HomeMy WebLinkAboutECHDA24-03 Conditional Commitment Letter_Eagle VillasEagle County Housing and
Development Authority
Matt Scherr,Chair
970-328-8605
www.eaglecounty.us
EAGLE COUNTY HOUSING AND DEVELOPMENT AUTHORITY
CONDITIONAL FUNDING COMMITMENT LETTER
February 27,2024
Mr.Connor Larr
Ulysses Development Group LLC
210 University Blvd,Suite 460,
Denver,CO 80206
RE:ECHDA Conditional Funding Commitment Letter for the benefit of
Eagle Villas Apartments located in Eagle,Colorado
Dear Mr.Larr:
Eagle County staff has reviewed the application for funding submitted by Ulysses Development
Group (together with any designated affiliate of Ulysses Development Group,“UDG”)for the
acquisition and resyndication of Eagle Villas Apartments,a 120-unit low income apartment
complex located in Eagle,CO (the “Project”).The Project consists of 120 low income rental
units with rental rates affordable to households earning between 45-60%AMI.The Project was
originally financed utilizing the Low Income Housing Tax Credit (“LIHTC”)program that has
preserved the low rental rates utilizing a Land Use Restriction Agreement (“LURA”).The 30
year term of the LURA for 100 units expires at the end of 2024.The remaining 20 units are
subject to a LURA that expires in 2047.
UDG proposes to acquire the Project in the spring of 2024 and in the spring of 2025 will
resyndicate the Project utilizing the LIHTC program to extend the Project’s affordability for 60
years.UDG will commit to making 108 of the units affordable to households earning between
45%-60%AMI with up to 12 units affordable to households earning up to 80%AMI.The
proposed resyndication plan includes capital investment estimated at $8 million to include
internal upgrades,external upgrades,and sustainability upgrades.
UDG has requested the following from ECHDA:$6.5 million in subordinate debt,of which $3.5
million will be repaid to ECHDA at resyndication,ECHDA’s participation in the project as a
special limited partner to effectuate property,sales,and use tax exemption,Eagle County’s
private activity bond allocation for both 2024 and 2025,ECHDA’s application to the state of
Colorado for $13.2 million in Private Activity Bond Capacity from the Statewide Balance,and
an inducement resolution of $29 million in tax exempt bonds.
DocuSign Envelope ID: 8ED9BF45-1205-4815-B6AC-E525F9EB72AF
At a regularly scheduled public meeting held on February 27,2024,the ECHDA Board reviewed
UDG’s request for funding,and heard presentations from staff and UDG representatives.Based
on the foregoing,the ECHDA Board approves the following conditional funding commitment,
subject to the terms and conditions set forth below (“Commitment”):
1.Receipt of an executed Purchase and Sale agreement between UDG and Eagle Villas
LLC for the purchase of the 120 unit Eagle Villas apartment project by March 30,2024.
2.A $6,500,000 loan will be made by ECHDA to UDG at Project acquisition (“Loan”).The
Loan is subject to approval and execution of a loan agreement between UDG and
ECHDA that outlines the funding amount,timing,and other terms and conditions.UDG
understands and agrees that an estimated $3,500,000 will be repaid to ECHDA at
resyndication,with a maximum $3,000,000 long term loan.UDG understands and agrees
that any loan agreement must be approved by the ECHDA Board at a regularly scheduled
public meeting.
3.Upon resyndication,UDG will invest an estimated $8 million in capital improvements
that will include internal (kitchen,bath,appliances),external (roofs,parking lot
resurfacing)and sustainability upgrades (heat pumps,PV,to facilitate a transition to high
efficiency electric utilities and the feasibility of a geothermal system)to the Project.UDG
will share improvement plans with ECHDA.
4.Upon approval of participation by the ECHDA Board,ECHDA will acquire an
ownership interest in and become a special limited partner of a limited liability limited
partnership,or similar entity,formed to own the units.The ECHDA ownership interest is
intended to facilitate qualification of the Project for an exemption from real property
taxes and from sales and use taxes,to the extent attributable to the units,and as otherwise
approved by applicable governmental authorities.Participation by ECHDA in the limited
liability limited partnership is subject to approval and execution of a limited partnership
agreement between UDG and the ECHDA that outlines the terms of the partnership,roles
of the partners and length of exemption.UDG understands and agrees that the limited
partnership agreement must be approved by the ECHDA Board at a regularly scheduled
public meeting.Upon the admission of ECHDA to the limited liability limited
partnership,ECHDA agrees to use its commercially reasonable efforts,at no cost to
ECHDA,to take such actions as reasonably necessary to facilitate the tax exemption for
the 120 units.Notwithstanding the foregoing,UDG understands and acknowledges that
the proposed tax exemption is subject to approval each year by the Eagle County
Assessor and may be subject to change based on State law.
5.ECHDA will submit an application for an allocation of up to $13,200,000 of the State of
Colorado’s 2024 Statewide Private Activity Bond Balance on behalf of UDG to support
the Project.The application will be submitted on or prior to the March 1,2024 deadline.
6.ECHDA will execute and approve agreements required to be included as part of the
Statewide Private Activity Bond Balance application,including,but not limited to an
DocuSign Envelope ID: 8ED9BF45-1205-4815-B6AC-E525F9EB72AF
Inducement Resolution,a Due Diligence Certificate,and Statewide Balance Allocation
request.
7.ECHDA will support UDG’s request to Eagle County Government and to any other entity
that has excess Private Activity Bond Capacity,all of which will be used to support the
resyndication of the Project.UDG will be responsible for securing all Private Activity
Bond Capacity necessary to fund the Project.
8.This Commitment shall terminate 12 months from the date of the ECHDA’s approval of
this Commitment.
9.The ECHDA shall not disburse any proceeds from the Loan until UDG demonstrates to
the satisfaction of ECHDA that it has secured additional funding commitments from
other sources sufficient to fully fund the acquisition of the Project.UDG agrees that
upon request of County 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.
10.UDG agrees that,upon resyndication,a LURA will be recorded against all 120 units
preserving the affordability of the majority of units at 45%-60%AMI,with no more than
12 units at 80%AMI for a minimum of 60 years.
11.UDG shall indemnify,defend and hold harmless the ECHDA,Eagle County,and any of
their respective officers,agents and employees against any losses,claims,damages or
liabilities for which ECHDA and/or County may become subject to insofar as an such
losses,claims,damages or liabilities arise out of,directly or indirectly,this Commitment,
or are based upon any performance or nonperformance by UDG or any of its
sub-recipients hereunder including claims for bodily injury or personal injury including
death,or loss or damage to tangible or intangible property;and UDG shall reimburse
ECHDA and/or County for reasonable attorney fees and costs,legal and other expenses
incurred by ECHDA and/or County in connection with investigating or defending any
such loss,claim,damage,liability or action.This indemnification shall not apply to
claims by third parties against the ECHDA and/or County to the extent that ECHDA
and/or County is liable to such third party for such claims without regard to the
involvement of UDG or to claims arising from the gross negligence or willful misconduct
of ECHDA.
12.This Commitment has been issued to UDG on the basis of certain information and
materials provided by UDG to ECHDA.ECHDA reserves the right to terminate or
amend this Commitment based upon information which comes to its 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 UDG,its
funding for the Project,the composition or unit mix of the Project,the nature of the
Special Limited Partnership,or the nature of the LURA shall,at the sole option of
ECHDA and without limitation to any other right or remedy of ECHDA,void the
DocuSign Envelope ID: 8ED9BF45-1205-4815-B6AC-E525F9EB72AF
Commitment and all of ECHDA’s conditional commitments hereunder. Further, UDG
and ECHDA understand and acknowledge that no legal obligations are created by this
Commitment, and that neither UDG nor ECHDA will have any legal obligations with
respect to the proposed transaction (unless and until definitive agreements are executed
and delivered by both parties and approved and ratified by the Board, as provided above,
and only as provided therein).
13. The terms of this Commitment set forth the entire agreement of the parties with respect to
the subject matter hereunder, and supersedes all prior written or oral understandings with
respect hereto. No modification or waiver of any provision of this Commitment 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 loan
agreement and the limited liability limited partnership agreement and that once executed,
the loan agreement and the limited liability limited partnership agreement shall set forth
the entire agreement of the parties.
Please confirm your agreement to the foregoing terms and conditions of the Commitment by
signing below.
Eagle County Housing and Development Authority
By: ________________________________
Its: ________________________________
Ulysses Development Group
By: __________________________
Its: ____________________________
DocuSign Envelope ID: 8ED9BF45-1205-4815-B6AC-E525F9EB72AF
Connor Larr
Matt Scherr