Number
350
Version
Original
Reference
Sponsor
The President
Title
Resolution approving Travaux, Inc. to take all actions necessary in connection with the transfer of Highland Gardens to the Housing Authority of the City of Milwaukee and the refinance and rehabilitation of Highland Gardens
Analysis
Body
The undersigned, Housing Authority of the City of Milwaukee, a Wisconsin public body corporate and politic (the “Member” or “HACM”), being the sole member of Travaux, Inc. a Wisconsin nonstock nonprofit corporation (the “Corporation”) does hereby approve, authorize, adopt, consent to, and confirm the following actions, as hereinafter written:
WHEREAS, the Corporation is a substitute investor member of Highland Park Community, LLC, a Wisconsin limited liability company (the “Company”);
WHEREAS, the Highland Park Development, LLC (“HPD”) is the manager of the Company;
WHEREAS, HACM is the manager of the HPD;
WHEREAS, the Company currently owns Highland Gardens a 114-unit residential housing development with other ancillary improvements (the “Project”),
Whereas, the Project is subject to that certain RAD Use Agreement dated April 16, 2018 (the “RAD Use Agreement”) that was entered into by and among the Company, HACM, and the U.S. Department of Housing and Urban Development (“HUD”);
WHEREAS, the Project is subject to a RAD Project Based Voucher Housing Assistance Payment contract (the “RAD HAP”) and a Project-Based Voucher Housing Assistance contract (“PBV HAP” and together with RAD HAP, the “HAP Contracts”), dated June 1, 2018;
WHEREAS, pursuant to Resolution R13432, HACM, authorized, among other things, the refinancing and rehabilitation of the Project and the formation of a new entity to acquire, own, manage and operate the Project;
WHEREAS, in furtherance of the Project and pursuant to Articles of Organization, filed on July 11, 2023, with the State of Wisconsin Department of Financial Institutions; Highland Gardens LLC, a Wisconsin limited liability company (the “Project Owner”), was formed to acquire, own, operate and manage the Project;
WHEREAS, HACM authorized the formation of Highland Gardens Development LLC, a Wisconsin limited liability company (the “HG Development”), to be the sole managing member of the Project Owner, pursuant to Articles of Organization, filed July 11, 2023 with the State of Wisconsin Department of Financial Institutions;
WHEREAS, the Wisconsin Housing and Economic Development Authority (“WHEDA”) awarded the Project Owner low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code for the rehabilitation of the Project;
WHEREAS, pursuant to a Letter of Intent by PNC dated October 24, 2023 (“PNC LOI”) and a Letter of Intent by Sugar Creek Capital, dated October 25, 2023 (“SG LOI”), PNC Bank, National (“PNC”) will serve as the federal limited member of the Project Owner with 99.979% interest therein, Columbia Housing SLP Corporation (“Columbia”) will serve as the special limited member of the Project Owner with a 0.001% interest therein, and Affordable Housing Fund III-I LLC, a Missouri limited liability (“Affordable Fund”), will serve as the Project Owner’s state limited member with a 0.01% interest therein;
WHEREAS, in connection with the rehabilitation of the Project, the Company, PNC, Columbia, and Affordable Fund will enter into an Amended and Restated Operating Agreement for the Project Owner (the “Amended and Restated Operating Agreement”), and various other agreements, certificates and documents required thereunder or described therein to effectuate the tax credit equity investments being made by PNC, Columbia and Affordable Fund;
WHEREAS, in furtherance of the long-term viability of the Project, the Company shall convey to HACM, pursuant to a Special Warranty Deed (the “Deed”), the fee simple interest in the Project, together with the land located at 1818 W. Juneau Avenue, Milwaukee, WI 53233 and legally described on Exhibit A attached hereto (the “Land”) and the buildings and improvements situated thereon (the “Improvements”);
WHEREAS, HACM will transfer to the Project Owner a leasehold interest in the Land pursuant to a Ground Lease that will be executed by HACM, as “Landlord” thereunder and the Project Owner, as “Tenant”. HACM will also transfer a fee simple interest in the Improvements to the Project Owner;
WHEREAS, pursuant to a Ground Lease Agreement that will be executed by HACM, as “Landlord” thereunder, the Project Owner, as “Tenant”, shall acquire a leasehold interest in the Land. A fee simple interest in the Improvements will also be transferred to the Project Owner;
WHEREAS, in connection with the rehabilitation of the Project, the Project Owner shall receive a first-priority loan from WHEDA in the approximate principal amount of Twelve Million Two Hundred Eighty-Six Thousand Four Hundred Fifty-Seven and No/100 U.S. Dollars ($12,286,457.00), or such other amount as deemed acceptable by HACM’s Secretary-Executive Director (the “WHEDA Loan”);
WHEREAS, to facilitate financing for the Project HACM will make a subordinate acquisition loan to the Project Owner in the approximate principal amount of Seven Million and No/100 U.S. Dollars ($7,000,000.00), or such other amount as deemed acceptable by HACM’s Secretary-Executive Director (the “Acquisition Loan”);
WHEREAS, in connection with the rehabilitation of the Project, HACM is making a subordinate loan to the Project Owner in the approximate principal amount of One Million Five Hundred Fifty and No/100 U.S. Dollars ($1,550,000.00), or such other amount as deemed acceptable by HACM’s Secretary-Executive Director (the “Non-Federal Funds Loan” and, together with the Acquisition Loan, the “Authority Loans”);
WHEREAS, in connection with the existing RAD Use Agreement and the HAP Contracts, the Company will assign the RAD Use Agreement and the HAP Contracts to Project Owner;
WHEREAS, pursuant to Resolution T319, the Corporation, authorized, among other things, the Corporation to manage the construction of the Project;
WHEREAS, the Corporation will act as the “Construction Manager” pursuant to that AIA 102-2017 Standard Form of Agreement between the Project Owner and the Corporation (the “Construction Manager Agreement”);
WHEREAS, the Project Owner will enter into an agreement with Galbraith Carnahan Architects LLC, in connection with the preparation of plans, specifications and other items in furtherance of the Project (the “Architect Agreement”);
WHEREAS, the Corporation has determined that completion of the Project is in the best interest of the Company and therefore desires to support the Project and authorize the transactions contemplated herein.
RESOLUTIONS
BE IT RESOLVED, that Member, acting as the sole member of the Corporation, as the substitute investor member of the Company, is hereby authorized, empowered and directed to enter into, execute, and deliver any and all instruments, certificates, agreements and documents to convey the fee interest in the Land and Improvements to HACM, and to negotiate, enter into, execute, and deliver any and all instruments, certificates, agreements and documents required thereunder or in connection therewith, including the Special Warranty Deed (collectively, the “Deed Documents”), and to perform all of its obligations thereunder, and to consummate the transaction contemplated thereby; and be it
FURTHER RESOLVED, that Member, acting as the sole member of the Corporation, as the substitute investor member of the Company, is hereby authorized, empowered, and directed to enter into, execute, and deliver, any and all instruments, certificates, agreements and documents to assign the RAD Use Agreement and HAP Contracts to Project Owner, and comply with the RAD Use Agreement and obtain HUD approval for the refinancing and rehabilitation of the Project, including, but not limited to, the Assignment, Assumption, and Extension of Rental Assistance Demonstration Project-Based Voucher Housing Assistance Payments Contract, Assignment and Assumption of Rental Assistance Demonstration Use Agreement, RAD-PBV Restructuring Template (collectively, the “HUD Documents”), and to perform all of its obligations thereunder, and to consummate the transaction contemplated thereby; and be it
FURTHER RESOLVED, that Member, acting as the sole member of the Corporation, as the substitute investor member of the Company, is hereby authorized, empowered, and directed to enter into, execute, and deliver any and all instruments, certificates, agreements and documents in connection with the rehabilitation of the Project, without limitation, the Construction Management Agreement, architectural agreements or guaranties., and to take any and all actions in connection with the Architect Agreement and the rehabilitation of the Project; and be it
FURTHER RESOLVED, that Member, acting as the sole member of the Corporation, as the substitute investor member of the Company, is hereby authorized, empowered, and directed to enter into, execute, and deliver any and all instruments, certificates, agreements and documents required by the WHEDA Loan, Authority Loans, the Amended and Restated Operating Agreement, or as required by PNC, Columbia or Affordable Fund (collectively, the “Investors”), including without limitation any guarantees and indemnities in favor of Investors or WHEDA; and be it
FURTHER RESOLVED, that Willie L. Hines, Jr., as president of the Corporation, or his designee, is hereby authorized to execute any and all documents on behalf of the Corporation, individually and as substitute investor member of the Company; and be it
FURTHER RESOLVED, that Willie L. Hines, Jr., as president of the Corporation, is hereby authorized, empowered, and directed to take such further action on behalf of the Corporation, individually and as substitute investor member of the Company , as they deem necessary to effectuate the foregoing; and be it
FURTHER RESOLVED, that all acts previously performed, relative to this matter, by Willie L. Hines, Jr., as president of the Corporation on behalf of the Corproration, individually and as substitute investor member of the Company be and hereby are approved, ratified, and confirmed in all respects; and be it
FURTHER RESOLVED, that these Resolutions shall become effective immediately.
Requestor
Drafter
Housing Management, Fernando Aniban, Asst. Secretary, 08/08/2024