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HomeMy WebLinkAbout03-26-18 City Commission Packet Materials - C3. Midtown TIF Assistance Grant Agreement with Midtown Apartments Commission Memorandum REPORT TO: Mayor and City Commission FROM: David Fine, Economic Development Specialist Staff Liaison to the Midtown Urban Renewal Board SUBJECT: Authorize the City Manager to sign Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC. MEETING DATE: Monday, March 26, 2018 AGENDA ITEM TYPE: Consent RECOMMENDATION: Authorize the City Manager to sign Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC. BACKGROUND: The City Commission ratified the Midtown Urban Renewal Board’s award of a Midtown TIF Assistance Program Grant of up to $88,482 for a nine-unit apartment complex developed by Midtown Apartments, LLC at 511 W. Peach St. on September 11, 2017. Based on this approval, staff negotiated a grant agreement with the developer. The proposed agreement stipulates certain terms and conditions for the grant award, which would be paid following occupancy certification for the project. Grant funds cover eligible costs related to demolition and public infrastructure costs for the project, which include impact fees. Greater detail on the project and its impact on Midtown can be in the City Commission Packet Materials from September 11, 2017. UNRESOLVED ISSUES: None. ALTERNATIVES: As determined by the City Commission. 21 FISCAL EFFECTS: The grant amount of up to $88,482 will be included in the Fiscal Year 2019 Work Plan and Budget request for the Midtown Urban Renewal District. Staff expects that the project will be completed in FY 2019. Report compiled on March 15, 2018. LINK: Midtown Apartments City Commission Packet Materials from September 11, 2017. 22 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 1 MIDTOWN TIF ASSISTANCE PROGRAM GRANT AGREEMENT THIS GRANT AGREEMENT is made and entered into this ____ day of __________, 20__ by and between the City of Bozeman, Montana, a self-governing municipal corporation located at 121 N. Rouse Ave., Bozeman MT 59771 (“City”) as “Grantor” and Midtown Apartments LLC, a Limited Liability Corporation located at 117 E. Main St., Bozeman, MT 59715 as “Grantee.” WHEREAS, on December 16, 2015, the Bozeman City Commission adopted Ordinance 1925, the Bozeman Midtown Urban Renewal District Plan (“Plan”), defining the boundaries of the Bozeman Midtown Urban Renewal District (“District”) and delineating goals and strategies for eliminating blight, and authorizing the Bozeman Midtown Urban Renewal Board (“Board”) to act as the agency to exercise urban renewal powers; and WHEREAS, the Plan encourages commercial and residential development or redevelopment through the use of incentives, such as, but not limited to, public infrastructure support; and WHEREAS, the Board developed the Midtown Urban Renewal district Tax Increment Financing Assistance Program (“Midtown TIF Assistance Program”) to grant monies appropriated by the City Commission for grant assistance in the Board’s Annual Work Plan and Budget; and WHEREAS, on January 23, 2017 the Bozeman City Commission adopted Resolution No. 4770 establishing policies for the granting of funds by the Board to a requesting entity through the Midtown TIF Assistance Program; and WHEREAS, the intent of these funds is to offset the cost of redevelopment of substandard or “blighted” properties within the District; and WHEREAS, Grantee is the developer of the Midtown Apartments development (the “Project”) to be located at 511 West Peach, Bozeman MT; and WHEREAS, Grantee presented a request to the Board for a grant of up to $88,482 to be used for demolition of existing structures, impact fees, and cash-in-lieu of parkland; and WHEREAS, on August 3, 2017 the Bozeman Midtown Urban Renewal Board approved the grant request in the amount of $88,482 (“grant award”) documented in the minutes of the August 3, 2017 meeting; and WHEREAS, on September 11, 2017, the City Commission approved the grant award. 23 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 2 THE PARTIES AGREE: 1. The Grant. The City, through the Board, will grant and release to Grantee a sum of up to eighty-eight thousand, four hundred eighty-two dollars ($88,482) (the “Grant”) pursuant to the payment terms in Section 3. 2. Use of Grant Funds. a. Grant funds will be used by Grantee for the sole purpose of reimbursing demolition costs, impact fees, and cash-in-lieu of parkland. b. Grant funds must be used within two years of the date of the Letter of Award. Any funds not disbursed to the Grantee within that time will remain in the District fund. The Board, in its sole discretion, may provide an extension of up to one year to the original two year timeframe. c. Use of TIF assistance funds must be in compliance with the terms of this Grant Agreement. 3. Payment of Grant Funds a. The Grant payment will be applied toward reimbursement of demolition costs, impact fees, and cash-in-lieu of parkland following the issuance of the certificate of occupancy for the Project, unless the Board reasonably determines, in its sole discretion, Grantee has failed to meet its obligations pursuant to sections 2, 3(b), 4, 5, 9, or 10 of this Agreement. b. Should Grantee receive additional funding for the Project from other funding sources, or if for any other reason Grantee requires less than $88,482 to fully fund the Project, it will notify the Board of such reduction in need as soon as reasonably possible and the Board may reduce the amount of the Grant and the payment(s) of Grant funds. 4. Grantee Representations. Grantee represents and warrants to City: a. Grantee has familiarized itself with the nature and extent of this Grant Agreement, the contents of Resolution 4770 (attached hereto as Exhibit A) and with all local conditions and federal, state and local laws, ordinances, rules, and 24 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 3 regulations that in any manner may affect Grantee’s obligations under this Grant Agreement. b. Grantee has familiarized itself with applicable City of Bozeman procurement regulations related to bidding, hiring, and prevailing wages and agrees to comply with such regulations if applicable. c. Grantee has the power to enter into and perform this Grant Agreement. d. The Grant funds are necessary to accomplish the financing requirements of the Project. 5. Reports/Accountability/Public Information. Grantee agrees to develop and/or provide such documentation as requested by the Board demonstrating Grantee’s compliance with the requirements of this Grant Agreement. Grantee shall allow the Board or the City, its auditors, and other persons authorized by the Board to inspect and copy its books and records for the purpose of verifying that monies provided to Grantee pursuant to this Grant Agreement were used in compliance with this Grant Agreement and all applicable provisions of federal, state, and local law. Grantee will retain such records for fifteen years after receipt of final payment under this Agreement unless permission to destroy them is granted by the Board. 6. Default and Termination. If Grantee fails to comply with any condition of this Grant Agreement at the time or in the manner provided for, the City may terminate this Agreement if the default is not cured within thirty (30) days after written notice is provided to Grantee. The notice will set forth the items to be cured. If this Grant Agreement is terminated pursuant to this Section, Grantee will repay to the City any Grant funds already disbursed to Grantee or applied toward impact fees or cash-in-lieu of parkland owed by Grantee for the Project. 7. Limitation on Grantee’s Damages; Time for Asserting Claim a. In the event of a claim for damages by Grantee under this Grant Agreement, Grantee hereby expressly waives any right to claim or recover consequential, special, punitive, lost business opportunity, lost productivity, field office overhead, general conditions costs, or lost profits damages of any nature or kind. b. In the event Grantee wants to assert a claim for damages of any kind or nature, Grantee shall provide City with written notice of its claim, the facts and circumstances surrounding and giving rise to the claim, and the total amount of damages sought by the claim, within ninety (90) days of the facts and 25 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 4 circumstances giving rise to the claim. In the event Grantee fails to provide such notice, Grantee shall waive all rights to assert such claim. 8. Representatives a. City’s Representative. The City’s Representative for the purpose of this Agreement shall be David Fine or such other individual as City shall designate in writing. Whenever approval or authorization from or communication or submission to City is required by this Agreement, such communication or submission shall be directed to the City’s Representative and approvals or authorizations shall be issued only by such Representative; provided, however, that in exigent circumstances when City’s Representative is not available, Grantee may direct its communication or submission to other designated City personnel or agents and may receive approvals or authorization from such persons. b. Grantee’s Representative. Grantee’s Representative for the purpose of this Grant Agreement shall be Luke Welborn, or such other individual as Grantee shall designate in writing. Whenever direction to or communication with Grantee is required by this Agreement, such direction or communication shall be directed to Grantee’s Representative; provided, however, that in exigent circumstances when Grantee’s Representative is not available, City may direct its direction or communication to other designated Grantee personnel or agents. 9. Indemnity/Waiver of Claims/Insurance. To the fullest extent permitted by law, Grantee agrees to defend, indemnify and hold the City and its agents, representatives, employees, and officers (collectively referred to for purposes of this Section as the City) harmless against all third party claims, demands, suits, damages, losses, and expenses, including reasonable defense attorney fees, which arise out of, relate to or result from Grantee’s (i) negligence or (ii) willful or reckless misconduct. Such obligations shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity that would otherwise exist. The indemnification obligations of this Section must not be construed to negate, abridge, or reduce any common-law or statutory rights of the indemnitee(s) which would otherwise exist as to such indemnitee(s). Grantee’s indemnification obligations under this Section shall be without regard to and without any right to contribution from any insurance maintained by City. Should any indemnitee described herein be required to bring an action against Grantee to assert its right to defense or indemnification under this Grant Agreement or under 26 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 5 Grantee’s applicable insurance policies required below the indemnitee shall be entitled to recover reasonable costs and attorney fees incurred in asserting its right to indemnification or defense but only if a court of competent jurisdiction determines Grantee was obligated to defend the claim(s) or was obligated to indemnify the indemnitee for a claim(s) or any portion(s) thereof. In the event of an action filed against City resulting from the City’s performance under this Grant Agreement, the City may elect to represent itself and incur all costs and expenses of suit. Grantee also waives any and all claims and recourse against the City or its officers, agents or employees, including the right of contribution for loss or damage to person or property arising from, growing out of, or in any way connected with or incident to the performance of this Grant Agreement except “responsibility for his own fraud, for willful injury to the person or property of another, or for violation of law, whether willful or negligent” as per 28-2-702, MCA. These obligations shall survive termination of this Grant Agreement. In addition to and independent from the above, Grantee shall at Grantee’s expense secure insurance coverage through an insurance company or companies duly licensed and authorized to conduct insurance business in Montana which insures the liabilities and obligations specifically assumed by Grantee in this Section. The insurance coverage shall not contain any exclusion for liabilities specifically assumed by Grantee in this Section. The insurance shall cover and apply to all claims, demands, suits, damages, losses, and expenses that may be asserted or claimed against, recovered from, or suffered by the City without limit and without regard to the cause therefore in amounts not less than as follows: • Workers’ Compensation – statutory; • Employers’ Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate; • Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate The City of Bozeman, its officers, agents, and employees, shall be endorsed as an additional or named insured on a primary non-contributory basis on the Commercial General policy. The insurance and required endorsements must be in a form suitable to 27 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 6 City and shall include no less than a thirty (30) day notice of cancellation or non- renewal. The City must approve all insurance coverage and endorsements prior to disbursement of Grant funds. Grantee shall notify City within two (2) business days of Grantee’s receipt of notice that any required insurance coverage will be terminated or Grantee’s decision to terminate any required insurance coverage for any reason. 10. Nondiscrimination. Grantee agrees that all hiring by Grantee of persons performing this Grant Agreement shall be on the basis of merit and qualifications. Grantee will have a policy to provide equal employment opportunity in accordance with all applicable state and federal anti-discrimination laws, regulations, and contracts. Grantee will not refuse employment to a person, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of race, color, religion, creed, political ideas, sex, age, marital status, national origin, actual or perceived sexual orientation, gender identity, physical or mental disability, except when the reasonable demands of the position require an age, physical or mental disability, marital status or sex distinction. Grantee shall require these nondiscrimination terms of its subcontractors providing services under this Grant Agreement. 11. Attorney’s Fees and Costs. In the event it becomes necessary for a party to this Agreement to retain an attorney to enforce any of the terms or conditions of this Agreement or to give any notice required herein, then the prevailing party shall be entitled to reasonable attorney’s fees and costs, including fees, salary, and costs of in- house counsel to include City Attorney. 12. Integration and Modification. This document contains the entire agreement between the parties and no statements, promises or inducements made by either party or agents of either party not contained in this written Agreement may be considered valid or binding. This Agreement may not be modified except by written agreement signed by both parties. 13. Dispute Resolution a. Any claim, controversy, or dispute between the parties, their agents, employees, or representatives shall be resolved first by negotiation between senior-level personnel from each party duly authorized to execute settlement agreements. Upon mutual agreement of the parties, the parties may invite an independent, disinterested mediator to assist in the negotiated settlement discussions. 28 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 7 b. If the parties are unable to resolve the dispute within thirty (30) days from the date the dispute was first raised, then such dispute may only be resolved in a court of competent jurisdiction in compliance with the Applicable Law provisions of this Agreement. 14. No Assignment. Grantee may not subcontract or assign Grantee’s rights, including the right to Grant payments, or any other rights or duties arising hereunder, without the prior written consent of City. 15. No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party and their respective successors and assigns. It is not the parties’ intent to confer third party beneficiary rights upon any other person or entity. 16. Choice of Law. This Agreement shall be governed and construed in accordance with the laws of the State of Montana without regard to conflict of law provisions. The Parties agree to submit to the personal and exclusive jurisdiction of the courts located within Gallatin County, Montana. 17. Non-Waiver. A waiver by either party of any default or breach by the other party of any terms or conditions of this Agreement does not limit the other party’s right to enforce such term or conditions or to pursue any available legal or equitable rights in the event of any subsequent default or breach. 18. Severability. If any portion of this Agreement is held to be void or unenforceable, the balance of the Agreement shall continue in effect. 19. Counterparts. This Agreement may be executed in counterparts, which together constitute one instrument. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** 29 Midtown TIF Assistance Grant Agreement with Midtown Apartments, LLC Page 8 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year indicated below. _______________________ Date: __________ ___________, City Manager City of Bozeman STATE OF MONTANA ) : ss. County of Gallatin ) On this ______ day of __________________, 20__, this instrument was acknowledged before me by _________________ as City Manager of the City of Bozeman, a self-governing municipal government. ______________________________________ Notary Public for the State of Montana Printed Name: __________________________ Residing at: ____________________________, Montana My commission expires: _______________ _______________________ Date: __________ _______________________ [print name] _______________________ [title] [Grantee name] STATE OF MONTANA ) : ss. County of Gallatin ) On this ______ day of __________________, 20__, this instrument was acknowledged before me by _________________________, as _______________[title] of Midtown Apartments, LLC, a limited liability corporation. ______________________________________ Notary Public for the State of Montana Printed Name: __________________________ Residing at: ____________________________, Montana My commission expires: _______________ 30 EXHIBIT A CITY OF BOZEMAN RESOLUTION 4770 31