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HomeMy WebLinkAboutresolution.council.156-00 RESOLUTION NO. I~6 (SERIES OF 2000) A RESOLUTION OF THE CITY COUNCIL OF ASPEN, COLORADO, APPROVING A PROFESSIONAL SERVICE AGREEMENT BETWEEN THE CITY OF ASPEN AND KD HOUSING PARTNERS, AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ASPEN WHEREAS, there has been submitted to the City Council a professional service agreement between the City of Aspen, Colorado and KD Housing Partners, a copy of which is annexed hereto and part thereof. NOW, THEREFORE, 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 that a Professional Service Agreement between the City of Aspen, Colorado, and KD Housing Partners, regarding financial consulting services for the Tmscott project, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said Agreement on behalf of the City of Aspen. R~ hchei~E .~-Richards, l~layor "~. I, Kathryn Koch, duly appointed and acting City Clerk do certify that the foregoing is a tree and accurate copy of that resolu~on adopted by the City Council of the City of Aspen, Colorado, at a meeting held ~ // ,2000. BOYD & BAZIL, LLP ATTORNEYS AT LAW 632 EAST HOPI~NS AVENL~ ASPEN, COLOP~DO 81611 PG-IONDA J. BAZIL TELF. PHON~: (970) 925-717I RJBAZIL~KOF.NET FACSIMILE: (970) 925-4668 November 3, 2000 Mr. John E, Durso KD Housing Partners 10 Crystal Pool Irvine, California 92612 Re: Proposed Agreement with Aspen/Pitkin County Housing Authority Dear John: I have reviewed the standard insurance provisions from the City of Aspen's Agreement for Professional Services. The insurance requirements of the Agreement appear to be directed to licensed professionals such as engineers and architects. They are not designed for consultants such as yourself. Since you are the sole shareholder of your corporation, you should be able to provide the City with a copy of your existing health insurance policy and your election to opt out of workmen's compensation coverage. In addition, a copy of your existing automobile liability policy should be provided. Since you are not a licensed professional, professional liability insurance is unavailable to you. Should you have any questions, please feel free to call me. Sincerely, BOYD & BAZIL, LLP By:. Rhonda J. Bazil RJB/hs eric. AGREEMENT made this day of ,2000 between Aspen/Pitkin County Housing Authority whose principal address is 530 East Main Street, Lower Level, Aspen Colorado 81611 (APCHA) as development manager for the Truscott area development and KD Housing Partners Inc., whose principal office is I0 Crystal Pool, Irvine California 92612 (KD). RECITALS: WHEREAS, the City of Aspen currently holds or will acquire ownership of the land adjacent to Truscott Place and further described as Lot 4 of the 3ra Amended Plat of the Aspen Golf Course Subdivision and WHEREAS, the City of Aspen wishes develop new affordable housing on Lot 4 area and the City of Aspen wishes to utilize APCHA as overall development manager for the affordable housing to be developed on Lot 4 area and WHEREAS, APCHA wishes to use KD's expertise in affordable housing feasability analysis to analyze and procure financing for the proposed affordable housing development, NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the parties agree as follows: 1. Project Scope The subject of this agreement is the development of an ownership and financing structure and the procurement of financing for development and construction of affordable multifamily housing, and the terms, provisions and compensation pursuant to which KD will act to create a financing structure and arrange financing for Lot 4 of the Truscott redevelopment. Truscott consists of three distinct affordable housing development phases with common supporting infrastructure to be constructed throughout the development of Lot 4 and adjacent properties. Lot 4 will encompass the development of approximately 58 new affordable housing units anticipated to be financed through a taxable or tax-exempt mortgage revenue bond and City of Aspen subsidy. Unit rents are to be affordable under APCHA Category 3. KD shall use its best efforts to provid¢ services, as set forth in Section 2, necessary to assist APCHA in the economic feasability analysis, overall development and financing of Lot 4 and the supporting infrastructure. Lot 4 affordable housing unit development will here'mailer be collectively referred to as the Project (Project). KD will further use its best efforts to obtain, negotiate and coordinate construction and permanent financing for the Project in amounts as anticipated on Exhibit A attached hereto. All services performed by KD will be provided as an Independent Contractor pursuant to this Agreement, not as an employee of APCHA, the City of Aspen or any affiliate. 2. Scope of Services The following is a description of KD services segregated into 4 processes, a Financing and a General Services category. All KD services will be provided as required and as applicable for the Project as identified above. Predevelopment Process ® As it relates to project financing, advise APCHA in its selection of an appropriate legal structure and formation of the entity or entities to acquire, develop, own, and operate the housing units contained within the Project. · Review, for consistency with lender requirements, a project "critical path" and development timetable. · Review and assist in the development of a project proforma format for consistency with lender requirements. Review and assist with updated project proforma based upon completed schematic design and initial architect and contractor cost estimates. · Attend one project development team meeting per month. Construction Process · Review, for consistency with lender requirements, a request, reporting and approval procedure for RFIs, ASIs, and Change Orders. · Review, for consistency with lender requirements, the construction budget and detailed cash flow analysis for construction of the housing units. · Review monthly construction draws for consistency with lender requirements and coordinate same with all financing sources throughout construction. · Review, for consistency with lender requirements, ail APCHA approved Change Order requests. · Prepare and distribute customary monthly status reports pertaining to the financial aspects of the development, within fifteen (15) days after each monthly draw period. 2 · Attend one project development team meeting per month. Project Completion/Lease Up Process · Assist APCHA in structuring a Rental Management Agreement consistent with all reporting requirements of the lender. · If requested, recommend and assist APCHA in selecting an experienced third party property management company to provide initial lease-up and ongoing management of the Housing Units in compliance with the requirements of the lender. · Assist in the development of and review for consistency with lender requirements, operating budgets and projected 15 year operating proforma. · Deliver all appropriate project related documents to APCHA at completion. Overall Financing · Compile and review all required information and exhibits and create all required proforma in order to apply for any Taxable and/or Tax Exempt bond financing and any required construction financing. · Prepare and submit all required applications and/or due diligence packages required for any Taxable and/or Tax Exempt bond financing. · Assist the City in hiring consultants and coordinate the efforts of all consultants, agreed upon by APCHA and KD, with respect to those tasks necessary for KD to perform its' services, typically legal and accounting, throughout the construction and permanent financing process. Hiring of any consultant will be subject to the approval of and/or procurement codes of the City of Aspen. · Represent APCHA during negotiations and assist in the preparation of all financing documents on terms and conditions reasonably acceptable to APCHA. All negotiated financing and related documents to be reviewed and approved by selected counsel and APCHA representative (anticipated amounts and sources on Exhibit A attached). · Obtain a commitment for, and assist in closing tax exempt and/or taxable bond and/or conventional permanent debt on terms and conditions reasonably acceptable to selected counsel and APCHA (anticipated amounts and sources on Exhibit A attached). ® Negotiate all applicable documents, obtain, a commitment for, and assist in closing construction debt and/or bridge financing and/or other construction financing vehicle, on terms and conditions reasonably acceptable to selected counsel and APCHA (anticipated amounts and sources on Exhibit A attached). · Assist in the coordination of and review the construction and permanent funding inflow schedules and layering of all sources of financing to be utilized by the Project. · Attend one monthly meeting with APCHA designated representative to review financing status. General Services · Recommend and assist APCHA in its selection of a qualified project attorney and accountant to be retained by APCHA to provide services relative to Tax Exempt bond financing, if requested. · Review, for consistency with lender requirements, the project schedule and critical path time lines. 3. Responsibilities of APCHA For all of the following APCHA will: · Become the Owner/General Partner of the, to be formed, entity which will acquire and develop the Project. APCHA, in its role of Owner/General Partner, will take all necessary and reasonably expected actions required of an Owner/General Partner and will provide typical Owner/General Partner guarantees for all aspects of the required financing. · Diligently fulfill all its obligations under all Project financing agreements and documents including those related to construction loans, permanent loans, and bond financing. · Take all necessary and reasonably expected actions to secure all loans and grants and any and all other financing necessary for the completion of the Project. · Be responsible for providing or obtaining from others all guarantees that may be required by lenders and others providing financing for the Project. · Establish or become the entity to own the Project and cause such entity to have sufficient powers, funds, authorities and assets to carry out APCHA's responsibilities as owner/developer/general partner of the project. · Establish and maintain insurance coverage sufficient to satisfy all lenders providing funds to the project. · Cooperate with and assist KD in all respects of the latter's carrying out of its responsibilities in a timely manner, to include rendering required decisions in a timely manner so as not to delay the financing process.. · Make payments to KD and others in connection with the Project financing in a timely manner. · Engage attorneys, accountants and other third parties necessary for the execution all necessary Project financing and entity documents. KD will be designated as the Financing Manager in the contracts with such parties and will be authorized to take day-to-day administrative actions on behalf of 4 APCHA consistent with the proposed responsibilities and duties of KD. ·Furnish services of other consultants when such services are reasonably required by and requested by KD. · Furnish structural, mechanical, chemical, air and water pollution tests, tests for hazardous materials, and other laboratory and environmental tests, inspections and reports required by law or by any lender providing funds to the project. · Furnish legal, accounting and insurance consulting services, as may be necessary at any time for the financing of the Project, including any auditing services which may be required by any lender associated with the project. This will include any audit APCHA deems necessary to ascertain and authenticate the purpose and/or use of funds the Financing Manager has expended. ·Pay, or provide for payment of KD services pursuant to the terms and conditions of this agreement. · Act upon the advice of KD in the performance of KD services. Said advice must be consistent with the land use approvals and past approvals of the City Council with regard to the Project. IfAPCHA chooses not to act upon the advice of KD, to the detriment of KD's ability to provide its services pursuant to this agreement, then KD shall be deemed to be excused from their obligations under this agreement and shall be compensated for all services performed to date and all services remaining under this agreement. · As owner/property manager APCHA will familiarize itself with any and all requirements of the lender with respect to management reporting and compliance and perform same. 4. Efforts of Parties APCHA and KD will use reasonably diligent efforts to carry out their responsibilities, but neither guarantees that any element of the Project will be achieved. 5. Fees and Reimbursements The total combined compensation for services during all phases of this agreement shall be based upon a percentage of financing acquired, assembled, negotiated and/or managed, as financial manager, by KD. The fee (Fee) for the Project shall be 2 % of all "Permanent Financing" but shall specifically exclude any financing anticipated and listed as permanent "City Subsidy". If APCHA desires KD to arrange construction period financing then the same fee structure shall apply. (projected financing character, structure and amounts are attached hereto as exhibit A). This fee shall be inclusive of all of KD general and administrative overhead and direct 5 expenses incurred in the performance of KD services. It does not include any third party or consultant costs required for the successful completion of the Project or any reimbursable expenses as defined below. It is understood that KD financing services are front loaded and will be substantially performed and earned prior to actual payment for the service. The schedule below indicates when the fees for services shall be deemed as earned: Compensation shall be earned on the following schedule and tasks: Phase 1 - 58 new housing units utilizing Taxable or Tax Exempt Bond Financing · $2,500 per month shall be earned starting with the execution of this agreement and continue up to the funding date of the anticipated permanent debt/bond issue. Said payment shall not exceed 15 % of the Fee. If funding of the anticipated permanent debt/bond issue occurs prior to this monthly amount earning 15 % of the Fee then the difference, up to 15%, will be paid at funding date. If at the funding date the monthly payments have exceeded 15% of the Fee, the excess shall be deducted from the payment due as part of the "remaining balance" due and payable as indicated below. Task 1 10% of the projected Fee, based upon exhibit A, shall be earned when a final proposed ownership structure, financing plan and Project sources and uses is presented to and agreed upon by APCHA. Task 2 An additional 10% of the projected Fee, based upon exhibit A, shall be earned on the date of submission of all exhibits and applications necessary for securing the permanent loan/bond financing. Task 3 An additional 20% of the projected Fee, based upon exhibit A, shall be earned upon the provision to APCHA and/or the ownership entity of a conditional commitment/inducement resolution. Task 4 The remaining balance of the Fee, calculated on the actual final financing amounts, less any payments made pursuant to the schedule of payments above, shall be paid within 30 days of the funding of the permanent loan/tax exempt bond. If the permanent loan/tax exempt bond proceeds are used for construction funding, this payment shall occur at start of construction. KD shall provide invoices monthly. Invoices shall be due and payable upon receipt. Any invoice remaining unpaid for a period of over 30 days shall accrue interest at the rate of 1.5% per month on the unpaid balance. 6. Termination 1. Events or Termination. KD's agreement with APCHA shall terminate upon any one of the following: a. The effective date of a notice sent to KD stating APCHA's determination made in good faith that it is terminating the agreement for "cause" as defined under Section 2 below; or b. The effective date of a notice sent to KD stating that APCHA is terminating the agreement, without cause, which notice can be given by APCHA at any time after the effective date at APCHA's sole discretion, for any reason or for no reason; and c. The effective date of a notice sent to APCHA from KD stating that KD is electing to terminate its agreement with APCHA. 2. Cause Defined. For the purposes of the Agreement, "cause" for KD's termination will exist at any time after the happening of one or more of the following events: a. KD's intentional failure or refusal in any material respect, faithfully or diligently, to perform its obligations under the agreement but only after APCHA has provided KD with written notice specifying the failure or refusal in reasonable detail and after KD has been afforded at least 30 days from the date of receipt of said notice to correct the failure set forth in the notice; b. Unprofessional, unethical or fraudulent conduct or conduct that is materially detrimental to the Project or AP CHA's reputation, character or standing; c. Dishonest conduct or an unlawful or criminal act which would reflect badly on the Project in APCHA's reasonable judgment; d. A decision by the City of Aspen or APCHA to permanently abandon the project (defined in Section 1). 3. Effect of Termination. a. Except as provided below, in the event of termination of this Agreement by either party, with or without cause, all obligation of the parties shall cease except for the APCHA's obligation to pay KD all fees earned through the date of termination based upon the task level achieved under Section 5. b. In the event of termination of this Agreement by APCHA other than "for cause" after the completion of Task 3 or after obtaining a commitment for Permanent Financing, the entire remaining balance of the 2% Fee for all Permanent Financing for Lot 4 shall be due and payable to KD, 7. Resolution of Disputes See attached arbitration clause. 8. Insurance a) CommercialGeneralLiabilitylnsurance: 7 Intentionally Omitted b) Comprehensive Automobile Liability Intentionally Omitted c) Professional Liability Intentionally Omitted 9. Reimbursable Expenses Reimbursable expenses are in addition to KD fees for services provided in Paragraph 5 and include expenses incurred by KD in the interest of the project, as follows: expenses in connection with authorized out of town travel; long distance communication regarding the Project; expenses for securing studies, legal/accounting work and other purposes previously approved by APCHA; expenses of additional insurance coverage or limits requested by APCHA in excess of that normally carried by KD; and any other expense authorized by APCHA. 10. Miscellaneous Provisions a) Governing Law: Colorado Law shall govern the interpretation and enforcement of this Agreement b) KD and APCHA respectively bind themselves, their partners, successors, assigns and legal representatives to the other party of the Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to the covenants of the agreement. c) All notices required by the Agreement shall be by Certified Mail, Return Receipt Requested, addressed to the appropriate party at the address shown on page 1, or such other address such party shall have notified the other party is the changed address, such notice of change itself being sent by Certified Mail, Return Receipt Requested. d) This agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations or agreements, either written or oral. This agreement governs the relations between the parties solely as to the matters set forth herein and not as to any other relations between the parties. This Agreement may be amended only by written instrument signed by both parties. e) This agreement may be executed in several counterparts, each of which shall be such other address such party shall have notified the other party is the changed address, such notice of change itself being sent by Certified Mall, Return Receipt Requested. d) This agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations or agreements, either written or oral. This agreement governs the relations between the parties solely as to the matters set forth herein and not as to any other relations between the parties. This Agreement may be amended only by written instrument signed by both parties. e) This agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument. f) The captions to the paragraphs of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement. g) Nothing contained in this Agreement shall constitute or be construed to be or create a partnership, joint venture or similar relationship between APCHA and KD. IN WITNESS WHEREOF, the parties have signed this Agreement on the date set forth on the first page. CITY OF ASPEN, COLORADO ATTESTED BY: By: (~!g~urso, President EXHIBIT A The following financing assumptions are the projected reasonable expectations for equity and acquirable debt for the Project. These assumptions are based upon current financial market conditions, and APCHA provided project information and assumptions as of Aug 1, 2000. All amounts are subject to adjustment due to changes in interest rates and underwriting criteria. Lot 4 58 new housing units to utilizing Taxable or Tax Exempt Bond Financing Anticipated Itousing Construction Costs: $10,960,000 Financing during the Construction ?eriod City Subsidy: Purchase of land and construction funding $5,460,000. Construction Loan: It is reasonable to expect Taxable and or Tax Exempt bond financing in the amount of $5,500,000, Typically these monies can and would be used for construction; however, there could be an economic benefit for the City to provide this funding during construction as a construction loan. Permanent Financing City Subsidy: Permanent subsidy $5,460,000 or as required Permanent Loan: Based upon an increase in today's rates, current financial market underwriting and anticipated CAT III rents, it is reasonable to expect a Tax Exempt bond financing in the approximate amount of $5,500,000. A taxable bond would yield a lower loan and therefor is less desirable. l0 ARBITRATION 1. General: Appointment of Arbitrators; and Discovery. a. Except as otherwise specifically provided in this subparagraph, if any controversy or dispute between the parties hereto arises under, out of, or in relation to any of the provisions hereof which cannot be settled by the parties within fifteen (15) days after a party hereto gives written notice of the existence of such dispute, either party, within thirty (30) days of the expiration of the foregoing fifteen (15) day period, may submit such controversy or dispute for arbitration to, and in accordance with the Rules of Practice and Procedure of the American Arbitration Association (together its successors and agents referred to herein as the "Arbitrators"), as then in effect, except as otherwise provided by the provisions of this Article. The provisions of this Articles shall not be construed to deny any party the right to seek provisional remedies available to said party before a court of law. For the purposes of this Agreement, the parties, by submitting the controversy or dispute to the Arbitrators, do not waive or relinquish their rights to seek provisional remedies before a court of law and said parties expressly agree that each party shall have the right to seek provisional remedies before a court of law. c. If neither party elects to submit a controversy to arbitration within the aforesaid thirty (30) day period, then either party shall have the fight to commence legal proceedings to resolve the controversy; provided, however, such party must first give written notice to the other party of its intent to commence litigation and the party receiving such notice shall have fifteen (15) days following the date of receipt of such notice to submit the controversy to arbitration in accordance with the foregoing provisions of this Articlel If the party, after receiving such notice, does not submit the controversy to arbitration within such fifteen (15) day period, the right to arbitrate such noticed dispute shall be waived and then the party giving the notice shall have the right to commence legal proceedings to resolve the controversy without further notice or further obligation to comply with the provisions of this Article with respect to that particular controversy. For the purposes of this Agreement, the time within which any arbitration proceedings can be instituted with respect to any matter or dispute shall be deemed to have elapsed only upon the expiration of the aforesaid fifteen (15) day period following the receipt of such a notice of intent to commence legal proceedings. If either party refuses to submit to arbitration after duly given notice of the other party's exercise of his/her right to arbitrate, the other party shall be entitled to an order from the appropriate court compelling arbitration. If either party commences legal proceedings (and the other party does not successfully compel arbitration) to resolve the controversy as specifically provided in this subparagraph, the parties hereto shall stipulate immediately upon the setting of a trial date that the proceeding be tried by a temporary judge. d. The provision of Colorado law governing discovery in civil litigation, or any successor amended statute or law containing similar provisions, are incorporated by reference herein and shall apply in any such arbitration; specifically, the parties shall have the right to engage in all preheating discovery as that which would be permitted in a civil litigation action to resolve their dispute. The Arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys' fees and costs, to the same extent as a court of law, should the Arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The parties shall have a certified court reporter make a record of the hearing. 2. Final Judgment, Findings of Fact and Conclusions a. The Arbitrator shall apply Colorado law as thought he/she was bound by applicable statutes and precedents and case law, including the admissibility of evidence and shall endeavor to decide the controversy as though he/she were a judge in a Colorado court of law. The Arbitrator shall have the power to issue any award, judgment, decree or order of relief that a court of law or equity could issue under Colorado law, including, but not limited to, money damages, specific performance, or injunctive relief} and for such purposes, it is hereby expressly acknowledged and agreed that damages at law will be an inadequate remedy for a breach or threatened breach of any provision ofth/s Agreement, it being the intention ofttfis sentence to make clear the agreement of the parties that the respective rights and obligations of the parties hereunder shall be enforceable in any arbitration proceedings in accordance with principles of equity as well as law. b. The Arbitrator shall prepare a written decision that shall be supported by written findings of fact and conclusions which adequately set forth the basis of his/her decision and which cite the statutes and precedents applied and relied upon in reaching his/her decision. The award, judgment, decree or order, and the findings of the Arbitrator shall be final, conclusive and binding upon the parties, and judgment upon the award and enforcement of any other judgment, decree or order of relief granted by the Arbitrator may be entered or obtained in any court of competent jurisdiction upon the application of any party. This agreement to arbitrate shall be self-executing without the necessity of filing any action in any court and shall be specifically enforceable under the prevailing arbitration law. 3. Costs and Expenses a. Except as otherwise provided for in this Agreement, all costs and expenses of any arbitration proceeding hereunder, shall be shared equally by the parties. Each party shall bear its own attorneys' fees. Notwithstanding the foregoing, however, in the event the Arbitrator shall determine that a party acted without substantial justification in submitting a dispute to arbitration or causing a dispute to be submitted to arbitration, the party who is so determined to be acting without substantial justification shall bear all costs and expenses of the other party in the proceeding including, but not limited to, the reasonable attorneys' fees of such other party. AGREEMENT made this day of ,2000 between Aspen/Pitkin County Housing Authority whose principal address is 530 East Main Street, Lower Level, Aspen Colorado 81611 (APCHA) as development manager for the Truscott area development and KD Housing Partners Inc., whose principal office is 10 C~ystal Pool, Irvine California 92612 (KD). RECITALS: WHEREAS, the City of Aspen currently holds or will acquire ownership of the land and buildings known as Truscott Place and further described as Lot 3 of the 3ra Amended Plat of the Aspen Golf Course Subdivision and WHEREAS, the City of Aspen wishes develop new affordable housing on Lot 3 area and the City of Aspen wishes to utilize APCHA as overall development manager for the affordable housing to be developed in the Lot 3 area and WHEREAS, APCHA wishes to use KD's expertise in affordable housing feasability analysis and to analyze and procure financing for the proposed affordable housing development, NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the parties agree as follows: 1. Lot 3 Scope The subject of this agreement is the development of an ownership and financing structure and the procurement of financing for development and construction of affordable multifamily housing, and the terms, provisions and compensation pursuant to which KD will act to create a financing structure and arrange financing for Lot 3 of the Truscott redevelopment. Truscott consists of three distinct affordable housing development phases with common supporting infrastructure to be constructed throughout the development of Lot 3 and adjacent properties.. Lot 3 will consist of the acquisition and renovation of 46 affordable housing units, currently part of Truscott place, and the development of approximately 41 new affordable housing units. Lot 3 is anticipated to be financed through a combination of tax-exempt bonds, Federal Low Income Housing Tax Credits (LIHC) and City of Aspen subsidy. Unit rents are to be affordable under LIHC guidelines which approximate APCHA Category 2 rents. KD shall use its best efforts to provide services, as set forth in Section 2, necessa~ to assist APCHA in the economic feasability analysis, overall development and financing of Lot 3 and the supporting infrastructure. Lot 3 affordable housing unit development will hereinafter be collectively referred to as the Project (Project). KD will further use its best efforts to obtain a reservation of Federal Low Income Housing Tax Credits (LIHC) from the Colorado Housing and Finance Authority (CHFA), obtain, negotiate, and coordinate the equity contribution for the sale of the LIHC and to obtain, negotiate and coordinate construction and permanent financing for the Project in amounts as anticipated in Exhibit A attached hereto. All services performed by KD will be provided as an Independent Contractor pursuant to this Agreement, not as an employee of APCHA, the City of Aspen or any affiliate. 2. Scope of Services The following is a description of KD services segregated into four processes, a Financing and a General Services category. All KD services will be provided as required and as applicable for the Project as identified above. Predevelopment Process ® As it relates to project financing, advise APCHA in its selection of an appropriate legal structure and formation of the entity or entities to acquire, develop, own, and operate the housing units contained within the Project. This will include assisting in developing a strategy to maintain certain portions of the favorable tax exempt bond financing underlying the existing Truscott place. · Review, for consistency with lender requirements, a project "critical path" and development timetable. · Review and assist in the development of a project proforma format for consistency with lender requirements. Review and assist with updated project proforma based upon completed schematic design and initial architect and contractor cost estimates. · Attend one project development team meeting per month. Construction Process · Review, for consistency with lender requirements, a request, reporting and approval procedure for RFIs, ASIs, and Change Orders. · Review, for consistency with lender requirements, the construction budget and detailed cash flow analysis for construction of the housing units. · Review monthly construction draws and coordinate same with all financing sources throughout construction. · Review, for consistency with lender requirements, all APCHA approved Change Order requests. · Prepare and distribute customary monthly status reports pertaining to the financial aspects of the development, within fifteen (15) days after each monthly draw period. · Attend one project development team meeting per month. 2 Project Completion/Lease Up Process · Assist APCHA in structuring a Rental Management Agreement consistent with all reporting requirements of all lenders. · If requested, recommend and assist APCHA in selecting an experienced third party property management company to provide initial lease-up and ongoing management of the Housing Units in compliance with the requirements of Section 42 of the IRS code which defines the LIHC program. · Review, and advise as to implementation, the forms and procedures to be used to ensure compliance with IRS Section 42 and with any specific bond financing requirements. With respect to the LIHC, development and implementation to be performed by APCHA after attendance at the required monitoring and compliance seminar given by CHFA. · Assist in the development of and review for consistency with lender requirements, operating budgets and projected 15 year operating proforma. · Deliver all appropriate project related documents to APCHA at completion. Tax Credit Application Process · Advise APCHA as to the most advantageous ownership structure. · Structure the Project parameters to achieve the required point score under the guidelines set forth for the appropriate application round by the CHFA LIHC allocation plan. · Negotiate and obtain a commitment for a Tax Credit equity contribution from a national syndicator for Tax Credit Application purposes. · Negotiate and obtain commitments for both conventional construction and permanent financing for Tax Credit Application purposes. · Prepare and coordinate all project feasibility, financial analysis and proformas required for submission with the LIItC application. · Prepare and coordinate the Colorado LIHC Application with all applicable governmental agencies and interested financial institutions. · Assemble all information and required exhibits and submit LIHC application to CI-IFA with copies to APCHA. Overall Financing Process · Compile and review all required information and exhibits and create all required proforma in order to apply for any Taxable and/or Tax Exempt bond financing, any required construction financing and the sale of the LIHC. · Prepare and submit all required applications and/or information packages required for any Taxable and/or Tax Exempt bond financing and the sale of the LIHC. ® Assist the City in hiring consultants coordinate the efforts of all consultants, agreed upon by APCHA and KD, with respect to those tasks necessary for KD to perform its' services, typically legal and accounting, throughout the construction and permanent financing process. Hiring of any consultant will be subject to the approval of and/or procurement codes of the City of Aspen. · Represent APCHA during negotiations and assist in the preparation of all financing documents on terms and conditions reasonably acceptable to APCHA. All negotiated financing and related documents to be reviewed and approved by selected tax counsel and APCHA representative (anticipated amounts and sources on Exhibit A attached). · Negotiate all applicable documents, obtain a commitment for, and assist in closing tax exempt and/or taxable bond and/or conventional permanent debt on terms and conditions reasonably acceptable to selected counsel and APCHA (anticipated amounts and sources on Exhibit A attached). · Negotiate all applicable documents, obtain a commitment for, and assist in closing construction debt and/or bridge financing and/or other construction financing vehicle, on terms and conditions reasonably acceptable to selected counsel and APCHA (anticipated amounts and sources on Exhibit A attached). · Negotiate, obtain a commitment for, and close LIHC equity financing on terms and conditions reasonably acceptable to selected counsel and APCHA. This will include negotiating the terms and conditions contained within all syndication documents applicable to the equity contribution (ie: partnership agreement, subscription agreement, bridge loan agreement, development management agreement, project agreement, etc.)(subject to anticipated amounts and sources on Exhibit A attached). · Assist in the coordination of and review the construction and permanent funding inflow schedules and layering of all sources of financing to be utilized by the Project. General Services · Recommend and assist APCHA in its selection of a qualified project accountant to be retained by APCHA to provide services relative to Tax Exempt bond financing and LIHC. Accountant must have experience with bond financing and cost certification procedures required by IRS Section 42. · Recommend and assist APCHA in its selection of a qualified Tax Code and LIHC Partnership Attorney to be retained by APCHA to assist in all negotiations with respect to ownership structure and financing. Attorney must have experience with LIHC deal structures, equity and debt negotiations and all related tax consequences. · Review and coordinate the selected project accountant's preparation and filing of required Section 42 documentation with the appropriate 4 governmental authorities. Provide said review and coordination through final allocation cost certification and receipt of IRS Form 8609. ·Attend monthly meetings with APCHA designated representative to review financing status. ·Review, for consistency with lender requirements, the project schedule and critical path time lines. 3. Responsibilities of APCItA For all of the follow'rog APCHA will: · Become the Owner/General Partner of the, to be formed, entity which will acquire and develop the Project. APCHA, in its role of Owner/General Panner, will take all necessary and reasonably expected actions required of an Owner/General Partner and will provide typical Owner/General Partner guarantees for all aspects of the required financing. · Diligently fulfill all its obligations under all Project financing agreements and documents including those related to construction loans, permanent loans, and bond financing. · Take all necessary and reasonably expected actions to secure all loans and grants and any and all other financing necessary for the completion of the Project. ·Be responsible for providing or obtaining from others all guarantees that may be required by lenders and others providing financing for the Project. · Establish or become the entity to own the Project and cause such entity to have sufficient powers, funds, authorities and assets to carry out APCHA's responsibilities as owner/developer/general partner of the project. ·Establish and maintain insurance coverage sufficient to satisfy all lenders providing funds to the project. · Cooperate with and assist KD in all respects of the latter's canying out of its responsibilities in a timely manner, to include rendering required decisions in a timely manner so as not to delay the financing process. ·Make payments to KD and others in connection with the Project financing in a timely manner. · Engage attorneys, accountants and other third parties necessary for the execution all necessary Project financing and entity documents. KD will be designated as the Financing Manager in the contracts with such parties and will be authorized to take day-to-day administrative actions on behalf of APCHA consistent with the proposed responsibilities and duties of KD. ·Furnish services of other consultants when such services are reasonably required by and requested by KD. · Furnish structural, mechanical, chemical, air and water pollution tests, tests for hazardous materials, and other laboratory and environmental tests, inspections and reports required by law or by any lender providing funds to the project. · Furnish legal, accounting and insurance consulting services, as may be 5 necessary at any time for the financing of the Project, including any auditing services which may be required by any lender associated with the project. This will include any audit APCHA deems necessary to ascertain and authenticate the purpose and/or use of funds the Financing Manager has expended. · Pay, or provide for payment of KD services pursuant to the terms and conditions of this agreement. · Act upon the advice of KD in the performance of KD services. Said advice must be consistent with the land use approvals and past approvals of the City Council with regard to the Project. IfAPCHA chooses not to act upon the advice of KD, to the detriment of KD's ability to provide its services pursuant to this agreement then KD shall be deemed to be excused from their obligations under this agreement and shall be compensated for all services performed to date and all services remaining under this agreement. · As owner/property manager APCHA will familiarize itself with any and all requirements of the lender with respect to management reporting and compliance and perform same. 4. Efforts of Parties APCHA and KD will use reasonably diligent efforts to carry out their responsibilities, but neither guarantees that any element of the project will be achieved. 5. Fees and Reimbursements The total combined compensation for services during all phases of this agreement shall be based upon a percentage of permanent financing acquired, assembled, negotiated and/or managed, as financial manager, by KD. The fee (Fee) for the Project shall be 4% of all "Permanent Financing" and shall specifically exclude any financing anticipated and listed as permanent "City Subsidy". If APCHA desires KD to arrange a construction loan then the same fee structure shall apply (anticipated financing structure and amounts are attached hereto as exhibit A). This fee shall be inclusive of all of KD general and administrative, overhead and direct expenses incurred in the performance of KD services. It does not include any third party or consultant costs required for the successful completion of the Project or any reimbursable expenses as defined below. It is understood that KD financing services are front loaded and will be substantially performed and earned prior to actual payment for the service. The schedule below indicates when the fees for services shall be deemed as earned: Compensation shall be earned on the following schedule: Lot 3 - 41 new and 46 renovated units utilizing Tax Exempt Bond, and LIHC equity 6 · $2,500 per month shall be earned starting with the execution of this agreement and continue up to the funding date of the anticipated permanent debt / bond issue. Said payment shall not exceed 15 % of the Fee. If funding of the anticipated permanent debt/bond issue occurs prior to this monthly amount earning 15 % of the Fee then the difference, up to 15%, will be paid at funding date: If at the funding date the monthly payment has exceeded 15% of the Fee, the excess shall be deducted from the payment due as part of the "remaining balance" due and payable as indicated below. Task 1 10% of the projected Fee, based upon exhibit A, shall be earned when a final proposed ownership structure, financing plan and Project sources and uses is presented to and agreed upon by APCHA. Task 2 An additional 10% of the projected Fee, based upon exhibit A, Fee shall be earned on the date of submission of all exhibits and applications necessary for securing the permanent loan/bond financing. Task 3 An additional 10% of the Fee, based upon commitment amounts, shall be earned upon the provision to APCHA and/or the ownership entity of a binding permanent loan (tax exempt bond) commitment/inducement resolution. Task 4 An additional 5% of the projected Fee, based upon exhibit A, shall be earned on the date of submission of the Tax Credit Application to CHFA. Task 5 An additional 10% of the projected Fee, based upon exhibit A, Fee shall be earned upon the receipt of a Letter of Determination, from CHFA, specifying the amount of tax credits available. Task 6 An additional 10% of the projected Fee, based upon exhibit A and actual equity commitment, shall be earned upon the provision to APCHA and/or the ownership entity of a binding commitment from a syndicator to purchase the Tax Credits Task 7 The remaining balance of the Fee, calculated on the actual final financing amounts, less any payments made pursuant to the schedule of payments above, shall be paid within 30 days of the funding of the permanent loan/tax exempt bond. If the permanent loan/tax exempt bond proceeds are used for construction funding, this payment shall occur at start of construction. KD shall provide invoices monthly. Invoices shall be due and payable upon receipt. Any invoice remaining unpaid for a period of over 30 days shall accrue interest at the rate of 1.5% per month on the unpaid balance. 6. Termination 1. Events of Termination. KD's agreement with APCHA shall terminate upon 7 any one of the following: a. The effective date of a notice sent to KD stating APCHA's determination made in good faith that it is terminating the agreement for "cause" as defined under Section 2 below; or b. The effective date of a notice sent to KD stating ihat APCHA is terminating the agreemefiI; without cause, which notice can be given by APCHA at any time after the effective date at APCHA's sole discretion, for any reason or for no reason; and c. The effective date of a notice sent to APCHA from KD stating that KD is electing to terminate its agreement with.APCHA. 2. Cause Defined. For the purposes of the Agreement, "cause" for KD's termination will exist at any time after the happening of one or more of the following events: a. KD's intentional failure or refusal in any material respect, faithfully or diligently, to perform its obligations under the agreement but only after APCHA has provided KD with written notice specifying the failure or refusal in reasonable detail and after KD has been afforded at least 30 days from the date of receipt of said notice to correct the failure set forth in the notice; b. Unprofessional, unethical or fraudulent conduct or conduct that is materially detrimental to the Project or APCHA's reputation, character or standing; c. Dishonest conduct or an unlawful or criminal act which would reflect badly on the Project in APCHA's reasonable judgment. d. A decision by the City of Aspen or APCHA to permanently abandon the project (defined in Section 1). 3. Effect of Termination. a. Except as provided below, in the event of termination of this Agreement by either party, with or without cause, all obligation of the parties shall cease except for the APCHA's obligation to pay KD all fees earned through the date of termination based upon the task level achieved under Section 5. b. In the event of termination of this Agreement by APCHA other than "for cause" after the completion of Task 3 or after obtaining a commitment for Permanent Financing, the entire remaining balance of the 4% Fee for all Permanent Financing for Lot 3 shall be due and payable to KD. 7. Resolution of Disputes See attached arbitration clause. 8. Insurance a) Commercial General Liability Insurance: Intentionally Omitted b) Comprehensive Automobile Liability Intentionally Omitted c) Professional Liability Intentionally Omitted 9. Reimbursable Expenses Reimbursable expenses are in addition to KD fees for services provided in Paragraph 5 and include expenses incurred by the KD in the interest of the project, as follows: expenses in connection with authorized out of town travel; long distance communication regarding the Project; expenses for securing studies, legal/accounting work and other purposes previously approved by APCHA; expenses of additional insurance coverage or limits requested by APCHA in excess of that normally carried by KD; and any other expense authorized by APCHA. 10. Miscellaneous Provisions a) Governing Law: Colorado Law shall govern the interpretation and enforcement of this Agreement b) KD and APCHA respectively bind themselves, their partners, successors, assigns and legal representatives to the other party of the Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to the covenants of the agreement. c) All notices required by the Agreement shall be by Certified Mail, Return Receipt Requested, addressed to the appropriate party at the address shown on page 1, or such other address such party shall have notified the other party is the changed address, such notice of change itself being sent by Certified Mail, Return Receipt Requested. d) This agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations or agreements, either written or oral. This agreement governs the relations between the parties solely as to the matters set forth herein and not as to any other relations between the parties. This Agreement may be amended only by written instrument signed by both parties. e) This agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument. f) The captions to the paragraphs of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement. or oral. This agreement governs the relations between the parties solely as to the matters set forth herein and not as to any other relations between the parties. This Agreement may be amended only by written instrument signed by both parties. e) This agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument. f) The captions to the paragraphs of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement. g) Nothing contained in this Agreement shall constitute or be construed to be or create a partnership, joint venture or similar relationship between APCHA and KD. IN WITNESS WHEREOF, the parties have signed this Agreement on the date set forth on the first page. CITY OF ASPEN, COLORADO ATTESTED BY: By: ~2~~>~ ~'9~//~~ INc. By: ~ ~lSurso, President 10 EXHIBIT A The following financing assumptions are the anticipated reasonable expectations for equity and acquirable debt for the Project. These assumptions are based upon current financial market conditions, 1999 CI-IFA Tax Exempt Bond program requirements, 1999 Tax Credit allocation rules, and APCHA provided project information and assumptions as of Aug 1, 2000. All amounts are subject to adjustment due to changes in interest rates and underwriting criteria. Lot 3 / Truseott Redevelopment Anticipated Housing Construction Costs: $7,900,000 Construction Sources City Subsidy: Purchase of land and construction funding $600,000. Amount required to buy down the existing bond issue is yet to be determined. Construction Loan: It is reasonable to expect a CHFA/FHA Tax Exempt bond financing in the amount of $5,200,000. Typically these monies can and would be used for construction however there would be an economic benefit for the City to provide this funding during construction. Tax Credit Equity: It is reasonable to expect 65% of the total Tax Credit Equity Contribution during construction which would equateto approximately $1,500,000. Deferred Fees: It is reasonable to expect to defer approximately $500,000 of development fees to final LIHC equity contribution or payable from project cash flow. Permanent Financing City Subsidy: Purchase of land and construction funding $600,000. Amount required to buy down the existing bond issue is yet to be determined. Permanent Loan: Based upon an increase in today's rates and CHFA/FHA underwriting it is reasonable to expect Tax Exempt Bond financing in the approximate amount of $5,200,000. Tax Credit Equity: It is reasonable to expect a total Tax Credit Equity contribution of approximately $2,400,000 subject to the posted Applicable Percentage when elected and changes in the CHFA allocation plan. Deferred Fees: It is reasonable to expect to defer approximately $200,000 of APCHA allowable developer fees. These deferred fees will be paid through a priority distribution of cash flow from the project. 11 ARBITRATION 1. General: Appointment of Arbitrators; and Discovery. a. Except as otherwise specifically provided in this subparagraph, if any controversy or dispute between the parties hereto arises under, out of, or in relation to any of the provisions hereof which cannot be settled by the parties within fifteen (15) days after a party hereto gives written notice of the existence of such dispute, either party, within thirty (30) days of the expiration of the foregoing fifteen (15) day period, may submit such controversy or dispute for arbitration to, and in accordance with the Rules of Practice and Procedure of the American Arbitration Association (together its successors and agents referred to herein as the "Arbitrators"), as then in effect, except as otherwise provided by the provisions of this Article. b. The provisions of this Articles shall not be construed to deny any party the right to seek provisional remedies available to said party before a court of law. For the purposes of this Agreement, the parties, by submitting the controversy or dispute to the Arbitrators, do not waive or relinquish their rights to seek provisional remedies before a court of law and said parties expressly agree that each party shall have the right to seek provisional remedies before a court of law. c. If neither party elects to submit a controversy to arbitration within the aforesaid thirty (30) day period, then either party shall have the right to commence legal proceedings to resolve the controversy; provided, however, such party must first give written notice to the other party of its intent to commence litigation and the party receiving such notice shall have fifteen (15) days following the date of receipt of such notice to submit the controversy to arbitration in accordance with the foregoing provisions of this Article. If the party, after receiving such notice, does not submit the controversy to arbitration within such fifteen (15) day period, the right to arbitrate such noticed dispute shall be waived and then the party giving the notice shall have the right to commence legal proceedings to resolve the controversy without further notice or further obligation to comply with the provisions of this Article with respect to that particular controversy. For the purposes of this Agreement, the time within which any arbitration proceedings can be instituted with respect to any matter or dispute shall be deemed to have elapsed only upon the expiration of the aforesaid fifteen (15) day period following the receipt of such a notice of intent to commence legal proceedings. If either party refuses to submit to arbitration after duly given notice of the other party's exercise of his/her right to arbitrate, the other party shall be entitled to an order from the appropriate court compelling arbitration. If either party commences legal proceedings (and the other party does not successfully compel arbitration) to resolve the controversy as specifically provided in this subparagraph, the parties hereto shall stipulate immediately upon the setting of a trial date that the proceeding be tried by a temporary judge. d. The provision of Colorado law governing discovery in civil litigation, or any successor amended statute or law containing similar provisions, are incorporated by reference herein and shall apply in any such arbitration; specifically, the parties shall have the right to engage in all preheating discovery as that which would be permitted in a civil litigation action to resolve their dispute. The Arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys' fees and costs, to the same extent as a court of law, should the Arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The parties shall have a certified court reporter make a record of the hearing. 2. Final Judgment, Findings of Fact and Conclusions a. The Arbitrator shall apply Colorado law as thought he/she was bound by applicable statutes and precedents and case law, including the admissibility of evidence and shall endeavor to decide the controversy as though he/she were a judge in a Colorado court of law. The Arbitrator shall have the power to issue any award, judgment, decree or order of relief that a court of law or equity could issue under Colorado law, including, but not limited to, money damages, specific performance, or injunctive relief; and for such purposes, it is hereby expressly acknowledged and agreed that damages at law will be an inadequate remedy for a breach or threatened breach of any provision of this Agreement, it being the intention of this sentence to make clear the agreement of the parties that the respective rights and obligations of the parties hereunder shall be enforceable in any arbitration proceedings in accordance with principles of equity as well as law. b. The Arbitrator shall prepare a written decision that shall be supported by written findings of fact and conclusions which adequately set forth the basis of his/her decision and which cite the statutes and precedents applied and relied upon in reaching his/her decision. The award, judgment, decree or order, and the findings of the Arbitrator shall be final, conclusive and binding upon the parties, and judgment upon the award and enforcement of any other judgment, decree or order of relief granted by the Arbitrator may be entered or obtained in any court of competent jurisdiction upon the application of any party. This agreement to arbitrate shall be self-executing without the necessity of filing any action in any court and shall be specifically enforceable under the prevailing arbitration law. 3. Costs and Expenses a. Except as otherwise provided for in this Agreement, all costs and expenses of any arbitration proceeding hereunder, shall be shared equally by the parties. Each party shall bear its own attorneys' fees. Notwithstanding the foregoing, however, in the event the Arbitrator shall determine that a party acted without substantial justification in submitting a dispute to arbitration or causing a dispute to be submitted to arbitration, the party who is so determined to be acting without substantial justification shall bear all costs and expenses of the other party in the proceeding including, but not limited to, the reasonable attorneys' fees of such other party. ADDENDUM TO CONSULTING CONTRACT In accordance with our Consulting Agreement dated December 11, 2000, between: KD Housing Partners, Inc. (KD) l0 Cwstal Pool Irvine, CA 92612 and: Aspen/Pitkin County Housing Authority (APCHA) 530 East Main Street Lower Floor Aspen, CO 81611 for the project: Truseott Place Lot 3 the following scope of services are to be an addendum to the contract by and between the parties listed above: In addition to those services contained in the above named contract, KD will provide the following additional services with respect to securing a construction loan from Wells Fargo Community Development Bank for Truseott Place Lot 3. In accordance Paragraph 5 of said contract KD shall, on behalf of Truscott Place Lot 3 (Trnscott) apply for, provide all due diligence materials and secure a cemmitmant for said loan in the name of the Truseott. The total compensation for these services shall be 1% of the construction financing acquired by KD. This fee shall be inclusive of all of KD general and administrative overhead and direct expenses incurred in the performance of KD services. It does not inchide any third party or consultant costs required for the successful completion of these services or any reimbursable expenses as defined in the above referenced contract. Fees for these services shall be earned at closing of said loan. KD shall invoice APCHA for all fees and costs incurred by KD in securing said loan. APCHA hereby agrees to pay said invoice within 10 days of receipt of IN WITNESS WHEREOF, the parties have signed this Addendum on this day of 2001. ~R ASPEN/PITKIN COUNTY HOUSING AUTHORITY KDHO S, INC. )ua:so, President CITY OF ASPEN, COLORADO Tros¢ottContrazt. Addendum. Wl~d EXHIBIT A 1s, Revision as of May I1, 2001 The following financing assumptions are the anticipated ~:easonable expectations for equity and debt for the Project. These assumptions are based upon current financial market conditions, 2001 CHFA Tax Exempt Bond program requirements, 2001 Tax Credit allocation regulations, and APCHA provided project information and assumptions as of May 1, 2001. All amounts are subject to adjustment due to changes in interest rates, underwriting criteria and fluctuating market conditions. Lot 3 / Truseott Phase lI Housing Antieipated Housing Projeet Cost: $11,377,000 Note: Project cost includes the acquisition price of Truscott 200 & 300 at $2.9 mil and certain allocations of overall soft costs, infrastructure, and landscaping as discussed with the housing office and reflected in the sources and uses statement as of this date. Construction Financing Sources CityLoan/Subsidy: For acquisition of Tmscott 200 & 300 and construction gap Financing $3,614,000. Please refer to "Transfer in Use" memo regarding existing bonds. Construction Loan: It is reasonable to anticipate a conventional construction loan of approximately $6.2 mil. APCHA has decided not to utilize the Tax Exempt Bonds for construction due to Prevailing Wage/Davis Bacon issues. Tax Credit Equity: It is reasonable to expect 60% of the total Tax Credit Equity Contribution during construction which would equate to approximately $1,300,000 Deferred Fees: It is reasonable to expect to defer the projected $350,000 of development fees to final LIHC equity contribution or payable from project cash flow. Permanent Financing Sources City Loan: The City will carry a note for $2.9 mil fully subordinated to other debt and payable from available cash flow from the project. City Subsidy: It is reasonable to anticipate a City subsidy of approximately $464,000. Permanent Loan: Based upon CHFA/FHA underwriting, as of this date, utilizing rents and expenses as presented in proforma information as of this date it is reasonable to expect Tax Exempt Bond financing in the approximate amount of $5,650,000. Tax Credit Equity: It is reasonable to expect a total Tax Credit Equity contribution of approximately $2,120,000 subject to the existing market for equity investment, the posted Applicable Percentage when elected and changes in the CHFA allocation plan. Deferred Fees: It is reasonable to expect to defer approximately $250,000 of APCHA allowable developer fees. These deferred fees will be paid through a priority distribution of cash flow from the project.