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Home My WebLink AboutECHDA22-12 Conditional Commitment Letter_Haymeadow, Phase IEAGLE COUNTY HOUSING AND DEVELOPMENT AUTHORITY CONDITIONAL COMMITMENT LETTER December 20, 2022 7 Hermit Condos, LLC RE: ECHDA Conditional Commitment Letter Haymeadow, Phase 1 Dear Mr. Cohen: ECHDA staff has reviewed the application for funding submitted by 7 Hermit Condos (“7 Hermit”) for the Haymeadow, Phase 1, a seven building, 76 unit condominium unit development on approximately 5 acres of land located in Eagle, CO (the “Project”). The Project consists of 18 1 bedroom, 1 bath units and 54 2 bedroom, 2 bath units. The Parties understand that 7 Hermit may, in its discretion, choose to convert 6 of the 18 1 bedroom, 1 bath units to 2 bedroom, 2 bath units. 7 Hermit is requesting ECHDA enter into a bulk sale agreement for purchase of 43 2 bedroom, 2 bath condos at $600,000 per unit ($25,800,000 total purchase), with the estimated subsidy of $6,880,000 to serve as a deposit for the ECHDA bulk sale, all as described in the following paragraph. The 43 units are identified on the site plan attached hereto as Exhibit A. The total ECHDA subsidy will be based on the maximum initial sales prices that would be set by ECHDA on the resale of the units. If ECHDA partners to purchase 43 units, 7 Hermit will additionally commit to delivering 18 Town of Eagle priced capped units (Local Employee Residence Program) units (9 are required in Phase 1, 9 in future phases) and 15 Town of Eagle Resident Occupied (as defined in Paragraph 13, Section 2 of Town of Eagle, Colorado Ordinance No. 13 – Series of 2021) units (of a total of 30 RO units required before Haymeadow develops its 150th unit) which would deliver 76 deed restricted units, the entirety of Haymeadow Phase 1. Additionally, if ECHDA partners to purchase 43 units, 7 Hermit has agreed to construct all 7 buildings in Phase 1 with electric only mechanical systems with a Coefficient of Performance of 3.0 or higher. Some of the HOA electric utilities will be offset by PV systems. Haymeadow Phase 1 is fully entitled. 7 Hermit indicates construction will begin in March 2023 with delivery of the first building estimated March 2024 and roughly one building monthly until completion, estimated during the summer of 2024. The Parties understand that a contract has not yet been signed with the general contractor and depending on the timing of finalizing the GMP contract, and the bulk sale agreement contemplated in this commitment letter, this schedule is subject to change. DocuSign Envelope ID: 72479F36-CF48-4727-A5BF-A6CA91D9E77F Following review of 7 Hermit’s funding application, and based on the criteria in the Eagle County Housing Guiding Principles document and an evaluation of existing units and other projects under development, staff recommends ECHDA commit to a bulk purchase of 43 2 bed, 2 bath units at $600,000 per unit and 21 garages priced at $30,000 per unit by providing 7 Hermit a $6,880,000 deposit, the estimated total subsidy. The total value of the bulk sale is $26,430,000 or 43 units priced at $600,000 per unit plus 21 garages priced at $30,000 per unit. ECHDA will sell the units subject to a price capped deed restriction to Eligible Households, defined by the Eagle County Affordable Housing Guidelines. The total value of the subsidy to record 43 price capped deed restrictions against the units will be determined by ECHDA at the time of resale. Staff estimates the units may sell at an Initial Maximum Sales price that is affordable to households earning 120% of Area Median Income or $440,000 per unit and agree the units will be sold at an average price that would be affordable to households earning not less than 100% AMI. At a regularly scheduled public meeting held on December 20, 2022, the ECHDA Board reviewed 7 Hermit’s request for partnership, and heard presentations from County staff and 7 Hermit representatives. Based on the criteria in the Eagle County Housing Guiding Principles document and an evaluation of existing units and other projects under development, and subject to the terms and conditions set forth below, the ECHDA Board approved a commitment for the deposit for the Project in an amount not to exceed $6,880,000 (the “Deposit”), which sum represents $160,000 per unit/price-capped deed restriction (the “Commitment”). The terms and conditions of the Commitment are as follows: 1. The Commitment is subject to approval and execution of a bulk sale agreement between 7 Hermit and the ECHDA that outlines the terms of the purchase, including, but not limited to, deposit security, total funding amount, timing of funding, timing of building delivery, timing of recording of deed restrictions, and assignment rights of construction contract (the “bulk sale agreement”). 7 Hermit understands and agrees that this bulk sale agreement must be approved by the ECHDA Board at a regularly scheduled and public meeting. 7 Hermits further understands and agrees that the Deposit will be secured through a deed of trust on the Phase 1 Property which will be subordinate to the construction loan for Phase 1. 2. The term of the bulk sale agreement is anticipated to be 18-24 months (“Term”), and it is anticipated that the Deposit will be disbursed upon execution of the bulk sale agreement and may be used by 7 Hermit to pay costs of development of the Project and shall not be held in escrow. 7 Hermit shall commence and diligently pursue construction of the Project during the Term. In the event 7 Hermit is unable to commence construction or if 7 Hermit stops construction during the Term, the bulk sale agreement may be terminated in the ECHDA’s sole discretion and no further funds shall be disbursed by the ECHDA for the Project. In such event, 7 Hermits shall return the Deposit to ECHDA within seven (7) days of termination. ECHDA agrees to waive any remedy for specific performance. If, after payment of the Deposit, ECHDA reasonably DocuSign Envelope ID: 72479F36-CF48-4727-A5BF-A6CA91D9E77F determines that payment was improper because the purposes for which the payment was made were misrepresented, or the terms of the bulk sale agreement were breached, then upon written notice of such determination and request for reimbursement from ECHDA, 7 Hermit shall forthwith return the Deposit to Eagle County. 3. Notwithstanding the foregoing, the ECHDA shall not disburse the Deposit until 7 Hermit demonstrates to the satisfaction of the ECHDA that it has secured additional funding commitments from other sources sufficient to fully fund construction of the Project. 7 Hermit agrees that upon request of ECHDA staff, it shall provide ECHDA or its representatives with access to its books and records and proformas for the Project and shall further provide copies of any commitment letters of funding agreements from other sources for the funding of the Project. 4. 7 Hermit agrees that the Deposit shall be used and expended solely for construction of the Project, as specified herein and in its ECHDA funding application dated August 24, 2022. 5. This Conditional Commitment Letter has been issued to 7 Hermit on the basis of certain information and materials provided by 7 Hermit to the ECHDA. ECHDA and 7 Hermits each reserve the right to terminate or amend this Conditional Commitment Letter based upon information which comes to their attention after the date of this letter. Any misinformation, misrepresentation, or withholding of material information incident hereto or the occurrence of any material adverse change to 7 Hermit, its funding for Haymeadow, Phase 1 or the Project, the composition or unit mix of the Project or Haymeadow Phase 1, or the nature of the deed restrictions shall, at the sole option of ECHDA and without limitation to any other right or remedy of ECHDA, void this Conditional Commitment Letter and all of ECHDA’s conditional commitments hereunder. 6. This Conditional Commitment Letter supersedes all prior written (including, but not limited to, any grant application executed in connection with the funding) or oral understandings with respect hereto. No modification or waiver of any provision of this Conditional Commitment Letter shall be effective unless the same shall be in writing and signed by all the parties hereto. It is also hereby intended that this Commitment shall not survive the execution of the bulk sale agreement and that once executed, the bulk sale agreement shall set forth the entire agreement of the parties regarding the Project Please confirm your agreement to the foregoing terms and conditions of the Conditional Commitment Letter by signing below. Eagle County Housing and Development Authority By: Its: Jeanne McQueeney 7 Hermit Condos, LLC By: _________________ Its: __________________ DocuSign Envelope ID: 72479F36-CF48-4727-A5BF-A6CA91D9E77F Brandon Cohen DocuSign Envelope ID: 72479F36-CF48-4727-A5BF-A6CA91D9E77F