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HomeMy WebLinkAboutContractWILLOWCREST PHASE 2 PROJECT GRANT BENEFICIARY AGREEMENT SALES AND USE TAX AFFORDABLE HOUSING FUND GRANT THIS AGREEMENT, dated for reference purposes only as March 31, 2025, is by and between the City of Renton (the "City"), a Washington municipal corporation, and Community Land Trust ("HOMESTEAD" or "Grantee"), a Washington State non-profit corporation and sets forth the terms and conditions under which the City will provide a grant to HOMESTEAD from the City's sales and use tax revenue collected pursuant to RCW 82.14.530 from 2021 to date of execution of this Agreement. The City and the Grantee are referred to collectively in this Agreement as the "Parties." Once fully executed by the Parties, this Agreement is effective as of the last date signed by both parties. RECITALS: WHEREAS, Renton adopted Ordinance No. 5983 (October 5, 2020) authorizing sales and use tax funds for housing and related services in accordance with RCW 82.14.530, asamended; and WHEREAS, RCW 82.14.530 authorizes, under specified circumstances, the imposition of a local sales and use tax that may not exceed one-tenth of one percent for: "(i) constructing or acquiring affordable housing, which may include emergency, transitional, and supportive housing and new units of affordable housing within an existing structure, and facilities providing housing-related services, or acquiring land for these purposes;" (RCW 84.14.530(2)(a)(i)); and WHEREAS, pursuant to RCW 82.14.530(2),the affordable housing and facilities providing housing-related programs constructed with the moneys collected from the sales and use tax may only be provided to persons within any of the following population groups whose income is at or below sixty percent (60%) of King County median income: persons with behavioral health disabilities; veterans; senior citizens; homeless (or at risk of being homeless), including families with children; unaccompanied homeless youth or young adults; persons with disabilities; or domestic violence survivors; and CAG-25-206 WHEREAS, HOMESTEAD's second phase of its Willowcrest project ("Willowcrest Phase 2 Project" or "Project") is a new construction project which will help increase the available supply of affordable housing in Renton; and WHEREAS, Willowcrest Phase 2 Project is comprised of 19 new affordable units, 3 of which would be sold to households whose income is at or below sixty percent (60%) of the King County median income as established by the U.S. Department of Housing and Urban Development, and are persons with behavioral health disabilities; or, veterans; or, senior citizens; or are homeless or at-risk of being homeless (including families with children; or unaccompanied homeless youth or young adults; or, persons with disabilities; or, domestic violence survivors or are otherwise eligible under RCW 82.14.530(2)(b) as it may be amended in the future; and WHEREAS, the City is autho rized to award this Sales and Use Tax Grant in support of the Project pursuant to RCW 35.21.685. NOW, THEREFORE, in consideration of the mutual benefits and covenants herein referred to, and incorporating the language above in this Agreement, it is hereby agreed by and between the Parties as follows: AGREEMENT 1.Grant Amount. The total amount to be awarded to Grantee under the program is not to exceed $900,000.00 (nine hundred thousand dollars) of sales and use tax revenue collected by the City pursuant to RCW 82.14.530 between January 1, 2021, and the date of execution of this Agreement, as a reimburseable sum according to the disbursement process noted below. Except as specifically provided herein, the Grantee shall be solely responsible for payment of any taxes imposed as a result of this Agreement. a.Award Disbursement. i.The award will be disbursed based on actual reimbursable expenses described in paragraph 4 of this Agreement. ii.Invoice. On a monthly, or no less than quarterly basis during any quarter during which reimburseable expenses are incurred, Grantee shall submit an invoice in a format acceptable to the City, including a description of what work has been performed, and supporting documentation including, but not limited to, invoices or reports showing completion of work for which reimbursement is sought. iii.No waiver . Payment for any reimbursement shall not constitute a waiver by the City of any remedies it may have for any breach of this Agreement by the Grantee. PAGE 2 OF 13 iv.If sufficient funds are not appropriated or allocated for payment under this Agreement for any future fiscal period, the City shall not be obligated to make disbursements for amounts incurred after the end of the current fiscal year. No penalty or expense shall accrue to the City in the event this provision applies. b.Contingent Funding. Funding is contingent upon HOMESTEAD obtaining a Certificate of Occupancy by May 1, 2029, and ensuring that for a minimum period of fifty (50) years from the date of execution of this Agreement, the three (3) units remain as affordable to households that are eligible under RCW 82.14.530 and earn no more than sixty percent (60%) AMI. c.Repayment of Funds; Recoupment. If any funds provided to Grantee were used in a manner that is not consistent or allowable as outlined in this Agreement, Grantee shall return funds to City in the amount determined to be ineligible at the then-value of funds disbursed (e.g., 2035 value of $900,000.00 in 2025) as reasonably determined by the City using the Consumer Price Index to adjust for inflation. Grantee further agrees that it is financially responsible for and will repay the City any and all indicated amounts following an audit exception (i.e., breakdown of internal controls that may result in failure to meet grant outcomes) which occurs due to Grantee's failure, for any reason, to comply with the terms of this Agreement. This duty to repay the City shall not be diminished or extinguished by the termination of the Agreement. i.If the Certificate of Occupancy is not obtained by May 1, 2029 or the units subject to this Agreement, or units reserved for households per the terms of this Agreement for the entire period (at least 50 years), Grantee agrees to repay the entire disbursement provided, plus interest, unless such interest is otherwise waived by the Renton City Council, upon receipt of repayment demand by the City of Renton. Notwithstanding the foregoing, the City must provide HOMESTEAD with notice of its intent to demand the repayment of the entire disbursement, and HOMESTEAD shall have 30 days to cure any noncompliance with this Agreement before any such repayment must be made by HOMESTEAD. ii.In the event of repayment demand, and after the notice and opportunity to cure period has expired, the award disbursed shall bear interest at the rate of twelve percent {12%) per annum from the date of the execution of the Agreement. The repayment of the disbursement with interest shall not excuse or cure any default by Grantee under the Agreement. PAGE 3 OF 13 2. 3. iii.If the interest rate specified is higher than the rate then permitted by law, the interest rate shall be decreased to the maximum legal interest rate then permitted by law. Term.This Agreement shall be in effect from the date of mutual execution, or May 1, 2025, whichever is later and terminate fifty (50)years from the date of execution or May 1, 2075, whichever is later. This term may be extended by mutual written agreement as described in paragraph 9, or the Agreement may be earlier terminated according to the process and terms at paragraph 3. Termination/Repayment. Termination. The City reserves the right to terminate this Agreement in the event HOMESTEAD fails to meet material terms of this Agreement during its term. Repayment. In the event of termination after disbursement of any funds, such termination will result in an immediate demand for all disbursed funds, with interest pursuant to 1.c.ii of this Agreement. 4.Scope of Work. Grantee shall construct three (3) of the 19 units to be reserved for households that are eligible under RCW 82.14.530 and with a household income not more than 60% of the King County median income; this reservation will be in place for the entire term of this Agreement. With respect to the Willowcrest Phase 2 Project, and for the entire term of the Agreement, Grantee agrees to: a.Execute and record restrictive covenant in a form acceptable to the City to maintain three (3) units as affordable under the terms of this Agreement; and b.Construct the Willowcrest Phase 2 Project substantially as presented to the City (19 new affordable units); and c.Comply with Washington state prevailing wage requirements for residential construction for the entire project (all 19 units); and d.Submit a copy of the Certificate of Occupancy for the Project not later than May 1, 2029; and e.Sell three (3) residential dwelling units in the Project to populations eligible under RCW 82.14.530; and f.Submit a written certification at the time of sale of each of the three (3) units subject to this grant agreement and report to the CED Administrator including such information the City may deem necessary or useful, and at a minimum to include certification that at the time of each change of ownership of designated units during the period of affordability that the purchaser meets terms of this Agreement found in the then-current RCW 82.14.530. PAGE4 OF 13 g.The City will accept certification and reports in a form Grantee provides to regulatory agencies. 5.Grantee Responsibilities. a.Grantee understands and agrees that funds provided under this Agreement may only be used in compliance with RMC 5-10 and RCW 82.14 and any other applicable provisions of law. b.The Grantee understands and acknowledges that providing false information on any documents submitted to the City or its designees as part of the Grantee's participation in the Grant may constitute fraud, justify termination of this Agreement, trigger the Grantee's obligation to return funds, and may be subject to civil and/or criminal penalties and/or sanctions. c.No Employee Relationship. The Grantee understands and acknowledges that neither the Grantee nor any officer, employee or agent of the Grantee shall be considered to be an employee of the City, nor entitled to any benefits accorded City employees, by virtue of the services provided under this Agreement. The City shall not be responsible for assuming the duties of an employer with respect to the Grantee or any employee of the Grantee. d.Non-discrimination. During the performance of this Agreement, Grantee and its subcontractors shall comply with all federal and state nondiscrimination laws, including but not limited to, chapter 49.60 RCW, Washington's Law Against Discrimination, and 42 U.S.C. 12101 et seq., the Americans with Disabilities Act (ADA). In the event of Grantee's noncompliance or refusal to comply with any nondiscrimination law,regulation, or policy, this Agreement may be rescinded, canceled, or terminated in whole or in part. e.Insurance. HOMESTEAD shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with performance of the work hereunder by HOMESTEAD, their agents, representatives, employees or subcontractors. i.No Limitation: The maintenance of insurance by HOMESTEAD, as required by this Agreement, shall not be construed to limit the liability of HOMESTEAD to the coverage provided by such insurance, or otherwise limit Renton's recourse to any remedy available at law or in equity. ii.HOMESTEAD shall secure and maintain: 1.Commercial general liability insurance in the minimum amounts of $1,000,000 for each occurrence/$2,000,000 aggregate for the Term of this Agreement. PAGE 5 OF 13 6/24/2025 Approved by Patrice Kent via email 6/4/2025 PAGE 13 OF 13 EXHIBIT A SCOPE OF WORK AND BUDGET Project Title: Willow Crest Phase 2 Project Funding Start Date: May 1, 2025 (tentative) Address: 1132 Edmonds Ave NE Renton, WA 98056 Amount of requested funding: $900,000 Legal Description: Lot 1 of Willowcrest Townhomes Binding Site Plan, According to the Binding Site Plan Recorded in Volume 291 of Plats at Pages 20 through 24, in King County Washington City Contact: Margarette Bravo, Planning Technician 425 430 6555 mbravo@rentonwa.gov HOMESTEAD Contact: Kathleen Hosfeld, Executive Director 206 633 1277 x 113 kathleen@clt.org Name of Grantee Signatory: Kathleen Hosfeld 1. Project Scope The project will be constructing the infrastructure to provide public utilities to the property, redoing the streetscape on Edmonds Ave to meet the new street improvement standards, and constructing 19 new townhomes in 5 buildings, with 19 garage parking spaces, 4 carport parking spaces and 3 surface parking stalls. The area of construction is 40,097 sf. 2. Budget breakdown Task Estimated Amount Acquisition $ 88,896 Design & Engineering $ 999,300 Permitting & Project Management $ 697,000 Construction & Contingency $11,962,743 Financing $ 360,300 Sales & Holding Costs $ 242,926 TOTAL $14,351,165 Note: 3 specific homes at the property that will be priced at 60% AMI. The proposed funding of $900,000 will cover construction costs of the three (3) HB1590 eligible units only.