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HomeMy WebLinkAbout10- City of Bozeman and F&H LLCMemorandum f Understanding between the City of Bozeman and F&H LLC THIS IS AN AGREEMENT made as of 9 0 tO, between THE CITY OF BOZEMAN, a Municipal Corporation, Bozeman, Montana 59715 (the "CITY and F&H LLC, 2215 Arrowleaf Hills Drive, Bozeman, Montana 59715 (the "BENEFICIARY"). WHEREAS, it is the intent of this Memorandum to recognize accountability to the public and transparency in the use of federal appropriations is critical to ensuring the public maintains a high level of trust in governmental operations; and WHEREAS, the specific purpose of this Memorandum is to designate the roles and responsibilities of the CITY and the BENEFICIARY in the use of $768,654.00 of federal Housing and Urban Development (HUD) appropriations for construction of a third floor on the F&H building in downtown Bozeman. NOW THEREFORE, in consideration of BENEFICIARY receiving funding under this Memorandum and pursuant to the federal appropriations the parties agree as follows: ARTICLE 1: DESIGNATED BENEFICIARY/START OF CONSTRUCTION 1.1 Although the CI1Y is the designated recipient of the federal appropriation, the BENEFICIARY shall also be obligated in meeting all requirements of local, state, and federal law regarding the use of this appropriation. If both the CITY and the BENEFICIARY cooperate fully in fulfilling the CITY's reporting requirements accountability to the public and transparency in the use of this federal appropriation will be enhanced. 1.2 The CITY designated the BENEFICIARY as a sub-recipient beneficiary of the Department of Housing and Urban Development Economic Development Initiative Special Project funding (HUD EDI-SP) (hereinafter referred to as the "FUNDING"). The BENEFICIARY's FUNDING is designated to provide funds for construction of the F&H Building at 209-219 East Main Street, Bozeman, MT and is specifically appropriated for costs associated with the construction of a third story on the building. The BENEFICIARY shall receive FUNDING up to $768,654.00 as outlined in the attached project budget (Attachment 2). Memorandum of Understanding between the City of Bozeman and F&H LLC Page 1 of 6 1.3 Construction using the FUNDING shall corninence no sooner than the CITY receives final environmental clearance from HUD. ARTICLE 2: BENEFICIARY RESPONSIBILITIES 2.1 The BENEFICIARY agrees that as a condition of continuing to receive the FUNDING the BENEFICIARY shall be responsible for participating with the CITY in complying with all reporting requirements of the FUNDING, including but not limited to the applicable requirements of 24 CFR Part 85 (except as indicated in this Memorandum) and the federal Office of Management and Budgets Circulars A -87 (revised 5/4/95, as further amended 8/29/97) and A -133 (revised June 27, 2003). As such, the BENEFICIARY agrees to be bound by the federal HUD requirements in the same capacity as the CITY regarding this appropriation and specifically agrees the HUD requirements are included herein by reference and shall be applicable as if fully contained herein. (See Attachment 3 for a partial description of the HUD legal requirements.) In doing so, the BENEFICIARY shall fully assist the CITY in meeting its reporting requirements by providing all information and documentation requested by the CITY regarding the use of FUNDING for, but riot limited to, the following: I. The procurement of all materials, including identification of source, prices, and any competitive bidding process employed; 2. All subcontracts entered into and amounts paid and any competitive bidding process used to enter into subcontracts; 3. All wages paid to employees of the contractor and any subcontractors; and 4. Any other aspects of construction wherein the FUNDING is applied. 2.2 The BENEFICIARY shall ensure all wages paid under the FUNDING shall comply with the CITY's living wage ordinance (Chpt. 2.96, Bozeman Municipal Code.). if state or federal wage requirements apply, the BENEFICIARY shall ensure all wages paid using the FUNDING shall comply with any applicable federal or state wage laws. 2.3 The BENEFICIARY recognizes and agrees that failure to comply with these requirements or failure to complete construction may result in the CITY suspending or revoking the expenditure of FUNDING. Failure to comply with these requirements or complete construction may also result in the CITY requiring the BENEFICIARY to repay any amount previously paid to the BENEFICIARY if the CITY is so obligated by HUD. ARTICLE 3: CITY OF BOZEMAN RIGHTS/RESPONSIBILITIES 3.1 Pursuant to the HUD requirements listed in Article 2, above, the CITY is responsible for ensuring the use of the FUNDING complies with all federal legal requirements. The CITY Memorandum of Understanding between the City of Bozeman and F &H LLC Page 2 of 6 agrees to cooperate fully with the BENEFICIARY in expending funds authorized under the federal appropriation. To do so, The CITY shall name a Project Coordinator who shall be the liaison between the BENEFICIARY and the CITY. The Project Coordinator shall be Josset G auley. 12 The CITY shall have the right of review and examination of the BENEFICIARY's project regarding construction and expenditures at all times. 3.3 The City may suspend or terminate the provision of FUNDING if the BENEFICIARY fails to comply with the requirements of Article 2 and may also require the BENEF1CARY repay any amount previously paid to the BENEFICIARY if the CITY is so obligated by HUD. ARTICLE 4: FUNDINGAND REIMBURSEMENT PROVISIONS 4.1 The BENEFICIARY submitted a project budget with the original FUNDING application, stating a total budget of $768,654.00. Reimbursable expenses are limited to items presented in this budget (Attachment 2). Any project budget revisions should be submitted to the City of Bozeman. Total FUNDING to the BENEFICIARY is limited to a total of $768,654.00. No funds shall be used for any purpose except those for 3 story construction as outlined in Attachment I and Attachment 3. 4.2 HUD requires that no more than 20% of the grant award ($193,650) on non-construction expenses (environmental review, engineering, architecture, etc.) The BENEFICIARY submitted a project budget stating a total non-construction budget of $54,687.00. Any revisions should be submitted to the City of Bozeman for review and approval. 4.3 Prior to invoicing, the City will need a timeline of quarterly budget expenses in order to book expenses under the appropriate fiscal year. 4.4 Eligible reimbursement requests are limited to the budget line items in Attachment 2 and should be submitted to the Grants Coordinator, Josset Gauley in the Finance Department. 4.5 Reimbursement requests shall include an invoice from the BENEFICAIRY and shall be supported with receipts and purchase orders, where applicable, from contractors, subcontractors, and/or material providers. The CITY may request additional documentation or require site inspection to ensure the work and/or materials have been completed or installed pursuant to the local and state building codes. 4.6 The CITY shall use best efforts to ensure the timely payment of all submitted invoices. 4.7 The BENEFICIARY will be considered a grant "beneficiary" and will not be subject to HUD's regular procurement requirements. Memorandum of Understanding between the City of Bozeman and F&H LLC Page 3 of 6 4.8 The BENEFICIARY shall invoice the City of Bozeman for eligible expenses. 4.9 The City of Bozeman will be subject to HUD procurement requirements when invoiced directly by the contractor. ARTICLE 5: GENERAL CONSIDERATIONS 5.1 I Inspection and Audit. All books, papers, records, payrolls, vouchers and invoices relating to project costs by the BENEFICIARY shall be made available to the CITY, or its authorized representatives, for audit and review, at the BENEFICIARY's respective offices at all reasonable times during the contract period and for three years from the date of final payment. 5.2 Federal Disposition Rules Not Applicable. As a beneficiary of HUD funding, property disposition requirements to not apply. (The BENEFICIARY may sell the property without reimbursement to HUD). 5.3 Nondiscrimination. The BENEFICIARY agrees not to discriminate in the fulfillment of this Memorandum and in the expenditure of any FUNDING under the appropriation on the basis of race, color, religion, creed, sex, age, marital status, national origin, or actual or perceived sexual orientation, gender identity or disability. Furthermore, the BENEFICIARY agrees this requirement shall apply to the hiring and treatment of its contractors and to all subcontracts. The above shall apply except when the reasonable demands of a position require an age, physical or mental disability, marital status or sex distinction. The BENEFICIARY shall be subject to and comply with Title VI of the Civil Rights Act of 1964; Section 140, Title 2, United States Code, and all regulations promulgated thereunder. 5.4 Defend, Indemnify, and Hold Harmless. The BENEFICIARY agrees to: Waive any and all claims and recourse against the CITY and 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 provision of funds under the HUD appropriation for the improvements to the BENEFICIARY'S real property; and 2. To indemnify, hold harmless, and defend the CITY and its agents, principals, and employees from and against any and all liability (including liability where activity is inherently or intrinsically dangerous), damages, losses or costs, including but not limited to reasonable attorney's fees (including fees of the Bozeman City Attorney or Memorandum of Understanding between the City of Bozeman and F &H LLC Page 4 of 6 retained outside counsel) arising out of or resulting from the BENEFICIARY's use of funds under this Agreement or a third party's negligence, recklessness, or intentional misconduct resulting from the BENEFICIARY's use of funds under this Agreement, or compliance with all federal, state and local law resulting from the BENEFICIARY's use of funds under this Agreement. In the event of an action filed against the CITY resulting from BENEFICIARY's performance under this agreement, the CITY may elect to represent itself and incur all costs and expenses of suit. The obligations of the BENEFICIARY's to defend, indemnify and hold harmless the CITY will apply to any suit, cause of action, claim, cost or obligation including, without limitation, those alleged under the common law or pursuant to a federal or state statute or regulation including those arising in tort, trespass, nuisance, and strict liability. These obligations shall survive the completion of construction and the expenditure of all funds allocated under the federal appropriation and shall continue in effect for the life of the improvements. 5.5 Insurance. The BENEFICIARY shall maintain adequate liability and property insurance on the F &H building from the date of commencement of construction until two (2) years after the building is legally occupied and such declaration shall name the CITY as an additional insured and shall contain coverage for no less than $750,000 per claim and $1,500,000 per occurrence. The BENEFICIARY shall provide a copy of the insurance declaration to the CITY prior to the commencement of construction and annually thereafter until the two -year period has run. 5.6 Public Records. The PARTIES recognize all documents created pursuant to the FUNDING of the PROJECT and reporting are public documents available for inspection through the CITY and the BENEFICIARY specifically agrees that no trade secrets exist in any document. The CITY will protect proprietary information of the BENEFICIARY, limited to bank account numbers or related matters, to the greatest extent permissible by law. 5.7. Severability: If any provision of this Memorandum is held to be void or unenforceable by a court, the validity of the remaining provisions shall not be affected and the rights and obligations of the Parties shall be construed and enforced as if the Agreement did not contain the particular provision held to be void or unenforceable. 5.8 Venue and Choice of Law: This Memorandum shall be construed under the laws of the State of Montana and the Parties agree venue shall be the Eighteenth Judicial District, Gallatin County, Montana. Memorandum of Understanding between the City of Bozeman and F &H LLC Page 5 of 6 5.9 Attorney Fees: That in the event it becomes necessary for either Party of 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 or the Party giving notice shall be entitled to reasonable attorney's fees and costs, including fees, salary, and costs of in -house counsel to include the Bozeman City Attorney or retained outside counsel. 5.10 Amendment /Modification: That any amendment or modification of this Contract or any provisions herein shall be made in writing or executed in the same manner as this original document and shall after execution become a part of this Contract. 5.11 Interpretation and Construction. This Agreement has been jointly drafted and /or reviewed by the Parties hereto following negotiations between them. It shall be construed according to the fair intent of the language as a whole, and not for or against either of the Parties. 5.12 Independent Review /Authority to Sign: The Parties acknowledge that they have been advised by independent legal counsel, not retained or paid by the other, regarding this Agreement, and have entered it freely, without duress or coercion. Each Party represents to the other that the person signing below on its behalf has authority to bind their respective entities to this Agreement. In w itness whereof, the Parties hereto do make and execute this agreement. City of Bozeman, Montana By: rr� 11 Chris A. Kukulski, City Manager Date: 5 -2 Approved as to Form: Gr Sullivan, City Attorney F &H, LLC (BENEFICIARY) By: Mike Hope, Member Date: 57/ 7/ /0 Memorandum of Understanding between the City of Bozeman and F &H LLC Page 6of6 Attachment 1: F&H Project Proposal Chris Kukulski Bozeman City Manager 121 North Rouse Avenue Bozeman, MT Dear Mr. Kukulski: February 26, 2010 L SUBJECT: Application as grant sub-recipient for the City of Bozeman's Housing Urban Development-Economic Development Initiative funding. Thank you for providing F H LLC the opportunity to apply for this grant. In our packet you will find a timeline for the completion afthe project, budget for the project, elevations of the project, and floor plans. We are requesting $768,654.00. This money will be used to add a third story to our current project located where the R-Bar, Boodles, and the Montana Trails Gallery were located prior to the blast on March 5, 2009. Prior to the March 5 explosion there was a total of 15,225 square feet (combined basement and above ground}, We currently have submitted building plans that will encornpass 29,848 square feet to the City of Bozeman. This is a net gain of 14,623 Square feet if we are recipient of the grant we will add a third story to our current project. This will add another 5,702 square feet to our project. The net gain would then be 20,325 square feet. Our intended use for the basement and main level is hospitality (Santa Fe Reds, R-Bar, and Pickle Barrelj, The second floor is designated for office space and the third floor would be a combination of office space and possible residential. This all fits into the new Downtown Development plan that the city has adopted. Martel Construction has been hired to construct the building and Locati Architects are designing it. Both firms are local companies with long histories in Bozeman. The stimulus to the Attachment 1: F&H Project Proposal 2 local economy would be over $s,0oo,0onooif°m are granted the ftrnding, There would also be an estimated increase to the property tax base of $8500.00 per year. That money would directly beriefit Dowtitown Bozemari through the tax increment finance district. Once the building is ftffly eased out it will also help keep Downtown Bozeman vibrant, all business should benefit from the increased square footage with increased foot traffic. If you should have any further questions please Sincerely, Mike Rope Member r&wLuc Attachments SUB TOTAL 5,702 sf $625,554 General Requirments (Per Month add to schedule) 2 $24,000.00 mo I $48,000 Contractors Fee (5'4 of Subtotal) 6% 718 $40,413 Assumed Square Footage 5,702 sf Perirnter of Space 18 aill sf Ht of Wails Finished Comrnon Area 718 Lobby MEE sf 2.06 IIM Statement of Probable Cost EMEM1111111111111111MIE Northside Ailey Site Improvments 071' 1,5[0® =Emu 11.11 Unit Co41- $10.00= 525,300 00 ea 10iAL $15,000 $31,3 $31,3663 1 Floor Decking 5,702 ME $5 50 /'sF Floor Slab 5,702 $4.00 Jsf Added Structure Floor Beams Main 10 tons $3,000.00 ton $30,000 Floor Beams Secondary tons 53,000.00 ton .111 $21,000 Cols from 3rd flr to Roof MEM tons $3,000 00 ton 519,500 .11111.111M M $7,800 24 riser 5375.00 riser EIZE 24 mai 5200.00 riser $4,800 Elevator =ME 1,170= $74,200.00 $50.00 sf Ell $58,5.00 Exterior Finished Surface Main Street {South) East and West 3,060 sF $30.00 =I $91,800 Alley (North) 1,170 sf $40.00 sf 546,800 Railings Roof Flecks 140 if $100,00 ME- $14,000 Pavers at Roof Decks IIIIMEI=1 MIIIIIIIIMMIIMMIIIIIIIIIIIIIIIIIMI $20.00 $75.00 $500 $7:50 L MI 522,240 $38,400 51 0,300 Interior Finishes Lobby 206 SYSTEMS 5,702 Fire Protection Plumbing 5,702 $3.70 $4.39 K- 521,097 $25,032 531,361 HVAC 5,702 st EIMMES 5,702,5E 55.50 Attachment 2: F &H Building Project Budget F&H Project Third Floor Price Evaluation Architectural and Engineering Fees $54,667 ESTIMATF[1 COST FOR THE THIRD FLOOR CONSTRUCTION $768,654,1 Attachment 3: HUD Legal Requirements HUD-EDI-SP Grants. Source HUD-ED-SP 2010 grant application pages 4-7 staff to assist you in that process. Please contact the Department's Office of Departmental Grants Management and Oversight at (202)402-2206 for any questions related. to the electronic submission of your application. LEGAL REQUIREMENTS: A. REQUIREMENTS UNDER THE CONSOLIDATED APPROPRIATIONS ACT, 2010 (PA,. 111-117)) (THE ACT) Limitations on Eligible Activities There are several key provisions oldie Act of which you should be aware. First., the Act contains the following language with regard to the activities that are payable with FY2010 grant funds: "...no unobligated funds for EDI grants may be used for any purpose except acquisition, l annin. des' um Ise o e isment revitalization redevelo mein or construction." The Act also prohibits the use of grant funds for program operations, which would include rent, utilities, salaries, travel and other operating costs of your organization, The intent of Congress expressed by these provisions is to ensure that EDI-SP grant recipients use the funds for construction or other "hard cost" activities as authorized in the specific language governing your grant funds and pursuant to other provisions of the Act. Tice letter of invitation accompanying this Application Kit includes the specific language enacted by Congress for your grant. HUD cannot approve any activities other than those specified by Congress in the authorizing language for your grant or any activities that are otherwise not eligible under the terms of the Act as enacted by Congress. Limitations on Planning, Management and Administrative Expenses The Act contains the following language with regard to planning, management and administrative costs payable with the grant funds: That unless explicitly provided for under this heading, ...not to exceed 20 percent of any grant made with funds appropriated under this heading...shall be expended for planning and management development and administration. The 20 percent limitation is applicable to your EDI-SP grant and encompasses genera' management expenses associated with administration of the grant as well as direct project delivery costs, including, but not limited to: Professional services necessary to implement the project (e.g.. architectural, engineering, surveying, appraisal, legal, accounting, etc.); Development and construction management fees and costs 4 Attachment 3: HUD Legal Requirements HUD-EDI-SP Grants. Source HUD-EDI-SP 2010 grant application pages 4-7 Project financing fees, expenses, taxes and insurance; and On-site services during co.nstruction (e.g., security, temporary utilities, etc.) You must prepare a brief project description and a simple, line nein project budget as part of the application. The project budget should identify only the use of the EDI-SP funds. Please keep the above limitations in mind as you prepare your project budget. Limitations on the Use of Funds for Projects Involving Eminent Domain The Act also provides that no funds made available under the Act may be used to support any Federal„ State or local projects that seek to use the power of eminent .domain, unless eminent domain is employed only for a public use, For purposes of this provision, public use shall not be construed to include economic development that primarily benefits private entities. B. SIGNIFICANT REGULATIONS THAT APPLY TO YOUR GRANT: The Grant Agreement transmitted by the Department following approval of your application will set forth all applicable regulatory requirements for your grant. Below are some of the more significant applicable regulatory requirements. The regulations below may also be accessed from the Congressional Grants Division Web site, as outlined on page one of this Application Kit. State and Local Governments and Indian Tribal Governments The requirements of 24 CFR §85 and OMB Circulars A-87 and A-133 apply to State and Local Governments and Indian Tribal Governments. Applicants are encouraged to review the provisions of these regulations and circulars, including provisions related to the disposition of property acquired with 1-IUD funds at Part 24 CFR §8531 and the procurement requirements of Part 24 CFR §85.36. Academe Institutions, Hospitals and Non-Profit Organizations 1. The requirements of 24 CFR §84 and OMB Circulars A-122 and A-133 apply to Academic Institutions, Hospitals, and Non-Profit Organizations. Applicants are encouraged to review the provisions of these regulations and circulars, including provisions related to the disposition of property with HUD funds at 24 CFR §8432 and the procurement requirements beginning at 24 CFR §84.40. Please note that grantees subject to 24 CFR §84 and using $1,000,000 or more of EDI-SP funds to acquire real property, will be required to demonstrate that they have recorded the Departtnent's interest in the real property as a condition of the grant award, as provided pursuant to 24 CFR §84.37, 2, Faith based organizations should also review the Department's regulations governing the award of funds to faith based organizations, pursuant to 24 CFR §5,109. 5 Attachment 3: HUD Legal Requirements HUD-EDI-SP Grants. Source HUD-EDI-SP 2010 grant application pages 4-7 All Applicants I 24 CFR §58 concerning environmental review of your project applies to all EDI-SP Grant Recipients Please see Attachment IV of this Application Kit for additional and important information about these requirements FOLLOWING ENACTMENT OF THE ACT, NO HUD OR OTHER FUNDS MAY BE COMMITTED TO A PROJECT PRIOR TO COMPLIANCE WITH THE ENVIRONMENTAL REQUIREMENTS OF 24 CFR 5& 2. Applicants and their subreeipients must comply with 24 CFR §5.105,, Other Federal Requirements (a) Nondiscrimination and equal opportunity, 3. The requirements of Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR §135 apply to all grant recipients that are awarded $200,000 or more for projects involving housing construction, rehabilitation or other public construction. Applicants are encouraged to review the requirements of this regulation and to submit Section 3 summary reports (HUD-60002) annually, if applicable. Additional information regarding Section 3 is provided in Attachment V of this Application Kit (p39). C. REGULATIONS THAT DO NOT APPLY TO YOUR GRANT: 1. HUD regulations for the competitive Economic Development Initiative program and the formula Community Development Block Grant program. 2, Davis-Bacon requirements, unless your project is also supported by other funds which do require adherence to the Davis-Bacon Act, D. OBLIGATION AND EXPENDITURE DEADLINES: HUD's authority to obligate your FY2010 EDI-SP grant expires on September 30, 2012. Your organization must have an executed grant agreement with HUD before that date. Additionally, all FY2010 EDI-SP funds must be expended by September 30, 2017 or they will be recaptured and returned to the U.S. Treasury. The Department cannot waive or extend these statutory deadlines. E. ENVIRONMENTAL REVIEW REQUIREMENTS: HUD reminds all applicants that no EDI-Special Project grant or any other funds, public or private, mav be committed to a project and no EDI-Special Project grant funds can be drawn down for the project, until an environmental review has been completed. This environmental review must be done by a "responsible entity" [(24 CFR 98.2 (7)1, which is nonnally the unit of general. local government within which the project is located that 6 Attachment 3: HUD Legal Requirements HUD-EDI-SP Grants. Source HUD-EDI-SP 2010 grant application pages 4-7 exercises land use responsibility, or the Indian Tribe or Alaskan Native Village jurisdiction within which the pmject is :located that exercises land use responsibility. If you plan to use your EDI-Special Project funds for such work as architectural and engineering or technical assistance, then the environmental review by a responsible entity may he as simple as .documenting that these activities are excluded from any further review. lf, however, your EDI-Special Project involves, for example, acquisition or disposition of real property, change in land use or physical change of land or buildings, the environmental review may be complex, and in some instances, lengthy. HUD's release of funds to your bank account shall not occur until HUD has received and approved an environmental certification by a unit of general local government. an Indian Tribe or an Alaskan Native Village with jurisdiction over the project, or in some instances the county or state. if HUD so determines. It is also usually the case that an environmental review conducted under State or local laws will not fully satisfy the federal environmental review requirements set forth in 24 CFR §58. Additional information about the mandatory environmental review is provided in Attachment IV of this Application Kit, along with a listing of the local HUD Field Environmental Officers in your jurisdiction who can assist you in this process. ENV ONMENTAL REVIEW REMINIAR REMEMBER. You may not take any actions nor commit any HUD or any non-HUD funds which would cause actions that are choice-limiting among reasonable alternatives or would produce an adverse environmental impact, before HUD has approved the environmental certification of compliance, and the request for release of funds. Choice-limiting actions include acquisition, leasing, rehabilitation, demolition and new construction. You are therefore encouraged to have the environmental review ptocess started as soon as possible. 7