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HomeMy WebLinkAboutCRA-R-23-0015 Wynwood Works Finance CommitmentsHOUSING December 30th, 2022 Humberto Gonzalez, Executive Director Omni Development District Community Redevelopment Agency 1401 N Miami Avenue, 2"4 Floor Miami, FL 33136 Re: Financing Commitments in the Agreement for Development of Property dated and effective as of November 24, 2020 (the "Original Agreement"), by and between the OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY, a public agency and body corporate created pursuant to Section 163.356, Florida Statutes (the "CRA"), and WYNWOOD WORKS, LLC, a Florida limited liability company (the "Developer"), as amended by that certain First Amendment to Agreement dated May 19, 2022, that certain Second Amendment to Agreement dated June 23, 2022, that certain letter from the CRA dated as of July 28, 2022, that certain letter from the CRA dated as of October 21, 2022, that certain Third Amendment to Agreement dated October 26, 2022, and that certain letter from the CRA dated as of November 18, 2022 (collectively with the Original Agreement, the "Agreement"). Dear Mr. Gonzalez: Pursuant to Section 8 of the Agreement, December 31, 2022, is the deadline for the Developer to obtain all applicable Financing sources and/or credits for the Project (as defined in the Agreement). In satisfaction of this requirement, attached, please find all financing commitments for Wynwood Works. • $6,000,000 OMNI-CRA Land Contribution (See Agreement) • $9,900,000 OMNI-CRA Financing Grant (See Agreement) • $30,000,000 Construction Bond/ $9,945,000 (Attachment 1) • $23,824,445 Partnership LIHTC Equity (Attachment 2) • $3,500,000 City of Miami GOB (Attachment 3) • $3,500,000 City of Miami NRD-1 (Attachment 4) Financoal Analysis 4% LINTC iEI3 & Mortgage - Private Placement Wynwod Works Sources of Funds: OMNI CRA - land OMNI CRA - Grant Tax Exempt Bonds Construction permanent $ 6,000,000 $ 6,000,000 $ 9,900,000 $ 9,900,000 $ 30,000,000 $ 9,945,000 Partnership UHTC Equity $ 3,573,666 $ 23,824,445 $ 3,500,000 $ 3,500,000 City of Miami - NRD-1 ; $ 3,500,000 $ 3,500,000 Developer Fee Equity (deferred/waived) $ 8,302,616 , $ 4,733,691 RI TOTAL SOURCES $ 64,776,282 $ 61,403,136 F City of Miami - GOB Uses of Funds: Construction Bond Pre -Payment Acquisition Costs Construction Costs Financing and Legal Costs Soft Costs Developer Fee Project Reserves $ 12,349,460 'j $ $ 6,300,177 $ $ 41,531,083 $ $ 3,756,592 $ $ 838,970 $ $ - $ - $ 6,270,000 41,531,083 3,756,592 838,970 8,302,616 703,875 TOTAL USES $ 64,776,282 $ 61,403,136 I GAP/SURPLUS Sincerely yours, Nick Inamdar Wynwood Works, LLC c/o Magellan Housing, LLC 2100 Coral Way, Suite 405 Miami, FL 33145 Attachment 1 RBC Capital Markets' Housing Finance Authority of Miami -Dade County Multifamily Mortgage Revenue Bonds, Series 2022 (Wynwood Works) SUMMARY OF PRELIMINARY FINANCING ASSUMPTIONS DECEMBER 27, 2022 This Summary of Preliminary Financing Assumptions (Summary) has been prepared for convenience of discussion and reference purposes only. This Summary is not an exhaustive description of the terms and conditions that RBC Capital Markets, LLC (RBCCM or the Underwriter) may reasonably require and RBCCM reserves the right, in its sole discretion, to modem or supplement terms considered reasonable and customary for transactions of this nature. This Summary is not a commitment to underwrite bonds or a commitment to extend credit, make a loan or otherwise fund the bonds or project. Any transaction that results from this Summary is subject to credit, legal, risk and business approvals. Any commitment will only occur upon the negotiation of mutually agreeable terms and the completion of customary documentation and opinions. In the event of a conflict between this Term Sheet and transaction documents, the latter shall govern. Issue: Housing Finance Authority of Miami -Dade County, Florida $30,000,000* Multifamily Mortgage Revenue Bonds, Series 2022 (Wynwood Works) Rating: Unrated Anticipated Closing The issue is expected to close in February- March, 2023 Restrictions: Minimum denominations of $250,000 and initial investor letter. A Limited Offering Memorandum will be prepared summarizing the transaction. The cover of the LOM will contain the following statement: EACH INITIAL PURCHASER OF THE BONDS WILL BE REQUIRED TO CERTIFY THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A OF THE SECURITIES ACT BY EXECUTING AND DELIVERING AN INVESTOR LETTER IN THE FORM ATTACHED TO THE LIMITED OFFERING MEMORANDUM.. THE BONDS MAY ONLY BE TRANSFERRED TO A FUTURE PURCHASER UPON DELIVERY TO THE TRUSTEE OF AN INVESTOR LETTER IN THE FORM DELIVERED BY THE INITIAL PURCHASER UPON CLOSING OF THE ISSUE. Method of Sale: Limited Public Offering Underwritten by RBC Capital Markets Financing: The Bonds are limited obligations of the Issuer payable solely from and equally and ratably secured by a pledge of (i) the revenues of the project which will be used to make payments due on the mortgage loan, which payments will, in turn, be used to pay debt service on the Bonds, (ii) all interest of the Issuer provided for under the Mortgage Loan, the Note, the Loan Agreement (except for certain reserved rights), and the Land Use Restriction Agreement, (iii) the present and continuing right to receive, collect, or make claim for any moneys, income, revenue, Developer: profits and other amounts payable or receivable under the above referenced documents, (iv) all funds and accounts held by the Trustee under the Indenture and earnings thereon (other than moneys in the Rebate Fund or Cost of Issuance Fund). Upon issuance of the Bonds, the Issuer will use the Bond proceeds together with approximately $24,000,000* of LIHTC syndication proceeds and various subordinate loan funds in the amount of $22,900,000 to finance the acquisition and construction of the development. The subordinate financing includes the following sources: $6,000,000 OMNI- CRA land contribution, $9,900,000 OMNI- CRA funds, $3,500,000 in funding from the City of Miami and $3,500,000 NRD-1 Public Benefits Trust Fund Contribution. The tax exempt bond financing will consist of approximately $30,000,000* in bonds that will finance the acquisition and construction of the development and will be secured by a first mortgage. Approximately $20,055,000* of the Bonds will be repaid from a portion of the proceeds from the sale of the 4% low income housing tax credit and various subordinate loan funds ("Construction Bonds") and $9,945,000* in Bonds will serve as permanent financing of the development and will remain outstanding for a 18* year term, will amortize over a 40* year period and will be supported by rental revenue generated from the property ("Permanent Bonds"). The Construction Bonds will be subject to special mandatory redemption [36 months] following closing. Magellan Housing, LLC ("Magellan"), is the Manager of the General Partner of the Owner and is the Manager of the Developer. Magellan is a national real estate firm that builds and operates high quality housing to serve every income level. Managing Partners, Nick Inamdar and Amay Inamdar have a combined 30 years of experience in project management, legal structuring, and finance. Nick Inamdar will direct and coordinate development efforts to completion. His relevant experience includes coordinating development of numerous Miami projects in scope and size to the proposed project. He is past chairman of the board for the Florida statewide affordable and workforce housing industry organization, the Coalition of Affordable Housing Providers (CAHP). Developer Partner: Greystone Affordable Development will serve as Developer partner during the construction phase and is among the largest developers of affordable rental housing in the United States. As a leader within the affordable housing industry, Greystone provides creative solutions as well as disciplined transaction management, development, and leadership to get deals done right the first time. They believe that Development: well-built housing and community development serve as catalysts for durable economic transformation. Tanya Eastwood is the President and CEO and is responsible for the strategic growth and implementation of Greystone's affordable housing development efforts. As the founder for Greystone's Affordable Development team, she has facilitated the development and preservation of nearly 15,000 affordable apartment homes with another 5,800 units in various stages of completion across 12 states. Wynwood Works will be a signature 12-story green -certified mixed -income and mixed -use development located at 2035 North Miami Avenue, City of Miami, Florida. The development includes 120 apartments of mixed income housing set -asides for tenants at approximately the following Area Media Income (AMI) levels and will utilize the IRS LIHTC income averaging rules: • 10%at30%AMI • 10%at50%AMI • 60% at 60% AMI • 20% at 80% AMI Development Features: • Mixed -Use community with approximately 4,550 sq ft of ground floor commercial space. • Green Certification incorporating an environmentally responsible plan that identifies "best -practice" green strategies during construction, operation, and maintenance. • Modern Energy Star rated appliances and state of the art security system. • Secured automobile parking. Unit Mix SF/Unit Total SF Type of Unit Total Unit Mix 550 2,200 0 Bedroom/ 1 BA - 30% 4 550 2,200 0 Bedroom/ 1 BA - 50% 4 550 18,150 0 Bedroom/ 1 BA - 60% 33 550 3,850 0 Bedroom/ 1 BA - 80% 7 750 5,250 1 Bedroom/ 1 BA - 30% 7 750 5,250 1 Bedroom/ 1 BA - 50% 7 750 27,000 1 Bedroom/ 1 BA - 60% 36 750 12,000 1 Bedroom/ 1 BA - 80% 16 950 950 2 Bedroom/ 1 BA - 30% 1 950 950 2 Bedroom/ 1 BA - 50% 1 950 2,850 2 Bedroom/ 1 BA - 60% 3 950 950 2 Bedroom/ 1 BA - 80% 1 81,600 Total 120 Debt Service Reserve Fund: Replacement Reserves: Structure: Sinking Fund: Mandatory Redemption: Optional Redemption: Mandatory Redemption: The owner of development will be Wynwood Works, LLC (the "Borrower") and will be managed by Wynwood Works Manager, LLC (the "General Partner"). The Limited Partner with a [99.99%] cwnership interest is expected to be RBC Community Investments, LLC, or an affiliate thereof. There will be a Debt Service Reserve funded in the amount of six months* of the annual debt service payment on the Permanent Bonds funded from tax exempt bond proceeds at closing. Such amount will be held in an account under the Trust Indenture. In the event funds are not on deposit to make monthly principal and interest payments, the Debt Service Reserve may be drawn by the Trustee to make payments due on the Bonds. The Debt Service Reserve Fund will be subject to replenishment. An Operating Reserve will also be funded in an amount equal to six months* of operating expenses. Replacement Reserves will be funded from cash flow on an ongoing basis in an amount equal to $300* per unit per year which will be subject to periodic increases based on physical needs assessments. The Construction Bonds will pay interest only and will be subject to mandatory redemption in 36 months. The Permanent Bonds will pay interest monthly at a fixed rate and following an initial three year* interest only period, will amortize over a 40* year period. The Bonds will be subject to mandatory tender/redemption in 18* years. The Permanent Bonds will begin mandatory sinking fund amortization three* years following the date of issuance. The Permanent Bonds will be subject to mandatory tender/redemption on the first day of the month 18 years following Bond issuance*. The Construction Bonds may be redeemed from LIHTC contributions or subsidy funds following the date when the units have been placed in service and the project receives a certificate of occupancy. The Permanent Bonds will be subject to optional redemption at par plus accrued interest on or after the first day of the month following the 141 anniversary of Bond issuance. The Bonds are subject to mandatory redemption at par plus accrued interest: 1) to the extent any excess funds remain in the Project Fund following initial construction, 2) in the event of material damage or destruction of the project left uncured or condemnation of the project (to be paid from insurance proceeds, deposited after claim with the Trustee or to be paid from condemnation proceeds), 3) in an Event of Default, 4) from Interest Terms: available funds to achieve a debt service coverage ratio of at least 1.15X for a three month period at the time of payment of the final installments of housing credit equity, 5) at the option of the Significant Bondholder at a price of par in the event of a Determination of Taxability or a price of 103% if action or inaction of the Borrower is the cause of such event or 6) as otherwise set forth in the Indenture. The Bonds will bear interest at a fixed rate payable monthly on the first of each month. The interest rate will be determined at the time of pricing as the lowest rate at which the Bonds may be sold at a price of par (100%). Based on market conditions as of December 27, 2022, the estimated rate on the Construction Bonds was 4.87%* and the estimated rate on the Permanent Bonds was 5.57%* (calculated assuming a spread of 240 basis points over the applicable Municipal Market Data index as of such date: 3 Year for Construction Bonds and 17 Year for Permanent Bonds). Tax Status: Non-AMT Construction Security: The Contractor will provide a payment and performance bond in the amount of the construction contract. Construction Completion Guaranty: Operating Deficit Guaranty: The Developer will be required to guarantee completion of construction of the property. In addition, the contractor has a direct obligation to the Trustee under an assignment agreement to complete the project. The Borrower will be required to provide an operating deficit guaranty until the property achieves 90% occupancy and a debt service coverage level of 1.15X for 90 days ("Stabilization"). Such guaranty may be released upon confirmation of the debt service coverage ratio by the Investor Limited Partner. Selected Covenants: The following covenants will be incorporated in the Loan Agreement and Trust Indenture as applicable: • If the debt service coverage falls below 1.10X, the Significant Bondholder will have the right to require the Trustee to engage a housing consultant and/or a physical needs assessment report, at the expense of the borrower. If the consultant concludes that the manager has failed to manage the project in a prudent manner, the housing consultant may recommend replacement of the management company (with the approval of the Significant Bondholder) if satisfactory steps are not taken within 60 days to cure deficiencies noted. To the extent a physical needs assessment report is requested, the analysis will be performed by an independent party at the Borrower's Relevant Ratios: Underwriter Fee: expense and mandatory Replacement Reserve deposits will be adjusted according to the engineer's recommendation if so required by the Significant Bondholder. In addition, if Debt Service Coverage drops below 1.05, all gross revenues will be required to be deposited with the Trustee subject to release in accordance with the terms of the Trust Indenture. • The Borrower must submit to the Significant Bondholder and Trustee monthly occupancy reports, financial statements and construction updates until the project reaches stabilization. Thereafter, the Borrower must submit quarterly occupancy reports and financial statements, as well as annual audited financial statements. Management reports, annual budgets, as well as certain other information will be required on an annual basis. Underwriting Debt Service Coverage Ratio: Minimum of 1.15X DSC. All -in including local government subordinate debt; Current DSC projected to be 1.15X* on hard debt. Permanent Debt per Unit: Approximately $82,875* Tax Credit Equity per Unit: Approximately $200,000* Subsidy per Unit: Approximately $190,833 Perm Weighted Average Bond Maturity (WAM): 17 Years* RBC Capital Markets will charge an underwriting/origination fee of 1.25% of the par amount of Construction and Permanent Bonds in connection with the financing plus the fees of counsel, Norris, George & Ostrow and Ballard Spahr in the amount of * Preliminary — Subject to Change Underwriter: RBC CAPITAL MARKETS LLC AAA--J hbUf Helen Hough Feinberg Managing Director, Housing Group Borrower: Wynwood Works, LLC By: By: Member of Manager of Manager Disclosures: RBC Capital Markets, LLC (RBC Capital Markets or RBCCM), seeks to serve as an underwriter on a future transaction and not as a financial advisor or municipal advisor. The information provided is for discussion purposes only in anticipation of being engaged to serve as an underwriter. The primary role of an underwriter is to purchase securities with a view to distribution in an arm's-length commercial transaction with the issuer and/or the obligor. The underwriter has financial and other interests that differ from those of the issuer and/or the obligor. RBCCM is not recommending an action to you as the municipal entity or obligated person. RBCCM is not acting as an advisor to you and does not owe a fiduciary duty pursuant to Section 15B of the Exchange Act to you with respect to the information and material contained in this communication. RBCCM is acting for its own interests. You should discuss any information and material contained in this communication with any and all intemal or external advisors and experts that you deem appropriate before acting on this information or material. Preliminary, subject to change. This announcement is not an offer, solicitation, commitment or recommendation to buy or sell the bonds and does not purport to be a complete statement of all material facts relating to the bonds. The offering is made only by means of the Official Statement, copies of which may be obtained from RBC Capital Markets. This communication is not, and under no circumstances should be construed as, a solicitation to act as securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Products and services are offered through RBC Capital Markets or RBC Wealth Management, as applicable. RBC Capital Markets may buy from or sell to customers on a principal basis in the securities or related derivatives that are the subject of this communication. RBC Capital Markets has or may have proprietary positions in the securities or in related derivatives that are the subject of this communication. RBC Capital Markets may have been manager or co -manager of a public offering of securities of the issuer within the past twelve months. Additional information is available upon request. All information contained in this communication constitutes RBC Capital Markets' judgment as of the date of this communication, and is subject to change without notice and is provided in good faith but without legal responsibility. The information contained in this communication has been compiled by RBC Capital Markets from sources believed to be reliable, but no representation or warranty, express or implied, is made by RBC Capital Markets, its affiliates or any other person as to its accuracy, completeness or correctness. The material contained herein is not a product of any research department of RBC Capital Markets or any of its affiliates. Nothing herein constitutes a recommendation of any security or regarding any issuer; nor is it intended to provide information sufficient to make an investment decision. RBC Capital Markets is not acting as a fiduciary or as a municipal, financial, commodity or investment adviser. The information provided is not intended to be and should not be construed as "advice" within the meaning of Section 15B of the Securities Exchange Act of 1934. Nothing in this communication constitutes legal, accounting or tax advice or individually tailored investment advice. This material has been prepared without regard -to the individual financial circumstances and objectives of persons who receive it and such investments or services may not be suitable for all investors. Past performance is not a guide to future performance, future retums are not guaranteed, and a loss of original capital may occur. Potential investors are advised to consult with their own legal, accounting, tax, financial and other advisors, as applicable, to the extent appropriate. This document may not be reproduced, disclosed, distributed or summarized, whole or in part, to any third party without the prior consent of RBC Capital Markets. To the fullest extent permitted by law neither RBC Capital Markets, nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this communication or the information contained herein. RBC Capital Markets is a registered trademark of Royal Bank of Canada. RBC Capital Markets is the global brand name for the capital markets business of Royal Bank of Canada and its affiliates, including RBC Capital Markets, LLC (member FINRA, NYSE and SIPC). ® Registered trademark of Royal Bank of Canada. Used under license. © Copyright 2022. All rights reserved Attachment 2 Capital Markets RBC Capital Markets RBC Community Investments Cleveland, Ohio, 44102 Telephone: (216) 875-2626 Fax: (216) 875-2612 December 28, 2022 Magellan Housing 2911 W. Autumn Run Circle Sugar Land, Texas 77479 Attn: Nick Inamdar Re: Wynwood Works Miami, FL Dear Nick: Thank you for providing us the opportunity to submit a letter of intent to support the application on Wynwood Works (the "Project"). This letter serves as our mutual understanding of the business terms regarding the acquisition of an ownership interest in a to -be -formed Florida limited partnership (the "Partnership"). RBC Community Investments, LLC, its successors and assigns ("RBC") will acquire a 99.99% interest in the LIHTC, RBC Community Investments Manager 11, Inc. ("RBC Manager") will acquire a .01% interest in the LIHTC (collectively, the "Interest") in the Partnership. 1. Project and Parties Involved. (a) The Project, located in the City of Miami, State of Florida will consist of 120 apartment units. Within the Project, 120 units will be occupied in compliance with the low-income housing tax credit ("LIHTC") requirements of Section 42 of the internal Revenue Code. (b) The parties involved with the Project are as follows: (i) General Partner. The General Partner is a to -be -determined single purpose, taxable entity which is owned 100% by Magellan Housing. (ii) Developer. The Developer is Magellan Housing LLC, or its affiliate. (iii) Guarantors. Subject to RBC's review and approval of financial statements, the Guarantor is the Developer and any other guarantors required by RBC. 2. Purchase Price. The Interest in the Partnership will be acquired for a total capital contribution of $23,824,445. This capital contribution is based on the Project receiving the tax credits described in Paragraph 3 and represents a price per tax credit dollar of $0.89. This pricing assumes both the Developer and the General Partner use cash basis accounting for tax purposes. Further, the pricing assumes depreciable basis consisting of 100% of residential depreciation taken over 30 years, 100% of depreciation on site improvements taken over 15 years, and 100% of depreciation on personal property taken over 5 years. The capital contribution, subject to adjustments set forth in Paragraph 5 below, will be payable to the Partnership in installments as set forth on Exhibit A. 3. Federal LIHTC. The Project is applying for an allocation or commitment for tax-exempt volume cap in the amount of $30,000,000, which will entitle it to LIHTC in the amount of $2,677,172 annually. The total Federal LIHTC anticipated to be delivered to the Partnership is $26,771,717. It is expected that RBC will be allocated a total Federal LIHTC amount of $26,769,040 (the "Projected Federal LIHTC") during the credit period. 4. Fundin„; Sources. The purchase price is based upon the assumption that the Project will receive funding on the terms and conditions acceptable to RBC. 5. Ad i ustments. (a) Downward Capital Adjustment. The amount of Federal LIHTC to be allocated to RBC during the credit period ("Certified Federal LIHTC") will be determined promptly following receipt of cost certification from the accountant and Form 8609. If the Certified Federal LIHTC is less than the Projected Federal, LIHTC, RBC's capital contributions will be reduced by an amount (the "Downward Capital Adjustment") equal to the product of (i) $.89 multiplied by (ii) the difference between Projected Federal LIHTC and Certified Federal LIHTC. (b) Late Deliver', Adjustment. The amount of Federal LIHTC allocated to RBC will be determined at the time the Project is fully leased. If the amount of the actual Federal LIHTC allocated to RBC is less than projected, RBC's capital contribution shall be reduced by an amount (the "Late Delivery Adjustment") equal to the difference between the projected amount (adjusted for any Downward Capital Adjustment) and the amount of the Federal LIHTC allocated to RBC less the present value (using a 10% discount rate for the Federal LIHTC) of the additional Federal LIHTC projected to be received in future years. (c) Payment b. General Partner. If the Downward Capital Adjustment and the Late Delivery Adjustment exceed the total of all unfunded capital contributions, then the General Partner will make a payment to the Partnership equal to the amount of such excess, and the Partnership will immediately distribute such amount to RBC as a return of its capital contribution. Except to the extent otherwise stated herein, this payment will not give rise to any right as a loan or capital contribution or result in any increase in the General Partner's capital account. 6. General Partner and Guarantor Obligations. In addition to Paragraph 5(c) above, the General Partner is responsible for items 6(a) through 6(f) below. Any amounts advanced by the General Partner will not be considered as loans or capital contributions reimbursable or repayable by the Partnership unless otherwise stated herein. (a) Construction Completion. The General Partner will guarantee construction completion in accordance with approved plans and specifications and will pay for any construction costs, costs to achieve permanent loan closing, repayment of all construction financing and costs necessary to fund reserves required to be funded at or before permanent loan closing. (b) Operating Deficits. (i) Pre -Stabilization. The General Partner will guarantee funding of operating deficits until the date (the "Stabilization Date") which is the first day of the month following a 3-month period (such 3-month period to commence after the permanent loan closing/conversion and full repayment of the construction loan) in which the Project has maintained an average 1.15 debt service coverage; and (ii) Post -Stabilization. Commencing with the Stabilization Date and continuing until the Release Date (defined below), the General Partner will guarantee funding of operating deficits of up to the equivalent of 6 months of operating expenses, replacement reserves, and must -pay hard debt service. Any funds paid by the General Partner under this Paragraph 6(b)(ii) shall be treated as an unsecured loan to the Partnership with interest at the rate of 0% per annum, to be repaid out of cash flow, refinancing, sale and liquidation proceeds as provided in Paragraph 9 hereof. The "Release Date" is the later of: (A) the fifth anniversary of the Stabilization Date, (B) the date the Project has achieved an average debt service coverage of 1.15 for the 12-month period immediately prior to the Release Date, and (C) the date the Project has achieved a 1.15 debt service coverage for each of the 5 months immediately prior to the Release Date. Notwithstanding the foregoing, if, as of the Release Date, the balance of the Operating Reserve described in Section 7(a) is less than the amount contemplated in 7(a), this guaranty shall continue until the balance in the Operating Reserve is equal to the amount contemplated in 7(a). (c) LIHTC Shortfall or Recapture Event. To the extent not already addressed by the Downward Capital Adjustment or the Late Delivery Adjustment, if the actual amount of LIHTC for any year is less than Projected LIHTC, the General Partner will guarantee payment to RBC of an amount equal to the shortfall or recapture amount, plus related costs and expenses incurred by RBC. This guaranty does not cover any loss of credits due to changes in the IRS code or tax credit rules and regulations after the date the partnership agreement is executed. (d) Repurchase. The General Partner will repurchase RBC's interest upon the occurrence of certain events described in the Project Entity Agreement. (e) Environmental Indemnie The General Partner will indemnify RBC against any losses due to environmental condition at the Project. (f) Developer Fee. The General Partner will guarantee payment of any developer fee remaining unpaid at the end of the LIHTC compliance period. (g) Guarantors. The Guarantors will guarantee all of the General Partner's obligations. 7. Reserves. (a) Operatint, Reserves. An operating reserve in the amount of 6 months of operating expenses and must -pay hard debt service will be established and maintained by the General Partner concurrent with RBC's final capital contribution. Withdrawals from the operating reserve will be subject to RBC's consent. Expenditures from operating reserves will be replenished from available cash flow as described in Paragraph 9(b) below. (b) R ; lacement Reserves. The Partnership will maintain a replacement reserve, and make contributions on an annual basis equal to the greater of (i) $350 per unit and (ii) the amount required by the permanent lender, or allocating agency. The amount of the contribution will increase annually by 3%. Annual contributions will commence at final C/O. 8. Fees and Compensation. The following fees will be paid by the Partnership for services rendered in organizing, developing and managing the Partnership and the Project. (a) Developer Fee. The Developer will earn a developer fee up to the maximum allowed by the allocating agency. The deferred portion of the developer fee, if any, shall accrue interest at 8% per annum commencing as of the date of RBC's final capital contribution. Payment of the deferred fee will be subordinate to all other Partnership debt as well as operating expense and reserve requirements (b) Incentive Management Fee. An incentive management fee will be payable to the General Partner on an annual basis in an amount equal to 90% of net cash flow as set forth on Paragraph 9(b) below. (c) Property Management Fee. The management agent and the terms of the property management agreement are subject to the prior approval of RBC. (d) Asset Mana<<ement Fee. The Partnership will pay RBC Manager an annual asset management fee of $5,000 which will increase by 3% annually. The asset management fee will be cumulative and will be paid quarterly in advance commencing with the first anniversary of the closing date. 9. Tax Benefits and Distributions. (a) Tax Benefits. Tax profits, tax losses, and tax credits will be allocated 99.9% to RBC, .O1% to RBC Manager and .09% to the General Partner. (b) Net Cash Flow Distributions. Distributions of net cash flow (cash receipts less cash expenditures, payment of debt service, property management fee and RBC's asset management fee), will be made as follows: (i) to RBC in satisfaction of any unpaid amounts due under Paragraphs 5; (ii) to RBC Manager for any unpaid asset management fees; (iii) to the operating reserve to maintain the balance required in Paragraph 7(a); (iv) to the General Partner for any unpaid asset management fees; (v) to the payment of any unpaid developer fee; (vi) to the payment of any debts owed to the General Partner or its affiliates; (vii) 90% of the remaining cash flow to the General Partner as an incentive management fee; and (viii) the balance to the General Partner, RBC and RBC Manager in accordance with their percentage interests described in Paragraph 9(a). (c) Distributions upon Sale. Liquidation or Refinance. Net proceeds resulting from any sale, liquidation or refinance will be distributed as follows: (i) to payment in full of any Partnership debts except those due to RBC, RBC Manager or the General Partner and/or their affiliates; (ii) to the setting up of any required reserves for contingent liabilities or obligations of the Partnership; (iii) to RBC, in satisfaction of any unpaid amounts due under Paragraphs 5 and 6 above and for any other amounts due and owing to RBC; (iv) to RBC Manager for any unpaid asset management fees; (v) to RBC for any excess or additional capital contributions made by it; (vi) to the payment of any debts owed to the General Partner or its affiliates including any unpaid developer fee and any unpaid General Partner Asset Management Fees; (vii) to RBC in an amount equal to any projected federal income tax incurred as a result of the transaction giving rise to such proceeds; and (viii) the balance, 90% to the General Partner, 9.999% to RBC and 0.001 % to RBC Manager. 10. Construction. The General Partner will arrange for a fixed or guaranteed maximum price construction contract. The Contractor's obligations will be secured by a letter of credit in an amount not less than 15% of the amount of the construction contract or a payment and performance bonds in an amount not less than the amount of the construction contract. The Project will establish a construction contingency in an amount not less than 10% of the construction costs, or such greater amount as RBC may reasonably require following its review of construction documents. RBC, may, in its sole discretion, engage a construction consultant and use best efforts to share with construction lender, to: (i) to review plans and specifications and (ii) evaluate the construction progress by providing monthly reports to the Partnership. 11. Due Diligence, Opinions and Projections. (a) Due Diligence: The General Partner will provide RBC with all due diligence items set forth on its due diligence checklist, including but not limited to, financial statements for the Guarantors, schedule of real estate owned and contingent liabilities, plans and specifications, a current appraisal, a current (less than 6 months old) market study, a current (less than 6 months old) Phase I environmental report, rent and expense data from comparable properties, site/market visit and title and survey. The General Partner agrees to reasonably cooperate with RBC (including signing such consents as may be necessary) in obtaining background reports on the Developer, Guarantors and other Project entities as determined by RBC. RBC does not require terrorism insurance. (b) Legal Opinions. The General Partner's counsel will deliver to RBC a local law opinion satisfactory to RBC. RBC's counsel will prepare a tax opinion and the General Partner agrees to cooperate to provide all necessary documentation requested by RBC's counsel. (c) Diligence Reimbursement. The Partnership will reimburse RBC $75,000 for the costs incurred by RBC in conducting its due diligence review and for the costs and expenses of RBC's counsel in connection with the preparation of the tax opinion. (d) Proiections. The projections to be attached to the Project Entity Agreement and that support the Tax Opinion will be prepared by RBC based on projections provided by the General Partner. RBC's projections will include development sources and uses, calculation of eligible basis, operating and construction period cash flow analysis, 15-year operating projection, 35-year debt analysis and 15- year capital account analysis. 12. Closin;; Contingencies. RBC's obligation to close on the purchase of the Interest will be contingent upon RBC's receipt, review and approval of all due diligence including the items set forth on its due diligence checklist as well as the following: (a) Proiect Entity Documents. Preparation and execution of RBC's standard Project Entity Agreement and other fee agreements containing representations and warranties, covenants, consent rights, and indemnities, each on terms and conditions satisfactory to RBC. (b) Information and Laws. No adverse change in the information you have provided to us and no adverse change in existing law. (c) Anticipated Closinu Date. The closing occurring on or before December 31, 2023. 13. Termination and Confidentiality . (a) Termination Date. Once executed by both the General Partner and the Guarantors, this letter shall be a binding agreement and will remain in effect until the later of September 16, 2022 or 8 months after a reservation is received (the "Termination Date"). In recognition of the time which will be expended and the expenses which will be incurred by RBC in connection with the transaction contemplated hereby, the General Partner agrees that, until the Termination Date, neither it nor any of its officers, employees, agents, or affiliates will solicit, entertain or negotiate with respect to any inquiries or proposals relating to the acquisition of an interest in the Partnership or the equity syndication of the Partnership or the Project without the prior written approval of RBC. In the event the General Partner enters into an arrangement with a party other than RBC prior to the Termination Date, RBC will be entitled to pursue all remedies available to it. If RBC elects not to acquire the Interest based on the failure of any of the closing contingencies, the General Partner and RBC will be mutually released from the terms and conditions contained in this letter. (b) Confidentialk, . The General Partner agrees to keep the terms and conditions contained in this letter confidential and not to disclose the terms to any third party (other than attorneys and accountants of the Partnership) without the express prior written approval of RBC. 14. Additional Items. (a) Renortine Obligations. The General Partner will cause to be furnished to RBC on a prompt basis customary monthly, quarterly and annual financial statements and rent rolls for the Partnership, together with audited financial statements and tax returns and monthly construction reports. If the foregoing is in accordance with your understanding of the terms and conditions, please indicate your acceptance on the enclosed copy and return it to the undersigned. Very truly yours, By: Name: Dan Kierce Title: Managinc Director The undersigned approves and accepts the terms of this Letter of Intent. General Partner: By: Its: Member of Manager of Manager of Wynwood Works, LLC Date: 12/28/22 EXHIBIT A CAPITAL CONTRIBUTIONS Conditions ' Amount i) 15.00% upon the later of (a) the execution of the Partnership Agreement, (b) closing of the financing sources described in Exhibit B, and (c) receipt and approval of all due diligence items on RBC's due diligence checklist. I $3,573,666 ii) 65.00% upon the later of: (a) receipt of lien -free project completion and Certificates of Occupancy for all of the units, (b) receipt of an architect's certificate of substantial completion, and (c) receipt of a preliminary cost certification prepared and certified by the General Partner, $15,485,889 iii) 15.00% upon the later of: (a) achievement of 100% qualified occupancy (b) receipt of a final cost certification from an independent certified public accountant, (c) achievement of i) 90 % occupancy and ii) 1.15 DSC based on proforma debt service for the 90 consecutive days prior to payment, and (d) Permanent Loan Closing/Conversion and full repayment of construction financing, iv) 5.00% upon the later of: (a) achievement of the Stabilization Date, and (b) receipt of the IRS Form 8609. $3,573,667 $1,191,223 Total: $23,824,445 EXHIBIT B SOURCES Construction Loan • Source: Tax -Exempt Bonds (Lender TBD) • Amount: $30,000,000 • Maturity: 30 months after Project closing • Interest Rate: 5.50% • Collateral: 1s` mortgage on Project during construction Construction / Permanent Loan • Source: TBD (lender acceptable to RBC) • Amount: $9,609,000 • Maturity: 20 years after conversion • Interest Rate: 5.86% after conversion • Amortization: 40 years after conversion • Collateral: 1' mortgage on Project after conversion Construction Loan • Source: OMNI — CRA Land Contribution • Amount: $6,000,000 • Maturity: 30 years after conversion • Interest Rate: 0.00% • Amortization: NA — Cash Flow • Collateral: 2nd mortgage on Project (or other collateral acceptable to RBC) Construction Loan • Source: OMNI — CRA • Amount: $9,900,000 • Maturity: 50 years after conversion • Interest Rate: 0.00% • Amortization: NA — Cash Flow • Collateral: 3rd mortgage on Project (or other collateral acceptable to RBC) Construction Loan • Source: City of Miami • Amount: $3,500,000 • Maturity: 30 years after conversion • Interest Rate: 1.00% • Amortization: NA — Cash Flow • Collateral: 4'h mortgage on Project (or other collateral acceptable to RBC) Construction Loan • Source: NRD-1 Public Benefits Trust Fund Contribution • Amount: $3,500,000 • Maturity: 30 years after conversion • Interest Rate: 0.00% • Amortization: NA — Cash Flow • Collateral: 5'h mortgage on Project (or other collateral acceptable to RBC) Attachment 3 iJt c+f �ittmi ARTHUR NQRIEGA, V City Manager December 2, 2022 Mr. Nick Inamdar Wynwood Works, LLC 2100 Coral Way, Suite 405 Miami, Florida 33145 Re: Wynwood Works, LLC: Wynwood Works Dear Mr. Inamdar: On November 16, 2022, the Housing and Commercial Loan Committee (" 11C1,C'`) revised agreement terms related to HCLC's original allocation of $3,500,000 of Miami Forever Bond ("GOB") funds, as approved on July 19, 2022. The GOB funds will be used for the development of the Wynwood Works apartments project, which will be constructed at 2035 North Miami Avenue. The purpose of this correspondence is to set forth the new loan terms of the Loan Agreement between the City of Miami ("City") and the Borrower noted below in connection with the Project. Borrower: Wynwood Works, LLC (''Borrower') a Florida limited liability company, whose principal business address is 2100 Coral Way. Suite 405, Miarni, Florida 33145. Description of the Project: Wynwood Works will be a new construction project located on a single site in Wynwood at 2035 North Miami Avenue. The new development will feature 12 stories, green -certified construction and will serve as both mixed -income and mixed -use. It will have a total of 120 units with approximately 98 parking spaces, an open-air deck. a community room, private offices, co -working space, 6 artist -designated homes, gated bike parking, and educational, health, and occupational enrichment programming for tenants. (48) units will consist of one -bath studios. (66) units will consist of one bedroom and one bath and, (6) units will feature two bedroom and one bath. The project will have (120) City -assisted, GOB units. The project will provide modern affordable housing opportunities for various community groups: individuals transitioning out of Homelessness (30% AM1), Extremely Low-income individuals (30% AMI), and households earning between 50-80% AMi. DEPARTMENT OE HOUSING & COMMUNITY DEVELOPMENT One Fla$rer Building / i4 N.E 1st Avenue / Miami, Florida 33132 / 1305) 416.2089 / fax: p3031416-2(190 / TTY 1305) 468.340.2 Mailil>p Address., P.O. Box 330708-0708 Miami, FL 33233-708 This commitment letter is conditioned upon the Borrower completing the following: 1. Securing a $8.95 million first permanent mortgage 2. Obtaining a $3.5 million grant from the NRD-1 Public Benefits Trust Fund 3. Obtaining a $9.9 million grant from the Omni-CRA 4. Obtaining a $6 million land contribution from the Omni-CRA 5. Finalizing a partnership agreement 6. and meeting all the terms below - The following loan terms and conditions shall apply: 1. Use of Funds: City funds will be used for hard construction costs. 2. City Assisted Units: 120 project units shall be assisted with GOB funds for households earning up to 80% AMI. 3. Maximum Rent Levels: (12) units at 30% of AMI, (12) units at 50% of AMI, (72) at 60% of AMI, and (24) at 80% of AMI. Rents charged on City -assisted units are subject to Florida Housing Finance Corporation according to the income target proposed by the Borrower. The rent and income limits are published annually by the US Department of Housing and Urban Development ("HUD") and Florida Housing Finance Corporation ("FHFC"). 4. Affordability Period: an affordability period of 30 years will apply commencing from the date the City approves the closeout of the project. 5. Loan Repayment & Interest Rate Terms: Interest -only cash flow note. Each year, developer must make a $35,000 payment, representing a 1% interest rate, to the City based on available cash flow. Any unpaid interest each year will be paid by next year's available cash flow or deferred until maturity. Property must maintain the required affordability structure for 30 years. Failure to comply will result in the full repayment of principal and an agreed upon default interest rate. Full repayment of principal at the 30-year maturity. 6. Draw Disbursements: The City shall not fund any draw request in an amount that exceeds the City's initial contribution percentage of the entire development cost of the project. 7. City Incurred Costs: Borrower understands and agrees that $10,000 of the GOB funds was awarded to the project for, and may be used by the City to cover, costs incurred by the City on behalf of the project. 8. Increase in Project Costs: if the project costs increase ten percent (10%) or more of the original budget, and the Borrower is not able to secure additional funding within 60 days before the project commencement, the project will be subject to recommendation to the Housing and Commercial Loan Committee for de -obligation of the project funding. 2 9. Retainage(s): Five percent (5%) of each draw request will be retained until the City has received as part of the close-out, at the Borrower's sole cost, a Final Cost Certification prepared by an independent certified public accountant, both in form and substance acceptable to the City. 10. Commitment Fee: There will be a $5,000 commitment fee. 11. Eligible Project Costs: Eligible project costs will be effective from the date of environmental clearance. 12. Subject to approval as stated here in by the City of Miami Commission. 13. Reporting Compliance: Borrower is subject to compliance reporting requirements in the process of construction and during the affordability period. 14. Development Benchmarks/Scope of Work: The project shall: (a) commence construction within six (6) months from the Effective Datet of the contract; (b) obtain all certificates of occupancy required for the project within 18 months from the Effective Date; and (c) have all project units rented within 12 months after the issuance of project's certificate(s) of occupancy, but in no event later than 36 months from the Effective Date. 15. Insurance Requirements: Borrower shall obtain and furnish evidence of insurance coverage as the City may require in connection with the Project. 16. Affirmative Marketing Plan: Borrower shall provide an Affirmative Marketing Plan using HUD's approved form and report to the City annually on all actions taken to comply with said plan. Borrower shall comply with the requirements of the affordable housing notice to City Officials Ordinance 413491. 17. Lottery: Selection of eligible tenants shall be from the results of a tenant lottery, which shall be conducted with a representative of the City of Miami present. In addition, the project shall comply with the requirements of the City of Miami Ordinance 13645, Resident Preference. 18. Project Signage: Borrower shall furnish signage identifying the Project and shall acknowledge the contribution of the City by incorporating the seal of the City and the names of the City commissioners and officials in all documents, literature, pamphlets, advertisements, and signage, permanent or otherwise. All such acknowledgments shall be in a form acceptable to the City. 19. De -obligation of Funds: The City may at its sole discretion de -obligate the funding approved herein, if by no later.than six (6) months from the date of approval of the t The "Effective Date" is the date on which the contract has been signed by the City Manager and attested to by the City Clerk. 3 City funds, the Borrower has failed to closed on all funding commitments represented herein. 20. Discretionary Action by Administration: Staff shall have the discretion to approve and, by way of Memorandum, authorize the City Manager to execute any and all documents needed to further the Project Completion, provided, however, that the lien position nor the project terms are not materially affected. Due to the realities of financing affordable housing developments, the total dollar amount of this development's senior debt is subject to change. Please be advised that so long as the dollar amount of the senior debt, as listed herein, does not increase more than 9.99%, then such changes will be deemed approved by the City of Miami's ("City") Housing and Commercial Loan Committee even if such change negatively impacts the City's mortgage's lien priority. 21, Project Default: If the City determines that the project is in default, the following conditions will apply: • The highest interest rate available under the law will be applicable for the funds disbursed from date of disbursement. • The Restrictive Covenant will remain as a restriction on the Project property throughout the Affordability Period; and • The borrower, project developer, managing partner(s) of the borrower and/or other individuals, principals and/or other entities as determined by the City will be debarred from receiving any City funding for a period of five (5) years. 22. Compliance with the provisions of Living Wage requirements 23. Funding Availability: this Commitment Letter is intended to be a summary of the most important elements of the agreement between the City and the Borrower to enter into a Ioan transaction and is subject to all requirements and conditions contained in Loan Documents to be executed by the Borrower. Not every provision that imposes duties, obligations, burdens, or limitations on the Borrower is contained herein, but shall be contained in the final Loan Agreement satisfactory to the City and the Office of the City Attorney. rely, an t Director i 4 THE FOREGOING COMMITMENT LETTER IS ACKNOWLEDGED AND ACCEPTED THIS 6m DAY OF DECEMBER. 2022. Wynwood Works, LLC By Wynwood Works Manager, LLC, its manager By: Magellan Soiling, LLC, its manager By: /Z / V `-- Name: Niknl A. Inamdar Title: Member 5 Attachment 4 t arnar000 December 27, 2022 Mr. Nick Inamdar Wynwood Works, LLC 2100 Coral Way, Suite 405 Miami, Florida 33145 Re: Wynwood Works, LLC: Wynwood Works Dear Mr. Inamdar: On December 22, 2022, the NRD-i Public Benefits Trust Fund Committee ("NRD-1" or "Trust Fund") approved an allocation of $3,500,000 of NRD-1 funds to be used for the development of the Wynwood Works apartments project, which will be constructed at 2035 North Miami Avenue. The purpose of this correspondence is to set forth the new loan terms of the Loan Agreement between the Trust Fund and the Borrower noted below in connection with the Project. Borrower: Wynwood Works, LLC ("Borrower") a Florida limited liability company, whose principal business address is 2100 Coral Way, Suite 405, Miami, Florida 33145. Description of the Project: Wynwood Works will be a new construction project located on a single site in Wynwood at 2035 North Miami Avenue. The new development will feature 12 stories, green -certified construction and will serve as both mixed -income and mixed -use. It will have a total of 120 units, with approximately 98 parking spaces, an open-air deck, a community room, private offices, co -working space, 6 artist -designated homes, gated bike parking, and educational, health, and occupational enrichment programming for tenants. (48) units will consist of one -bath studios, (66) units will consist of one bedroom and one bath and, (6) units will feature two bedroom and one bath. The project will have (120) NRD-1 units. The project will provide modem affordable housing opportunities for various community groups: individuals transitioning out of Homelessness (30% AMI), Extremely Low-income individuals (30% AMI), and households earning between 50-80% AMI. 1 `psiIta MINIPPOCI This commitment letter is conditioned upon the Borrower completing the following: 1. Securing a $8.95 million first permanent mortgage 2. Obtaining a $3.5 million GOB loan from the City of Miami 3. Obtaining a $9.9 million grant from the Omni-CRA 4. Obtaining a $6 million land contribution from the Omni-CRA 5. Finalizing a partnership agreement 6. and meeting all the terms below - The following loan terms and conditions shall apply: 1. Use of Funds: NRD-1 monies will be used for hard costs. 2. NRD Assisted Units: 120 project units shall be assisted with NRD-1 funds for households earning up to 80% AMI. 3. Maximum Rent Levels: (12) units at 30% of AMI, (12) units at 50% of AMI, (72) at 60% of AMI, and (24) at 80% of AMI. Rents charged on NRD-1-assisted units are subject to Florida Housing Finance Corporation according to the income target proposed by the Borrower, The rent and income limits are published annually by the US Department of Housing and Urban Development ("HUD") and Florida Housing Finance Corporation ("FHFC"). 4. Affordability Period: an affordability period of 30 years will apply commencing from the date the City of Miami, Dept. of Housing and NRD approves the closeout of the project. 5. Loan Repayment & Interest Rate Terms: this is a deferred, forgivable loan provided to the Borrower with no debt service payments required. The property must maintain the required affordability structure for a period of 30 years. Failure to comply with these requirements will result in the full repayment of principal at an agreed upon interest rate. In the event of affordability compliance, this deferred loan will be forgiven at maturity. 6. Draw Disbursements: The Trust Fund shall not fund any draw request in an amount that exceeds the Trust Fund's initial contribution percentage of the entire development cost of the project. 7. NRD-1 Incurred Costs: Borrower understands and agrees that $10,000 of the NRD-1 funds was awarded to the project for and may be used by the Trust Fund to cover, costs incurred by the Trust Fund on behalf of the project. Further, Borrower understands and agrees that an additional $35,000 of the NRD-1 funds will be used by the Trust Fund to pay the City of Miami's Dept. of Housing and 2 y aQr.tr• Community Development commitment fee for their work on this project on behalf of the Trust Fund. 8. Increase in Project Costs: If the project costs increase ten percent (10%) or more of the original budget, and the Borrower is not able to secure additional funding within 60 days before the project commencement, the project will be subject to recommendation to the Trust Fund Board for de -obligation of the project funding. 9. Retainage(s): Five percent (5%) of each draw request will be retained until the Trust Fund has received as part of the close-out, at the Borrower's sole cost, a Final Cost Certification prepared by an independent certified public accountant, both in form and substance acceptable to the City of Miami, on behalf of the Trust Fund. 10. Commitment Fee: There will be a $5,000 commitment fee. 1 1 . Eligible Project Costs: Eligible project costs will be effective from the date of environmental clearance. 12. Reporting Compliance: Borrower is subject to compliance reporting requirements in the process of construction and during the affordability period. 13. Development Benchmarks/Scope of Work: The project shall: (a) commence construction within six (6) months from the Effective Date' of the contract; (b) obtain all certificates of occupancy required for the project within 18 months from the Effective Date; and (c) have all project units rented within 12 months after the issuance of project's certificate(s) of occupancy, .but in no event later than 36 months from the Effective Date. 14. Insurance Requirements: Borrower shall obtain and furnish evidence of insurance coverage as the City/Trust Fund may require in connection with the Project. 15. Affirmative Marketing Plan: Borrower shall provide an Affirmative Marketing Plan using HUD's approved form and report to the City annually on all actions taken to comply with said plan. Borrower shall comply with the requirements of the affordable housing notice to City Officials Ordinance #13491. 16. Lottery: Selection of eligible tenants shall be from the results of a tenant lottery, which shall be conducted with a representative of the City of Miami or Trust Fund present. In addition, the project shall comply with the requirements of the City of Miami Ordinance 13645, Resident Preference. I The "Effective Date" is the date on which the contract has been signed by the City Manager, or authorized signatory (as applicable), and attested to by the City Clerk. 3 17. Project Signage: Borrower shall furnish signage identifying the Project and shall acknowledge the contribution of the Trust Fund by incorporating the Trust Fund's logo in all documents, literature, pamphlets, advertisements, and signage, permanent or otherwise. All such acknowledgments shall be in a form acceptable to the Trust Fund. 18. De -obligation of Funds: The Trust Fund may at its sole discretion de -obligate the funding approved herein, if by no later than six (6) months from the date of approval of the NRD-1 funds, the Borrower has failed to closed on all funding commitments represented herein. 19. Discretionary Action by Administration: Staff shall have the discretion to approve and, by way of Memorandum, authorize the City Manager, or authorized signatory (as applicable), to execute any and all documents needed to further the Project Completion, provided, however, that the lien position nor the project terms are not materially affected. Due to the realities of financing affordable housing developments, the total dollar amount of this development's senior debt is subject to change. Please be advised that so long as the dollar amount of the senior debt, as listed herein, does not increase more than 9.99%, then such changes will be deemed approved by the Trust Fund even if such change negatively impacts the Trust Fund's mortgage's lien priority. 20. Project Default: If the City or Trust Fund determines that the project is in default, the following conditions will apply: • The highest interest rate available under the law will be applicable for the funds disbursed from date of disbursement. • The Restrictive Covenant will remain as a restriction on the Project property throughout the Affordability Period; and • The borrower, project developer, managing partner(s) of the borrower and/or other individuals, principals and/or other entities as determined by the City, on behalf of the Trust Fund, will be debarred from receiving any City or Trust Fund funding for a period of five (5) years. 21. Compliance with the provisions of Living Wage requirements Sincerely, Manny Gonzalez Digitally shred by Manny Gonzalez Date: 2022.12.29 21:4859 Manny Gonzalez Executive Director 4 THE FOREGOING COMMITMENT LETTER IS ACKNOWLEDGED AND ... h7 SY ACCEPTED THIS r; .., .DAY OF DECEMBER. 2022. By: fr Name: fr ` 4 p4 • 44 ►49- Title: Mc„,‘— ' J+1••- 5