HomeMy WebLinkAbout185 - 01/07/2014 - AUTHORIZING THE RELEASE OF RESTRICTIVE COVENANTS ON PROPERTY AT 405 LINDEN STREET OWNED BY THE FORT ORDINANCE NO. 185, 2013,
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE RELEASE OF RESTRICTIVE COVENANTS
ON PROPERTY AT 405 LINDEN STREET OWNED BY
THE FORT COLLINS HOUSING AUTHORITY
WHEREAS; on October 1, 2001 the City and the Fort Collins Housing Authority
("Authority") entered into a Recipient Contract, through which the Authority received a grant
from the City of $174,931 in Community Development Block Grant (CDBG) funds to
rehabilitate affordable rental housing units in Fort Collins; and
WHEREAS, the Authority used $8,400 of the CDBG funds to replace the roof and siding
on a single-family house at 405 Linden Street owned by the Authority (the "Property"); and
WHEREAS, the terms of the Recipient Contract, as amended in May 2003, require the
Authority to restrict the benefitted housing units to households with income equal to or less than
50% of the area median income 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 October 1, 2001, the Authority 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 Authority 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 Authority ever fail to comply with them; and
WHEREAS, the terms of the Recipient Contract do not require the Authority to repay the
CDBG funds, and neither the Recipient Contract nor the Covenant allows for the Covenant to be
released if the Property is sold or the funds are repaid before the twenty-year affordability period
expires; and
WHEREAS, as part of the Authority's long-term plan to sell single family homes and
reinvest the funds into more cost-effective multi-family housing, the Authority is asking the City
to release the Covenant with respect to the Property, so that the Property can be sold for
redevelopment; and
WHEREAS, as a condition of releasing the Covenant, the Authority has agreed to repay
the $8,400 of CDBG funds invested in the Property and to provide a comparable 3-bedroom
replacement unit within the next five years; and
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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 23-1 11 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, the repayment to the City of$8,400 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 Authority's request at the
Board's regular meeting on December 5, 2013 and voted to recommend the release of the
Covenant so long as a replacement unit is provided.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. 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 2. That the City Manager is hereby authorized to execute such documents as
are necessary to release the Covenant and to document the Authority's obligation to provide a
replacement three-bedroom unit within five years 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.
Introduced, considered favorably on first reading, and ordered published this 17th day of
December, A.D. 2013, and to be presented for final passage on the 7th day of January, A.D.
2014.
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Passed and adopted on final reading on the 7th day of January, A.D. 2014.
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