HomeMy WebLinkAbout028 - 03/15/2016 - AUTHORIZING THE RELEASE OF RESTRICTIVE COVENANTS ON PROPERTY AT 520 CHERRY STREET OWNED BY THE FORTORDINANCE NO. 028, 2016
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE RELEASE OF RESTRICTIVE COVENANTS
ON PROPERTY AT 520 CHERRY STREET OWNED BY
THE FORT COLLINS HOUSING CORPORATION
WHEREAS, on February 21, 2003, the City entered into a Recipient Contract with the
Fort Collins Housing Corporation, now known as Villages, Ltd. (the "Corporation"), the non-
profit development arm of the Fort Collins Housing Authority(the "Authority"); and
WHEREAS, through the Recipient Contract, the Corporation received a grant from the
City of $258,000 in Community Development Block Grant (CDBG) funds to rehabilitate 16
affordable rental housing units in Fort Collins; and
WHEREAS, the Corporation used $30,100 of the CDBG funds to replace the roof and
make interior and exterior repairs to a duplex at 520 Cherry Street owned by the Corporation(the
Property"); and
WHEREAS, the terms of the Recipient Contract require the Corporation to use the
Property for affordable rental housing in accordance with federal law for not less than twenty
years; and
WHEREAS, the Recipient Contract gave the City the right to require a deed of trust or
other security interest in properties improved using the CDBG funds and to require, in addition
to or in lieu of a deed of trust, a deed restriction on such properties to protect the City's interest
in the funds provided under the-Recipient Contract; and
WHEREAS, on February 21, 2003, the Corporation and the City also entered into an
Agreement of Restrictive Covenants Affecting Real Property (the "Covenant"), which placed a
twenty-year affordability requirement on multiple properties owned by the Corporation and
improved with CDBG funds under the Recipient Contract, including the Property; and
WHEREAS, the Covenant gives the City the right to enforce the terms and conditions of
the Covenant should the Corporation ever fail to comply with them; and
WHEREAS, the terms of the Recipient Contract do not require the Corporation to repay
the CDBG funds, and neither the Recipient Contract nor the Covenant allows for the Covenant to
be released before the twenty-year affordability period expires if the Property is sold or the funds
are repaid; and
WHEREAS, the Corporation has been approached by the owner of a residential property
adjacent to the Property who would like to buy the Property and replat it to increase the size of
her existing lot; and
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WHEREAS, the Corporation would like to sell the Property to the neighbor and so has
asked the City to release the Covenant with respect to the Property in exchange for repayment of
the $30,100 of CDBG funds invested in the Property; and
WHEREAS, the City's right under the Covenant to restrict the use of the,Property
constitutes an interest in real property owned by the City that the City would be giving up by
releasing the Covenant; and
WHEREAS, Section 23-111(a) of the City Code states that the City Council is authorized
to sell, convey or otherwise dispose of any interest in real property owned in the name of the
City, provided that the City Council first finds, by ordinance, that such sale or other•disposition
is in the best interests of the City; and
WHEREAS, approval of this request will result in the loss of two affordable rental units
in the City, but the sale of the Property will generate sales proceeds that the Authority can use for
future affordable housing projects, and the repayment to the City of$30,100 in CDBG funds will
allow the City to make those funds available for future affordable housing projects; and
WHEREAS, the Affordable Housing Board reviewed the Corporation's request at the
Board's regular meeting on February 4, 2016, and. voted to recommend the release of the
Covenant so long as the CDBG funds were repaid and the Corporation agreed to restrict two
currently unrestricted units for the duration of the Covenant, if such a restriction would be
financially prudent; and
WHEREAS, the Corporation has since notified the City that it has determined it would
not be feasible to restrict two additional units.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY,OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That the City Council hereby finds that releasing the Covenant on the
Property on the terms and conditions described herein is in the best interests of the City.
Section 3. That the City Manager is hereby authorized to execute such documents as.
are necessary to release the Property from the Covenant upon repayment of the CDBG funds, on
terms'and conditions consistent with this Ordinance, along with such other terms and conditions
as the City Manager, in consultation with the City Attorney, determines are necessary or
appropriate to protect the interests of the City or effectuate the purposes of this Ordinance.
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Introduced, considered favorably on first reading, and ordered published this 1 st day of
March, A.D. 2016, and to be presented for final passage on the 15th day of March,A.D. 2016.
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City Clerk
Passed and adopted on final reading on the 15th day of March, A.D. 2016.
Mayor
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City Clerk
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