HomeMy WebLinkAbout20- HRDC - Darlinton Boulevards DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
GRANT AGREEMENT
HRDC— Preservation of Darlinton Manor and Boulevards Apartments as Affordable Rentals
THIS AGREEMENT is made and entered into this 24th day of November 2020 ("Effective
Date"), 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 Human Resources
Development Council of District IX, Inc. ("HRDC"), a Montana nonprofit corporation located at
32 South Tracy Ave., Bozeman Montana 59715 as Grantee. Collectively City and HRDC may be
referred to herein as the "Parties."
WHEREAS, on October 17, 2005 the Bozeman City Commission adopted Resolution No. 3866
establishing policies for the granting of funds from the City of Bozeman to a requesting entity;
and
WHEREAS, HRDC submitted a proposal to the City Commission for a grant of$500,000 to pay
for partial construction costs to rehabilitate and renovate Darlinton Manor and Boulevards
Apartments as affordable rental homes; and
WHEREAS, on October 14, 2020 the Community Affordable Housing Advisory Board (CAHAB)
reviewed the grant request and recommended the City Commission approve the Grant; and
WHEREAS, the City approved HRDC's Preservation of Darlinton Manor and Boulevards
Apartments grant request on November 24 , 2020.
WHEREAS, the City Commission finds there is a compelling public interest in preserving rental
stock affordable for qualified low income households, and in increasing the number of homes in
Bozeman affordable in perpetuity, and that the project will serve a public purpose.
THE PARTIES AGREE:
1. Grant. The City will grant and release to HRDC a sum of up to five hundred thousand
dollars ($500,000) from its Community Housing Fund (the "Grant") pursuant to the
payment terms in Section 4.
2. Use of Grant Funds. Grant funds in the amount of up to five hundred thousand dollars
($500,000) will be used by HRDC for the sole purpose of paying costs associated with
the renovation and rehabilitation of 41 rental homes in the Boulevards Apartments
building, and 100 rental homes in Darlinton Manor as described in the proposal and
supporting materials submitted by HRDC to the City Commission, attached hereto as
Exhibit A and by this reference incorporated herein.
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
3. Term. The term of this Agreement will commence on the Effective Date and expire one
(1) year after the Effective Date unless earlier terminated as provided herein.
4. Payment of Grant Funds.
a. Grantee must meet the following requirements to receive Grant funds:
i. All work done pursuant to the Grant must be completed by licensed,
insured, and bonded contractors.
ii.Within one year of the Effective Date, HRDC may request reimbursement
for construction costs as they are incurred in the amount of$500,000 for
both Darlinton Manor and Boulevards Apartments. Requests for
reimbursement must be submitted in writing with proof of expenses paid
to the Community Housing Manager and City's Director of Finance.
Acceptable forms of proof of payment shall be as determined in the sole
discretion of the City's Director of Finance.
b. The City will have no obligation to pay any Grant funds unless at the time of the
reimbursement request (i) all of HRDC's representations as set forth in Section 5
are true and correct, and (ii) HRDC is not in breach of any term of this
Agreement. If any of the above conditions are not satisfied in the determination
of the City, the City shall have no obligation to reimburse any expenses and the
City's determination to refrain from reimbursing, or its inability to reimburse,
any of the expenses shall not be or result in a default of this Agreement.
c. Any Grant funds not requested within one year of the Effective Date will remain
in the City's Community Housing Fund and will be available for other
appropriation.
d. The City reserves the right to complete a visual inspection of each of the finished
apartment buildings and to review such additional evidence confirming
compliance with this Agreement as the Director of Community Development
may reasonably request prior to payment of Grant funds.
5. Grantee Representations
a. HRDC has familiarized itself with the nature and extent of this Agreement and
with all local conditions and federal, state and local laws, ordinances, rules, and
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
regulations that in any manner may affect HRDC's performance under this
Agreement.
b. HRDC represents and warrants to City that it has the experience and ability to
perform its obligations under this Agreement; that it will perform said
obligations in a professional, competent and timely manner and with diligence
and skill; that it has the power to enter into and perform this Agreement; and
that its performance of this Agreement shall not infringe upon or violate the
rights of any third party, whether rights of copyright, trademark, privacy,
publicity, libel, slander or any other rights of any nature whatsoever, or violate
any federal, state and municipal laws.The City will not determine or exercise
control as to general procedures or formats necessary for HRDC to meet this
warranty.
c. HRDC represents and warrants to City that the Grant funds are necessary to
accomplish the financial requirements of the Project.
6. Permits and Compliance With Laws. HRDC will obtain, in a timely manner, all required
permits, licenses and approvals, and will meet all requirements of all local, state and
federal laws, rules and regulations which must be obtained or met in connection with
construction of the Project.
7. Reports/Accountability/Public Information. If Grant funds are paid to HRDC, HRDC will
provide to the City a formal written report that includes, at a minimum, the proof of
expenses paid and a final project summary with outcomes within 60 days of final receipt
of Grant funds. HRDC agrees to develop and/or provide such other documentation as
requested by the City demonstrating HRDC's compliance with the requirements of this
Agreement. HRDC must allow the City, its auditors, and other persons authorized by the
City to inspect and copy its books and records for the purpose of verifying that monies
provided to HRDC pursuant to this Agreement were used in compliance with this
Agreement and all applicable provisions of federal, state, and local law. HRDC will retain
such records for seven years after receipt of final payment under this Agreement unless
permission to destroy them is granted by the City. HRDC shall not issue any statements,
releases or information for public dissemination regarding this Grant without prior
approval of the City. Requests for approval should be provided to the City's designated
representative noted in Section 11.a for review 5 days before publication.
8. Independent Contractor Status. The Parties agree that HRDC, its agents, employees,
contractors, or subcontractors, are independent contractors for purposes of this
Agreement and are not to be considered employees or agents of the City for any
purpose. HRDC and its agents, employees, contractors, or subcontractors, are not
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
subject to the terms and provisions of the City's personnel policies handbook and may
not be considered a City employee for workers' compensation or any other purpose.
HRDC, its agents, employees, contractors, or subcontractors, are not authorized to
represent the City or otherwise bind the City in any way.
9. Default and Termination. If HRDC fails to comply with any condition of this Agreement
at the time or in the manner provided for, the City may terminate this Agreement if the
default is not cured within fifteen (15) days after written notice is provided to HRDC.
The notice will set forth the items to be cured. If this Agreement is terminated pursuant
to this Section, HRDC will repay to the City any Grant funds already delivered to HRDC
for the Project. In the event of termination under this Section, HRDC shall, under no
circumstances, be entitled to claim or recover consequential, special, punitive, damages
of any nature arising, or claimed to have arisen, as a result of the termination.
10. Limitation on HRDC's Damages; Time for Asserting Claim
a. In the event of a claim for damages by HRDC under this Agreement, HRDC's
damages shall be limited to contract damages and HRDC 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 HRDC wants to assert a claim for damages of any kind or nature,
HRDC must first provide the 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
circumstances giving rise to the claim. In the event HRDC fails to provide such
notice, HRDC shall waive all rights to assert such claim.
11. Representatives
a. City's Representative. The City's Representative for the purpose of this
Agreement shall be the City of Bozeman Finance Director 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, HRDC may direct its communication or submission to other
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
designated City personnel or agents and may receive approvals or authorization
from such persons.
b. HRDC's Representative. HRDC's Representative for the purpose of this
Agreement shall be HRDC's Executive Director or such other individual as HRDC
shall designate in writing. Whenever direction to or communication with HRDC
is required by this Agreement, such direction or communication shall be directed
to HRDC's Representative; provided, however, that in exigent circumstances
when HRDC's Representative is not available, City may direct its direction or
communication to other designated HRDC personnel or agents.
12. Indemnity/Waiver of Claims/Insurance. To the fullest extent permitted by law, HRDC
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, expenses,
action or other proceeding whatsoever including reasonable defense attorney fees, (i)
arising or purportedly arising out of, or resulting or purportedly resulting from, the
construction or installation of the Improvements, any violation by HRDC of any
agreement, condition or covenant of this Agreement, the maintenance and operation of
the Project, or the presence on any portion of the Land, of any dangerous, toxic or
hazardous pollutants, contaminants, chemicals, waste, materials or substances; or (ii)
which is proximately caused by HRDC or its officers, agents, contractors, consultants or
employees.
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). HRDC'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 HRDC to
assert its right to defense or indemnification under this Agreement or under HRDC'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 HRDC was obligated to
defend the claim(s) or was obligated to indemnify the indemnitee for a claim(s) or any
portion(s) thereof.
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
In the event of an action filed against City resulting from the City's performance under
this Agreement, the City may elect to represent itself and incur all costs and expenses of
suit.
HRDC 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 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 Agreement.
In addition to and independent from the above, HRDC shall at HRDC'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 HRDC in this Section.The insurance coverage shall
not contain any exclusion for liabilities specifically assumed by HRDC in this Section
unless and to the extent coverage for such liability is not reasonably available.
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 and which is acceptable to
the City and HRDC shall furnish to the City an accompanying certificate of insurance and
accompanying endorsements 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 Liability policy. The insurance and required endorsements must be in a form
suitable to 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
delivery of Grant funds to HRDC. HRDC shall notify City within two (2) business days of
HRDC's receipt of notice that any required insurance coverage will be terminated or
HRDC's decision to terminate any required insurance coverage for any reason.
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
13. Nondiscrimination and Equal Pay
HRDC agrees that all hiring by HRDC of persons performing this Grant Agreement shall
be on the basis of merit and qualifications. HRDC will have a policy to provide equal
employment opportunity in accordance with all applicable state and federal anti-
discrimination laws, regulations, and contracts. HRDC 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.
HRDC represents it is, and for the term of this Agreement will be, in compliance with the
requirements of the Equal Pay Act of 1963 and Section 39-3-104, MCA (the Montana
Equal Pay Act). HRDC must report to the City any violations of the Montana Equal Pay
Act that Contractor has been found guilty of within 60 days of such finding for violations
occurring during the term of this Agreement.
HRDC shall require these nondiscrimination terms of its subcontractors providing
services under this Grant Agreement.
14. Public Meetings and Access to Public Records
a. Meetings of HRDC that pertain to the receipt or expenditure of Grant funds from the
City are subject to the open meeting requirements of Montana law, including those
set forth in Title 7, Chapter 1, Part 41, MCA and Title 2, Chapter 3, MCA. To ensure
compliance, HRDC will provide agendas for meetings that pertain to the receipt or
expenditure of Grant funds covered by this Agreement to the City Clerk's office no
later than 72 working hours prior to meeting for notice on the City's official posting
board and any other sites deemed reasonable by the Clerk's office. In addition,
meeting minutes will be kept by HRDC and provided to the City Clerk's office no later
than 90 days after the meeting. These minutes shall be posted and made available
to the public by the City Clerk's office except for those minutes taken during a closed
meeting in accordance with 2-3-203, MCA. Minutes taken during a closed meeting
shall also be provided to the City Clerk's office but shall be handled in accordance
with the City Clerk's regular executive session protocol and kept private in a secured
cabinet.
b. In accordance with 7-1-4144, MCA and subject to any applicable legal obligation to
protect and preserve individual confidential or private information, upon reasonable
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
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request and at reasonable times during normal business hours, HRDC shall make
such records available for inspection and copying by members of the public. HRDC
may charge for such copying in accordance with the policies of the City, which HRDC
hereby adopts for such purposes.
c. To determine whether a meeting or part of a meeting may be closed to the public
and to determine whether information contained in HRDC documents is protected
by law from disclosure, HRDC may seek a determination of the City Attorney at no
cost to HRDC. Such request and determination shall not create an attorney-client
relationship between HRDC and the City.
15. 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
counsel to include City Attorney.
16. 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.
17. 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.
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.
18. No Assignment. HRDC may not subcontract or assign HRDC's rights, including the right
to Grant payments, or any other rights or duties arising hereunder, without the prior
written consent of City.
19. Successors Bound By Agreement; No Third Party Beneficiary. Subject to compliance
with Section 26, this Agreement will inure to the benefit of and be binding upon the
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Parties and their respective successors in interest and permitted assignees. This
Agreement is for the exclusive benefit of the Parties, does not constitute a third-party
beneficiary agreement, and may not be relied upon or enforced by a third party.
20. 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.
21. 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.
22. Severability. If any portion of this Agreement is held to be void or unenforceable, the
balance of the Agreement shall continue in effect.
23. Counterparts. This Agreement may be executed in counterparts, which together
constitute one instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this instrument the day and year
indicated below.
CITY OF BOZEMAN DocuSigned by:
DocuSigned by:
�'11 kl All °�' 11/30/2020
°" Date:
251607FD8A824A6...
Jeff Mihelich, City Manager
HRDC
i r1c
I
.r
Date:
Heather Grenier, President and CEO
Approved as to form:
DocuSigned by:
SAS Date: 11/30/2020
876992AC9ACA44B...
Greg Sullivan, City Attorney
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
City of Bozeman
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Exhibit A
Community Housing Fund Application and Supporting Materials
FY 2021 Grant Agreement—HRDC Preservation of Darlinton Manor and Boulevards Apartments Exhibit A
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
BUILDING A
BETTER
COMMUNITY
August 28, 2020
rn
Q Ms.Tanya Andreasen
Community Housing Program Manager
City of Bozeman
r 20 E Olive Street
® Bozeman, MT 59715
Dear Ms.Andreasen:
HRDC and Good Housing Partnership seek City support to assist with the preservation and
s rehabilitation 141 subsidized rentals in the Boulevards Apartments and Darlinton Manor.
Preservation of subsidized rentals is a critical strategy to meeting the objectives of the City's
Community Housing Action Plan.
The Boulevards Apartments a 41-unit subsidized building is in the heart of downtown,just across the
street from HRDC's Bozeman offices. The building serves very low-income people with disabilities and
elderly members of our community.The proximity to HRDC housing counselors, service navigators
and other supportive services, along with a subsidy that ensures that tenants only pay 30%of their
income toward rent, has helped many tenants exit long-time homelessness and achieve housing
stability. Unfortunately,this prime downtown location, and the nature of the annually-renewing
mod-rehab subsidy placed the building at high redevelopment risk. In August 2019, HRDC worked
with the property owner to acquire the building using a temporary financing structure, with the long-
term intent to apply for Low Income Housing Tax Credits (LIHTC)to acquire and rehabilitate the
apartments. HRDC is also working with HUD's Rental Assistance Demonstration (RAD) program to
convert the annually-renewing mod-rehab contract to a 20-year Housing Assistance Payment
Contract.To assist with the RAD conversion and LIHTC process, HRDC is partnering with a national
expert in RAD conversions,Good Housing Partnership (GHP).The RAD conversion will both preserve
the subsidy for the units,while extending the contract period beyond the current annual period,
making market conversion difficult. The LIHTC will also allow for a substantial renovation of the
building. Built in 1914,the apartments need extensive systems and accessibility upgrades, in addition
to full renovation of the units.
Darlinton Manor is a 100-unit subsidized property targeted to low-income seniors and people with
disabilities. HRDC's subsidiary corporation, Darlinton Apartments, Inc. acquired this property in July
2020.This property currently has a HUD Housing Assistance Payment contract,which guarantees that
residents only pay 30%of their income toward rent, on 88 of the 100 units. HRDC plans to add place-
based Section 8 Housing Vouchers to the remaining units to expand subsidy to all 100 units. While
the scope of work needed at Darlinton Manor is not as extensive as the Boulevards,the units are in
need of renovation and ADA upgrades.
p: 406.587.4486
e: hello@thehrdc.org
, 32 South Tracy
Bozeman, Montana 59715
HRDC
BUILDING A BETTER COMMUNITY
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
BUILDING A
BETTER
COMMUNITY
Combining the LIHTC application for acquisition and rehabilitation of the Boulevards and Darlinton
allows for the scale required to apply through the non-competitive 4% LIHTC program. Under the
o non-competitive program, all applications meeting threshold requirements are funded.This results in
a more rapid tax credit commitment, and allows HRDC to forgo the risks of the competitive funding
s process.
m
z
r
While the LIHTC 4% application process is non-competitive,the constraints of the program limit the
® percentage of seller note and deferred developer fee allowed. Additionally,the rehabilitation
proposes$1 million in funding from the Housing Trust Fund, which is a competitive funding process.
@j One critical component of HTF application ranking is local financial participation. As such, the loss of
funds from the City would adversely impact both the LIHTC and HTF applications and the feasibility of
m the project in general, possibly risking loss of subsidized units in our community.
s
a}
The Community Housing Needs Assessment notes that the community is already in desperate need
of additional housing units for people at all income levels. An estimated 1,460 units are needed just
to meet current demand; to meet the needs of Gallatin County's growth rate, over 3,000 below-
market rate units are needed. As this community continues to grow, the preservation of affordable
housing like the Boulevards and Darlinton Manor is critical. At this time, only 5%of the City's rentals
are affordable to households earning less than 60%AMI, however 45%of renters fall below this
income level, and only 1%of units are affordable to very low income households earning less than
30%AMI. Our community is already in an extreme housing crisis;the loss of these units would be
staggering, and the subsidy irreplaceable. Preserving these homes is the most cost-effective strategy
for ensuring that our most vulnerable community members are able to maintain housing
affordability. We sincerely hope that the City of Bozeman will agree to assist with this effort.
Sincerely,
4 racy M�enuez��
Associate Director
p: 406.587.4486
e: hello@thehrdc.org
, 32 South Tracy
Bozeman, Montana 59715
HRDC
BUILDING A BETTER COMMUNITY
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Online Community Housing Fund Application
1. Organization Seeking Funding
Organization Name Human Resource Development Council of District IX, Inc.
Address 32 South Tracy
Contact Name Not answered
Contact Phone Number (406)585-4890
Contact Email Address tmenuez@thehrdc.org
2. Project
Information
Project Name Boulevards/Darlinton Preservation
Location of Project 6 W. Babcock and 606 N. 5th
Project Description
The proposed project will rehabilitate and preserve 141 subsidized rental units in Bozeman.
The two properties,The Boulevards Apartments,and Darlinton Manor are described in detail
below.
The Boulevards Apartments provide 41 units of subsidized housing in the heart of
downtown,just across the street from HRDC's Bozeman offices.The building serves very
low-income people with disabilities and elderly members of our community.The proximity
to HRDC housing counselors, service navigators and other supportive services,along with a
subsidy that ensures that tenants only pay 30%of their income toward rent, has helped
many tenants exit long-time homelessness and achieve housing stability. Unfortunately,this
prime downtown location and the nature of the annually-renewing mod-rehab subsidy
placed the building at high redevelopment risk. In August 2019, HRDC worked with the
property owner to acquire the building using a temporary financing structure,with the long-
term intent to apply for Low Income Housing Tax Credits to acquire and rehabilitate the
apartments.Additionally, HRDC is working with HUD's Rental Assistance Demonstration
(RAD) program to convert the annually-renewing mod-rehab contract to a 20-year Housing
Assistance Payment Contract.The RAID conversion will both preserve the subsidy for the
units,while extending the contract period beyond the current annual period, making market
conversion difficult.The building,constructed in 1914, is in desperate need of rehabilitation.
Like many older buildings, it needs improvements to systems,accessibility upgrades,and full
renovation.
Darlinton Manor is a 100-unit subsidized property targeted to low-income seniors and
people with disabilities. HRDC's subsidiary corporation, Darlinton Apartments, Inc. acquired
this property in July 2020 through a right of first refusal.This property currently has a HUD
Housing Assistance Payment contract,which guarantees that residents only pay 30%of their
income toward rent,on 88 of the 100 units. HRDC plans to add place-based Section 8
Housing Vouchers to the remaining units to expand subsidy to all 100 units.While the scope
of work needed at Darlinton Manor is not as extensive as the Boulevards,the units are in
need of renovation and ADA compliance upgrades.
Combining the LIHTC application for acquisition and rehabilitation of the Boulevards and
Darlinton allows for the scale required to apply through the non-competitive 4%LIHTC
program. Under the non-competitive program,all applications meeting threshold
DocuSign Envelope ID:631381 E6C-6004-4FF4-AD8E-26E21803B3B7
requirements are funded.This results in a more rapid tax credit commitment,and allows
HRDC to forgo the risks of the competitive funding process. In total,the properties have a
combined acquisition cost of$12.5 million with rehabilitation demands of approximately
$7.5 million.
The Affordable Housing needs assessment notes that the community is already in desperate
need of additional housing units for people at all income levels.An estimated 1,460 units are
needed just to meet current demand;to meet the needs of Gallatin County's growth rate,
over 3,000 below-market-rate units are needed.As this community continues to grow,the
preservation of subsidized housing is critical.At this time, only 5%of the City's rentals are
affordable to households earning less than 60%AMI, however,45%of renters fall below this
income level.Only 1%of units are affordable to very low-income households earning less
than 30%AMI. Our community is already in an extreme housing crisis;the loss of these units
would be staggering,and the subsidy irreplaceable.
Project Timing 2021-2022
Which Community Preservation of Subsidized Rentals
Housing Action Plan
Strategy/Action Item
Does This Project
Address?
#of Affordable Dwelling 141
Units to be
Generated/Renovated
Area Median Income% less than 60%AMI
Targeted
Project Partners(if Good Housing Partnership
applicable)
3. Indicate how this project ensures permanent or long term affordability
[x] Deed Restriction
Please Explain
Both properties will be subject to renewed HUD Housing Assistance Payment(HAP)contracts,with a 20-
year term,and a 41-year Land Use Restriction Agreement(LURA)for the Low Income Housing Tax Credit
Program.The LURA is filed as a deed restriction on the property.
Page 2
4. Project Funding(Please attach budget at the end of the application)
Total Project Budget $29,525,127
S. Primary Project Funding Sources
1. Permanent Debt
$Amount $16,277,508
2. Tax Credit Equity
$Amount 7,380,932
3. Seller Note/other sources (please see budget)
$Amount 5,866,687
DocuSign Envelope ID:631381 E6C-6004-4FF4-AD8E-26E21803B3B7
Amount Requested From $500,000.00
Community Housing Fund
6. Which Project Elements Will Funds Be Used For?(attach line item budget if needed)
1. Rehabilitation
$Amount $500,000.00
2. Not answered
$Amount Not answered
3. Not answered
$Amount Not answered
7. Type of Funding Requested
(o)Grant
8. If you selected Grant,would you consider a Loan if Grant was not available?
(o)Yes
9. Would you accept 50%of your requested amount?
(o)Yes
10. Would you accept 25%of your requested amount?
(o)Yes
11. Could the Grant/Loan be split among multiple years?
(o)Yes
12.When would the funds requested need to be received in order to optimize the benefit of the funds
requested for the project?
06/30/2021
13. Have you received community housing funding assistance in the past 5 years?
(o)Yes
Page 3
14. Additional Information
What is the level of High level
urgency behind the
funding request?
If Community Housing While the LIHTC 4%application process is non-competitive,the constraints of
Funds are not allocated the program limit the percentage of seller note and deferred developer fee
to this project,how does allowed.Additionally,the rehabilitation proposes$1 million in funding from
impact the project? the Housing Trust Fund,which is a competitive funding process. One critical
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
component of HTF application ranking is local financial participation.As such,
the loss of funds from the City would adversely impact both the LIHTC and HTF
applications and the feasibility of the project in general, possibly risking loss of
subsidized units in our community.
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Blvd/Darlinton Schedule
Milestone
Acquire Interest in Darlinton Jul-20
Submit Tax Credit and Bond Applications
Darlinton and Blvd Aug-20
HTF,City Funds, Risk Share Loan
Submit Application for HTF Sep-20
Submit Application for City Funds Aug-20
Request to MBOH for Risk Share Loans Sep-20
Order Third Party Reports
Appraisals
Environmental
Phase 1/Radon
Lead/Asbestos
Rent Comparability Studies
Market Studies
Survey
Design and Engineering
Architectural Drawings
Engineering
Scope Finalization Aug-20
Plan Check Submission Sep-20
Permit Nov-20
Contractor
Select Contractor Sep-20
Finalize Scope Oct-20
Review subcontractor Bids Sep-20
Finalize Schedule of Values Oct-20
Finalize Construction Contract Oct-20
Finance and Legal
Select Investor and Lender Aug-20
Due Diligence Process Aug-Oct 2020
Underwriting Aug-Oct 2020
Partnership Oct-20
Loan Documents Oct-20
Bond Documents Oct-20
HUD Documents Oct-20
HTF Documents
Risk Share Loan Documents
HUD Process
Submit Applications for MUTM Aug-20
Submit Application for Mod/Rehab Aug-20
Complete HUD Legal Review Sep-20
Receive HUD Approval Oct-20
Close on the Financing Nov-Dec-20
Issue Notice to Proceed Dec-20
Construction Mobilization Dec-20
Begin Unit Renovations/Relocation Jan-21
Construction Completion Mar-22
Temporary Certificate of Occupancy Jan-22
Certificate of Occupancy Mar-22
Stabilization-90/90 Test Jul-22
Process 8609
Final Cost Cert May-22
Submit PIS Application to MBOH May-22
Receive 8609 Aug-22
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Boulevards/Darlinton Budget
Uses
Acquisition 12,500,000
Rehabilitation 7,484,750
Furnishings 245,217
Contingency 741,000
Relocation 775,500
Architect and Engineering 381,000
Construction Financing Fees and Interest 2,186,511
Permanent Financing Costs 318,177
Legal 130,000
Reserves 760,776
LIHTC Syndication Costs 462,679
Permitting 61,304
Developer Fee 3,478,213
TOTAL USES 29,525,127
Construction Sources
Construction Loan 21,000,000
LIHTC Equity 1,845,233
Developer Note 2,568,948
Housing Trust Fund 1,000,000
City of Bozeman 500,000
Deferred Developer Fee 2,610,946
TOTAL CONSTRUCTION SOURCES 29,525,127
Permanent Sources
Permanent Loan 16,277,508
LIHTC Equity 7,380,932
Developer Note 2,568,948
Housing Trust Fund 1,000,000
City of Bozeman 500,000
Rehab NOI 571,852
Deferred Developer Fee 1,225,887
TOTAL PERMANENT SOURCES 29,525,127
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Boulevards Apartments and
Darleinton Manor Preservat6ion
-%�_.�_.�-_._�. ��a+ _ -•ram
DC
Y'
1
K -
f ►' -:
r -
DocuSign Envelope63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Darlinton Man
0
100 units (85 subsidized PBS8)
32 Studiol 68 one bedroom
--�- I ' •wry I ;• �
41 top 0
4 .
ri
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DxuSign Envelope ID:63B81 E6C-6004-0FF4-AD8E-26E21803B3B7
Current Residents
• Both buildings are elderly/disa bled designated
• Very low, often fixed incomes
• Boulevards : 41 units ( 39 with current subsidy)
• Darlinton : 100 units (85 with current subsidy)
• Acquisition rehab process would add 17 subsidized units
* Subsidies ensure that residents pay 30% of income toward
re nt
DocuSign Envelope ID:63B81 E6C-6004-4FF4-AD8E-26E21803B3B7
Where oespreservation
it in ?
Bozeman Housing Bridge
Middle
Income
Willow Springs $63.30O
Moderate
Income
sOU.t 4 i In-"Mae Upper Middle
I�corwe
Arrowleaf/Perennial '
Low ,
Incomes
63T
Upper
Inc*#nes
Darlinton/Blvds
Very Law
Income
i
S I F. ?-I r
Warming Center i
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
Bozeman Housing Needs
Renter Income Distribution Compared to Available Rentals
Income Range
Affordable Rent Dist • • Rentals*
<30% AMI $4 7 5 2 3%
30. 1 to 60% KE $950 22%
60. 1 - 80% $ 11260 16% 21%
80. 1 - 100% $ 1580 11% 26%
100. 1 - 120% $11900 8% 31%
Over 120% Over $1,900 20% 17%
TOTAL - 100% 140 listings
*Available rentals include rentals available in the City in mid -Dec 2018.
About 38% of Bozeman's low-income renters earn below 30% of AMI
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
work - Boulevards
� co e of
p
• Electrical rewiring/systems upgrades
• Sprinkler system install
or
• New elevator _
• Windows
• Roof
- r
• Accessibility upgrades
• Units �
• Appliances
• Cabinets
• Flooring
• Fixtures ;!
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
work - Darlinton%) cope of
• Windows
• Roof
• Accessibility upgrades
• Units
• Appliances
0
• Cabinets
• Flooring
• Fixtures
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
Budget
Uses Construction Sources
Acquisition 12,500,000 Construction Loan 21,000,000
Rehabilitation 7,484,750 LIHTC Equity 1,845,233
Furnishings 245,217
Contingency 741,000 Developer Note 2,568,948
Relocation 775,500 Housing Trust Fund 1,000,000
Architect and Engineering 381,000 City of Bozeman 500,000
Construction Financing Fees and Interest 2,186,511 Deferred Developer Fee 2,610,946
Permanent Financing Costs 318,177 TOTAL CONSTRUCTION SOURCES 29,525,127
Lega 1 130,000
Reserves 760,776 Permanent Sources
LIHTC Syndication Costs 462,679 Permanent Loan 161277508
Permitting 61,304 LIHTC Equity 7/380/932
Developer Fee 3,478,213 Developer Note 2/568/948
TOTAL USES 29,525,127 Housing Trust Fund 1,000,000
City of Bozeman 500,000
Rehab N01 571,852
Deferred Developer Fee 1,225,887
TOTAL PERMANENT SOURCES 29,525,127
DocuSign Envelope ID:63B81E6C-6004-4FF4-AD8E-26E21803B3B7
Blvd/Darlinton Schedule
Acquire Boulevards Jul-19
Extend Boulevards subsidy contract Oct-19
Acquire Interest in Darlinton Jul-20
Submit Tax Credit and Bond Applications Aug-20
HTF, City Funds, Risk Share Loan Schedule
Submit Application for HTF Sep-20
Submit Application for City Funds Aug-20
Request to MBOH for Risk Share Loans Sep-20 Questions ?
Order Third Party Reports June - August 2020
Design and Engineering June - August 2020 Thank
Scope Finalization Aug-20 you !
Plan Check Submission Sep-20
Permit Nov-20
Select Contractor Sep-20
Finalize Schedule of Values Oct-20
Finalize Construction Contract Oct-20
Finance and Legal E
Select Investor and Lender Aug-20
Due Diligence/Underwriting Aug-Oct 2020
LIHTC Partnership, Loan, Bond and HUD docs complete Oct-20
HUD Process
Submit Applications for MUTM and RAD Aug-20 ,
Complete HUD Legal Review Sep-20
Receive HUD Approval Oct-20
Close on the Financing and LIHTC Nov-Dec-20
Issue Notice to Proceed Dec-20 H DC
Construction Mobilization Dec-20
Begin Unit Renovations/Relocation Jan-21
Construction Completion Mar-22