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Legislation #: 160172 Introduction Date: 3/3/2016
Type: Ordinance Effective Date: 3/25/2016
Sponsor: MAYOR LUCAS
Title: Authorizing the Director of Neighborhoods and Housing Services to enter into a Memorandum of Agreement for the completion of the Colonnades at Beacon Hill project at 27th and Tracy (the "Project"); amending the 2012 and 2014 One Year Action Plans and authorizing submittal of a Substantial Amendment to the U.S. Department of Housing and Urban Development for its consideration; estimating revenue and appropriating funds in the HOME Investment Partnerships Fund; estimating revenue and appropriating funds in the Community Development Block Grant Fund; authorizing contracts with Colonnades at Beacon Hill Development, LP (“Developer”) in the amount of $3,000,000.00; and recognizing this ordinance as having an accelerated effective date.

Legislation History
DateMinutesDescription
3/3/2016 Filed by the Clerk's office
3/17/2016 Held on Docket (3/24/2016)
3/3/2016 Referred to N&PS and Housing Joint Committee
3/16/2016 Advance and Do Pass, Debate
3/24/2016 Passed

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160172.pdf Authenticated 203K Authenticated
Colonnades.pptx Other 193K Neighborhoods 3.16

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ORDINANCE NO. 160172

 

Authorizing the Director of Neighborhoods and Housing Services to enter into a Memorandum of Agreement for the completion of the Colonnades at Beacon Hill project at 27th and Tracy (the "Project"); amending the 2012 and 2014 One Year Action Plans and authorizing submittal of a Substantial Amendment to the U.S. Department of Housing and Urban Development for its consideration; estimating revenue and appropriating funds in the HOME Investment Partnerships Fund; estimating revenue and appropriating funds in the Community Development Block Grant Fund; authorizing contracts with Colonnades at Beacon Hill Development, LP (“Developer”) in the amount of $3,000,000.00; and recognizing this ordinance as having an accelerated effective date.

 

WHEREAS, the Project is a redevelopment project in the Beacon Hill Redevelopment Area which consists of the rehabilitation of one historically significant colonnade-style, 6-unit apartment structure, and the construction of four new 6-unit apartment structures along 27th Street at Tracy Avenue to be leased to a mix of market rate and low income Kansas City, Missouri residents; and

 

WHEREAS, Ordinance No. 120155, passed March 8, 2012, authorized a $1,700,000.00 contract with the Borrower from Home Investment Partnerships Program (“HOME”) funding for the construction and rehabilitation of the Project; and

 

WHEREAS, Ordinance No. 120855, passed September 27, 2012, authorized a $400,000.00 HOME contract amendment to help cover additional costs due to the destruction by fire of one of the historic buildings in the Project which caused the loss of historic tax credit equity; and

 

WHEREAS, Committee Substitute for Ordinance No. 130064, passed on January 31, 2013, authorized a $250,000.00 contract with Community Development Block Grant (“CDBG”) funds to cover predevelopment costs associated with the Project; and

 

WHEREAS, Ordinance No. 150082, passed on February 19, 2015, authorized a contract amendment of $386,229.00 with CDBG funds to cover unanticipated project costs, however, the Project was halted prior to expenditure of these funds; and

 

WHEREAS, Committee Substitute for Ordinance No. 150551, passed on July 9, 2015, authorized a contract amendment of $800,000.00 with HOME funds to cover unanticipated project costs, however, the Project was halted prior to expenditure of these funds; and

 

WHEREAS, while 82% of all construction activities of the Project have been completed, the Project has been challenged by numerous issues including significant unforeseen site conditions, the stabilization of the remaining historic structure, the closure of the general contractor’s business, the replacement of the general contractor, and numerous construction faults, all of which necessitates additional oversight and funding to complete the Project; and

WHEREAS, on November 23, 2015, Bank of America N.A. filed a Complaint against the Developer in the U.S. District Court for the Western District of Missouri seeking judgment for the amount owed by Developer to the Bank pursuant to the Project’s loan documents (“Complaint”); and

WHEREAS, in its Complaint, Bank of America also requested the appointment of a Receiver to take possession and control of the Project; and

WHEREAS, on December 30, 2015, the Federal Judge granted Bank of America’s Motion for Appointment of Receiver and appointed the Receiver selected by Bank of America; and

WHEREAS, the Project's lenders, including Bank of America, N.A. on behalf of itself and Banc of America Public Capital Corp (collectively, “Bank of America”) and the City, as well as the low income housing tax credit investors including Kansas City Equity Fund 2009, L.L.C., St. Louis Equity Fund 2011 L.L.C., St. Louis Equity Fund 2012 L.L.C., and St. Louis Equity Fund 2013 L.L.C. (collectively, "KC Equity Funds"), the Receiver and the Developer propose to enter into a mutually agreeable Memorandum of Agreement to describe the actions of each party, the remaining budget, additional or revised funding requirements, and a construction and rehabilitation completion schedule; and

 

WHEREAS, the City has an obligation to the United States Department of Housing and Urban Development to complete the Project; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the Director of Neighborhoods and Housing Services is authorized to enter into a Memorandum of Agreement with the Receiver, Bank of America, N.A. on behalf of itself and Banc of America Public Capital Corp. (collectively, "Bank of America"); the low income housing tax credit investors including Kansas City Equity Fund 2009, L.L.C., St. Louis Equity Fund 2011 L.L.C., St. Louis Equity Fund 2012 L.L.C., and St. Louis Equity Fund 2013 L.L.C. (collectively, “KC Equity Funds”), and Colonnades at Beacon Hill, LP, to guide the completion of the Colonnades at Beacon Hill project at 27th and Tracy and will include additional funding as approved in this Ordinance.

 

Section 2.  That the Substantial Amendment to the 2012 and 2014 One Year Action Plans prepared pursuant to the National Affordable Housing Act of 1990, as amended, a copy of which in substantial form is attached hereto and made a part hereof, is hereby approved.

 

Section 3. That the Mayor, on behalf of the City of Kansas City, Missouri, is authorized to execute and submit the aforesaid Substantial Amendment to HUD.

 


Section 4. That revenue is estimated in the following account of the HOME Investment Fund by the following amount:

 

16-2940-570001-476050-G57HOME14 HUD Grants $1,200,000.00

 

Section 5. That the appropriation in the following account of the HOME Investment Fund is increased by the following amount:

 

16-2940-575326-G57HOME14 Housing Services $1,200,000.00

 

Section 6. That revenue is estimated in the following account of the Community Development Block Grant Fund by the following amount:

 

16-2600-570001-477150-G57CDBG14 HUD Grants $ 650,000.00

 

Section 7. That appropriation is increased in the following account of the Community Development Block Grant Fund by the following amount:

 

16-2600-575311-B-G57CDBG14 Neighborhood Revitalization $ 650,000.00

 

Section 8. That the Director of Neighborhoods and Housing Services Department is authorized to enter into contracts with Colonnades at Beacon Hill Development, LP using $2,000,000.00 of HOME funds from Account No. 16-2940-575326-G57HOME14 and $1,000,000.00 of CDBG funds from Account Nos. 16-2600-575311-G57CDBG12 and 16-2600-575311-G57CDBG14 for the purpose of completing the rehabilitation, construction, and development of the Project.

 

Section 9.  That this Ordinance, which appropriates money, is recognized as an ordinance with an accelerated effective date as provided by Section 503(a)(3)(C) of the City Charter, and shall take effect in accordance with that section.

 

_____________________________________________

 

I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.

 

___________________________________

Randall J. Landes

Director of Finance

 

Approved as to form and legality:

 

 

___________________________________

Nicole Rowlette

Assistant City Attorney