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LRAC PKT 10-16-2013Federal Way CDBG Loan Review Advisory Committee October 16, 2013 5:30 — 7:30 pm Hylebos Room A ,qenda 1. Call to Order 2. Roll Call 3. Public Comment 4. Approval of July 22, 2013 Minutes S. Committee Member Reports 6. Staff Reports a) Amendment to CDBG PY 2013 Annual Action Plan b) PY 2014 CDBG Action Plan 7. Old Business a) Universal Cartridge USA, LLC loan 8. New Business a) Commercial Exterior Improvement Program Application Review Process Discussion b) September Loan Status and Payment Reports 9. Adjournment Next regularly scheduled meeting: January 15, 2014 5:30 — 7:30 pm Hylebos Conference Room Chair Evans Catalano Chair Evans Chair Evans Chair Evans Bennett Bennett Chair Evans Chair Evans CITY OF FEDERAL WAY LOAN REVIEW ADVISORY COMMITTEE MEETING SUMMARY JULY 22, 2013 COMMITTEE MEMBERS PRESENT: Graham Evans, Chair; Donald Bartlett, Vice Chair; Keven Dunn; Lori DeVore; Mark Hutson. COMMISSION MEMBERS ABSENT: Frank Spicer. STAFF PRESENT: Jay Bennett, Community Services Manager; Dee Dee Catalano, CDBG /Human Services Coordinator; Amy Jo Pearsall, City Attorney. GUESTS: Charles Gathu; Phon Sivongxay, Highline Community College. CALL TO ORDER The meeting was called to order at 5:30 pm. ROLL CALL Dee Dee Catalano took the roll. APPROVAL OF MINUTES Donald Bartlett moved to approve the April 18, 2013 meeting minutes. Mark Hutson seconded the motion, which carried 3 — 0. COMMITTEE MEMBER REPORTS OLD BUSINESS a) Universal Cartridge USA, LLC Loan Application Donald Bartlett reported on the application review team's consideration of the underwriting report on the Universal Cartridge application. He summarized their concerns and said they would like to give Mr. Gathu an opportunity to respond. Mr. Gathu spoke to the Committee and answered their questions. The Committee discussed the underwriting report and Mr. Gathu's application further. Donald Bartlett moved to recommend approval to the City Council of the Universal Cartridge loan request in the amount of $18,500, with the initial four months as interest -only payments, a 36 month term at a 6.5% interest rate, with the conditions that the credit report be cleared and quarterly reports on the business be submitted to the City. Keven Dunn seconded the motion, which carried 4 — 0. The Committee discussed if key man insurance should be a condition of the loan as well. Donald Bartlett moved that key man insurance is not required for the loan. Keven Dunn seconded the motion, which carried 3 —1, with Graham Evans dissenting. Jay Bennett requested that Keven Dunn represent the Committee at the FEDRAC meeting on July 23. Mr. Gathu is welcome and encouraged to attend. The City Council will consider FEDRAC's recommendation at their August 6"' regular meeting. NEW BUSINESS a) Loan Review Policy Changes Jay Bennett said that changes to the loan review process were discussed in draft earlier this year but were not approved. The major change in the process was that the Committee would make a formal recommendation to the City Council on a loan application after it has been referred to underwriting. Lori Devore moved to approve the amended Commercial Loan Review Process. Keven seconded the motion, which carried 4 — 0. b) Commercial Exterior Improvement Program (CEIP) Underwriting Requirements Jay Bennett said that staff believes that underwriting isn't necessary for the CEIP because the loans would go to established businesses that will need to document that they can provide the 50% match for the loan. There is nothing in the CEIP policies that require underwriting. The Committee agreed that underwriting for the CEIP is not necessary. STAFF REPORTS a) Amendment to CDBG PY 2013 Annual Action Plan Jay Bennett informed the Committee that the 2013 CDBG Annual Action Plan (AAP) is being amended because new activities are being added, some funds are being moved between programs, and a few changes are being made to the public services projects. One new activity is a Section 108 Loan Guarantee application. Additionally, due to lack 2 of demand, the CEIP budget is being reduced from $100,000 to $70,000, and the Small Business Loan budget is being reduced from $300,000 to $145,000. The Emergency Housing Repair Program, which had received high demand, is being increased by $100,000. ADJOURNMENT The meeting adjourned at 6:52 pm. NEXT MEETING Regular Meeting October 16, 2013 5:30 7:30 pm Hylebos Room 3 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -8325 (253) 835 -7000 Commercial Exterior Improvement Program RECEIVED Property Owner Application SEP 19 2013 04- 61 Fed" WOY- .Mail Application to: For assistance: Human Services Division City of Federal Way phone: 253 - 835 -2401 Human Services Division email: housin grepairlEcityoffederalway.com 333258 th Avenue S fax: 253 -835 -2409 Federal Way, WA 98003 Name Title Kirk H. Haupt LLC Managing Member Corporation /Organization Name Twin Lakes Place Associates, LLC Address Unit # Zip Code 22404 Melchert Way SW 98070 Vashon, WA E -mail Address Daytime Phone Home Phone kirkhaupt @gmaii.com 206 - 463 -4488 Same Street Address Unit # Zip Code 2500 SW 336th St. , 98023 Federal Way King County Tax Parcel Number: 132103 -909 -6 Remove existing awning and outside lighting Apply new paint, new awning, outside lighting and cannel lit signage Minor structural changes, including adding a window to the east wall at the southwest Corner. PROPERTY OWNER APPLICATION - 1 - 8/2013 a" OF �. Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -70 wwwtxxtybtledetal Mwm The purpose of the investment is to lease currently un- occupied portions of the building, provide for the elimination of spot blight and further economic investment in the immediate area, and the creation of job opportunities, which might not otherwise be available in the immediate future without the investment of CDBG funds. The Applicant hereby states that it fully understands and agrees to the following: A. Funding for this program is derived from the Community Development Block Grant (CDBG) Program and is subject to the eligibility and availability of this funding source. B. As security for the Applicant's performance hereunder, Applicant shall execute a Promissory Note, a Restrictive Covenant and /or a Guaranty in favor of the City of Federal Way. C. Upon approval, Applicant shall deposit an amount of private funds in an amount sufficient to pay fifty percent of the total eligible project costs. D. Within two years of completion of the CDBG project activities identified above, Applicant shall cause a lease to a tenant or create itself the required number of full -time and /or full -time equivalent jobs at the Commercial Property. One full -time job is the equivalent of a minimum of 1,820 annual work hours. A minimum of 51 percent of the new jobs will be filled by or made available to persons of low and moderate income families. E. In the event that the CDBG funds have been used to benefit the Applicant by providing the improvements outlined in the application and Applicant fails to meet the minimum of fifty -one percent (51°x6) of the new jobs created being filled by or made available to persons from low to moderate income families, Applicant shall repay the total amount of CDBG funds expended on the project. F. Applicant shall forward to the City for its review and all proposed lease documents for the City's review, thereby assuring HUD requirements are contained therein, until such a time that the promissory note associated with the zero interest, deferred loan has expired. P R O P E R T Y OWNER APPLICATION - 2 - 8/2013 CITY OF CITY HALL '`�•...;. Federal Way ,3325 8th y-, WA South Fe,dera! way: WA 98003 -6325 (253,83 5 -7©UO arvrn Gtyoffederal way. cot» G. Applicant shall furnish from time to time, upon the request by the City of Federal Way, reports on progress being made in meeting the requirements of D above. H. Applicant shall keep and maintain books, records and other documents relating directly to the expenditure of the private funds for the purposes of the project improvements until such a time that the promissory note associated with the zero interest, deferred loan has expired. I. Applicant agrees that any duly authorized representative of the City of Federal Way and /or HUD shall, at all reasonable times, have access to and the right to inspect, copy, audit, and examine all such records related to private expenditures and job generation as a result of the above described project until the completion of all close -out procedures respecting the project and the final settlement and conclusions of issues arising out of the loan. J. There shall be no reimbursements allowed as a part of the subject loan for work completed prior to the closing of the loan. All disbursements for loans must be accompanied by invoices and paid receipts. K. The City.shall either provide construction inspection or accept the inspection by a licensed architect, at City's option. L. The project and its construction will be in compliance with the City's building codes and all other applicable laws and regulations including zoning laws. The City Permitting Department will have the discretion to suggest design alternatives for any sign being used or to be used on the building being assisted under this program. A sketch and detailed description, including dimensions, colors, materials and textures of signs to be used, will accompany the application. The construction shall be in compliance with applicable City Building Codes and performed by a licensed, bonded and non - debarred contractor. M. Will use its best efforts to afford minority and women -owned business enterprises the maximum practicable opportunity to participate in the work performed through the Commercial Exterior Improvement Program. N. The project's construction is subject to federal and state prevailing wage laws. 0. If the project is sold or the property is otherwise disposed of by Applicant prior to the PROPERTY O W N E R APPLICATION - 3 - 8/2013 CITY OF CITY HALL Federal Way 33325 8th Avenue South Federal Way, WA 9$ 043 -6325 (253) 835 -7000 www.dtyoffaderaMw.com expiration of the promissory note, remaining monies on the loan shall be due to the City of Federal Way. P. Shall maintain the improvements in compliance with City of Federal Way Building and Property codes. Q. The City of Federal Way program costs are as follows: 1) Application fee: $200 2) Closing costs: Per City of Federal Way CDBG Commercial Exterior Improvement Program— Policies and Procedures Manual 2013 3) Legal Review - 50% of costs incurred s L-�'' 1, on behalf of j, %'fX-L -f , &a declare, under Penalty of Periury, that 'all information stated on this form and on the documents I have submitted is true and correct. I further declare that I meet the minimum eligibility requirements of the housing repair program. yh This declaration was signed by me this 1� _ day of 2013. Va 5116 D _ A- _ Si ture A icarft Location (city, tate) Signed STATE OF WASHINGTON ) ) ss. COUNTY OF— I�_ j On this day personally appeared before me tlP,dt, -�1Y to me known to be the W► (�it+� -r of Li.�that executed the foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he /she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN my hand and official seal this Notary Public State of Washington HEATHER E RUSSELL My Appointment Expires Oct 1, 2013 Notary's printed name Notary Public in and for the signature Washington. PROPERTY OWNER APPLICATION - 4 - 8/2013 CA "J l/' � 1 oV "lot, ;,AF 0 7C <�o O O Z y y Mid p 0 A m 8 OUR Z D�Z 61 b$p n 6t Z O H SIP s� n A m O F O a �i Y V O Z N y N i 4� 0 pry � z m ; n A Q£m O A N °Z �S n O r O 7v cn l'1 S m K m O mmm)�51 &-S COg sm � Va n A m fO 6 A 3 op n O O n m 9 m O N Jill t O � All 0 t O � All 0