COUNTY COUNCIL OF WICOMICO COUNTY, MARYLAND. Resolution No

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1 , COUNTY COUNCIL OF WICOMICO COUNTY, MARYLAND 2015 Legislative Session Legislative Day No. 17 Resolution No Introduced by: The President of the Council at the request of the County Executive A RESOLUTION TO APPROVE AN AGREEMENT FOR PAYMENT IN LIEU OF TAXES WITH BOOTH STREET PHASE I. LLC AND AUTHORIZING THE COUNTY EXECUTIVE TO EXECUTE THE AGREEMENT. WHEREAS. the Wicomico County Housing Authority provides safe. sanitary and decent housing for low Income citizens of Wicomico County; and WHEREAS. Booth Street Phase L LLC Intends to acquire from the Wicomico County Housing Authority a long-term leasehold estate In the real property popularly known as "Booth Street Apartments" that will be redeveloped in two phases. into an 168 unit apartment complex. Phase I shall consist of 84 units. for low income citizens of Wicomico County-Booth Street Phase t LLC will manage said complex; and WHEREAS. in accordance with Section of the Tax-Property Article of the Annotated Code of Maryland. Booth Street Phase I. LLC and the County may enter into an agreement for negotiated payments in lieu of real property taxes (PILOT PAYMENTS) on the 1 84 housing units of Phase I; and WHEREAS. the County and Booth Street Phase I. LLC wish to enter Into the Agreement for Payment in Lieu of Taxes. attached as Exhibit "A", setting forth the rights and responsibilities of each party and the amount to be paid to the County In lieu of property taxes. NOW. THEREFORE. BE IT RESOLVED by the County Council of Wicomico County, Maryland that: 1. The County Executive of Wicomico County. Maryland Is authorized to enter into an Agreement for Payment In Lieu of Taxes with Booth Street Phase I. LLC. 2. The Agreement for Payment in Lieu of Taxes shall be in substantially the same form attached as Exhibit "A" and made a part hereof. and In such form the Agreement for Payment in Lieu of Taxes is hereby approved as to form and content. Done at Salisbury, Maryland. this 18th day of August

2 ATIEST: COUNTY COUNCIL OF WICO ICO COUNTY, MARYLAND Matthew E. Creamer, Council Administrator CERTIFICATION

3 AGREEMENT FOR PAYMENT IN LIEU OF TAXES EXHIBIT I A This Agreement is made this day of, 2015, by and among Wicomico County, Maryland, a body corporate and politic, and Booth Street Phase I, LLC, a Maryland limited liability company. PREAMBLE Wicomico County, Maryland (the "County") recognizes that there is a significant need for quality affordable housing units in the County for senior citizens. Booth Street Phase I, LLC may acquire, from the Wicomico County Housing Authority, a long-term leasehold estate in the real property popularly known as "Booth Street Apartments" which occupies parcels more particularly described on Exhibit A, and, thereafter, demolish the existing structures and develop an eighty-four (84) unit apartment complex restricted to households with incomes at or below sixty percent (60%) of the area median income, together with community facilities and certain ancillary amenities (collectively. the "Project"). Of the eighty-four (84) units within the Project, fifty (50) units (the "RAD Units") shall constitute units developed to replace demolished public housing units in accordance with the Rental Assistance Demonstration program ("RAD") of the U.S. Department of Housing and Urban Development ("HUD") and benefitting from and restricted by the low-income housing tax credit program under Section 42 of the Internal Revenue Code (the "LIHTC Requirements"). The remaining thirty-four (34) units shall not be subject to RAD, but shall be subject to the LIHTC Requirements only (the "LIHTC-only Units"). The County is duly authorized to enter into and deliver this Agreement pursuant to the County's duly adopted Resolution No. _ The parties hereto, upon the mutual understanding that the Project may be operated in conformity with Section of the Tax-Property Article of the Annotated Code of Maryland ("Section 7-505") or similar legislation pertaining to payments in lieu of the county's real property tax, wish to enter into this Agreement for negotiated payments in lieu of real property taxes to facilitate the acquisition and operation of the Project and, thereby, continue to make available to citizens of the County needed affordable housing and on-site services for families with incomes at or below sixty percent ( 60%) of the area median income in conformity with Section or similar legislation pertaining to payments in lieu of the County's real property tax. NOW, THEREFORE, in consideration of the premises, the parties agree as follows: l. Representations. Booth Street Phase I, LLC makes the following affirmative representations as the basis for the undertakings on the County's part herein contained: (a) (i) Booth Street Phase I, LLC is a limited liability company duly formed under the laws of the State of Maryland; (ii) Booth Street Phase I, LLC has the legal capacity to own and operate the Project and has all necessary right and authority to enter into this Agreement DMEAST # v3

4 for the full term hereof; and (iii) this Agreement has been duly authorized by the managing member of Booth Street Phase I, LLC. (b) This Agreement has been duly executed and delivered on behalf of Booth Street Phase I, LLC and constitutes the legal, valid and binding obligation of Booth Street Phase I, LLC enforceable in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights. (c) Booth Street Phase I, LLC intends to operate the Project in conformity with Section or similar legislation pertaining to payments in lieu of the county's real property tax at all times during the term of this Agreement. 2. PILOT. The payments to be made by Booth Street Phase I, LLC and its successors and or assigns to the County, provided for herein with respect to the Project, shall be in lieu of certain Wicomico County real property taxes (the "PILOT Payment"). 3. Duration. Provided that the Project continues to be owned by Booth Street Phase I, LLC or its successors and or assigns and is operated in accordance with this Agreement, then, for twenty-five (25) years beginning with the date Booth Street Phase I, LLC acquires long-term leasehold title to the real property, hereinafter referred to as the "PILOT Period," the Project shall be exempt from Wicomico County real property taxes. From and after termination of said 25 year period, or such earlier date that the Project is no longer operated in accordance with this Agreement, the Project shall be subject to all regular real property taxes that may be levied, and Booth Street Phase I, LLC and its successors and/or assigns shall be liable for such taxes in accordance with applicable law. 4. PILOT Payments. During the PILOT Period, Booth Street Phase I, LLC and its successors and/or assigns agrees to pay to the County, and the County agrees to accept each year in lieu of County real property taxes, a Pilot Payment to be determined as follows: 40% of the assessed valuation of the LIHTC-only Units only (34 Units), times the Wicomico County tax rate as determined and changed from time to time, to the effect that such PILOT Payment shall be 40% of the amount which would be payable as taxes with respect to the improvements if the LIHTC-only Units (34 Units) were subject to regular Wicomico County and/or City of Salisbury municipal levy, and nothing shall be paid with respect to the land. The remaining fifty (50) Units of this 84 unit Project shall remain exempt. The PILOT Payment due to the County shall be reduced in any year that Booth Street Phase I, LLC also makes a payment in lieu of taxes to the City of Salisbury (the "City PILOT Payment") by the amount of the City PILOT Payment. The PILOT Payment shall be billed by Wicomico County and become due and payable at the same time as County real property taxes. The LIHTC- only Units shall be assessed and reassessed from time to time as though for purposes of County taxation according to the regular methods and practices applicable to other real property of a similar classification in Wicomico County. 5. Rights and Remedies. Booth Street Phase I, LLC and its successors and/or assigns shall make its PILOT Payment as and when taxes would otherwise be due in the absence of this Agreement. In the event of nonpayment, the County shall have the right to terminate this Agreement upon sixty (60) days prior written notice to Booth Street Phase I, LLC and its successors and/or assigns and to each of the mortgage lenders and investors listed on Exhibit B DMEAST # v3 2

5 attached hereto and as may be amended by notice to the County from time to time (collectively, the "Lenders"); provided, however, that if the PILOT Payment is made within such sixty day period, this Agreement shall remain in full force and effect. 6. Occupancy Requirements. This Agreement shall remain in full force and effect for as long as Booth Street Phase I, LLC and its successors and or assigns shall rent all residential units in the Project designated for families with incomes at or below 60% of the area median income, and shall hold all vacant units available for rent to families with incomes at or below 60% of the area median income who qualify for affordable housing as determined from time to time by HUD and LIHTC Requirements or any successor organization to which administrative authority is transferred or any other similar program. 7. Term. The County shall have the right to terminate this Agreement at any time by written notice to Booth Street Phase I, LLC if the Project is no longer being operated in accordance with this Agreement; provided, however, Booth Street Phase I, LLC shall have a reasonable period of not less than one hundred twenty ( 120) days after written notice of such noncompliance to bring the Project back into compliance. Without limiting the generality of the foregoing, a reasonable time shall include such time as may be necessary to evict any noncomplying tenants and to re-let their units; provided, however, the Project shall not be deemed to be non-compliant if a tenant satisfied the income requirements upon admission but is determined to be over-income upon annual income recertification as long as an income-eligible tenant is admitted to the next available unit within the Project. In the event this Agreement is terminated for any reason, after any applicable notice and cure period and the failure to cure such breach, then the Project shall only be subject to pay the County real property taxes that it would otherwise be obligated to pay on a go forward basis from the date of said termination had this Agreement not been in effect but, in no event, shall the Project be subject to, nor shall Booth Street Phase I, LLC and its successors and/or assigns be required to reimburse the County for any real property taxes that were waived prior to the termination of this Agreement. 8. Assignment. This Agreement shall bind and inure to the benefit of the parties hereto and their parents, subsidiaries, affiliates, successors and assigns. This Agreement may be assigned by Booth Street Phase I, LLC and its successors and/or assigns upon written notice to and consent by the County. DMEAST 1# v3 3

6 ATTEST: WICOMICO COUNTY, MARYLAND R. Wayne Strausburg, Director of Administration Bob Culver, County Executive STATE OF MARYLAND, WICOMICO COUNTY TO WIT: I HEREBY CERTIFY that on this day of, 2015, before me, the subscriber, a Notary Public, in and for the state and county aforesaid, personally appeared Bob Culver, who acknowledged himself to be the County Executive of Wicomico County, Maryland, and that he, as such Executive, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing, in my presence, the name of the County by himself as Executive and certified under due form of law that the matters and facts hereinbefore set forth are true and correct to the best of his knowledge, information and belief. AS WITNESS my hand and Notarial Seal. Notary Public My Commission Expires: DMEAST # v3

7 WITNESS: BOOTH STREET PHASE I, LLC By: Booth Street Phase I Managing Member, LLC, its managing member By: Pennrose GP, LLC, its managing member Mark H. Dambly, President STATE OF MARYLAND, WICOMICO COUNTY TO WIT: I HEREBY CERTIFY that on this day of 2015, before me, the subscriber, a Notary Public, in and for the state and county aforesaid, personally appeared Mark H. Dambly, who acknowledged himself/herself to be the President of Pennrose GP, LLC, the managing member of Booth Street Phase I Managing Member, LLC, which is the managing member of Booth Street Phase I, LLC, and that he/she, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing, in my presence, the name of the Company by himself/herself as President and certified under due form of law that the matters and facts hereinbefore set forth are true and correct to the best of his/her knowledge, information and belief. AS WITNESS my hand and Notarial Seal. Notary Public My Commission Expires: OMEAST # v3 5

8 LEGAL DESCRIPTION EXIDBIT "A" PARCEL 1 BEING KNOWN AND DESIGNATED AS Lot 1 as shown on a plat entitled "Resubdivision for Booth Street Town Homes" dated December 2, 2014, and recorded in the land records of Wicomico County in Plat Book MSB 16, page 546. Being also all that property described by metes and bounds description and shown on an ALT A/ACSM survey entitled "Booth Street Lot 1" dated February 18, 2015, as revised, and performed by KCW Engineering Technologies, Inc., described as follows: Beginning for the same at a cement post found on the Northern right of way line of Booth Street, 60 feet wide as shown on a plat entitled "Revised Property Survey for Crestwood, Inc.," and recorded among the land records of Wicomico County in Plat Book 652, page 73, also at a point at the beginning of North 2 degrees 24 minutes West foot plat line as shown on the aforementioned plat (652n3); thence,1eaving the point of beginning as now surveyed by KCW Engineering Technologies, Inc. with all bearings being referenced to the Maryland State Coordinate System, and running with and binding on the Western boundaries of the aforementioned plat (652/73), 1. North 10 degrees 34 minutes 11 seconds West feet to a cement post found at a point on the Second or North 74 degrees 30 minutes East 215 foot line of a lot of land designated Item First which, by deed dated May 8th, 2000 and recorded among the land records of Wicomico County in Liber 1746, folio 90, was granted by Sara W. Menne to Flora Humphreys and Patricia Gail Phillips; thence, running with and binding on the remainder of the aforementioned Second deed line ( 1746/90), 2. North 67 degrees 16 minutes 49 seconds East feet to the beginning of the Third or North 03 degrees 24 minutes West 85 foot deed line as described in the aforementioned deed ( 1746/90); thence, running with and binding on all of the aforementioned Third deed line ( 1746/90), 3. North 10 degrees 34 minutes 11 seconds West feet to an iron pipe found at the beginning of the North 75 degrees 27 minutes East foot plat line as shown on the aforementioned plat (652/73); thence, leaving the Western boundaries of the aforementioned plat (652n3) and running with and binding on part of the aforementioned foot plat line (652173), 4. North 67 degrees 16 minutes 49 seconds East feet to the end of the third or North 14 degrees 33 minutes West foot line of a parcel of land which, by deed dated September 26, 1968 and recorded among the land records of Wicomico County in Liber 679, folio 14, by Crestwood, Inc. to Wicomico County Housing Authority; thence, running reversely with and binding on all of the aforementioned Third deed line (679/14), 5. South 22 degrees 43 minutes 11 seconds East feet; thence leaving the aforementioned 3nl deed line (679/14) 6. North 85 degrees 17 minutes 29 seconds East feet; thence 7. North 67 degrees 16 minutes 49 seconds East feet; thence DMEAST # v3

9 8. South 22 degrees 43 minutes 11 seconds East feet to a point on the South 75 degrees 27 minutes West foot plat line as shown on the aforementioned plat (652n3); thence, running with and binding on the remainder of the aforementioned foot plat line (652173), 9. South 67 degrees 16 minutes 49 seconds West feet to the point of beginning, containing acres of land more or less. Being a part of a parcel of land, which by deed dated July 19, 1968 and recorded among the land records of Wicomico County in Liber 674, folio 545, was granted by Crestwood, Inc. to Wicomico County Housing Authority. Being part of a parcel of land, which by deed dated September 26, 1968 and recorded among the land records of Wicomico County in Liber 679, folio 14, was granted by Crestwood, Inc. to Wicomico County Housing Authority. DMEAST # v3 2

10 LIST OF LENDERS AND INVESTORS EXHIBIT ''B" Community Development Administration Maryland Department of Housing and Community Development 7800 Harkins Road Lanham, MD JPMorgan Chase Bank, N.A. c/o Community Development Banking 90 l 15th Street NW, ll th Floor Washington, DC ACP-ILP, LLC Alden Capital Partners Tax Credit Fund 16, LP FNBC Leasing Corporation c/o Alden Capital Partners, LLC Ventura Blvd. Suite 600 Los Angeles, CA DMEAST # v3 3