HomeMy WebLinkAbout2024-03-18 H04A Affordable Housing Option to Purchase Agreement_Northpointe Development II CorpAGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: March 18, 2024
AGENDA ITEM:Resolution to Approve and Execute an Option to Purchase 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 in 2023 to develop affordable housing units on 6.44 acres near Douglas
Parkway and North Warrior Ln. At the City Council’s direction, Northpointe is resubmitting an
application for tax credits in 2024. As part of the City’s contribution to the project, Northpointe will
be given a nine-month option to purchase the land for $1. In addition to being the City’s contribution
to the project, the State of Iowa gives extra points to low-income housing tax credit projects in which
the land is donated or sold for $1. If Northpoint does not receive low-income housing tax credits, this
agreement will dissolve.
FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: In 2022, the City purchased this
13.6 acre parcel for $902,500. This resolution and agreement only covers the
southern half of this parcel- 6.44 acres. Pending successful receipt of low-
income housing tax credits, this agreement would allow Northpointe to
purchase this land for $1.
COMMISSION/BOARD/COMMITTEE COMMENT:
STAFF REVIEW AND COMMENT:
RECOMMENDATION: Staff recommends approval
ATTACHMENTS: I. Proposed Resolution
II. Option to Purchase Agreement
PREPARED BY: Nick Osborne
REVIEWED BY: Nick Osborne
PUBLIC NOTICE INFORMATION –
NAME OF PUBLICATION:
DATE OF PUBLICATION:
H4A
THE CITY OF WAUKEE, IOWA
RESOLUTION 2024-
RESOLUTION TO APPROVE AND EXECUTE AN OPTION TO PURCHASE
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, Northpointe Development II Corporation has proposed to develop
affordable housing on 6.44 acres of land near Douglas Parkway and North Warrior Lane;
AND,
WHEREAS, the City of Waukee proposes that pending an award of low income housing
tax credits and successfully abiding by a development agreement, Northpointe
Development II Corporation have the option to purchase the above described land for $1
AND,
WHEREAS, a public hearing on the recommended Option to Purchase Agreement has
been held on March 18, 2024.
NOW THEREFORE BE IT RESOLVED by the City of Waukee City Council in
session this 18th day of March, 2024, that the City of Waukee approve and execute an
Option to Purchase Agreement with Northpointe Development II Corporation for the
purpose of developing an affordable housing project:
____________________________
Courtney Clarke, Mayor
Attest:
___________________________________
Rebecca D. Schuett, City Clerk
RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN
R. Charles Bottenberg
Chris Crone
Rob Grove
Anna Bergman Pierce
Ben Sinclair
OPTION AGREEMENT FOR PURCHASE OF REAL ESTATE
THIS AGREEMENT, made and entered into on this ______ day of ________________,
2024, (the Effective Date”), by and between Northpointe Development Corporation, a corporation
duly formed and existing pursuant to the laws of the State of _________________, whose address
for the purpose of this Agreement is 230 Ohio Street, Oshkosh, WI 54902, (the “Buyer”) and the
City of Waukee, Iowa, a municipal corporation, (the “City”) whose address for the purpose of this
Agreement is 230 W. Hickman Road, Waukee, IA 50263.
WHEREAS, the City owns the real property preliminarily described as Outlot Y in the
final plat attached hereto as Exhibit A (the “Real Estate”).
WHEREAS, Buyer desires to obtain an option, in accordance with the terms herein, to
purchase the Real Estate from the City, subject to the terms outlined below.
WHEREAS, the Parties have reached an agreement on the terms and provisions for the
option to purchase and wish to herein reduce their agreement to writing for formal execution and
acknowledgement.
IT IS THEREFORE AGREED as follows, to-wit:
1.Optioned Property: City hereby grants to Buyer the exclusive right of option to
purchase a portion of the Real Estate legally described above of which approximate boundaries
are outlined in Exhibit B (legal description yet to be defined) for the period provided in Paragraph
3 hereof upon satisfaction of the terms of the Developer’s Agreement between the parties and any
amendments thereto Option Payment: City hereby acknowledges as consideration for this option,
the receipt of the sum of one dollar and no cents ($1.00), plus the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
2.Option Term: Buyer shall have the exclusive right to exercise the option for a
period of nine (9) months following the 2024 Iowa Finance Authority low-income housing tax
credit (“LIHTC”) application due date in April of 2024 as established by the 2023-2024 Nine
Percent (9%) Qualified Action Plan. In the event Buyer fails to file said application by said
established due date, or in the event Buyer does not receive the 2024 LIHTC award, Buyer shall
notify City within ten (10) business days after the due date or the date that the Iowa Finance
Authority notifies the public of the LIHTC awards of such non-award, which ever date applies
first, and this Agreement shall automatically terminate, the Option shall expire, and neither Party
shall have any further rights and/or duties hereunder.
Extension of Option Term: In the event that Buyer receives a 2024 LIHTC award, Buyer
may extend the term of the option by delivering the City written notice of intent to extend the
option before the expiration of the term. In the event the Buyer extends its option as provided
herein, the term shall be extended to April 1, 2025, or termination of the concurrent developer’s
agreement between the parties, which ever shall first occur.
3.Purchase Price: The purchase price to be paid by Buyer shall be one dollar and
no cents ($1)(the “Purchase Price”).
4.Exercise of Option. Buyer may exercise the option following its performance of
the requirements provided in Section 7.01 of the concurrent Developer’s Agreement in the manner
provided for therein.
5.Closing: Unless the Parties mutually agree to a deferred date, possession shall be
delivered and closing shall occur within thirty (30) days after Buyer exercises said option,
execution of the below noted Development Agreement, and delivery by the City of an abstract
showing marketable title. For this Agreement, both Parties acknowledge that time is of the essence.
At Closing, Buyer shall deliver to the Closing Agent the following:
a.An electronic wire transfer of good federal funds in the amount of the
balance of the cash portion of the Purchase Price, plus all other applicable costs, expenses
and fees.
b.The Settlement Statement prepared by the Closing Agent and executed by
Buyer.
c.All other documents reasonably required by the Closing Agent to satisfy the
remainder of its requirements described in the Commitment.
6.Access to Real Estate: City agrees that during the Option Term, Buyer and Buyer’s
employees, designated agents and contractors shall have the right upon 24 hours advanced notice
to the City (or shorter time period if approved by City) to enter the Real Estate for purposes of
conducting any inspections and/or tests as provided hereunder. Buyer, at its sole expense, may
inspect and make soil and other tests at any reasonable time during the Option Term. Buyer agrees
to repair any damage to the Property caused by Buyer’s exercise of its rights under this section.
Buyer shall indemnify and hold City harmless with respect to all costs and expenses (including,
without limitation reasonable attorneys’ fees) incurred by City due to Buyer’s (i) entry onto the
Real Estate, and (ii) failure to repair any damage to the Real Estate caused by Buyer’s entry onto
the Real Estate. This provision shall survive the Closing or termination of this Agreement.
7.City’s Representations and Warranties: As a material inducement to the
execution and delivery of this Agreement by Buyer and the performance by Buyer of its duties and
obligations hereunder, City does hereby warrant and represent to Buyer of the Effective Date, and
as of the date of Closing:
a.Information: Except as noted herein, City has no knowledge of any
information affecting the Real Estate that has or would have a material adverse impact on
Buyer’s ability to use, lease and operate the Real Estate for Buyer’s intended use, herein
defined as for the purposes of constructing housing as applied for in the 2024 Iowa Finance
Authority LIHTC application.
b.Legal Compliance: To the best of the City’s knowledge, and except as
disclosed in writing to Buyer prior to the expiration of the Option Term, there are no past
or continuing violation, or alleged violation, of any legal requirement affecting the Real
Estate; including, without limitation, any past or continuing violation or alleged violation
of any local, state or federal environmental, building, zoning, subdivision, fire or other law,
statute, ordinance, code, regulation rule or order (collectively, “Laws”).
c.Litigation: To the best of the City’s knowledge, there are no pending or
threated claims, actions, suits, litigation or governmental proceeding affecting the Real
Estate or which could result in a potential lien against the Real Property.
d.Other Agreements: To the best of the City’s knowledge, there are no
agreements or understandings, oral or written, with any person, entity or governmental
authority affecting the Real Estate which could give rise to claims affecting the Real Estate.
e.Governmental Actions: To best of the City’s knowledge, there are no
threated or pending condemnation or eminent domain proceeding, special assessment,
rezoning or moratorium affecting the Real Estate.
f.Environmental Matters: To the best of the City’s knowledge, the Real Estate
in not in violation of any environmental laws.
g.Authority: City has the full right, power and authority to sell, convey and
transfer the Real Estate as provided in this Agreement. The execution and delivery of this
Agreement is, and the execution and deliver of all documents required of City hereunder
when delivered by City will be, duly authorized, validly and legally binding upon City and
enforceable in accordance with their respective terms, and City shall provide such
documentation to Buyer and to the Closing Agent sufficient to evidence such authority.
8.Development Agreement & Updated Concept Plan: This Agreement is
contingent upon both Parties mutually agreeing to and executing a concurrent Development
Agreement between the Parties. This Agreement is also contingent upon the Buyer submitting for
approval to the City a final Concept Plan as identified in Section 5.01(a) & (b) of the concurrent
Development Agreement, which shall include, but not be limited to, development plans for the
Real Estate and timelines for said development.
9.Title Insurance: Buyer within a reasonable time following the exercise of the
option by Buyer shall obtain a commitment for an owner’s policy of title insurance to the Real
Property (the “Title Commitment”). Buyer shall cause to be issued an owner’s policy of title
insurance at closing, consistent with the Title Commitment, in the amount of the purchase price
on current ALTA form issued by an insurer licensed to write title insurance in Iowa, with a gap
endorsement. Buyer shall pay all costs of providing such title insurance and gap endorsement.
10.Acceptable Title: Buyer shall have the right, within 5 days after receipt of the Title
Commitment, to notify Seller of objections to the state of title to the Real Property. In the event
Seller is notified of such objection, Seller shall use good faith efforts to remedy any such objections
and shall have 5 days from the date of Buyer’s notice to notify Buyer of its proposed cure for each
objection and to provide Buyer with a revised Title Commitment evidencing that such objections
have been remedied and/or insured over in a manner satisfactory to Buyer in its sole and absolute
discretion. If Seller fails to timely provide such notice and/or such Title Commitment or Buyer is
not satisfied with Seller’s proposed cures to Buyer’s objections, in Buyer’s sole discretion, Buyer
shall have the right either (i) waive the objections and proceed to closing, or (ii) decline to exercise
the Option and be released from any further obligations under this Agreement. Notwithstanding
the foregoing, at or prior to Closing, Seller, at Seller’s expense, shall remove any exceptions on
the title commitment that relate to monetary liens, such as: (i) mortgages, financing statements,
financing liens, mechanics’ and materialmen’s liens encumbering the Real Property, (ii) delinquent
tax liens relating to the Real Property, or (iii) other liens or encumbrances which secure other
monetary obligations of Seller which are of a definite, undisputed and ascertainable amount.
11.Real Property Taxes. The City shall be responsible for all property taxes, if any,
due on the property prior to the closing date. Buyer shall be responsible for all real property taxes
levied upon the Real Property after the closing date.
12.Assessments: City shall pay all assessments which are liens as of the date of
closing.
13.Insurance: City shall retain liability insurance on the premises until the date of
closing when possession is transferred to buyer.
14.Deed: Upon payment of the purchase price, City shall execute and deliver to Buyer
or its successor or assign a Deed conveying to Buyer the City’s interest in the real property, in fee
simple absolute, free and clear of all liens, and encumbrances, except those excepted only for
recorded easements.
15.Condition of the Property: City shall maintain the Real Property in the condition
substantially the same as it exists on the date of this Agreement until the date of Closing, except
as provided by this Agreement and except for ordinary wear and tear.
16.Failure to Exercise Option: In the event Buyer fails or neglects to timely exercise
the option or in any other manner fails to timely fulfill the terms of this Agreement, all sums paid
to the City shall be forfeited to and become the property of City and neither party shall have any
further rights or claims against the other.
17.Assignment: It is expressly agreed and understood that neither Party shall assign
their interest and/or benefits of this Agreement without first obtaining prior written consent from
the other Party. Either Party may choose to refuse consent of said assignment for any reason or for
no reason at all. The only exception shall be that Northpointe Development II Corporation may
assign this contract to Prairie Rose Apartments – Waukee, LLC without prior approval by the City
as long as Developer or its wholly-owned affiliate is the managing member of such entity.
18.Successors and Assigns: Should either party agree to allow an assignment of this
Agreement, this Agreement shall become binding upon and insures to the benefit of successors
and assigns.
19.Entire Agreement: This instrument constitutes the entire agreement between the
parties with respect to the subject matter thereof and supersedes all prior oral or written
agreements, statements, representations, and promises. No addition to or change in the terms of
this Agreement shall be binding upon the parties unless it is expressed in a writing signed by the
parties.
20.Modification of Agreement: Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be binding only if
evidenced in writing signed by each party.
21.Interpretation: This Agreement shall be governed exclusively by and construed
in accordance with the laws of the State of Iowa. The paragraph headings in this Agreement are
for convenience only and in no way define or limit the scope or intent of any provisions of this
Agreement. This Agreement may be executed in any number of counterparts, each of which shall
be regarded as an original and all of which shall constitute but one and the same instrument.
22.Governing Law: This Agreement and rights and duties hereunder shall be
construed in accordance with the laws of the state of Iowa. Venue for any dispute shall be in the
Iowa District Court in Dallas County, Iowa.
23.Section Headings: The titles to the Sections of this Agreement are solely for the
convenience of the Parties and shall not be used to explain, modify, simplify, or aide in the
interpretation of the provisions of this Agreement.
[SIGNATURE PAGES TO FOLLOW]
THE CITY OF WAUKEE, IOWA
By: ________________________________
Courtney Clarke, Mayor
ATTEST:
By: ________________________________
Rebecca D. Schuett, City Clerk
STATE OF IOWA, DALLAS COUNTY, ss:
On this _____ day of _________________, 2024, before me the undersigned, a Notary Public
in and for the State of Iowa, personally appeared Courtney Clarke and Rebecca D. Schuett, to me
personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk,
respectively, of the City of Waukee, Iowa; that the instrument was signed and sealed on behalf of
the City by authority of its City Council, as contained in Resolution No. ______ passed by the City
Council on the _____ day of ______________, 2024, and that Courtney Clarke and Rebecca D.
Schuett, as such officers, acknowledged the execution of the instrument to be the voluntary act and
deed of the City, by it and by them voluntarily executed.
_______________________________________________
Notary Public in and for the State of Iowa
NORTHPOINTE DEVELOPMENT CORPORATION
By: ___________________________________________
Print Name: _________________________________
Title: _______________________________________
STATE OF ______________________, __________________COUNTY, ss:
On this ____ day of ______________, 2024, before me, the undersigned, a Notary Public
in and for the State of Iowa, personally appeared _______________________, to me personally
known, who being by me duly sworn, did say that the person is the ____________ of
_______________________, a___________________ corporation, and that the instrument was
signed on behalf of said company by authority of its Board of Directors; and that said person
acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the
company and by it voluntarily executed.
_________________________________________
Notary Public in and for the State of ____________
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Waukee, IA April 3, 2023 |22396
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