HomeMy WebLinkAboutLetter of Intent - Grant to RHA for Sunset Center - 07/11/2018 SUR-106
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
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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
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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:
1. 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:
a. 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.
b. 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.
c. As noted in the original promissory note, RHA agrees to make annual
payments of$160,000 (one hundred sixty thousand dollars),plus applicable
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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.
d. 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.
e. 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.
f. 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.
g. 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.
h. Additional items that are mutually acceptable to the City and RHA.
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Signed this"'of July, 2018
RHA: City:
Renton Housing Authority City of Re on
Byetteti
Mark Gr I .er �
�' 7 Denis Law
Executive Direc or Mayor
ATTEST:
By : tf ,/i 7 '4 d
Jason/ . •th ity Cler
Q� Rev%,00,„
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DAA I;TED 1 1 1
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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): 722 780-2040.
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Letter of Intent Attachment B
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