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93-79 Resolution No. 93-79 RESOLUTION AUTHORIZING EXECUTION OF A REHABILITATION AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. (425 and 427 Fremont Street) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Larry L. Rice, City Manager, be and is hereby authorized and directed to execute a Rehabilitation Agreement on behalf of the City of Elgin with Neighborhood Housing Services of Elgin, Inc. for the rehabilitation of the property commonly known as 425 and 427 Fremont Street, a copy of which is attached hereto and made a part hereof by reference. sl George VanDeVoorde George VanDeVoorde, Mayor Presented: March 10, 1993 Adopted: March 10, 1993 Vote: Yeas 7 Nays 0 Recorded: Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk REHABILITATION AGREEMENT In consideration of the mutual promises, covenants, and undertakings of the parties hereto, Neighborhood Housing Services of Elgin, Inc., an Dkinois not-for-profit corporation (hereinafter referred to as "NHS") and the City of Elgin, a municipal corporation (hereinafter referred to as "City") hereby agree as follows: 1. NHS agrees to rehabilitate the foregoing legally described property: The west 1/2 of the west 1/2 of the north 1/2 of Lot 3 of T. Schoonhoven's addition to Elgin, in the City of Elgin, Kane County, Illinois. PIN: 06-12-383-005 The east 1/2 of the west 1/2 of the north 1/2 of Lot 3 in T. Schoonhoven's addition to Elgin, in the City of Elgin, Kane County, Illinois. PIN: 06-12-383-006 ya? Commonly known as 425 and 429 Fremont Street, Elgin, Illinois, pursuant to those specifications developed by the architectural firm of Gardner, Roach and Welch Architects, Ltd. entitled "Project Manual, Residential Renovations, 439 and 425 Fremont Street) dated June 1992 and site plan specifications drawings entitled "Residential Rehabilitation 425 and 439 Fremont Street" dated May 21, 1992, subject to reasonable modifications thereof as may subsequently be needed,during the rehabilitation process of the subject property; provided, however, that NHS tt obligations to perform hereunder are contingent upon the following two conditions: s a. Conveyance of satisfactory title to the subject property by the City to NHS pursuant to that certain separate real estate sales contract entered into between the City and NHS dated 7/41/4Jr /�/ 9 3 ; and b. City's performance of its obligations under paragraph 4 hereinafter. 2. NHS shall complete all rehabilitation required under this agreement on or before . wi t v .( d/,17,4,e 3. The rehabilitation of the subject property shall be done in substantial conformance with those specifications developed by the architectural firm of Gardner, ! , tirj ,• • 4 Roach and Welch Architects, Ltd. entitled "Project Manual, Residential Renovations, 439 and 425 Fremont Street" dated June 1992 and site plan specifications drawings entitled "Residential Rehabilitation 425 and 439 Fremont Street" dated May 21, 1992. The parties acknowledge that as the rehabilitation process takes place, reasonable modifications to the • foregoing specifications may need to be made to accomplish the goals of the rehabilitation project, given the resources available to accomplish the project and, therefore, Neighborhood Housing Services of Elgin agrees that modifications to the aforementioned plans and specifications shall be approved by a specified City Staff member. The City of Elgin agrees to not unreasonably withhold the review and authorization of modifications or otherwise withhold the timely progression of the rehabilitation as outlined. 4. The City agrees to pay to NHS the sum of Twenty-five Thousand and no/100ths Dollars ($25,000.00) at the time of conveyance of title of the subject property to NHS pursuant to the aforereferenced separate real estate sales contract between the parties hereto. NHS shall utilize said funds to defray the costs of rehabilitation. Any costs of rehabilitation in excess of said amount shall be born solely by NHS. 5. Upon conveyance of the subject property from the City of Elgin to NHS, NHS shall market the subject property for sale, at its own costs, and shall be entitled to all proceeds generated from the sale of the subject property. NHS agrees that the subject property shall not be reconveyed to an employee, agent or family member of either the City or NHS. NHS shall give reconveyance preference to low or moderate income purchasers as defined by the Department of Housing and Urban Development, and shall reconvey exclusively to such low or moderate income purchasers for a period from the time of conveyance to NHS and for up to ninety (90) days following the substantial completion (75%) of the rehabilitation. After this period, offers from prospective buyers whose household income is beyond the low and moderate income levels as defined by the Department of Housing and Urban Development will be considered. At all times, priority will be given to prospective buyers from households with incomes within the low and moderate income guidelines. 6. In the event of a default of any of the obligations of NHS hereunder, NHS shall repay to the City of Elgin, all funds as outlined in paragraph 4 of this agreement, not to exceed $25,000.00 upon notification of default; provided, however, that NHS be given sixty (60) days to cure any default prior to the repayment of funds. 7. In the event that the transaction contemplated by the aforereferenced separate real estate sales contract between the parties does not close and title to the subject property is not conveyed by the City to NHS thereunder, then this agreement shall be null and void and of no legal effect. Os- 8. Except as otherwise specifically provided herein, the parties hereto shall bear their own costs, expenses and attorneys fees and costs incurred in the performance and enforcement of the terms and conditions contained herein. SELLER: PURCHASER: City of Elgin, a municipal corporation NHS, Inc., a not-for-profit corporation, By: Dated: 3/2// 3 Dated: .3/6//9..� r S • Agenda Item No. March 5, 1993 TO: Mayor and Members of the City Council FROM: Larry L. Rice, City Manager SUBJECT: Sales Contract With NHS For 427 Fremont Street and Rehabilitation Agreement With NHS For 427 Fremont Street PURPOSE The purpose of this memorandum is to advise the City Council that an agreement has been reached with Neighborhood Housing Service of Elgin regarding the terms of the sale of 427 Fremont Street to NHS and the payment of $25,000 to as- sist with the rehabilitation of the house at 427 Fremont Street. BACKGROUND In October of 1992 the City Council decided to sell 427 Fremont Street to NHS and to give NHS $25,000 in Block Grant Funds to assist with the rehabilitation of the property. NHS had requested that following the sale of the house and the pay off of any other construction loans that any "profit" be directed to the NHS revolving loan fund. Following discus- sion with NHS representatives, it was decided the rules and regulations relating to the CDBG Funds would make it cumber- some for NHS and the City to implement the Rehabilitation and Loan Participation Program as it was initially proposed. It was determined that the project would function more efficient- ly if the $25,000 earmarked to assist in the renovation came from services other than the CDBG program. FINANCIAL IMPACT The City will sell 427 Fremont Street to NHS for $10.00. The $25,000 from the City which is to be applied to the rehabilitation cost will come from the 1993 bond issue. NHS has agreed to market the home under the following terms: • Mayor and Members of the City Council March 5, 1993 Page 2 1. The property will not be sold to an employee, agent or family member of either the City of NHS. 2. Preference will be given to low or moderate income purchasers. If NHS fails to perform as required under the terms of the Rehabilitation Agreement, the $25,000 will be repaid to the City. RECOMMENDATION Authorize the City Manager to enlist into a real estate sales contract and a rehabilitation agreement with NHS for 427 Fremont Street. Larry L. Rice - ty Manager LLR:daw Attachment Irk r