1. (1) The qualified applicant must be incorporated as a not-for-profit corporation prior to execution of an urban initiatives program contract.

2. (2) A performance contract shall serve as the award mechanism. Such contract shall not be assigned or transferred, except upon written authorization of the commissioner.

   1. (i) the term of the performance contract, which shall be for a period of two years, with the possibility of the commissioner in his/her discretion extending the contract;
   2. (ii) the amount of urban initiatives funds awarded under the contract;
   3. (iii) the specific location and description of the proposed project, including the approximate number of buildings and residential, commercial, community, or cultural units affected;
   4. (iv) the exact scope of work to be performed and the specific terms and conditions required by the division;
   5. (v) a detailed timetable for completion of the proposed project;
   6. (vi) a listing of all other funding sources committed to the proposed project;

   7. (vii) a detailed long-term plan for the management or disposition of the property improved by the qualified applicant;

      1. (a) the division shall have the right to review and approve the tenant selection procedure, the terms and conditions of all initial leases, and the overall management plan for operating and maintaining the property; and
      2. (b) the division shall have the right to review and approve any transfer of property acquired or improved, in whole or part, with urban initiatives funds, and to approve the future use of any urban initiatives funds recaptured by the qualified applicant through such transfer(s). Instruments, in addition to the urban initiatives contract, may be executed to ensure enforcement of this provision.

   8. (viii) an agreement to guarantee future maintenance of the improvement subsequent to the termination of the performance contract.

      (b) Program funds.

3. (1) Funds awarded to the qualified applicant may be in the form of a grant, a loan, or a combination of both.

4. (2) Use of funds.

   1. (i) Program funds shall be for payment of material expenses related to the proposed project, incurred subsequent to contract execution, including:

      1. (a) the costs of acquisition, construction, repair, renovation, rehabilitation, demolition, clearance and sealing of any building or other structure, provided that such funds may not be used for planning of any such activity or for operating an office to be used by the qualified applicant; and provided further that no funds shall be used for acquisition unless such acquisition is in conjunction with the construction, repair, renovation, rehabilitation, demolition, clearance or sealing of any building or other structure; and
      2. (b) fees to consultants retained by the qualified applicant for eligible services listed in clause (a) of this subparagraph.

   2. (ii) In no event shall program funds be used for:

      1. (a) payment of salaries and wages to employees of the qualified applicant; or
      2. (b) other costs or expenses directly related to the applicant's employees or consultants, including office rentals, office equipment, fringe benefits, office expenses, or other administrative expenses.
5. (3) All contracts entered into by the applicant for any services which are to be paid for, in whole or in part, with program funds shall be arms-length transactions and shall be entered into only after an appropriate evaluation of the experience and qualifications of the contracting firm or individual. All firms and individuals with whom such contracts are executed shall be experienced and qualified, and the contract price shall be fair and reasonable. The commissioner shall have the right to cancel any contract that, in the commissioner's sole judgment, does not comply with this paragraph.
6. (4) The qualified applicant shall not enter into any other contract, lease or other agreement whose terms or effect commit the use of program funds for a period of time in excess of the term of the performance contract.
7. (5) Payments shall be made by the division to the qualified applicant as needed to compensate such applicant for work completed on the proposed project. The Division may withhold payments if all required documentation is not presented or is incomplete.
8. (6) The qualified applicant shall maintain accurate books and records of all financial transactions which relate to the performance of the contract, in accordance with generally accepted accounting principles, and make these records available to the division upon request.

(a) Contracts.