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HomeMy WebLinkAbout2023-04-03 I02B Northpointe Amendment to Development AgreementAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: April 3, 2023 AGENDA ITEM:Resolution Authorizing and Executing Amendment to a Development Agreement with Northpointe Development II Corporation for Affordable Housing Project FORMAT:Resolution SYNOPSIS INCLUDING PRO & CON: The City selected Northpointe Development II Corporation’s proposal to develop 64 affordable housing units on 6.44 acres near Douglas Parkway and North Warrior Ln. The negotiated development agreement lays out all of the requirements for the City and for the developer. In the event that the developer does not receive low-income housing tax credits, this agreement is null and void. The amendment changes the total units to 60; 46 developed by Northpointe Development II and 14 developed by a third party nonprofit, such as Habitat for Humanity. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: No direct fiscal impact. Unless otherwise stated, all direct costs are borne by the developer. COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: RECOMMENDATION: Staff recommends approval ATTACHMENTS: I. Proposed Resolution II. Amendment to Development Agreement PREPARED BY: Nick Osborne REVIEWED BY: PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: DATE OF PUBLICATION: I2B THE CITY OF WAUKEE, IOWA RESOLUTION 2023- RESOLUTION AUTHORIZING AND EXECUTING AN AMENDMENT TO DEVELOPMENT AGREEMENT WITH NORTHPOINTE DEVELOPMENT II CORPORATION FOR AFFORDABLE HOUSING PROJECT IN THE NAME AND BY THE AUTHORITY OF THE CITY OF WAUKEE, IOWA WHEREAS, the City of Waukee, Iowa is a duly organized municipality within Dallas County; AND, WHEREAS, the City of Waukee has chosen Northpointe Development II Corporation’s proposal to develop 64 affordable housing units on 6.44 acres of land near Douglas Parkway and North Warrior Lane; AND, WHEREAS, on March 6, 2023, the Waukee City Council approved aa Development Agreement with Northpointe Development II Corporation for the purpose of developing an affordable housing project (Resolution #2023-093); AND, WHEREAS, the City of Waukee and Northpointe Development II Corporation propose to amend the agreement to include 60 total affordable units; 46 developed by Northpointe Development II Corporation and 14 units by a separate third party developer; AND, WHEREAS, the City has been in discussions with the developer, Northpointe Development II Corporation, regarding certain obligations of both the City and the developer related to public improvements, affordability standards, and requirements of the subdivision; AND, WHEREAS, the discussions have resulted in an amendment to the development agreement that City Staff believes are in the best interest of the City to approve. NOW THEREFORE BE IT RESOLVED by the City of Waukee City Council in session this 3rd day of April, 2023, that the Developer’s Agreement with Northpointe Development II Corporation is hereby approved BE IT FURTHER RESOLVED that the Mayor is authorized to execute any and all documents to effectuate the development agreement: ____________________________ Courtney Clarke, Mayor Attest: ___________________________________ Rebecca D. Schuett, City Clerk RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN Anna Bergman Pierce R. Charles Bottenberg Chris Crone Larry R. Lyon Ben Sinclair 49094225 AGREEMENT TO AMEND DEVELOPMENT AGREEMENT AND OPTION AGREEMENT THIS AGREEMENT is dated as of April ____, 2023 between NORTHPOINTE DEVELOPMENT II CORPORATION ("Northpointe") and CITY OF WAUKEE, IOWA (the "City"). RECITALS The parties hereto acknowledge the following: A. Northpointe and the City have entered into a Development Agreement dated on or about the date hereof (the "Development Agreement") pursuant to which Northpointe has agreed to develop an affordable housing project (the "Project") on certain real estate currently owned by the City (the "Property"). B. Northpointe and the City have entered into an Option Agreement for Purchase of Real Estate dated on or about the date hereof (the "Option Agreement") pursuant to which the City has granted to Northpointe an option to purchase the Property. C. Northpointe intends to submit an application to the Iowa Finance Authority ("IFA") in April, 2023 for an allocation of 9% low-income housing tax credits (the "Tax Credits") for the Project. D. Northpointe originally intended that the Project would contain 64 apartment units. Northpointe based the number of apartment units on the expectation that IFA could award up to $1.6 million in Tax Credits to the Project. However, Northpointe has recently learned that IFA has reduced the maximum amount of Tax Credits that could be awarded to the Project to $1.2 million. Based on this reduced Tax Credit amount, Northpointe will only be able to develop 46 townhome units as part of the Project. E. Northpointe and the City would still like Northpointe to develop the Project containing 46 units. However, another developer (such as Habitat for Humanity) would need to acquire a portion of the Property and develop 14 townhome units on such portion of the Property. F. In the event IFA awards Tax Credits to the Project, Northpointe and the City will amend the Development Agreement and the Option Agreement to reflect the fact that Northpointe will only be acquiring a lesser portion of the Property, that Northpointe will only be developing 46 townhome units as part of the Project, and that another developer (such as Habitat for Humanity) will be acquiring a portion of the Property and developing 14 townhome units thereon, and addressing any additional amendments to the Development Agreement and the Option Agreement that arise by virtue of the change in the concepts. The Option Agreement is being amended 49094225 concurrently with the execution of this Agreement to Amend Development Agreement and Option Agreement for the purpose of showing an approximate area where the Northpointe Project will be built, however additional amendments are necessary to further define this area and the specifics of the dual development. G. Northpointe and the City desire to set forth in writing the basic terms and conditions of any such amendments. AGREEMENTS In consideration of the Recitals and mutual agreements which follow, Northpointe and the City hereby agree as follows: 1.Northpointe and the City shall cooperate in good faith to find another developer (such as Habitat for Humanity) to develop 14 low-income townhome units on a portion of the Property. The City shall enter into a separate development agreement and option agreement with such other developer to acquire the land associated with the low income 14-unit townhome project. Attached hereto as Exhibit A is a depiction of the Property showing generally that portion on which Northpointe’s Project would be developed and that portion on which the other developer’s project would be developed, although the parties agree that the specific portions of the Property which each respective developer would develop will be defined more particularly in the future amendments to the Development Agreement and Option Agreement. 2 Northpointe and the City shall cooperate in good faith to work to further amend the Development Agreement and Option Agreement to address the changes to Northpointe’s Project, the other project by the other developer, and those portions of the Property that would be owned and developed by Northpointe and the other developer. Northpointe and the City acknowledge that any such amendments shall include a requirement that Northpointe shall be responsible for constructing infrastructure (such as roads and utilities) that would serve both Northpointe’s Project and the other developer’s project and that Northpointe, the City and the other developer may need to enter into easement agreements granting Northpointe the right to construct such infrastructure on that portion of the Property being developed by the other developer. 3 The City shall not be obligated to convey that portion of the Property, yet to be defined, to Northpointe on which the Project will be developed unless and until (a) the City and Northpointe have made final amendments to the Development Agreement and Option Agreement, which will be made after Northpointe’s submission of its application to IFA; and (b) the City and the other developer have entered into a development agreement and option agreement for the development of the low income 14-unit townhome project. In the event that the parties do not reach an agreement on the final amendments to the Development Agreement and Option Agreement, or the City has not reached an agreement with another developer the low income 14-unit townhome project, said agreements, and any amendments shall terminate and be void and of no further effect. 49094225 4 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same instrument. Signatures sent via facsimile or e-mail transmission shall be deemed original signatures for purposes of creating a binding Agreement. 5 This Agreement may be amended only by a writing signed by all of the parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. [Signatures on next page] 49094225 NORTHPOINTE DEVELOPMENT II CORPORATION BY Its CITY OF WAUKEE, IOWA BY Courtney Clarke, Mayor ATTEST: BY Rebecca D. Schuett, City Clerk