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HomeMy WebLinkAboutRES 12-38RESOLUTION NO.12-38 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING THE ADOPTION OF COMMERCIAL REHABILITATION GUIDELINES. WHEREAS,the City of Apache Junction,Arizona,is desirous of undertaking a commercial rehabilitation program; and WHEREAS,this program is anticipated to be funded with funds provided by the State of Arizona Department of Housing ("ADOH"); and WHEREAS,ADOH requires that every local government requesting funds for commercial rehabilitation adopt specific guidelines for such a program; and WHEREAS,the City of Apache Junction has developed such Commercial Rehabilitation Guidelines ("CRGs")dated January 2013, which have been pre -approved by ADOH. NOW,THEREFORE,BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AS FOLLOWS: 1) The City Council of the City of Apache Junction,Arizona, hereby adopts such CRGs, dated January 2013, in Attachment A,which shall be used to implement its commercial rehabilitation program; and 2)The City of Apache Junction,Arizona,shall utilize such CRGs,without revisions,except those authorized by the Mayor.Such revisions shall be submitted to ADOH by the City 10 working days before such amended guidelines are effectuated. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS 15TH DAY OF JANUARY 2013. SIGNED AND ATTESTED TO THIS 15TH DAY OF JANUARY 2013. OHN INSALACO Mayor RESOLUTION NO. 12-38 PAGE 1 OF 2 ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: 4 M -3 -IQ, RICHARD J. STERN City Attorney RESOLUTION NO. 12-38 PAGE 2 OF 2 CITY OF APACHE JUNCTION, ARIZONA COMMERCIAL REHABILITATION PROGRAM GUIDELINES As Adopted by the City Council on January 15, 2013 TABLE OF CONTENTS Program Goals and Objectives 2 Eligibility Criteria 3 Selection Criteria 5 Contract Requirements 6 Program Assistance 6 Loan Closing and Lien Recording Procedures 7 Recapture Period 7 Loan Servicing Policy/Subordination 8 Revolving Loan/Program Income 8 Property Standards 8 Procurement Policy 9 Labor Standard Requirements 11 Marketing 11 Staff Structure 11 Reporting Procedures 11 Conflict of Interest 11 Complaint and Grievance Procedure 12 Non -Discrimination 12 Changes to Program Guidelines 12 Forms 12 City of Apache Junction Commercial Rehabilitation Program Guidelines,page 1 of 12 The City Council of the City of Apache Junction adopts the following Commercial Rehabilitation Guidelines ("CRG")to assist the City in administering the City's Commercial Rehabilitation Program ("CRP"). The main focus of the CRP is to provide rehabilitation of commercial buildings within the City's Redevelopment Areas in accordance with the City's Building Code standards and the applicable design guidelines as identified in the Downtown Redevelopment and Implementation Strategy.Design guidelines are available through the Development Services Department. The purpose of the program is to assist with the elimination of slum and blight in the aforementioned area (s) pursuant to A.R.S. Title 36; encourage revitalization; and provide economic growth and prosperity within the community. Unless specifically stated to the contrary, content contained in these guidelines are the principal requirements for administering the City's CRP. PROGRAM GOALS AND OBJECTIVES The overall goals of the program are: 1.To provide an attractive, revitalized downtown business community that will spur further activity, commerce and investment in the Redevelopment Area (s). 2.To stabilize and/or improve current commerce and job opportunities within the Redevelopment Area (s). 3.To fund projects which will improve blighted conditions in the Redevelopment Area (s). 4.To restore and rehabilitate commercial building and bring them into compliance with applicable laws, codes, and design guidelines. 5.To eliminate blight and prevent further deterioration of commercial buildings. 6.To create viable commercial districts that are appealing to residents, property owners, investors, and visitors alike. The CRP's objectives include: I.To improve the visual appearance of the structures within the Redevelopment Area (s). 2.To promote a climate for reinvestment in revitalizing neighborhoods. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 2 of 12 3.To further encourage both public and private investment within the Redevelopment Area (s). ELIGIBILITY CRITERIA To be eligible, the applicant and/or the property to be rehabilitated must meet the following criteria: •Located within a Redevelopment Area approved and adopted by the City Council including the Crossroads Redevelopment Area and the Apache Trail Redevelopment Area. •Operating as a small business. For purposes of this program, small business is defined as privately owned corporations, partnerships, sole proprietorships or franchisee, with fewer than 500 employees. •Renters must obtain the support and permission of the property owner and work in collaboration with the property owner to complete and submit a Commercial Rehabilitation funding application.Applications may only be submitted by the property owner. •The property/business must be owner operated for a minimum of one (1) year or rented where the business owner (renter) has operated a business from the structure for at least one (1)year prior to program entry.If a business is being relocated to Apache Junction; that business shall have been operating for a minimum of three (3) years prior to relocation. •Feasible for rehabilitation under the time and monetary constraints of this program. •Applicants must provide proof of their monetary contribution to the program, if applicable. For the purposes of eligibility, self help or "sweat" equity is not allowable forms of equity. •Proof of current insurance on the building must be provided. •Property owner and business owner must be current on all local taxes and hold the applicable privilege tax license. •A.R.S.1-501 and 1-502 requires that all applicants who receive services under the program shall provide proof of lawful presence in the United States including a sworn affidavit that the required documentation is true under penalty of perjury. •Property owner is to complete any recent construction project underway prior to the City's approval of commercial rehabilitation assistance. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 3 of 12 •Buildings of historical value may only be eligible upon review and approval by the State Historic Preservation Office. •The rehabilitation of buildings located in the 100 -year floodplain is not eligible for participation in the rehabilitation program;however,if the floodplain covers only the parking lot or open space on the site, the building may receive assistance. •Properties in lawful non -conforming zoning, properties with open unresolved building or code compliance cases and business/property owners unwilling to follow the City of Apache Junction Program Guidelines, are not eligible for services under this program. o Properties that are classified "lawful non -conforming" are not generally eligible for rehabilitation.However,if the proposed rehabilitation is non-structural and there are no properties waiting to be rehabilitated, lawful nonconforming properties that meet all other eligibility criteria may be considered. o Properties with an open building or code case are generally not eligible for rehabilitation.However if the case is relating to a correctable building condition that CRP funds can correct under the requirements of the program, then the unit will be deemed eligible. •Properties rehabilitated through this program must be free of any encumbrances such as liens or judgments.Properties may be encumbered by a mortgage in first position so long as a financial institution or other such mortgage/loan company holds that mortgage/loan; however, there must be sufficient equity remaining to justify placing a lien for the rehabilitation deferred payment loan in second position.Properties encumbered by mortgages/loans held by individuals or partnerships are not eligible unless a warranty deed is recorded and a lien may be placed on the property. Mortgage/loan payments and insurance premiums must all be current. The City cannot legally subordinate its liens. •Eligible activities include: 1.Labor & Materials for Building facade treatment improvements; 2.Labor & Materials for ADA improvements (exterior of building and restroom facilities); 3.Labor & Material for Replacement and/or upgrade of nonconforming signage; 4.Labor and Materials to address a code violation (e.g. heating, air conditions or sewer hookup with a documented code violation); and 5.Labor & Materials for Landscape/streetscape improvements. •Ineligible activities include but are not limited to demolition and the purchase City of Apache Junction Commercial Rehabilitation Program Guidelines,page 4 of 12 of materials only. SELECTION CRITERIA A notice of funding availability ("NOFA") will be made through the City's legal newspaper, within the two local papers and the City's website advertising the application submittal guidelines. Applications will be accepted at a specified date and time, reviewed and scored. They will be scored based upon the criteria identified in the NOFA by a City Manager appointed body. Applications submitted must be complete and will be reviewed only if the required documentation is submitted. The following will be taken into consideration when determining the priority of applications for inclusion in the project: a)The degree to which the goals of the program are met; b)The degree to which the program will improve a blighted property; C)The degree to which the project complies with or is in alignment with the design guidelines of the specific overlay zone or City design guidelines; d)The degree to which the façade improvements will improve the aesthetics of the immediate surrounding area (i.e., the streetscape, etc.); e)The degree to which the property owner and/or tenant will provide additional landscaping or site improvements to the property; f)The amount of leverage committed; g)The age and the physical condition of the building; and h)Value of unit after rehabilitation. The City of Apache Junction does require that the applicant contribute financially to the project in the form of cash called leverage. The applicants who provide more than the required leverage will be scored higher. Leverage requirements are dependent upon the project type. Project type Funding available Leverage requirement Exterior Rehabilitation $1,000 to $30,000 5% Signage $1,000 to $5,000 0% Building Code Issue $1,000 to $30,000 5% Landscaping Improvement $1,000 to $30,000 5% Each application will be processed by the appointed body and a response will be provided to the applicant within 60 business days of receipt of application. If an application is rejected (based upon financial reasons and level of risk), the applicant may submit a written appeal. The appeal must be submitted to the Business Advocate within 10 days from date of receipt of the rejection notice. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 5 of 12 CONTRACT REQUIREMENTS The approval of the project for funding will be contingent upon: a)A complete application; b)Verification of business and privilege licenses,tax payments,liens,and assessments; c)Verification of leverage commitment; d)Verification that the proposed project follows all local laws,ordinances, building codes, and design guidelines; e)A favorable score; and f)The availability of funding. PROGRAM ASSISTANCE Funds for the program are primarily provided through the:1)Community Development Block Grant Program ("CDBG") and 2) State Special Project funding ("SSP")as administered by the Arizona Department of Housing ("ADOH"). Additional funding sources may be used as they become available. Commercial rehabilitation assistance to property owners within the Crossroads Redevelopment Area and the Apache Trail Redevelopment Area may be in the form of grants and deferred payment/forgivable loans. The funding for each project is stipulated under each grant program from which the funding is expended.The eligible funding and the maximum investment may change with each funding year. However under no circumstance may the minimum investment be below $1,000 nor may the maximum investment exceed $30,000. Below is a guideline for program assistance based upon the project type: Project type Funding available Assistance provided Exterior Rehabilitation $1,000 to $30,000 Deferred payment/forgivable loan Signage $1,000 to $5,000 Grant Building Code Issue $1,000 to $30,000 Deferred payment/forgivable loan Landscaping Improvement i $1,000 to $30,000 Deferred payment/forgivable loan Grants are provided at no cost to the property or business owner. Grants may not be less than $1,000 and may not exceed $5,000. Grants may be offered for the purpose of signage and may be granted to the same property owner multiple times City of Apache Junction Commercial Rehabilitation Program Guidelines,page 6 of 12 with a change of renter/business but may only be offered to a business owner once. Deferred payment forgivable loans secured by a promissory note and a deed of trust may not be less than $1,000 and may not exceed $30,000 per project. A percentage of the total assistance provided on forgivable loans will be forgiven on the anniversary date of the execution of the recording of the loan instruments throughout the recapture period, provided that the commercial building continues to be occupied by the same property owner or a renter.There are no successor assignments allowed. The unforgiven balance of the loan shall become due and payable upon the sale, exchange or transfer of property or if the property remains vacant for a maximum of nine (9) months during the recapture period. Unabated code violations will be cause for calling in the balance of the loan. After execution of the loan,subordination agreements with lending institutions will not be honored since such practice is lending of City credit in violation of State constitutional law. Properties rehabilitated through this program must be free of any encumbrances such as liens or judgments.Properties may be encumbered by a mortgage in first position so long as a financial institution or other such mortgage company holds that mortgage; however, there must be sufficient equity remaining to justify placing a lien for the rehabilitation deferred payment loan in second position.Properties encumbered by mortgages/loans held by individuals or partnerships are not eligible unless a warranty deed is recorded and a lien may be placed on the property. LOAN CLOSING AND LIEN RECORDING PROCEDURES The Program Coordinator will be responsible for recording the required paperwork as determined by the loan. The lien will be recorded at the Pinal County Assessor's Office. The Deed of Trust will be placed on a tracking system by the Program Coordinator who will track the forgivable loan calculating the amount of dollars that will be forgiven as each year passes until the loan has been completely forgiven as outlined in the funding section of these guidelines. The City will be no lower than the first position on the lien of the property or second if a financial institution held first position prior to the City recording the loan documents. A provision shall be included by reference into the deed that all subsequent owners must maintain the façade and building Improvements in accordance with the City's Design Guidelines and accordingly correct any code violations that may occur. This specific provision shall remain in full force and effect and shall be considered a permanent covenant of the property deed. The provisions of this paragraph shall supersede the term of the loan and shall not be extinguished by any other instrument used for the legal exchange of the property's ownership. RECAPTURE PERIOD When a recipient elects to receive assistance in the form of a deferred payment forgivable loan, the following recapture periods apply. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 7 of 12 Amount of Funds Invested Per Unit Recapture Period $1,000 to $5,000 1 years $5,001 to $15,000 3 years $15,001 - $30,000 5 years When a recipient receives a deferred payment loan no further CRP investment can be made until after the recapture period has expired. There shall be no other prorating of the loan retirement schedule than as indicated above. LOAN SERVICING POLICY/SUBORDINATION Should a refinancing request be made by the property owner after the rehabilitation work has been completed and a lien has been placed on the structure and the request has been made prior to the end of the recapture period, the lien shall become due and payable to the City. Thus, should the refinance arrangement be a cash out, the City will require payment in full of the loan balance. The City will be no lower than first position on the lien of the property. As noted above, the City cannot subordinate the loan in any manner. REVOLVING LOAN FUND/PROGRAM INCOME The City of Apache Junction does not currently have a revolving loan fund. Therefore the City will be tracking all loans. In the event that funds are returned to the City, these funds will then be immediately circulated into the CRP, if approved by ADOH and will be utilized prior to the use of any new grant funds.These recaptured funds will be deposited into the Miscellaneous Grant Fund and will be tracked by the City's fiscal officer and City Manager. ADOH reserves the right to recapture any funds returned to the City. PROPERTY STANDARDS The property standards that must be achieved as a result of assisted rehabilitation are established by the most recently adopted Building Codes. An inspection will be conducted by a City Building Inspector to assist the property owner with the details of the project scope and to identify any applicable code violations or health and safety concerns. Eligible activities include: 1.Exterior Rehabilitation:This category can include, but is not solely limited to, building facades, masonry, adobe, brick re -pointing, awning improvements, lighting, entrance repair, restoration of architectural details, etc. Any façade renovations must be for the entire length and width of the façade. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 8 of 12 2.Signage Improvements:Replacement or refurbishment of business signage to enhance physical appearance of commercial corridors and increase business marketing opportunities. 3.Building Code Issues:This category allows eligible establishments to address interior repairs if they are building code violations. 4.Landscaping:Rehabilitating landscaping adjacent to building to include trees, plants, turf and ground cover. Ineligible costs include: 1.General maintenance 2.Roofs (unless they are building code violations) 3.Repairs covered by insurance, e.g., vandalism 4.Demolition 5.Interior Improvements (unless they are building code violations) 6.Purchase of materials only 7.Performance of work by applicant or applicant's own contractor (per H.U.D.) 8.Pre -agreement costs 9.Funds shall not be used for business operations 10. Parking lot paving Services may be provided, at no cost to the applicant, by an architectural firm to assist with the overall design of the façade. This covered service is available upon request by contacting the Program Coordinator. The design review process is applicable to all projects that are awarded under the CRP. This process is managed between the Development Services Department, property owner, and Program Coordinator. If the structure is 50 years or older all proposed work is to be submitted and reviewed by the State Historic Preservation Office ("SHPO"). No work shall begin on the structure until a review has been provided by SHPO. PROCUREMENT POLICY The application submitted shall include a detailed description of the work to be completed, a cost estimate and any applicable designs or architectural renderings. After the application has been received, the information verified and funding is available, the Program Coordinator and property owner will thoroughly discuss the work to be done. Once the project scope is approved by the property owner, the City will competitively procure,as allowable and appropriate under the law,a qualified contractor that meets all of the procurement requirements of the City of City of Apache Junction Commercial Rehabilitation Program Guidelines,page 9 of 12 Apache Junction and the program funder. The City shall obtain a minimum of two or more bids from licensed contractors to complete the project.Contractors will be required to meet all City of Apache Junction and Arizona Department of Housing requirements to be eligible to be awarded a contract. The contractor must hold a current City Privilege and Business License;have a valid contractor license from the State of Arizona; and hold the applicable professional insurance. If a contractor has not been pre-screened and is the low bidder, they must be qualified before a contract will be awarded to them. Additionally,any contractor participating in the CRP must be verified as being eligible to receive federal funds.Property owners will be instructed to select the lowest responsive and responsible bidder.The property owner may opt to pay the price difference between the low bid and the selected contractor's bid price.The contract will be between the property owner and the contractor.The City will serve only as an administrator/financier to the contract. The City wishes to encourage contractors to buy locally whenever possible. The City of Apache Junction encourages minority contractor participation in all projects to include Disadvantaged Business Enterprises e.g.Small Business Enterprises,Minority -owned Business Enterprises,and Women -owned Business Enterprises. A pre -bid meeting will be scheduled prior to the acceptance of the bids to invite all potential contractors to the project site to review the project scope in order to offer an accurate quote. The pre -bid meeting will also be utilized to answer questions and offer information to all contractors and the property owner. All change orders to the bid specification require the earliest prompt signature of the owner and the City in order to become valid. No change orders will be approved or paid if the work was completed prior to signed approval by the City. Change orders shall not exceed 10% of the total bid price unless the additional work was requested by the City. The City will monitor all rehabilitation during construction.If progress payments are called for in the contract, the property owner and the City will make an inspection of the work outlined in the work write-up scheduled for completion before a progress payment will be made. The Program Coordinator or his/her designee's signature will be required to execute any payments. In the event of any dispute between the owner and the contractor concerning the completion of rehabilitation,the City will work with both parties to negotiate a satisfactory solution.If a solution cannot be negotiated, the Business Advocate or his/her designee will be the final authority regarding when the job has been satisfactorily completed. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 10 of 12 No payments shall be made to the contractors without written approval from the City and the property owner, with the exception of disputed discrepancies which may be resolved and paid with the signature of the Business Advocate. LABOR STANDARD REQUIREMENTS All work completed by the contract shall fall under the U.S. Department of Labor's Davis Bacon Act. MARKETING The CRP will be advertised when funding is available. The marketing will be in the form of a NOFA and will be advertised in the City's legal newspaper, the two local papers and the City's website calling for participation. The City will make every effort to accommodate persons with disabilities and non- English speaking persons. STAFF STRUCTURE All administrative and supervisory work will be done by City Staff. The City Manager appointed body will review and score all application and make recommendation for contract award. The Program Coordinator will be responsible for the following: project management, procurement; change order approvals; payment and final inspection. The Program Coordinator can be reached at 300 East Superstition,Apache Junction, Arizona 85119.The Program Coordinator can also be contacted at (480) 474-5090 or TDD (480) 983-0095. REPORTING PROCEDURES Reporting for this program will follow the required reporting procedures of the funding source. CONFLICTS OF INTEREST 1)Any person who is an employee,agent,consultant,officer,or elected or appointed official of the City may not obtain a personal or financial interest or benefit from this activity, nor may they have an interest whatsoever, however remote, in a contract, subcontract or proceeds either for themselves, their family or business ties during their tenure, or for one year thereafter. 2)No contract will be awarded to a contractor who is related,or whose employee is related to the applicant by blood or marriage. City of Apache Junction Commercial Rehabilitation Program Guidelines,page 11 of 12 COMPLAINT AND GRIEVANCE PROCEDURE Applicants, program participants, or prospective contractors may initiate a complaint by submitting concerns in writing to the City of Apache Junction Business Advocate, or his/her designee, at 300 East Superstition Boulevard, Apache Junction, Arizona 85119. The Business Advocate, or his/her designee, is responsible for receiving, reviewing, and responding to all complaints including prequalification of applicant or contractor qualification.The City shall issue a written response to any complaint within ten (10) working days of receipt. If unsatisfactory to the complainant, a written appeal of the City's response shall be filed within ten (10) working days of receipt of the City's response. Appeals shall be made to the City Manager,by sending such appeal to 300 East Superstition Boulevard, Apache Junction, Arizona, 85119 Attn: City Manager.The City Manager shall be the final administrative decision maker. Further judicial appeals shall be in accordance with A.R.S. Title 12, 12-901. Assistance from the City in preparing a grievance is available at no charge if needed due to either a disability or language limitation. Assistance will be provided at (480)474-5090 TDD (480)983-0095;FAX (480)474-5102 or 300 East Superstition Boulevard, Apache Junction, Arizona 85119. NON DISCRIMINATION The City of Apache Junction, or any of its sub recipients, do not discriminate in any activity on the basis of race, color, religion, sex, disability, familial status, or national origin. CHANGES TO PROGRAM GUIDELINES The CRP Guidelines are generally adopted with revisions annually, however should an emergency change within the CRP Guidelines as adopted by the City Council be required throughout the program year, the Mayor shall submit a letter in writing to the Arizona Department of Housing ten (10) business days prior to the effective date. FORMS Notice of Funding Availability Construction Contract Application Work Write Up Deed of Trust Review Criteria Rating Form Promissory Note Certification of Work Completed Loan Agreement Lien Waiver City of Apache Junction Commercial Rehabilitation Program Guidelines,page 12 of 12