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HomeMy WebLinkAboutC08-054PROPERTY MANAGEMENT AGREEl'~NT This PROPERTY MANAGEMENT AGREEMENT (this "Agreement") is entered into as of January 1, 2008 between SENIORS ON BROADWAY LP, a Colorado limited partnership ("Owner") and COUNTY OF EAGLE, STATE OF COLORADO, a body corporate and politic, by and through its Board of County Commissioners ("County"), with reference to the following: WHEREAS, Owner is governed by its Amended and Restated Agreement of Limited Partnership dated as of October 1, 2007 ("Partnership Agreement") between Seniors on Broadway LLC ("General Partner") and NDC Corporate Equity Fund VII, L.P. ("NDC"). WHEREAS, Owner is constructing a fourteen (14) unit low income housing apartment complex in Eagle, Colorado ("Project"). WHEREAS, County, which is an affiliate of General Partner, has the personnel and resources to professionally manage the Project. WHEREAS, Owner wishes to obtain the benefits of County's expertise in the field of real estate management by contracting with the County for the County to manage the Project subject to the terms and provisions of this Agreement, and County for a fee wishes to manage the Project on behalf of Owner. NOW, THEREFORE, in consideration of the mutual covenants herein contained and of other good and valuable consideration, the parties hereto agree as follows: ARTICLE 1 APPOINTMENT Owner hereby contracts with County to manage, operate and maintain the Project on behalf of Owner and to provide services as required under Article 6 of this Agreement. County hereby accepts this appointment. ARTICLE 2 TERM Subject to and upon the terms and conditions set forth herein, this Agreement shall commence on January 1, 2008 ("Commencement Date") and shall continue in force, ending on December 31, 2008 ("Original Term"). The term will be automatically renewed at the end of the Original Term or any later Renewal Term (each term after the Original Term being referred to herein as a "Renewal Term") for an additional one year, unless terminated in accordance with the provisions of this Agreement. Except for increases to the Base Rate used to calculate the Management Fee pursuant to Article 3, the terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term. ARTICLE 3 MANAGEMENT FEE Management Agreement (00166290-2) (3).DOC In consideration of the performance by County of its duties and obli ations hereunder Owner shall pay to County a management fee (Mana>ement Fee") equal ~o the Base Rate multiplied by the amount Gross Receipts. The "Bas_ a Rate" during the Original Term will equal 6.3%, and the Base Rate will increase by 3% on January 1 of each subsequent year (such that the new Base Rate will equal the prior Base Rate multiplied by 103%). "Gross Receipts" shall mean all amounts received from the operation of the Project including, but not limited to, rents, parking fees, security deposit forfeitures (but not security deposits), laundry income, and fees. No later than the fifth day of the month County shall pay the Management Fee for the prior month and submit to Owner an invoice detailing the calculation for the payment thereof. As an affiliate of Owner, County agrees that if gross receipts in any month are not sufficient to pay operating expenses (as described in Section 5.7), up to 60% of the Management Fee shall accrue without interest until sufficient gross receipts are available, at which time accrued portions of the Management Fee shall be then due and payable. ARTICLE 4 RELATIONSHIP 4.1 County is Actine for Account of Owner. All actions by County in performing its duties and providing services pursuant to this Agreement shall be for the account of the Owner. 4.2 Delegation and Assi inept. County shall have the right to delegate its responsibilities under this Agreement to employees of County or to engage independent contractors for performance of any part of the services to be provided hereunder. Neither the Owner, nor the County, shall assign all or any part of this Agreement without the prior written consent of the other party to this Agreement. ARTICLE 5 SERVICES OF COUNTY 5.1 Management and Operation. The County shall manage, operate and maintain the Project in a manner normally associated with the management and operation of a reasonable quality apartment project and in a manner reflective of the standards set forth by the real estate management industry. 5.2 Em loo ees. County shall have in its employ at all times a sufficient number of capable employees to enable it to properly and safely manage, operate and maintain the Project. The compensation of any employees (i.e., salary, bonuses, payroll tax, insurance, workman's compensation and other employee benefits) dedicated full-time to the Project shall be paid by Owner. A portion of the compensation of employees dedicated part time to the Project and part time to non-Project matters, shall be paid by Owner based on the percentage of time spent on the Project. All matters pertaining to the employment, supervision, compensation, promotion and discharge of such employees are the responsibility of the County. 5.3 Bud ets. County shall prepare and submit to Owner a proposed operating budget and a proposed capital budget for the management and operation of the Project for the Management Agreement (00166290-2) (3).ppC 2 forthcoming calendar year by October 15 of each year. Owner shall consider the proposed budgets, consult with the County, and agree on an approved operating budget and an approved capital Budget for the forthcoming calendar year as provided for in Section 3.16 of the Partnership Agreement. The approved budgets shall serve as a guideline to the County in maintaining and operating the Project, and County agrees, subject to the provisions of Article 6, to use diligence and to employ all reasonable efforts in order to effect that the actual cost of maintaining and operating the Project shall not exceed the approved budget pertaining thereto. 5.4 Collection of Receivables. County shall use reasonable and diligent efforts, including collection suits and proceedings, but subject to Owner's prior approval, to collect promptly all rents (including laundry income and all other income) and other charges which may become due at any time from any tenant or from others for services provided in connection with or for the use of the Project or any portion thereof. County shall collect and identify any income due Owner from miscellaneous services provided to tenants or the public, including, but not limited to, cleaning income, tenant storage and coin operated machines of all types (e.g., vending machines, pay telephones, etc.). In connection with such suits or proceedings, only legal counsel designated by Owner shall be retained. Ali legal expenses incurred in bringing such approved suit or proceeding shall be submitted to Owner for its approval. County shall not write off any income items without prior approval of Owner. 5.5 Leasing. County shall be responsible for the leasing of the Project. County shall have the specific authority to negotiate leases and rental agreements in connection with amendments, renewals, extensions, modification or cancellation of existing leases and preparation of new leases. County shall make every reasonable effort to .obtain and keep desirable tenants for the Project and perform whatever services may be required in connection with the above mentioned negotiations. 5.6 Repairs. Decoration Alterations. County will cause the Project to be maintained and repaired in accordance with state and local codes in a condition acceptable to Owner. Without limiting the generality of the foregoing, County shall institute and supervise all ordinary and extraordinary repairs, decorations and alterations, including the administration of a preventive maintenance program for all mechanical, electrical and plumbing systems and equipment. Notwithstanding the generality of the foregoing, except for developing the capital budget, County shall not be responsible for instituting or supervising mayor construction and rehabilitation projects except as may be provided in a separate agreement with Owner. 5.7 O erating Activities. County shall institute and supervise all operational activities of the Project, such as, but not limited to, the following; (a) Supervision of the security on behalf of the Owner; (b) Responsibility and supervision of maintenance, repair and replacement of landscaping; (c) Responsibility and supervision of a preventive maintenance program; Management Ageement (00166290-2) (3).DOC 3 (d) Responsibility and supervision for any necessary maintenance or repairs to the Project; and (e) Any other activity incidental to the normal operation of an apartment project 5.7 Expenses. The County shall pay from the Project operating account all authorized operating expenses, including property taxes (to the extent not abated) and insurance premiums. Operating expenses shall not include contingent ground lease rent and residual receipt loan payments. 5.8 Relationship. County shall handle all operational banking matters related to its contractual responsibility hereunder. Owner shall designate which bank(s) or financial institutions County shall use in discharging this responsibility. 5.9 Maintenance of Records. County shall maintain complete and identifiable records, and files on all matters pertaining to the Froject. Such records, and records and financial reports shall be available to the Owner during business hours upon two (2)• business day prior written notice. 5.10 Tenant Security Deposits. Security deposits shall be kept by County in a bank or financial institution approved by Owner, and in accordance with laws applicable to tenant security deposits. County shall maintain detailed records. of all security deposits and such records will be open for inspection by Owner. 5.11 Books. Cards Etc. All books, cards, registers, receipts, documents, disks, tapes and any other papers or electronic records connected with the operation of the Project are the sole property of Owner, and County will not publish, transmit or release said information to any party without the prior consent of Owner. ARTICLE 6 COUNTY'S AUTHORITY 6.1 Approved Oneratin Budget. Owner's approval of the approved operating budget shall constitute approval for County to expend money from the Project operating account in order to operate and manage the Project, and County may do so without further approval as long as County does not exceed the aggregate amount set for in the approved operating budget for any calendar quarter. The expenditures in excess of the approved operating budget which do not cumulatively vary more than fifteen percent (15%) from said approved budget in any fiscal quarter may be made upon filing with the Owner a requisition for additional operating expenses which further specifies the percentage variance from the original approved operating budget. 6.2 Approved Capital Budget Owner's approval of the approved capital budget shall not constitute an authorization for County to expend any money for capital expenditures. Any capital expenditure must be specifically authorized by the Owner. With respect to the purchase and installation of major items of new or replacement equipment, County shall recommend that Owner purchase the items when County believes such purchase to be necessary or desirable. Management Agreement (~1662~-2) (3).DpC 4 Owner may arrange to purchase and install the same itself or may authorize County to do so subject to prescribed supervision and specification requirements and conditions. Unless Owner specifically waives such requirements in writing, all capital equipment, new or replacement, with a cost to obtain and install exceeding $5000 shall be awarded on the basis of competitive bidding. 6.3 Contracts. County may enter into contracts for maintaining, repairing or servicing the property and any of the constituent parts of the property subject to the approved operating budget. 6.4 Compliance with Laws. It is the intent of the Owner that the Project be operated in full compliance with federal, state and municipal laws, ordinances, regulations and orders relative to the use, operation, repair and maintenance of the Project and with the rules, regulations or orders of the local Board of Fire Underwriters or other similar body. County shall promptly endeavor to remedy any violation or potential violation of any such law, ordinance, rule, regulation or order which comes to its attention and shall promptly report any violation or potential violation and proposed action to be taken to Owner. 6.5 Emergen ~. In case of emergency, County may make expenditures for repairs which exceed budget or prior approvals from Owner without prior written approval if it is necessary to prevent damage or injury. Owner must be informed of any such expenditures within the next five (5) business days. 6.6 Structural Char es. The Owner expressly withholds from the County any power or authority to make any structural changes in any building or to make any other major alterations or additions in or to any such building or equipment therein, or to incur any expense chargeable to the Owner other than expenses related to exercising the express powers above vested in the County without the prior written direction of the Owner. ARTICLE 7 INSURANCE Owner has obtained insurance in Owner's name and at Owner's expense, insuring against physical damage, liability for loss against business interruption, and damage or injury to property or persons of third persons which may arise out of the occupancy, management, operation or maintenance of the Project. County shall (a) notify Owner with twenty-four (24) hours after County receives notice of any such loss, dama a or in of liability) which might bar Owner from obtaining any protec t o affo ded by an h of Oission may hold or which might prejudice Owner in its defense to a claim based on suchloss, damage or injury; and (c) agree that Owner shall have the exclusive right, at its option to conduct the defense to any claim, demand or suit within limits prescribed by the policy or policies of insurance. ARTICLE 8 OWNER' S RIGHT TO AUDIT Management Agreement (166290-2) (3).DOC S Owner reserves the right for Owner' s employees or others appointed by Owner, to conduct examinations, of the books and records maintained for Owner by County. Owner also reserves the right to perform any and all additional audit tests relating to County's activities; either at the Project, or at any office of the County, provided such audit tests are related to those activities performed by County for Owner. Any and all such audits conducted either by Owner's employees or appointees will be at the sole expense of Owner. ARTICLE 9 BANK ACCOUNTS 9.1 Oneratine Account. The County shall deposit daily all rents and other funds collected from the operation of the Project in a bank approved by Owner. County shall pay the operating expenses of the Project and any other payments relative to the Project as required by the terms of this Agreement from the operating account. 9.2 Security Deposit Account. County shall keep and maintain security deposits in a separate account pursuant to Section 5.10 herein. 9.3 Change of Banks, Owner may direct the County to change a depository bank or the depository arrangements for a Project account. 9.4 Access to Accounts. Owner shall be permitted access to the Project accounts through additional signature cards if requested. ARTICLE 10 IlVSUFFICIENT INCOME If at any time the gross income (or cash in the operating account) from the Project shall not be sufficient to pay the bills and charges which may by incurred with respect to the Project, the County shall notify Owner immediately upon first projection or awareness of a cash shortage or .pending cash shortage and Owner and County shall jointly determine payment priority. County shall not be obligated to pay said expenses and charges from its own account. After County has paid, to the extent of available funds, all bills and charges based upon the ordered priorities set jointly by Owner and County, County shall submit to Owner a statement of all remaining unpaid bills. Owner shall immediately and without delay make all reasonable effort to provide sufficient monies to pay any unpaid expenses before they become delinquent. ARTICLE 11 TERMINATION 11.1 Termination by Owner for Cause. Owner may terminate this Agreement upon the occurrence of any of the following events: (a) (i) the filing of a voluntary petition in bankru tc (•~ ) bankrupt or insolvent; iii filing of any merger petit onl or anslwer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or Management Agreement (W166290-2) (3).DOC similar relief under any present or future statute or law relating to bankruptcy, insolvency, or other relief for debtors, whether federal or state; (iv) County seeking, consenting to, or acquiescing in the appointment of any trustee, receiver, conservator or liquidator' of County, or of all or any substantial part of its properties (the terms "acquiescing," as used herein, shall be deemed to include but not be limited to the failure to file a petition or motion to vacate or discharge any order, judgment or decree providing for such appointment within the time specified by law) (v) a court of competent jurisdiction entering an order, judgment or decree approving a petition filed against County seeking any reorganization arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute or law relating to bankruptcy, insolvency or other relief of debtors, whether federal or state, and County either consents to or acquiesces (as hereinabove defined) in the entry of such order, judgment or decree, or such order, judgment or decree shall remain unvacated or unstayed for an aggregate of sixty (60) days from the date of entry thereof; or (vi) the appointment of a trustee, receiver, conservator or liquidator of County of all or any substantial part of its properties without the consent of or acquiescence of County which remains unvacated or unstayed for an aggregate of sixty (60) days; or (b) (i) County fails to perform any of its services in the manner or within the time required herein; or, (ii) County commits or permits a breach of or default in any of its duties, liabilities or obligations hereunder, and in either case such event remains uncured for a period of fifteen (15) days after written notice thereof from Owner to County. 11.2 Termination by Owner Without Cause. Even in the absence of any other express right to terminate this Agreement, Owner may terminate this Agreement upon thirty (30) days' prior written notice to County. 11.3 Termination by County for Cause. County may terminate this Agreement upon the occurrence of a breach of or default by Owner in any of its duties, liabilities or obligations hereunder, which remains uncured for a period of thirty (30) days after written notice thereof from County to Owner. 11.4 Effect of Termination. If this Agreement is terminated by any ply as provided above, it is further agreed: (a) Notwithstanding any other provision herein to the contrary, the County's right to compensation shall cease as of the effective date set forth in the notice of termination, except that County shall be entitled to all monies owed to County by Owner up to the effective date of termination. (b) That County's powers and authority under this Agreement shall cease and terminate at the effective date set in the notice of termination and County shall in no event make any expenditure in excess of that shown on the approved operating or capital Management Agreement (1~16b240-2) (3).DOC '] budget unless authorized in writing by the Owner to be charged. (c) County shall deliver to Owner the following with respect to the Project: (1) a final accounting after termination of this Agreement, reflecting the balance of income and expenses on the Project as of the effective date of termination to be delivered within fifteen (15) days after such termination; and (2) any balance or monies of Owner held by County with respect to the Froject, shall be delivered immediately after such effective termination date and thereafter promptly after same are received by County. ARTICLE 12 TERMINATION Upon termination of this Agreement, County will give to Owner all books, cards, registers, receipts, documents, tapes, disks and other information with respect to the Project. ARTICLE 13 COUNTY'S LIABILITY 13.1 Limitation of Liability and Indemnity. Except as otherwise stated herein, County shall not in the performance of this Agreement, be liable to Owner or to any other person for any act or omission of any agent or employee of Owner or County, or its subsidiaries or affiliates, unless the same results from negligence or willful misconduct of the County, its officers, employees or agents. Owner shall indemnify, protect, defend and hold harmless County from and against any and all claims, demands, actions, liabilities, losses, costs, expenses, damages, penalties, interest, fines, injuries and obligations, including reasonable attorneys' fees, court costs and litigation ,expenses ("Claims") incurred by County resulting from performance of its obligations under this Agreement, except that this indemnification shall not apply with respect to any Claims resulting from any act or failure to act constituting negligence or willful misconduct of the County. 13.2 Good Faith Com liance. Notwithstanding any other provisions of this Agreement, in no event shall Owner make any claim against County, or its affiliates on account of any alleged errors of judgment made in good faith in connection with the operation of the Project hereunder by County or the performance of any advisory or technical services provided by or arranged by the County. Owner shall not object to any expenditures made by County in good faith in the course of its management of the Project or in settlement of any claim arising out of the operation of the Project unless such expenditure is specifically prohibited by this Agreement. ARTICLE 14 NOTICES All notices, demands, consents and reports provided for in this Agreement shall be in writing and shall be given to Owner or County at the address set forth below or at such other address as they may specify hereafter in writing: Management Agreement (00166240-2) (3).DOC g - If to Owner: Seniors on Broadway LP 500 Broadway Eagle, CO 81631-0850 Attention: President With a copy to NDC NDC Corporate Equity Fund VII, L.P. c/o NDC Housing and Economic Development Corporation 708 Third Avenue, Suite 710 New York, NY 10017 Attention: Chairman If to County: County of Eagle 500 Broadway Eagle, CO 81631-0850 Attention: Chairman Such notice or other communication may be mailed by United States mail, postage prepaid, and maybe deposited in a United States Post Office or a depository for the receipt of mail regulazly maintained by the post office. Notice delivered by mail shall be deemed given the third business day after deposit in the United States mail; notice delivered by facsimile shall be accompanied by mailing a copy within one day' after transmission and shall then be. deemed given the first business day after confirmed delivery. ARTICLE 15 MISCELLANEOUS 15.1 Construction. This Agreement shall be interpreted for the plural to include the singular and the singular to include the plural as the context may require. 15.2 Ame_ n_, Except as otherwise herein provided, any and all amendments, to this Agreement shall be null and void unless approved by the parties hereto in writing. 15.3 Hea-~. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. 15.4 Complete A reement. This Agreement supersedes and takes the place of any and all previous negotiations, representations, and oral agreements between the parties hereto. 15.5 Waiver. The waiver of any of the terms and conditions of this Agreement on any occasion or occasions shall not be deemed as waiver of such terms and conditions on any future occasion. 15.6 Bindin Nature. This Agreement shall be binding upon and inure to the benefit of Owner, each of his successors and/or permitted assigns, and shall be binding upon and inure to Management Agreement ((m166290-2) (3).DOC 9 the benefit of County, and its permitted assigns. 15.7 Governin Law. This Agreement shall be construed, interpreted and applied in accordance with and shall be governed by, the laws applicable in the State of Colorado. 15.8 Counteroarts, 'T'his Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute the same instrument [Remainder of Page Intentionally Left Blank] Management Agreement (00166290-2) (3).DOC 1 Q IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Owner: SENIORS ON BROADWAY LP, a Colorado limited partnership By: Seniors on Broadway LLC, a Colorado limited liability company, its general partner By: Golden Eagle Elderly Housing Corporation, a Colorado nonprofit corporation, its sole member By: Name: Sara J. fisher Title: President County: COUNTY OF EAGLE, STATE OF COLORADO, a body corporate and politic, by and through its Board of County Commissioners ay: ~~~ Name: Peter F. Runyon Title: Chairman