20-1198ORDINANCE NO. 20-1198
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF DENTON AND THE MICHAELS
DEVELOPMENT COMPANY I, L.P., A NEW JERSEY LIMITED PARTNERSHIP, TO
MEMORIALIZE THE UNDERSTANDING AND AGREEMENT OF THE PARTIES WITH
RESPECT TO THE CONSTRUCTION OF A MULTI -FAMILY AFFORDABLE RENTAL
HOUSING DEVELOPMENT; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, The Michaels Development Company I, L.P. ("Michaels") proposes to
construct a multi -family affordable rental housing development to be located at approximately
1900 S Mayhill Road in Denton named the Mayhill Road Apartments ("Project"); and
WHEREAS, Michaels has requested a resolution of support from the City of Denton
("City") to support its application for low-income housing tax credits; and
WHEREAS, the City and Michaels desire to enter into an agreement to establish the
specific unit mix for the Project; and
WHEREAS, the City Council of the City of Denton hereby finds that the agreement
between the City and Michaels serves a municipal and public purpose, is in the public interest, and
is of a benefit to the citizens of the City of Denton; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble of this ordinance are incorporated
herein by reference.
SECTION 2. The City Manager, or his designee, is hereby authorized to execute the
Memorandum of Understanding, attached hereto as Exhibit 1, with The Michaels Development
Company I, L.P. and to carry out the duties and responsibilities of the City under the MOU.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
The motion to ap rove this ordinance was made by j4L44, WW, and
seconded by ; the ordinance was passed6d approved e following
vote:
I- 0 ]:
Aye Nay
Mayor Chris Watts:
✓ _
Gerard Hudspeth, District 1:
v----
/Keely
KeelyG. Briggs, District 2:
Jesse Davis, District 3:
John Ryan, District 4:
Deb Armintor, At Large Place 5:
Paul Meltzer, At Large Place 6: ✓
Abstain Absent
PASSED AND APPROVED this the 9�ay of A4n,4, 2020.
CHRIS S, MAYOR
ATTEST:
ROSA RIOS, CITY SECRETARY
, • •a
t
BY:
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APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
KIN
EXHIBIT 1
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into as of the qday of June,
2020 by and among the CITY OF DENTON (the "City") and THE MICHAELS
DEVELOPMENT COMPANY I, L.P. (the "Applicant").
BACKGROUND
Applicant is proposing the new construction of multi -family affordable rental housing
development to be located at approximately 1900 S Mayhill Road Denton, TX 76208, in Denton,
Denton County, Texas natned the Mayhill Road Apartments (the "Project"); and
Applicant has advised the City that it intends to submit an. application to the Texas
Department of Housing and Community Affairs ("TDHCA") for 2020 or 2021 Housing Tax
Credits funds to provide equity financing for the Project (the "Application"); and
The City Council of the City of Denton, wishes to evidence a resolution of support for the
Application to TDHCA to facilitate the award of low-income housing tax credits to the Project
(the "Resolution"); and
Applicant has agreed to make certain commitments to the City in exchange for the
Resolution.
UNDERSTANDING OF THE PARTIES
1. City shall approve and issue the Resolution, subject to Applicant agreeing to the
provisions of Sections 2 through 4 hereof.
2. City and Applicant have agreed that Applicant will include in the Tax Credit
Application the commitment to elect income averaging which will result in an average income at
the Project of sixty percent (60%) of Area Median Gross Income ("AMGI") or less. The Tax
Credit Application will further provide for the unit mix shown on Exhibit A attached hereto (the
"Unit Mix'). Applicant shall seek City Council approval prior to changing the Unit Mix. The
failure of Applicant to seek City Council approval of a change in the Unit Mix shall be
considered a breach of this MOU.
3. (a) Applicant shall enter into a "separated contract" with the general contractor for the
Project which shall explicitly provide that it is a separated contract for sales tax purposes, that
the jobsite is Denton for sales tax purposes and that the general contractor shall collect Denton
sales tax. (b) Applicant shall use commercially reasonable efforts to cause the general contractor
to enter into separated contracts for sales tax purposes for all material subcontracts for the
Project. For purposes of this MOU, "material subcontract" shall mean all subcontracts between
the general contractor and any subcontractors and material suppliers which provide for an
aggregate contract price equal to or greater than $500,000.00. The purpose of the provisions of
this Section 2 is to maximize the amount of sales tax that is collected by the City in connection
with the Project. The general contractor shall not be a nonprofit organization.
4. Applicant's satisfaction of the requirements of Sections 2 and 3(a) hereof shall be a
condition of the issuance of a building permit to Applicant for the Project.
5. This MOU is a binding agreement by and between the parties and enforceable against
each of the parties in accordance with its terms.
IN WITNESS WHEREOF, the parties execute this Memorandum of Understanding on
or as of the date first written herein.
CITY OF DENTON
By:
Name. ile
Title: City Manager
ATTEST:
ROSA RIOS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
BY:
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THE MICHAELS DEVELOPMENT
COMPANY I, L.P., a New Jersey limited
partnership
By: _
Name:
Title:
John J. O'Donnell
President
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MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into as of the 23 day of June,
2020 by and among the CITY OF DENTON (the "City") and THE MICHAELS
DEVELOPMi ENT COMPANY I, L.P. (the "Applicant'.
BACKGROUND
Applicant is proposing the new construction of multi -family affordable rental housing
development to be located at approximately 1900 S Mayhill Road Denton, TX 76208, in Denton,
Denton County, Texas named the Mayhill Road Apartments (the "Frc)ject"); and
Applicant has advised the City that it intends to submit an application to the Texas
Department of Housing and Community Affairs ("TDHCA") for 2020 or 2021 Housing Tax
Credits funds to provide equity financing for the Project (the "Application"); and.
The City Council of the City of Denton, wishes to evidence a resolution of support for the
Application to TDHCA to facilitate the award of low- income housing tax credits to the Project
(the "Resolution); and
Applicant has agreed to make certain commitments to the City in exchange for the
Resolution.
UNDERSTANDING OF THE PARTIES
1. City shall approve and issue the Resolution, subject to Applicant agreeing to the
provisions of Sections 2 through 4 hereof.
2. City and Applicant have agreed that Applicant will include in the Tax Credit
Application the commitment to elect income averaging which will result in an average income at
the Project of sixty percent (60%) of Area Median Gross Income ("AMGI') or less. The Tax
Credit Application will further provide for the unit mix shown on Exhibit A attached hereto (the
"Unit Mix"). Applicant shall seek City Council approval prior to changing the Unit Mix. The
failure of Applicant to seek City Council approval of a change in the Unit Mix shall be
considered a breach of this MOU.
3. (a) Applicant shall enter into a "separated contract" with the general contractor for the
Project which shall explicitly provide that it is a separated contract for sales tax purposes, that
the jobsite is Denton for sales tax purposes and that the general contractor shall collect Denton
sales tax. (b) Applicant shall use commercially reasonable efforts to cause the general contractor
to enter into separated contracts for sales tax purposes for all material subcontracts for the
Project. For purposes of this MOU, "material subcontract" shall mean all subcontracts between
the general contractor and any subcontractors and material suppliers which provide for an
aggregate contract price equal to or greater than $500,000.00. The purpose of the provisions of
this Section 2 is to maximize the amount of sales tax that is collected by the City in connection
with the Project. The general contractor shall not be a nonprofit organization.
4. Applicant's satisfaction of the requirements of Sections 2 and 3(a) hereof shall be a
condition of the issuance of a building permit to Applicant for the Project.
5. This MOU is a binding agreement by and between the parties and enforceable against
each of the parties in accordance with its terms.
IN WITNESS WHEREOF, the parties execute this Memorandum of Understanding on
or as of the date first written herein.
CITY OF DENTON
By: '��Iu aj�L —
Name: Todd Hileman
Title: City Manager
ATTEST:
ROSA RIOS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
BY:40 D
2
THE NUCHAELS DEVELOPMENT
COMPANY I, L.P., a New Jersey limited
partnership
Title: President
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