HomeMy WebLinkAboutRecorded Doc 2020-019 AZO-010
DOC # 2020-0326421
RECORDING REQUESTED BY: 07/23/2020 02:27 PM Fees: $0.00
First American Title Company Page 1 of 37
Recorded in Official Records
WHEN RECORDED MAIL DOCUMENT TO: County of Riverside
City of Cathedral City Peter Aldana
Assessor-County Clerk-Recorder
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attn: City Clerk **This document was electronically submitted
to the County of Riverside for recording"
Receipted by:JACQUELINE#2386
Space Above This Line for Recorder's Use Only
A.P.N.: 678-210-034-3 and 678-210-035-4 File No.: OSA-6000063 (jg)
Property Address: , Cathederal City, CA 92234
Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants
Title of Document
TRA: 019-013, 019-152
DTT: N/A
Exemption reason declared pursuant to Government Code 27388.1
O This Document is a transfer that is subject to the imposition of documentary transfer tax.
N This is a document recorded in connection with a transfer that is subject to the imposition of document
transfer tax.
Document reference: Grant Deed recorded concurrently herewith
O This document is a transfer of real property that is a residential dwelling to an owner-occupier
❑ This is a document recorded in connection with a transfer of real property that is a residential dwelling to
an owner-occupier.
Document reference:
THIS PAGE ADDED TO PROVIDE EXEMPTION INFORMATION FOR THE BUILDING HOMES AND JOBS ACT FEE
(SB-2; AFFORDABLE HOUSING FEE) ($3.00 Additional recording fee applies)
, 1
RECORDING REQUESTED BY:
First American Title Company
WHEN RECORDED MAIL DOCUMENT TO:
City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attn: City Clerk
Space Above This Line for Recorder's Use Only
A.P.N.: 678-210-034-3 and 678-210-035-4 File No.: OSA-6000063 (jg)
Property Address: , Cathederal City, CA 92234
Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants
Title of Document
TRA: 019-013, 019-152
DTT: N/A
Exemption reason declared pursuant to Government Code 27388.1
❑ This Document is a transfer that is subject to the imposition of documentary transfer tax.
O This is a document recorded in connection with a transfer that is subject to the imposition of document
transfer tax.
Document reference: Grant Deed recorded concurrently herewith
❑ This document is a transfer of real property that is a residential dwelling to an owner-occupier
E This is a document recorded in connection with a transfer of real property that is a residential dwelling to
an owner-occupier.
Document reference:
THIS PAGE ADDED TO PROVIDE EXEMPTION INFORMATION FOR THE BUILDING HOMES AND JOBS ACT FEE
(SB-2; AFFORDABLE HOUSING FEE) ($3.00 Additional recording fee applies)
1
Recording Requested By:
First American Title Company
Homebuilder Services Division
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cathedral City
68-700 Avenida Lab Guerrero
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE§§6103, 27383
lo0000(3 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
CP SENIOR APARTMENTS, L.P.
(Cathedral Palms Senior Apartments)
OAK #4846-5287-9490 v13
This Affordable Housing Regulatory Agreement and Declaration of Restrictive
Covenants (this"Agreement") is entered into effective as of July 1, 2020 (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 CP Senior Apartments, 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 Grant Agreement(the "OPA")dated as of July 24, 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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OAK 414846-5287-9490 v13
I t
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 thirty percent(30%) of
AMI ("30% Units"), a monthly rent that does not exceed one-twelfth of thirty percent(30%)of
thirty percent(30%) 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 sixty-eight (68)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 thirty
percent(30%)of AMI; and (ii)not less than an additional 154 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 (the"Occupancy Restricted Units"). The Occupancy Restricted Units may 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 sixty-eight(68)units that are available at Affordable Rents to households whose income
is no greater than thirty percent(30%)of Area Median Income,and not less than an additional
154 units that are available at Affordable Rents to households whose income is no greater than
fifty percent(50%)of Area Median Income.
2.2.1 Loss of Subsidy. Owner shall in good faith apply for and accept all
available renewals for project-based rental assistance and/or operating subsidy for the Project. If
project-based rental assistance or operating subsidy for the Project is terminated or reduced,
Owner shall immediately notify Agency in writing, and shall make every effort to find alternative
subsidies or financing structures that would enable the rents, income-targeting, and occupancy
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restrictions set forth in Section 2.2 to be maintained. If Owner documents to Agency's
reasonable satisfaction that Owner has been unsuccessful in its efforts to identify and obtain
alternative resources,then to the extent necessary to maintain Project Financial Feasibility
(defined below)as reasonably determined by Agency: Owner may increase rents and income-
targeting for 30%Units above the levels allowed by Section 2.2 up to not greater than the rent
and income-targeting permitted for 50%Units. Rents shall be increased only to the extent and
only for the number of units required for Financial Feasibility, as reasonably determined by
Agency. Owner shall phase in any necessary rent increases as gradually as possible, consistent
with maintaining Project Financial Feasibility. Owner shall take measures to minimize disruption
to existing households. Furthermore, in the event Owner is unable to lease the Occupancy
Restricted Units to tenants that qualify for supportive housing and special needs set aside and
who are able to pay the increased rents, Agency shall promptly approve Owner's request to lease
the Occupancy Restricted Units to tenants that do not qualify for supportive housing or any
special needs set aside. Owner shall take measures to minimize disruption to existing
households. As used in this Agreement, "Financial Feasibility"means that the Project's annual
net operating income (i.e., gross annual income received minus operating expenses and deposits
into operating and replacement reserves in the amounts required by lenders that have provided
Project financing that is payable on a non-residual receipts basis)divided by annual debt service
payable on non-residual receipts loans equals 1.0. The increased rents and income-targeting
permitted pursuant to this Section 2.2.1 may remain in effect only for so long as required to
maintain Financial Feasibility. Owner will use best efforts to obtain alternate sources of
financing that will enable the Project to comply with the rent and occupancy restrictions set forth
in Section 2.2.
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
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
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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.
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
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:
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(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
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
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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
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.
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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 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
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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:
(i) 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;
(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
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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.
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
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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
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.
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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,
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
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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 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;
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(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;
a) 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;
(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;
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(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
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
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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
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
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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 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.
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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-
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
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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 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
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OAK #4846-5287-9490 v13
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
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.
22
OAK #4846-5287-9490 v13
(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
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
23
OAK #4846-5287-9490 v13
Owner: CP Senior Apartments, L.P.
9421 Haven Avenue
Rancho Cucamonga, CA 91730
Attention: CFO
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
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
24
OAK #4846-5287-9490 v13
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.
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.
25
OAK #4846-5287-9490 v13
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).
26
OAK #4846-5287-9490 v13
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
Agenc o t - ormer Redeye opment gency of the City of Cathedral City
BTA 11. / i
Print Name: 0/412k4 ` /71C(4//Sid.)
Title: C/711
ATTEST:
Gt Y 0.41,' TraCe9 2.' tc neZ.
City Clerk
APPROVED A TO FO'
A-vf rove
City Attorney
OWNER:
CP Senior Apartments, L.P., a California limited partnership
By: CP Senior GP LLC, a California limited liability company
Its: General Partner
By: National Community Renaissance of California, a California nonprofit public
benefit corporation
Its: Managing Member
By:
Print Name: G+ �9he�►bn
Title: nf�rNmart
SIGNATURES MUST BE NOTARIZED.
OAK #4846-5287-9490 v13 27
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:
Print Name:
Title:
ATTEST:
City Clerk
APPROVED AS TO FORM: C y/7
4247 CY4
City Attorney 41
OWNER:
CP Senior Apartments, L.P., a California limited partnership
By: CP Senior GP LLC, a California limited liability company
Its: General Partner
By: National Community Renaissance of California, a California nonprofit public
benefit corporation
Its: Managing Me ber
By:
Print Name: ( EL 'l V/V
Title: NCO
SIGNATURES MUST BE NOTARIZED.
OAK #4846-5287-9490 v13 27
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 ofR\1.105i dia
)
On J LJ j �,DCS , before me, L ai kX(,&. C. rdtct 1C1,Y j ft jl l C✓ ,
(Name of Notary)
notary public, personally appeared NA()AJ2,3 "P me, c.Ln\acn
who proved to me on the basis of satisfactory evidence to be the rs9.n(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 l /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.
(,04 E. q\CILIA.&4
(Notary Signature)
LAURA E.GARCIA
�.t�. r, Notary public•California
K�i `o Riverside County
Commission#2315917
L,o"� My Comm.Expires Dec 16,2023
OAK #4846-5287-9490 v13 28
California All-Purpose 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
County of San Bernardino s.s.
On July 2, 2020 before me, Monica Rodriguez, Notary Public
personally appeared Michael Finn
who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph ,¢ MONICA RODRIGUEZ
is true and correct. ,„t. Notary Public-California
. '4�;�,� San Bernardino County z
WITNESS my hand a • official seal. Z Ie
.* Commission #2194994 --
Comm.Expires May 2,6,20_21.4
/L
OPTIONAL INFORMATION
:LS _. _ _ _ a
Sem.,, � ��.. .,.�_ .��� . �a:�. ,, �.i_ui ..�...., u...,,.,,nt �wn�: ai � ,<tttach�i... , of In,
acknowleda'r'nt ;and may prove useful t- - =tying on the attached document.
Description of Attached Document
Method of Signer Identification
The preceding Certificate of Acknowledgment is attached to
a document titled/for the purpose of Proved to me on the basis of satisfactory evidence:
❑ form(s)of identification ❑ credible witness(es)
Notarial event is detailed in notary journal on:
containing pages, and dated
Page# Entry#
The signer(s) capacity or authority is/are as:
❑ Individual(s) Notary contact:
❑ Attorney-in-fact
n Corporate Other
Officer(s) ❑ Additional Signer❑ Signer(s)Thumbprints(s)
❑ Guardian/Conservator
❑ Partner-Limited/General
❑ Trustee(s)
❑ Other:
representing:
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 NO. 9536 AS SHOWN BY MAP ON FILE IN
BOOK 63, PAGE(S) 62 AND 63 OF MAPS IN THE OFFICE OF THE COUNTY
RECORDER OF RIVERSIDE COUNTY, CALIFORNIA.
EXCEPTING 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, OFFICIAL RECORDS.
APN: 678-210-034-3 (Parcel 2) and 678-210-035-4 (Parcel 3)
OAK #4896-5287-9990 v13 30
Exhibit B
Number of Units by Unit Size and Targeted Area Median Income(AMI) Levels
Maximum
Household 30% 50% Sub- Mgr Total
Income AMI AMI Total Unit
Studio 68 116 184 184
2-Bedroom 0 38 38 2 40
Total 68 154 222 2 224
OAK #4846-5287-9490 v13 31
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.
(f) Property. Commencing upon the Effective Date, Owner shall maintain property
insurance covering all risks of loss, including earthquake(if required) and flood(if required) for
OAK #4846-5287-9490 v13 32
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 #4846-5287-9490 v13 33
Q
(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 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 #4846-5287-9490 v13 34