HomeMy WebLinkAboutResolutions 5546 - Resolution Title Unknown DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
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RESOLUTION NO. 5546
RESOLUTION APPROVING AN AMENDMENT TO A DEVELOPMENT AGREEMENT
FOR A PROJECT IN THE MIDTOWN URBAN RENEWAL DISTRICT KNOWN AS THE
LUMBERYARD PROJECT
BE IT RESOLVED by the City Commission (the"Commission") of the City of
Bozeman, Montana(the "City"), as follows:
Section 1
Recitals.
1.01. On August 15, 2023, this Commission adopted Resolution No. 5505, approving
the Project (as hereinafter defined) as an urban renewal project in the Bozeman Midtown Urban
Renewal District(the "District")under the Bozeman Midtown Urban Renewal Plan. The Project
consists of a two-phase residential project, the first phase of which is expected to consist of the
design, engineering and construction of 21 studio apartments, 54 one-bedroom apartments, 78
two-bedroom apartments, 18 three-bedroom apartments, and related improvements, and the
second phase of which is expected to consist of the design, engineering and construction of 14
studio apartments, 36 one-bedroom apartments, 52 two-bedroom apartments, 12 three-bedroom
apartments, and related improvements, to be undertaken by Virga Venture I LLC (the
"Developer"). The Developer expects to sell a portion of its property to a third party that will
develop an affordable housing project thereon, expected to consist of not less than 90 units of
housing, each affordable at 60% of area median income, and the public improvements and
infrastructure to be constructed in connection with the Project will support the development of
the affordable housing project.
DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
Resolution 5546,Approving an Amendment to a Development Agreement for a Project in the Midtown URD Known
as the Lumberyard Project
1.02. Pursuant to such resolution, this Commission approved a form of Development
Agreement with respect to the Project, which included a requirement that restrictive covenants
(the "Restrictive Covenants")be recorded against property in the District to provide for the
development of the affordable housing project. In the Development Agreement, the Restrictive
Covenants are required to (i) run with the land, (ii) bind, for a period not less than 30 years from
the date of issuance of a certificate of occupancy with respect to such housing units, 90 housing
units to be affordable at 60% area median income ("AMI"), either as rental units or as owner-
occupied units with restrictions on resale prices, with resale and rental prices tied to affordability
at 60%AMI, and (iii)provide that a third-party nonprofit or government entity with experience
in managing affordable housing units must manage the rental or sale of such housing units.
1.03. The form of Development Agreement approved by the Commission included a
proposed form of Restrictive Covenants. However, the Developer has requested that the form of
Restrictive Covenants attached to and referenced in the Development Agreement be replaced
with alternative restrictive covenants, substantially in the form attached to this resolution as
Exhibit A (the"Revised Restrictive Covenants").
1.04. The Revised Restrictive Covenants (i) run with the land; (ii)bind, for a period not
less than 50 years from the date that the affordable housing project is placed in service, 155
housing units to be income targeted to 60% or less of AMI; and(iii) include robust enforcement
mechanisms and reporting requirements. However, the Revised Restrictive Covenants would
terminate in the event that the affordable housing project is acquired by foreclosure.
Section 2
Approval of the Restrictive Covenants; Amendment of the Development Agreement.
2.01. The Commission hereby finds that the Revised Restrictive Covenants are in
accordance with the City's requirements set forth in the Development Agreement. The
Commission hereby approves the Revised Restrictive Covenants, substantially in the form
attached hereto as Exhibit A, and approves attaching the Revised Restrictive Covenants to the
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DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-lE738165D94D
Resolution 5546,Approving an Amendment to a Development Agreement for a Project in the Midtown URD Known
as the Lumberyard Project
Development Agreement as Exhibit G thereto. References in the Development Agreement to the
"Restrictive Covenants" shall be read to refer to the Revised Restrictive Covenants.
2.02. The Commission hereby amends Section 3.12 of the Development Agreement to
read as follows:
"3.12. Affordable Housing Covenants. The Developer agrees that, as a condition
to receiving any reimbursement under this Agreement, the Developer will file a
restrictive covenant on the West Block,providing that any development at the West
Block will include a minimum of 90 housing units (the "Restricted Units"), which will be
restricted for a period not less than 30 years for use as housing affordable to households
with incomes equal to 60% area median income ("AMI"). As a condition to
reimbursement hereunder, the Developer shall record the restrictive covenants,
substantially in the form attached hereto as Exhibit G(the "Restrictive Covenants")
against the West Block. The Restrictive Covenants must(i)run with the land, (ii)bind,
for a period not less than 30 years from the date of issuance of a certificate of occupancy
with respect to the Restricted Units, the Restricted Units to be affordable at 60%AMI,
either as rental units or as owner-occupied units with restrictions on resale prices, with
resale and rental prices tied to affordability at 60%AMI, and(iii)provide that a third
tmits must manage the rental or-sale of the Restrieted Units robust enforcement
mechanisms and reporting requirements. In addition, the Restr-iet ve Geve an4s will
as sheft tefm r-entals, as that tefm is defined in the Bozeman Munieipal Code. The
aff-er-dability r-eqtfir-efneats in the Restrietive Covenants will be index based, tied to provide that the Restr4eted Units are prohibited ffem being used, fented er-made availa
Restr4eted Units will be based on the fnest reeen4 aff-or-dability data available thr-oug
Hetising and Urban Development's Hetising Availability Data System or-ether similaf
aff-er-dability data that is wailable at the time of r-efital or-sale/fesale. The Developer's
covenants described in this Section 3.12 are referred to herein as the "Affordable Housing
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DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
Resolution 5546,Approving an Amendment to a Development Agreement for a Project in the Midtown URD Known
as the Lumberyard Project
Covenants." The Developer acknowledges and agrees that the Affordable Housing
Covenants are fundamental to the City's agreements hereunder. The Parties acknowledge
that, as development proceeds at the West Block, it may be necessary or desirable to
record other instruments to implement the Affordable Housing Covenants and provide for
the affordability of the Restricted Units, either in addition to or in replacement of the
Restrictive Covenants to be recorded as a condition to reimbursement of the Developer
under this Agreement, and the Parties agree to cooperate with respect to recording such
other instruments if necessary or desirable. The Developer-aelnowzedges-tom
detefmined by the G4y, one per-son household prieing relates te studies, two per-sen
The City and the Developer acknowledge that the Restrictive Covenants terminate in the
event that the affordable housing project is acquired by foreclosure, and the City and the
Developer agree that any such termination of the Restrictive Covenants shall constitute
an event of default hereunder."
2.03. Approval of the Development Agreement, amended and supplemented as
described in this Section 2, is hereby ratified and confirmed.
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DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
Resolution 5546,Approving an Amendment to a Development Agreement for a Project in the Midtown URD Known
as the Lumberyard Project
PASSED,ADOPTED,AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 24 day of October, 2023.
DocuSigned by:
L 4�#Q —
CYNTHIA ANDRUS
Mayor
ATTEST: DocuSigned by:
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DocuSigned by:
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F41 F922095AB475...
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
La"
Signed by:
Sty( "A&
GREG SULLIVAN
City Attorney
5
DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Bozeman, Montana (the "City"), hereby certify that the attached resolution is a true copy of
Resolution No. 5546 entitled: "RESOLUTION APPROVING AN AMENDMENT TO A
DEVELOPMENT AGREEMENT FOR A PROJECT IN THE MIDTOWN URBAN
RENEWAL DISTRICT KNOWN AS THE LUMBERYARD PROJECT"(the"Resolution"),
on file in the original records of the City in my legal custody;that the Resolution was duly adopted
by the City Commission of the City at a regular meeting on October 24,2023, and that the meeting
was duly held by the City Commission and was attended throughout by a quorum,pursuant to call
and notice of such meeting given as required by law; and that the Resolution has not as of the date
hereof been amended or repealed.
I further certify that,upon vote being taken on the Resolution at said meeting,the following
Commission members voted in favor thereof: Cynthia L. Andrus, Terry Cunningham
Jennifer Madgic, Christopher Coburn
voted against the same:
abstained from voting thereon: or
2
were absent: Ho Pomeroy
WITNESS my hand and seal officially this 24 day of October, 2023.
ocuSigned by:
(SEAL) kt,
FDjj
, S
nncnnn c
MIKE MAAS
City Clerk
DocuSign Envelope ID:OFE8848A-7FF3-45FA-9AF7-1E738165D94D
Resolution 5546,Approving an Amendment to a Development Agreement for a Project in the Midtown URD Known
as the Lumberyard Project
EXHIBIT A
[Form of Revised Restrictive Covenants]
A-1