HomeMy WebLinkAboutLetter of Intent for $400K City capital grant for Sunset Multi-Service ...Letter of Intent
City of Renton Capital Grant to Renton Housing Authority
for Sunset Multi-Service & Career Development Center
To whom it may concern
Re: Letter of Intent between City of Renton and Renton Housing Authority
This letter of intent is between the City of Renton (“City”) and the Renton Housing Authority (“RHA”), and involves a City capital grant to help pay for renovations of the planned Sunset
Multi-Service & Career Development Center (the “Center”) to be located on a piece of property generally known as the "former Renton Highlands Library" parcel (the “Property”), located
at 2902 NE 12th Street, Renton, Washington, and more particularly described in Attachment A, Legal Description, and graphically shown on Attachment B; and
WHEREAS the Sunset Area is an ethnically diverse, low-income neighborhood in the Renton Highlands that has been a high-priority redevelopment and community revitalization area for the
City since 2000; and
WHEREAS the Renton City Council adopted the Sunset Area Community Revitalization Investment Strategy in 2009 which included supporting the Sunset Terrace Redevelopment as the City’s
highest priority community revitalization investment strategy; and
WHEREAS the City, RHA, and Renton School District came together with other regional and community partners to create the Sunset Area Community Revitalization and Sunset Terrace Redevelopment
plan in 2011; and
WHEREAS the Property is part of the Sunset Area Community Revitalization and the Sunset Terrace Redevelopment plan; and
WHEREAS in 2014 the City and RHA completed a Community Needs Assessment for Human Services and Housing for Renton, along with an addendum specific to the Sunset Area, (the “Needs Assessment);
and
WHEREAS the Needs Assessment identified significant unmet human service needs in the Sunset Area, including economic opportunity, basic needs, and health and wellness; and
WHEREAS the City, RHA, and other regional and community partners created the Sunset Area Transformation Plan in 2015 to respond to the Sunset Area community’s needs and apply for a U.S.
Department of Housing and Urban Development (“HUD”) Choice Neighborhoods Implementation (“CNI”) grant in 2015 and 2016; and
WHEREAS the proposed use of the Property for the Center was envisioned as an integral part of the Sunset Area Transformation Plan to better respond to the human services and career development
needs of residents in the Sunset Area; and
WHEREAS, although the Sunset Area Transformation Plan was not selected for a HUD CNI grant, the City, RHA, and other regional and community partners are currently working to implement
as many elements of the Sunset Area Transformation Plan as possible with other available resources; and
WHEREAS, the Property was sold by the City to RHA for the fair market value of $885,000, on March 16, 2018, (the “Closing”) for the planned purpose of creating the Center; and
WHEREAS, RHA paid $85,000 to City at Closing and executed a promissory note to the City for the balance of $800,000 with an interest rate of 1.70% annual percentage rate, to be paid
off by RHA at $160,000 per year plus applicable accrued interest on the anniversary date of Closing for five years (the “Property Loan”); and
WHEREAS, RHA and the City entered into an Interlocal Agreement on November 22, 2016, for payment of demolition costs of properties owned by RHA, by which RHA agreed to reimburse the
City pursuant to the terms of a promissory note; and
WHERAS, RHA has reimbursed a portion of the demolition costs to the City the amount of $135,621; and
WHEREAS, RHA has executed a promissory note on March 27, 2018, promising to pay the City the balance of the demolition costs in the amount of $325,957, with an interest rate of 1.7%
per annum (“Demolition Loan”); and
WHEREAS, Neighborhood House (a 112-year old non-profit organization that partners with diverse individuals and families in King County to build community and achieve their goals for
health, education, and self-sufficiency) has been working with the City and RHA for more than five years to help provide additional services in the Sunset Area; and
WHEREAS, the City, RHA and Neighborhood House have been working since 2015 with multiple regional and community organizations on a plan to acquire, renovate, and use the Property to
provide services at the Center; and
WHEREAS, RHA, Neighborhood House, HealthPoint, St. Vincent de Paul Society and Centro Rendu, and Renton Area Youth and Family Services (RAYS) currently plan to provide services at the
Center (“Current Partners”) and additional service providers are expected to be added in the future; and
WHEREAS, current services envisioned for the Center include: child and/or adult learning, tutoring, and mentoring; employment counseling and services and job training; integrated health
services, including behavioral health counseling and services and health education and health care services; case management; and legal assistance, and
WHEREAS, the Current Partners worked with Schemata Workshop to create a design and renovation plan to effectively use the Property for the Center; and
WHEREAS, Schemata Workshop and J.H. Brawner & Company, RHA’s development consultant, created a total acquisition and renovation budget for the Center of $3 million, including $885,000
for acquisition, approximately $1.8 million for renovation, and approximately $350,000 for architectural, engineering, and construction services and legal, reports, and other soft costs;
and
WHEREAS, Neighborhood House was the “People Implementation Entity” for the HUD CNI grant applications for the Sunset Area Transformation Plan and has been leading a capital campaign
to raise funds for the Center’s renovation; and
WHEREAS, the State of Washington provided a $412,000 capital grant for the Center in early 2018 and the project has a pending $600,000 capital grant request under consideration by the
Bill & Melinda Gates Foundation; and
WHEREAS, additional public and private capital funds are needed to effectively renovate the Property so that the Center can be used to provide needed human services for the community;
and
WHEREAS, the Current Partners are working to secure the remaining necessary capital funds to renovate and use the Property for the Center with a goal of beginning to provide services
at the Center by late-2019; and
WHEREAS this transaction is necessary for RHA to be able to effectively move forward with the renovations of the Center in a timely manner;
NOW, THEREFORE, in consideration of their mutual promises contained herein, the parties agree as follows:
City and RHA agree that it is their intention to enter into an agreement this year to consummate a $400,000 (four hundred thousand dollars) capital grant from the City to RHA to help
with the renovations of the Center. The agreement will be approved by the Renton City Council and the Renton Housing Authority Board of Commissioners and will generally include the
following items:
RHA agrees to pay the City $400,000 (four hundred thousand dollars) of the remaining balance of the Property Loan at least 30 (thirty) days in advance of when RHA needs the City to provide
the $400,000 (four hundred thousand dollars) capital grant for the Center.
The City agrees to return the original Property Loan promissory note to RHA and RHA agrees to provide the City with a revised Property Loan promissory note with the same terms and conditions,
but adjusted to reflect the remaining balance of the Property Loan at that time.
As noted in the original promissory note, RHA agrees to make annual payments of $160,000 (one hundred sixty thousand dollars), plus applicable
accrued interest, on the anniversary date of the Closing each year until the balance of the Property Loan is repaid, with the last payment adjusted to reflect the final applicable principal
and accrued interest.
RHA agrees to pay the City the remaining balance of the Demolition Loan in the amount of $325,957 (three hundred twenty-five thousand nine hundred fifty-seven dollars) plus accrued interest
by December 31, 2019, or upon sale of the underlying property secured by the Demolition Loan – whichever comes first.
The City agrees to return the original Demolition Loan promissory note to RHA and RHA agrees to provide the City with a revised Demolition Loan promissory note with the same amount and
interest rate but with a due date of no later than December 31, 2019.
RHA agrees to use the Property for the Center for a period of at least 10 (ten) years, commencing from the opening of the Center after renovations.
RHA agrees to provide services at the Center to respond to needs of residents in the Sunset Area and surrounding neighborhoods, including, for example child and/or adult learning, tutoring,
and mentoring; employment counseling and services and job training; integrated health services, including behavioral health counseling and services and health education and health care
services; case management; and/or legal assistance. However, the actual services to be provided will be determined based on the regional and community partners who participate in the
Center, the community’s evolving needs, and the available seed and/or operating funds for various services over the 10 (ten) year period.
Additional items that are mutually acceptable to the City and RHA.
Signed this ___ of June, 2018
RHA: City:
Renton Housing Authority City of Renton
By By
Mark Gropper Denis Law
Executive Director Mayor
ATTEST:
By______________________________________
Jason A. Seth, City Clerk
Letter of Intent
City of Renton Capital Grant to Renton Housing Authority
for Sunset Multi-Service & Career Development Center
Attachment A, Legal Description
Lot 1, City of Renton Short Plat No. LUA-16-00090, recorded under recording no. 20170519900004, in King County, Washington.
Tax Parcel Number(s): 722780-2040.
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