HomeMy WebLinkAboutGrand Investments,LLC-5/18/2015Mayor
BUCK
CLARK
COUNCIL
MEMBERS
DAVID
JONES
Ward 1
CAROLYN
COLE
Ward 2
PATRICK
MORRISSEY
Ward 3
QUENTIN M.
HART
Ward 4
RON
WELPER
Ward 5
TOM
LIND
At -Large
STEVE
SCHMITT
At -Large
CITY OF WATERLOO, IOWA
COMMUNITY DEVELOPMENT
620 Mulberry Street, Carnegie Annex • Waterloo, IA 50703 • (319) 291-4429 Fax (319) 291-4431
May 26, 2015
Mr. Brent Dahlstrom
604 Clay Street
Cedar Falls, Iwowa 50613
RE: Grand Crossing Multi -Family (RENTAL) Unit Production
New Construction Project
Dear Mr. Dahlstrom:
We enclose fully executed copies of the following documentation for your records on the
above referenced project betwee Grand Investments, LLC and the City of Waterloo, Iowa.
• Truth -In -Lending Disclosure Statement
• Mortgage
• Agreement for Covenants and Restrictions
• Promissory Note
• Master Contract
• Funding Agreement
Please contact our office at (319) 291-4429 if you have any questions or need additional
information. We look forward to working with you on this project.
Sincerely,
(1,844-(,, ‘edr\--
Nancy Guli
Community Development Coordinator
NG:an
Enclosures
Cc: Eric Johnson, Beecher Law Firm
City Clerk's Office
Noel Anderson, CPD Director
EQUAL HOUSING
OPPORTUNITY
CITY WEBSITE: www.cityofwaterlooiowa.com
WE'RE WORKING FOR YOU!
An Equal Opportunity/Affirmative Action Employer
Document prepared by: Community Development Board, 620 Mulberry Street, Waterloo, IA 50703
AGREEMENT FOR COVENANTS AND RESTRICTIONS
THIS AGREEMENT FOR COVENANTS AND RESTRICTIONS, dated as of the date of the below -described
Master Contract and Funding Agreement, is between the City of Waterloo, Iowa (the "City"), and Grand
Investments, LLC (the "Recipient").
WITNESSETH:
WHEREAS, the Recipient has applied for and received approval for funding from the CDBG Program, and has
entered into a Master Contract and a Funding Agreement with the City, and
WHEREAS, pursuant to the Funding Agreement, the City will make a loan in the amount of $3,650,000.00 (the
"Forgivable Loan") to the Recipient for the purpose of financing a portion of the costs of the project described in
Exhibit A to the Funding Agreement (the "Project") to be located on the real estate described in Exhibit 1 hereto (the
"Property"); and
WHEREAS, the Project will be economically feasible for the Recipient because of the Loan funds received through
the CDBG Program; and
WHEREAS, in accordance with the Funding Agreement, the Recipient is required to provide certain housing
benefits for low -and -moderate -income families as set forth in the Master Contract, and is further required to comply
throughout the term of Exhibit A of the Funding Agreement with the requirements and covenants set forth in the
Master Contract and Funding Agreement; and
WHEREAS, as a condition to receipt of Forgivable Loan proceeds, and in order to help ensure compliance by the
Recipient and any future owner of the Project with the requirements and covenants set forth in the Master Contract
and Funding Agreement throughout the required period of time as set forth on Exhibit A of the Funding Agreement,
so as to maintain the housing benefits for which assistance has been provided through the CDBG Program and
therefore protect the investment of the City and said Program in the Project, and in order to give the Recipient the
ability to fulfill its obligations under the CDBG Program to ensure such compliance, certain covenants and
restrictions governing the Project and enforceable by the City must be placed on the Property, which covenants and
restrictions shall run with the land and be binding on the Recipient and its successors or assigns.
NOW, THEREFORE, in consideration of the premises and for other valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. The Recipient, for itself and for its successors or assigns, makes the following covenants as to the
use of the Project:
Agreement for Covenants and Restrictions
(a) The Project shall constitute an eligible project as defmed in the CDBG Program and the City
rules (the "Rules") and as described in the Master Contract and Funding Agreement, and the Recipient shall
comply with all of the requirements of the Rules and the Master Contract and Funding Agreement and shall
own, operate and manage the Project as an eligible project for at least 10 years from the date of the final
disbursement of CDBG funds under the Forgivable Loan (the "Term of Affordability").
(b) All of the proceeds of the Forgivable Loan shall be spent on Qualified Costs of the Project (as
defmed in the Master Contract and Funding Agreement), in accordance with the Project Budget attached as
Exhibit A to the Funding Agreement.
(c) The Project shall be completed so as to provide the project benefits as required by and
specified in 24 CFR Part 570 and as referenced in the Master Contract and Funding Agreement.
(d) Throughout at least the Term of Affordability the Recipient will ensure that at least fifty-one
percent (51 %) of the households occupying the CDBG-assisted units are at or below eighty percent (80%) of
area median income, within the meaning of the Master Contract and the related attachments.
(e) Throughout at least the Tenn of Affordability the Recipient will maintain rent limitations on
the CDBG-assisted units not to exceed the most current HOME Program 65% rent limits, within the
meaning of the Master Contract and the related attachments.
(f) As of the execution date of this document, Attachment K depicts the current income limits
and rent limits. These limits may be modified by the U.S. Department of Housing and Urban Development
annually and may be forwarded to the Recipient by the City for modification. Per HUD requirement, these
income and rent limits are enforceable by the City and through this Agreement. In this Project, 36 of the 68
units will be considered CDBG-assisted units, with the Recipient submitting fixed addresses for acceptance
by the City. Throughout at least the Term of Affordability the Recipient shall conduct inspections of
Program -assisted units to ensure compliance with the property standards as specified in section 92.251 of 24
CFR Part 92, with CDBG substituted for HOME. The Project shall be inspected every two years from the
date of project completion.
(g) In order to ensure compliance with the covenants in subparagraphs (d), (e), and (f) above,
Recipient shall submit to the City on or before February 1 of each year during the Term of Affordability, its
certification of compliance with such covenant, together with documentation in form and substance
satisfactory to the City evidencing compliance with such covenant.
(h) If the Project includes more than one building, all such buildings shall be located on the
Property, and if such real estate is comprised of morethan one parcel, such parcels are contiguous except for
the interposition of a road, street, stream or similar features. All such buildings shall be owned for federal
tax purposes by the same person, and shall be financed pursuant to a common plan.
(i) Recipient shall comply with all of the covenants set forth in the Master Contract and
Funding Agreement.
2. All of the covenants herein shall run with the Property and the Project thereon, and be binding upon
the Recipient and its successors or assigns, for the Term of Affordability. Notwithstanding any other provisions of
this Agreement, this entire Agreement, or any of the provisions or paragraphs hereof, may be terminated upon
written agreement by the City and the Recipient.
2
Agreement for Covenants and Restrictions
3. Notwithstanding the provisions of paragraph 2 above, such covenants shall cease to apply to the
Property and the Project thereon prior to the end of the Term of Affordability in the event of involuntary
noncompliance therewith caused by a fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of
foreclosure, change in a federal law or action of a federal agency after the date of making of the Forgivable Loan
which prevents the City or its successors or assigns from enforcing the covenants, or condemnation or similar event,
but only if, within a reasonable period, amounts received as a. consequence of such event are used to provide a
project which meets the requirements of the Rules and the CDBG Program.
4. Notwithstanding the provisions of paragraph 3 above, if once the Project has been subject to
foreclosure, transfer or title by deed in lieu of foreclosure or similar event, and at any time during the part of the
Term of Affordability subsequent to such event, the Recipient or a related person to the Recipient obtains an
ownership interest in the Project for tax purposes, the covenants herein shall once again run with the Property and
the Project thereon and be binding on the Recipient or such related person and their respective successors or assigns
for the remainder of the Term of Affordability.
5. This Agreement may be amended only by an amendment in writing executed by the parties hereto.
6. Except for the rental of units in the Project to tenants, the Recipient hereby covenants and agrees not
to sell, transfer or otherwise dispose of the Project or any interest therein without obtaining the prior written consent
of the City, which shall be conditioned solely upon receipt of evidence satisfactory to the City that the Recipient's
purchaser or transferee (i) has assumed in writing all of the Recipient's duties and obligations under this Agreement,
the Master Contract and the Funding Agreement; (ii) has the financial capability to carry out such obligations; and
(iii) is knowledgeable in the operation and management of facilities similar to the Project facilities. It is hereby
expressly stipulated and agreed that any sale, transfer or other disposition of the Project in violation of this Section
may be ineffective to relieve the Recipient of its obligations under this Agreement, the Master Contract and the
Funding Agreement.
7. If the Recipient defaults in the performance or observance of any covenant, agreement or obligation
of the Recipient set forth in this Agreement, and if such default remains uncured for a period of thirty (30) days after
notice thereof by the City to the Recipient (or for a period of sixty (60) days after such notice if such default is
curable but requires acts to be done or conditions to be remedied which, by their nature, cannot be done or remedied
within such 30 -day period, and if the Recipient commences same within such 30 -day period and thereafter diligently
and continuously pursues the same to completion within such 60 -day period), then the City may declare the
Recipient is in default hereunder and may take any one or more of the following steps, at its option:
(a) by mandamus or other suit, action or proceeding at law or in equity, require the Recipient to
perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in
violation of the rights of the City hereunder, or obtain damages caused to the City by any such default;
(b) have access to and inspect, examine and make copies of all the books and records of the
Recipient pertaining to the Project;
(c) declare a default under the Master Contact and Funding Agreement and make no further
disbursements of Loan proceeds, and demand immediate repayment from Recipient of Loan proceeds
previously disbursed to Recipient; and
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Agreement for Covenants and Restrictions
(d) take whatever other action at law or in equity may appear necessary or desirable to enforce
the obligations, covenants and agreements of the Recipient hereunder and under the Master Contract and
Funding Agreement, including the recovery of Loan proceeds.
Recipient shall pay on demand all costs and expenses incurred by the City in enforcing or protecting its
rights and remedies hereunder, including, but not limited to, reasonable attorneys' fees and legal expenses.
No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the
right of the City to enforce the same or to obtain relief against or recover for the continuation or repetition of such
breach or violation or any similar breach or violation thereof at any later time or times.
8. The Recipient shall cause this Agreement and all amendments and supplements hereto to be
recorded and filed in such manner and in such places as the City may reasonably request, and shall pay all fees and
charges incurred in connection therewith.
9. This Agreement shall be governed by the laws of the State of Iowa.
10. Any notice required to be given hereunder shall be given by registered or certified mail, postage
prepaid, at the addresses specified below or at such addresses as may be specified in writing to the parties hereto:
Recipient: Grand Investments, LLC
2202 College Street
Cedar Falls, IA 50613
Attn: Brent Dahlstrom
City: Community Development Department
620 Mulberry Street
Waterloo, IA 50703
Attention: Rudy Jones
11. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining portions shall not in any way be affected or impaired. If, for any reason, a court fmds
that any portion of this Agreement is invalid or unenforceable as written, but that by limiting such provision or
portion thereof it would become valid and enforceable, then such provision or portion thereof shall be deemed to be
written, and shall be construed and enforced, as so limited.
12. This Agreement may be simultaneously executed in multiple counterparts, all of which shall
constitute one and the same instrument and each of which shall be deemed to be an original.
13. All of the rights and obligations set forth herein shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Covenants and Restrictions to
be executed and sealed by their duly authorized representatives as of the date first written above.
[signatures on next page]
4
Agreement for Covenants and Restrictions
GRAND INVESTMENTS, LLC CITY OATERLOO, IOW
By: ����` By:
Brent Dahlstrom, Managing Member
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK )
Acknowledged before me on
Investments, LLC.
Ernest G. Clark, Mayor
Attest:
Suzy Schaies, City Clerk
RECIPIENT ACKNOWLEDGMENT
P.B'ARA J i
;?1,0.7274ces
yn
, 2015, by Brent Dahlstrom as Managing Member of Grand
/7/
l
Notary Public in and for the State of Iowa
CITY ACKNOWLEDGMENT
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
Acknowledged before me on �� , 2015 by Ernest G. Clark and Suzy Schares as Mayor and
City Clerk, respectively, of the City of Waterlo , owa.
NANCY HIGBY
COMMISSION NO.788229
MY COMMISSIIONI(PlIRESlb
Notary Public
5
Agreement for Covenants and Restrictions
EXHIBIT 1
LEGAL DESCRIPTION
EXUIRXT
Parcel A in Part of Lot No. 30 in "Auditor's Falls Avenue and
Mullan Avenue P1atu in the City of Waterloo, Black Hawk County,
Iowa, described as follows;
Commencing at the most Southerly corner of Lot 30, thence N
48°50200" W, along the Southwesterly line of said Lot 30, a
distance of 323.07 feint to the Point of Beginning; thence
continuing along said Southwesterly line, I 18°50'00° W, a
distance of 243.81 feet; thence 111 62°55258" N, a distance of
222.89 feet; thence N 83945'11" E, a distance of 78.78 feet;
thence E 51°07237" E, a distance of 103.99 feet; thence S
48°54100 E, a distance of 17.47 feet; thence S 43443243" W, a
distance of 280.28 feet to the Point of Beginning, containing
1.2010 acres.
alkla That part of Lot 30 in "Auditor's Falls Avenue and Mullan
Avenue Plat", Black Hawk County, Iowa as indicated and described
on Plat of Survey Doc. H2014'41362.
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG-DRH) PROGRAM
FUNDING AGREEMENT
ACTIVITY TYPE: New Construction
AWARD TYPE: Forgivable Loan
AWARD AMOUNT: $3,650,000.00
LOAN TERM: 10 Year, forgivable loan
INTEREST RATE: 0%
EFFECTIVE DATE: 3/1/2015
WORK COMPLETION DATE: 5/1/2016
THIS COMMUNITY DEVELOPMENT BLOCK GRANT DISASTER RECOVERY
HOUSING (CDBG-DRH) PROGRAM FUNDING AGREEMENT is made by and between the
CITY OF WATERLOO, IOWA (the "City"), 620 Mulberry Street, Waterloo, Iowa 50703, and
Grand Investments, LLC (the "Recipient").
WHEREAS, the Recipient currently has a Master Contract with the City to accept
CDBG-DRH funds, and has submitted an application for funding to the City; and
WHEREAS, in approving the application the City has relied upon the representations of
the Recipient as to the proposed activities, management and financial condition of the Recipient,
investment of other funds, and other material information contained therein;
NOW, THEREFORE, the Recipient accepts the terms and conditions set forth in this
Funding Agreement and the Master Contract for this Funding Agreement. In consideration of
the mutual promises contained in the Master Contract and this Funding Agreement and other
good and valuable consideration, it is agreed as follows:
ARTICLE I
TERMS OF AWARD
1.1. Time of Performance. The services of the Recipient are to commence as of the
Effective Date and shall be undertaken in such sequence as to assure their expeditious
completion. All of the services required hereunder shall be completed on or before the Work
Completion Date. This Agreement shall be determined to have been completed when the City
determines the activity to be completed in accordance with the requirements of the CDBG
program regulations contained in 24 CFR Part 570. Specifically, the Funding Agreement is in
effect for the term of affordability as defined in Exhibit A, Program Schedule, of the Funding
Agreement. The term of affordability commences upon the actual final CDBG loan
disbursement date.
1.2. Maximum Payments. It is expressly understood and agreed that the maximum
amounts to be paid to the Recipient by the City for any item of work or service shall conform to
1
the budget as presented in Exhibit A, Program Schedule. It is further understood and agreed that
the total of all payments to the Recipient by the City for all work and services required under this
Funding Agreement shall not exceed the Award Amount unless modified by written amendment
of this Funding Agreement as provided in Section 1.0 of the General Provisions, Attachment A
of the Master Contract. Funds shall be disbursed in accordance with Exhibit A, Program
Schedule.
1.3. Other Project Funds. The Recipient agrees to provide local contributions to the
Activity as defined in the Other Project Funds column of the budget shown on Exhibit A,
Program Schedule. Expenditures above this level, necessary to complete the statement of work
and services, shall be paid with Other Project Funds. Reports of the Other Project Funds
expended shall be included in the financial report required in Section 6.1(b).
ARTICLE 2
SECURITY
2.1. Security Instruments. The Recipient shall ensure the execution in the City's
favor of all security agreements, financing statements, mortgages, personal and/or corporate
guarantees (hereafter, "Security Instruments") as required by the City. The following Security
Instruments shall be required of the Recipient: Forgivable Mortgage, Promissory Note, and
Agreement for Covenants and Restrictions.
2.2. Financing Statement. For each Project entered into by the Recipient, the City
requires the filing of a financing statement. The Recipient shall provide the City with a copy of
the closing statement and a certificate of title showing the recordation of the security interests of
the City and all other lienholders of record. The Recipient shall ensure that the financing
statement(s) include language approved by the City to secure its interests.
2.3. Mortgage. For each Activity or Project entered into by the Recipient, the City
requires the filing of a mortgage. The Recipient shall provide the City with the original date-
stamped, recorded mortgage and an attorney's opinion of title reflecting the interests of the City.
2.4. Filing. The Recipient shall file in a proper and timely manner any and all security
instruments required in connection with each Funding Agreement, as required by the security
provisions of the Funding Agreement, and promptly providing the City with date-stamped
originals of said Security Instruments. The Recipient shall, at the City's request, obtain and
provide to the City lien searches or attorneys' title opinions.
ARTICLE 3
LOAN TERMS AND CONDITIONS
3.1. The Award. The City agrees to make a loan to the Recipient in the Award
Amount first stated in this Funding Agreement. The Award Amount is to assist in the financing
of the Activity described in Exhibit A, Program Schedule, of this Funding Agreement. The
2
obligation of the Recipient to repay the loan, plus interest at the annual rate first stated above in
this Funding Agreement, shall be evidenced by the Promissory Note of the Recipient to the City
in the amount of the loan, to be in the form attached hereto as Exhibit B, Promissory Note. If the
Recipient meets all of the program requirements and responsibilities, the loan shall be considered
forgivable after 10 years of affordability, as previously defined in the Master Contract. In the
event the Recipient fails to requisition and spend the full face amount of the loan as set out
herein and in said Promissory Note, then the amount of the loan shall be reduced accordingly.
3.2. Actions upon a Declaration of Default. In addition to the actions provided in
the Master Contract, the City may additionally take the following actions upon declaration of
default by the City:
(a) By notice to the Recipient, declare the loan payable under the Promissory
Note and this Agreement to be forthwith due and payable, without
presentment, demand, protest, or further notice of any kind, all of which
are hereby expressly waived by the Recipient;
(b) Take whatever action at law or in equity may appear necessary or
desirable to collect the payments and other amounts then due and
thereafter to become due or to enforce performance and observance of any
obligation, agreement or covenant of the Recipient under this Agreement.
No remedy herein conferred upon or reserved to the City is intended to be
exclusive of any other remedy or remedies, and each and every such
remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute.
3.3. Prepayment of Forgivable Loan. The outstanding principal of the loan may be
prepaid by the Recipient at any time without penalty.
ARTICLE 4
INCORPORATED DOCUMENTS
4.1. Documents Incorporated by Reference. The Recipient shall comply with the
terms and conditions of the following documents which are hereby incorporated by this
reference:
1. Master Contract.
2. Funding Agreement Exhibit A, Program Schedule.
3. Funding Agreement Exhibit B, Promissory Note.
4. Agreement for Covenants and Restrictions.
3
5. Master Contract Attachment Q — Multi -Family (Rental) Unit Production
IN WITNESS WHEREOF, the parties have executed this Funding Agreement on the
latest day and year specified below.
RECIPIENT: GRAND INVESTMENTS, LLC
By:
Brent Dahlstrom, Managing Member
CITY OF W TERLOO, IOWA
By:
Attest:
rnest G. Clark, Mayor
Suzy Schar City Clerk
4
Date: -C ' IS'
Funding Agreement - EXHIBIT A — Program Schedule
ACTIVITY DESCRIPTION
Grand Investments, LLC
Finance new construction associated with proposed Grand Crossing Project
Proposed project would involve 68 rental units; 32 Market Rate Income Rental Units; 36 Affordable Low -Mod Income Rental Units
WORK
AFFORDABILITY
COMPLETION
COMPLIANCE
PERFORMANCE TARGETS
DATE
TERM
New Construction
April 1, 2016
10 Years
PAYMENT TERMS
10 Year Loan - Forgivable when all conditions of the Master Contract and Covenants are met
AMOUNT BUDGETED
OTHER
TOTAL
SOURCE
PROJECT
CDBG-DRH
CDBG-DRH
PROJECT
ACTIVITY
OF FUNDS
FUNDS
Fora Loan
10 -year Loan
BUDGET
Acquisition, financing
costs, legal, accounting,
insurance, soft costs
Equity
$1,000,000
0
1,000,000
Architectural, construction,
site work, capital reserves,
construction interest, soft
costs
US Bank
$4,900,000
0
0
4,900,000
Deferred Developer Fee
Loan
$1,000,000
1,000,000
Brownfields Tax Credit
Grant
$500,000
500,000
Construction
Equity, forgivable loan
$500,001
3,650,000
0
4,150,001
0
TOTAL ALL FUNDS
$7,900,001
$3,650,000
0
$11,550,001
DISBURSEMENT SCHEDULE
A retainage of 10% will be held on each draw prior to completion. Work must be completed and verified by City staff prior to disbursement. Requests for Payment must be submitted by Wednesday
noon to be processed for payment the following Monday. Checks will be mailed out Tuesday the following week afternoon. Final payment and closeout is contingent upon project completion,
certificates of occupancy for aU units, and submission of demographic/related information on HOME -assisted unit tenants.
Payouts will be split between the State loan and other funding sources as follows:
- 50% from State CDBG Disaster Recovery Loan
- 50% from other funding sources
DISBURSEMENTS
less 10% retainage
#1: Demolition, Environmental Assessment
$ -
(150k Tess retainage)
Requisition of funds shall be based upon completion of work and
#2: Foundation, Grading
$ -
(200k less retainage)
submittal of invoices. Retainage paid with final request for payment,
#3: Framing
$ -
(250k Tess retainage)
which will be contingent upon completion of construction work,
#4: Roof-on/interior
$ -
(192k less retainage)
obtaining appropriate occupancy permits, & providing demographic &
#5: Final Payout (retainage)
$ -
N9
related information on HOME -assisted unit tenants.
$ -
$ 3,000,000.00
Agreed to by:
Grand Investments, LLC
Brent Dahlstrom, Managing Member
Effective June 2, 2014
Attachment Q
Multi -Family (Rental) Unit — New Production — Round # 6
Any of the IEDA's CDBG Disaster Recovery Housing Recipient Counties:
Black Hawk County; Cass County; Cerro Gordo County; Dubuque County;
Linn County and Union County (administer by the Regional Super COGs)
and any of the following CDBG Entitlement Cities: Ames; Cedar Falls;
Cedar Rapids; Council Bluffs; Davenport; Des Moines; Dubuque, Waterloo
and West Des Moines, may apply on behalf of for-profit or non-profit multi-
family (rental) housing developers to construct multi -family rental dwelling
units within their jurisdictions. Funding will only be allowed for projects
located in one of the presidentially declared disaster recovery counties.
Funds available for this round will be approximately $55,000,000.
The funds will be divided as follows: 1) Approximately $30,000,000 will
be designated for cities over 50,000 population. 2) Approximately
$25,000,000 will be designated for cities under 50,000 population.
Applications may qualify as either: a) Replacing units lost; or b) Impact on
area recovery.
For the expanded Super COG disaster regions, projects will only be
allowed in incorporated communities within your jurisdiction.
All individual projects must have written concurrence and acceptance of
the project from the local government entity in which the project will be
located.
Submit your proposals to the IEDA by no later than September 2, 2014.
IEDA anticipates awarding projects by January 5, 2015.
Projects should plan to be under construction no later than April 1, 2015.
• Application limits are as follows:
✓ For the Entitlement Cities, no more than two applications may be
submitted. Submit one project on each application form. Only Cedar
Rapids can submit more than two projects to replace units lost.
✓ Any of the IEDA's six CDBG Disaster Recovery Housing Recipients
(Administered by their assigned Regional Super COG) may submit more
than two projects but not more than two projects from any one community.
Submit one project on each application form.
• Projects will be prioritized according to such factors as: a) affordability; b)
sustainability; c) need (market); d) the project's relationship to the
disasters of 2008; e) adaptive re -use (historic preservation, upper story
and conversion); f) infill; and g) other factors, if necessary, because of
1
Effective June 2, 2014
funding limitations and/or the overall goal to ensure availability of this
activity across all affected areas of the State of Iowa. The IEDA may
require (and at our discretion) a market study to be conducted to support
the claimed need for a proposed project (including such factors as
location, size of rental units, number of rental units, rent structure, etc.).
Required market studies will be at the applicant's expense.
• CDBG Disaster Recovery Housing Funds will be awarded on a most ready
to proceed (shovel ready) basis after evaluation of the project proposals.
The COGs or Cities submitting the approved projects to IEDA will verify
the readiness to proceed in their cover letter.
• This activity is limited to newly -generated multi -family housing. This
activity does not include those projects for which low income housing tax
credits are also sought or that comprise any portion of the financial
resources of the proposed project's budget.
• Definitions:
"Adaptive Re -use" For purposes of this guidance for this activity, adaptive
re -use proposals (i.e., those projects converting non-residential use
structures or buildings into residential use structures or buildings) will be
considered as new production, and therefore eligible under this activity.
Adaptive re -use shall include any historic preservation rental housing
projects, upper story residential projects and conversion of existing
structures into new housing units.
"Affordable Rental Units" means those units contained in the mortgaged
property and contained in the agreement for covenants and restrictions
that are occupied by low and moderate income persons or households at
any given time. Affordable rental units (in the appropriate number as
described later in these guidelines under the CDBG National Objective
criteria) are to be retained at all times as affordable rental units throughout
the period of affordability through income limitations of the tenants
occupying those units and through rent limitations for the tenants
occupying those units.
"In -fill' means new development on any vacant parcel within an
incorporated area that according to the assessor's office has been
previously improved.
"Mixed Use" means a project that includes a commercial venture with
residential. The residential project must stand on its own and commercial
improvements will not be considered. All costs associated with the
commercial must be separated and not reflected in the proposed budget,
sources and uses of funds and proforma for the residential project. No
live/work units will be funded.
2
Effective June 2, 2014
"Multi -family" means a project that is intended to be for rental units for
multiple families. The smallest number of units would be a duplex. Single
family units are not included in this activity.
"Project" means a site or sites together with any building or buildings
located on a site or sites that are under common ownership, management,
and financing and are to be assisted with CDBG Disaster funds as a
single undertaking, and includes all activities associated with the site(s)
and building(s).
"Scattered Site" means the Applicant must submit a composite application
reflecting the total of all sites as well as separate site specific exhibits for
each site included in the Project. A scattered site is a project where
multiple buildings with similar units are not located in proximity to one
another, but are located within a 20 -mile radius in the same community, as
determined by Google Maps (www.Googlemaps.com) using driving
directions, and are jointly managed for the purposes of meeting the
affordable rental unit requirements. A scattered site project may be new
construction, acquisition, conversion, upper -story or a combination of
these types. The application for scattered sites must include a total project
budget along with individual project budgets for each site.
• Applicants, prior to application submission, need to determine the
development team that will be involved in each project and prior to
proposal submission to the IEDA. Applicants will need to be able to
convey the development team members and their respective roles and
responsibilities in the proposed projects within the application submitted to
the IEDA. Entities identified in the application as members of the
development team and considered instrumental in the development of the
application, may not be subject to competitive bidding and procurement
after a project is awarded. (see IEDA's Procurement Policy for Disaster
Recovery Housing). Development team members may include, but are not
limited to:
- Owner (or eventual owner);
Program administrator / overseer from start to finish, including
throughout the prescribed period of affordability, if different from the
owner;
Developer(s) and/or builder(s) of the multi -family (rental) housing;
Architectural / Engineering (NE) or design services, as applicable;
Construction Lender(s);
Permanent Lender(s), as applicable;
- Property Manager(s);
Energy Rater firm;
Etc.
3
Effective June 2, 2014
• There is a maximum per project cap limitation of $3,000,000 on the CDBG
Disaster Recovery funds. The Recipient shall determine the per unit cost
cap limitation, for each project, if any.
• Any and all additional costs of the project above the stated CDBG Disaster
funds limitations of $3,000,000 shall come from other financial resources.
Projects should reflect a Debt Service Coverage Ratio between 1.15 and
1.35 for the period of affordability. All other necessary financial resources
shall be committed and secured prior to the commitment of CDBG
Disaster funds to the rental project. All secured financial resources should
be supported by commitment letters with terms or account balance
statements for owner funds in the application. Financial documents can be
submitted as confidential. If an applicant intends to use Historic
Preservation Tax Credits and/or Workforce Housing Tax Credits
(previously known as Housing Enterprise Zone) in their sources of funds,
providing documentation that these credits have been applied for is
sufficient for this application. Award of said tax credits is not required for
application.
• CDBG National Objective - All assisted multi -family (rental) new
production projects shall meet the national objective of "Primarily benefits
persons of low and moderate income — Housing". Effectively, this means
that no less than 51% of the rental units in an assisted rental project shall
be occupied by persons or households whose incomes are at or below
80% of the area median income limits (LMI) by household size as
established by HUD for the jurisdiction in which the rental project is
located. Mixed use projects will be allowed under this activity but only the
residential portion will be funded. Residential and Commercial costs must
be separated and Commercial Income cannot be included in the proforma.
51 % of all rental units in the project (rounded up to the nearest whole
number) shall be made available to and occupied by a low and
moderate (LMI) tenant (e.g., in a thirty-two unit project, seventeen units
shall be made available to and occupied by LMI tenants).
For rental projects that contain residential units of varying bedroom
sizes, to the extent possible, the 51% criteria needs to be applied (i.e.,
a proportional share) to all sizes (number of bedrooms) of units.
Scattered site projects accomplished as a single undertaking shall take
into consideration the individual properties on the various sites when
determining national objective compliance (i.e., the 51 % criteria). Each
site will have to meet the National Objective. According to HUD
Occupancy rules: all single unit structures must be occupied by an LMI
tenant, two -unit structures (duplex) must have at least one unit occupied
by an LMI tenant and structures containing more than two units must have
at least 51 % of the units occupied by LMI tenants.
Effective June 2, 2014
When all work has been completed, each property receiving CDBG
Disaster funds will require a forgivable loan and agreement for covenants
and restrictions in the form of a recorded lien (sample of lien available
upon request from IEDA). At that time the term of affordability begins. For
scattered sites each individual site will have a recorded lien and forgivable
loan on each parcel for the amount of the actual construction costs
allocated by CDBG funds for that site and an aggregate of soft costs
divided by square footage for all scattered sites in a single application;
ensuring that the total of all scattered sites forgivable loans match the total
CDBG Disaster funds award amount for the project. It is at this juncture
(initial occupancy following the provision of assistance) that the
appropriate number of units in the project needs to be occupied by the
appropriate number of LMI tenants and the subsequent rents limited on
those units.
• Projects constructed under this activity could result in mixed -income
projects, in that, only a percentage of the total number of units are
required to meet the activity income and rent requirements (i.e., the
"assisted" units). In the design of projects under this activity, consideration
needs to be given to keeping all units in the project, not just the assisted
units, consistent with each other in terms of bedroom sizes, square
footage, similar design features, similar amenities, etc. This will allow
assisted property owners units to maintain the required percentage of
assisted units within the project and at the same time be able to use any
of the units in the project to meet the required percentage. If unit design is
not consistent, applications may be rejected; awards reduced and/or
contain other restrictions to ensure appropriate use of funds for affordable
units.
• Maximum (gross) rent limits on the CDBG Disaster Funds assisted
(affordable) rental units (by bedroom size) shall not exceed the most
current HOME Program 65% rent limits.
• Rental property owners of CDBG Disaster funds assisted rental projects
shall agree to a period of affordability in terms of tenant income
restrictions (limitations) and through affordable rent limitations (controls)
on all CDBG Disaster funds assisted rental units (i.e., the affordable rental
units) serving LMI tenants, maintaining the appropriate number of
affordable rental units for the entire period of affordability.
A 10 -year period of affordability will be placed on projects that contain 12
or more units. A 5 -year period of affordability will be placed on projects
that contain less than 12 units.
Long-term affordability requirements shall be secured through an
agreement for covenants and restrictions and a forgivable loan in the
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Effective June 2, 2014
amount of the CDBG Disaster Funds filed as a recorded lien that will ride
with the assisted rental property owner's land.
Throughout the period of affordability, assisted rental property owners
shall ensure that the appropriate number of rental units remains affordable
to, and are occupied by, income eligible and verified LMI tenants. All
assisted rental units shall be subject to the maximum rent limitations (by
bedroom size) applicable to all assisted rental units for the entire 5 or 10
year period of affordability. Applicants will need to identify who will be
responsible for the Tong -term affordability requirements and oversight for
all funded new construction multi -family (rental) projects.
• Throughout the period of affordability, assisted rental property owners
shall agree to periodic reporting requirements and compliance monitoring
and/or inspections (for tenant incomes and rents on the affordable units,
appropriate unit mix, property standards compliance, etc.).
• The CDBG Disaster funds subsidy amount provided must be secured as a
recorded mortgage lien on the assisted multi -family property.
• The CDBG Disaster funds forgivable loan may be recorded in junior
position to the principal conventional loan (if there is one), but must be
recorded in senior position to any and all other funding in the project.
Additionally, recipients must maintain their assistance security agreements
in the above -stated recording position throughout the 5 or 10 -year period.
• Form of assistance — The form of financial assistance (CDBG funds) will
be a 10 -year forgivable loan (non -receding), forgiven in full at the end of
the 10 -year compliance period for projects with 12 or more units. For
projects with less than 12 units, the form of financial assistance (CDBG
funds) will be a 5 -year forgivable loan (non -receding), forgiven in full at the
end of the 5 -year compliance period. If the assisted rental project is sold
or transferred, or converted to an alternate (use, during the compliance
period following completion and acceptance, the entire amount of the
CDBG forgivable loan shall be repaid. Upon mutual agreement and
consent between the IEDA and the originally assisted rental property
owner; the assisted rental project may be sold or transferred, but, only if
the new purchaser agrees to continue with the terms of the forgivable loan
agreement and the agreement for covenants and restrictions, to complete
the remainder of the affordability period (tenant income and rent limitations
on 51% of the rental units).
• Newly constructed multi -family dwelling units under this activity shall not
be constructed in a 100 -year flood plain or within buy-out areas (those
buying out properties in a 100 -year flood plain), known or proposed. No
adaptive re -use multi -family proposals located within the 100 -year flood
plain will be allowed under this activity.
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Effective June 2, 2014
• All newly constructed multi -family units shall be designed and constructed
in accordance with all locally adopted and enforced building codes and
standards. In the absence of any locally adopted and enforced building
codes or standards, the requirements of the Iowa State Building Code
shall apply.
• It is the IEDA's goal to utilize the CDBG Disaster Funds in a manner that
results in green -built, sustainable multi -family structures. All newly
constructed units, including adaptive re -use, upper story, conversion and
new construction multi -family housing shall meet the requirements of the
Iowa Green Streets Criteria. All proposals must submit a completed Green
Development Plan and Checklist. The Iowa Green Streets Criteria and
supporting resources are available under the "Resources" section online
at www.iowaeconomicdevelopment.com/CommunityDevelopmentkreen.
A pre -application workshop to review CDBG and Iowa Green Streets
Criteria requirements will be held on June 19, 2014 in Grinnell, please
notify Jeff Geerts with IEDA for more information.
• Lots (land) on which to construct the multi -family housing proposed need
to be identified and site control (not necessarily ownership) obtained, prior
to application submission, and be identified (property address and legal
description) within the application. This is particularly important with regard
to the requirements of the Iowa Green Streets Criteria.
• Recipients may be allowed general administrative funds in an amount not -
to -exceed two percent (2%) of the total award (calculated by considering
the total of all project -related costs as ninety-eight percent of the total
award i.e. Project Cost _ .98 - Project Cost = Administration).
• The owner and/or the developer / builder of the newly constructed multi-
family housing shall obtain their own construction financing.
• Developers / builders will be allowed a combined developers fee and/or
builders fee (overhead and profit) not -to -exceed twelve percent of the total
cost of construction.
• Program Income does not pertain to those sub -recipients of rental
construction or rehabilitation that can certify that they are a for-profit entity
and that they own the funded project with no portion of the project being
leased to the sub -recipient by a third party. They can show for-profit
status by completing the Department's Certificate of the Developer. They
can show ownership of the project property by either producing a Title
Guaranty Certificate or a title opinion and/or documentation from the
county recorder's office or the County Assessor's office. Land ownership
in Iowa must be recorded in the county that the property resides with the
7
Effective June 2, 2014
recorder and the county assessor's office also lists ownership of land as a
way of accurately taxing property owners.
• All awarded projects are subject to the standard State and Federal
Regulations associated with the expenditure of Federal Community
Development Block Grant (CDBG) funds. Including but not limited to
Federal Labor Standards, Environmental Review, Lead Safe Housing,
Civil Rights and Fair Housing, etc. Grant administrators for these projects
should be familiar with these regulations and should ensure that all
developments are in compliance with the terms of the disaster recovery
contracts. Please note that all projects with 8 or more units will be subject
to Davis Bacon wage rates. All projects must complete an environmental
review with a 15 -day notification period prior to a release of funds. See
CDBG Management Guide for more details regarding these regulations.
8
CITY OF WATERLOO
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM
MASTER CONTRACT
CONTRACT EFFECTIVE DATE: 3/1/2015
RECIPIENT: Grand Investments, LLC
PROJECT ADDRESS: West Mullan and Jefferson Streets,
Waterloo, IA
THIS COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM MASTER
CON TRACT (the "Master Contract") is made by and between the CITY OF WATERLOO, IOWA (the
"City"), 620 Mulberry Street, Waterloo, Iowa 50703 and the Recipient identified above.
The Recipient accepts the terms and conditions set forth in this Master Contract for any and all
subsequent Funding Agreements funded with the funds identified herein. In consideration of the mutual
promises contained in this Master Contract and other good and valuable consideration, it is agreed as
follows:
ARTICLE I
DEFINITIONS
As used in this Master Contract, the following terms shall apply:
1.1. Act. Act means Title I of the Housing and Community Development Act of 1974, as
amended (§§ 42 U.S.C. 5301 et seq.)
1.2. Activity. Activity means the detailed description of the work, services, and other
accomplishments to be performed by the Recipient as described in the Funding Agreement and the
housing fund application approved by the City. An Activity may contain one or more Projects.
1.3. Allowable Costs. Allowable Costs are those costs which are summarized in each
Funding Agreement Program Schedule, Exhibit A; and consistent with federal regulations and guidelines
applicable to the CDBG program, especially as defined at 24 CFR § 570.202.
1.4. Integrated Disbursement Information System. Integrated Disbursement Information
System (IDIS) means the U.S. Department of Housing and Urban Development's computerized finance
system which manages, disburses, collects, and reports information on the use of CDBG funds and which
shall apply to fiscal management in accordance with 24 CFR 570 Subpart J.
1.5. Contract Expiration Date. Contract Expiration Date means the date the Master
Contract ceases to be in force and effect. The Master Contract expires upon the expiration date of all
Funding Agreements covered under this Master Contract. The date is defined in Article 1.1 of the
Funding Agreements.
1.6. Funding Agreement. Funding Agreement means a separately executed document
referenced in this Master Contract, which contains information, terms and conditions pertaining to each
Activity or Project being funded with CDBG funds.
1.7. Funding Agreement Expiration Date. Funding Agreement Expiration Date means the
date a Funding Agreement ceases to be in force and effect. A Funding Agreement expires upon the
occurrence of one of the following: (a) the Recipient complies with the affordability requirements as
provided in Attachment M and fulfills the conditions and activities as of the last date specified in Article
1.1 of the Funding Agreement; or (b) the Funding Agreement or Master Contract is terminated by the
City due to any default under Article 8 of the Master Contract.
1.8. CDBG. CDBG means the CDBG Disaster Recovery Housing Program created under the
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (P.L. 110-329)
under the Community Development Block Grant program.
1.9. HUD. HUD means the U.S. Department of Housing and Urban Development.
1.10. Master Contract or Contract. Master Contract or Contract means this Master Contract
and all of the notes, leases, assignments, mortgages, and similar documents referred to in this Master
Contract and all other instruments or documents executed by the Recipient or otherwise required in
connection with this Master Contract, including the CDBG Funding Agreements and applications
together with any related submittal documents.
1.11. Project. Project means a site, an entire building or two or more buildings within a four -
block area under common ownership, financing and management that are proposed to be assisted with
CDBG funds (and other Project funds) as a single undertaking. There may be one or several Projects
within each Activity.
1.12. Work Completion Date. Work Completion Date means the date identified in Exhibit A,
Program Schedule of the Funding Agreement upon which an Activity being funded through a Funding
Agreement shall reach its physical conclusion.
ARTICLE 2
FUNDING
2.1. Funding Source. The source of funding for Activities funded through this Master
Contract and its Funding Agreements is a federal appropriation for the CDBG Program.
2.2. Receipt of Funds. All payments under the Master Contract and the Funding Agreements
are subject to receipt by the City of sufficient federal funds for the CDBG program.
2.3. Prior Costs. No costs incurred prior to the Funding Agreement(s) Effective Date may be
included as Activity costs for the purposes of this Master Contract or its Funding Agreement(s).
2.4. Disbursement of Less Than the Total Award Amount. If the total amount of funding
for a particular Activity has not been requested by the Recipient within sixty (60) days after the Activity's
work completion date, then the City shall be under no obligation for further disbursement for that
Activity.
2.5. Order of Disbursement of Grant and Loan Award. Under a Funding Agreement
which contains both public and private funds, the funds shall be considered disbursed equally.
2
2.6. Reversion of Assets. Upon the Funding Agreement Expiration Date, any Recipient who
meets the definition of subrecipient under 24 CFR § 570.500 shall transfer to the City any CDBG funds
on hand at the time of the expiration and any accounts receivable attributable to the use of CDBG funds.
ARTICLE 3
PROJECT REQUIREMENTS
3.1. Affordability Requirements. Any Activity assisted under this Master Contract and its
Funding Agreements shall meet the affordability requirements of the latest HUD Section 8 income
guidelines, as detailed in Attachment M. The maximum income of tenants shall be 80% of area median
income (AMI) as determined and made available by HUD. For this project 36 of the 68 units shall meet
the income requirements and the rent requirements (also detailed in Attachment K and determined by the
latest HUD 65% HOME income limits). Noncompliance with the referenced affordability requirements
shall necessitate immediate repayment by the Recipient of all funds invested by the City in the Activity or
Project. Repayment shall be made to the recipient's CDBG account, or as determined by the City.
3.2. Performance Targets. On each Funding Agreement Work Completion Date, the
Recipient shall have accomplished the activities and performance targets as described in the Funding
Agreement Exhibit A, Program Schedule, and as further elaborated in the Funding Agreements Approved
Housing Fund Application.
3.3. Calculation of Project Completion. The City has the final authority to assess whether
the Recipient has met their performance targets at the Work Completion Date. The City shall determine
completion according to the performance targets set forth in the Funding Agreement's Exhibit A,
Program Schedule. The City reserves the right to monitor and measure at any time during the Master
Contract term the achievement of the performance targets.
3.4. Enforcement Provisions. The following means of enforcement shall apply to each
identified form of Activity assistance, and shall be binding on the Recipient when a Funding Agreement
is executed for that form of assistance. Additional provisions may be included as a part of a Funding
Agreement.
(a) Owner -Occupied Rehabilitation. Any owner -occupied property assisted with
CDBG funds shall have placed upon it recorded security instruments, as approved by the City, protecting
the investment for the benefit of lower-income persons in accordance with CDBG National Objectives in
accordance with 24 CFR § 570.208.
(b) Rental Housing. Any rental housing property assisted with CDBG funds shall
have placed upon it recorded security instruments, as approved by the City, insuring compliance with the
occupancy restrictions (80% Area Median Income as determined and made available by HUD) and the
rent restrictions as defined by Attachment K and the latest HUD determinations (the most current HOME
Program 65% rent limits).
(c) Homeownership. Any property assisted under the homeownership activity shall
have placed upon it recorded security instruments, as approved by the City, insuring compliance with
CDBG affordability provisions.
3.5. Housing Quality Standards. All housing assisted with CDBG funds shall be
maintained in compliance with the property standards defined in 24 CFR § 92.251, substituting CDBG for
HOME, and any locally enforceable housing standards, laws and codes of the City, as affected by the
Activity location.
3
3.6. Project Requirements. All Activities shall adhere to the requirements found at Subpart
K of 24 CFR Part 570, as applicable in accordance with the type of Activity assisted.
3.7. Affirmatively Furthering Fair Housing. The Recipient shall comply with the
affirmative marketing responsibilities in accordance with 24 CFR § 92.351, substituting CDBG for
HOME as applicable, and responsibilities in affirmatively furthering Fair Housing per 24 CFR § 570.601.
3.8. Religious Organizations. Religious organizations shall follow the conditions found at
24 CFR § 92.257, substituting CDBG for the use of HOME funds.
3.9. Annual Income Certifications. Recipients of CDBG funds for tenant -based rental
assistance and rental housing shall maintain records of determination of each tenant income eligibility and
eligibility as a family at the time they receive the assistance. The Recipient shall reexamine family
income, size and composition at least annually during the term of affordability.
3.10. Property Standards Certifications. Recipients of CDBG funds for rental housing shall
maintain records indicating that an inspection of the rental housing was performed and at a minimum
meets property standards defined in 24 CFR § 92.251, substituting CDBG for HOME, and any locally
enforceable housing standards, laws and codes of the City, as affected by the Activity location. Projects
shall be subject to city rental inspections on a regular basis as established by state law and city codes.
ARTICLE 4
USE OF FUNDS
4.1. General. The Recipient shall perform in a satisfactory and proper manner, as reasonably
determined by the City, the work activities and services as written and described in the approved Housing
Fund Application (Exhibit B to the Funding Agreement) as summarized in the Recipient's approved
Funding Agreement Schedule (Exhibit A to the Funding Agreement).
4.2. Budget Revisions. Activity budget revisions, which would result in changes in other
Project funds, shall be subject to approval of the City through the contract amendment process. In no
instance shall the City be obligated to provide additional funds for an activity or project if the Recipient
finds total costs will exceed those identified in the Funding Agreement. Budget revisions shall be
compatible with the terms of this Master Contract and each Funding Agreement and of such a nature as to
qualify as an allowable cost. Budget revisions requested during the final ninety (90) days prior to the
Work Completion Date of each Funding Agreement will be approved by the City only if it determines
that the revisions are necessary to complete activities and are allowable. The submission of a final
Payment Certification to the City shall be construed to mean the Recipient has completed work for that
Activity, and that funds shall no longer be available to that particular Activity.
4.3. Administrative Costs. Funds may be used for costs of administering the CDBG
program(s) funded under this Contract in accordance with federal regulations. Only administrative costs
incurred after the effective date of the Funding Agreement offering the administrative funds are eligible
for CDBG fund reimbursement. The amount of CDBG funds which may be used for this purpose is
limited to the amounts specifically identified as administrative funds in the HOME Funding Agreement
budget.
4.4. Program Income — Prior to Work Completion Date. Proceeds received by the
Recipient from principal and interest payments on a CDBG investment loan, or other proceeds received as
4
a result of a CDBG investment, if received prior to the Funding Agreement Work Completion Date, shall
be expended prior to requesting additional CDBG rental rehab funds.
4.5. Program Income — After Work Completion Date. The Recipient may not retain
program income after the Funding Agreement Work Completion Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF RECIPIENT
To induce the City to make the award referred to in this Master Contract and subsequent Funding
Agreements executed under this Master Contract, the Recipient represents, covenants and warrants that:
5.1. Authority. The Recipient is duly authorized and empowered to execute and deliver the
Master Contract and the subsequent Funding Agreements.
5.2. Financial Information. All financial statements and related materials concerning each
Activity provided to the City are true and correct in all material respects and completely and accurately
represent the subject matter thereof as of the effective date of the statements and related materials, and no
material adverse change has occurred since that date.
5.3. Application. The contents of the application the Recipient submitted to the City/State
for approval for CDBG funding is a complete and accurate representation of the Activity as of the date of
submission and there has been no material adverse change in the organization, operation, or key personnel
of the Recipient since the date the Recipient submitted its Housing Fund Application to the City.
5.4. Claims and Proceedings. There are no actions, lawsuits or proceedings pending or, to
the knowledge of the Recipient, threatened against the Recipient affecting in any manner whatsoever its
rights to execute the Master Contract or subsequent Funding Agreements or the ability of the Recipient to
make the payments required under the Master Contract and Funding Agreements, or to otherwise comply
with the obligations of the Recipient contained under the Master Contract and Funding Agreements.
There are no actions, lawsuits or proceedings at law or in equity, or before any governmental or
administrative authority pending or, to the knowledge of the Recipient, threatened against or affecting the
Recipient or any property involved in the Activities.
5.5. Prior Agreements. The Recipient has not entered into any verbal or written contracts,
agreements, or arrangements of any kind that are inconsistent with the Master Contract or Funding
Agreements.
5.6. Effective Date. The covenants, warranties and representations of this Article are made
as of the Effective Date of this Master Contract and shall be deemed to be renewed and restated by the
Recipient at the time of execution of each subsequent Funding Agreement and at the time of each advance
or request for disbursement of CDBG funds.
ARTICLE 6
COVENANTS OF THE RECIPIENT
6.1. Affirmative Covenants. Until the Activity has been closed out, audited (as required),
and the audit approved by the City, all loans repaid, and affordability standards maintained for the
appropriate length of time, the Recipient covenants with the City that:
5
(a) Work and Services. The Recipient shall perform work and services detailed in
each approved Housing Fund Application by the Funding Agreement Work Completion Date.
(b) Reports. The Recipient shall prepare, review and sign the report(s) as specified
below, together with any reports required in any Funding Agreement, in the form and content specified by
the City.
(c) Records. The Recipient shall adhere to the following record requirements:
(i) Required Records. The Recipient shall maintain books, records,
documents and other evidence pertaining to all costs and expenses incurred and revenues received under
this Master Contract and its Funding Agreements in sufficient detail to reflect all costs, direct and
indirect, of labor, materials, equipment, supplies, services and other costs and expenses of whatever
nature, for which payment is claimed under this Master Contract and its Funding Agreements. The
Recipient shall maintain books, records and documents in sufficient detail to demonstrate compliance
with 24 CFR 570, the Master Contract and its Funding Agreements.
(ii) Record Retention Requirements. The Recipient shall maintain records
for a period of five (5) years beyond the date upon which the affordability requirements applicable under
24 CFR § 92.252 and 24 CFR § 92.254, substituting CDBG for HOME, expire or, if there are no long-
term affordability requirements applicable, then five (5) years beyond the Funding Agreement Work
Completion Date. Records for non -expendable property acquired under this Master Contract and its
Funding Agreements shall be retained for a five (5) year period after the final disposition of property.
Records shall be retained beyond the prescribed period if any litigation or audit is begun or if a claim is
instituted involving this Master Contract and its Funding Agreements covered by the records. In these
instances, the records shall be retained until the litigation, audit or claim has been finally resolved or until
the end of the regular period, whichever is later. Records covering displacements and acquisition must be
retained for at least five (5) years after the date by which all persons displaced from the property and all
persons whose property is acquired for the Activity have received the final payment to which they are
entitled in accordance with 24 CFR § 570.606.
(d) Access to Records/Inspections. The Recipient shall, without prior notice and
during regular business hours, permit HUD or its representatives, the General Accounting Office or its
representatives, and the City or its representatives to examine, audit and/or copy (i) any plans and work
details pertaining to any Activity, (ii) all of the Recipient's books, records and accounts, and (iii) all other
documentation or materials related to this Master Contract and its Funding Agreements. The Recipient
shall provide proper facilities for making such examination and/or inspection.
(e) Use of CDBG Funds. The Recipient shall expend funds received under this
Master Contract and its Funding Agreements only for the purposes and activities described in its
approved Housing Fund Application, this Master Contract and its Funding Agreements, and as approved
by the City.
(f) Documentation. The Recipient shall deliver to the City, upon request, (i) copies
of all contracts or agreements relating to each Activity, (ii) invoices, receipts, statements or vouchers
relating to each Activity, (iii) a list of all unpaid bills for labor and materials in connection with each
Activity, and (iv) budgets and revisions showing estimated Activity costs and funds required at any given
time to complete and pay for each Activity.
(g) Notice of Proceedings. The Recipient shall promptly notify the City of the
initiation of any claims, lawsuits or proceedings brought against the Recipient.
6
(h) Indemnification. The Recipient shall indemnify and hold harmless the City and
its officers, employees and agents, from and against any and all claims, demands, causes of action, costs,
expenses, fines, fees, penalties, or liabilities of any type or nature whatsoever, including but not limited to
reasonable attorneys' fees and expenses, arising from or in connection with any Project or Activity.
(i) Notice to Citv. In the event the Recipient becomes aware of any material
alteration in an Activity funded under this Master Contract, initiation of any investigation or proceeding
involving an Activity funded under this Master Contract, or any other similar occurrence, the Recipient
shall promptly notify the City.
(j) Project Fees. The Recipient shall ensure the prompt payment of all appraisal,
survey, recording, title, license, permit and other fees and expenses incurred incidental to the funding
award.
(k) Certifications and Assurances. The Recipient certifies and assures that the
Activities funded under this Master Contract will be conducted and administered in compliance with all
applicable federal, state and local laws, regulations, ordinances and orders. Certain statutes are expressly
made applicable to activities assisted under the Act by the Act itself, while other laws not referred to in
the Act may be applicable to such activities by their own terms. The Recipient certifies and assures
compliance with the applicable orders, laws and implementing regulations, including but not limited to,
the following:
(i) Title I of the Housing and Community Development Act of 1974; and
Department of Housing and Urban Development regulations which implement the CDBG Program at 24 CFR 570.
(ii) Financial Management guidelines issued by the U.S. Office of Management and
Budget, OMB Circular A-122 (Cost Principles for Nonprofit Organizations); OMB Circular A-87 (Principles for
Determining Costs Applicable to Grants and Contracts with State, Local and Federally recognized Indian Tribal
Governments); OMB Circular A-128 (Audits of State and Local Governments); OMB Circular A-133 (Audits of
Institutions of Higher Learning and Other Non -Profit Institutions); the following requirements of OMB Circular A-
110 (Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education,
Hospitals and other Nonprofit Organizations): Attachment B, Attachment F, paragraph 2 of Attachment H, and
Attachment 0; and the following requirements of the Code of Federal Regulations, 24 CFR Part 85 (Administrative
Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal
Governments): Subsections 85.6, 85.12, 85.20, 85.22, 85.26, 85.35, 85.36, 85.44, 85.51, and 85.52.
(iii) Title VI of the Civil Rights Act of 1964 as amended (Public Law 88-352; 42
U.S.C. §§ 2000d et seq.); Title VIII of the Civil Rights Act of 1968 as amended (Public Law 90-284; 42 U.S.C. §§
3601 et seq.); the Iowa Civil Rights Acts of 1965; Iowa Executive Order #15, dated April 2, 1973, and Executive
Order #34, dated July 22, 1988; Presidential Executive Order 11063, as amended by Executive Order 12259;
Presidential Executive Order 11246, as amended; Section 504 of the Rehabilitation Act of 1973 as amended (29
U.S.C. § 794); the Americans with Disabilities Act, as applicable, (P.L. 101-336, 42 U.S.C. §§ 12101-12213; the
Age Discrimination Act of 1975 as amended (42 U.S.C. §§ 6101 et seq.); and related Civil Rights and Equal
Opportunity statutes; and regulations which implement these laws.
(iv) Fair Housing Act, Public Law 90-284. The Public Fair Housing Act is part of
Title VIII of the Civil Rights Act of 1968 as amended (42 U.S.C. §§ 3601 et seq.); Section 3 of the Housing and
Urban Development Act of 1968 as amended (12 U.S.C. § 1701u); and regulations which implement these laws.
(v) Executive Orders 11625, 12432, and 12138 as amended, to encourage the use of
minority and women's business enterprises in connection with activities funded under the program.
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(vi) Davis -Bacon Act, as amended (40 U.S.C. §§ 276a - 276a-5), where applicable
under 24 CFR § 570.603; Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327 et seq.); the Copeland
Anti -Kickback Act (18 U.S.C. § 874); the Department of Defense Reauthorization Act of 1986; and regulations
which implement these laws.
(vii) Lead Based Paint Poisoning Prevention Act (42 U.S.C.§§ 4821-4846) and
implementing regulations; Requirements for the Notification, Evaluation, and Reduction of Lead -Based Paint
Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance; Final Rule (24 CFR
Part 35, et al.).
(viii) Fair Labor Standards Act and implementing regulations.
(ix) Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970, as amended (URA) (42 U.S.C. §§ 4601-4655) and implementing regulations; Section 104(d) of the Housing
and Community Development Act of 1974, as amended, governing the residential anti -displacement and relocation
assistance plan; and Section 105(a)(11) of the Housing and Community Development Act of 1974, as amended,
governing optional relocation assistance.
(x) National Environmental Policy Act of 1969 and implementing regulations.
(xi) Government -wide Restriction on Lobbying Certification (Section 319 of Public
Law 101-121, codified at 31 U.S.C. § 1352) and implementation regulations.
(xii) Hatch Act, as amended (codified at 5 U.S.C. §§ 7321 et seq.) (regarding political
partisan activity and federally funded activities) and implementing regulations.
()dii) Section 102 of the Department of Housing and Urban Development Reform Act
of 1989 (P.L. 101-235), and implementing regulations.
(xiv) Citizen participation, hearing and access to information requirements found
under sections 104(a)(2) and 104(a)(3) of Title I of the Housing and Community Development Act of 1974, as
amended and as modified by the waivers and alternative requirements published in the Federal Register on
September 11, 2008.
(xv) Subsection 104(1) of Title I of the Housing and Community Development Act of
1974, as amended, regarding the prohibition of the use of excessive force in nonviolent civil rights demonstrations
and the enforcement of state and local laws on barring entrance to or exit from facilities subject to such
demonstrations.
(xvi) Drug -Free Workplace Act.
(xvii) Iowa Code Chapter 91C requires all contractors and/or subcontractors
performing construction or construction -related work within Iowa to register with the State if they earn more than
$2,000 per year. See www.iowaworkforce.org/labor/contractor.htm to register.
(xviii) MBE/WBE Requirements. Though listed above in subparagraph (ii), 24 CFR
Part 85.36 requires that all necessary affirmative steps will be taken to assure that minority firms, women's business
enterprises, and labor surplus area firms are used when possible. Requirements and reporting forms were provided
as part of the pre -construction workshop.
(1) Maintenance of Project Property and Insurance. The Recipient shall -
maintain Activity property or properties in good repair and condition, ordinary wear and tear excepted,
and shall not suffer or commit waste or damage upon the property. The Recipient shall pay for and
maintain insurance as is customary in its industry. This insurance shall be in an amount not less than the
full insurable value of the property. The Recipient shall name the City as a mortgagee and/or an
additional insured, as appropriate.
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(m) Means of Enforcement. The Recipient shall ensure the appropriate enforcement
provisions detailed in Section 3.4 are included for each Activity funded with CDBG funds, as appropriate.
6.2. Negative Covenants. During the term of this Master Contract and Funding Agreements
entered into hereunder, the Recipient covenants with the City that it shall not, without the prior written
disclosure to and prior written consent of the City, directly or indirectly:
(a) Assignment. Assign, waive or transfer any of its rights, powers, duties or
obligations under this Master Contract or any Funding Agreements.
(b) Property/Collateral. Sell, transfer, convey, assign, encumber or otherwise
dispose of any of the real property or other collateral securing any loan or other investment instrument
produced under this Master Contract or its Funding Agreements.
(c) Restrictions. Place or permit any restrictions, covenants or any similar
limitations on the real property and/or other collateral securing any loan or other investment instrument
produced under this Master Contract or its Funding Agreements, other than as expressly permitted or
required by the Master Contract or its Funding Agreements.
(d) Removal of Collateral. Remove from an Activity site or the State all or any part
of the collateral securing any loan or other investment instrument produced under this Master Contract or
its Funding Agreement.
(e) Business Ownership. Materially change the ownership, structure or control of
the business affecting any Activity funded under this Master Contract, including but not limited to,
entering into any merger or consolidation with any person, firm or corporation or permitting substantial
distribution, liquidation or other disposal of business assets directly associated with an Activity. Changes
in the business ownership, structure or control which do not materially affect any Activity shall require
forty-five (45) days advance written notice to the City but not written consent of the City. The City shall
determine the materiality of the change and whether or not the change affects any Activity funded under
this Master Contract.
(f) Administration. Cease administering the activities funded under this Master
Contract and subsequent Funding Agreements.
ARTICLE 7
DEFAULT AND REMEDIES
7.1. Events of Default. Any of the following shall constitute an Event of Default under this
Master Contract or a Funding Agreement:
(a) Material Misrepresentation. If at any time any representation, warranty or
statement made or furnished to the City by, or on behalf of, the Recipient in connection with this Master
Contract or its Funding Agreements, or to induce the City to make an award to the Recipient, shall be
determined by the City to be incorrect, false, misleading or erroneous in any material respect when made
or furnished and shall not have been remedied to the City's satisfaction within thirty (30) days after the
City gives written notice to the Recipient.
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(b) Nonpayment. If the Recipient fails to make a payment when due under the
terms of this Master Contract or its Funding Agreements within thirty (30) days after the City gives
written notice of such overdue payment to the Recipient.
(c) Noncompliance. If there is a failure by the Recipient to comply with any of the
covenants, terms or conditions contained in this Master Contract, its Funding Agreements or Security
Instruments executed pursuant to the Master Contract or Funding Agreements.
(d) Work Completion Date. If an Activity, in the sole reasonable judgment of the
City, is not completed on or before the Funding Agreement Expiration Date, as specified in Section 1.1 of
its Funding Agreement.
(e) Lack of Affordability. If an Activity fails to maintain affordability of the
CDBG-assisted housing during the aforementioned 10 -year compliance period.
(f) Misspending. If the Recipient expends CDBG fund proceeds for purposes not
described in the Housing Fund Application, this Master Contract or its Funding Agreements, or as
authorized by the City.
(g) Insurance. If loss, theft, damage or destruction of any substantial portion of the
property of the Recipient occurs for which there is either no insurance coverage or for which, in the
opinion of the City, there is insufficient insurance coverage.
(h) Business Changes. If there is a material change in the ownership, structure or
control of the Recipient which occurs without the prior written disclosure to and, if required, written
permission of the City.
(i) Abandonment. If there is an abandonment of the Activity(s) assisted under the
Funding Agreement.
(j) Insecurity,. The City shall deem itself insecure in good faith and reasonably
believes, after consideration of all the facts and circumstances then existing, that the prospect of payment
and satisfaction of the obligations under this Master Contract and its Funding Agreements, or the
performance of or observance of the covenants in this Master Contract and Funding Agreements, or the
value of its collateral is or will be materially impaired.
(k) Failure to Provide Enforcement. If the Recipient has failed to provide an
appropriate means of enforcement for an Activity.
7.2. Notice of Default. The City shall issue a written notice of default providing therein a
thirty (30) day period in which the Recipient shall have an opportunity to cure. The cure period shall be
extended for up to an additional period of thirty (30) days if the default is curable but requires acts to be
done or conditions to be remedied which, by their nature, cannot be done or remedied within such 30 -day
period, and if the Recipient commences same within such 30 -day period and thereafter diligently and
continuously pursues the same to completion within such 60 -day period.
7.3. Remedies Upon Default. If the default remains after lapse of the opportunity to cure,
the City shall have the right, in addition to any rights and remedies available to it, to do one or more of the
following:
(a) Exercise any remedy provided by law.
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(b) Upon the happening of any Event of Default, the City shall have the right, in
addition to any rights and remedies available to it under any of the Security Instruments (as defined in the
Funding Agreement), to require immediate repayment of the full amount of funds disbursed to the
Recipient under this Master Contract or any Funding Agreement plus interest without presentment,
demand, protest, notice of protest, notice of intention to accelerate or other notice of any kind, all of
which are hereby expressly waived by the Recipient.
7.4. Failure to Meet Performance Targets. If the Recipient is determined by the City to be
in default of this Master Contract or its Funding Agreements due to meeting less than one hundred
percent (100%) of its performance targets described in Section 3.2, the City may require full repayment
or, at its discretion, the City may permit repayment of CDBG fund proceeds which allows partial credit
for the performance targets which have been met, or the City may permit other remedies that the City
determines to be appropriate. In the event of repayments for a Funding Agreement that contains both a
grant and a loan, the repayments shall first be made of funds derived from the grant portion of the
Funding Agreement. If there are insufficient funds to cover the default repayment from the grant portion,
the City may require repayment of some or all of the loan. If the Funding Agreement specifies the
Activity for which repayment is being required, the repayment will be considered to be a repayment of
that Activity's fund, in the same manner as herein described.
ARTICLE 8
INCORPORATED DOCUMENTS
8.1. Documents Incorporated by Reference. The Recipient shall comply with the terms and
conditions of the following documents that are hereby incorporated by reference:
1. Funding Agreements executed referencing this Master Contract, dated upon
execution.
2. Agreement for Covenants and Restrictions, dated upon execution.
3. Forgivable Mortgage, dated upon execution.
4. Attachment Q, part of the Iowa Department of Economic Development CDBG
Housing Disaster Recovery Fund Contract.
8.2. Order of Priority. In the event of a conflict between documents of this Master Contract,
the following order of priority shall govern:
1. Articles 1 through 10 herein.
2. Funding Agreements referencing this Master Contract.
3. Community Development Block Grants, 24 CFR Part 570, as amended.
ARTICLE 9
MISCELLANEOUS
9.1. Binding Effect. This Master Contract and its Funding Agreements shall be binding upon
and shall inure to the benefit of the City and the Recipient and their respective successors, legal
representatives and assigns. The obligations, covenants, warranties, acknowledgments, waivers,
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agreements, terms, provisions and conditions of this Master Contract shall be jointly and severally
enforceable against the parties to this Master Contract.
9.2. Survival of Contract. If any portion of this Master Contract or its Funding Agreements
is held to be invalid or unenforceable, the remainder shall be valid and enforceable. If a court finds that
any provision of this Master Contract or any of its Funding Agreements is invalid, illegal, or
unenforceable as written, but that by limiting such provision it would become valid, legal and
enforceable, then such provision shall be deemed to be written, construed and enforced as so limited. The
provisions of this Master Contract and its Funding Agreements shall survive the execution of all
instruments herein mentioned and shall continue in full force until the Activity is completed as
determined by the City.
9.3. Governing Law; Venue of Suit. This Master Contract and its Funding Agreements shall
be interpreted in accordance with the laws of the State of Iowa, and any action relating to the Master
Contract and its Funding Agreements shall only be commenced in the Iowa District Court for Black
Hawk County or the United States District Court for the Northern District of Iowa.
9.4. Notices. Whenever this Master Contract or its Funding Agreements requires or permits
any written notice or request by one party to another, it shall be enclosed in an envelope, addressed to the
party to be notified at the address heretofore stated (or at such other address as may have been designated
by written notice), properly stamped, sealed and deposited with the United States Postal Service. Any
such notice given hereunder shall be deemed delivered upon the earlier of actual receipt or three (3)
business days after posting. The City may rely on the address of the Recipient set forth heretofore, as
modified from time to time, as being the address of the Recipient.
9.5. Waivers. No waiver by the City of any default hereunder shall operate as a waiver of
any other default or of the same default on any future occasion. No delay on the part of the City in
exercising any right or remedy hereunder shall operate as a waiver thereof. No single or partial exercise
of any right or remedy by the City shall preclude future exercise thereof or the exercise of any other right
or remedy.
9.6. Limitation. It is agreed by the Recipient that the City shall not, under any
circumstances, be obligated financially under this Master Contract and its Funding Agreements except to
disburse funds according to the terms of the Master Contract.
9.7. Headings. The headings in this Master Contract and its Funding Agreements are
intended solely for convenience of reference and shall be given no effect in the construction and
interpretation of this Master Contract or its Funding Agreements.
9.8. Integration. This Master Contract and its Agreement for Covenants and Restrictions,
Mortgage, and Funding Agreements contains the entire understanding between the Recipient and the City
and any representations that may have been made before or after the signing of this Master Contract and
its Funding Agreements, which are not contained herein, are nonbinding, void and of no effect. None of
the parties have relied on any such prior representation in entering into this Master Contract or its
Funding Agreements.
9.9. Counterparts. This Master Contract and its Funding Agreements may be executed in
any number of counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute but one and the same instrument.
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9.10. Nonrecourse. Without releasing, impairing, forgiving or waiving in any manner or
amount the obligations or promises of the Recipient contained or referred to herein or in the Mortgage of
even date given as security herefor, or the obligations or promises of the Recipient or any other party
contained or referred to in any other documents given or which may from time to time be given as
security for loan evidenced by a Promissory Note, and without releasing, impairing forgiving or waiving
the right to foreclose said Mortgage for the full amount of all indebtedness evidenced hereby and by said
Mortgage, which right of foreclosure as to the property described or referred to therein by any lawful
means is specifically reserved hereby, the City, by acceptance hereof, agrees for itself and its successors
and assigns, that if there be default hereunder or under said Mortgage or any other document given as
security for a Promissory Note, then neither it nor they will seek repayment of the indebtedness evidenced
by said Promissory Note from any property or resources of the Recipient other than from the property
described or referred to in said Mortgage and from any other property or rights of the Recipient or of
others which may now or later be assigned or pledged as additional security for the repayment of the
indebtedness evidenced by said Promissory Note, and no director, officer, stockholder, partner or member
of the maker of said Promissory Note shall have any liability hereunder for repayment of the indebtedness
evidenced hereby; specifically reserving any and all legal remedies now or hereafter available against the
Recipient for satisfaction of any of the obligations of the Recipient or others, other than the Recipient's
obligation to pay the indebtedness evidenced hereby.
ARTICLE 10
AMENDMENT
10.1. Amendment.
(a) Writing Required. This Master Contract and its Funding Agreements may only
be amended in a written instrument executed by both parties, except as otherwise provided in paragraph
(b) below. Examples of situations where amendments are required include extensions for completion of
the activity, changes to the activity including, but not limited to, alteration of existing approved activity or
substitution of other forms of match funds or other Project funds.
(b) Unilateral Modification. Notwithstanding paragraph (a) above, the City may
unilaterally modify the Master Contract or its Funding Agreements at will in order to accommodate any
change in the Act or any change in the interpretation of the Act or any applicable federal, state or local
laws, regulations, rules or policies. A copy of such unilateral modification will be given to the Recipient
as an amendment to this Contract and its Funding Agreements.
(c) City Review. The City will consider whether an amendment request from
Recipient is so substantial as to necessitate reevaluating the City's original funding decision. An
amendment will be denied if it substantially alters the circumstances under which the funding was
originally approved or if it does not meet requirements set forth in CDBG regulations at 24 CFR Part 570.
10.2. Contract Provisions. All contracts awarded by a business and its contractors, including
small purchases, shall contain the following provisions as applicable:
(a) Equal Employment Opportunity. All contracts shall contain a provision
requiring compliance with E.O. 11246, "Equal Employment Opportunity, " as amended by E.O. 11375,
"Amending Executive Order 11246 Relating to Equal Employment Opportunity," and as supplemented
by regulation at 41 CFR part 60, "Office of Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor."
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(b) Copeland "Anti -Kickback" Act (18 U.S.C. & 874 and 40 U.S.C. 4 276c). All
contracts and subcontracts in excess of $2,000 for construction or repair awarded by the business shall
include a provision for compliance with the Copeland "Anti -Kickback" Act (18 U.S.C. § 874), as
supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on
Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United
States"). The Act provides that each contractor or recipient shall be prohibited from inducing, by any
means, any person employed in the construction, completion, or repair of public work, to give up any part
of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported
violations to the Federal awarding agency.
(c) Davis -Bacon Act, as Amended (40 U.S.C. 44 276a to a-7). When required by
Federal program legislation, all construction contracts awarded by the business of more than $2,000 shall
include a provision for compliance with the Davis -Bacon Act (40 U.S.C. §§ 276a to a-7) and as
supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions
Applicable to Contracts Governing Federally Financed and Assisted Construction"). Under this Act,
contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum
wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be
required to pay wages not less than once a week. The Recipient shall place a copy of the current
prevailing wage determination issued by the Department of Labor in each solicitation, and the award of a
contract shall be conditioned upon the acceptance of the wage determination. The Recipient shall report
all suspected or reported violations to the Federal awarding agency.
(d) Contract Work Hours and Safety Standards Act (40 U.S.C. 44 327-333).
Where applicable, all contracts awarded by recipients in excess of $2,000 for construction contracts and
in excess of $2,500 for other contracts that involve the employment of mechanics or laborers shall include
a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards
Act (40 U.S.C. §§ 327-333), as supplemented by Department of Labor regulations (29 CFR Part 5).
Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic
and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week
is permissible provided that the worker is compensated at a rate of not less than 11/2 times the basic rate of
pay for all hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to
construction work and provides that to the purchases of supplies or materials or articles ordinarily
available on the open market, or contracts for transportation or transmission of intelligence.
(e) Rights to Inventions Made Under a Contract or Agreement. Contracts or
agreements for the performance of experimental, developmental, or research work shall provide for the
rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR
Part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued
by the awarding agency.
(I) Clean Air Act (42 U.S.C. 44 7401 et seq.) and the Federal Water Pollution
Control Act (33 U.S.C. 44 1251 et seq.), as Amended. Contracts and subcontracts of amounts in excess
of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. §§ 7401 et seq.) and the
Federal Water Pollution Control Act as amended (33 U.S.C. §§ 1251 et seq.). Violations shall be
reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency
(EPA).
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(g) Byrd Anti -Lobbying Amendment (31 U.S.C. 4 1352). Contractors who apply
or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier
above that it will not and has not used Federal appropriated funds to pay any person or organization for
influencing or attempting to influence an officer or employee of any agency, a member of Congress,
officer or employee of Congress, or an employee of a member of Congress in connection with obtaining
any Federal contract, grant or any other award covered by 31 U.S.C. § 1352. Each tier shall also disclose
any lobbying with non -Federal funds that takes place in connection with obtaining any Federal award.
Such disclosures are forwarded from tier to tier up to the Recipient.
(h) Debarment and Suspension (E.O.s 12549 and 12689). No contract shall be
made to parties listed on the General Services Administration's List of Parties Excluded from Federal
Procurement or Nonprocurement Programs in accordance with Executive Orders 12549 and 12689,
"Debarment and Suspension." This list contains the names of parties debarred, suspended, or otherwise
excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other
than Executive Order 12549. Contractors with awards that exceed the small purchase threshold shall
provide the required certification regarding its exclusion status and that of its principal employees.
(i) Environmental Protection Agency (EPA). Contractors shall comply with the
applicable ambient air quality standards set forth in 40 CFR Part 50, as amended.
10.3. Audit Requirements.
(a) Single Audit. The Recipient shall ensure that an audit is performed in
accordance with the Single Audit Act of 1984 (P.L. 98-502), OMB Circular A-128 or A-133, as
applicable.
(b) Additional Audit. As a condition of the award to the Recipient, the City
reserves the right to require the Recipient to submit to a post -completion audit and review in addition to
the audit required above. Such an audit and review will be at the expense of the Recipient.
10.4. Compliance With Laws and Regulations. The Recipient shall comply with all
applicable State and federal laws, rules, ordinances, regulations and orders.
10.5. Unallowable Costs. If the City determines at any time, whether through monitoring,
audit, closeout procedures or by other means or process that the Recipient has expended funds which are
unallowable, the Recipient will be notified of the questioned costs and given an opportunity to justify
questioned costs prior to the City's final determination of the disallowance of costs. If it is the City's
final determination that costs previously paid by the City are unallowable under the terms of the Contract
and its Funding Agreements, the expenditures will be disallowed and the Recipient shall repay to the City
any and all disallowed costs. In the instance of a Funding Agreement containing both a grant and a loan,
the grant is to be repaid first, and loan funds repaid if additional repayment is required after the grant
funds have been exhausted. If the disallowance occurs on an activity which is specified in the budget, the
funds will be repaid in accordance with the budget amount, in the same order as described herein.
10.6. Suspension. When the Recipient has failed to comply with the Master Contract or any
Funding Agreement, or award conditions or standards, the City may, on reasonable notice to the
Recipient, suspend the Contract and withhold future payments, or prohibit the Recipient from incurring
additional obligations of CDBG funds. Suspension may continue until the Recipient completes the
corrective action as required by the City. The City may allow such necessary and proper costs which the
Recipient could not reasonably avoid during the period of suspension provided the City concludes that
such costs meet the provisions of HUD regulations issued pursuant to OMB Circular A-87.
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10.7. Termination.
(a) For Cause. The City may terminate the Master Contract or any Funding
Agreement, in whole or in part, whenever the City determines that the Recipient has failed to comply with
the terms and conditions of the Contract.
(b) For Convenience. The City or the Recipient may terminate the Master Contract
or any Funding Agreement, in whole or in part, when all parties agree that the continuation of the Funding
Agreement activity would not produce beneficial results commensurate with the future disbursement of
funds.
(c) Due to Reduction or Termination of CDBG Funding. At the discretion of the
City, the Master Contract or any Funding Agreement may be terminated, in whole or in part, if there is a
reduction or termination of CDBG funds to the City.
(d) Due to Failure to Perform. At the discretion of the City, the Master Contract or
any Funding Agreement may be terminated, in whole or in part, if the Recipient is unable to file project
set-up forms to commit funds within 180 days of the signing of the Contract.
10.8. Procedures Upon Termination.
(a) Notice. The City shall provide written notice to the Recipient of the decision to
terminate, the reason(s) for the termination, and the effective date of the termination. If there is a partial
termination due to a reduction in funding, the notice will set forth the change in funding and the changes
in the approved budget. The Recipient shall not incur new obligations beyond the effective date and shall
cancel as many outstanding obligations as possible. The City's share of noncancellable obligations which
the City determines were properly incurred prior to notice of cancellation will be allowable costs.
(b) Rights in Products. All finished documents, data, reports or other material
prepared by the Recipient under the Contract shall, at the City's option, become the property of the City.
10.9. Enforcement Expenses. The Recipient shall pay upon demand any and all reasonable
fees and expenses of the City, including the fees and expenses of its attorneys, experts and agents, in
connection with the exercise or enforcement of any of the rights of the City under this Contract or any
Funding Agreement.
10.10. Indemnification. The Recipient shall indemnify and hold harmless the City, its officers
and employees, from and against any and all claim, demands, causes of action, fines, fees, penalties,
losses, damages, costs, expenses, or liabilities of any type or nature, including but not limited to
reasonable attorneys' fees and expenses, (each of the foregoing is a "Claim") including but not limited to
any Claim accruing or resulting from any and all claims of subcontractors, laborers and any other person,
firm or corporation furnishing or supplying work, services, materials or supplies in connection with the
Recipient's performance of this Master Contract and its Funding Agreements, and from any and all
Claims accruing or resulting to any person, firm or corporation who may be injured or damaged by the
Recipient, its officers, employees or agents, in the performance of this Contract or a Funding Agreement.
10.11. Conflict of Interest. The conflict of interest provisions found at 24 CFR § 570.611 shall
apply in the conduct of the CDBG program. In the procurement of property and services by the
Recipient, the conflict of interest provisions in 24 CFR § 85.36 and OMB Circular A-110, as appropriate,
16
apply. In all cases not governed by 24 CFR § 85.36 or OMB Circular A-110, the provisions found at 24
CFR § 570.611 apply.
10.12. USE OF DEBARRED, SUSPENDED, OR INELIGIBLE CONTRACTORS OR
SUBCONTRACTORS OR SUBRECIPIENTS. CDBG funds shall not be used directly or indirectly to
employ, award contacts to, or otherwise engage the service of, or fund any contract or recipient during
any period of debarment, suspension, or placement in ineligible status under the provisions of 24 CFR
Part 24 or any applicable law or regulation of the U.S. Department of Labor.
10.13. Equal Opportunity and Fair Housing. The Recipient shall comply with the provisions
of 24 CFR § 5.105(a) concerning Equal Opportunity and Fair Housing provisions of Federal law. The
Recipient shall comply with the provisions of federal, state and local law and regulations to insure that no
employee or applicant for employment is discriminated against because of race, creed, religion, color,
age, sex, sexual orientation, national origin or ancestry, marital status, or disability.
10.14. Certification Regarding Government -Wide Restriction on Lobbying. The Recipient
certifies, to the best of its knowledge and belief, as follows:
No Federal appropriated funds have been paid or will be paid, by or on behalf of
the Recipient, to any person for influencing or attempting to influence an officer
or employee of any agency, a member of Congress, an officer or employee of
Congress, or any employee of a member of Congress in connection with the
awarding of any Federal contract, the making of any Federal grant, the making of
any Federal loan, the entering into of any cooperative agreement, and the
extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
ii. If any funds other than Federal appointed funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or employee of
any agency, a member of Congress, an officer or employee or Congress, or an
employee of a member of Congress in connection with this Federal contract,
loan, or cooperative agreement, the Recipient shall complete and submit Standard
Form -LLL, a Disclosure Form to Report Federal Lobbying, in accordance with
its instruction.
iii. The Recipient shall require that the language of this certification be included in
the award documents for all subawards at all tiers (including subcontracts, and
contracts under grants, loans, and cooperative agreements) and that all
subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed
when this transaction was made or entered into. This certification is a prerequisite for
making or entering into this transaction imposed by 31 U.S.C. § 1352. Any person who
fails to file the required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
10.15. Inclusion in Subcontracts. The Recipient will include the provisions of Section 10.13
and Section 10.14 in every subcontract unless exempt by the State of Iowa, and said provisions will be
binding on each subcontractor. The Recipient will take such action with respect to any subcontract as the
City may direct as a means of enforcing such provisions including sanctions for noncompliance. In the
event the Recipient becomes involved or is threatened by litigation with a subcontractor or vendor as a
17
result of such direction by the City, the Recipient may request the City to enter into such litigation to
protect the interests of the City.
10.16. Political Activity. No portion of program funds shall be used for any partisan political
activity or to further the election or defeat of any candidate for public office. Neither the program nor the
funds provided therefor, nor the personnel employed in the administration of this Contract or its Funding
Agreements, shall be in any way or to any extent engaged in the conduct of political activities in
contravention of the Hatch Act (5 U.S.C. § 15).
The undersigned hereby agree and bind their respective organizations to the above terms and conditions
and are authorized to do so.
GRAND INVESTMENTS, LLC
By:
Brent Dahlstrom, Managing Member
CITY OF WATTRLOO, IOWA
Batiy: DATE:
rnest G. Clark, Mayor
DATE: L-/ /57 l 5
Attest:
Suzy Scha es, City Clerk
18
ATTACHMENT K
Waterloo-Cedar Falls, IA HUD Metro Area
j:nancy-g/subrecipient files FY2015/generaUncome and rental limits effective 3-6-2015.x1sx
2015 Income Limits-CDBG
Effective 3/6/2015
Family Size
1
2
3
4
5
6
7
8
0-30%
$ 13,800
$ 15,930
$ 20,090
$ 24,250
$ 28,410
$ 32,570
$ 36,730
$ 40,890
31-50%
$ 22,950
$ 26,200
$ 29,500
$ 32,750
$ 35,400
$ 38,000
$ 40,650
$ 43,250
51-60%
$ 27,600
$ 31,860
$ 40,180
$ 48,500
$ 56,820
$ 65,140
$ 73,460
$ 81,780
61-80%
$ 36,700
$ 41,950
$ 47,200
$ 52,400
$ 56,600
$ 60,800
$ 65,000
$ 69,200
2014 HOME Program Rents
Effective 5/1/2014
Rental
Efficiency
1 Bedroom
2 Bedroom
3 Bedroom
4 Bedroom
5 bedroom
6 bedroom
FMR
$ 495
$ 573
$ 720
$ 957
$ 1,275
$ 1,466
$ 1,658
LOW HOME Rent
$ 495
$ 573
$ 720
$ 833
$ 930
$ 1,026
$ 1,121
HIGH HOME Rent
$ 495
$ 573
$ 720
$ 1,049
$ 1,151
$ 1,251
$ 1,352
50% Rent Limit
$ 561
$ 601
$ 721
$ 833
$ 930
$ 1,026
$ 1,121
65% Rent Limit
$ 710
$ 762
$ 916
$ 1,049
$ 1,151
$ 1,251
$ 1,352
CITY OF WATERLOO
COMMUNITY DEVELOPMENT BLOCK GRANT DISASTER RECOVERY HOUSING
SECURED PROMISSORY NOTE — FORGIVABLE TERMS
Borrower: Grand Investments, LLC, an Iowa limited liability company
Loan Amount: $3,650,000.00
Interest Rate: 0% per annum, compounded monthly
Date: 3/01/2015
Mortgaged Premises: West Mullan and Jefferson Streets
Waterloo, IA 50701
This Promissory Note (the "Note") is entered into on the date set forth above by and
between Borrower and the City of Waterloo, Iowa (the "City"), pursuant to the terms of a certain
Master Contract dated March 1, 2015 and a certain Funding Agreement thereunder dated as of
the date of this Note. The parties agree to the following terms and conditions:
1. Payments. Provided that Borrower fulfills all terms, covenants and conditions of the
Master Contract and the Funding Agreement, then no repayment of this Note shall be required.
If an Event of Default occurs under the Master Contract or the Funding Agreement that is not
remedied within any allowed cure period, then the Loan Amount shall be immediately due and
payable in full, and Borrower shall repay the Loan Amount in full upon demand by the City. All
payments of principal and interest shall be made to the City of Waterloo, Community
Development office at 620 Mulberry Street, Waterloo, Iowa 50703 or at such other place as may
be designated in writing by the City.
2. Forgiveness. Subject to Borrower's compliance with the terms, covenants and
conditions of the Master Contract, the Funding Agreement, and other documents subsidiary
thereto, including but not limited to the Agreement for Covenants and Restrictions, this Note
shall be cancelled and repayment of the Loan Amount shall be forgiven at the end of the Term of
Affordability as defined in the Agreement for Covenants and Restrictions.
3. Security for Repayment. The Loan Amount will be secured by a mortgage (the
"Mortgage") subordinate only to any mortgage on the Mortgaged Property given by Borrower in
connection with financing construction of the improvements to the project site to be benefited by
the Loan Amount.
4. Collection Costs. In case of suit on this Note, Borrower agrees to pay the reasonable
attorney's fees and expenses and costs of suit incurred by the City.
5. Representations. Borrower represents and warrants that (a) Borrower is not
prohibited from incurring the indebtedness contemplated by this Note by any law, regulation,
agreement, instrument, restriction, order or judgment; (b) Borrower is duly organized, validly
existing, and in good standing under the laws of the state of Iowa; (c) Borrower has full right,
title, and authority to execute and perform this Note; (d) each person executing this Note has
been duly authorized to do so on behalf of Borrower; and (e) this Note is the legal and binding
obligation of Borrower, enforceable against Borrower according to the terms hereof.
6. Legal Counsel. Borrower acknowledges that it has had the opportunity to seek the
advice of independent legal counsel concerning this Note.
7. Waivers. Borrower and other makers, endorsers and sureties hereby waive
presentment, demand, notice of nonpayment, protest, notice of intention to accelerate or other
notice of any kind. Sureties, endorsers, and guarantors agree to all of the provisions of this Note
and consent that the time or times of payment of all or any part hereof may be extended after
maturity, from time to time, without notice. The foregoing waivers are made knowingly, freely
and voluntarily.
8. General Terms. Borrower may not assign its obligations hereunder, in whole or in
part, to any other person or entity without the prior written consent of the City. This Note is
binding on and shall inure to the benefit of Borrower and the City and the respective successors and
permitted assigns of each. Time is of the essence with respect to the performance of Borrower's
duties under this Note. Words and phrases contained herein shall be construed as in the singular
or plural number, and as masculine, feminine or neuter gender, according to the contexts. The
captions and headings of the paragraphs of the Note are for convenience only and are not to be
used to interpret or define the provisions hereof. This Note shall be governed by and construed
in accordance with the laws of the State of Iowa and the federal laws and regulations governing
the Community Development Block Grant Program.
IN WITNESS WHEREOF, the parties have executed this Promissory Note as of the date
stated above.
Grand Investments, LLC City of Waterloo, Iowa
Brent Dahlstrom
Managing Member
By:
rnest G. Clark, Mayor
Attest:
Suzy Sages, City Clerk
PERSONAL GUARANTY. The undersigned, being either an officer, shareholder, manager, or
member of Borrower, hereby agree for themselves and their heirs, personal representatives, and
assigns, to unconditionally guarantee to City, its successors and assigns, the full and prompt
performance by Company, its successors and assigns, of all promises and covenants on the part
of Company to be performed pursuant to the foregoing Note. Liability of guarantors hereunder
is joint and several.
Brent Dahlstrom
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Document prepared by: Community Development Board, City of Waterloo, 620 Mulberry Street, Waterloo, IA 50703
MORTGAGE
For consideration received, Grand Investments, LLC (the "Borrower") does hereby execute and deliver this
Mortgage to and for the benefit of the City of Waterloo, Iowa (the "Lender"), subject to the terms and conditions set
forth herein.
1. Grant of Mortgage and Security Interest. Borrower hereby sells, conveys and mortgages unto
Lender, and grants a security interest to Lender, in the following described property:
a. Land and Buildings. All of Borrower's right, title and interest in and to the following
described real estate situated in Black Hawk County, Iowa (the "Land"):
[insert legal description, or refer to description on Exhibit A]
and all buildings, structures and improvements now standing or hereafter constructed or placed on the Land
(the `Buildings"), including all hereditaments, easements, appurtenances, riparian rights, mineral rights,
water rights, rights in and to the lands lying in streets, alleys and roads adjoining the Land, estates and other
rights and interests now or hereafter belonging to or in any way pertaining to the Land.
b. Personal Property. All fixtures and other personal property integrally belonging to, or
hereafter becoming an integral part of, the Land or Buildings, whether attached or detached, including but
not limited to light fixtures, shades, rods, blinds, venetian blinds, awnings, storm windows, screens,
linoleum, water softeners, automatic heating and air conditioning equipment, and all proceeds, products,
increase, issue, accessions, attachments, accessories, parts, additions, repairs, replacements and substitutes
of, to, and for the foregoing (the "Personal Property").
c. Revenues and Income. All rents, issues, profits, leases, condemnation awards and
insurance proceeds now or hereafter arising from the ownership, occupancy or use of the Land, Buildings
and Personal Property, or any part thereof (the "Revenues and Income").
TO HAVE AND TO HOLD the Land, Buildings, Personal Property and Revenues and Income (collectively called
the "Mortgaged Property"), together with all privileges, hereditaments thereunto now or hereafter belonging, or in
any way appertaining and the products and proceeds thereof, unto Lender, its successors and assigns.
2. Purpose. This Mortgage secures the disbursement of the forgivable loan made by Lender to
Borrower evidenced by a promissory note in the principal amount of $3,650,000 (the "Note") which presumes no
payments, with the full debt forgiven if the Borrower complies with all of the required provisions of the CDBG
program and related requirements. If there is a default event that is not cured within the provisions provided under
the Note, Agreement for Covenants and Restrictions, and Master Contract to which this Mortgage pertains, then this
Mortgage secures to Lender: (a) the repayment of the debt evidenced by the Note, with any stipulated penalty
interest, and all renewals, extensions, modifications or refmancing thereof and any promissory note issued in
substitution therefor; (b) the payment of all other sums, with interest, advanced under paragraph 7 of this document
to protect the security of this Mortgage; and (c) the performance of Borrower's covenants and agreements under this
Mortgage and the Note. For this purpose, Borrower does hereby mortgage,
3. Representations and Warranties of Borrower. Borrower represents, warrants and covenants to
Lender that (i) Borrower holds clear title to the Mortgaged Property and title in fee simple in the Land; (ii) Borrower
has the right, power and authority to execute this Mortgage and to mortgage and grant a security interest in the
Mortgaged Property, and the person executing this Mortgage on Borrower's behalf is duly authorized to do so; (iii)
the Mortgaged Property is free and clear of all liens and encumbrances, except for real estate taxes not yet
delinquent and except for any mortgage given in connection with fmancing for the work of constructing the
improvements (a "Project Mortgage"); (iv) Borrower will warrant and defend title to the Mortgaged Property and
the lien and priority of this Mortgage against all claims and demands of all persons, whether now existing or
hereafter arising, except the claim of any Project Mortgage of superior priority; and (v) all buildings and
improvements now or hereafter located on the Land are, or will be, located entirely within the boundaries of the
Land.
4. Taxes. Borrower shall pay each installment of taxes and special assessments of every kind, now
or hereafter levied against the Mortgaged Property before the same become delinquent, without notice or demand,
and shall deliver to Lender proof of such payment fifteen (15) days after the day in which such tax or assessment
becomes delinquent.
5. Liens. Borrower shall not create, incur or suffer to exist any lien, encumbrance, security interest
or charge on the Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien
of this Mortgage, other than the lien of current real estate taxes and installments of special assessments with respect
to which no penalty is yet payable, and other than the lien of any Project Mortgage of superior priority. Borrower
shall pay, when due, the claims of all persons supplying labor or materials in connection with the Mortgaged
Property. Borrower shall promptly discharge any lien which has, or may attain, priority over this Mortgage unless
Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to
Lender; (b) contests in good faith the lien by or defends against enforcement of the lien in, legal proceedings which
in the Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an
agreement satisfactory to Lender subordinating the lien to this Mortgage. If Lender determines that any part of the
Mortgaged Property is subject to a lien which may attain priority over this Mortgage, Lender may give Borrower a
notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within
10 days of the giving of notice. Notwithstanding anything to the contrary in this paragraph 5, the parties
contemplate the Borrower will encumber the Mortgaged Property with one or more Project Mortgages and that such
Project Mortgage(s) will have superior priority over the lien of this Mortgage, and Lender hereby consents to such
Project Mortgage(s).
6. Insurance.
a. Risks to be Insured. Borrower, at its sole cost and expense, shall maintain insurance on
the Buildings and other improvements now existing or hereafter erected on the Land and on the Personal
Property included in the Mortgaged Property against loss by fire, extended coverage perils and such other
hazards as Lender may from time to time require, such insurance to have a Replacement Cost endorsement
attached thereto, with the amount of the insurance at least equal to the balance of the amount owed under
the Note. Borrower will at its sole cost and expense, from time to time, and at any time at the request of
Lender, provide Lender with evidence satisfactory to Lender of the replacement cost of the Mortgaged
Property. Borrower will maintain such other insurance as Lender may reasonably require.
b. Policy Provisions. All insurance policies and renewals thereof maintained by Borrower
pursuant to this Mortgage shall be written by an insurance carrier satisfactory to Lender, contain a
mortgagee clause in favor and in form acceptable to Lender, contain an agreement of the insurer that it will
not amend, modify or cancel the policy except after thirty (30) days prior written notice to Lender, and be
reasonably satisfactory to Lender in all other respects.
c. Delivery of Policy or Certificate. If requested by Lender, Borrower will deliver to
Lender original policies satisfactory to Lender evidencing the insurance which is required under this
Mortgage, and Borrower shall promptly furnish to Lender all renewal notices and, upon request of Lender,
2
evidence of payment thereof. At least ten (10) days prior to the expiration date of a required policy,
Borrower shall deliver to Lender a renewal policy in form satisfactory to Lender.
d. Assignment. If the Mortgaged Property is sold at a foreclosure sale or if Lender shall
acquire title to the Mortgaged Property, Lender shall have all of the right, title and interest of Borrower in
and to any insurance policies required hereunder, and the unearned premiums thereon, and in and to the
proceeds thereof resulting from any damage to the Mortgaged Property prior to sale or acquisition.
e. Notice of Damage or Destruction; Loss Adjustment. If the Mortgaged Property or
any part thereof shall be damaged or destroyed by fire or other casualty, Borrower will, within five (5)
calendar days after the occurrence of the damage or destruction, give written notice thereof to the insurance
carrier and to Lender and will not adjust any damage or loss which is estimated by Borrower in good faith
to exceed twenty percent (20%) of the value of the Land and Buildings unless Lender shall have joined in
or concurred with such adjustment; but if there has been no adjustment of any such damage or loss within
four (4) months from the date or occurrence thereof and if an Event of Default shall exist at the end of such
four (4) month period or at any time thereafter, Lender may alone make proof of loss, adjust and
compromise any claim under the policies, and appear in and prosecute any action arising from such
policies. In connection therewith, Borrower does hereby irrevocably authorize, empower and appoint
Lender as attorney-in-fact for Borrower (which appointment is coupled with an interest) to do any and all
of the foregoing in the name and on behalf of Borrower.
f. Application of Insurance Proceeds. All sums paid under any insurance policy required
by this Mortgage shall be paid to Lender, which shall, at its option, apply the same (after first deducting
therefrom Lender's expenses incurred in collecting the same including but not limited to reasonable
attorneys' fees) to the reduction of amounts due under the Note or to the restoration, repair, replacement or
rebuilding of the mortgaged property; provided, however, if funds are sufficient to restore, repair, or rebuild
the mortgaged property, there is no default, and the Note is not within six (6) months of maturity, such
funds shall be applied to the restoration, repair, replacement or rebuilding of Mortgaged Property and then
secondly to the reduction of any further amounts due under the Note. Any application of insurance
proceeds to principal of the Note shall not extend or postpone the due date of the installments payable
under the Note or change the amount of such installments.
g. Expense Reimbursement. Borrower shall promptly reimburse Lender upon demand for
all of Lender's expenses incurred in connection with the collection of the insurance proceeds, including but
not limited to reasonable attorneys' fees, and all such expenses shall be additional amounts secured by this
Mortgage.
7. Protection of Lender's Rights in the Property. If Borrower fails to perform the covenants and
agreements contained in this Mortgage, or there is a legal proceeding that may significantly affect Lender's rights in
the Mortgaged Property (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture or to enforce
laws or regulations), then Lender may do and pay for whatever is necessary to protect the value of the Mortgaged
Property and Lender's rights in the Mortgaged Property. Lender's actions may include paying any sums secured by
a lien which has priority over this Mortgage, appearing in court, paying reasonable attorneys' fees and entering on
the Mortgaged Property to make repairs. Although Lender may take actions under this paragraph, Lender is not
obligated to do so. Any amounts disbursed or incurred by Lender under this paragraph shall become additional debt
of Borrower secured by this Mortgage. Unless Borrower and Lender agree to the other terms of payment, these
amounts shall bear interest from the date of disbursement at the rate of twelve percent (12%) per annum and shall be
immediately due and payable, with interest, upon notice from Lender to Borrower requesting payment.
8. Inspection. Lender or its agents shall have the right at reasonable times to enter upon the
Mortgaged Property for the purpose of inspecting the Mortgaged Property. Lender shall have no duty to make such
inspection. Nothing contained in this paragraph shall require Lender to incur any expense or do any act hereunder,
and Lender shall not be liable to Borrower for any damage or claims arising out of action taken by Lender pursuant
to this paragraph.
9. Condemnation. Borrower shall give Lender prompt notice of any action, actual or threatened, in
condemnation or eminent domain and hereby assign, transfer and set over to Lender the entire proceeds of any
3
award or claim for damages for all or any part of the Mortgaged Property taken or damaged under the power of
eminent domain or condemnation. Lender is hereby authorized to intervene in any such action in the name of
Borrower, to compromise and settle any such action or claim, and to collect and receive from the condemning
authorities and give proper receipts and acquittance for such proceeds. Any expenses incurred by Lender in
intervening in such action or compromising and settling such action or claim, or collecting such proceeds shall be
reimbursed to Lender first out of the proceeds. The remaining proceeds or any part thereof shall be applied to
reduction of amounts due under the Note or to the restoration or repair of the Mortgaged Property, the choice of
application to be solely at the discretion of the Lender.
10. Payment and Performance of the Obligations. Borrower will pay all amounts payable under
the Note in accordance with the terms of the Note when and as due and will timely perform all other obligations of
Borrower under the Note, the Agreement for Covenants and Restrictions, the Funding Agreement, and the Master
Contract arising out of the same transaction as this Mortgage (each of the foregoing is an "Obligation"). The
provisions of the Obligations are hereby incorporated by reference into this Mortgage as fully set forth herein.
11. Compliance with Laws. Borrower shall comply with all present and future statutes, laws, rules,
orders, regulations and ordinances affecting the Mortgaged Property, any part thereof, or the use thereof.
12. Events of Default. Each of the following occurrences shall constitute an event of default
hereunder (an "Event of Default"):
a. Borrower shall default in the due observance or performance of any covenant, condition
or agreement on its part to be observed or performed pursuant to the terms of this Mortgage or any of the
Obligations.
b. Borrower shall make an assignment for the benefit of its creditors, or a petition shall be
filed by or against Borrower under the United States Bankruptcy Code, or Borrower shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties or
of the Mortgaged Property or shall not, within thirty (30) days after the appointment of a trustee, receiver
or liquidator of any material part of its properties or of the Mortgaged Property, have such appointment
vacated.
c. A judgment, writ or warrant of attachment or execution, or similar process shall be
entered and become a lien on or be issued or levied against the Mortgaged Property or any part thereof
which is not released, vacated or fully bonded within thirty (30) days after its entry, issue or levy.
d. An event of default, however defined, shall occur under any other mortgage, assignment
or other security document constituting a lien on the Mortgaged Property or any part thereof.
e. If all or any part of the Mortgaged Property or any interest in it is sold or transferred (or if
a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may
require immediate payment in full of all sums due.
13. Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at any time
thereafter while such Event of Default exists, Lender may, at its option, exercise one or more of the following rights
and remedies (and any other rights and remedies available to it):
a. Lender may declare immediately due and payable all Notes secured by this Mortgage,
and the same shall thereupon immediately be due and payable without further notice of demand.
b. Lender shall have and may exercise with respect to the Personal Property, all the rights
and remedies accorded upon default of a secured part under the Iowa Uniform Commercial Code. If notice
to Borrower of intended disposition of such property is required by law in a particular instance, such notice
shall be deemed commercially reasonable if given to Borrower at least ten (10) days prior to the date of
intended disposition.
4
c. Lender may (and is hereby authorized and empowered to) foreclose this Mortgage in
accordance with the laws of the State of Iowa, and at any time after the commencement of an action in
foreclosure, or during the period of redemption, the court having jurisdiction of the case shall at the request
of Lender appoint a receiver to take immediate possession of the Mortgaged Property and of the Revenues
and Income accruing therefrom, and to rent or cultivate the same as the trustee may deem best for the
interest of all parties concerned, and such receiver shall be liable to account to Borrower only for the net
profits, after application of rents, issues and profits upon the costs and expenses of the receivership and
foreclosure and upon the Note.
14. Redemption. It is agreed that if this Mortgage covers less than ten (10) acres of land, and in the
event of the foreclosure of this Mortgage and sale of the property by sheriff's sale in such foreclosure proceedings,
the time of one year for redemption from said sale provided by the statutes of the State of Iowa shall be reduced to
six (6) months provided the Lender, in such action files an election to waive any deficiency judgment against
Borrower which may arise out of the foreclosure proceedings; all to be consistent with the provisions of Chapter 628
of the Iowa Code. If the redemption period is so reduced, for the first three (3) months after sale such right of
redemption shall be exclusive to the Borrower, and the time periods in Sections 628.5, 628.15 and 628.16 of the
Iowa Code shall be reduced to four (4) months.
It is agreed that the period of redemption after a foreclosure of this Mortgage shall be reduced to sixty (60)
days if all three of the following contingencies develop: (1) The real estate is less than ten (10) acres in size; (2) the
Court finds affirmatively that the real estate has been abandoned by the owners and those persons personally liable
under this Mortgage at the time of foreclosure; and (3) Lender files an election to waive any deficiency judgment
against Borrower or its successors in interest in such action. If the redemption period is so reduced, Borrower or its
successors in interest or the owner shall have the exclusive right to redeem for the first thirty (30) days after such
sale, and the time provided for redemption for creditors as provided in Sections 628.5, 628.15 and 628.16 of the
Iowa Code shall be reduced to forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of
Borrower shall be presumption that the property is not abandoned. Any such redemption period shall be consistent
with the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to limit or otherwise
affect any redemption provisions contained in Chapter 628 of the Iowa Code.
15. Additional Instruments. At any time and from time to time until payment in full of the Note,
Borrower, at Lender's request, will promptly execute and deliver to Lender such additional instruments as may be
reasonably required to further evidence the lien of this Mortgage and to further protect the security interest of
Lender in connection with the Mortgaged Property. Such instruments may include, but are not limited to, additional
security agreements, financing statements, and continuation statements.
16. Borrower Not Released; Forbearance by Lender Not a Waiver. Extension of the time for
payment or modification of amortization of the sums secured by this Mortgage granted by Lender to any successor
in interest of Borrower shall not operate to release the liability of the original Borrower or Borrower's successors in
interest. Lender shall not be required to commence proceedings against any successor in interest or refuse to extend
time for payment or otherwise modify amortization of the sums secured by this Mortgage by reason of any demand
made by the original Borrower or Borrower's successors in interest. Any delay or forbearance by Lender in
exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy.
17. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a financing
statement filed as a fixture filing with respect to Personal Property and for this purpose the name and address of
debtor is the name and address of Borrower as set forth in paragraph 22 herein and the name and address of the
secured party is the name and address of the Lender as set forth in paragraph 22 herein.
18. Care of Property. Borrower shall take good care of the Mortgaged Property; shall keep the
Buildings and the Personal Property now or later placed upon the Mortgaged Property in good and reasonable repair
and shall not injure, destroy or remove either the Buildings or Personal Property during the term of this Mortgage.
Except for construction of the planned improvements as disclosed to Lender before the date hereof, Borrower shall
not make any material alteration in the Mortgaged Property without the prior written consent of Lender.
19. Successors and Assigns Bound; Joint and Several Liability; Co-signers. The covenants and
agreements of this Mortgage shall bind and benefit the successors and assigns of Lender and Borrower. Borrower's
covenants and agreements shall be joint and several. Any Borrower who co-signs this Mortgage but does not
5
execute the Note: (a) is co-signing this Mortgage only to mortgage, grant and convey that Borrower's interest in the
Mortgaged Property under the terms of this Mortgage; (b) is not personally obligated to pay the sums secured by this
Mortgage; and (c) agrees that Lender and any other borrower may agree to extend, modify, forbear or make any
accommodations with regard to the terms of this Mortgage or the Note without the Borrower's consent.
20. Attorneys' Fees. Borrower shall pay on demand all costs and expenses incurred by Lender in
enforcing or protecting its rights and remedies hereunder, including, but not limited to, reasonable attorneys' fees
and legal expenses.
21. Severability. In the event any portion of this Mortgage shall, for any reason, be held to be
invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected thereby and shall
continue to be valid and enforceable and if, for any reason, a court finds that any provision of this Mortgage is
invalid, illegal, or unenforceable as written, but that by limiting such provision it would become valid, legal and
enforceable then such provision shall be deemed to be written, construed and enforced as so limited.
22. Notices. All notices required to be given hereunder shall be in writing and deemed given when
personally delivered or deposited in the United States mail, postage prepaid, sent certified or registered, addressed as
follows:
a. If to Lender, to: City of Waterloo
Community Development Department
Attention: Rudy Jones
620 Mulberry Street
Waterloo, IA 50703
b. If to Borrower, to: Grand Investments, LLC
Attn: Brent Dahlstrom
2202 College Street
Cedar Falls, IA 50613
23. Governing Law. This Mortgage shall be governed and construed in accordance with the laws of
the State of Iowa.
24. Successors and Assigns Bound; Number; Gender; Captions. The rights, covenants and
agreements contained herein shall be binding upon and inure to the benefit of the parties and their respective legal
representatives, successors and assigns. Words and phrases contained herein, including acknowledgment hereof,
shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender, according to the
contexts. The captions and headings of the paragraphs of this Mortgage are for convenience only and are not to be
used to interpret or define the provisions hereof.
25. Acknowledgment of Receipt of Copies of Mortgage and Note. Borrower hereby acknowledges
the receipt of a copy of this Mortgage together with a copy of each promissory note secured hereby.
26. Release. Upon payment of all sums secured by this Mortgage, Lender shall release this Mortgage
without charge to Borrower.
27. Waivers. Each of the undersigned relinquishes all rights of dower, waives all right of homestead
and distributive share in and to the Mortgaged Property and waives any right to exemption as to the Mortgaged
Property.
[signatures on next page]
6
Grand Investments, LLC
By:
[homestead waiver omitted]
Brent Dahlstrom, Managing ► er
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK )
Acknowledged before me on /7? F) y /5- , 2015, by Brent Dahlstrom as Managing Member of
Grand Investments, LLC.
Notary Public
e ;_; MOSTE C
„ P 4 _6" Beal=
7
EXBIBfl' ".V"
Parcel A in Part of Lot No. 30 in °hAuuditor's Fails Avenue and
Mullan Avenue Plat' in the City of Waterloo, Flack Hawk County,
yoga, described as follows;
Commencing at the most Southerly cornet' of Lot 30; thence N
49650'00" 44,E along the Southwesterly lino of said Lot 30, a
distance of 323.07 feat to the Point, of 8eginn i,ng; thence
controlling along said Southwesterly line, N 48650'00' W, a
distance of 243,81 feet; thence ea 62"5,558" By a distance ctf.
222.89 feet; thence t1 83'45'11" E, a di5.tar re of 78.70 feet;
thence S 57°07'376 E, a distance of 103.9.9 Feet; thence S
48650'00" E, a distance of 17.47 feet; thence S 43°43'43" W, a
distance of 280.28 feet be the Point. of 8eginnthg, containing
1.6V1V- acres.
a1kta That part of Lot 30 in "Auditor's Falls Avenue and Mullan
Avenue Plat", Black Hawk County, Iowa as indicated and described
on Plat of Survey Doc. #2014-11362.
Tuesday, May 19, 2015 12:32 PM
TRUTH -IN -LENDING DISCLOSURE STATEMENT
Applicant:
Grand Investments, LLC
2202 College Street
Cedar Falls, IA 50613
Creditor:
City of Waterloo
Community Development Department
620 Mulberry Street
Waterloo, IA 50703
Repayment Period Disclosure
NOTE: All numerical disclosures, except the late payment charge, are estimates.
ANNUAL
PERCENTAGE RATE:
The cost of your
credit as a yearly rate.
FINANCE
CHARGE:
The dollar amount
the credit will
cost you.
AMOUNT
FINANCED:
The amount of credit
provided to you or
on your behalf.
0% $0 $3,650,000.00
TOTAL OF
PAYMENTS:
The amount you will have
paid after you have made
all scheduled payments.
You have the right to receive at this time an itemization of the mount financed.
I want an itemization. r„)0 v I do not want an itemization.
$0
Your payment schedule will be:
No. of Payments Amount of Payment Compliance Period Expected to End
0 $0 June 1, 2026
SECURITY: You are giving a security interest in the property located at: Corner of W. Mullan Avenue and Jefferson
Street
DEFAULT: If you fail to comply with the CDBG Program requirements or other related project requirements during
the 10 -year compliance period, you will be required to repay the ENTIRE amount financed above.
PREPAYMENT: You make a full prepayment or a partial prepayment without paying any penalty. If you pay off
early, you will not be entitled to a refund of part of the finance charge.
ASSUMPTION: Someone buying your property cannot assume the remainder of the mortgage without prior written
consent of the City.
PROPERTY INSURANCE is required in connection with this loan. It may be obtained through any responsible
insurance company of your choice that is acceptable to the Lender.
ACKNOWLEDGMENT OF RECEIPT
I/We acknowledge receipt of this Truth -in -Lending Disclosure Statement.
/ \e
Date Brent Dahlstrom, Managing Member
Grand Investments, LLC
The Acknowledgment of Receipt must be dated and signed by each person with an ownership interest in the property.