the Closing.
ARTICLE VIIL TERNIINATION
8.1 Termination by City for Event of Default. Upon written notice from the City
and the expiration of any cure rights set forth in this Section 8.1, any of the following will
constitute an "Event of Default' by the Developer under this Agreement entitling the City to
21
terminate this Agreement (subject, in any event, to (1) Events Beyond Control in Section 8.3 or
(2)the determination that performance is infeasible due to the occurrence of events contemplated
in Section 8.4):
8.1.1 Developer becoming insolvent, making an arrangement with or for the
benefit of its creditors, acquiescing in the appointment of a receiver, trustee or liquidator,
instituting or becoming the subject of any proceeding commenced under any law for the
relief of debtors, or otherwise objectively demonstrating financial incapacity to carry out
its obligations hereunder; or
8.1.2 Failure of Developer or an Affiliate of Developer to make payment
when due to a third party contractor or consultant engaged by Developer,resulting in a lien
statement being recorded against any of the Sites unless Developer causes such lien
statement to be released within 45 days after the City delivers a copy of such recorded lien
statement to Developer; or
8.1.3 Material breach of any representation, warranties, covenants, or
certifications made in this Agreement if such material breach is not cured by Developer
within 30 days after receiving written notice of such breach from the City.
8.2 Termination by Developer for Event of Default. Upon written notice from
the Developer, it will constitute an"Event of Default'by the City under this Agreement entitling
the Developer to terminate this Agreement(subject, in any event,to (1)Events Beyond Control in
Section 8.3 or(2)the determination that performance is infeasible due to the occurrence of events
contemplated in Section 8.4) if the City materially breaches any representation, warranty,
covenant, or certification made by it in this Agreement if such material breach is not cured by the
City within 30 days after receiving written notice of such breach from the Developer.
8.3 Events Beyond Control. Notwithstanding Section 8.1 and Section 8.2, this
Agreement will not be terminated for an Event of Default if the delay in completing the,work or
other cause of the subject Event of Default arises from unforeseeable causes beyond the reasonable
control of the Developer or the City,as applicable("Events Beyond Control").Examples of Events
Beyond Control include without limitation (a) acts of God or public enemy, (b) acts or failure to
act, or delays in action, of CHFA, APCHA, HUD or other governmental entities in either their
sovereign or contractual capacity, (c) fires, (d) floods, (e) strikes or labor disputes, (f)
unavailability of materials, (g)unusually severe weather, (h) delays of subcontractors or suppliers
at any tier arising from unforeseeable causes beyond the control and without fault or negligence
of the Developer, (i) delay caused by litigation that is not between the City and the Developer; or
6) acts or failure to act by the party that has alleged the party is in default.
8.4 Termination for Infeasibility. In the absence of an Event of Default the
parties will nevertheless still have the right to terminate this Agreement and/or this Agreement
may terminate automatically in certain circumstances as provided below in this Section 8.4.
8.4.1 Termination Prior to Submittal Date. The City and the Developer
will each have the right to terminate this Agreement upon written notice to the other party
at any time prior to the Submittal Date if such party determines in good faith that the Project
22
is infeasible or unachievable or excessively costly based on any of the information received
or developed in the course of advancing the Project. Any termination by the City under
this Section 8.4.1 shall be in its sole discretion. If either party terminates this Agreement
prior to the Submittal Date pursuant to this Section 8.4.1, then the City will be responsible
for reimbursing the Developer for all Developer Pursuit Costs incurred by the Developer
through the date of such termination (even if actual payment by the Developer to an
applicable vendor is made after the date of such termination). Such reimbursement by the
City to the Developer will be paid within 30 days after the Developer submits to the City
a written invoice for all such Developer Pursuit Costs together with reasonable back-up for
the total amount owed (e.g., invoices of vendors or other appropriate support for any
amount claimed) together with proof that the Developer has actually paid all such
Developer Pursuit Costs. For the avoidance of doubt, upon any termination prior to the
Submittal Date, no Management Fee (as described below) shall be payable to the
Developer.
.8.4.2 Termination After Submittal Date and Prior to Closing. After the
occurrence of the Submittal Date, this Agreement will terminate even in the absence of an
Event of Default under the following circumstances: (a) by the City upon seven (7) days'
written notice delivered to Developer at any time prior to the Closing if the City determines
in good faith, but in its sole and absolute discretion, that the Project is infeasible or
unachievable or excessively costly, on terms acceptable to the City; or(b) automatically as
of the last day of the Entitlement/Feasibility Period if Final Entitlement for the Project does
not occur by the end of the Entitlement/Feasibility Period unless the City and the Developer
agree in writing to extend the Entitlement/Feasibility Period. If this Agreement terminates
pursuant to this Section 8.4.2, then, subject to Section 8.4.3, the City will (i) reimburse the
Developer for all Developer Pursuit Costs incurred by the Developer through the date of
such termination(even if actual payment by the Developer to an applicable vendor is made
after the date of such termination); and (ii) pay the Developer the accrued "Management
Fee" (as defined in Section 8.4.5 below) for providing the Developer Services until the
effective date of such termination. Such reimbursement of the Developer Pursuit Costs
and payment of the Management Fee by the City to the Developer will be paid within 30
days after the Developer submits to the City a written invoice for the Management Fee and
all such Developer Pursuit Costs together with reasonable back-up for the total amount
owed (e.g., invoices of vendors or other appropriate support for any amount claimed)
together with proof that the Developer has actually paid all such Developer Pursuit Costs.
8.4.3 Termination for Failure of Financing. If the Developer is not able to
secure a loan commitment (in a commercially reasonable form, including standard
qualifications and conditions that must be satisfied as a condition to actual closing of the
loan) from one or more qualified lenders to provide financing for construction of the
Project in accordance with the Project Budget by the end of the Entitlement/Feasibility
Period,then this Agreement will automatically terminate unless the Developer and the City
agree to extend the Entitlement/Feasibility Period. If this Agreement terminates pursuant
to this Section 8.4.3, then the Developer will not be entitled receive reimbursement from
the City for any of the Developer Pursuit Costs and will not be entitled to receive any
payment of Management Fee or other consideration from the City in compensation for the
Developer Services.
23
8.4.4 Effect of Termination for Infeasibility. If this Agreement terminates
or is terminated pursuant to this Section 8.4, then the parties will be released from all
obligations to each other under this Agreement except for the reimbursement and payment
terns contained in Section 8.4.1 and Section 8.4.2 and those terms of this Agreement that
expressly survive termination.
8.4.5 Management Fee. The sole compensation to Developer for its services
through the Entitlement/Feasibility Period(other than reimbursement of Developer Pursuit
Costs as provided above and the Developer Fee pursuant to Section 3.3) shall be a
management fee (the "Management Fee")calculated as provided in this Section 8.4.5, and
payable as provided in this Section 8.4. The"Management Fee" means a management fee
equal to the lesser of (x)$20,000 per calendar month(prorated for any partial month based
on the actual number of days in such month) for the period of time beginning on the
Submittal Date and ending on the day on which this Agreement terminates pursuant to this
Section 8.4,(y)20%of the Developer Fee that would be earned by the Developer based on
the most recent approved Project Budget if the Closing occurred and the Project were
consummated in accordance with the most recent approved Development Plan and Project
Budget, or (z) $500,000. The Management Fee shall accrue and shall be payable only as
provided in Section 8.4.2; provided, that if the Closing occurs, the accrued Management
Fee shall be waived in lieu of Developer receiving payments of the Developer Fee as
provided in Section 3.3.
8.5 Delivery of Work Product to City. If this Agreement is terminated or
terminates pursuant to Section 8.1 or Section 8.4, the Developer will discontinue all services
affected in pursuit of the Project and deliver to the City, without recourse to the Developer, copies
all written information, reports, papers, and other materials concerning the Sites and the Project
accumulated or generated in performing the Developer Services under this Agreement, but
excluding any internal proprietary financial information concerning the Investor,the Developer or
any Affiliate of the Developer. If this Agreement is terminated pursuant to Section 8.4.1 or
Section 8.4.2, then Developer will not be obligated to deliver such materials to the City until the
City has paid the Developer the amounts to which it is entitled pursuant to Section 8.4.1 or
Section 8.4.2, as applicable. The terms of this Section 8.5 will survive the termination of this
Agreement.
ARTICLE IX. MISCELLANEOUS
9.1 Term. This Agreement will continue in effect until it is terminated pursuant to
its terms or consummation of the Closing. Upon consummation of the Closing, the terms of this
Agreement will merge with and be superseded by the terms of the Closing Documents.
9.2 Notices. Any notice or other communication given or made pursuant to this
Agreement will be in writing and will be (i) delivered personally or by courier, (ii) emailed, (iii)
sent by overnight express delivery, or (iv) mailed by first class mail, to a party at its respective
address set forth below (or at such other address as will be specified by the party by like notice
given to the other party):
24
If to City: City of Aspen
Attn: Chris Everson, AH Project Manager
130 S. Galena St.
Aspen, CO 81611
Email: chris.everson@cityofaspen.com
With a copy to:
City of Aspen
Attn: James R. True, Esq., City Attorney
130 S. Galena St.
Aspen, CO 81611
Email:jim.true@cityofaspen.com
If to Developer: Aspen Housing Partners, LLC
Attn: Jason Bradshaw
228 Eastwood Road
Aspen, CO 81611
Email:jebradshaw@mae.com
With a copy to:
Waas Campbell Rivera Johnson& Velasquez LLP
Attn: Bart Johnson, Esq.
420 E. Main St., Ste. 210
Aspen, CO 81611
And:
SCG Development
Attn: Stephen Wilson
8245 Boone Blvd., Suite 640
Vienna, VA 22182
Email: spw@stratfordcapitalgroup.com
All such notices and other communications will be deemed given on the date of personal or local
courier delivery,email transmission confirmed by a delivery receipt, delivery to overnight courier
or express delivery service, or deposit in the United States Mail, and will be deemed to have been
received(i)in the case of personal or local courier delivery, on the date of such delivery, (ii) in the
case of telecopy, upon actual receipt, (iii) in the case of delivery by overnight courier or express
delivery service, on the date following dispatch, and (iv) in the case of mailing, on the date
specified in the return receipt therefor.
9.3 Further Assurances.Each party will execute such other and further documents
as may be reasonably necessary or proper for the consummation of the transaction contemplated
by this Agreement.
25
9.4 Assignment.Neither this Agreement nor any part or subpart of this Agreement
will be assignable by Developer, except upon written consent of the City.
9.5 Counterparts.This Agreement may be executed in counterparts,each of which
will be deemed original, but all of which, together, will constitute one instrument.
9.6 Interpretation and Governing Law. This Agreement will not be construed
against the party who prepared it but will be construed as though prepared by both parties. This
Agreement will be construed, interpreted, and governed by the laws of the State of Colorado.
9.7 Attorneys' Fees. If the Developer or the City files a suit to enforce this
Agreement or any provisions contained herein or any legal dispute arises from this Agreement
between the parties, the substantially prevailing party in such suit will be entitled to recover, in
addition to all other remedies or damages, reasonable attorneys' fees and court costs incurred in
such suit.
9.8 Severability. If any portion of this Agreement is declared by a court of
competent jurisdiction to be invalid or unenforceable such portion will be deemed severed from
this Agreement and the remaining parts will continue in full force as though such invalid or
unenforceable provision had not been part of this Agreement.
9.9 Final Agreement. Unless otherwise expressly provided herein,this Agreement
constitutes the final understanding and agreement between the parties with respect to the subject
matter hereof and supersedes all prior negotiations, understandings and agreements between the
parties, whether written or oral. This Agreement may be amended, supplemented or changed only
by a writing signed or authorized by or on behalf of the party to be bound thereby.
9.10 Waivers. The failure of either party to insist in any one or more cases upon the
strict performance of any of the other party's obligations under this Agreement or to exercise any
right or remedy herein contained will not be construed as a waiver or a relinquishment for the
future of such obligation, right or remedy. No waiver by either party of any provision of this
Agreement will be deemed to have been made unless set forth in writing and signed by that party.
9.11 Successors. The terms, covenants, agreements, provisions, and conditions
contained herein will bind and inure to the benefit of the parties hereto, their successors and
permitted assigns.
9.12 Headings. The headings in this Agreement are inserted for convenience only
and will not be used to define, limit or describe the scope of this Agreement or any of the
obligations herein.
9.13 Construction. Whenever in this Agreement a pronoun is used, it will be
construed to represent either the singular or the plural, either the masculine or the feminine, as the
case will demand.
9.14 Certain Approvals. Unless otherwise expressly stated, all approvals or
consents required of either party hereunder will not be unreasonably withheld, conditioned or
delayed, and will be in writing.
26
9.15 Binding Effect.This Agreement will inure to the benefit of, and will be binding
upon, the City's successors and assigns except as otherwise provided in this Agreement. This
Agreement will inure to the benefit of, and will be binding upon, Developer's successors and
assigns so long as the succession or assignment is permitted pursuant to the terms of this
Agreement.
9.16 Cumulative Rights. Except as expressly limited by the terms of this
Agreement, all rights, powers and privileges conferred hereunder will be cumulative and not
restrictive of those provided at law or in equity.
9.17 References to this Agreement. All references to this Agreement will include
all documents and exhibits incorporated by reference.
9.18 No Commissions. The parties covenant and agree that no brokerage
commission, finder's fee, or similar compensation is due to any third party in connection with this
Agreement or will be owed upon the Closing. To the extent allowed by applicable law, the City
agrees to indemnify and hold the Developer and the Project Entity harmless from and against any
loss, liability, damage, cost or expense (including, without limitation, court costs and reasonable
attorneys' fees) paid or incurred by the Developer or the Project Entity by reason of any claim to
any broker's, finder's or other fee in connection with this transaction by any party claiming by,
through or under the City. The Developer agrees to indemnify and hold the City harmless from
and against any loss, liability, damage or expense (including, without limitation, court costs and
reasonable attorneys' fees) paid or incurred by the City by reason of any claim to any broker's,
finder's or other fee in connection with this transaction by any party claiming by,through or under
the Developer or the Project Entity. The parties' obligations under this Section will survive
Closing or any termination of this Agreement and remain fully enforceable thereafter.
remainder of page intentionally blank]
27
IN WITNESS WHEREOF, the parties have duly executed this Agreement by their duly
authorized signatories on or as of the date first written above.
CITY:
City of Aspen, Colorado, a Co rado home rule
municipaI'corp tion
Y
Steven Ska on, Mayor
Atte t:
t
mda arming, City Clerk
APPROVED AS TO FORM:
-1ames R. True, Esq., City Attorney
DEVELOPER:
Aspen Housing Partners,LLC, a Colorado limited
liability company ,,/
By. Z,�Axl
Con Bradshaw, Manager
28 .
Exhibit A
Description of Sites
517 Park Circle,Aspen, Colorado:
Lot 1,
Re-Subdivision of Lots 1 and 2 of the WAGAR/DETWEILER SUBDIVISION, according to the
Plat thereof recorded February 8, 2006 in Plat Book 77 at Page 41 as Reception No. 520689.
COUNTY OF PITKIN, STATE OF COLORADO
802 W. Main Street,Aspen, Colorado:
Lots Q, R, and S,
Block 12,
CITY AND TOWNSITE OF ASPEN
COUNTY OF PITKIN, STATE OF COLORADO
488 Castle Creek Road,Aspen, Colorado:
Lots 1 and 2,
488 CASTLE CREEK ROAD FINAL P.U.D. AND LOT SPLIT SUBDIVISION EXEMPTION
according to the Plat thereof recorded September 27, 2006 in Plat Book 81 at Page 48 as
Reception No. 529046.
COUNTY OF PITKIN, STATE OF COLORADO
A-1
Exhibit B
Current Development Plan
AHP will submit, in a phased approach, three separate land use applications for the
development of 802 West Main St, 517 Park Circle and 488 Castle Creek Rd. Similarly,
construction of the projects will be executed in a phased plan under three separate
construction contracts. It is anticipated that the buildings will commence on 30-45 day
intervals.
The proposed unit mix include one and two bedroom units (71%one bedrooms/29%two
bedroom) with one parking space per bedroom at each location with the exception of Castle
Creek which will have .84 parking spaces per bedroom. See table below:
Unit Mix
S17 Park Circle
#of Units Per Unit Sq. Ft. Total Sp. Ft. Parking Spaces
517 Park- 1 BR 7 700 4,900 7
517 Park- 2 BR 4 900 3,600 4
Total 11 773 8,501) 11
802 West Main Street
#of Units Per Unit Sq. Ft. Total Sp. Ft. Parking Spaces
802 Main- 1 BR 10 700 7,000 10
Total 10 r 700 1 7,000 10
488 Castle Creek Road
#of Units Per Unit Sq.Ft. Total Sp. Ft. Parking Spaces
488. 1 BR 18 700 12,600 18
488- 2 BR 10 90D 9,000 14
Total 28 r 771 21,600 1 32
Project Total
#of Units Per Unit Sq. Ft. Total Sp. Ft. Parking Spaces
1 Bedrooms 35 700 24,500 35
2 Bedrooms 14 900 12,600 18
Total 49 r 757 1 37,100 53
B-1
AHP, with input from City staff and APCHA, has assumed the category mix outlined in the table
below. This mix was used in presentations during the public outreach process as well as the
financial budgeting attached as Exhibit D. The City of Aspen loan in each of the financing
options is based on these assumptions.
APCHA Categories Served
k Units Maximum Rents
APCHA Category 1
IBedroom 20 618
2 Bedroom 4 732
APCHA Category 2
I Bedroom 10 1,044
2 Bedroom 4 1,199
APCHA Category 3
1 Bedroom 5 1,480
2 Bedroom 4 1,635
APCHA Category 4
1 Bedroom 0 0
2 Bedroom 2 2,090
B-2
802 West Main Street
11,}I/{{jI 11J
Southeast perspective from corner of Main &7 t Streets
i
".s
r
Northeast perspective from approach on 711 Street
B-3
488 Castle Creek It
' a
View
4 +d
t g
wr
from • . •
View
t
� ��� } 'X ," a.., -r—�- �y.'"'f s����� `_i"tr��.• Ivy��
ti
L� S
from • Approach
a
yr„
i
Exhibit C
Current Project Schedule
[see attached page]
C-1
\ � � ® w:/ � mi�� ;
. � � )�/7 \ �` �
\\ ` 166 g6 „ ; | §
a 1:0 a art 0101\! !
11 1 in I'li 1 i R,12- 1 It P.,11
Exhibit D
Current Project Budget
9%e AHTC 4%+State AHTC 4%AHTC
Sources
Federal Tax Credit Equity 11,498,(100 4,401,000 4,401,000
State Tax Credit Equity 0 2,051,OD0 0
First Mortgage Loan 4,302,637 4,302,637 4,302,637
City of Aspen Loan 9,927,997 14,912,459 16,956,864
Total 25,728,635 25,667,096 25,660,501
Uses
Construction Costs 17,871,797 17,871,797 17,871,797
Impact/Tap Fees 1,200,000 1,200,000 1,200,000
A&E Engineering 1,306,603 1,306,603 1,306,603
Financing Fees/Costs 657,089 612,646 606,948
Legal Fees(All) - 350,000 350,000 350,000
Other Third Party/Soft Costs 540,000 540,000 540,000
Reserves 464,277 464,277 464,277
Interest Expense 622,753 612,251 612,061
Developer Fee 2,716,115 2,709,522 2,708,815
Total 25,728,635 25,667,096 25,66,501
D-1
Developer Pursuit Costs To Date
Drew l cor.2 Duke 3 cooker'
12/31/16 2/28/1) 3/31/1) 6/30/V
1)M-K9u&tbn _
BI 6iry-KRulsluon
Nord fpmtrmllon Costs 11,017,02S 46
BuildpD Pm(M1(fi%) 016,025.96
General RepWrements 16%1 816,025.96
Nuousad(2%) 272,025.32
Cons Conlugency 680.06330
FiBC 594,]8LW
Ate Work 1125,]50.00
Ate Work/CM1Contingency L$_W_o00.00
finers Contingency 1,0W,OW.00
ImpacOap/Other Fees 1,2W,o00.00 23,4W.W
P6P Bonds lin Gen RoO)
BuilEing Permits
Builder Risk Insurance In Gen Renu)_
ME Design+� 691330.W
Davd Johnston Architects
Concept Development 20,ODD.W 20,OW.W
Publk Outreach 22,616.W
AIA
land use/Zoniry/Landscapc/etc.(4%) 614,871.08
Method PSD
ConceptEmelopment 21.W,W 21,5W.W
Publk Outreach 84,9W.W 42,IW.W 42,840.W
AA
onnect Ono
Concept Devebpmenl A'SERI 4,W W
Publk Outreach 43.2M.W 26.925.W 9,998.W 6,321.W
I AM 229,SW.W 14,451 W
Row Mg Fore,Engineering
Cancept0evelt, nt
PUNk 0utreach
AIA ],]85.W ],]85W
McDowell Erylrceriry
PUNk Outrea /Land Ute %,263W 28,118.W 28,14S.W
PR modb+limelight)PO Meetings)
Publk Outre.h 29,471W 9.247.W 11,721W 7,503.W I,UDD.W
Kminish,une _
Repmductbn 231.W 6.654.W 1401 W
Endronmenul/Spii/Ere,V Reports Wp00.W
HP Kumar
Geotechnical 2,2W.W
ESA-Pha.1 B,SW.W
Marker Study/Appralul20p00.W _—
IPCNA/CurtRe Jew 20,k30D.W -- --
survey 10,000.W
Peak Survey,_ng '
ALTA B4O0O.W
Story Poles-Ustle Ueek 3,612,W
L�glneedng
(Legal-Real Esate 175,OOO.GO 16,130W 11,85000 6,9U4.W
LePb LeMer ]S,oW.oO
Legal_Organlutional W10 WW
LegaFTCEquity W,Ooo_W
Cost/Perm Lown Fees-221(d_)4 172,]05.49 —_
(Bridge loan Fees/Interest 163,7SO.W
Bond Fees 24gOD0.W r
[HFA TaxGNit Fees lFN( 81,233.95
CIIFAT Gamed[ enF (sate)
,TdirJU ording
Real Estate Tan 120,WD.W
Property hesuranm ]0,000.W
Ktountbg/Coit Cert W,M,w
MurkNng 50,000.W
soft Cost Contingency IS.=w
Lea.-up Reserve lw=W
LIOF ral'mg 0efiut Reserve 263,524.15
hReeplacement Reserves 14JW.W r
FM WorkingUpital Reserve 86,W2.24
Neguti Arbitrage liD:000.20
Construction"n mtemt 502,753.30
Developer{ee 3,]16,115.40 ,
Totalus: 26,226.31].611 I ]1,5681 95.4201 ]4,5201 157,0241
D-2
9%AHTC Option
9%AHTC
Total
Descri tion Total Per Unit
Federal Capital Contributions 11.498,000 234.653
State Capital Contributions 0
First Mortgage Loan 4.302,637 %7.809
Second Mortgage Loan(CoA Contribution) 9.927.997 202,612
Deterred Development Fee 0 0
Total Sources: 25.728,635 525.074
Land-Acquisition 0
Building-Acquisition 0
Bard Construction Cost 11,017,025 224,837
Builders Profit(6%) 816,076 16,655
General Requirement(6%) 816.076 16,655
Overbead(2%) 272.025 5,552
Contractors Contingency 680.063 13,879
FF&E 594,781 12.138
Site Work 1.175.750 23.995
Site Work I Civil Contingency -{_ 1,500,000 30,612
Owners Contingency 1.IX0,000 20.408
Impact/Tap Fees 1.200.000 24,490
P&P Bonds(in Gen Requ) 0
Building Permit(TBD) 0
Builders Risk Insurance In Gen Requ) 0
A&E Design(3.5%) 538.013 10.980
A&E Supervision(]%) 153,718 3,137
Land use/Zoning[andseapeletc.(4%) 614.872 12.548
Environmental/SoillEnergy Reports 30.000 612
Market Smdy/Appmiml 20.000 408
PCNAICost Review 20.000 408
Sunny 10.000 204
Legal.Real Estate 175.000 3.571
Legal.Lender 75.000 1.531
Legal-Organizational 50,000 1,020
Legal.TC Equity - 50.000 1,020
Cost)Perm Loan Fees.221(d)4 172.105 3,512
Bridge Loan Feeslinteresi 163,750 3.342
Bond Fees 240.000 4.898
CHFA Tax Credit Fees(Fed) 81,234 1,658
CHFA Tax Credi Fees(State) 0
Title/Recording 40.000 816
Real Estate Taxes 120.000 2.449
Property Insurance 70,000 1,429
Accounting/Cost Cen 30.000 612
Marketing 50,000 1.020
SnR Cost Contingency 150,000 3,061
Lease-up Reserve 100.000 2,041
Operating Deficit Reserve 263,524 5,378
Replacement Reserves 14.700 300
FHA Working Capital Reserve 56.053 1.756
Negative Arbitrage 120.000 2.449
Construction Loan Interest 502.753 10,260
Developer Fee 2716 115 55.431
Total Uses: 29,728,635 525.074
D-3
4%+State AHTC Option
4%+Stole AHTC
Total
Description Total Per Unit
Federal Capital Contributions 4.401,091) X9,816
State Capital Contributions 2,051,000 41,X57
First Mortgage Loan 4,302.1137 87,1409
Second Mortgage Loan 14,912,459 304,336
Deterred Development Fee Qq (0)
Total Sources: 25.(1(17.096 523.1418
Land-Acquisition 0
Building-Acquisition 0
Hard Construction Costs 11,017,025 224.X37
Builders Prolit(6%) 816,076 16,655
General Requirements(6%) 816,076 16,655
Overhead(21/.) 272,025 5.552
Contractors Contingency 6140,063 13.879
FFSE 594,7X1 12,138
Site Work 1.175.750 23,995
Site Work l Civil Contingency. 1.500.0011 30,612
Owners Contingency 1,000,000 20,408
Impactfrap Fees 1,200.000 24,490
PSP Bonds(in Gen Requ) 0
Building Permits O
Builders Risk Insurance In Gen Requ) 0
ASE Design(3.5%) 538.013 10,980
ASE Supervision(I%) 153,718 3,137
Land usefLoning)Isndscape/etc(4%) 614,872 12.548
EnvironmenmVSoil/Energy Reports 30,000 612
Market SludylAppmisal 20,000 408
PCNA/Cost Review 20,000 4014
Survey 10,000 204
Legal.Real Estate 175.000 3,571
Legal.Lender 75,000 1.531
Legal.Organizational 50.000 1.020
Legal.TC Equity 50.000 1.020
CosUPerm Loan Fees.221(d)4 172,105 3.512
Bridge Loan Fees)Interesi 163,750 3,342
Bond Fees 240.000 4.898
CHFA Tax Credit Fees(Fed) 31.093 635
CHFA Tox Crdt Fees(State) 5.697 116
Title/Recording "40.000 .816
Real Estate Taxes 120,000 2.449
Property Iruumnce 70.000 1.429
AccouminglCost Cen 30,000 612
Marketing 50,000 1,020
Son Cost Contingency 150,000 3,061
Lease-up Reserve 100.000 2,001
Operating Deficit Reserve 263,524 5,378
Replacement Reserves 14.700 300
FHA Working Capital Reserve X6.053 1.756
Negative Arbitrage 120,ODU 2.449
Construction Loan Interest 492.251 10.046
Developer Fee 2.709.522 55.296
Total Uses: 25.667.096 523.8114
D-4
4%AHTC Option
4%AHTC
Total
Description Total Per Unit
Federal Capital Contributions 4.401,000 89.916
State Capital Contributions 0
First Mongage Loan 4.302,637 K7.K09
Second Mortgage Loan 16,956.964 346.059
Deterred Development Fee 0 0
Total Sources: 25,660.501 523.694
Land-Acquisition - 0
Building-Acquisition 0
Hard Construction Costs 11.017.025 224.K37
Builders Profit(696) 916,076 16,655
General Requirements(6%) 916,076 16.655
Overhead(2%) 272.025 5.552 -
Contractors Contingency 680.063 13,879
FF&E 594,781 12,13K
Site Work 1.175,750 23,995
Site Work l Civil Contingency 1.500,000 30,612
Owners Contingency 1.000,000 20.409
Impact/Tap Fees 1,200.000 24.490
PSP Bonds(in Gen Requ) 0
Building Permits 0
Builders Risk insurance In Gen Requ) 0
A&E Design l3.5%) '538,013 10.990
ASE Supervision ]%) 153.718 3,137
Land usc(Loning/Landscupe/ctc.(4%) 614,972 12.54K
EnvironmentalfSoillEnergy Reports 30,000 612
Market Study/Appraisal 20.000 408
PCNA/Cost Review 20,000 408
Smey 10.000 204
Legal•Real Estate 175,000 3.571
Legal.Lender 75,000 1.531
Legal-Organizational 50,000 1.020
Legal.TC Equity 50.000 1,020
Cost/Perm Loan Fecs-2211dp 172.105 3,512
Bridge Loan Fees+Imerest 163.750 3.342
Bond Fees 240,000 4.X99
CHFA Tax Credit Fees(Fed) 31.092 635
CHFA Tax Credi Fees IState) 0
Title/Recording 40.000 816
Real Estate Taxes 120.OD0 2.449
Property Insurance 70,000 1.429
AccountinglCost Cert 30.000 612
Marketing 50,000 1.020
Soli Cost Contingency 150.000 3.061
Leasc-up Reserve 100.000 2.041
Operating Deficit Reserve 263.524 5.379
Replacement Reserves 14.700 300
FHA Working Capital Reserve K6.053 1.756
Negative Arbitrage 120,000 2.449
Construction Loan Interest 492.061 10.042
Developer Fee 2.709.815 55.2x2
Total Uses: 25.GGo.501 523.694
D-5
Exhibit E
Preliminary List of Approved Consultants
Project Architect: David Johnston Architects
Planning Consultant: Method Planning+ Development
General Contractor: Shaw Construction
Landscape Architect: Connect One Design
Civil Engineer: Roaring Fork Engineering
Geotechnical Engineer: HP Kumar
Traffic Engineer: McDowell Engineering, LLC
Environmental Consultant: HP Kumar
Surveyor: Peak Surveying, Inc.
I
E-1