HomeMy WebLinkAboutContract 1862 Ig;01(4,—,
OWNER PARTICIPATION AND GRANT AGREEMENT
by and between
THE CITY OF CATHEDRAL CITY,
acting in its capacity as the Housing Successor Agency to the former
Redevelopment Agency of the City of Cathedral City
and
NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA,
a California nonprofit public benefit corporation
(Cathedral Palms Senior Apartments)
14 II , 2019
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THIS OWNER PARTICIPATION AND GRANT AGREEMENT (this "Agreement") is
entered into effective as of , 2019 ("Effective Date")by and between the City of
Cathedral City, a municipal corporation, acting in its capacity as the Housing Successor Agency
to the former Redevelopment Agency of the City of Cathedral City(in such capacity, referred to
herein as the "Agency"), and National Community Renaissance of California, a California
nonprofit public benefit corporation formerly known as Southern California Housing
Development Corporation ("Developer" or"National CORE"). The Agency and the Developer
are collectively referred to herein as the "Parties."
RECITALS
A. Developer is the owner of the real property located at 31750 Landau Boulevard in
the City of Cathedral City, California, known as Riverside County Assessor's Parcel Nos. 678-
210-034-3 and 678-210-035-4, and more particularly described in Exhibit A attached hereto (the
"Property"). The Property is improved with a multifamily senior housing development known
as Cathedral Palms Apartments consisting of 191 studio apartments and 40 two-bedroom
apartments restricted for occupancy by eligible senior households at affordable rents (the
"Project").
B. The former Redevelopment Agency of the City of Cathedral City
("Redevelopment Agency") and Developer entered into an Owner Participation Agreement
dated as of May 1, 2003, and recorded in the Official Records on December 15, 2003 as
Instrument No. 2003-977446 ("Original OPA"), pursuant to which the Redevelopment Agency
provided a residual receipts loan to Developer in the amount of One Million Dollars
($1,000,000) (the "Original Loan") to fund certain sewer infrastructure improvements related to
the Project and which were completed by Developer. The Original Loan is evidenced by a
promissory note from Developer to the Redevelopment Agency(the "Original Promissory
Note").
C. Developer has proposed to rehabilitate and refinance the Project using a
combination of 4%federal low-income housing tax credits,tax-exempt bonds, funding from the
State of California Department of Housing and Community Development and from other
institutional and governmental sources. To implement the rehabilitation of the Project,National
CORE has requested that the Agency: (i) provide a grant to National CORE in the amount of
Seven Hundred Sixty-Five Thousand, One Hundred Twenty-Five Dollars($765,125) ("New
Agency Funds") at the time that construction financing closes for the rehabilitation, (ii) approve
the transfer of the Property to a limited partnership whose managing general partner is a limited
liability company for which Developer will be the managing member, and(iii)approve the
termination and cancellation of National CORE's obligations pertaining to the Original Loan and
the Original Promissory Note prior to the transfer of the Property.
D. Concurrently with the closing for construction financing for the rehabilitation of
the Project, among other documents,the Approved Partnership will execute: (i) an Affordable
Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory
Agreement")that will require rents for the residential units in the Project to be affordable to
low-, and very low-income senior households, including a supportive housing and special needs
set-aside as required by TCAC and/or State of California No Place Like Home funding, for a
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term of not less than fifty-five (55) years, and (ii) an assignment and assumption agreement
executed by Developer and the Approved Partnership in form approved by Agency reflecting
Developer's assignment of certain of its rights hereunder to the Approved Partnership and the
Approved Partnership's assumption of certain of Developer's obligations under this Agreement.
The Regulatory Agreement will replace and supersede previously-recorded restrictions affecting
the Property as more particularly described in the Termination and Release Agreement attached
hereto as Exhibit F.
E. A material inducement to Agency to enter into this Agreement is the agreement
by Developer or the Approved Partnership, as applicable,to rehabilitate the Project within the
time periods specified herein and in accordance with the provisions hereof, and the Agency
would be unwilling to enter into this Agreement in the absence of an enforceable commitment to
take such actions and complete such work in accordance with such provisions and within such
time periods.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows.
ARTICLE I
DEFINITIONS; EXHIBITS
1.1 Definitions. The following terms shall have the meanings set forth in the Sections
referenced below whenever used in this Agreement and the Exhibits attached hereto. Additional
terms are defined in the Recitals and text of this Agreement.
"Actual Household Size" means the actual number of persons in the
applicable household.
"Adjusted for Family Size Appropriate for the Unit" shall be
determined consistent with Section 50052.5(h) of the California Health and Safety
Code; provided however, if the Project is financed using federal low-income
housing tax credits, for so long as the extended use regulatory agreement executed
by and between the Project owner and TCAC remains in effect for the Project,
"Adjusted for Family Size Appropriate for the Unit" shall be determined in
accordance with the applicable provisions of Section 42 of the Internal Revenue
Code of 1986, as amended and the federal regulations applicable thereto.
"Affordability Covenant" is defined in Section 2.6.
"Affordable Housing Agreement" is defined in Section 2.6.
"Affordable Rent" means the following amounts, less a utility allowance
and other fees and charges required to be paid by tenants of the Project on a non-
optional basis: (i) for units that are restricted for rental to households with
incomes of not more than forty percent(40%) of AMI ("40% Units"), a monthly
rent that does not exceed one-twelfth of thirty percent (30%) of forty percent
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(40%) of Area Median Income, Adjusted for Family Size Appropriate for the
Unit, and (ii) for units that are restricted for rental to households with incomes of
not more than fifty percent (50%) of AMI ("50% Units"), a monthly rent that
does not exceed one-twelfth of thirty percent(30%) of fifty percent (50%) of Area
Median Income, Adjusted for Family Size Appropriate for the Unit.
"Agency" means Cathedral City, a municipal corporation, acting in its
capacity as the Housing Successor Agency to the former Redevelopment Agency
of the City of Cathedral City.
"Agency Documents" means collectively, this Agreement, the Regulatory
Agreement, and the Termination and Release Agreement.
"Applicable Laws" is defined in Section 5.15.
"Approved Partnership" means a limited partnership whose managing
general partner is National CORE, , a wholly-controlled tax-exempt affiliate of
National CORE, or a limited liability company whose managing member is
National CORE.
"Area Median Income" or"AMI" means the median income for
Riverside County, California, adjusted for Actual Household Size, as determined
by the U.S. Department of Housing and Urban Development("HUD")pursuant
to Section 8 of the United States Housing Act of 1937 and as published from time
to time by the State of California Department of Housing and Community
Development("HCD") in Section 6932 of Title 25 of the California Code of
Regulations or successor provision; provided however, during such time that the
Project is subject to a TCAC regulatory agreement, the rules applicable to low
income housing tax credits under the applicable provisions of Section 42 of the
Internal Revenue Code, as amended and the regulations applicable thereto, shall
apply for the purpose of determining the applicable household income limitations.
"Authorized Representative" means the City Manager of the City of
Cathedral City, or his or her designee.
"CDLAC" means the California Debt Limit Allocation Committee.
"Certificate of Completion" is defined in Section 5.12.
"City" means the Cathedral City, California, a municipal corporation.
"City Council" means the City Council of the City of Cathedral City,
California.
"Claims" is defined in Section 5.11.
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"Closing Date" or"Close of Escrow" shall be the date that escrow closes
for transfer of title to the Property to the Approved Partnership and the close of
construction financing for rehabilitation of the Project.
"Conditions of Approval" is defined in Section 5.4.
"Construction Plans" is defined in Section 5.6.
"Developer" means National Community Renaissance of California, a
California nonprofit public benefit corporation formerly known as Southern
California Housing Development Corporation and Developer's permitted
successors and assigns.
"Environmental Laws" is defined in Section 6.6.2.
"Escrow Agent" is defined in Section 3.1.
"Financing Plan" is defined in Section 2.5.2.
"Force Majeure" is defined in Section 11.2.
"Hazardous Material" is defined in Section 6.6.1.
"Improvements" means the existing residential development located on
the Property as such will be modified pursuant to the Construction Plans, and any
additional improvements to be constructed on the Property pursuant to the
Construction Plans, including without limitation, a new community building.
"Indemnitees" is defined in Section 5.11.
"Investor Limited Partner" means RSEP Holding, LLC, a Delaware
limited liability company, and its successors and assigns or an affiliate of Red
Stone Equity Partners, LLC.
"National CORE" means National Community Renaissance of
California, a California nonprofit public benefit corporation formerly known as
Southern California Housing Development Corporation.
"New Agency Funds" is defined in Recital C.
"Official Records" means the Official Records of Riverside County.
"Original Loan" is defined in Recital B.
"Original OPA" is defined in Recital B.
"Original Regulatory Agreement" is defined in Section 2.6.
"Partnership Agreement" is defined in Section 7.3.
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"Project" is defined in Recital C and is more fully described in Section
2_3.
"Property" is defined in Recital A and described in Exhibit A.
"Redevelopment Covenant" is defined in Section 2.6.
"Regulatory Agreement" is defined in Section 3.4.
"TCAC" means the California Tax Credit Allocation Committee.
"Termination and Release Agreement" is defined in Section 2.6.
"Title Company" is defined in Section 3.1.
"Transfer" is defined in Section 7.2.
1.2 Exhibits. The following Exhibits are attached hereto and incorporated into this
Agreement by this reference:
A Legal Description of the Property
B Form of Regulatory Agreement
C [Intentionally omitted]
D Financing Plan
E Form of Certificate of Completion
F Termination and Release Agreement
G Schedule of Performance
ARTICLE II
REPRESENTATIONS; EFFECTIVE DATE; PROJECT SCOPE; FINANCING PLAN
2.1 Developer Representations. Developer covenants that until the expiration or
earlier termination of this Agreement, upon learning of any fact or condition which would cause
any of the warranties and representations in this Section 2.1 to be untrue, Developer shall
immediately give written notice of such fact or condition to Agency. Developer acknowledges
that Agency shall rely upon Developer's representations made herein notwithstanding any
investigation made by or on behalf of Agency. Developer hereby represents, warrants, and
covenants that the following are true and correct as of the Effective Date, and shall be true and
correct as of the Closing Date.
(a) Organization. Developer is a nonprofit public benefit corporation, duly
organized and in good standing under the laws of the State of California, and tax-exempt under
Section 501(c)(3) of the Internal Revenue Code of 1986.
(b) Authority of Developer. Developer has full power and authority to
execute and deliver this Agreement and all other documents or instruments executed and
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delivered by Developer, or to be executed and delivered by Developer pursuant to or in
connection with this Agreement, and to perform and observe the terms and provisions of all of
the foregoing.
(c) Authority of Persons Executing Documents. This Agreement and all other
documents or instruments that have been or that will be executed and delivered by Developer
pursuant to or in connection with to this Agreement, have been or will be executed and delivered
by persons who are duly authorized to execute and deliver the same for and on behalf of
Developer, and all actions required under Developer's organizational documents and applicable
governing law for the authorization, execution, delivery and performance of this Agreement and
all other documents or instruments that have been or that will be executed and delivered by
Developer, pursuant to or in connection with this Agreement, have been duly taken or will have
been duly taken (to the extent such actions are required) as of the date of execution and delivery
of such documents.
(d) Valid and Binding Agreements. This Agreement and all other documents
or instruments that have been or that will be executed and delivered by Developer pursuant to or
in connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered, constitute legal, valid and binding obligations of Developer, enforceable
in accordance with their respective terms, subject to laws affecting creditors' rights and
principles of equity.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement or any other documents or instruments that have been or that will be executed
and delivered by Developer pursuant to or in connection with this Agreement, nor the
performance of any provision, condition, covenant or other term hereof or thereof, will conflict
with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of
any court, board, commission or agency binding on Developer, or any provision of the
organizational documents of Developer, or will conflict with or constitute a breach of or a default
under any agreement to which Developer is a party, or will result in the creation or imposition of
any lien upon any assets or property of Developer, other than liens established pursuant hereto.
(f) Pending Proceedings. Except as disclosed in writing to the Agency prior
to execution of this Agreement, Developer is not in default under or in violation of any law or
regulation or under any order of any court, board, commission or agency whatsoever, and to the
best knowledge of Developer's officers, there are no claims, actions, suits or proceedings
pending or,to the best knowledge of Developer's officers, threatened against or affecting
Developer or the Property, at law or in equity, before or by any court, board, commission or
agency which would have a material adverse effect on the Developer or the Project. Developer
is not the subject of any bankruptcy or insolvency proceeding, and no general assignment or
arrangement for the benefit of creditors or the appointment of a trustee or receiver to take
possession of all or substantially all of Developer's assets has been made.
2.2 Effective Date. The obligations of the Parties hereunder shall be effective as of
the Effective Date which date is set forth in the preamble to this Agreement.
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2.3 Project Scope. The Property is currently developed with a senior rental housing
development consisting of 191 studio apartments, 40 two-bedroom apartments, and a community
room. The Project will include (i)the demolition of eight (8)existing studio apartments, (ii)the
construction of a new approximately 3,400 square foot community center, and (iii)the
substantial rehabilitation of the existing apartments, including the conversion of a portion of the
existing community center back into use as a studio residential unit. When rehabilitation is
complete,the Project will include 184 studio apartments and 40 two-bedroom units. All of the
residential units except two (2)managers' units will be subject to affordability and occupancy
restrictions in accordance with the Regulatory Agreement. The Project will serve low-,very
low-, and to the extent feasible, extremely low-income senior households, including a supportive
housing and special needs set-aside as required by the sources of funding for the acquisition,
rehabilitation, and operation of the Project.
2.4 Design Review; Conditions of Approval; Environmental Review. Developer will
submit design documents including elevations and schematic drawings for the Project for review
and approval by the City Planning Commission or City Council, as applicable. If the City does
not approve any submittal,Developer shall submit revised documents that address the City's
objections. Developer agrees that it shall rehabilitate the Project in accordance with the
approved design documents and Construction Plans.
The City has determined that as proposed, the Project qualifies for an exemption pursuant
to CEQA Guidelines Section 15301. In the event that the proposed Project is modified or other
circumstances arise that would affect the Project's eligibility for an exemption, Developer shall
cause to be performed any additional environmental studies required by the City in connection
with environmental review of the Project in accordance with CEQA.
2.5 Financing Plan.
2.5.1 Preliminary Financing Plan. As described in Exhibit D, Developer has
preliminarily proposed financing the Project with a combination of loans,tax-exempt bonds, 4%
federal low-income housing tax credits and equity contributions from tax credit investors,
funding from the Agency, deferred developer fee, and allocable net income from interim
operation of the Project during construction/rehabilitation. In addition, at the Close of Escrow
for sale of the Property to the Approved Partnership,National Community Renaissance of
California(in this capacity, "Seller")will take back a residual receipts promissory note ("Seller
Note")for(a) a substantial portion of its equity in the Project, and (b) repayment of Seller's
previous advances in the amount of approximately $750,000 to cover Project operating cash
shortfalls if Project reserves accrued as of Close of Escrow and/or other sources of Project
Financing are insufficient to reimburse Seller for such advances. The Seller Note will be secured
by a deed of trust that will be junior and subordinate to all other deeds of trust recorded at the
Close of Escrow. The Seller Note will be payable only from residual receipts either accruing to
the general partner of the Approved Partnership or payable when other residual receipts notes
have been paid in full, and shall be payable in full 57 years from the Close of Escrow. The
form of the Seller Note,the interest rate payable thereunder, and the form of the deed of trust
securing the same, shall be subject to Agency's review and approval; provided,however,the
Agency's consent shall not be required for an interest rate equal to the long-term applicable
federal rate for the month in which Close of Escrow occurs.
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2.5.2 Revised Financing Plan. Developer shall submit for Agency review and
approval a revised financing plan addressing the anticipated sources and uses of financing for the
acquisition of the Property by the Approved Partnership and the rehabilitation/construction of the
Project (the "Financing Plan"). The Financing Plan shall indicate all sources of funds necessary
to pay, when due,the estimated costs of planning for, acquiring, rehabilitating, and constructing
the Project, and Developer shall deliver to Agency prior to the Closing Date, evidence that all
such funds are subject to binding commitments in form acceptable to Agency, from equity
investors and lenders, subject only to commercially reasonable conditions. The Financing Plan
shall include projected development and operating pro formas which set out in detail the plan for
financing the costs of acquisition, rehabilitation, and operation of the Project.
2.5.3 Modifications; Final Financing Plan. Proposed modifications to the
Financing Plan shall be submitted to the Agency for review and approval. Agency staff shall
promptly review such proposed modifications, and acting through its Authorized Representative,
the Agency shall approve such modifications in writing within fifteen (15) business days
following receipt provided that the modifications and the material submitted conform to the
requirements of this Agreement. If the Agency does not approve proposed modifications, the
Agency shall set forth its objections in writing and notify Developer of the reasons for its
disapproval. Developer shall thereafter submit a revised Financing Plan that addresses the
reasons for disapproval. If the Agency does not approve or provide written objections to
Developer within such fifteen (15) business day period, the proposed modifications shall be
deemed approved. Agency's approval of the final Financing Plan shall be a condition precedent
to Agency's obligation to provide the New Agency Funds. The terms set forth in the body of
this Agreement shall prevail in the event of a conflict between the information set forth in the
Financing Plan and the terms set forth in the body of this Agreement.
2.5.4 Financing Applications. Developer will use best efforts to submit
applications to CDLAC and TCAC in order to secure allocations of tax-exempt bonds and 4%
federal low-income housing tax credits, respectively, by not later than July 1, 2020, subject to
the agencies' application schedules. Upon award of a preliminary tax credit reservation from
TCAC, Developer shall exercise diligent good faith efforts to obtain a funding commitment from
a reputable equity investor. If Developer does not receive an allocation of tax-exempt bonds and
an award of 4% tax credits by December 1, 2020, unless the Parties agree to an alternative
financing plan for the Project, the Agency shall have the right, by delivery of written notice to
Developer,to terminate this Agreement, and upon such termination, all rights and obligations of
the Parties hereunder shall terminate except those that expressly survive termination.
2.5.5 Loan and Grant Documents; Partnership Agreement. Developer shall
submit to the Agency for its review and approval, copies of all loan and grant documents for the
Project construction/rehabilitation and permanent financing sources, and copies of the
1 Partnership Agreement and related documents.
2.6 Termination and Release of Prior Documents. The Parties agree that this Agreement
shall supersede and replace in its entirety the Original OPA. In addition, the Parties agree that
effective as of the date that the Regulatory Agreement is recorded in the Official Records,the
Regulatory Agreement shall supersede and replace in their entirety all of the following
instruments: (i)that certain Regulatory Agreement and Declaration of Restrictive Covenants,
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executed by and between the Redevelopment Agency and Southern California Housing
Development Corporation, dated as of October 1, 1996, and recorded December 30, 1996, as
Instrument No. 489518, of Official Records ("Original Regulatory Agreement"); (ii) that
certain Operation and Maintenance Agreement executed by and between the Redevelopment
Agency and The Southern California Housing Development Corporation, dated as of October 1,
1996, and recorded December 30, 1996, as Instrument No. 489519, of Official Records (the
"Original O&M Agreement"); (iii)that certain Declaration of Affordability Covenants,
executed by Southern California Housing Development Corporation, dated May 1, 2003, and
recorded December 31, 2003, as Instrument No. 2003-1017672, of Official Records
("Affordability Covenant"); (iv)that certain Declaration of Redevelopment Covenants,
executed by Southern California Housing Development Corporation, dated May 1, 2003, and
recorded December 31, 2003, as Instrument No. 2003-1017895, of Official Records
("Redevelopment Covenant"); and (v)the Affordable Housing Agreement dated October 1,
1996 ("Affordable Housing Agreement").
To evidence the agreement of the Parties described in this Section 2.6, the Parties shall
execute a Termination and Release Agreement substantially in the form attached hereto as
Exhibit F (the "Termination and Release Agreement") which shall be recorded in the Official
Records substantially concurrently with recordation of the Regulatory Agreement. Concurrently
with the recordation of the Termination and Release Agreement, Agency shall execute and
record a Release and Full Reconveyance of that certain Deed of Trust, Security Agreement and
Fixture Filing (with Assignment of Rents), executed by The Southern California Housing
Development Corporation as Trustor for the benefit of the Redevelopment Agency, dated
October 1, 1996, and recorded on December 30, 1996, as Instrument No. 489521, of Official
Records.
Provided that all conditions precedent to such action have been satisfied, prior to the
Close of Escrow, Agency agrees to execute and record such instruments as reasonably necessary
to document the termination and cancellation of National CORE's obligations pertaining to the
Original Loan and the Original Promissory Note.
2.7 Schedule of Performance. Developer will prepare a detailed schedule of the
expected time for performance of its activities under this Agreement, including milestones for
obtaining entitlements, applying for and securing financing, and an anticipated Closing Date (the
"Schedule of Performance"). An initial Schedule of Performance is attached to this Agreement
as Exhibit G. Developer shall provide any proposed modifications to the Schedule of
Performance to Agency for its review and approval. The Parties recognize that the Schedule of
Performance may require modification from time to time as approval of Project entitlements and
financing may require.
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ARTICLE III
CONDITIONS PRECEDENT TO CLOSING
3.1 Escrow. Agency and Developer shall open escrow at the office of First American
Title Company located at 3400 Central Avenue, Suite 100, Riverside, CA 92506, or such other
title company as the Parties may agree upon ("Escrow Agent" and "Title Company") in order
to consummate the closing for the transactions contemplated hereby.
3.2 Costs of Closing and Escrow; Legal Fees. Developer or the Approved
Partnership shall pay all title insurance premiums for policies Developer or the Approved
Partnership elects to obtain in connection with the transfer of title to the Property and the
financing of the Project, and all recording fees, transfer taxes, escrow fees, and closing costs
incurred in connection with the acquisition of the Property by the Approved Partnership.
Developer or the Approved Partnership shall pay for the cost of any lender's policy of title
insurance that Agency elects to acquire in connection with the transactions contemplated hereby.
Agency and Developer shall provide Escrow Agent with a copy of this Agreement, which
together with such supplemental instructions as Agency or Developer may provide and which are
consistent with the intent of this Agreement or which are otherwise mutually agreed upon by
Agency and Developer, shall serve as escrow instructions for the Close of Escrow. At Close of
Escrow, Developer shall pay Agency's legal fees incurred in connection with the transactions
contemplated by this Agreement, including without limitation, attorneys' fees incurred in
connection with the negotiation and preparation of this Agreement and the Agency Documents,
review of the Partnership Agreement and related documents, and review of loan documents,
grant agreements, intercreditor, and subordination agreements required in connection with the
financing of the Project and the Close of Escrow, in an amount not to exceed Thirty-Five
Thousand Dollars ($35,000).
3.3 Closing. The Closing Date shall be a date that is mutually acceptable to the
Parties, consistent with Section 5.1, and which shall occur within thirty (30) days following the
Developer's satisfaction or Agency's waiver of all conditions precedent set forth in Section 3.4.
Prior to the Close of Escrow, Developer or the Approved Partnership, as applicable, shall deposit
into escrow the Agency Documents to which Developer or the Approved Partnership is a party,
executed and acknowledged as applicable, and the share of closing costs to be paid by such
parties. Provided that all conditions precedent to Close of Escrow have been satisfied or waived,
Agency shall deposit into escrow executed copies of the Agency Documents to which Agency is
a party and all instruments which the Agency is required to provide pursuant to Section 2.6. On
the Closing Date, the Escrow Agent shall cause the Regulatory Agreement and all other
recordable instruments to be recorded in the Official Records in compliance with the provisions
of this Agreement and with instructions from the Parties or their counsel.
3.4 Agency's Conditions to Closing. Agency's agreement to permit National CORE
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to transfer title of the Property to the Approved Partnership, Agency's obligation to provide the
New Agency Funds to National CORE, and Agency's obligation to execute and deliver the
Termination and Release Agreement at the Close of Escrow are conditioned upon the satisfaction
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of the terms and conditions set forth in this Section 3.4, unless any such condition is waived in
writing by the Agency acting in the discretion of its Authorized Representative.
(a) No Default. There shall exist no condition, event or act which would
constitute a material breach or default under this Agreement or any other Agency Document, or
which, upon the giving of notice or the passage of time, or both,would constitute such a material
breach or default.
(b) Representations. All representations and warranties of Developer
contained herein or in any other Agency Document or certificate delivered in connection with the
transactions contemplated by this Agreement shall be true and correct in all material respects as
of the Close of Escrow.
(c) Due Authorization and Good Standing. Developer shall have delivered to
Agency copies of all of the following, including updated versions of any of the following that
have been amended or modified since the date of any prior delivery to Agency: (i) a certificate
of good standing, certified by the Secretary of State, indicating that Developer is properly
organized and authorized to do business in the State of California; (ii) a copy of Developer's
articles of incorporation and all amendments thereto, certified by the Secretary of State; (iii) a
copy of Developer's bylaws, certified by an authorized officer or manager of Developer as
accurate, complete, and in full force and effect; (iv) evidence of Developer's tax-exempt status,
and (v)a resolution certified by Developer's authorized officer authorizing Developer's
execution of and performance under this Agreement and the other Agency Documents.
(d) Partnership Documents. Developer shall have delivered all of the
following: (i)the Partnership Agreement(as amended/amended and restated); (ii)the Approved
Partnership's LP-1 and good standing certificate (each as updated and certified by the Secretary
of State); (iii)for the general partner of the Approved Partnership, a good standing certificate,
evidence of tax-exempt status (if applicable), certified articles of incorporation/LLC-1,
bylaws/operating agreement certified by an authorized officer or representative thereof, and
certified resolutions authorizing the Approved Partnership to enter into the transactions
contemplated hereby and to execute the Agency Documents, and as applicable, amendments
thereto; and(iv) an assignment and assumption agreement in form approved by Agency pursuant
to which the Approved Partnership shall have assumed the Assigned Obligations (as such term is
defined below in Section 4.6).
(e) Execution, Delivery and Recordation of Documents. Developer(or as
applicable,the Approved Partnership) shall have executed, acknowledged as applicable, and
delivered to Agency this Agreement, and all other documents required in connection with the
transactions contemplated hereby, including without limitation(i) an Affordable Housing
Regulatory Agreement and Declaration of Restrictive Covenants substantially in the form
attached hereto as Exhibit B (the"Regulatory Agreement"), and (ii) a Termination and Release
Agreement substantially in the form attached hereto as Exhibit F. Concurrently with the Close of
Escrow,the Regulatory Agreement shall be recorded in the Official Records.
(f) Intentionally omitted.
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(g) Financing Plan. Agency shall have approved the Financing Plan, as the
same may have been revised, including without limitation, the development and operating
budgets for the Project.
(h) Approval of Partnership Agreement and Financing Documents; Evidence
of Availability of Funds. Agency shall have approved the Partnership Agreement, and shall have
approved the loan documents for all financing sources for the Project. With the exception of
financing that may be provided under the Affordable Housing Program (AHP) of the Federal
Home Loan Bank of San Francisco, all sources of construction financing for the Project shall
have closed or shall close concurrently with the Close of Escrow, and Developer shall have
provided evidence reasonably satisfactory to Agency that(i) all conditions to the release and
expenditure of the initial draw of funds from each source described in the approved Financing
Plan as a source of construction financing for the Project have been met and that such funds will
be available at the Close of Escrow, and (ii) all construction financing (including draws
subsequent to the initial draw of funds) will be available upon the satisfaction of the conditions
set forth in the applicable documents.
(i) Construction Contract, Plans, Budget and Schedule. Agency shall have
approved the construction budget and schedule, and the construction contract for the Project, and
Agency shall have approved the final Construction Plans and specifications for the Project.
Developer shall have delivered a copy of the construction contract for the Project to the Agency.
If Agency has not provided written objections regarding the construction budget and schedule, or
the construction contract for the Project within fifteen (15) business days following their
submittal to the Agency, such items shall be deemed to have been approved.
(j) Permits and Approvals. Developer shall have delivered evidence
satisfactory to Agency that Developer has obtained all approvals and all permits (including
without limitation building permits) required to rehabilitate the Project, or that the receipt of such
permits is subject only to the payment of fees necessary for the issuance thereof and such
conditions as Agency shall reasonably approve.
(k) Payment of Fees. Developer shall have paid when due all fees and
charges in connection with the processing of all applicable City permits and approvals.
(1) Insurance; Payment and Performance Bonds. Developer shall have
provided evidence satisfactory to Agency that Developer has obtained insurance coverage
meeting the requirements set forth in Article X, and shall have provided to Agency copies of
payment bonds and performance bonds pursuant to Section 5.18.
(m) Mechanics' Liens. Developer's delivery to Agency of evidence
reasonably satisfactory to Agency that there are no mechanics' liens or stop notices related to the
Property or the Project, and the delivery to Agency of full waivers or releases of lien claims if
required by Agency.
(n) Other Documents. Developer's delivery to Agency, and Agency approval
of, such other documents related to the development and financing of the Project as Agency may
reasonably request.
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(o) Settlement Statement. Agency shall have approved the final settlement
statement for the Close of Escrow.
(p) Construction Financing. Escrow for the Agency financing shall close
concurrently with the closing for the conventional construction loan for the Project and any
public agency loans for the Project.
(q) Grant Proceeds. National CORE and the Approved Partnership shall have
entered into an agreement in form approved by Agency regarding disbursement and use of the
New Agency Funds for the Project, in accordance with Section 4.2.
ARTICLE IV
AGENCY FINANCIAL ASSISTANCE
4.1 New Agency Funds. In order to increase the affordability of the Project, upon
satisfaction of the conditions precedent set forth in Section 3.4 above, Agency agrees to provide
a grant to National CORE in the amount of Seven Hundred Sixty-Five Thousand, One Hundred
Twenty-Five Dollars ($765,125) upon the terms and conditions and for the purposes set forth in
this Agreement.
4.2 Use of New Agency Funds. National CORE covenants and agrees that it shall
loan or contribute the New Agency Funds to the Approved Partnership for use solely for
rehabilitation, construction, and related costs for the Project. Provided that all applicable
conditions precedent to disbursement set forth in Section 3.4 have been satisfied, Agency shall
disburse the New Agency Funds into a restricted account that(i) is held either by an Agency-
approved escrow holder or by the Project's commercial construction lender, and (ii) is subject to
and governed by an escrow agreement, intercreditor agreement, or similar agreement approved
by Agency. Upon such disbursement, the New Agency Funds shall be deemed to have been
disbursed to National CORE and subsequently loaned or contributed by National CORE to the
Approved Partnership. Agency shall approve withdrawals from such account solely for Project
rehabilitation/construction costs and related Project costs approved by Agency.
4.3 Intentionally omitted.
4.4 Conditions to Closing and Disbursement of New Agency Funds. Agency's
obligation to disburse New Agency Funds is conditioned upon the satisfaction of all of the
conditions set forth in Section 3.4 above.
4.5 No Obligation to Close Escrow Upon Default. Notwithstanding any other
provision of this Agreement, the Agency shall have no obligation to authorize Close of Escrow
or disburse any of the New Agency Funds following:
(i) the failure of any of Developer's representations and warranties made in
this Agreement or in connection with this Agreement to be true and correct in all material
respects;
(ii) the termination of this Agreement; or
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(iii) the occurrence of an Event of Developer Default under any Agency
Document which remains uncured beyond any applicable cure period, or the existence of any
condition, event or act which upon the giving of notice or the passage of time or both would
constitute an Event of Developer Default under any Agency Document.
4.6 Assumption of Obligations by Approved Partnership. National CORE intends to
sell and transfer the Project to the Approved Partnership. Concurrent with such transfer,the
Approved Partnership shall: (i) assume all of Developer's obligations under this Agreement and
the other Agency Documents, other than the obligations of National CORE relating to the receipt
and use of the grant proceeds which shall remain the obligation of National CORE (collectively
the "Assigned Obligations"), pursuant to an assignment and assumption agreement in form
approved by Agency, or in Agency's discretion, an amended and restated version of this
Agreement, and (ii) execute and deliver such additional instruments as Agency shall reasonably
require. The assignment and assumption agreement may specify that the indemnity provisions of
this Agreement shall continue to apply to National Community Renaissance of California with
respect to Claims arising from or relating to the period prior to the Close of Escrow, and that the
indemnity provisions of this Agreement shall apply to the Approved Partnership with respect to
Claims arising after the Close of Escrow. Notwithstanding anything to the contrary contained
herein,National CORE shall at all times remain the recipient of the New Agency Funds and shall
remain liable for all obligations relating to receipt and use of such funds.
ARTICLE V
REHABILITATION AND USE OF THE PROJECT AND THE PROPERTY
5.1 Development Schedule. Subject to Force Majeure and any modification of the
Schedule of Performance agreed upon by the Parties, Developer shall commence rehabilitation
of the Project by not later than July 1, 2021, and shall diligently prosecute to completion the
rehabilitation of the Project to enable City to issue final certificates of occupancy or equivalent
thereof for all residential units in the Project within eighteen (18)months following
commencement of the work but in no event later than December 31, 2022. Developer shall use
diligent and commercially reasonable efforts to perform Developer's obligations under this
Agreement within the times periods set forth herein, and if no such time is provided,within a
reasonable time, designed to permit issuance of final certificates of occupancy or equivalent
thereof for all residential units in the Project by the date specified in this Section 5.1. Subject to
Force Majeure and the City's issuance of permits and approvals, Developer's failure to
commence or complete rehabilitation of the Project in accordance with the time periods specified
in this Section 5.1 shall be an Event of Developer Default hereunder.
The Authorized Representative shall have discretion to extend the deadlines specified in
this Section 5.1 by up to two (2)one-year periods without City Council approval.
5.2 Project Costs. Except as expressly set forth herein, Developer shall be solely
responsible for all direct and indirect costs and expenses incurred in connection with the Project,
including without limitation appraisal fees,title reports and any environmental assessments
Developer elects to undertake. Except as expressly set forth herein, all costs of designing,
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developing and rehabilitating the Project and compliance with the Conditions of Approval, shall
be borne solely by Developer and shall not be an obligation of the City or the Agency.
5.3 Permits and Approvals; Payment of Fees; Cooperation. Developer acknowledges
that the execution of this Agreement by the Agency does not constitute City approval for the
purpose of the issuance of building permits, does not limit in any manner the discretion of City
in such approval process, and does not relieve Developer from the obligation to apply for and to
obtain from the City and all other agencies with jurisdiction over the Property, all necessary
approvals, entitlements, and permits for the rehabilitation of the Project(including without
limitation, the approval of Construction Plans, the issuance of any certificates regarding historic
resources required in connection with the development of the Property(if any), and the approval
of the Project in compliance with CEQA and if applicable,NEPA), nor does it limit in any
manner the discretion of the City or any other agency in the approval process. Prior to the Close
of Escrow for the Project, Developer shall have obtained all entitlements, permits, licenses and
approvals required for the rehabilitation of the Project, including without limitation, building
permits and use permits or shall provide evidence satisfactory to Agency that receipt of such
permits and approvals is subject only to such conditions as Agency may reasonably approve.
Developer shall pay when due all customary and usual fees and charges in connection with the
processing of all applicable permits and approvals. Developer shall not commence construction
work on the Project prior to issuance of building permits required for such work. Agency staff
shall work cooperatively with Developer to assist in coordinating the expeditious processing and
consideration of all permits, entitlements and approvals necessary for the development and
operation of the Project as contemplated by this Agreement.
5.4 Conditions of Approval. Developer shall rehabilitate the Project in accordance
with the terms and conditions of this Agreement and in compliance with the terms and conditions
of all approvals, entitlements and permits that the City or any other governmental body or agency
with jurisdiction over the Project or the Property has granted or issued as of the date hereof or
may hereafter grant or issue in connection with rehabilitation of the Project, including without
limitation, all mitigation measures imposed in connection with environmental review of the
Project and all conditions of approval imposed in connection with any entitlements, approvals or
permits (all of the foregoing approvals, entitlements, permits, mitigation measures and conditions
of approval are hereafter collectively referred to as the "Conditions of Approval").
5.5 Fees. Developer shall be solely responsible for, and shall promptly pay when due,
all customary and usual fees and charges of City and all other agencies with jurisdiction over
rehabilitation of the Project in connection with obtaining building permits and other approvals
for the Project, including without limitation, those related to the processing and consideration of
amendments, if any, to the current entitlements, any related approvals and permits,
environmental review, architectural review, historic review, and any subsequent approvals for
the Project.
5.6 Construction Plans. Developer shall submit to City's Building Department
detailed construction plans for the Project(the "Construction Plans"). As used herein
"Construction Plans" means all construction documents upon which Developer and Developer's
contractors shall rely in rehabilitating the Project(including the landscaping, parking, and
common areas) and shall include, without limitation, the final architectural drawings,
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landscaping, exterior lighting and signage plans and specifications, materials specifications,
exterior elevations, and building plans and specifications.
5.7 Construction Pursuant to Plans. Developer shall rehabilitate and/or construct each
component of the Project in accordance with the Construction Plans as approved by the City's
Building Department, the Conditions of Approval, and all other permits and approvals granted
by the City pertaining to the Project. Developer shall comply with all directions, rules and
regulations of any fire marshal, health officer, building inspector or other officer of every
governmental agency having jurisdiction over the Property or the Project. Each element of the
work shall proceed only after procurement of each permit, license or other authorization that may
be required for such element by any governmental agency having jurisdiction. All design and
construction work on the Project shall be performed by licensed contractors, engineers or
architects, as applicable.
5.8 Change in Construction Plans. If Developer desires to make any material change
in the approved Construction Plans, Developer shall submit the proposed change in writing to the
Agency and to the City Building Department for their written approval, which approval shall not
be unreasonably withheld or delayed if the Construction Plans, as modified by any proposed
change, conform to the requirements of this Agreement and any approvals issued by the City
after the Effective Date. If the City Building Department approves the proposed change,the
Agency shall be deemed to have approved the proposed change provided that the change does
not result in a change in the total number of residential units in the Project or a reduction in the
size of the community building. If the proposed change is rejected by the City Building
Department or the Agency, the previously approved Construction Plans shall continue to remain
in full force and effect. Any change in the Construction Plans required in order to comply with
applicable codes shall be deemed approved, so long as such change does not substantially nor
materially change the architecture, design, function, use, or amenities of the Project as shown on
the latest approved Construction Plans. Nothing in this Section is intended to or shall be deemed
to modify the City's standard plan review procedures.
5.9 Rights of Access. For the purpose of ensuring that the rehabilitation of the
Project is completed in compliance with this Agreement, Developer shall permit representatives
of the Agency to enter upon the Property during normal business hours and following twenty-
four (24) hours' written notice (except in the case of emergency in which case such notice as
may be practical under the circumstances shall be provided).
5.10 Disclaimer. Developer acknowledges that neither the Agency nor the City is
under any obligation, and neither the Agency nor the City undertake or assume any responsibility
or duty to Developer or to any third party, to in any manner review, supervise, or inspect the
progress of rehabilitation or the operation of the Project. Developer and all third parties shall
rely entirely upon its or their own supervision and inspection in determining the quality and
suitability of the materials and work, the performance of architects, subcontractors, and material
suppliers, and all other matters relating to the rehabilitation and operation of the Project. Any
review or inspection undertaken by the Agency or the City is solely for the purpose of
determining whether Developer is properly discharging its obligations under this Agreement, and
shall not be relied upon by Developer or any third party as a warranty or representation by the
Agency or the City as to the quality of the design or construction of the Project or otherwise.
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5.11 Defects in Plans. Neither the Agency nor the City shall be responsible to
Developer or to any third party for any defect in the Construction Plans or for any structural or
other defect in any work done pursuant to the Construction Plans. To the greatest extent
permitted by law,Developer shall indemnify, defend (with counsel approved by Agency) and
hold harmless the City,the Agency and their respective elected and appointed officers, officials,
employees, agents, consultants, and contractors (all of the foregoing, collectively,the
"Indemnitees") from and against all liability, loss, cost, expense (including without limitation
attorneys' fees and costs of litigation), claim, demand, action, suit,judicial or administrative
proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively
"Claims") arising out of, or relating to, or alleged to arise from or relate to defects in the
Construction Plans or defects in any work done pursuant to the Construction Plans whether or
not any insurance policies shall have been determined to be applicable to any such Claims. The
indemnification obligations set forth in this Section shall survive the expiration or earlier
termination of this Agreement and the recordation of a Certificate of Completion. Developer's
indemnification obligations pursuant to this Section shall not extend to Claims to the extent
arising from the gross negligence or willful misconduct of the Indemnitees, and are subject to the
additional terms set forth in Section 10.2 below.
5.12 Certificate of Completion for Project. Promptly after completion of rehabilitation
of the Project, City's issuance of a final Certificate of Occupancy or equivalent for all residential
units in the Project, and the written request of Developer,the Agency will provide a certificate
substantially in the form attached hereto as Exhibit E ("Certificate of Completion") so
certifying. The Certificate of Completion shall be conclusive evidence that Developer has
satisfied its obligations regarding the rehabilitation of the Project. At Developer's option the
Certificate of Completion shall be recorded in the Official Records. The Certificate of
Completion shall not constitute evidence of compliance with or satisfaction of any obligation of
Developer to any holder of a deed of trust or mortgage securing money loaned to finance the
Project or any part thereof and shall not be deemed a notice of completion under the California
Civil Code, nor shall such Certificate provide evidence that Developer has satisfied any
obligation that survives the expiration of this Agreement.
5.13 Equal Opportunity. There shall be no discrimination on the basis of race, color,
religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring,
firing, promoting or demoting of any person engaged in construction work on the Property, and
Developer shall direct its contractors and subcontractors to refrain from discrimination on such
basis.
5.14 Prevailing Wage Requirements. To the extent applicable, Developer and its
contractors, subcontractors and agents shall comply with California Labor Code Section 1720 et
seq. and the regulations adopted pursuant thereto (and if applicable,the federal Davis Bacon Act
and implementing regulations) (all of the foregoing, collectively, "Prevailing Wage Laws"), and
shall be responsible for carrying out the requirements of such provisions. If applicable,
Developer shall prepare all necessary plans for monitoring payment of prevailing wages, and at
Developer's expense shall implement such plans and comply with all applicable reporting and
recordkeeping requirements.
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To the greatest extent permitted by law, Developer shall indemnify, defend (with counsel
approved by Agency) and hold the Indemnitees harmless from and against all Claims that
directly or indirectly, in whole or in part, are caused by, arise in connection with, result from,
relate to, or are alleged to be caused by, arise in connection with, or relate to,the payment or
requirement of payment of prevailing wages (including without limitation, all claims that may be
made by contractors, subcontractors or other third party claimants pursuant to Labor Code
Sections 1726 and 1781) or the requirement of competitive bidding in connection with the
Project,the failure to comply with any state or federal labor laws, regulations or standards in
connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any
act or omission of Developer related to this Agreement with respect to the payment or
requirement of payment of prevailing wages or the requirement of competitive bidding, whether
or not any insurance policies shall have been determined to be applicable to any such Claims.
The provisions of this Section 5.14 shall survive the expiration or earlier termination of this
Agreement and the issuance of a Certificate of Completion for the Project. Developer's
indemnification obligations set forth in this Section shall not apply to Claims to the extent arising
from the gross negligence or willful misconduct of the Indemnitees, and are subject to the
additional terms set forth in Section 10.2 below.
5.15 Compliance with Laws. Developer shall carry out and shall cause its contractors
and subcontractors to carry out the rehabilitation of the Project in conformity with all applicable
federal, state and local laws, rules, ordinances and regulations ("Applicable Laws"), including
without limitation, all applicable Environmental Laws, all applicable federal and state labor laws
and standards, Section 3 of the Housing and Community Development Act of 1974, as amended
(if applicable pursuant to financing sources used for the Project), applicable provisions of the
California Public Contracts Code, the City's zoning and development standards, building,
plumbing, mechanical and electrical codes, all other applicable provisions of the City's
Municipal Code, and all applicable disabled and handicapped access requirements, including
without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq.,
Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the
Unruh Civil Rights Act, Civil Code Section 51, et seq.. To the greatest extent permitted by law,
Developer shall indemnify, defend (with counsel approved by Agency) and hold harmless the
Indemnitees from and against any and all Claims arising in connection with the breach of
Developer's obligations set forth in this Section whether or not any insurance policies shall have
been determined to be applicable to any such Claims. Developer's indemnification obligations
set forth in this Section shall not apply to Claims to the extent arising from the gross negligence
or willful misconduct of the Indemnitees. Developer's defense and indemnification obligations
set forth in this Section 5.15 shall survive the expiration or earlier termination of this Agreement
and the issuance of a Certificate of Completion for the Project and shall be subject to the
additional terms set forth in Section 10.2 below.
5.16 Liens and Stop Notices. Until the expiration of the term of the Regulatory
Agreement, Developer shall not allow to be placed on the Property or any part thereof any lien or
stop notice on account of materials supplied to or labor performed on behalf of Developer. If a
claim of a lien or stop notice is given or recorded affecting the Project or the Property or any part
thereof, Developer shall within twenty(20) days of such recording or service: (a)pay and
discharge (or cause to be paid and discharged) the same; or(b) effect the release thereof by
recording and delivering (or causing to be recorded and delivered)to the party entitled thereto a
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surety bond in sufficient form and amount; or (c) provide other assurance satisfactory to Agency
that the claim of lien or stop notice will be paid or discharged.
5.17 Right of Agency to Satisfy Liens on the Property. Subject to Developer's right to
contest such lien or stop notice in good faith, if Developer fails to satisfy or discharge any lien
or stop notice on the Property or any part thereof pursuant to and within the time period set forth
in Section 5.16 above,the Agency shall have the right, but not the obligation, to satisfy any such
liens or stop notices at Developer's expense and without further notice to Developer. In such
event Developer shall be liable for and shall immediately reimburse Agency for such paid lien
or stop notice. Alternatively, the Agency may by written notice require Developer to
immediately deposit with Agency the amount necessary to satisfy such lien or claim pending
resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is
adversely determined against Developer. Developer shall file a valid notice of cessation or
notice of completion upon cessation of construction work on the Property for a continuous
period of thirty (30) days or more, and shall take all other reasonable steps to forestall the
assertion of claims or liens against the Property. The Agency may (but has no obligation to)
record any notices of completion or cessation of labor, or any other notice that the Agency
deems necessary or desirable to protect its interest in the Property.
5.18 Performance and Payment Bonds. Prior to commencement of construction work
on the Project, Developer shall cause its general contractor to deliver to the Agency copies of
payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to
do business in California, each in a penal sum of not less than one hundred percent(100%) of the
scheduled cost of construction/rehabilitation of the Project. The bonds shall name the Agency as
co-obligee. Developer's obligations hereunder may be satisfied by naming Agency as a co-
obligee of bonds furnished to the construction lender or other financing parties providing funds
for construction/rehabilitation of the Project. If the Project construction lender does not require
the provision of payment and performance bonds, then in lieu of providing payment and
performance bonds to the Agency, Developer may provide a completion guaranty, in such form
as reasonably required by the Agency, to be executed by Developer or an affiliate thereof
reasonably acceptable to Agency guaranteeing the lien-free completion of the Project in
accordance with this Agreement.
5.19 Insurance Requirements. Developer shall maintain and shall cause its contractors
to maintain all applicable insurance coverage specified in Article X.
5.20 Quarterly Performance Reporting. Upon Agency request, during rehabilitation of
the Project, Developer shall submit to Agency a quarterly performance report within thirty (30)
days of the end of each quarter. The report shall be in the form of a narrative description of all
activities performed in relation to the Project including all development and rehabilitation
activities. The report shall include a Project time-line, including a schedule for completing
milestones and/or tasks, and indicate the status of the Project in relation to such time-line.
Developer shall provide the quarterly reports described in this Section until rehabilitation of the
Project is complete. Upon Agency request, Developer shall, on a monthly basis, provide copies
of construction inspection reports and draw reports provided to construction lenders, at the same
time that such reports are provided to Project construction lenders.
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5.21 Project Completion Reporting. No later than ninety (90) days following
completion of rehabilitation of the Project, Developer shall provide to Agency a Project financial
completion audit or similar audit required under tax credit requirements, performed by an
independent certified public accountant in accordance with generally accepted accounting
principles that identifies all sources and uses of all Project funds. Developer shall provide to
Agency a copy of any Project cost audit concurrently with Developer's provision of such audits
to other regulatory or financing agencies.
5.22 Affordable Senior Housing; Agency Monitoring Fee; Relocation.
5.22.1 Affordable Housing. Developer covenants and agrees for itself, its
successors and assigns that the Property will be subject to recorded covenants that will restrict
use of the Property to operation of an affordable rental residential development for seniors, and
that for a term of not less than fifty-five (55) years commencing upon the issuance of the final
certificate of occupancy or equivalent upon completion of rehabilitation/construction of the
Project, not less than forty-six (46) of the residential units in the Project(thirty-eight(38) studio
apartments and eight (8)two-bedroom apartments) shall be available at Affordable Rents to
households whose income is no greater than forty percent (40%) of Area Median Income, and
not less than an additional 176 of the residential units in the Project (146 studio apartments and
30 two-bedroom apartments) shall be available at Affordable Rents to households whose income
is no greater than fifty percent(50%) of Area Median Income, subject to the terms and
conditions of the recorded covenants. There shall be two (2) manager's units that will not be
subject to rent or occupancy restrictions. Notwithstanding the foregoing, Developer shall
comply with rent and occupancy restrictions imposed by all applicable financing sources and
regulatory agencies if such agencies impose requirements on the Project that are more stringent
than those set forth in this Agreement.
Developer intends to seek up to sixty-eight (68) Section 8 Project-Based Vouchers from
the Housing Authority of the County of Riverside ("HACR") pursuant to which up to 68
apartment units (the"PBV Units") would be set aside for supportive housing, and would be
subject to income limits, occupancy requirements, and rent restrictions pursuant to (i) an
Agreement to Enter into a Housing Assistance Payment Contract("AHAP")to be executed by
and between HACR and the Approved Partnership, and (ii) a Housing Assistance Payment
contract("HAP Contract")that would be executed by and between HACR or HUD and the
Approved Partnership. If Project-Based Vouchers are awarded for the Project, the PBV Units
will be included among the units restricted by the Regulatory Agreement to households whose
income is not more than 50%of Area Median Income; however, the PBV Units may be subject
to more restrictive income and rent limits. If Project-Based Vouchers are not ultimately
awarded to the Project, or if, once awarded, the HAP Contract is cancelled or is not renewed,
then the apartment units that were, or that would have been, subject to the HAP Contract shall
continue to remain available to households whose income is not more than 50%of Area Median
Income in accordance with the Regulatory Agreement so that the Project will continue to include
forty-six (46) units that are available at Affordable Rents to households whose income is no
greater than forty percent(40%) of Area Median Income, and not less than an additional 176
units that are available at Affordable Rents to households whose income is no greater than fifty
percent (50%) of Area Median Income.
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5.22.2 Senior Housing. Developer has elected to operate the Project as a senior
housing development and as such to require all dwelling units in the Project except for the
managers' units to be occupied or held available for occupancy by households that include
"elderly" or"senior" residents in accordance with applicable law. To the extent applicable,the
Project will be operated at all times in accordance with (a) the Unruh Act, including without
limitation California Civil Code Sections 51.2, 51.3, and 51.4; (b)the federal Fair Housing Act,
42 U.S.C. Section 3607(b) and 24 CFR 100.304; (c) the California Fair Employment and
Housing Act, Government Code Section 12900 et seq., and (d) all other laws and regulations
applicable to the Project. Developer shall develop and implement appropriate age verification
procedures to ensure compliance with this Section 5.22.2, and shall provide Agency with a copy
of such verification procedures. Up to sixty-eight (68) of the studio apartments will be reserved
for occupancy by households that include a member age 62 or older if required by the HAP
Contract and/or HUD regulations for units assisted with Project-Based Vouchers.
To the greatest extent permitted by law, Developer (and after Close of Escrow,the
Approved Partnership) will indemnify, defend, and hold the Indemnitees harmless from all
Claims arising out of the failure to comply with applicable legal requirements related to housing
for seniors. The indemnity provisions of this paragraph shall survive the expiration or other
termination of this Agreement.
5.22.3 Monitoring Fee. As more particularly set forth in the Regulatory
Agreement, Developer shall be obligated to pay to Agency an annual compliance monitoring fee
in an amount equal to Seventy Dollars ($70) per unit. Such annual compliance monitoring fee
shall be increased for the third year of Project operation following the City's issuance of a final
certificate of occupancy or equivalent for the Project, and annually thereafter, by the percentage
increase in the Consumer Price Index-All Urban Consumers (CPI-U) for the Riverside-San
Bernardino-Ontario, California area over the prior year.
5.22.4 Relocation. Persons residing on the Property shall not be displaced before
suitable replacement housing is available. Developer shall ensure that all occupants of the
Property receive all notices, benefits and assistance to which they are entitled in accordance with
California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and
local regulations implementing such law, and all other applicable local, state and federal laws,
regulations and policies, including but not limited to the Uniform Relocation Act(42 U.S.C.
§ 4601 et seq.) and implementing regulations (collectively"Relocation Laws") relating to the
displacement and relocation of eligible persons as defined in such Relocation Laws. Agency
acknowledges that Developer/the Approved Partnership intends to relocate existing tenants
within the Project during rehabilitation. All costs incurred in connection with the temporary
and/or permanent displacement and/or relocation of occupants of the Property, including without
limitation payments to a relocation consultant, moving expenses, and payments for temporary
and permanent relocation benefits pursuant to Relocation Laws shall be paid by Developer, and
neither City nor Agency shall have any responsibility for payment therefor. Developer shall be
liable for any and all claims for applicable relocation benefits sought by any current, former or
future tenant of the Property or the improvements existing or to be constructed on the Property.
To the greatest extent permitted by law, Developer shall indemnify, defend (with counsel
approved by Agency) and hold the Indemnitees harmless from and against all Claims arising
from the breach of Developer's obligations set forth in this Section whether or not any insurance
policies shall have been determined to be applicable to any such Claims. Developer's
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indemnification obligations set forth in this Section (i) shall survive the expiration or earlier
termination of this Agreement, and (ii) shall not extend to Claims to the extent arising from the
gross negligence or willful misconduct of the Indemnitees. Agency does not and shall not waive
any rights against Developer that it may have by reason of any indemnity and hold harmless
provision set forth in this Agreement because of the acceptance by Agency, or the deposit with
Agency by Developer, of any of the insurance policies described in this Agreement.
5.23 Maintenance. Developer shall at its own expense, maintain the Property and the
Improvements, including the landscaping and common areas, in good physical condition, in good
repair, and in decent, safe, sanitary,habitable and tenantable living conditions in conformity with
all Applicable Laws. Without limiting the foregoing, Developer agrees to maintain the Property
and the Improvements (including without limitation, landscaping, driveways, parking areas, and
walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti,
disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps
to promptly ameliorate and prevent the same from occurring on the Property. Developer shall
make commercially reasonable efforts to prevent and/or rectify any physical deterioration of
the Improvements and shall make all repairs, renewals and replacements reasonably
necessary to keep the Property and the Improvements in good condition and repair.
5.24 Taxes and Assessments. Developer shall pay all real and personal property taxes,
assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes
assessed against the Property and/or the Improvements, at such times and in such manner as to
prevent any penalty from accruing, or any lien or charge from attaching to the Property or
Improvements; provided, however, Developer shall have the right to contest in good faith, any
such taxes, assessments, or charges. In the event the Developer exercises its right to contest any
tax, assessment, or charge, the Developer, on final determination of the proceeding or contest,
shall immediately pay or discharge any decision or judgment rendered against it, together with
all costs, charges and interest. Nothing in this Section is intended to impair Developer's right to
seek a"welfare exemption" from the payment of ad valorem real property taxes assessed against
the Property under California Revenue and Taxation Code Section 214(g).
5.25 Obligation to Refrain from Discrimination. Developer shall not restrict the rental,
sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the Property or the Project,
or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, gender
identity, disability, marital status, ancestry, or national origin of any person. Developer
covenants for itself and all persons claiming under or through it, and this Agreement is made and
accepted upon and subject to the condition that there shall be no discrimination against or
segregation of any person or group of persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy,tenure or
enjoyment of the Property or the Improvements, or part thereof, nor shall Developer or any
person claiming under or through Developer establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or Improvements,
or part thereof. Developer shall include such provision in all deeds, leases, contracts and other
instruments executed by Developer, and shall enforce the same diligently and in good faith.
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All deeds, leases or contracts made or entered into by Developer, its successors or
assigns, as to any portion of the Property or the Improvements shall contain the following
language:
(a) In Deeds,the following language shall appear:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and all
persons claiming under or through it, that there shall be no discrimination against
or segregation of a person or of a group of persons on account of any basis listed
in subdivision (a) or(d) of Section 12955 of the Government Code, as those bases
12926, 12926.1, subdivision(m) and paragraph (1) of
Sections
aredefinedm
subdivision(p)of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the
property herein conveyed nor shall the grantee or any person claiming under or
through the grantee establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
property herein conveyed. The foregoing covenant shall run with the land.
"(2) Notwithstanding paragraph (1), with respect to familial status,paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions(n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1)."
(b) In Leases,the following language shall appear:
"(1) The lessee herein covenants by and for the lessee and lessee's heirs, personal
representatives and assigns, and all persons claiming under the lessee or through
the lessee,that this lease is made subject to the condition that there shall be no
discrimination against or segregation of any person or of a group of persons on
account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ancestry or disability in the leasing, subleasing,transferring, use,
occupancy,tenure or enjoyment of the property herein leased nor shall the lessee
or any person claiming under or through the lessee establish or permit any such
practice or practices of discrimination of segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the property herein leased.
"(2)Notwithstanding paragraph (1), with respect to familial status, paragraph (1)
shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in
paragraph(1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11
and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision
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(d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o),
and (p) of Section 12955 of the Government Code shall apply to paragraph (1)."
(c) In Contracts pertaining to operation or management of the Project,the following
language, or substantially similar language prohibiting discrimination and segregation
shall appear:
"There shall be no discrimination against or segregation of any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the property nor shall the transferee or
any person claiming under or through the transferee establish or permit any such
practice or practices of discrimination or segregation with reference to selection,
location, number, use or occupancy of tenants, lessee, subtenants, sublessees or
vendees of the land."
ARTICLE VI
CONDITION OF THE SITE; ENVIRONMENTAL MATTERS
6.1 Developer's Obligations. Developer hereby covenants and agrees that:
(1) Developer shall not knowingly permit the Property or any portion thereof
to be a site for the use, generation,treatment, manufacture, storage, disposal or transportation of
Hazardous Material or otherwise knowingly permit the presence or release of Hazardous
Material in, on, under, about or from the Property with the exception of limited amounts of
cleaning supplies and other materials customarily used in construction, rehabilitation, use or
maintenance of buildings and grounds of multifamily residential properties similar in nature to
the Project, and used, stored, and disposed of in compliance with Environmental Laws.
(2) Developer shall keep and maintain the Property and each portion thereof
in compliance with, and shall not cause or permit the Project or the Property or any portion of
either to be in violation of, any Environmental Laws.
(3) Upon receiving actual knowledge of the same, Developer shall
immediately advise Agency in writing of: (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against the Developer, or
the Property pursuant to any applicable Environmental Laws; (ii) any and all claims made or
threatened by any third party against the Developer or the Property relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Material;
(iii) the presence or release of any Hazardous Material in, on, under, about or from the Property;
or(iv) Developer's discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Project classified as "Border Zone Property" under the provisions of
California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in
connection therewith,that may in any way affect the Property pursuant to any Environmental
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Laws or cause it or any part thereof to be designated as Border Zone Property. The matters set
forth in the foregoing clauses (i)through (iv) are hereinafter referred to as"Hazardous
Materials Claims". The Agency shall have the right to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any Hazardous Materials
Claim.
(4) Without the Agency's prior written consent,which shall not be
unreasonably withheld or delayed, Developer shall not take any remedial action in response to
the presence of any Hazardous Material in, on, under, or about the Property(other than in
emergency situations or as required by governmental agencies having jurisdiction in which case
the Agency agrees to provide its consent), nor enter into any settlement agreement, consent
decree, or other compromise in respect to any Hazardous Materials Claim. Agency shall have
the right to join and participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have its reasonable
attorneys' fees in connection therewith paid by Developer.
6.2 Environmental Indemnity. To the greatest extent permitted by law, Developer
shall indemnify, defend (with counsel approved by Agency) and hold Indemnitees harmless from
and against all Claims resulting, arising, or based directly or indirectly in whole or in part, upon
(i)the presence, release, use, generation, discharge, storage or disposal of any Hazardous
Material on, under, in or about the Property, or the transportation of any such Hazardous
Material to or from, the Property, or(ii)the failure of Developer,Developer's employees, agents,
contractors, subcontractors, or any person acting on behalf of or as the invitee of any of the
foregoing to comply with Environmental Laws, except to the extent caused by the Agency's
gross negligence or willful misconduct. The foregoing indemnity shall further apply to any
residual contamination in, on, under or about the Property or affecting any natural resources, and
to any contamination of any property or natural resources arising in connection with the
generation, use, handling,treatment, storage, transport or disposal of any such Hazardous
Material, and irrespective of whether any of such activities were or will be undertaken in
accordance with Environmental Laws.
Developer's obligation to indemnify the Indemnitees shall not be limited or impaired by
any of the following: (i) any amendment or modification of any Agency Document; (ii) any
extensions of time for performance required by any Agency Document; (iii) any provision in any
of the Agency Documents limiting the personal liability of Developer, or any other party under
the Agency Documents; (iv)the accuracy or inaccuracy of any representation and warranty made
by Developer under this Agreement or by Developer or any other party under any Agency
Document, (v)the release of Developer or any other person, by Agency or by operation of law,
from performance of any obligation under any Agency Document; and (vi)Agency's failure to
properly perfect any lien or security interest given as security for performance under the
Regulatory Agreement.
The provisions of this Section 6.2 shall be in addition to any and all other obligations and
liabilities that Developer may have under applicable law, and each Indemnitee shall be entitled to
indemnification under this Section without regard to whether Agency or that Indemnitee has
exercised any rights against the Property or any other security, pursued any rights against any
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guarantor or other party, or pursued any other rights available under the Agency Documents or
applicable law. The obligations of Developer to indemnify the Indemnitees under this Section
shall survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of
foreclosure, and any release of record of the Regulatory Agreement. Developer's
indemnification obligations under this Section shall not extend to Claims to the extent arising
from the gross negligence or willful misconduct of the Indemnitees, and are subject to the
additional terms set forth in Section 10.2 below.
6.3 Disclosure. Developer represents and warrants that except as disclosed to Agency
in writing, as of the date hereof to the best knowledge of Developer's principals: (i)the Property
is free of Hazardous Materials and is not in violation of any Hazardous Materials Law; (ii)there
are no buried or partially buried storage tanks located on the Property; (iii) Developer has
received no notice, warning, notice of violation, administrative complaint,judicial complaint, or
other formal or informal notice alleging that conditions on the Property are or have ever been in
violation of any Hazardous Materials Law or informing Developer that the Property is subject to
investigation or inquiry regarding Hazardous Materials on the Property or the potential violation
of any Hazardous Materials Law; (iv)there is no monitoring program required by the
Environmental Protection Agency or any other governmental agency concerning the Property;
and (v)Developer has disclosed to Agency all information, records, and studies in Developer's
possession or reasonably available to Developer relating to the Property concerning Hazardous
Materials.
Developer hereby acknowledges and agrees that(i)this Section is intended as the
Agency's written request for information (and the Developer's response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5(d)(2), and (ii)each representation and warranty in this Agreement or any of the
other Agency Documents (together with any indemnity applicable to a breach of any such
representation and warranty)with respect to the environmental condition of the property is
intended by the Agency and the Developer to be an"environmental provision" for purposes of
California Code of Civil Procedure Section 736.
6.4 Intentionally omitted.
6.5 No Limitation. Developer hereby acknowledges and agrees that Developer's
duties, obligations, and liabilities under this Article VI are in no way limited or otherwise
affected by any information the Agency may have concerning the Property and/or the presence
in, on, under or about the Property of any Hazardous Material,whether the Agency obtained
such information from the Developer or from its own investigations.
6.6 Definitions.
6.6.1 "Hazardous Material" means any chemical, compound, material,
mixture, or substance that is now or may in the future be defined or listed in, or otherwise
classified pursuant to any Environmental Laws (defined below) as a"hazardous substance",
"hazardous material", "hazardous waste", "extremely hazardous waste", infectious waste", toxic
substance",toxic pollutant", or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability, corrosivity, reactivity,
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carcinogenicity, or toxicity. The term"hazardous material" shall also include asbestos or
asbestos-containing materials, radon, chrome and/or chromium, polychlorinated biphenyls,
petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits,
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, perchlorate,
and methyl tert-butyl ether,whether or not defined as a hazardous waste or hazardous substance
in the Environmental Laws.
6.6.2 "Environmental Laws" means any and all federal, state and local
statutes, ordinances, orders,rules, regulations, guidance documents,judgments, governmental
authorizations or directives, or any other requirements of governmental authorities, as may
presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the
presence, release, generation,use, handling, treatment, storage,transportation or disposal of
Hazardous Material, or the protection of the environment or human, plant or animal health,
including, without limitation,the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 (42 U.S.C. § 9601),the Hazardous Materials Transportation Act(49 U.S.C. § 1801 et
seq.), the Resource Conservation and Recovery Act(42 U.S.C. § 6901 et seq.),the Federal
Water Pollution Control Act(33 U.S.C. § 1251 et seq.), the Clean Air Act(42 U.S.C. § 7401 et
seq.),the Toxic Substances Control Act(15 U.S.C. § 2601 et seq.), the Oil Pollution Act(33
U.S.C. § 2701 et seq.),the Emergency Planning and Community Right-to-Know Act(42 U.S.C.
§ 11001 et seq.),the Porter-Cologne Water Quality Control Act(Cal. Water Code § 13000 et
seq.), the Toxic Mold Protection Act(Cal. Health& Safety Code § 26100, et seq.),the Safe
Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et
seq.),the Hazardous Waste Control Act(Cal. Health& Safety Code § 25100 et seq.), the
Hazardous Materials Release Response Plans & Inventory Act(Cal. Health& Safety Code
§ 25500 et seq.), and the Carpenter-Presley-Tanner Hazardous Substances Account Act(Cal.
Health and Safety Code, Section 25300 et seq.).
ARTICLE VII
LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT
AND CONTROL OF DEVELOPER
7.1 Identity of Developer; Changes Only Pursuant to this Agreement. Developer has
represented that it possesses the necessary expertise, skill and ability to carry out the
rehabilitation of the Project pursuant to this Agreement. The qualifications, experience, financial
capacity and expertise of Developer are of particular concern to the Agency. It is because of
these qualifications, experience, financial capacity and expertise that the Agency has entered into
this Agreement with Developer. No voluntary or involuntary successor, assignee or transferee of
Developer shall acquire any rights or powers under this Agreement, except as expressly provided
herein.
7.2 Prohibition on Transfer. Prior to the expiration of the term of the Regulatory
Agreement, Developer shall not, except as expressly permitted by this Agreement, directly or
indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial
sale, transfer, conveyance, encumbrance, assignment(including without limitation, any
assignment for security purposes) or lease (collectively, "Transfer") of the whole or any part of
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the Property, the Project, the Improvements, or this Agreement,without the prior written
approval of Agency which approval shall not be unreasonably withheld. Any such attempt to
assign this Agreement without the Agency's consent shall be null and void and shall confer no
rights or privileges upon the purported assignee. In addition to the foregoing,prior to the
expiration of the term of the Regulatory Agreement, except as expressly permitted by this
Agreement, Developer, or if the Project has been conveyed to an Approved Partnership,the
Approved Partnership shall not undergo any significant change of ownership without the prior
written approval of Agency. For purposes of this Agreement, a"significant change of
ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent
(25%) in aggregate of the ownership and/or control of Developer or the Approved Partnership, as
applicable,taking all previous transfers into account on a cumulative basis; provided however,
neither the admission of an investor limited partner, nor the transfer by the investor limited
partner to subsequent limited partners shall be restricted by this provision.
7.3 Transfers. Subject to Section 8.4 below, the prohibitions set forth in this Article
shall not be deemed to prevent: (i)the granting of temporary or permanent easements or permits
to facilitate development of the Property; (ii)the dedication of any property required pursuant to
this Agreement; (iii)the lease of individual residences to tenants for occupancy as their principal
residence in accordance with the Regulatory Agreement; (iv) assignments creating security
interests (including without limitation, collateral pledges of partnership equity interests) for the
purpose of financing the acquisition, construction, or permanent financing of the Project
provided that such financing is provided by the lenders and/or the tax credit investor identified in
the approved Financing Plan and is consistent with the terms set forth in the approved Financing
Plan as it may be updated with Agency approval, subject to the requirements of Article VIII, or
Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure
of, such a security interest; (v) a Transfer to a tax-exempt entity under the direct control of or
under common control with Developer; (vi) a Transfer to an Approved Partnership; (vii)the
admission of limited partners, and any transfer of limited partnership interests in accordance with
the Approved Partnership's agreement of limited partnership (the"Partnership Agreement");
(viii)the removal of the general partner of an Approved Partnership by the investor limited
partners for a default under the Partnership Agreement,provided that the replacement general
partner is an entity reasonably satisfactory to Agency or is an affiliate of a limited partner of the
Approved Partnership that will serve as general partner for an interim period of no more than 180
days during which time a permanent replacement general partner reasonably satisfactory to
Agency shall be identified and admitted; (ix)the transfer of the general partner's interest to a
nonprofit entity that is tax-exempt under Section 501(c)(3)of the Internal Revenue Code of 1986
as amended, or to a limited liability company whose sole member is a nonprofit entity that is tax-
exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, provided
such replacement general partner(or managing member) is reasonably satisfactory to Agency; or
(x)the grant of an option and/or right of first refusal to the general partner of an Approved
Partnership or an affiliate of the general partner in accordance with the Partnership Agreement.
7.4 Requirements for Proposed Transfers. The Agency may, in the exercise of its
sole discretion, consent to a proposed Transfer of this Agreement,the Property,the
Improvements or part thereof if all of the following requirements are met(provided however,the
requirements of this Section 7.4 shall not apply to Transfers described in clauses (i), (ii), (iii),
(iv), (vii), and (x) of Section 7.3, and solely with respect to the removal of the general partner by
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the investor limited partner for a default under the Partnership Agreement and the replacement of
the general partner with an affiliate of the investor limited partner for an interim period of not
more than 180 days, clause (viii) of Section 7.3, provided that the provisions of this Section 7.4
shall apply to the selection of a replacement general partner after such interim period:
(i) The proposed transferee demonstrates to the Agency's satisfaction that it
has the qualifications, experience and financial resources necessary and adequate as may be
reasonably determined by the Agency to competently complete and manage the Project and to
otherwise fulfill the obligations undertaken by the Developer under this Agreement.
(ii) The transferor and the proposed transferee shall submit for Agency review
and approval all instruments and other legal documents proposed to effect any Transfer of all or
any part of or interest in the Property, the Improvements or this Agreement together with such
documentation of the proposed transferee's qualifications and development capacity as the
Agency may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and
obligations of the Developer under this Agreement and the other Agency Documents arising
after the effective date of the Transfer and all obligations of Developer arising prior to the
effective date of the Transfer(unless Developer expressly remains responsible for such
obligations) and shall agree to be subject to and assume all of Developer's obligations pursuant
to the Conditions of Approval and all other conditions, and restrictions set forth in this
Agreement. The assumption of such obligations shall be documented in an assignment and
assumption agreement in form approved by Agency.
(iv) The Transfer shall be effectuated pursuant to a written instrument
satisfactory to the Agency in form recordable in the Official Records.
(v) The final form of the Partnership Agreement, operating agreement, and
other organizational documents of the proposed transferee and its general partner(s)/managing
member, and any subsequent amendments that affect the Agency's economic interests under this
Agreement or the Agency Documents shall be subject to the Agency's review and approval.
Consent to any proposed Transfer may be given by the Authorized Representative
unless the Authorized Representative, in his or her discretion, refers the matter of approval to the
City Council. If the Agency has not rejected a proposed Transfer or requested additional
information regarding a proposed Transfer in writing within thirty (30) days following Agency's
receipt of written request for such Transfer, the proposed Transfer shall be deemed approved.
7.5 Effect of Transfer without Agency Consent.
7.5.1 In the absence of specific written agreement by the Agency, no Transfer
by Developer, the Approved Partnership, or a successor or assignee of either shall be deemed to
relieve the Developer or any other party from any obligation under this Agreement.
7.5.2 It shall be an Event of Developer Default hereunder entitling Agency to
pursue remedies including without limitation, termination of this Agreement if without the prior
written approval of the Agency, Developer assigns or Transfers this Agreement, the
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Improvements, or the Property, or any part thereof or interest therein, or undertakes any other
Transfer(including without limitation any assignment for security or encumbrance of the
Property or any part thereof) in violation of Article VII. This Section 7.5.2 shall not apply to
Transfers described in clauses (i), (ii), (iii), (iv), (vii), and (x)of Section 7.3, or to the removal
and interim replacement of the general partner as described in clause (viii) of Section 7.3.
7.6 Recovery of Agency Costs. Within ten (10) days following Agency's delivery of
an invoice detailing such costs,the party proposing a Transfer shall reimburse Agency for all
Agency costs, including but not limited to reasonable attorneys' fees, reasonably incurred in
reviewing instruments and other legal documents proposed to effect a Transfer of this
Agreement,the Property or the Improvements, or part thereof or interest therein, and in
reviewing the qualifications and financial resources of a proposed successor, assignee, or
transferee.
ARTICLE VIII
SECURITY FINANCING; RIGHTS OF MORTGAGEES
AND LIMITED PARTNERS
8.1 Mortgages and Deed of Trust for Development. Mortgages and deeds of trust, or
any other reasonable security instrument are permitted to be placed upon the Property or the
Improvements only for the purpose of securing loans for the purpose of financing the acquisition
of the Property,the design and construction/rehabilitation of the Improvements, and other
expenditures reasonably necessary for the rehabilitation of the Project pursuant to the approved
Financing Plan and this Agreement. Developer shall not enter into any conveyance for such
financing that is not contemplated in the applicable Financing Plan as it may be updated with
Agency approval,without the prior written approval of the Authorized Representative or his or
her designee. As used herein, the terms "mortgage" and"deed of trust" shall mean any security
instrument used in financing real estate acquisition, construction and land development.
8.2 Subordination. The Agency agrees that Agency will not withhold consent to
reasonable requests for subordination of the Regulatory Agreement to deeds of trust provided for
the benefit of lenders providing construction and/or permanent financing for the Project
consistent with the approved Financing Plan as it may be updated with Agency approval,
provided that the instruments effecting such subordination include reasonable protections to the
Agency in the event of default, including without limitation, extended notice and cure rights.
Developer agrees to use best efforts to cause requested subordination agreements to include the
rights set forth in Section 8.6 below.
8.3 Holder Not Obligated to Construct. The holder of any mortgage or deed of trust
authorized by this Agreement shall not be obligated to complete construction of the Project or to
guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize
any such holder to devote the Property or any portion thereof to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or authorized by this
Agreement and the Regulatory Agreement.
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8.4 Notice of Default and Lender Right to Cure. Whenever Agency delivers any
notice of default hereunder,Agency shall concurrently deliver a copy of such notice to each
holder of record of any mortgage or deed of trust secured by the Property or the Improvements,
provided that Agency has been provided with the address for delivery of such notice. Agency
shall have no liability to any such holder for any failure by the Agency to provide such notice to
such holder. Each such holder shall have the right, but not the obligation, at its option,to cure or
remedy any such default or breach within the cure period provided to Developer and Agency
shall recognize and accept any such cure as if, and with the same force and effect, it had been
made by Developer. In the event that possession of the Property or the Improvements (or any
portion thereof) is required to effectuate such cure or remedy,the holder shall be deemed to have
timely cured or remedied the default if it commences the proceedings necessary to obtain
possession of the Property or Improvements, as applicable, within the applicable cure period,
diligently pursues such proceedings to completion, and after obtaining possession, diligently
to cure or
remedya
completes such cure or remedy. A holder who chooses to exercise its right
default or breach shall first notify Agency of its intent to exercise such right prior to commencing
to cure or remedy such default or breach. Nothing contained in this Agreement shall be deemed
to permit or authorize such holder to undertake or continue the construction of the Project
(beyond the extent necessary to conserve or protect the same)without first having expressly
assumed in writing Developer's obligations to Agency under this Agreement. The holder in that
event must agree to complete, in the manner provided in this Agreement, the Project and the
Improvements and submit evidence reasonably satisfactory to Agency that it has the
development capability on staff or retainer and the financial capacity necessary to perform such
obligations. Any such holder properly completing the Project pursuant to this Section shall
assume all rights and obligations of Developer under this Agreement.
8.5 Failure of Holder to Complete Improvements. In any case where, six(6) months
after default by Developer in completion of construction of the Project,the holder of record of
any mortgage or deed of trust has not exercised its option to construct the Project, or having first
exercised such option, has not proceeded diligently with such work,Agency may, but shall not
be obligated, to declare such failure to be an Event of Default hereunder.
8.6 Agency Right to Cure Defaults. In the event of a breach or default by any trustor
party under a mortgage or deed of trust secured by the Property or the Improvements,Agency
may, but shall not be obligated to cure the default, without acceleration of the subject loan,
following prior notice thereof to the holder of such instrument and the party in default. In such
event, Agency shall be entitled to reimbursement from, and the defaulting party shall be liable
for, all costs and expenses incurred by Agency associated with and attributable to the curing of
the default or breach.
8.7 Holder to be Notified. Developer agrees to use best efforts to ensure that each
term contained herein dealing with security financing and rights of holders shall be either
inserted into the relevant deed of trust or mortgage or acknowledged and accepted in writing by
the holder prior to its creating any security right or interest in the Property or the Improvements.
8.8 Modifications to Agreement. Agency shall not unreasonably withhold its consent
to modifications of this Agreement requested by Project lenders or tax credit investors provided
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such modifications do not alter Agency's substantive rights and obligations under this
Agreement.
8.9 Estoppel Certificates. Either Party shall, at any time, and from time to time,
within fifteen (15) days after receipt of written request from the other Party, execute and deliver
to such Party a written statement certifying that, to the knowledge of the certifying Party: (i)this
Agreement is in full force and effect and constitutes a binding obligation of the Parties (if such
be the case), (ii)this Agreement has not been amended or modified, or if so amended, identifying
the amendments, and (iii) the requesting Party is not in default in the performance of its
obligations under this Agreement, or if in default, describing the nature of any such default(s).
The Investor Limited Partner shall also have the right to receive such an estoppel upon request,
which estoppel shall specifically permit reliance thereon by the Investor Limited Partner and its
affiliates.
8.10 Rights of Limited Partners. If the Project has been transferred to an Approved
Partnership, whenever Agency delivers any notice of default hereunder, Agency shall
concurrently deliver a copy of such notice to the limited partner(s) in accordance with Section
11.3. The limited partner(s) shall have the same right as Developer to cure or remedy any
default hereunder within the cure period provided to Developer; provided however, if the default
is of such nature that the limited partners reasonably determine that it is necessary to replace the
general partner in order to cure such default, then the cure period shall be extended by an
additional sixty(60) days after the removal and replacement of such general partner, provided
that the limited partners have promptly commenced and diligently proceeded with all requisite
actions to effect such removal and replacement. Such cure shall be accepted or rejected by the
Agency on the same basis as if tendered by Developer.
ARTICLE IX
DEFAULTS,REMEDIES AND TERMINATION
9.1 Event of Developer Default. The following events shall constitute an event of
default on the part of Developer hereunder("Event of Developer Default"):
(a) Developer fails to commence or complete rehabilitation of the Project
within the time period set forth in Section 5.1, or subject to Force Majeure, abandons or suspends
construction of the Project prior to completion for a period of sixty(60) days or more;
(b) A Transfer occurs, either voluntarily or involuntarily, in violation of
Article VII;
(c) Developer fails to maintain insurance as required pursuant to this
Agreement, and Developer fails to cure such default within five (5) days;
(d) Subject to Developer's rights pursuant to Section 5.3 above, Developer
fails to pay prior to delinquency taxes or assessments due on the Property or the Improvements,
or fails to pay when due any other charge that may result in a lien on the Property or the
Improvements, and Developer fails to cure such default within twenty (20) days of the date of
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i
1
delinquency, but in all events prior to the date upon which the holder of any such lien has the
right to foreclose thereon;
(e) A default arises under any loan secured by a mortgage, deed of trust or
other security instrument recorded against the Property and remains uncured beyond any
applicable cure period such that the holder of such security instrument has the right to accelerate
repayment of such loan;
(f) Any representation or warranty contained in this Agreement or in any
application, financial statement, certificate or report submitted to the Agency in connection with
this Agreement proves to have been incorrect in any material and adverse respect when made
and continues to be materially adverse to the Agency;
(h) If, pursuant to or within the meaning of the United States Bankruptcy
Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy
Law"), Developer or any general partner of an Approved Partnership that has acquired the
Property or part thereof: (i) commences a voluntary case or proceeding; (ii) consents to the entry
of an order for relief against Developer or any general partner of such Approved Partnership in
an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator
or similar official for Developer or any general partner of such Approved Partnership ; (iv)
makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its
debts as they become due;
(i) A court of competent jurisdiction shall have made or entered any decree or
order(1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a
petition seeking reorganization of the Developer or seeking any arrangement for Developer
under bankruptcy law or any other applicable debtor's relief law or statute of the United States
or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the
Developer in bankruptcy or insolvency or for any of its properties, or(4) directing the winding
up or liquidation of the Developer, in each case if such decree, order, petition, or appointment is
not removed or rescinded within sixty(60) days;
(j) Developer shall have assigned its assets for the benefit of its creditors
(other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution
on any substantial part of its property, unless the property so assigned, sequestered, attached or
executed upon shall have been returned or released within sixty(60) days after such event
(unless a lesser time period is permitted for cure pursuant to paragraphs (h) or(i) above or
pursuant to any other mortgage on the Property, in which event such lesser time period shall
apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration,
attachment, or execution;
(k) The Developer shall have voluntarily suspended its business or Developer
shall have been dissolved or terminated;
(1) An event of default arises under any Agency Document and remains
uncured beyond any applicable cure period;
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(m) Developer uses the New Agency Funds for any purpose other than Project
rehabilitation costs unless the Agency has provided prior written consent to permit another use of
such proceeds; or
(n) Developer defaults in the performance of any term, provision, covenant or
agreement contained in this Agreement other than an obligation enumerated in this Section 9.1
and unless a shorter cure period is specified for such default,the default continues following
written notice thereof from Agency to Developer for ten (10) days in the event of a monetary
default or thirty (30) days in the event of a nonmonetary default; provided however, if the default
is of a nature that it cannot be reasonably cured within thirty(30) days, an Event of Developer
Default shall not arise hereunder if Developer commences to cure the default within thirty(30)
days and thereafter prosecutes the cure of such default with due diligence and in good faith to
completion.
9.2 Agency Default. An event of default on the part of Agency ("Event of Agency
Default") shall arise hereunder if Agency fails to keep, observe, or perform any of its covenants,
duties, or obligations under this Agreement, and the default continues for a period of sixty (60)
days after written notice thereof from Developer to Agency, or in the case of a default which
cannot with due diligence be cured within sixty(60) days, Agency fails to commence to cure the
default within sixty (60) days of such notice and thereafter fails to prosecute the cure of such
default with due diligence and in good faith to completion.
9.3 Agency's Right to Terminate Agreement. If an Event of Developer Default shall
occur and be continuing beyond any applicable cure period, then Agency shall, in addition to
other rights available to it under law or this Agreement, have the right to terminate this
Agreement. If Agency makes such election, Agency shall give written notice to Developer, the
Investor Limited Partner, and any mortgagee entitled to such notice, specifying the nature of the
default and stating that this Agreement shall expire and terminate on the date specified in such
notice, and upon the date specified in the notice, if no cure has then been made, this Agreement
and all rights of Developer under this Agreement, shall expire and terminate.
9.4 Agency's Remedies and Rights Upon an Event of Developer Default. Upon the
occurrence of an Event of Developer Default and the expiration of any applicable cure period,
Agency shall have all remedies available to it under this Agreement or under law or equity,
including, but not limited to the following, and Agency may, at its election, without notice to or
demand upon Developer, except for notices or demands required by law or expressly required
pursuant to the Agency Documents, exercise one or more of the following remedies:
(a) Seek specific performance to enforce the terms of the Agency Documents;
(b) Terminate this Agreement pursuant to Section 9.3; and
(c) Pursue any and all other remedies available under this Agreement or under
law or equity to enforce the terms of the Agency Documents and Agency's rights thereunder;
provided, however, any remedy in which the Agency seeks repayment of grant funds shall be
exercised solely against National CORE.
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9.5 Developer's Remedies Upon an Event of Agency Default. Upon the occurrence
of an Event of Agency Default, Developer may bring an action for equitable relief seeking the
specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or
preventing any violation of such terms and conditions.
9.6 Remedies Cumulative. Except as otherwise expressly stated in this Agreement,
the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or
more of such rights or remedies shall not preclude the exercise by it, at the same or different
time, of any other rights or remedies for the same or any other default by the other Party.
9.7 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting
any of its rights and remedies as to any default shall operate as a waiver of such default or of any
such rights or remedies, nor deprive either Party of its rights to institute and maintain any action
or proceeding which it may deem necessary to protect, assert or enforce any such rights or
remedies in the same or any subsequent default.
ARTICLE X
INDEMNITY AND INSURANCE
10.1 Indemnity. To the greatest extent permitted by law, Developer shall indemnify,
defend (with counsel approved by Agency) and hold the Indemnitees harmless from and against
any and all Claims (including without limitation, Claims arising from any injury, death, illness,
property damage, or loss of property) arising directly or indirectly, in whole or in part, as a result
of or in connection with the development, construction, rehabilitation, improvement, operation,
ownership or maintenance of the Project or the Property, or any part thereof by Developer or
Developer's contractors, subcontractors, agents, employees or any other party acting for or on
behalf of Developer, or otherwise arising out of or in connection with Developer's performance
or failure to perform under this Agreement, including without limitation, Claims arising or
alleged to have arisen in connection with any violation of Applicable Laws in connection with
the rehabilitation, operation or management of the Project, or relating to approval of the Project
or approval of this Agreement. Developer's indemnification obligations under this Section 10.1
shall not extend to Claims to the extent arising from the gross negligence or willful misconduct
of Indemnitees and are subject to the additional terms set forth in Section 10.2 below. The
provisions of this Section 10.1 shall survive the expiration or earlier termination of this
Agreement. It is further agreed that Agency does not and shall not waive any rights against
Developer that it may have by reason of this indemnity and hold harmless agreement because of
the acceptance by Agency, or the deposit with Agency by Developer, of any of the insurance
policies described in this Agreement.
10.2 Terms Applicable to Indemnity Provisions. The terms set forth in this Section
10.2 shall apply to all provisions of this Agreement that pertain to Developer's obligations to
indemnify Agency and the other Indemnitees, including without limitation, Sections 5.11, 5.14,
5.15, 5.22.2, 5.22.4, 6.2, 10.1, and 11.1. In connection with each such provision, all of the
following shall apply:
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(a) Agency does not and shall not waive any rights against Developer that it may
have by reason of any indemnity and hold harmless provision set forth in this Agreement
because of the acceptance by Agency, or the deposit with Agency by Developer, of any of the
insurance policies described in this Agreement.
(b) Developer's obligation to indemnify the Indemnitees shall not be limited or
impaired by any of the following: (i) any amendment or modification of any Agency Document
(unless and to the extent an indemnity provision was modified by such amendment or
modification); (ii) any extensions of time for performance required by any Agency Document;
(iii) any provision in any of the Agency Documents limiting the personal liability of Developer,
or any other party under the Agency Documents; or(iv)the accuracy or inaccuracy of any
representation and warranty made by Developer under this Agreement or by Developer or any
other party under any Agency Document, (v) the release of Developer or any other person, by
Agency or by operation of law, from performance of any obligation under any Agency
Document;
(c) The obligations of Developer to indemnify the Indemnitees shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and
any release of record of the Regulatory Agreement.
10.3 Liability, Workers' Compensation, and Property Insurance.
(a) Commercial General Liability. Developer(and until issuance of the final
certificate of occupancy or equivalent for the Project all contractors working on behalf of
Developer on the Project) shall maintain a commercial general liability policy including
coverage for bodily injury, property damage, products, completed operations and contractual
liability coverage with coverage limits in the greater of: (a)the amounts required by the
construction and permanent lenders for the Project, or (b) One Million Dollars ($1,000,000) each
occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Five Million
Dollars ($5,000,000) excess liability coverage, or such other policy limits as Agency may require
in its reasonable discretion; provided however, the coverage requirements for subcontractors
shall be One Million Dollars ($1,000,000 per occurrence, Two Million Dollars ($2,000,000)
annual aggregate. Such policy or policies shall be written on an occurrence basis and shall name
the Indemnitees as additional insureds.
(b) Automobile. Developer (and until issuance of the final certificate of
occupancy or equivalent for the Project all contractors working on behalf of Developer on the
Project) shall maintain a comprehensive automobile liability coverage in the amount of One
Million Dollars ($1,000,000), combined single limit including coverage for owned and non-
owned vehicles. Automobile liability policies shall name the Indemnitees as additional insureds.
(c) Workers' Compensation; Employer's Liability. Developer (and if the
Property has been transferred to an Approved Partnership, the general partners thereof) shall
furnish or cause to be furnished to Agency evidence satisfactory to Agency that Developer (and
if the Property has been transferred to an Approved Partnership, the general partners thereof),
and any contractor with whom Developer(or the Approved Partnership) has contracted for the
performance of work on the Property or otherwise pursuant to this Agreement, carries statutory
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Workers' Compensation insurance and Employer's Liability insurance in a minimum amount of
One Million Dollars ($1,000,000)per accident.
(d) Builder's Risk. Upon commencement of construction work and
continuing until issuance of the final certificate of occupancy or equivalent for the Project,
Developer or the general contractor working on the Project shall maintain a policy of builder's
all-risk insurance in an amount not less than the full insurable cost of the Project on a
replacement cost basis naming Agency as loss payee as its interests may appear.
(e) Professional Liability/Errors and Omissions. Professional Liability/Errors
and Omissions insurance as appropriate for design/build operations with limits not less than One
Million Dollars ($1,000,000) each claim. If the professional liability/errors and omissions
insurance is written on a claims made basis: (i) the retroactive date must be shown and must be
before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be
provided for at least three(3) years after completion of Project construction, and (iii) if coverage
is cancelled or non-renewed and not replaced with another claims made policy form with a
retroactive date prior to the Effective Date, Developer must purchase extended period coverage
for a minimum of three (3) years after completion of construction.
(f) Property. Commencing upon the Effective Date, Developer shall maintain
property insurance covering all risks of loss including earthquake (if required) and flood (if
required) for one hundred percent (100%) of the replacement value of the Project with
deductible, if any, in an amount not to exceed $25,000, naming Agency as loss payee as its
interests may appear.
(g) Insurance Providers. Companies writing the insurance required hereunder
shall be licensed to do business in the State of California. Insurance shall be placed with insurers
with a current A.M. Best's rating of no less than A: VII.
(h) Evidence of Insurance; Endorsements; Policies. Prior to the Effective
Date of this Agreement, Developer shall furnish Agency with certificates of insurance in form
acceptable to Agency evidencing the insurance coverage required under paragraphs (a), (b), (c),
and (e) above, duly executed endorsements evidencing the Indemnitees' status as additional
insured, and all other endorsements and coverage required hereunder pertaining to such
coverage. Prior to commencement of Project construction, Developer shall furnish Agency with
certificates of insurance in form acceptable to Agency evidencing the insurance coverage
required under paragraph (d) above. Prior to City's issuance of a final certificate of occupancy
or equivalent for the Project, Developer shall furnish Agency with certificates of insurance in
form acceptable to Agency evidencing the insurance coverage required under paragraph (0
above.
All insurance certificates shall contain a statement of obligation on the part of the
carrier to notify Agency of any material adverse change, cancellation, termination or non-
renewal of the coverage at least thirty (30) days in advance of the effective date of any such
material adverse change, cancellation, termination or non-renewal. Upon Agency's request,
Developer shall, within thirty(30) days of the request, provide or arrange for the insurer to
provide to Agency, complete certified copies of all insurance policies required under this
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Agreement. Agency's failure to make such request shall not constitute a waiver of the right to
require delivery of the policies in the future.
(i) Additional Insured Endorsements. The additional insured endorsements
for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09
11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 20 10 10 01 and CG 20
37 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94.
(j) Reinstatement. If any insurance policy or coverage required hereunder is
canceled or reduced, Developer shall, within five (5) days after receipt of notice of such
cancellation or reduction in coverage, but in no event later than the effective date of cancellation
or reduction, file with Agency a certificate showing that the required insurance has been
reinstated or provided through another insurance company or companies. Upon failure to so file
such certificate, Agency may, without further notice and at its option, procure such insurance
coverage at Developer's expense, and Developer shall promptly reimburse Agency for such
expense upon receipt of billing from Agency.
(k) Primary Coverage; Waiver of Subrogation; Annual Aggregate Limits. All
coverage shall be primary insurance and shall not be contributing with any insurance, or self-
insurance maintained by City or Agency, and the policies shall so provide. Each insurance
policy shall contain a waiver of subrogation for the benefit of the City and the Agency. If any of
the required insurance is provided under a form of coverage that includes an annual aggregate
limit or provides that claims investigation or legal defense costs are included in such annual
aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified
above.
(1) Deductibles/Retentions. Any deductibles or self-insured retentions shall
be declared to, and be subject to reasonable approval by, City's Risk Manager. At the option of
and upon request by City's Risk Manager if the Risk Manager determines that such deductibles
or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles
or self-insurance retentions as respects the Indemnitees, Developer shall procure a bond
guaranteeing payment of losses and related investigations, claims administration and defense
expenses, or Developer shall provide the Agency with some other assurance of payment thereof
reasonably acceptable to Agency.
(m) Adjustments. The limits of the liability coverage and, if necessary, the
terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than
every five (5) years after the Effective Date nor more than once in every three (3) year period) to
address changes in circumstance, including, but not limited to, changes in inflation and the
litigation climate in California. Agency shall give written notice to Developer of any such
adjustments, and Developer shall provide Agency with amended or new insurance certificates or
endorsements evidencing compliance with such adjustments within thirty(30) days following
receipt of such notice.
(n) Additional Insured Coverage; Liability Limits. For all liability insurance
required by this Agreement, Developer(and Developer's contractors, as applicable) shall obtain
endorsements that name the Indemnitees as additional insured in the full amount of all applicable
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policies, notwithstanding any lesser minimum limits specified in this Agreement. This
Agreement requires Developer(and the general contractor, as applicable)to obtain and provide
for the benefit of the Indemnitees additional insured coverage in the same amount of insurance
carried by Developer(or the general contractor, as applicable), but in no event less than the
minimum amounts specified in this Agreement. In the event that Developer(or Developer's
contractors as applicable) obtains insurance policies that provide liability coverage in excess of
the amounts specified in this Agreement, the actual limits provided by such policies shall be
deemed to be the amounts required under this Agreement. Without limiting the foregoing,the
limits of liability coverage specified in this Agreement are not intended, nor shall they operate, to
limit Agency's ability to recover amounts in excess of the minimum amounts specified in this
Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 No Brokers. Each Party warrants and represents to the other that no person or
entity can properly claim a right to a real estate commission, brokerage fee, finder's fee, or other
compensation with respect to the transactions contemplated by this Agreement. Each Party
agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs
or liabilities arising in connection with a breach of this warranty and representation. The terms
of this Section shall survive the close of escrow and the expiration or earlier termination of this
Agreement.
11.2 Enforced Delay; Extension of Times of Performance. The time for performance
of provisions of this Agreement by either Party shall be extended for a period equal to the period
of any delay directly affecting the Project or this Agreement which is caused by war,
insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of a
public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, suits
filed by unrelated third parties concerning or arising out of this Agreement or unseasonable
weather conditions ("Force Majeure"). An extension of time for any of the above-specified
causes will be deemed granted only if written notice by the Party claiming such extension is sent
to the other Party within ten (10) calendar days from the commencement of the cause. In any
event, construction of the Project must be completed no later than ninety (90) calendar days after
the scheduled completion date pursuant to the schedule set forth in this Agreement, any
unavoidable delay notwithstanding.
Times of performance under this Agreement may also be extended in writing by the
mutual agreement of Developer and Agency (acting in the discretion of the Authorized
Representative unless he or she determines in his or her discretion to refer such matter to the
City Council). Agency and Developer acknowledge that, notwithstanding any contrary
provision of this Agreement, adverse changes in economic conditions, either of the affected
Party specifically or the economy generally, changes in market conditions or demand, and/or
inability to obtain financing to complete the Project shall not constitute grounds of enforced
delay pursuant to this Section. Each Party expressly assumes the risk of such adverse economic
or market changes and/or financial inability, whether or not foreseeable as of the Effective Date.
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11.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent
pursuant to this Agreement or any other Agency Document shall be made in writing, and sent to
the Parties and the Investor Limited Partner at their respective addresses specified below or to
such other address as a Party or the Investor Limited Partner, as applicable, may designate by
written notice delivered to the other Parties in accordance with this Section. All such notices
shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii)
certified or registered mail, return receipt requested, in which case notice shall be deemed
delivered on receipt if delivery is confirmed by a return receipt; or(iii) nationally recognized
overnight courier, with charges prepaid or charged to the sender's account, in which case notice
is effective on delivery if delivery is confirmed by the delivery service.
Agency: City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Manager
Developer: National Community Renaissance of California
9421 Haven Avenue
Rancho Cucamonga, CA 91730
Attention: CFO
Investor Limited
Partner: c/o Red Stone Equity Partners, LLC
1100 Superior Avenue, Suite 1640
Cleveland, OH 44144
Attention: General Counsel
With a copy to: Bocarsly Emden Cowan Esmail & Arndt LLP
633 W. 5th Street, 64th Floor
Los Angeles, CA 90071
Attention: Kyle Arndt, Esq.
11.4 Attorneys' Fees. If either Party fails to perform or is otherwise in default of any
of its obligations under this Agreement, or if any dispute arises between the Parties concerning
the meaning or interpretation of any provision hereof, then the prevailing Party in any
proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on
account thereof and in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees and disbursements.
11.5 Waivers; Modification. No waiver of any breach of any covenant or provision of
this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no
waiver shall be valid unless in writing and executed by the waiving Party. An extension of time
for performance of any obligation or act shall not be deemed an extension of the time for
performance of any other obligation or act, and no extension shall be valid unless in writing and
executed by the Party granting the extension. This Agreement may be amended or modified only
by a written instrument executed by the Parties.
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11.6 Binding on Successors. Subject to the restrictions on Transfers set forth in
Article VII, this Agreement shall bind and inure to the benefit of the Parties and their respective t
permitted successors and assigns. Any reference in this Agreement to a specifically named Party
shall be deemed to apply to any permitted successor and assign of such Party who has acquired
an interest in compliance with this Agreement or under law.
11.7 Survival. All representations made by Developer hereunder, Developer's
obligations pursuant to Sections 5.11, 5.14, 5.15, 5.22.2, 5.22.4, 6.2, 10.1 and 11.1, and all other
provisions that expressly so state, shall survive the expiration or termination of this Agreement.
11.8 Headings; Interpretation; Statutory References. The section headings and
captions used herein are solely for convenience and shall not be used to interpret this Agreement.
The Parties acknowledge that this Agreement is the product of negotiation and compromise on
the part of both Parties, and the Parties agree, that since both Parties have participated in the
negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared
by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had
prepared it. All references in the Agency Documents to particular statutes, regulations,
ordinances or resolutions of the United States, the State of California, or the City of Cathedral
City shall be deemed to include the same statute, regulation, ordinance or resolution as hereafter
amended or renumbered, or if repealed, to such other provisions as may thereafter govern the
same subject.
11.9 Action or Approval. Whenever action and/or approval by Agency is required
under this Agreement,the Authorized Representative or his or her designee may act on and/or
approve such matter unless specifically provided otherwise, or unless the Authorized
Representative determines in his or her discretion that such action or approval requires referral to
the City Council for consideration.
11.10 Entire Agreement. This Agreement, including Exhibits A through G attached
hereto and incorporated herein by this reference, together with the other Agency Documents
contains the entire agreement between the Parties with respect to the subject matter hereof, and
supersedes all prior written or oral agreements, understandings, representations or statements
between the Parties with respect to the subject matter hereof. If the Exhibits to this Agreement
are inconsistent with this Agreement, the more restrictive requirements shall control, as
determined by the Authorized Representative. In the event of a conflict between this Agreement
and the other Agency Documents, the more restrictive requirements shall control, as determined
by the Authorized Representative.
11.11 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be an original and all of which taken together shall constitute one instrument. The
signature page of any counterpart may be detached therefrom without impairing the legal effect
of the signature(s) thereon provided such signature page is attached to any other counterpart
identical thereto having additional signature pages executed by the other Party. Any executed
counterpart of this Agreement may be delivered to the other Party by facsimile and shall be
deemed as binding as if an originally signed counterpart was delivered.
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11.12 Severability. If any term, provision, or condition of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable,the remainder of this Agreement
shall continue in full force and effect unless an essential purpose of this Agreement is defeated
by such invalidity or unenforceability.
11.13 No Third Party Beneficiaries. Except as expressly set forth herein, nothing
contained in this Agreement is intended to or shall be deemed to confer upon any person, other
than the Parties and their respective successors and assigns, any rights or remedies hereunder.
11.14 Parties Not Co-Venturers; Independent Contractor;No Agency Relationship.
Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers,
or principal and agent with one another. The relationship of Developer and Agency shall not be
construed as a joint venture, equity venture,partnership or any other relationship. Agency
neither undertakes nor assumes any responsibility or duty to Developer(except as expressly
provided in this Agreement) or to any third party with respect to the Project or the Agency
financing described herein. Developer and its employees are not employees of Agency but
rather are, and shall always be considered independent contractors. Furthermore, Developer and
its employees shall at no time hold themselves out as employees or agents of Agency. Except as
Agency may specify in writing, Developer shall have no authority to act as an agent of Agency
or to bind Agency to any obligation.
11.15 Time of the Essence; Calculation of Time Periods. Time is of the essence for
each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in
computing any period of time described in this Agreement,the day of the act or event after
which the designated period of time begins to run is not to be included and the last day of the
period so computed is to be included, unless such last day is not a business day, in which event
the period shall extend until the next business day. The final day of any such period shall be
deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a
"business day" means a day that is not a Saturday, Sunday, a federal holiday, or a state holiday
under the laws of the State of California.
11.16 Governing Law; Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to principles of conflicts of
laws. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior
Court of Riverside County, California or in the Federal District Court for the Central District of
California.
11.17 Maintenance and Inspection of Books and Records. Developer shall keep and
maintain at the Property or elsewhere with Agency's consent, full, complete, and adequate
books, records and accounts relating to the Project, including such books, records, and accounts
necessary to document Developer's compliance with this Agreement and the Agency
Documents, including without limitation, the records required to substantiate compliance with
the Regulatory Agreement. Upon request, Developer shall permit the Agency to inspect at
reasonable times and on a confidential basis those books, records and all other documents of
Developer necessary to determine Developer's compliance with the terms of this Agreement and
the Agency Documents.
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11.18 Political Activity. None of the funds, materials, property or services contributed
by Agency to Developer under this Agreement shall be used for any partisan political activity or
the election or defeat of any candidate for public office.
11.19 Non-Liability of City Officials, Employees and Agents. No member, official,
employee or agent of the City or Agency shall be personally liable to the Developer in the event
of any default or breach by the Agency or for any amount which may become due to the
Developer or its successor or on any obligation under the terms of this Agreement.
11.20 Conflict of Interest. In accordance with Government Code Section 1090 and the
Political Reform Act, Government Code Section 87100 et seq., no person who is a director,
officer, partner,trustee, employee, or consultant of the Developer or immediate family member
of any of the preceding, shall make or participate in a decision made by the City, the Agency, or
a City or Agency board, commission or committee, if it is reasonably foreseeable that the
decision will have a material effect on any source of income, investment or interest in real
property of that person or the Developer. Interpretation of this Section shall be governed by the
definitions and provisions used in the Political Reform Act, Government Code Section 87100 et
seq., its implementing regulations manual and codes, and Government Code Section 1090.
SIGNATURES ON FOLLOWING PAGES.
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IN WITNESS WHEREOF, the Parties have entered into this Owner Participation and
Grant Agreement effective as of the date first written above.
DEVELOPER:
National Community Renaissance of California,
a California nonprofit public benefit corporation
By:_ (mac-cn,. L 0
Print Name: M I c1-)o.e.` R`,o,n e
R
Title: �Aecv� 1V C. V I ce. PCe31 oi en
-\--
AGENCY:
City of Cathedral City, a municipal corporation, acting in its capacity as the Housing Successor
Agency to the former Redevelopment Agency of the City of Cathedral City
1 / / /
By: tt_ A_...- I , _ ��
City Manager
ATTEST.
1
JkLtii2-6q-e-t-1 `, ,
City Cler illir
APPROVED AST O
City Attorney
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Exhibit A
LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the City of Cathedral City, County of Riverside, State of
California, and is described as follows:
PARCELS 2 AND 3 OF PARCEL MAP 9536, IN THE CITY OF CATHEDRAL CITY, AS PER MAP
RECORDED IN BOOK 63, PAGE(S) 62 AND 63 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPT THEREFROM ALL MINERAL RIGHTS AS RESERVED BY ELMER R. BIECK AND GRACE E.
BIECK IN A DOCUMENT RECORDED APRIL 11, 1955, AS INSTRUMENT NO. 23600, OF OFFICIAL
RECORDS.
APN: 678-210-035-4, 678-210-034-3
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Exhibit B
FORM OF REGULATORY AGREEMENT
(Attach form of Regulatory Agreement.)
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
by and between
THE CITY OF CATHEDRAL CITY,
acting in its capacity as the Housing Successor Agency to the former Redevelopment
Agency of the City of Cathedral City
and
, L.P.
(Cathedral Palms Senior Apartments)
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This Affordable Housing Regulatory Agreement and Declaration of Restrictive
Covenants (this "Agreement") is entered into effective as of , 20_(the
"Effective Date") by and between the City of Cathedral City, a municipal corporation, acting in
its capacity as the Housing Successor Agency to the former Redevelopment Agency of the City
of Cathedral City (in such capacity, referred to herein as the "Agency") and
L.P., a California limited partnership (the "Owner"). The Agency
and the Owner are collectively referred to herein as the "Parties."
RECITALS
A. Owner is the owner of the real property located at 31750 Landau Boulevard in the
City of Cathedral City, California, known as Riverside County Assessor's Parcel Nos. 678-210-
034 and 678-210-035, and more particularly described in Exhibit A attached hereto (the
"Property").
B. Owner intends to rehabilitate, own, and operate an affordable multi-family, senior
housing development that after rehabilitation will consist of two hundred twenty-four(224)
apartments and related improvements (the "Project") in accordance with that certain Owner
Participation and Funding Agreement(the "OPA") dated as of , 2019, and
executed by and between Agency and National Community Renaissance of California, a
California nonprofit public benefit corporation formerly known as Southern California Housing
Development Corporation ("NCRC"). The rights and obligations of NCRC under the OPA have
been or are concurrently herewith being assigned to Owner. Capitalized terms used without
definition herein shall have the meaning ascribed to such terms in the OPA.
C. The OPA provides that the Restricted Units will be required to be available to
Eligible Households at Affordable Rents in accordance with this Agreement for a period of not
less than fifty-five (55) years.
D. Subject to the terms and conditions set forth in the OPA, Agency has agreed to
provide a grant in the amount of Seven Hundred Sixty-Five Thousand, One Hundred Twenty-
Five Dollars ($765,125)to assist in financing rehabilitation of the Project(the "Grant"). As a
condition precedent to the funding of the Grant, Agency requires the Project and the Property to
be subject to the terms, conditions, and restrictions set forth herein. The Grant will be provided
to NCRC which in turn will loan the Grant proceeds to Owner in accordance with the
requirements of the OPA.
E. The purpose of this Agreement is to satisfy the affordability requirements of the
Agency's affordable housing program and to regulate and restrict the occupancy and rents of the
Project's Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set
forth in this Agreement to run with the land and to be binding upon Owner and Owner's successors
and assigns for the full term of this Agreement.
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NOW THEREFORE, in consideration of the foregoing, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties hereby
agree as follows.
1.1 Agreement Supersedes Prior Affordability Covenants. As more particularly set forth in that
certain Termination and Release Agreement dated as of the date hereof, executed by and
between the Agency and NCRC, and recorded in the Official Records substantially concurrently
herewith,this Agreement supersedes and replaces the following instruments in their entirety:
(a) Operation and Maintenance Agreement, executed by and between the
Redevelopment Agency and The Southern California Housing Development Corporation, dated
as of October 1, 1996, and recorded December 30, 1996, as Instrument No. 489519, of Official
Records;
(b) Regulatory Agreement and Declaration of Restrictive Covenants, executed by and
between the former Redevelopment Agency of the City of Cathedral City and Southern
California Housing Development Corporation, dated as of October 1, 1996, and recorded
December 30, 1996, as Instrument No. 489518, of Official Records;
(c) Declaration of Affordability Covenants, executed by Southern California Housing
Development Corporation, dated May 1, 2003, and recorded December 31, 2003, as Instrument
No. 2003-1017672, of Official Records;
(d) Declaration of Redevelopment Covenants, executed by Southern California
Housing Corporation, dated May 1, 2003, and recorded December 31, 2003, as Instrument No.
2003-1017895, of Official Records; and
(e) Affordable Housing Agreement dated October 1, 1996, executed by Southern
California Housing Development Corporation and the Redevelopment Agency (which was not
recorded).
1.2 Definitions. The following terms have the meanings set forth in this Section wherever
used in this Agreement or the attached exhibits.
"Actual Household Size" means the actual number of persons in the applicable
household.
"Adjusted for Family Size Appropriate for the Unit" shall be determined consistent
with Section 50052.5(h) of the California Health and Safety Code; provided however, if the
Project is financed using federal low-income housing tax credits, for so long as the extended use
regulatory agreement executed by and between the Project owner and TCAC remains in effect
for the Project, "Adjusted for Family Size Appropriate for the Unit" shall be determined in
accordance with the applicable provisions of Section 42 of the Internal Revenue Code of 1986,
as amended and the federal regulations applicable thereto.
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"Affordable Rent" means the following amounts, less a utility allowance and other fees
and charges required to be paid by tenants of the Project on a non-optional basis: (i) for units
that are restricted for rental to households with incomes of not more than forty percent (40%) of
AMI ("40% Units"), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of
forty percent(40%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit,
and (ii) for units that are restricted for rental to households with incomes of not more than fifty
percent (50%) of AMI ("50% Units"), a monthly rent that does not exceed one-twelfth of thirty
percent (30%) of fifty percent(50%) of Area Median Income, Adjusted for Family Size
Appropriate for the Unit.
"Agency's Authorized Representative" means the City Manager of the City of
Cathedral City.
"Agency Documents" means the OPA, this Agreement, and the Termination and
Release Agreement (as defined in the OPA).
"Area Median Income" or "AMI" means the median income for Riverside County,
California, adjusted for Actual Household Size, as determined by the U.S. Department of
Housing and Urban Development ("HUD") pursuant to Section 8 of the United States
Housing Act of 1937 and as published from time to time by the State of California
Department of Housing and Community Development ("HCD") in Section 6932 of Title 25
of the California Code of Regulations or successor provision; provided however, during
such time that the Project is subject to a TCAC regulatory agreement, the rules applicable to
low income housing tax credits under the applicable provisions of Section 42 of the Internal
Revenue Code, as amended and the regulations applicable thereto, shall apply for the
purpose of determining the applicable household income limitations.
"Claims" is defined in Section 2.7.
"Eligible Household"means a household for which household Gross Income upon initial
occupancy does not exceed the maximum income level for a Restricted Unit as specified in
Section 2.2 and Exhibit B and which includes at least one member who is age 55 or older or
other qualifying resident as defined in California Civil Code Section 51.3.
"Gross Income" shall have the meaning set forth in Section 6914 of Title 25 of the
California Code of Regulations as such section may be revised from time to time.
"HUD" means the U.S. Department of Housing and Urban Development.
"Indemnitees" is defined in Section 2.7.
"Investor Limited Partner" means RSEP Holding, LLC, a Delaware limited liability
company, and its successors and assigns or an affiliate of Red Stone Equity Partners, LLC.
"Marketing and Management Plan" is defined in Section 6.5.
"NCRC" is defined in Recital B.
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"Official Records" means the Official Records of the Riverside County Recorder.
"OPA" is defined in Recital B.
"Rent Restricted" is defined in Section 2.2.
"Restricted Unit"means a dwelling unit that is reserved for occupancy at an Affordable
Rent by Eligible Households of specified household income levels as set forth in Section 2.2 and
Exhibit B.
2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself
and its successors and assigns, that throughout the term of this Agreement(as defined in Section
4.1 below), the Property shall be used solely for residential occupancy by Eligible Households in
compliance with the OPA and the requirements set forth in this Agreement. Owner represents
and warrants that it has not entered into any agreement that would restrict or compromise its ability
to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner
covenants that it shall not enter into any agreement that is inconsistent with such restrictions
without the express written consent of Agency. For the purpose of this Section, other regulatory
and similar agreements that impose more stringent affordability and occupancy restrictions on
the Project than those set forth in this Agreement shall not be deemed to be inconsistent with
this Agreement.
2.1 Senior Housing. Owner has elected to operate the Project as a senior housing
development and as such to require all dwelling units in the Project except for the managers'
units to be occupied or held available for occupancy by households that include "elderly" or
"senior" residents in accordance with applicable law. To the extent applicable,the Project will
be operated at all times in accordance with (a) the Unruh Act, including without limitation
California Civil Code Sections 51.2, 51.3, and 51.4; (b) the federal Fair Housing Act, 42 U.S.C.
Section 3607(b) and 24 CFR 100.304; (c) the California Fair Employment and Housing Act,
Government Code Section 12900 et seq., and (d) all other applicable laws and regulations.
Owner shall develop and implement appropriate age verification procedures to ensure
compliance with this Section 2.1, and shall provide Agency with a copy of such verification
procedures. To the greatest extent permitted by law, Owner will indemnify, defend, and hold
the Indemnitees harmless from all Claims arising out of Owner's failure to comply with
applicable legal requirements related to housing for seniors. Owner's indemnification
obligations set forth in this Section (i) shall survive the expiration or earlier termination of this
Agreement, and (ii) shall not extend to Claims to the extent arising from the gross negligence or
willful misconduct of the Indemnitees. Up to sixty-eight (68) of the studio apartments will be
reserved for occupancy by households that include a member age 62 or older if required by the
HAP Contract and/or HUD regulations for units assisted with Section 8 project-based vouchers.
2.2 Affordability and Occupancy Requirements. Throughout the term of this
Agreement (as defined in Section 4.1 below): (i) not less than forty-six (46) of the residential
units in the Project shall be both Rent Restricted and occupied (or if vacant, available for
occupancy) by Eligible Households whose gross household income is no greater than forty
percent (40%) of AMI; and (ii) not less than an additional 176 of the residential units in the
Project shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by
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Eligible Households whose gross household income is no greater than fifty percent(50%) of
AMI. The Project will include a supportive housing and special needs set-aside of up to 68
residential units as required by TCAC, and/or the State of California No Place Like Home
program. Such units will be subject to more restrictive household income qualifications and
deeper rent targeting requirements in accordance with the requirements of the applicable funding
source.
A dwelling unit shall qualify as "Rent Restricted" if the gross rent charged for such unit
does not exceed the Affordable Rent for the applicable household income category as specified
in this Section. Two (2) of the residential units in the Project shall be managers' units that will
not be subject to rent or occupancy restrictions. If necessary to ensure Project feasibility,the
Authorized Representative is authorized to approve modifications to the foregoing affordability
restrictions provided that all residential units except the managers' units shall be available at
Affordable Rents to households whose income is no greater than fifty percent(50%) of Area
Median Income.
Notwithstanding any contrary provision of this Agreement, if other Project lenders, Project
investors, or regulatory agencies restrict a greater number of units than restricted by this
Agreement or require stricter household income eligibility or affordability requirements than
those imposed hereby,the requirements(including without limitation,the rent and occupancy
requirements imposed in connection with the use of project-based Section 8 vouchers, housing
choice vouchers, or other rent subsidies) of such other lenders, investors or regulatory agencies
shall prevail so long as the same are in effect. Without limiting the generality of the foregoing, if
any residential units in the Project are subsidized with Section 8 project-based vouchers through
a Housing Assistance Payment contract("HAP Contract")with HUD or the Housing Authority
of the County of Riverside (the"PBV Units"), the provisions of the HAP Contract and the rules
and regulations applicable to such program shall prevail with respect to the setting of rents,
implementation of occupancy requirements, and determination of household Gross Income for
such units so long as the HAP Contract remains in effect. If project-based vouchers are awarded
for the Project,the PBV Units will be included among the units restricted by this Agreement to
households whose income is not more than 50% of Area Median Income; however the PBV
Units may be subject to more restrictive income and rent limits. If project-based vouchers are
not ultimately awarded to the Project, or if, once awarded,the HAP Contract is cancelled or is
not renewed, then the apartment units that were, or that would have been, subject to the HAP
Contract shall continue to remain available to households whose income is not more than 50%of
Area Median Income in accordance with this Agreement so that the Project will continue to
include forty-six (46) units that are available at Affordable Rents to households whose income is
no greater than forty percent(40%)of Area Median Income, and not less than an additional 176
units that are available at Affordable Rents to households whose income is no greater than fifty
percent(50%)of Area Median Income.
2.3 Rents for Restricted Units. For all Restricted Units, rents shall be limited to
Affordable Rents for households of the applicable income limit in accordance with Section 2.2
and Exhibit B. The Restricted Units shall be allocated among affordability categories as set forth
in Section 2.2 and Exhibit B. Notwithstanding the foregoing, no tenant qualifying for a
Restricted Unit shall be denied continued occupancy of a unit in the Project because, after
admission, such tenant's household income increases to exceed the qualifying limit for such
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Restricted Unit. A household which at initial occupancy qualifies in a particular income
category shall be treated as continuing to be of such income category so long as the household's
Gross Income does not exceed one hundred forty percent(140%) of the applicable income limit.
In the event the household Gross Income of a household that qualified at the applicable income
limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to
be considered as satisfying the applicable income limit if the unit remains Rent-Restricted.
In the event that recertification of tenant incomes indicates that the number of Restricted
Units actually occupied by Eligible Households falls below the number reserved for each
income group as specified in this Section 2.2 and Exhibit B, Owner shall rectify the condition
by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the
required income mix is achieved.
If upon income recertification, a tenant household's income exceeds sixty percent (60%)
of AMI Adjusted for Actual Household Size, Owner may increase rent for such tenant to the
lowest of the following: (a)thirty percent (30%) of the tenant household's Gross Income, (b)
the maximum rent allowed under any affordability restrictions imposed by other Project lenders,
and (c) if the Project has been allocated low-income housing tax credits, the maximum rent
allowed by Section 42 of the Internal Revenue Code of 1986, as amended.
In the event of inconsistency between the provisions of this Section 2.3 and the rules
applicable to the Project in connection with low-income housing tax credits, the rules applicable
to low-income housing tax credits shall prevail.
2.4 Managers' Units. Two (2) dwelling units in the Project may be used as resident
managers' units and shall be exempt from the occupancy and rent restrictions set forth in this
Agreement.
2.5 No Condominium Conversion. Owner shall not convert the residential units in the
Project to condominium or cooperative ownership or sell condominium or cooperative rights to the
residential units in the Project during the term of this Agreement.
2.6 Non-Discrimination; Compliance with Fair Housing Laws.
2.6.1 Intentionally omitted.
i
2.6.2 Fair Housing; Section 8 Vouchers. Owner shall comply with state and
federal fair housing laws in the marketing and rental of the units in the Project. Owner shall
accept as tenants, on the same basis as all other prospective tenants, seniors who are recipients of
federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or
any successor thereto.
2.6.3 Non-Discrimination. Owner shall not restrict the rental, sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, or any portion thereof,
on the basis of race, color, religion, creed, sex, sexual orientation, gender identity, disability,
marital status, ancestry, age (other than as permitted pursuant to this Agreement and applicable
law pertaining to housing for seniors), or national origin of any person. Owner covenants for
I
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I
itself and all persons claiming under or through it, and this Agreement is made and accepted
upon and subject to the condition that there shall be no discrimination against or segregation of
any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the rental, sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the Property or part thereof, nor shall Owner or any person claiming under or
through Owner establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include
such provision in all deeds, leases, contracts, and other instruments executed by Owner, and shall
enforce the same diligently and in good faith.
All deeds, leases, and contracts pertaining to management of the Project, made or
entered into by Owner, its successors or assigns, as to any portion of the Property or the
Improvements shall contain the following language:
(a) (1) In Deeds, the following language shall appear:
Grantee herein covenants by and for itself, its successors and assigns, and all
persons claiming under or through it, that there shall be no discrimination against
or segregation of a person or of a group of persons on account of any basis listed
in subdivision (a) or(d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p)of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
property herein conveyed nor shall the grantee or any person claiming under or
through the grantee establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
property herein conveyed. The foregoing covenant shall run with the land."
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1).
(b) (1) In Leases, the following language shall appear:
The lessee herein covenants by and for the lessee and lessee's heirs, personal
representatives and assigns, and all persons claiming under the lessee or through
the lessee,that this lease is made subject to the condition that there shall be no
discrimination against or segregation of any person or of a group of persons on
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account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ancestry or disability in the leasing, subleasing,transferring, use,
occupancy, tenure or enjoyment of the property herein leased nor shall the lessee
or any person claiming under or through the lessee establish or permit any such
practice or practices of discrimination of segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph (1),with respect to familial status, paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p)of Section 12955 of the Government Code shall
apply to paragraph(1).
(c) (1) In Contracts pertaining to management of the Project,the following
language, or substantially similar language prohibiting discrimination and
segregation shall appear:
There shall be no discrimination against or segregation of any person or group of
persons on account of any basis listed in subdivision (a)or(d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m)and paragraph(1) of subdivision(p)of Section 12955, and
Section 12955.2 of the Government Code, in the sale, lease, sublease,transfer,
use, occupancy,tenure, or enjoyment of the property nor shall the transferee or
any person claiming under or through the transferee establish or permit any such
practice or practices of discrimination or segregation with reference to selection,
location, number, use or occupancy of tenants, lessee, subtenants, sublessees, or
vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status,paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions(n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1).
2.7 Relocation. Persons residing on the Property prior to commencement of
construction/rehabilitation of the Project, shall not be displaced before suitable replacement
housing is available. Owner shall ensure that all occupants of the Property receive all notices,
benefits, and assistance to which they are entitled in accordance with California Relocation
Assistance Law(Government Code Section 7260 et seq.), all state and local regulations
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implementing such law, and all other applicable local, state, and federal laws,regulations and
policies, including but not limited to the Uniform Relocation Act(42 U.S.C. § 4601 et seq.) and
implementing regulations (collectively"Relocation Laws") relating to the displacement and
relocation of eligible persons as defined in such Relocation Laws. All costs incurred in
connection with the temporary and/or permanent displacement and/or relocation of occupants of
the Property, including without limitation payments to a relocation consultant, moving expenses,
and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall
be paid by Owner, and Agency shall have no responsibility for payment therefor. To the extent
reasonably possible, Owner may relocate Eligible Tenants displaced by construction
/rehabilitation to other units in the Project. Owner agrees to comply with the requirements
necessary to qualify the Project as a"qualified affordable housing preservation project"pursuant
to California Government Code Section 7262.5(a), and Agency agrees to reasonably cooperate
with Owner if necessary to confirm such designation, subject to the provisions of this Section
2.7.
To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel
approved by Agency) and hold the Agency and the City, and their respective elected and
appointed officers, officials, employees, agents, consultants, contractors, and representatives
(collectively, the"Indemnitees") harmless from and against all liability, loss, cost, expense
(including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit,
judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the
foregoing collectively"Claims") arising from the breach of Owner's obligations set forth in this
Section whether or not any insurance policies shall have been determined to be applicable to any
such Claims. Owner's indemnification obligations set forth in this Section(i) shall survive the
expiration or earlier termination of this Agreement, and (ii) shall not extend to Claims to the
extent arising from the gross negligence or willful misconduct of the Indemnitees.
3. Reporting Requirements; Access to Information; Inspections;Annual Monitoring Fee.
3.1 Tenant Certification. Owner or Owner's authorized agent shall obtain from each
prospective tenant prior to initial occupancy of each Restricted Unit, and on every anniversary
thereafter, a written certificate containing all of the following in such format and with such
supporting documentation as Agency may reasonably require:
(i) The identity of each household member;
(ii) The total household Gross Income; and
(iii) The age of each household member or other basis upon which each household
member qualifies for occupancy under California Civil Code Section 51.3 et seq..
Owner shall retain such certificates for not less than five(5)years, and upon Agency's request,
shall provide copies of such certificates to Agency and make the originals available for Agency
inspection.
3.2 Annual Report; Inspections. By not later than April 1 of each year during the
term of this Agreement, commencing in the year following completion of
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construction/rehabilitation of the Project, Owner shall submit a report describing operations of
the Project during the preceding calendar year("Annual Report")to the Agency in form
satisfactory to Agency, together with a certification that the Project is in compliance with the
affordability restrictions and occupancy requirements of this Agreement. The Annual Report
shall, at a minimum, include the following information for each dwelling unit in the Project: (i)
unit number; (ii) number of bedrooms; (iii) current rent, utility, and other charges; (iv) dates of
any vacancies during the previous year; (v) number of people residing in the unit; (vi) total
household Gross Income of residents; (vii) documentation of source of household income; (viii)
lease commencement and termination dates; (ix) initial move-in date; and (x)the information
required by Section 3.1.
Owner shall include with the Annual Report documentation verifying tenant eligibility,
and such additional information as Agency may reasonably request from time to time in order to
demonstrate compliance with this Agreement. The Annual Report shall conform to the format
requested by Agency; provided however, during such time that the Project is subject to a
regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in
connection with the use of state or federal low-income housing tax credits or tax-exempt bond
financing, Owner may satisfy the requirements of this Section that pertain to tenant income
certification and rents by providing Agency with a copy of compliance reports required in
connection with such financing.
In addition to the information described above, the Annual Report shall include the
following:
(1) A Project income and expense statement for the reporting period;
(ii) Proposed annual budget for the next fiscal year which sets forth Owner's
estimate of operating income, operating expenses and debt service for the year, amounts payable
to reserves and proposed rent adjustments;
(iii) Information on the status of the waiting list for units, including the number
of households on the list;
(iv) A report on reserve accounts which Owner is required to maintain for the
Project, including an operating reserve and replacement reserve account, if applicable,
summarizing draws of funds from such reserve account(s) during the prior calendar year and
remaining balances;
(v) A report summarizing any significant repairs or maintenance undertaken
for the Project during the prior calendar year and describing any remaining physical defects to be
corrected and the budget for such work;
(vi) A financial audit of the books and records of the Project prepared in
accordance with generally accepted auditing standards by an independent certified public
accountant.; provided however, if in the ordinary course of business regarding the audit of
Owner's books and records concerning the Project, the audit is not reasonably available at the
time the Annual Report is submitted, Owner shall provide a copy of such audit to the Agency
promptly when the same has been received by Owner;
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(vii) Agency may, from time to time, request additional or different
information, and Owner shall promptly supply such information in the reports required
hereunder.
3.3. Maintenance of Records.
3.3.1 Owner shall maintain all records regarding the rehabilitation of the Project
for five (5) years after final payment and all other pending matters are closed. Owner shall also
maintain tenant leases, income certifications, and other matters related to the leasing of the
Project for a period of five (5) years after the final date of occupancy by the tenant.
3.3.2 Records must be kept accurate and up-to-date. Agency shall notify Owner
of any records it deems insufficient. Owner shall have fifteen (15) calendar days from such
notice to correct any specified deficiency in the records; or, if more than fifteen (15) days shall
be reasonably necessary to correct the deficiency, Owner shall begin to correct the deficiency
within fifteen (15) days and diligently pursue the correction of the deficiency as soon as
reasonably possible.
3.4 Access to Records; Inspections.
3.4.1 With at least two (2) business days' written notice, during normal business
hours, Owner shall provide Agency and its authorized agents and representatives access to the
books, documents, papers and records of the Project for the purpose of making audits,
examinations, excerpts and transcriptions.
3.4.2 With at least three (3) business days' written notice, during normal
business hours and as often as may be deemed necessary, Agency and its authorized agents and
representatives shall be permitted access to and the right to examine the Project and the Property
and to interview tenants and employees of the Project, for the purpose of verifying compliance
with applicable regulations and compliance with the conditions of this Agreement and the other
Agency Documents.
3.4.3 Agency shall comply with all applicable provisions of law pertaining to
the protection of personal financial and/or identifying information of tenants provided to, or
made available to Agency for inspection pursuant to this Agreement, including without
limitation,the provisions of California Civil Code Sections 1798.80 through 1798.84,to the
extent applicable to the Agency. All tenant files, leases, certifications, income verification
documentation, and any other documents that may contain personal financial or identifying
information of any tenant (collectively referred to as "Tenant Data") to be provided by the
Owner to the Agency or any third party on the Agency's behalf, shall be made available for
review by Agency or its representatives either on-site at the Property or via an internet-based
document sharing platform selected by Owner. The Agency and its representatives agree to
comply with all applicable laws with respect to the handling, maintenance and protection of
Tenant Data, including, but not limited to,the provisions of Sections 1798.80 through and
including 1798.84 of the California Civil Code, as amended.
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3.5 Monitoring Fee. Owner shall be obligated to pay to Agency an annual Affordable
Housing Monitoring Fee in the amount of$70 per unit for each Restricted Unit in the Project.
The Affordable Housing Monitoring Fee shall be due to Agency by not later than April 1 of each
year during the term of this Agreement, commencing in the year following completion of
construction/rehabilitation of the Project. The amount of the first Annual Housing Monitoring
Fee shall be $15,540 ($70 times 222 Restricted Units). The Annual Monitoring Fee shall be
increased beginning in the third year of Project operation following the City's issuance of a final
certificate of occupancy or equivalent for the Project, and annually thereafter, by the percentage
increase in the Consumer Price Index-All Urban Consumers (CPI-U) for the Riverside-San
Bernardino-Ontario, California area over the prior year.
In the event that in any year there is insufficient Project cash flow available to pay the
Affordable Housing Monitoring Fee, the Agency will permit the fee to be deferred. Any
deferred amounts shall accrue and shall be payable from future Project cash flow. The Agency
shall have the right to file a lien against the Property if the Affordable Housing Monitoring Fee is
not paid when due provided that Agency has first given thirty(30) days written notice to Owner
of its intention to file such a lien, unless within such 30-day period either (i) Owner provides
reasonable evidence that there is insufficient Project cashflow to pay the required amount, or(ii)
Owner pays the Affordable Housing Monitoring Fee due for the then-current year together with
all accrued and unpaid past due amounts.
4. Term of Agreement.
4.1 Term of Restrictions. This Agreement shall remain in effect until the fifty-fifth
(55th) anniversary of the date upon which the City issues a final certificate of occupancy or
equivalent for the Project. If such date cannot be ascertained,the term of this Agreement shall
end on the fifty-seventh (57th) anniversary of the Effective Date of this Agreement.
4.2 Effectiveness Succeeds Conveyance of Property. This Agreement shall remain
effective and fully binding for the full term hereof regardless of any sale, assignment, transfer, or
conveyance of the Project or the Property, or any part thereof or interest therein.
4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to
execute and record appropriate instruments to release and discharge this Agreement; provided,
however, the execution and recordation of such instruments shall not be necessary or a
prerequisite to the termination of this Agreement upon the expiration of the term.
5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects
its interest in the Property and the Project to the covenants and restrictions set forth in this
Agreement. The Agency and Owner hereby declare their express intent that the covenants and
restrictions set forth herein shall be deemed covenants running with the land and shall be binding
upon and inure to the benefit of the heirs, administrators, executors, successors in interest,
transferees, and assigns of Owner and Agency, regardless of any sale, assignment, conveyance or
transfer of the Property,the Project or any part thereof or interest therein. Any successor-in-interest
to Owner, including without limitation any purchaser, transferee or lessee of the Property or the
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Project(other than the tenants of the individual dwelling units within the Project) shall be subject
to all of the duties and obligations imposed hereby for the full term of this Agreement.
Commencing upon the Effective Date of this Agreement, each and every contract, deed,
ground lease, or other instrument affecting or conveying the Property or the Project or any part
thereof, shall conclusively be deemed to have been executed, delivered, and accepted subject to the
covenants, restrictions, duties, and obligations set forth herein, regardless of whether such
covenants,restrictions, duties, and obligations are set forth in such contract, deed, ground lease, or
other instrument. Owner agrees for itself and for its successors that in the event that a court of
competent jurisdiction determines that the covenants herein do not run with the land, such
covenants shall be enforced as equitable servitudes against the Property and the Project in favor
of Agency.
6. Property Management; Repair and Maintenance; Marketing; Reserves; Supportive
Services.
6.1 Management Responsibilities. Owner shall be responsible for all management
functions with respect to the Property and the Project, including without limitation the
selection of tenants, certification and recertification of household income and eligibility,
evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary
repairs, replacement of capital items, and security. Agency shall have no responsibility for
management or maintenance of the Property or the Project.
6.2 Management Entity. Agency shall have the right to review and approve the
qualifications of the property management entity proposed by Owner for the Project, and shall
have the right to review and approve any property management agreement executed between
Owner and such entities,which approvals shall not be unreasonably withheld. The contracting of
management services to a management entity shall not relieve Owner of its primary
responsibility for proper performance of management duties. Agency hereby approves National
Community Renaissance of California, a California nonprofit public benefit corporation, as the
initial property management entity for the Project. Any subsequent management entity shall be
subject to Agency review and approval, which shall not be unreasonably withheld or delayed.
As provided more specifically in the OPA, the applicable provisions of which are incorporated
into this Agreement, upon Agency determination and delivery of written notice to Owner that
Owner has failed to operate the Project in accordance with this Agreement, Agency may require
Owner to contract with a qualified management agent selected by Agency and approved by the
Project lender and equity investor, to operate the Project, or to make such other arrangements as
Agency deems necessary to ensure performance of the required functions.
6.3 Repair, Maintenance and Security. Throughout the term of this Agreement,
Owner shall at its own expense, maintain the Property and the Project in good physical
condition, in good repair, and in decent, safe, sanitary, habitable, and tenantable living condition in
conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations,
reasonable wear and tear excepted. Without limiting the foregoing, Owner agrees to use
reasonable efforts to maintain the Project and the Property (including without limitation,the
apartment units therein, common areas, meeting rooms, landscaping, driveways, parking areas,
and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping,
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graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all
reasonable steps to prevent the same from occurring on the Property or at the Project. Owner
shall take reasonable action to prevent and/or rectify any physical deterioration of the
Property and the Project and shall make all repairs, renewals, and replacements reasonably
necessary to keep the Property and the improvements located thereon in good condition and
repair. Owner shall provide adequate security measures for the Project, including without
limitation,the installation of adequate lighting and deadbolt locks.
6.3.1 Additional Requirements. All construction/rehabilitation work and
professional services for the Project shall be performed by persons or entities licensed or
otherwise authorized to perform the applicable work or service in the State of California and
shall have a current City of Cathedral City business license if required under local law. To the
extent allowed by state and federal laws, Owner shall use reasonable efforts to limit the
installation of satellite dish, antenna, and other such equipment to screened locations on the
Property as approved by the Agency. Owner shall diligently work to resolve complaints related
to noise, parking, litter or other neighborhood concerns.
6.4 Agency's Right to Perform Maintenance. In the event that Owner breaches any of
the covenants contained in Section 6.3, and such default continues for a period of ten (10)days
after written notice from Agency to Owner which notice identifies in reasonable detail the item or
matters which Agency has determined to be in default (with respect to graffiti, debris, and waste
material) or thirty (30) days after written notice from Agency to Owner identifying items in
default(with respect to landscaping, building improvements, and general maintenance),then
Agency, in addition to any other remedy it may have under this Agreement or at law or in equity,
shall have the right, but not the obligation, to enter upon the Property and perform all acts and
work necessary to protect, maintain, and preserve the improvements and the landscaped areas on
the Property. All costs expended by Agency in connection with the foregoing, shall constitute an
indebtedness of Owner, and shall be paid by Owner to Agency upon written demand by Agency
accompanied by a description of the work performed and costs incurred by Agency. All such
sums remaining unpaid thirty(30) days following delivery of Agency's invoice therefor shall bear
interest at the lesser of ten percent(10%)per annum or the highest rate permitted by applicable
law. If authorized by California law, Agency shall have a lien against the Property for the amount
of such unpaid sums and shall have the right to record a Notice of Claim of Lien against the
Property.
6.5 Marketing and Management Plan; Rental Agreements. Not later than ninety
(90) days following commencement of construction/rehabilitation work on the Project,
Owner shall submit for Agency review and approval, a plan for marketing and managing the
Property("Marketing and Management Plan"or"Plan"). The Marketing and Management
Plan shall address in detail how Owner plans to market the Project to prospective Eligible
Households in accordance with fair housing laws and this Agreement, Owner's tenant selection
criteria, and how Owner plans to certify the eligibility of Eligible Households. The Plan shall also
describe the management team and shall address how the Owner and the management entity plan
to manage and maintain the Property and the Project. The Plan shall include the proposed
management agreement and the form of rental agreement that Owner proposes to enter into with
Project tenants. In addition, if applicable, the Plan shall include information regarding the
qualifications of the proposed social services provider, a copy of the proposed social services
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agreement, and a description of the services to be provided to residents. Owner shall abide by the
terms of the approved Marketing and Management Plan in marketing,managing, and maintaining
the Property and the Project, and throughout the term of this Agreement, shall submit proposed
modifications to Agency for review and approval.
In addition to the foregoing, the Marketing and Management Plan shall address the
following:
(a) The actions to be taken by Owner to affirmatively market units in
compliance with fair housing laws and in compliance with Agency's policies and
procedures, including the policies described in Section 2.6 above;
(b) Criteria for determining tenant eligibility, including certification of
household income and size, age of household members or other qualifying criteria, and
establishing reasonable occupancy standards (which occupancy standards shall be
consistent with applicable local, state and federal fair housing laws and state housing and
building codes), and procedures for screening prospective tenants, including obtaining
credit reports, unlawful detainer reports, landlord references, and criminal background
investigations, if permitted by applicable California law;
(c) A requirement that eligible applicants be selected for tenancy in the
Project based on order of application, lottery or other reasonable method approved by
Agency;
(d) A requirement that eligible applicants be notified of eligibility and be
provided an estimate regarding when a unit may be available;
(e) A requirement that ineligible applicants be notified of the reason for their
ineligibility;
(f) Specific procedures through which applicants deemed to be ineligible may
appeal this determination;
(g) Maintenance of a waiting list of eligible applicants;
(h) Specific procedures for obtaining documentation regarding prospective
tenants' incomes, as necessary, to certify that such income does not exceed allowable
income limits;
(i) Specific procedures for certification and recertification of household
incomes and procedures for handling over-income tenants;
(j) A requirement that a written rental agreement(in form approved by
Agency) be executed with each Eligible Household selected to occupy a Restricted Unit;
(k) A detailed listing of reasonable rules of conduct and occupancy which
shall be in writing, shall be consistent with federal and state law, and shall be provided to
each tenant upon occupancy;
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(1) A requirement that there be no storage on balconies and patios and that
tenants must keep all balconies, patios, and other exterior areas neat, clean, and clutter
free, including no clotheslines or laundry;
(m) A parking management plan which details, among other things, how
parking spaces will be assigned, how guest parking will be handled and how parking will
be managed to encourage tenants to use their assigned parking spaces;
(n) Procedures for maintenance and management of the Project;
(o) Procedures for dealing with tenant or neighborhood issues or concerns;
(p) Procedures for maintaining required Project reserve accounts, budgeting
for maintenance and repair needs as well as long-term rehabilitation needs, and handling
net cash flow; and
(q) Such other requirements and criteria/procedures as Agency may
reasonably determine appropriate.
6.6 Approval of Amendments. If Agency has not responded to any submission of the
Management and Marketing Plan, the proposed management entity,the proposed management
agreement, or any proposed amendment or change to any of the foregoing within fifteen (15)
business days following Agency's receipt of such plan, proposal, agreement, or amendment,the
plan, proposal, agreement, or amendment shall be deemed approved by Agency.
6.7 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees,
assessments,taxes, charges, liens, and levies applicable to the Property or the Project, including
without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall
pay such charges prior to delinquency. However, Owner shall not be required to pay any such
charge so long as (a) Owner is contesting such charge in good faith and by appropriate
proceedings; (b) Owner maintains reserves adequate to pay any contested liabilities; and (c) on
final determination of the proceeding or contest, Owner immediately pays or discharges any
decision or judgment rendered against it, together with all costs, charges, and interest. The
foregoing is not intended to impair Owner's ability to apply for any applicable exemption from
property taxes or other assessments and fees. Nothing in this Section is intended to impair
Owner's right to seek a"welfare exemption" from the payment of ad valorem real property taxes
assessed against the Property under California Revenue and Taxation Code Section 214(g).
6.8 Insurance Coverage. Throughout the term of this Agreement, Owner shall comply
with the insurance requirements set forth in Exhibit C, and shall, at Owner's expense, maintain in
full force and effect insurance coverage as specified in Exhibit C.
6.9 Property Damage or Destruction. If any part of the Project is damaged or
destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent
restriction requirements set forth in this Agreement. Such work shall be commenced as soon
as reasonably practicable after the damage or loss occurs and shall be completed within one
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year thereafter or as soon as reasonably practicable, provided that insurance proceeds are
available to be applied to such repairs or restoration within such period and the repair or
restoration is financially feasible. During such time that lenders or low-income housing tax
credit investors providing financing for the Project impose requirements that differ from the
requirements of this Section the requirements of such lenders and investors shall prevail.
6.10 Reserves. Owner shall establish and maintain operating and replacement
reserves in the amounts required by Project lenders and investors. If senior lienholder or tax
credit investor consent for withdrawals is not required in connection with withdrawals from
such Project reserve accounts, then Agency's advance written consent shall be required for
withdrawals from reserves for any non-routine, unbudgeted expense exceeding $20,000.
7. Recordation; Subordination. This Agreement shall be recorded in the Official Records.
The Agency agrees that the Agency will not withhold consent to reasonable requests for
subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in
the Financing Plan submitted to, and approved by, Agency for the Project, as such plan may be
updated with Agency approval, provided that the instruments effecting such subordination
include reasonable protections to the Agency in the event of default, including without
limitation, extended notice and cure rights.
8. Transfer and Encumbrance.
8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement,
except as permitted pursuant to the OPA or this Agreement, Owner shall not directly or
indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial
sale, transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any
part of the Property, the Project, or the improvements located on the Property, without the prior
written consent of the Agency, which approval shall not be unreasonably withheld. In addition,
prior to the expiration of the term of this Agreement, except as expressly permitted by this
Agreement or the OPA, Owner shall not undergo any significant change of ownership without
the prior written approval of Agency. For purposes of this Agreement, a"significant change of
ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent
(25%) in aggregate of the ownership and/or control of Owner, taking all previous transfers into
account on a cumulative basis; provided however, neither the admission of an investor limited
partner and/or special limited partner, nor the transfer by the investor limited partner and/or
special limited partner to subsequent limited partners or special limited partner, as applicable,
shall be restricted by this provision.
8.2 Transfers. Subject to Section 8.3 below, the prohibitions set forth in this Article 8
shall not be deemed to prevent: (i) the granting of temporary or permanent easements or permits
to facilitate development of the Property; (ii) the dedication of any property required pursuant to
the Agency Documents; (iii)the lease of individual residences to tenants for occupancy as their
principal residence in accordance with this Agreement; (iv) assignments creating security
interests (including without limitation, collateral assignments of partnership equity interests) for
the purpose of financing the acquisition, construction, rehabilitation, or permanent financing of
the Project or the Property, provided that such financing is provided by lenders and/or the tax
credit investor identified in the approved Financing plan and is consistent with the terms set forth
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in the Financing Plan approved by Agency as it may be updated with Agency approval, or
Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure
of, such a security interest; (v) a Transfer to a tax-exempt entity under the direct control of or
under common control with NCRC; (vi) a Transfer to a limited partnership in which the
managing general partner is NCRC, a tax-exempt affiliate of NCRC, or a limited liability
company of which NCRC or a tax-exempt affiliate of NCRC is the manager("Approved
Partnership"); (vii) the admission of limited partners and any transfer of limited partnership
interests in accordance with Owner's, or the Approved Partnership's, as applicable, agreement of
limited partnership (the "Partnership Agreement"); (viii) the removal of the general partner of
the Owner or of an Approved Partnership by the investor limited partner for cause in accordance
with the terms of the Partnership Agreement, provided that the replacement general partner is an
entity reasonably satisfactory to Agency or is an affiliate of the investor limited partner that will
serve as general partner for an interim period of no more than one hundred eighty (180) days
during which time a permanent replacement general partner reasonably satisfactory to Agency
shall be identified and admitted; (ix)the transfer of the general partner's interest to a nonprofit
entity that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as
amended (or to an entity wholly-owned thereby), provided such replacement general partner is
reasonably satisfactory to Agency; or(x)the grant of an option and/or right of first refusal to the
general partner(or affiliate of the general partner) of Owner or an Approved Partnership in
accordance with the Partnership Agreement.
8.3 Requirements for Proposed Transfers. The Agency may, in the exercise of its
sole discretion, consent to a proposed Transfer of this Agreement, the Property, the
Improvements or part thereof if all of the following requirements are met(provided however, the
requirements of this Section 8.3 shall not apply to Transfers described in clauses (i), (ii), (iii),
(iv), and (vii) of Section 8.2, and solely with respect to (a) the removal of the general partner by
the investor limited partner for a default under the Partnership Agreement, and (b) the
replacement of the general partner with an affiliate of the investor limited partner for an interim
period of not more than one hundred eighty (180) days, clause (viii) of Section 8.2 (provided that
the provisions of this Section 8.3 shall apply to the selection of a replacement general partner in
the event of a removal of the general partner in accordance with clause (viii) of Section 8.2):
(i) The proposed transferee demonstrates to the Agency's satisfaction that it
has the qualifications, experience, and financial resources necessary and adequate as may be
reasonably determined by the Agency to competently complete construction/rehabilitation and
manage the Project and to otherwise fulfill the obligations imposed on the owner of the Property
under this Agreement.
(ii) The transferor and the proposed transferee shall submit for Agency review
and approval all instruments and other legal documents proposed to effect any Transfer of all or
any part of or interest in the Property, the Improvements, or this Agreement together with such
documentation of the proposed transferee's qualifications and development capacity as the
Agency may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and
obligations of the Owner under this Agreement and the other Agency Documents arising after
the effective date of the Transfer and all obligations of Owner arising prior to the effective date
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of the Transfer(unless Owner expressly remains responsible for such obligations) and shall
agree to be subject to and assume all of the obligations pursuant to the Conditions of Approval
and all other conditions, and restrictions set forth in this Agreement.
(iv) The Transfer shall be effectuated pursuant to a written instrument
satisfactory to the Agency in form recordable in the Official Records.
Consent to any proposed Transfer may be given by the Agency's Authorized
Representative unless the Agency's Authorized Representative, in his or her discretion, refers the
matter of approval to the City Council. If the Agency has not rejected a proposed Transfer or
requested additional information regarding a proposed Transfer in writing within forty-five (45)
days following Agency's receipt of written request for such Transfer, the proposed Transfer shall
be deemed approved.
8.4 Effect of Transfer without Agency Consent. In the absence of specific written
agreement by the Agency, no Transfer of the Property or the Project shall be deemed to relieve
the Owner or any other party from any obligation under this Agreement. It shall be an Event of
Default hereunder entitling Agency to pursue remedies if without the prior written approval of
the Agency, Owner assigns or Transfers this Agreement, the Improvements, or the Property in
violation of Section 8. This Section 8.4 shall not apply to Transfers described in clauses (i), (ii),
(iii), (iv), and (vii) of Section 8.2, and solely with respect to (a)the removal of the general
partner by the investor limited partner for a default under the Partnership Agreement, and (b)the
replacement of the general partner with an affiliate of the investor limited partner for an interim
period of not more than one hundred eighty(180) days, clause (viii) of Section 8.2.
8.5 Recovery of Agency Costs. Within ten (10) days following Agency's delivery of
an invoice detailing such costs, the party proposing a Transfer shall reimburse Agency for all
Agency costs, including but not limited to reasonable attorneys' fees, reasonably incurred in
reviewing instruments and other legal documents proposed to effect a Transfer under this
Agreement and in reviewing the qualifications and financial resources of a proposed successor,
assignee, or transferee
8.6 Encumbrances. Owner agrees to use best efforts to ensure that all deeds of trust
or other security instruments and any applicable subordination agreement recorded against the
Property, the Project, or part thereof, for the benefit of a lender other than Agency ("Third-
Party Lender") shall contain each of the following provisions: (i) Third-Party Lender shall use
reasonable efforts to provide to Agency a copy of any notice of default issued to Owner
concurrently with provision of such notice to Owner; (ii) Agency shall have the reasonable right,
but not the obligation, to cure any default by Owner within the same period of time provided to
Owner for such cure extended by an additional ninety(90) days, and that such Third-Party
Lender shall accept a cure made by the Agency with the same force and effect as if the cure had
been made by Owner; (iii) provided that Agency has cured any default under Third-Party
Lender's deed of trust and other loan documents, Agency shall have the right to take title to the
Property and the Project without acceleration of Third-Party Lender's debt; and (iv) Agency
shall have the right to transfer the Property and the Project without acceleration of Third-Party
Lender's debt to a nonprofit corporation or other entity which shall own and operate the Project
as an affordable rental housing development, subject to the prior written consent of the Third-
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Party Lender. Owner agrees to provide to Agency a copy of any notice of default Owner
receives from any Third-Party Lender within three (3) business days following Owner's receipt
thereof.
8.7 Mortgagee Protection. No violation of any provision contained herein shall defeat
or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon
all or any portion of the Project or the Property, and the purchaser at any trustee's sale or
foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the
acquisition of title by such purchaser. Unless this Agreement is subordinated in accordance with
Section 7 above, such purchaser shall be bound by and subject to this Agreement from and after
such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this
Agreement has occurred, Agency shall give written notice to the holders of record of any
mortgages or deeds of trust encumbering the Project or the Property that such violation has
occurred.
9. Default and Remedies.
9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an event of default hereunder("Event of Default"):
(i) The occurrence of a Transfer in violation of Section 8 hereof;
(ii) Owner's failure to maintain insurance on the Property and the Project as
required hereunder, and the failure of Owner to cure such default within five (5) days;
(iii) Subject to Owner's right to contest the following charges, Owner's failure
to pay taxes or assessments due on the Property or the Project or failure to pay any other charge
that may result in a lien on the Property or the Project, and Owner's failure to cure such default
within twenty (20) days of delinquency, but in all events prior to the date upon which the holder
of any such lien has the right to foreclose thereon;
(iv) A default arises under any loan secured by a mortgage, deed of trust or
other security instrument recorded against the Property which remains uncured beyond any
applicable cure period such that the holder of such security instrument has the right to accelerate
repayment of such loan;
(v) A default by the Owner arises under the OPA that remains uncured
beyond the expiration of any applicable cure period; or
(vi) Owner's default in the performance of any term, provision or covenant
under this Agreement(other than an obligation enumerated in this Section 9.1), and unless such
provision specifies a shorter cure period for such default, the continuation of such default for ten
(10) days following written notice from Agency in the event of a monetary default or thirty(30)
days following written notice from Agency in the event of a non-monetary default, or if the
nature of any such non-monetary default is such that it cannot be cured within such thirty (30)
day period, Owner's failure to commence to cure the default within thirty (30) days and
thereafter prosecute the cure of such default to completion with due diligence and in good faith
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but in no event longer than ninety (90) days.
The limited partners of Owner shall have the right but not the obligation to cure any
default of Owner hereunder upon the same terms and conditions afforded to Owner, and Agency
will recognize a cure performed by a limited partner with the same force and effect as if the cure
were performed by Owner; provided however, if the default is of such nature that the limited
partners reasonably determine that it is necessary to replace the general partner of Owner in
order to cure such default, then the applicable cure period shall be extended by an additional
sixty (60) days following the removal and replacement of such general partner, provided that the
limited partners have promptly commenced and diligently proceeded with all requisite actions to
effect such removal and replacement. Agency shall provide a copy of any notice of default
hereunder to the limited partners at the address set forth in Section 11.3 hereof, or to such other
address provided to the Agency in writing, concurrently with the provision of such notice to
Owner.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation
beyond any applicable cure period, Agency may proceed with any of the following remedies:
(i) Bring an action for equitable relief seeking the specific performance of the terms
and conditions of this Agreement, and/or enjoining, abating, or preventing any
violation of such terms and conditions, and/or seeking declaratory relief;
(ii) For violations of obligations with respect to rents for Restricted Units, impose a
charge in an amount equal to the actual amount collected from a tenant in excess
of the Affordable Rent; or
(iii) Pursue any other remedy allowed under the Agency Documents or at law or in
equity.
Each of the remedies provided herein is cumulative and not exclusive. The Agency may
exercise from time to time any rights and remedies available to it under applicable law or in
equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this
Agreement.
10. Indemnity. To the greatest extent permitted by law, Owner shall indemnify, defend (with
counsel approved by Agency) and hold the Indemnitees harmless from and against all Claims
arising directly or indirectly, in whole or in part, as a result of or in connection with Owner's
construction/rehabilitation, management, or operation of the Property and the Project, or
Owner's employees', agents', contractors', or subcontractors' failure to comply with applicable
law, including without limitation state and federal fair housing laws, or failure to perform any
obligation as and when required by this Agreement. Owner's indemnification obligations under
this Section 10 shall not extend to Claims to the extent resulting from the gross negligence or
willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the expiration
or earlier termination of this Agreement.
10.1 Terms Applicable to Indemnity Provisions. The terms set forth in this Section
10.1 shall apply to all provisions of this Agreement that pertain to Owner's obligations to
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indemnify Agency and the other Indemnitees, including without limitation, Section 10. In
connection with each such provision, all of the following shall apply:
(a) Agency does not and shall not waive any rights that it may have by reason of any
indemnity and hold harmless provision set forth in this Agreement because of the acceptance by
Agency, or the deposit with Agency by Owner, of any of the insurance policies described in this
Agreement.
(b) Owner's obligation to indemnify the Indemnitees shall not be limited or impaired
by any of the following: (i) any amendment or modification of any Agency Document(unless
and to the extent an indemnity provision was modified by such amendment or modification); (ii)
any extensions of time for performance required by any Agency Document; (iii) any provision in
any of the Agency Documents limiting the personal liability of Owner, or any other party under
the Agency Documents; (iv)the accuracy or inaccuracy of any representation and warranty made
by Owner under this Agreement or by Owner or any other party under any Agency Document,
(v) the release of Owner or any other person, by Agency or by operation of law, from
performance of any obligation under any Agency Document; (vi)the release or substitution in
whole or in part of any security; and (vii) Agency's failure to properly perfect any lien or
security interest given as security for performance of Owner's obligations under the Agency
Documents.
(c) The obligations of Owner to indemnify the Indemnitees shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and
any release of record of this Agreement.
11. Miscellaneous.
11.1 Amendments. This Agreement may be amended or modified only by a written
instrument signed by both Parties and recorded in the Official Records.
11.2 No Waiver. Any waiver by Agency of any term or provision of this Agreement
must be in writing. No waiver shall be implied from any delay or failure by Agency to take
action on any breach or default hereunder or to pursue any remedy allowed under this Agreement
or applicable law. No failure or delay by Agency at any time to require strict performance by
Owner of any provision of this Agreement or to exercise any election contained herein or any
right, power or remedy hereunder shall be construed as a waiver of any other provision or any
succeeding breach of the same or any other provision hereof or a relinquishment for the future of
such election.
11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to
this Agreement shall be made in writing and sent to the Parties and the Investor Limited Partner
at their respective addresses specified below or to such other address as a Party or the Investor
Limited Partner, as applicable, may designate by written notice delivered to the other parties in
accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which
case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in
which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return
receipt; or (iii) nationally recognized overnight courier, with charges prepaid or charged to the
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sender's account, in which case notice is effective on delivery if delivery is confirmed to the
sender by the delivery service.
Agency: City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Manager
Owner: L.P.
Attention:
Investor Limited
Partner: c/o Red Stone Equity Partners
1100 Superior Avenue, Suite 1640
Cleveland, OH 44144
Attention: General Counsel
With a copy to: Bocarsly Emden Cowan Esmail &Arndt LLP
633 W. 5th Street, 64th Floor
Los Angeles, CA 90071
Attention: Kyle Arndt, Esq.
11.4 Further Assurances. The Parties shall execute, acknowledge, and deliver to the
other such other documents and instruments, and take such other actions, as either shall
reasonably request as may be necessary to carry out the intent of this Agreement.
11.5 Parties Not Co-Venturers; Independent Contractor; No Agency Relationship.
Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers,
or principal and agent with one another. The relationship of Owner and Agency shall not be
construed as a joint venture, equity venture, partnership, or any other relationship. Agency
neither undertakes nor assumes any responsibility or duty to Owner (except as expressly
provided in the Agency Documents or in this Agreement) or to any third party with respect to the
Project. Owner and its employees are not employees of Agency but rather are, and shall always
be considered independent contractors. Furthermore, Owner and its employees shall at no time
pretend to be or hold themselves out as employees or agents of Agency. Except as Agency may
specify in writing, Owner shall not have any authority to act as an agent of Agency or to bind
Agency to any obligation.
11.6 Action by the Agency. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent, or request by the Agency is required or
permitted under this Agreement, such action shall be in writing, and such action may be given,
made or taken by the Agency's Authorized Representative or by any person who shall have been
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designated by the Agency's Authorized Representative, without further approval by the City
Council.
11.7 Non-Liability of Officials, Employees, and Agents. No member, official, officer,
employee, or agent of a Party shall be personally liable to the other Party or any successor in
interest to such Party, in the event of any default or breach by such Party, or for any amount of
money which may become due to such Party or its successor or for any obligation of such Party
under the Agency Documents or this Agreement. Notwithstanding the foregoing, nothing set
forth in this Section shall be deemed to limit or restrict the ability of Agency to seek or obtain a
judgment against Owner or to enforce against Owner and its general partners to:
(A) recover under any provision of any Agency Document that obligates Owner to
indemnify Agency, or
(B) recover from Owner and its general partners compensatory damages as well as other
costs and expenses incurred by Agency (including without limitation reasonable attorneys' fees
and expenses) arising as a result of the occurrence of any of the following: (a) any fraud or
intentional misrepresentation on the part of the Owner, or any general partner thereof, or any
officer, director or authorized representative of Owner or any general partner thereof in
connection with the request for Agency funds, or in any Agency Document, or in connection
with any request for any action or consent by Agency in connection with Agency funds; (b) any
failure to maintain insurance on the Property and the Project as required pursuant to the Agency
Documents; (c) failure to pay taxes, assessments or other charges which may become liens on the
Property or the Project(subject to the right to contest as set forth in the Agency Documents); (d)
the presence of Hazardous Materials on the Property or other violation of the Owner's
obligations under the Agency Documents pertaining to environmental matters; (e) the occurrence
of any act or omission of Owner that results in waste to or of the Project or the Property and
which has a material adverse effect on the value of the Project or the Property; (f)the removal or
disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or
condemnation awards in violation of the Agency Documents; and (g)the material misapplication
of the proceeds of any insurance policy or award resulting from condemnation or the exercise of
the power of eminent domain or by reason of damage, loss or destruction to any portion of the
Project or the Property.
11.8 Headings; Construction; Statutory References. The headings of the sections and
paragraphs of this Agreement are for convenience only and shall not be used to interpret this
Agreement. The language of this Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any Party. All references in this Agreement to particular
statutes, regulations, ordinances, or resolutions of the United States, the State of California, or
the City of Cathedral City shall be deemed to include the same statute, regulation, ordinance, or
resolution as hereafter amended or renumbered, or if repealed, to such other provisions as may
thereafter govern the same subject.
11.9 Time is of the Essence. Time is of the essence in the performance of this
Agreement.
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11.10 Governing Law; Venue. This Agreement shall be construed in accordance with
the laws of the State of California without regard to principles of conflicts of law. Any action to
enforce or interpret this Agreement shall be filed and heard in the Superior Court of Riverside
County, California or in the Federal District Court for the Central District of California.
11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to
interpret or enforce the terms of this Agreement,the prevailing party shall be entitled to recover all
reasonable attorneys' fees and costs incurred in such action.
11.12 Severability. If any provision of this Agreement is held invalid, illegal, or
unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of
the remaining provisions shall not be affected or impaired thereby.
11.13 Entire Agreement; Exhibits. This Agreement,together with the OPA and the
other Agency Documents, contains the entire agreement of Parties with respect to the subject
matter hereof, and supersedes all prior oral or written agreements between the Parties with
respect thereto. Exhibits A through C attached hereto are incorporated herein by this reference.
11.14 Survival. Owner's obligations pursuant to Sections 2.1, 2.7, and 10, and all
other provisions that expressly so state, shall survive the expiration or termination of this
Agreement.
11.15 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one agreement.
SIGNATURES ON FOLLOWING PAGE(S).
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IN WITNESS WHEREOF, the Parties have executed this Affordable Housing
Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written
above.
AGENCY:
City of Cathedral City, a municipal corporation, acting in its capacity as the Housing
Successor Agency to the former Redevelopment Agency of the City of Cathedral City
By: FORM—DO NOT SIGN
Print Name:
Title:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
OWNER:
FORM—DO NOT SIGN , L.P. a California limited partnership
By:
Its: General Partner
By:
Print Name:
Title:
SIGNATURES MUST BE NOTARIZED.
OAK#4840-9104-8314 v12 73
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of )
On , before me, ,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
OAK#4840-9104-8314 v12 74
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of )
On , before me,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
OAK#4840-9104-8314 v12 75
Exhibit A
LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the City of Cathedral City, County of Riverside, State of
California, and is described as follows:
PARCELS 2 AND 3 OF PARCEL MAP 9536, IN THE CITY OF CATHEDRAL CITY, AS PER MAP
RECORDED IN BOOK 63, PAGE(S) 62 AND 63 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPT THEREFROM ALL MINERAL RIGHTS AS RESERVED BY ELMER R. BIECK AND GRACE E.
BIECK IN A DOCUMENT RECORDED APRIL 11, 1955, AS INSTRUMENT NO. 23600, OF OFFICIAL
RECORDS.
APN: 678-210-035-4, 678-210-034-3
OAK#4840-9104-8314 v12 76
Exhibit B
Number of Units by Unit Size and Targeted Area Median Income(AMI) Levels
Maximum
Household 40% 50% Sub- Mgr Total
Income AMI AMI Total Unit
Studio 38 146 184 184
2-Bedroom 8 30 38 2 40
Total 46 176 222 2 224
OAK#4840-9104-8314 v12 77
Exhibit C
INSURANCE REQUIREMENTS
Prior to initiating work on the Project and continuing throughout the term of this
Agreement, Owner shall obtain and maintain the following policies of insurance and shall
comply with all provisions set forth in this Exhibit.
(a) Commercial General Liability. A commercial general liability policy with
coverage limits in the amount of the greater of(i)the amounts required by the senior
construction and permanent lenders for the Project, or(ii) One Million Dollars ($1,000,000) each
occurrence, Two Million Dollars ($2,000,000) annual aggregate,together with Five Million
Dollars ($5,000,000) excess liability coverage, or such other policy limits as Agency may
reasonably require in its discretion, including coverage for bodily injury, property damage,
products, completed operations, and contractual liability coverage. The coverage requirements
for subcontractors shall be One Million Dollars ($1,000,000) per occurrence, Two Million
Dollars ($2,000,000) annual aggregate. Such policy or policies shall be written on an occurrence
basis and shall name the Indemnitees as additional insureds.
(b) Automobile. Comprehensive automobile liability coverage in the amount of One
Million Dollars ($1,000,000), combined single limit including coverage for owned and non-
owned vehicles. Automobile liability policies shall name the Indemnitees as additional insureds.
(c) Workers' Compensation; Employer's Liability. Owner shall furnish or cause to
be furnished to Agency evidence satisfactory to Agency that Owner and any contractor with
whom Owner has contracted for the performance of work on the Property or otherwise pursuant
to this Agreement carries Workers' Compensation insurance as required by law and Employer's
Liability insurance in a minimum amount of One Million Dollars ($1,000,000)per accident.
(d) Builder's Risk. Upon commencement of construction and continuing until
issuance of a Certificate of Completion, Owner or the general contractor working on behalf of
Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full
insurable cost of the Project on a replacement cost basis naming Agency as loss payee as its
interests may appear.
(e) Professional Liability/Errors and Omissions. Professional Liability/Errors and
Omissions insurance as appropriate for design/build operations with limits not less than One
Million Dollars ($1,000,000) each claim. If the professional liability/errors and omissions
insurance is written on a claims made basis: (i) the retroactive date must be shown and must be
before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be
provided for at least three (3) years after completion of Project construction/rehabilitation, and
(iii) if coverage is cancelled or non-renewed and not replaced with another claims made policy
form with a retroactive date prior to the Effective Date, Owner must purchase extended period
coverage for a minimum of three (3) years after completion of construction/rehabilitation.
(0 Property. Commencing upon the Effective Date, Owner shall maintain property
OAK#4840-9104-8314 v12 78
b
insurance covering all risks of loss, including earthquake (if required) and flood (if required)for
100%of the replacement value of the Project with deductible, if any, in an amount acceptable to
Agency, naming Agency as loss payee as its interests may appear.
(g) Insurance Providers. Companies writing the insurance required hereunder shall
be licensed to do business in the State of California. Insurance shall be placed with insurers with
a current A.M. Best's rating of no less than A: VII.
(h) Evidence of Insurance, Endorsements, Policies. Prior to the Effective Date of this
Agreement, Owner shall furnish Agency with certificates of insurance in form acceptable to
Agency evidencing the required insurance coverage, duly executed endorsements evidencing the
Indemnitees' status as additional insured, and all other endorsements and coverage required
hereunder. The certificates shall contain a statement of obligation on the part of the carrier to
notify Agency of any material adverse change, cancellation,termination or non-renewal of the
coverage at least thirty(30)days in advance of the effective date of any such material adverse
change, cancellation, termination, or non-renewal. All insurance certificates shall contain a
statement of obligation on the part of the carrier to notify Agency of any material adverse
change, cancellation,termination, or non-renewal of the coverage at least thirty(30) days in
advance of the effective date of any such material adverse change, cancellation, termination, or
non-renewal. Upon Agency's request, Owner shall, within thirty(30) days of the request,
provide, or arrange for the insurer to provide to Agency, complete certified copies of all
insurance policies required under this Agreement. Agency's failure to make such request shall
not constitute a waiver of the right to require delivery of the policies in the future.
(i) Additional Insured Endorsements. The additional insured endorsements for the
general liability coverage shall use Insurance Services Office (ISO)Form No. CG 20 09 11 85 or
CG 20 10 11 85, or equivalent, including(if used together) CG 20 10 10 01 and CG 20 37 10 01;
but shall not use the following forms: CG 20 10 10 93 or 03 94. Coverage shall be at least as
broad as CG 20 10 04 13.
(j) Reinstatement. If any insurance policy or coverage required hereunder is
canceled or reduced, Owner shall, within five(5) days after receipt of notice of such cancellation
or reduction in coverage, but in no event later than the effective date of cancellation or reduction,
file with Agency a certificate showing that the required insurance has been reinstated or provided
through another insurance company or companies. Upon failure to so file such certificate,
Agency may, without further notice and at its option, procure such insurance coverage at
Owner's expense, and Owner shall promptly reimburse Agency for such expense upon receipt of
billing from Agency.
(k) Primary Coverage; Waiver of Subrogation; Annual Aggregate Limits. All
coverage shall be primary insurance and shall not be contributing with any insurance, or self-
insurance maintained by Agency, and the policies shall so provide. Each insurance policy shall
contain a waiver of subrogation for the benefit of the Agency. If any of the required insurance is
provided under a form of coverage that includes an annual aggregate limit or provides that
claims investigation or legal defense costs are included in such annual aggregate limit, such
annual aggregate limit shall be three (3) times the occurrence limits specified above.
OAK#4840-9104-8314 v12 79
(I) Deductibles/Retentions. Any deductibles or self-insured retentions shall be
declared to, and be subject to reasonable approval by, City's Risk Manager. At the option of and
upon request by City's Risk Manager, if the Risk Manager determines that such deductibles or
retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or
self-insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing
payment of losses and related investigations, claims administration, and defense expenses, or
Owner shall provide the Agency with some other assurance of payment thereof reasonably
acceptable to the Agency.
(m) Adjustments. The limits of the liability coverage and, if necessary, the terms and
conditions of insurance, shall be reasonably adjusted from time to time (not less than every five
(5) years after the Effective Date nor more than once in every three (3) year period)to address
changes in circumstances, including, but not limited to, changes in inflation and the litigation
climate in California. Within thirty(30) days following Agency's delivery of written notice of
any such adjustments, Owner shall provide Agency with amended or new insurance certificates
and endorsements evidencing compliance with such adjustments.
(n) Additional Insured Coverage; Liability Limits. For all liability insurance required
by this Agreement, Owner(and Owner's contractors, as applicable) shall obtain endorsements
that name the Indemnitees as additional insured in the full amount of all applicable policies,
notwithstanding any lesser minimum limits specified in this Agreement. This Agreement
requires Owner(and Owner's general contractor, as applicable) to obtain and provide for the
benefit of the Indemnitees additional insured coverage in the same amount of insurance carried
by Owner(or Owner's contractors, as applicable), but in no event less than the minimum
amounts specified in this Agreement. In the event that Owner(or Owner's general contractor as
applicable) obtains insurance policies that provide liability coverage in excess of the amounts
specified in this Agreement,the actual limits provided by such policies shall be deemed to be the
amounts required under this Agreement. Without limiting the foregoing, the limits of liability
coverage specified in this Agreement are not intended, nor shall they operate, to limit Agency's
ability to recover amounts in excess of the minimum amounts specified in this Agreement.
OAK#4840-9104-8314 v12 80
Exhibit C
[Intentionally omitted.]
OAK#4840-9104-8314 v12 81
Exhibit D
FINANCING PLAN
Project Description
Cathedral Palms Senior Apartments is an existing 231-unit property(the "Property")that will be
rehabbed and reconfigured into a 224-unit low-income senior housing community with a new
permanent supportive housing set-aside for homeless seniors and community center located at
31750 Landau Blvd. in Cathedral City, CA 92234 ("Project"). The underlying Project sources
and uses as well as development costs; rent schedule, operating expenses and cash flow
worksheets are described below in this Exhibit D.
Parties to Proposed Financing
National Community Renaissance of California (National CORE) is the current owner and
proposed seller of the Property.
Under the proposed financing, CP Senior Housing Partners, L.P. (the "Partnership") will be the
Project borrower and owner. CP Senior GP LLC (the "General Partner") will be the General
Partner of the Partnership. National CORE will be the managing member of the General Partner,
as well as developer, construction manager and property manager for the Project.
Red Stone Equity Partners, LLC ("Red Stone") is the proposed tax credit syndicator and special
limited partner. Red Stone intends to place the Project in an investment fund that will serve as
the investment limited partner.
Other proposed lenders to the project include:
• JP Morgan Chase Bank
• State of California Housing & Community Development (HCD)
• National Community Renaissance of California (National CORE)
National CORE has covenanted and agreed to loan the proceeds of a new$765,125 grant from
the City of Cathedral City to National CORE as part of its seller financing to the Project.
Proposed Acquisition/Predevelopment Financing
National CORE, as current owner of the Property, will sell and transfer title of the property to the
Partnership for the appraised value of approximately$10,300,000 at Closing.
The acquisition of the Property will be primarily financed through a seller carryback loan of
approximately $9,119,496 (the "Seller Carryback Note"). The balance of the acquisition funding
will be paid with tax exempt bond proceeds in the form of a new construction loan from a private
lender.
OAK#4840-9104-8314 v12 82
The Seller Carryback Note will earn up to 5% interest compounded annually and, after
repayment of the Deferred Developer Fees (inclusive of interest), will receive payment from up
to 50% of residual cash flow until paid in full. (The Seller Carryback Note interest rate must be
greater than the Applicable Federal Rate at the time of closing, and the rate and term are subject
to lender and investor approval and satisfaction of the True Debt Test.)Terms of the Notes will
be 57 years from Construction Loan closing and/or 55 years from Permanent Loan conversion.
Upon the Notes being paid in full, the General Partner will receive 50% of residual cash flow.
The Partnership will apply for an allocation of 4% federal tax credits from the California Tax
Credit Allocation Committee (CTCAC), and tax-exempt bonds from the California Debt Limit
Allocation Committee (CDLAC). Following the CTCAC and CDLAC allocation meetings, the
Partnership will finalize negotiations with anticipated tax credit investor and lenders
The Partnership has been awarded sixty-eight(68) project based vouchers to be assigned to a set-
aside of homeless senior units in the Project by the Housing Authority of the County of
Riverside.
Proposed Construction/Take-out Financing
The Partnership will secure commitments for a bank construction only loan in the amount of
approximately $16,000,000 and bank construction/permanent for the estimated amount of
$2,588,000 in order to complete the construction of the project.
The bank construction and construction/permanent loans are expected to be outstanding for
approximately 24 months to allow for the completion of the property improvements and for
lease-up of all units by qualified occupants. The bank permanent loan will be made available
from the start of construction and will have a term of 18 or more years. Upon completion and
stabilization of the project,the bank construction loan will be paid down using tax credit equity.
The bank permanent loan will remain in place until the end of its term.
In addition to bank construction and permanent loans, other permanent financing includes:
• Tax credit equity- $12,502,401
• State of California No Place Like Home—$7,712,905
• Seller Cash loan - $1,215,125
• Seller Carryback loan - $9,119,496
The State of California No Place Like Home Loans (the "Public Agency Note")will earn 3%
simple interest and, after repayment of the Deferred Developer Fee (inclusive of interest) will
receive payment, as from 50% of residual cash flow until paid in full. Term of the Public
Agency Note will be 55 years from the applicable Permanent Loan conversion.
As a final source of funds,the Developer will defer developer fee or contribute developer fee as
a capital contribution. The Partnership will also commit income from operations generated
during the rehab phase to the project financing as needed.
OAK#4840-9104-8314 v12 83
Affordability
The 224 unit project will be a 100% affordable rental community with 222 units targeting
seniors earning 40% and 50%of Riverside County Area Median Income (AMI), including a
permanent supportive housing set-aside of sixty-eight (68) units for homeless seniors. Two (2)
units will be unrestricted and reserved for on-site staff.
All non-homeless units will be restricted for a period of 55 years to seniors 55 years or older. A
homeless senior set-aside will further restrict sixty-eight (68) units for homeless seniors 62 years
or older within the 50%AMI restricted units. Those units will require deeper affordability than
50%AMI and homeless occupancy standards as required under the State of California Housing
and Community Development(HCD)No Place Like Home program and Housing Authority
County of Riverside Housing Assistance Payment contract.
Approximately 80%of the restricted units will be at 50%AMI and 20%of the restricted units at
40%AMI as follows:
• 38 Studio @ 40%AMI
• 146 Studio @ 50%AMI
• 8 Two BR units @ 40%AMI
• 30 Two BR units @ 50% AMI
• 2 Exempt Property Management Units (Two 2BR for onsite property management staff)
Occupancy and rent levels will be determined by and meet the requirements of Section 42 of the
Internal Revenue Code of 1986, as amended and regulations promulgated pursuant thereto. The
68 studio units for homeless seniors to be funded specifically by State of California No Place
Like Home Program and assigned project based vouchers from the County of Riverside Housing
Authority will be further subject to deeper affordability and homeless occupancy standards.
The completed project will benefit very-low income and homeless seniors in need of permanent
supportive housing in the City of Cathedral City and surrounding communities and clearly fills a
recognized and urgent need for affordable and special needs housing in the area.
OAK#4840-9104-8314 v12 84
Exhibit E
FORM OF CERTIFICATE OF COMPLETION
(Attach form of Certificate.)
OAK#4840-9104-8314 v12 85
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE§§6103,27383
Space above this line for Recorder's use.
CERTIFICATE OF COMPLETION
This Certificate of Completion (this "Certificate") is made by the City of Cathedral
City, a municipal corporation, acting in its capacity as the Housing Successor Agency to
the former Redevelopment Agency of the City of Cathedral City (in such capacity,
referred to herein as the "Agency") effective as of , 20
RECITALS
A. Agency and National Community Renaissance of California ("NCRC"), a
California nonprofit public benefit corporation, entered into that certain Owner
Participation and Funding Agreement dated as of , 20_ (the "OPA")
concerning the rehabilitation of certain real property located in the City of Cathedral
City, Riverside County, California and more particularly described in Exhibit A attached
hereto (the "Property"). NCRC's rights and obligations under the OPA were assigned
to , L.P., a California limited partnership ("Developer") pursuant to
an unrecorded Assignment and Assumption Agreement dated as of
20_. Capitalized terms used herein without definition shall have the meaning ascribed
to such terms in the OPA.
B. Pursuant to Section 5.12 of the OPA, the Agency is required to furnish the
Developer or its successors with a Certificate of Completion upon completion of
development of the Project in accordance with the OPA.
C. The Agency has determined that the development of the Project has been
satisfactorily completed in accordance with the OPA.
NOW, THEREFORE, Agency hereby certifies as follows:
1. Development of the Project has been satisfactorily completed in
conformance with the OPA.
2. All indemnity, use, maintenance, and nondiscrimination covenants
contained in the OPA shall remain in effect and enforceable in accordance with the
OPA. This Certificate does not constitute evidence of Developer's compliance with
those covenants in the OPA that survive the issuance of this Certificate, including
without limitation, compliance with the Affordable Housing Regulatory Agreement and
OAK#4840-9104-8314 v12 86
Declaration of Restrictive Covenants entered into pursuant to the OPA and recorded in
the Official Records on , 20_ as Instrument No. Book ,
Page
3. This Certificate does not constitute evidence of compliance with or
satisfaction of any obligation of Developer to any holder of a deed of trust securing
money loaned to finance the Project or any part thereof, and does not constitute a
notice of completion under California Civil Code Section 9204.
4. Nothing contained in this instrument shall modify any provisions of the
OPA or any other document executed in connection therewith.
IN WITNESS WHEREOF, Agency has executed and issued this Certificate of
Completion as of the date first written above.
CITY OF CATHEDRAL CITY, a municipal corporation, acting in its capacity as the
Housing Successor Agency to the former Redevelopment Agency of the City of
Cathedral City
By: FORM- DO NOT SIGN
Name:
City Manager
ATTEST:
By: FORM- DO NOT SIGN
City Clerk
APPROVED AS TO FORM:
By: FORM- DO NOT SIGN
City Attorney
OAK#4840-9104-8314 v12 87
Exhibit A
PROPERTY
The land referred to is situated in the City of Cathedral City, County of Riverside, State of
California, and is described as follows:
PARCELS 2 AND 3 OF PARCEL MAP 9536, IN THE CITY OF CATHEDRAL CITY, AS PER MAP
RECORDED IN BOOK 63, PAGE(S) 62 AND 63 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPT THEREFROM ALL MINERAL RIGHTS AS RESERVED BY ELMER R. BIECK AND GRACE E.
BIECK IN A DOCUMENT RECORDED APRIL 11, 1955, AS INSTRUMENT NO. 23600, OF OFFICIAL
RECORDS.
APN: 678-210-035-4, 678-210-034-3
OAK#4840-9104-8314 v12
Exhibit F
TERMINATION AND RELEASE AGREEMENT
(Attach form of Agreement.)
OAK#4840-9104-8314 v12 89
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's use.
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT(this "Agreement") is executed
as of , 20 , by and between the City of Cathedral City, a municipal corporation,
acting in its capacity as the Housing Successor Agency to the former Redevelopment Agency of
the City of Cathedral City(in such capacity, referred to herein as the "Agency") and National
Community Renaissance of California, a California nonprofit public benefit corporation formerly
known as Southern California Housing Development Corporation ("NCRC"). The Agency and
NCRC are collectively referred to herein as the "Parties."
A. NCRC is the owner of the real property located at 31750 Landau Boulevard in the
City of Cathedral City, California, known as Riverside County Assessor's Parcel Nos. 678-210-
034 and 678-210-035, and more particularly described in Exhibit A attached hereto (the
"Property").
B. As more particularly set forth below, in 1996 and in 2003, the former
Redevelopment Agency of the City of Cathedral City ("Redevelopment Agency") and NCRC
entered into a series of agreements pertaining to the financing and development of the Property
and certain improvements located thereon.
C. Pursuant to Resolution No. adopted by the City Council of the City of
Cathedral City on January , 2012, the Agency assumed the housing rights and obligations of
the Redevelopment Agency pursuant to California Health and Safety Code Section 34176 upon •
dissolution of the Redevelopment Agency on February 1, 2012, and as a result thereof, the
Agency is the successor in interest to the Redevelopment Agency with respect to the Original
Redevelopment Agency OPA (defined below) and the other Original Redevelopment Agency
Documents (defined below).
D. NCRC and Agency have entered into an Owner Participation and Funding
Agreement dated as of , 2019 (the "New OPA"). Pursuant to the New OPA, an
Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants will be
executed by and between Agency and NCRC (or its successor in interest) and recorded in the
OAK#4840-9104-8314 v12 90
Official Records of Riverside County ("Official Records") substantially concurrently herewith
(the "New Regulatory Agreement").
E. As set forth herein,the Parties desire to terminate, release and reconvey the
Original Redevelopment Agency Documents.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. The Parties acknowledge the truth of the foregoing Recitals which are incorporated into
this Agreement by this reference.
2. Agency hereby acknowledges that it has forgiven NCRC's obligation to repay the funds
advanced by the Redevelopment Agency pursuant to the Original Redevelopment Agency OPA
in the form of a loan in the original principal amount of$1,000,000, and the Parties acknowledge
and agree that all other obligations of NCRC under the Original Redevelopment Agency OPA
have been satisfied.
3. The Parties further acknowledge and agree that upon recordation thereof in the Official
Records, the New Regulatory Agreement shall replace and supersede the following documents in
their entirety, each as defined below: (i) the O&M Agreement, (ii)the Original Regulatory
Agreement, (iii)the Affordability Covenant, (iv)the Redevelopment Covenant, and (v)the
Original Affordable Housing Agreement.
4. Effective upon the date of recordation of the New Regulatory Agreement, the Parties
agree that the following documents (collectively, the "Original Redevelopment Agency
Documents") shall each be terminated, and shall be of no further force or effect:
(i) Operation and Maintenance Agreement, executed by and between the
Redevelopment Agency and The Southern California Housing Development Corporation, dated
as of October 1, 1996, and recorded December 30, 1996, as Instrument No. 489519, of Official
Records (the "O&M Agreement");
(ii) Owner Participation Agreement (Sewer System Upgrade at Cathedral Palms
Apartments), executed by and between the Redevelopment Agency and Southern California
Housing Development Corporation, dated May 1, 2003, and recorded December 15, 2003, as
Instrument No. 2003-977446, of Official Records (the "Original Redevelopment Agency
OPA");
(iii) Regulatory Agreement and Declaration of Restrictive Covenants, executed by and
between the Redevelopment Agency and Southern California Housing Development
Corporation, dated as of October 1, 1996, and recorded December 30, 1996, as Instrument No.
489518, of Official Records (the "Original Regulatory Agreement");
OAK#4840-9104-8314 v12 91
(iv) Declaration of Affordability Covenants, executed by Southern California Housing
Development Corporation, dated May 1, 2003, and recorded December 31, 2003, as Instrument
No. 2003-1017672, of Official Records (the "Affordability Covenant");
(v) Declaration of Redevelopment Covenants, executed by Southern California
Housing Corporation, dated May 1, 2003, and recorded December 31, 2003, as Instrument No.
2003-1017895, of Official Records (the "Redevelopment Covenant");
(vi) Deed of Trust, Security Agreement and Fixture Filing(with Assignment of
Rents), executed by The Southern California Housing Development Corporation as Trustor for
the benefit of the Redevelopment Agency, dated October 1, 1996, and recorded on December 30,
1996, as Instrument No. 489521, of Official Records (the "Original Performance Deed of
Trust"); and
(vii) Affordable Housing Agreement dated October 1, 1996, executed by and between
Southern California Housing Development Corporation and the Redevelopment Agency
("Affordable Housing Agreement") which was not recorded.
5. This Agreement shall be recorded in the Official Records of Riverside County.
6. The Parties each agree to execute such further instruments and to take such further
actions as may be necessary or desirable in order to implement this Agreement, including
without limitation the execution, delivery and as applicable, the recordation, of such additional
instruments as may be necessary to evidence the termination of the Original Redevelopment
Agency Documents.
7. This Agreement may be executed in counterparts, each of which shall be an original and
all of which taken together shall constitute one and the same instrument.
SIGNATURES ON FOLLOWING PAGE(S).
OAK#4840-9104-8314 v12 92
IN WITNESS WHEREOF, the Parties have executed this Termination and Release
Agreement as of the date first written above.
AGENCY:
City of Cathedral City, a municipal corporation, acting in its capacity as the Housing
Successor Agency to the former Redevelopment Agency of the City of Cathedral City
By: FORM—DO NOT SIGN
Print Name:
Title:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
NCRC:
National Community Renaissance of California, a California nonprofit public benefit corporation
By: FORM—DO NOT SIGN
Print Name:
Title:
SIGNATURES MUST BE NOTARIZED.
OAK#4840-9104-8314 v12 93
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of )
On , before me,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
OAK 144840-9104-8314 v12 94
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of )
On , before me,
(Name of Notary)
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
OAK#4840-9104-8314 v12 95
Exhibit A
PROPERTY
The real property situated in the City of Cathedral City, County of Riverside, State of California,
described as follows:
PARCELS 2 AND 3 OF PARCEL MAP 9536, IN THE CITY OF CATHEDRAL CITY, AS PER MAP
RECORDED IN BOOK 63, PAGE(S) 62 AND 63 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPT THEREFROM ALL MINERAL RIGHTS AS RESERVED BY ELMER R. BIECK AND GRACE E.
BIECK IN A DOCUMENT RECORDED APRIL 11, 1955, AS INSTRUMENT NO. 23600, OF OFFICIAL
RECORDS.
APN: 678-210-035-4, 678-210-034-3
OAK#4840-9104-8314 v12 96
Exhibit G
SCHEDULE OF PERFORMANCE
DATE ITEM OF PERFORMANCE
Enter into Owner Participation Agreement (OPA) between
July 2019 National Community Renaissance of California (NCRC) and
City of Cathedral City
Submit 4% Low Income Housing Tax Credit (LIHTC)
October 2019 Application to California Tax Credit Allocation Committee
(CTCAC) and Tax-Exempt Bond Application to California Debt
Limit Allocation Committee (CDLAC)
December 2019 CTCAC and CDLAC Allocation Meetings
Enter into Agreement to Enter into a Housing Assistance
December 2019 Payment (ANAP) Contract with the Housing Authority County
of Riverside
Enter into Standard Agreement with the State of California
December 2019 Housing and Community Development Department No Place
Like Home (NPLH) Program
April 2020 Project Building Permit Issuance
April 2020 Close Construction Financing and transfer property to
Approved Partnership
May 2020 Commence Rehab
November 2021 Complete Rehab / Placed In Service
December 2022 100% Occupancy
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