HomeMy WebLinkAbout2010-12-7774130996
ORDINANCE NO. 2010-12-7774
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING A MEMORANDUM OF AGREEMENT AMONG THE CITY OF
PADUCAH, KENTUCKY, PADUCAH JUNIOR COLLEGE, INC., SCHOLAR
HOUSE OF PADUCAH, LLC, PADUCAH HOUSING SERVICES, LLC, AND
WABUCK DEVELOPMENT COMPANY, INC., WITH RESPECT TO SCHOLAR
HOUSE OF PADUCAH, A PUBLIC PROJECT
WHEREAS, in pursuit of its public purposes to provide to its citizens low-cost
and affordable housing within the corporate boundaries and to promote the development of a
skilled workforce, the City of Paducah, Kentucky ("City") has determined that it is desirable to
participate in the construction and development of a Scholar House of Paducah project (the
"Project") with Paducah Junior College, Inc. ("College"), Scholar House of Paducah, LLC
("Scholar House"), Paducah Housing Services, LLC ("PHS"), and Wabuck Development
Company, Inc. ("Wabuck"); and
WHEREAS, the Project entails the construction and operation of a new affordable
housing development for low-income parents as they pursue an education of higher learning
above their secondary level pursuant to the guidelines required by the State of Kentucky's
Priority Set Aside of 2011 as outlined in Kentucky's Qualified Allocation Plan for Federal Low -
Income Housing Tax Credits as administered by Kentucky Housing Corporation and Section 42
of the Internal Revenue Code; and
WHEREAS, City, College, Scholar House, PHS, and Wabuck find it necessary
and advisable to set forth in summary form the intention of the Project and the rights,
responsibilities, and obligations of each of the parties with respect to the Project; and
WHEREAS, City now desires to authorize the Memorandum of Agreement
among the City, College, Scholar House, PHS, and Wabuck with respect to the Project.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS:
SECTION 1. Recitals and Authorization. The City hereby approves the
Memorandum of Agreement among the City, College, Scholar House, PHS, and Wabuck (the
"MOA") in substantially the form attached hereto as Exhibit A and made part hereof. It is
further determined that it is necessary and desirable and in the best interests of the City to enter
into the MOA for the purposes therein specified, and the execution and delivery of the MOA is
hereby authorized and approved. The Mayor of the City is hereby authorized to execute the
MOA, together with such other agreements, instruments or certifications which may be
necessary to accomplish the transaction contemplated by the MOA with such changes in the
MOA not inconsistent with this Ordinance and not substantially adverse to the City as may be
approved by the official executing the same on behalf of the City. The approval of such changes
by said official, and that such are not substantially adverse to the City, shall be conclusively
evidenced by the execution of such MOA by such official.
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SECTION 2. Severability. If any section, paragraph or provision of this
Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or
unenforceability of such section, paragraph or provision shall not affect any of the remaining
provisions of this Ordinance.
SECTION 3. Compliance With Open Meetings Laws. The City Commission
hereby finds and determines that all formal actions relative to the adoption of this Ordinance
were taken in an open meeting of this City Commission, and that all deliberations of this City
Commission and of its committees, if any, which resulted in formal action, were in meetings
open to the public, in full compliance with applicable legal requirements.
SECTION 4. Conflicts. All ordinances, resolutions, orders or parts thereof in
conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed
and the provisions of this Ordinance shall prevail and be given effect.
SECTION 5. Effective Date. This Ordinance shall be read on two separate days
and will become effective upon summary publication pursuant to KRS Chapter 424.
ATTEST:
Tammara S. Brock, City Clerk
Introduced by the Board of Commissioners, December 7, 2010
Adopted by the Board of Commissioners, December 14, 2010
Recorded by Tammara S. Brock, City Clerk, December 14, 2010
Published by The Paducah Sun, December 21, 2010
ord\property-scholar house -moa
EXHIBIT A
MEMORANDUM OF AGREEMENT
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MEMORANDUM OF AGREEMENT 130661clean
This Memorandum of Agreement, ("Agreement"), is made and entered into by
and between Paducah Junior College, Inc, a Kentucky not for profit corporation
("College"), Scholar House of Paducah, LLC, a Kentucky limited liability company
("Scholar House"), City of Paducah, Kentucky, a city of the second class and a body
politic and corporate ("City"), Paducah Housing Services, LLC, Kentucky not for profit
limited liability company ("PHS"), and����W��a''buck Development Company, Inc., a
Kentucky corporation ("Wabuck"), this «�taay of Lea4tm 2010 (the effective
date regardless of the date signed).
Recitals
(A) College is the owner of approximately 5.82 acres located on Old North
Friendship Road in Paducah, McCracken County, Kentucky and more particularly
described as follows:
( A certain tract of land as surveyed by David H. Dummer, Jr. PLS No. 1955 of the
II firm of Dummer Surveying & Engineering Services, Inc. of Paducah, Kentucky on
October 6, 2004, located on the south side of Alben Barkley Drive (U.S. Highway
62) and west side of Old North Friendship Road in McCracken County, Kentucky,
and being more particularly described as follows:
Beginning at a '/2" diameter rebar and cap (set) 20.00 feet west at right angles
from the centerline of Old North Friendship Road, said centerline point being
located 93.50 feet south with said centerline from the centerline intersection of
the physical centerline of Woodway Drive and Old North Friendship Road, said
beginning point being the southeast corner of the herein described tract of land,
(all 'h" diameter rebar and cap (set) are '/2" diameter x 24" long with a plastic cap
stamped "D.H.Dummer PLS 1955");
THENCE North 02 degrees 06 minutes 15 seconds East for a distance of 576.20
feet with the west right-of-way line of Old North Friendship Road to a'/2" diameter
rebar and cap (set) 20.00 feet west at right angles from the centerline of said
road;
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THENCE along a curve to the left having a radius of 170.99 feet and an arc
length of 224.64 feet, being subtended by a chord of North 35 degrees 32
minutes 00 seconds West for a distance of 208.83 feet with the west right-of-way
line of said road to a %2" diameter rebar and cap (set) 20.00 feet south at right
angles from the centerline of said road;
THENCE North 73 degrees 10 minutes 15 seconds West for a distance of 227.96
feet with the south right-of-way line of said road to a '/2" diameter rebar and cap
(set) 20.00 feet south at right angles from the centerline of said road;
THENCE South 02 degrees 08 minutes 33 seconds West for a distance of
767.25 feet with the east line of the Paducah Highland Terrace, LTD property
described in Deed Book 631, Page 132, and Plat Book Section "H", Page 326 to
a %2" diameter rebar and cap (set) in the north line of the Dean W. Boe property
described in Deed Book 968, Page 83, Plat Section "H", Page 340;
THENCE South 82 degrees 36 minutes 27 seconds East for a distance of 350.00
feet with the north line of the Dean W. Boe property [passing through a 6"
diameter concrete monument with cap stamped "RLS 113" (found) at 344.29
feet] to the point of beginning.
Together with and subject to covenants, easements, right-of-ways and
restrictions of record and in existence.
Said property contains 5.8211 acres or 253,566 square feet.
Bearings described herein are based on a magnetic observation taken at the
time of this survey.
(B) College has entered into a "Real Estate Option/Purchase Agreement"
("Option"), with City, wherein by the terms of this Option College shall sell to City the
above described property, ("Property'), for the sum of ONE HUNDRED SIXTEEN
THOUSAND FOUR HUNDRED & 00/100THS DOLLARS ($116,400.00), which is less
than the fair cash value of the before described property.
(C) City has agreed to then convey this property to Scholar House for the
construction of a new affordable housing development pursuant to the Scholar House
guidelines as set out by Kentucky Housing Corporation, ("KHC"), for the consideration
of ONE DOLLAR ($1.00) and the further commitment by Scholar House, PHS, and
PA
Wabuck to construct on the property a 48 -unit affordable housing development
(including, without limitation, an attached community building set aside specifically for
tenant educational programs and an on-site daycare facility) pursuant to the guidelines
required by the State of Kentucky's Priority Set Aside of 2011 as outlined in Kentucky's
Qualified Allocation Plan for Federal Low -Income Housing Tax Credits as administered
by KHC and Section 42 of the Internal Revenue Code.
(D) Scholar House, upon being granted the property by City, will use funds
derived from KHC, a grant from the Federal Home Loan Bank of Cincinnati, syndication
financing from Ohio Equity Fund for Housing Limited Partnership XXI, an Ohio limited
partnership, (the "Fund") in accordance with the terms and conditions of the Equity
Commitment Letter attached hereto and made a part hereof (the "Equity Commitment
Letter') and loan funds from Wilson & Muir Bank & Trust Company to construct a
Scholar House project consisting of 48 family affordable units (including, without
limitation, an attached community building set aside specifically for tenant educational
programs and an on-site daycare facility) on the before described property ("Project").
(E) The Project will be developed and operated as a Scholar House project
under the Scholar House program of KHC. This program provides a transitional/living
setting for low-income parent(s), as defined by Section 42 of the Internal Revenue
Code, as amended from time to time, seeking self-sufficiency and is designed to help
unemployed or under -employed parent or parents with children pursue an education of
higher learning above their secondary level. The program is designed to help a parent
or parents who are at least eighteen years of age having primary custody of a child or
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children to pursue higher learning. Pursuant to current KHC guidelines all participants
must:
(a) Be a high school graduate or have a GED Certificate;
(b) Be a full time student or enrolled as a full time student in a post -secondary
educational program that requires a minimum of one year to complete;
(c) Be a parent with primary custody of a child or children;
(d) Have at least one child who is under the age of 18 years of age,-
(e)
ge;(e) Must be at least eighteen years of age; and
(f) Must be eligible for Section 8 rent subsidized housing.
(F) In addition, KHC requires an educational program agreement between the
Project and the applicant who seeks to reside in the Project. These current
requirements are as follows:
(a) The applicant must be enrolled in a full time academic program;
(b) The applicant must remain in good academic standing and provide proof
each semester in order to remain in the housing;
(c) The applicant must have a cumulative GPA of 2.0 by the end of the
second quarter/semester;
(d) Must maintain a minimum of a 2.0 GPA each quarter/semester;
(e) Must attend classes regularly;
(f) Must request approval from the Project's Family Service Coordinator for
any changes in their educational status;
(g) Must provide the Project's Family Service Coordinator a copy of the
current schedule by the first day of classes and grades must be turned in
one week after the end of the quarter/semester.
(G) College desires for Project to be maintained by Scholar House as a
Scholar House program as above defined or as later required as long as it is
economically feasible to do so and to abide by the Tax Credit Requirement as
referenced in Paragraph C above set out.
Agreement
Now, in consideration of the College conveying the property pursuant to the
Option at a price which is less than the fair cash value of the property, the parties agree
as follows:
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Scholar House will construct and operate an affordable housing project as
set out in its Application for Funding with KHC and Federal Home Loan Bank of
Cincinnati and as defined in Paragraph C above set out. Excavation for the Project will
begin no later than June of 2011 and the Project will be completed and be ready for
occupancy no later than September 1, 2012. Project will have a daycare facility to
serve resident parents' children who are under six (6) years of age.
2. A local board/committee will be established which will provide oversight for
the Project operations and participant selection which shall include members from the
leadership of West Kentucky Community and Technical College and College or their
designees.
3. PHS will be the Developer and the Manager of the Project. PHS will
further own 99.9% of the General Partnership interest in the Project and Wabuck will
own 0.01 % of the General Partnership interest in the Project. (PHS and Wabuck shall
be hereinafter referred to as the "General Partners.") The General Partners shall sell
and convey a 99.9% limited partnership interest in the Project (the "Limited Partner
Interest") to the Fund in accordance with the terms and conditions of the Equity
Commitment Letter.
4. (A) Scholar House will at all times operate the Project as a "Scholar
House Program" project as defined by KHC unless:
(a) It is released from the "Scholar House Program" by KHC; and
(b) The cash flow for any year after the first calendar year of tenant
occupancy of the Project is negative ("Negative Cash Flow").
Negative Cash Flow for the Project occurs when the operating
expenses incurred for the calendar year, plus all required reserve
payments, plus all required debt service, is in excess of the
Project's rental revenue received for the calendar year; and
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(c) Scholar House certifies to College that the restriction to continue as
a Scholar House Program Project as defined by KHC is a
significant causal factor in the Project's financial distress and that
unless the rental requirements are modified then the Project will not
be able to meet its financial obligations as required by Ohio Capital
Corporation for Housing and that the Project's financial distress will
in all likelihood continue unless the tenant eligibility requirements
are modified.
(B) If the tenant eligibility requirements are modified as set out in 4(A),
to the extent permitted by KHC and Federal Home Loan Bank of Cincinnati (agencies
having oversight control in the Project), tenant priority on the Project's waiting list shall
first be given to households eligible as Scholar House tenants as defined by KHC under
its Scholar House Program.
5. The General Partners grant to College or their qualified successor(s) an
exclusive option to purchase the Limited Partner Interest for a price equal to the greater
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(A) The appraised value of the Limited Partner Interest, assuming that the
Project remains available for continued low-income use for an additional fifteen (15)
years; or
(B) The sum of:
(a) Any taxes owed by the Fund or its assigns that result from the sale,
and
(b) The amount, if any, which when added to benefits previously
received by the Fund, will provide the Fund with its projected total
benefits (as defined in the Exhibit A to the Equity Commitment
Letter)
The initial term of this option shall commence at the end of the 15 -year Credit
Compliance Period as set forth in the Code and shall continue for a period of one (1)
year following said date. College shall exercise its option to purchase by notifying the
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General Partners, in writing, of its intent to purchase, which notification shall be given
prior to the expiration of the initial option term. Closing shall take place within one
hundred eighty (180) days following notice at a time and place agreed upon between
- the parties. Closing may be extended at the option of the College.
At the time of Closing, the Limited Partner Interest shall be transfer and convey
to College free and clear of all prior and subordinate interests. The cost of the transfer
shall be the responsibility of the College. In the event College does not exercise its
option to purchase during the initial option term, the General Partners grant to PHS or
their qualified successor(s) an exclusive option to purchase the Limited Partner Interest
upon the same terms and conditions, except the option term shall commence upon the
expiration or College's termination of the initial option term and shall continue for a
period of ninety (90) days following said date. The sale and conveyance of the Limited
Partner Interest to the Fund shall be subject to and subordinate to the option rights of
College and PHS.
6. Alternatively, the General Partners grant to College or their qualified
successor(s) an exclusive option to purchase 100% of the Project for a price equal to
the sum of:
(A) Any outstanding hard and soft debt, including the - General
Partners/Developer loans;
(B) Any taxes owed by the Fund that result from the sale; and
(C) Any transaction costs arising from the sale.
The initial term of this option shall commence at the end of the 15 -year Credit
Compliance Period as set forth in the Code and shall continue for a period of one (1)
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year following said date. College shall exercise its option to purchase by notifying the
General Partners, in writing, of its intent to purchase, which notification shall be given
prior to the expiration of the initial option term. Closing shall take place within one
hundred eighty (180) days following notice at a time and place agreed upon between
the parties. Closing may be extended at the option of the College.
At the time of Closing, the Project shall be transfer and convey by special
warranty deed to College free and clear of all prior and subordinate interests, except for
the debt referred to in paragraph 6(A). The cost of the transfer shall be the
responsibility of the College. In the event College does not exercise its option to
purchase during the initial option term, the General Partners grant to PHS or their
qualified successor(s) an exclusive option to purchase the Limited Partner Interest upon
the same terms and conditions, except the option term shall commence upon the
expiration or College's termination of the initial option term and shall continue for a
period of ninety (90) days following said date. The sale and conveyance of the Limited
Partner Interest to the Fund shall be subject to and subordinate to the option rights of
College and PHS.
7. City shall deed the property to Scholar House as is set out in Paragraph C
of the Agreement no later than February 1, 2011. If the General Partners fail to
consummate the sale and transfer of the Limited Partner Interest with the Fund by
entering into a Limited Partnership Agreement with the Fund or its successors or
assigns, (as explained in the Equity Commitment Letter) by May 1, 2011 then Scholar
House shall re -convey the property back to the City free of any mortgage interest and/or
lien interests by special warranty deed and City shall have no further commitment of any
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type to Scholar House or the General Partners. This right of re -conveyance vested in
the City shall be included in the deed from the City to the Scholar House. Upon the
closing of the Limited Partner Interest with the Fund or its successors and assigns, the
-� City shall, at its expense, release this right of re -conveyance by filing a deed of release
v with the local county court clerk's office. Written evidence of the consummation of the
Limited Partner Interest shall be required.
S. MISCELLANEOUS:
(A) Notices and Addresses — All notices, consents, demands, requests or
other communications which may or are required to be given hereunder shall be in
writing and shall be sent by telefax, overnight courier or United States Mail, Registered
or Certified Mail, Return Receipt Requested, postage prepaid to the parties at the
following addresses:
(a) Paducah Junior College, Inc.
Address: c/o West Kentucky Community and Technical College
4810 Alben Barkley Drive
Paducah, Kentucky 42001
Fax: 270-534-6319
Attention: Chair
(b) Scholar House of Paducah, LLC
Address: 2330 Ohio Street
Paducah, Kentucky 42003
Fax: 270-443-5558
Attention: Call Ross, COO
(c) City of Paducah
Address: 300 South 5tt' Street
Post Office Box 2267
Paducah, Kentucky 42002-2267
Fax: 270-444-8689
Attention: Director of Planning and Section 8 Housing
With copy to: Lisa H. Emmons
Denton & Keuler, LLP
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Post Office Box 929
Paducah, Kentucky 42002-0929
Fax: 270-442-6000
(d) Paducah Housing Services, LLC
Address: 2330 Ohio Street
Paducah, Kentucky 42003
Fax: 270-443-5558
Attention: Cal Ross, COO
With copy to: D. Glenn Denton
Denton & Keuler, LLP
Post Office Box 929
Paducah, Kentucky 42002-0929
Fax: 270-442-6000
(e) Wabuck Development Company, Inc.
Address: Post Office Box 556
Leitchfield, Kentucky 42755-556
Fax: 270-259-6071
Attention: Garry Watkins
With copy to: David B. Vickery .
101 North Main Street
Leitchfield, Kentucky 42754
Fax: 270-442-6000
Any party may change its address by delivering written notice to all other parties.
Notices, consents, demands, requests or other communications shall be deemed given
or served on the day when sent by telefax,. one day after deposit with an overnight
carrier, or three business days after deposit in the United States Mail.
(B) Pronouns and Plurals — All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of
the person or persons may require.
(C) Counterparts — This Agreement may be executed in several counterparts
all of which shall constitute one original, binding on all parties thereto, notwithstanding
that all the parties are not signatories to the same counterpart.
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(D) Applicable Law — This Agreement and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the State of Kentucky.
(E) Successors — This Agreement shall endure to the benefit of, be binding
upon, and be enforceable by and against the parties hereto, their heirs, executors,
administrators, successors and assigns.
(F) Severability — The invalidity or unenforceability of any provision of this
Agreement in a particular respect shall not affect the validity and enforceability of any
other provisions of this Partnership Agreement or of the same provision in any other
respect.
(G) Exhibits/Attachments — All exhibits/attachments append hereto or referred
to herein are incorporated herein by this reference.
(H) Amendment of Agreement — This Agreement may not be amended in
whole or in, part except by the written instruments signed by all the parties.
(1) Entire Agreement — This Agreement contains the entire agreement among
these parties with respect to the transactions contemplated herein, and this Agreement
supersedes all prior written agreements, commitments or understandings with respect
to the matters provided for herein and therein.
(the remainder of this page is intentionally left blank)
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PADUCAH JUNKLLE E, INC
by:
Authorized Representative
SCHOLAR H SE OF PADUCAH, L
by:
M n er
CITY OF(MIJEA
by: d-,�---
Authorize epresentati e
PADUZ�kcc---1
RVICES, LLC
by:
Authorized Representative
WABUCK DEVELOPMENT COMPANY, INC.
by: tea, - _
Authonzed Fepresentative
..'' ,;SCh kocaz Padtteai).
PC, du da) I
Signed and Sworn before me this
t! 15A day of I.e%j�/JP.I. 20 16
My Commission Expires UCP /P0 3
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