HomeMy WebLinkAbout6/7/2000 - STAFF REPORTS (4) I DATE: JUNE 7, 2000
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: REDEVELOPMENT DIRECTOR
APPROVAL OF OWNER PARTICIPATION WITH ROSE MIHATA AND SCOTT
TIMBERLAKE FOR THE REHABILITATION OF A 136-UNIT MATURE ADULT
APARTMENT COMPLEX, THE HERITAGE APARTMENTS,AT 300 SOUTH CALLE EL
SEGUNDO
RECOMMENDATION:
It is recommended that the Agency approve an Owner Participation Agreement with
Rose Mihata,an individual, and Scott Timberlake,an individual,for the rehabilitation
of a 136-unit mature adult apartment complex at 300 South Calve El Segundo,the
Heritage Apartments,in the Baristo-Fartell Redevelopment Project Area
BACKGROUND:
In January, 2000 staff received an initial request for Agency assistance from
Rose Mihata, owner of the Heritage Apartments at 300 South Calle El Segundo.
Ms. Mihata and her partner, Scott Timberlake, had purchased the complex in
August, 1999 from a long-time owner, and were immediately confronted with
twenty years'worth of deferred maintenance on the apartments, as well as the
normal wear and tear on various mechanical systems.
What precipitated the request was the City's Community Preservation Officers'
requirements that the new owners perform a number of significant property
repairs: Included in these repairs were the replacement of the block wall
surrounding the parking lot, repaving the parking lot, and resurfacing the
swimming pool and spa. The estimated cost of these repairs, based on
contractor estimates,was$100,000. Ms. Mihata requested that the Agency pay
the cost of these repairs, in return for a commitment to restrict a number of units
(10-15)to low-or moderate-income residents. Those repairs need to be made
whether or not we proceed with this agreement.
The complex was constructed in 1979 without any Agency assistance, and
therefore has no affordability restrictions on it. The apartments were originally
built as"mature adult"apartments, intended for self-sufficient(not requiring
special medical attention), low-and moderate-income seniors. The units are
smaller than typical for a project of this type; it was anticipated that smaller units
would reduce both the rent and maintenance costs of the units, thus making
them more affordable to the residents. Smaller units, along with the R-13
insulation and extensive sun control through landscaping, roof overhangs, and
canopies,was also supposed to make the units more energy efficient and
therefore less costly.
The priorities of the Agency's Low/Mod Housing Program thus far have been
correcting health and safety problems in existing units, as well as helping make
the units affordable to the tenants. As staff discussed the project with the Ca
Owner, It was determined that we could probably make the greatest Impact on I
the tenants by replacing the 20-year-old roof-top aiftonditioning units with new
energy efficient units. The tenants'electric bills should decrease in the summer,
and their comfort will Increase. Staff also asked the Local Government
Commission in Sacramento, who provide energy-efficiency design assistance to
cities through their Local Energy Assistance Program (LEAP), to assist in
packaging additional energy-related improvements. Based on two preliminary
bids obtained by the Owner, the cost of air conditioner replacement would be
between $260,000 and $300,000. Staff would look to package that with an
additional $40,000 to$50,000 in recommended energy efficiency Improvements
to the units.
Generally, on multi-family projects, the Agency has required one unit to be set
aside for persons of low-or moderate income for every$5,000 to$10,000 in
assistance given. Based on the information the Owner provided staff, rents are
$460 to$525 for 1 bedroom apartments (with new rentals at the$525 rate), and
$550 to$625 for 2-bedroom units, with the higher rate for new rentals. The
projects rents fall within the range of what is available to low income
households so, in effect, the entire complex is currently eligible. However, in the
future, the Increase in rents in the"restricted"apartments can be no faster than
Increases in the regional median income. Ultimately, it could mean that the
Owner could have two sets of rents: for unrestricted units and restricted units.
While the Owner was looking for grant funds for this project, in terms of how the
Agency normally contributes its funds to a project, it typically makes a kro-
interest, "silenr loan to an owner rather than an outright grant. Both achieve the
same goal, but silent loans protect the covenants, since a loan would be fully
repayable upon any breach of the agreement In addition, loans are easier to
monitor than grants because they are recorded on the deed. The Agency
typically subordinates the loan to the Owner's first trust deed, provided it were
held by an arm's length lender, not one of the owners. The loan would be
forgiven at the end of the term; therefore, the Owners would probably never
need to make payments on the loan unless they failed to perform according to
the terms of the Agreement
The most typical breach of the loan covenant would be N the Owner sold the
property to a new owner that did not wish to honor the affordability covenant; or,
if the current owners did not wish to honor the agreement Unlike the
Neighborhood Revitalization Program (Single Family Rehab), there will be no
amortization (principal reduction) of the loan in order to maintain a substantial
penalty upon contract breach.
Therefore, based on an overall Agency assistance package of$450,000,we
would require that sixty-eight(68) of the units at the Heritage Apartments fall
under the regulatory agreement That works out to about one restricted unit for
every$6,600 in Agency assistance, at the lower(more favorable to the Agency)
end of the average range of$5,000 to$10,000 per unit of assistance in rehab.
In addition to the Agency's contribution to the project, the OPA will require the
Owner to match the public investment with additional private investmen L While
a dollar for dollar match (or even more on the private side) is preferable, the
minimum acceptable private match would be 50% of the public investment, or
$225,000 in the case of a $450,000 public investment.
These improvements will focus on repairing safety, structural, or system
problems, such as staircases, roofing, mechanical, plumbing, or otherwise, that
will prolong the life of the property and keep it in good order. Secondly, other
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"quality of life*improvements such as repainting the apartments, providing new
appliances, upgrading the parking lot lighting,would be included. Staff
understands that$225,000 or more is a substantial investment in the property
(and far more than the$100,000 in originally required repairs), this program is
an opportunity for the Owner to leverage up to$2 in improvements for every
dollar they invest in the property, without having to service all of the debt.
In addition to the rent restrictions that will be outlined in the agreement, an OPA
will also contain other property requirements, in the form of CC& R's. These
usually refer to property maintenance standards, and will require that the
Owners keep the premises maintained and in good repair. They'll refer,
primarily, to exterior maintenance, since it is the easiest for the City to monitor
from the street:walls,fences, paving, trash enclosures and pickup, landscaping,
exterior lighting, eta
Staff will include this project—the$450,000 Agency share—in the 2000-
2001Communhy Redevelopment Agency Low/Mod Housing budget(not the
General Fund), since it not anticipated that any Agency expenditures will be
made in the remainder of the fiscal year.
_._7
JOHN S. RAYMOND
RedeveJ ent Di
APPROVED
ExecuWe Director
ATTACHMENTS:
1. Resolution
2. Owner Participation Agreement
BYWEOF FMW
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OWNER PARTICIPATION AGREEMENT G Pi l L1 C ;u I
THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is made and entered
into as of the day of May, 2000 ("Effective Date"), by and between the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate
and politic ("Agency"), and ROSE MIHATA, an individual, and SCOTT TIMBERLAKE, an
individual(collectively"Participant"),
1.0 PURPOSE OF THE AGREEMENT
The purpose of this Agreement is to effectuate the Redevelopment Plan for the Project
Area by improving the Site within the Project Area as well as to assist in providing adequate
housing affordable to low income households within the City of Palm Springs ("City"). The
development of the Project on the Property within the Project Area and the fiMhnent generally
of this Agreement are in the best interests of the City and the welfare of its residents and are in
accordance with the public purposes and provisions of applicable federal, state, and local laws
and regulations,under which the Project has been undertaken and is being assisted.
This Agreement is entered into by the Agency pursuant to its authority under the
Community Redevelopment Law of the State of California, Health and Safety Code Sections
33000 et M. (all statutory references herein are to the Health and Safety Code unless otherwise
provided); which authorizes the Agency to make agreements with owners,purchasers and lessees
of property in the Redevelopment Project Area providing for the development of property in
conformity with the Redevelopment Plan, and providing that the Agency retain controls and
establish restrictions or covenants running with the land so that the property will be developed,
operated,and used in conformity with this Agreement and the Redevelopment Plan(see Sections
33380,33381, 33437-33439 and 33339).
2.0 DEFINITIONS
The following terms as used in this Agreement shall have the meanings given unless
expressly provided to the contrary:
The term "Affordable Units" shall mean the sixty-eight(69) rental apartment dwelling
units in the Project that are covenanted for affordability, occupancy, and with respect to other
matters pursuant to this Agreement and the Agreement Containing Covenants.
The term "Agency" shall mean the Community Redevelopment Agency of the City of
Palm Springs, a public body, corporate and politic, having its offices at 3200 East Tahquuitz
Canyon Way, Palm Springs, California 92263. The term "Agency" as used herein also includes
any assignee of, or successor to, the rights, powers, and responsibilities of the Community
Redevelopment Agency of the City of Palm Springs.
The term "Agency Assistance" shall have the meaning set forth in Section 6 of this
Agreement.
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The term "Agreement Containing Covenants" shall mean the Agreement Containing
Covenants Affecting Real Property referred to in Section 4.1.1 which shall be in the form set
forth in Attachment No.4.
The term "Approved Project Plans and Permits" shall mean,collectively,the approved
Development Project Plan and Exterior Treatment Concept referred to in Section 3A, the
approved final building plans referred to in Section 3.5, and all other permits and approvals
required and issued for the Project as referred to in Section 3.6.4.
The term "City" shall mean the City of Palm Springs,a California municipal corporation,
having its offices at 3200 East Tahquitz Canyon Way, Palm Springs, California 92263. The City
is not a party to this Agreement and shall have no rights or obligations hereunder.
The term "CRL" shall mean the Community Redevelopment Law of the State of
California,codified at Health and Safety Code Section 33000 et seL.
The term "Effective Date" shall mean the latest of the dates set next to the signatures of
the parties hereto, after all the parties hereto have signed this Agreement, which latest date shall
be inserted into the preamble to this Agreement.
The tern "Eligible Improvements" shall mean those improvements described in
Attachment No. 4 to which the Agency Assistance may be applied, as further provided at Section
6.1 herein.
The term"Executive Director" shall mean the individual duly appointed to the position
of Executive Director of the Agency.
The term "Fiscal Year" shall mean the period from July 1 through June 30.
The term "Minimum Participant Expenditure" shall have the meaning ascribed at
Section 6.1.1(a)herein.
The term "Participant" shall mean ROSE MIHA.TA and SCOTT TIMBERLAKE,
individuals,having their offices at 300 South Calle El Segundo, Pahn Springs,California 92262,
and any permitted successors or assignees of Participant as provided herein Participant has
represented to Agency that it is the fee owner of the Site. Accordingly,Participant qualifies as an
"Owner Participant" within the meaning of the Redevelopment Plan and the California
Community Redevelopment Law(Health & Safety Code §33000 et sea). The term "Participant"
includes any legally permissible assignee or successor to the rights, powers, and responsibilities
of Participant hereunder,in accordance with Section 3.15 of this Agreement.
The term "Project" shall mean the rehabilitation of the rental apartment complex at the
Site which contains one hundred thirty-six (136) units (which shall include a resident on-site
manager unit), of which sixty-eight (68) units shall be the Affordable Units, related interior and
exterior improvements, all designed and constructed in a manner so as to be architecturally
compatible with the existing neighborhood as well as functionally efficient in the areas of access,
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parking, security, and amenities, as more specifically described in the Scope of Development at
Attachment _ herein. The Affordable Units shall be restricted in accordance with the terms
of this Agreement and the Agreement Containing Covenants. �!N
The term "Redevelopment Plan" shall mean the Redevelopment Plan for the Tahquitz
Andreas Project Area("Redevelopment Project Area") which was approved and adopted on July
19, 1993, by the City Council of the City by Ordinance No. 1187, as amended on December 21,
1994 by Ordinance No. 1489, and again on December_, 1999 by Ordinance No.
The Redevelopment Plan is incorporated herein by this reference and is made a part hereof as
though fully set forth herein.
The term "Release of Construction of Covenants" shall mean the Release in the form
attached as Attachment No.6.
The tern "Schedule of Performance" shall mean that certain Schedule of Performance
attached hereto as Attachment No.4.
The tern "Site" shall mean that certain real property consisting of approximately
acres in the Tahquitz Andreas Project Area located at 300 South Calle El Segundo,
Palm Springs,California 92262,as specifically described at Attachment No. 2 hereto. The Site is
shown on the site map attached hereto as Attachment No. 1.
The term "Units" shall mean one hundred thirty-six (136) rental apartment dwelling
units on the Site, sixty-eight(68)of which shall be the Affordable Units.
3.0 CURRENT OWNERSHIP OF THE SITE;DEVELOPMENT OF THE SITE
.1 Ownership of the Site
Participant hereby represents to Agency that Participant, as of the Effective Date, is the
owner of fee title to the Site, as confirmed by a current property title report of the Site, which
Participant shall submit to Agency within the time set forth in the Schedule of Performance.
.2 Physical Condition of the Site
Agency shall have no responsibility for,and makes no representation or warranty,express
or implied, with respect to the presence of uncompacted fill, the condition of the soil, the
geology, seismology, the presence of any hazardous or toxic substances or materials, or any
similar matters. In no event shall Agency have any obligation to cure or correct any physical
defects or problems with respect to the Site. It shall be the sole responsibility of Participant to
investigate all aspects of the physical condition of the Site, including but not limited to the
existence of any hazardous or toxic materials or substances, and earthquake faults or other
geologic and seismic hazards. For the purposes of this Agreement, the term"hazardous or toxic
substances or materials" shall mean any substance or material identified by the federal
goverment or State of California as hazardous or toxic and included on any list of such
substances published by the federal government or State of California.
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Participant shall indemnify, defend, and hold Agency and City harmless from any claim,
suit, or action arising from the presence of any hazardous or toxic substances or materials
existing on the Site. This indemnification obligation remain in perpetuity. and shall survive and
shall not merge with any grant deed or any other instrument,whether or not recorded.
It shall be the sole responsibility of Participant to demolish and clear any improvements
on the Site inconsistent with the intended use thereof and to prepare the Site for rehabilitation. It
shall be the further responsibility of Participant to comply with all federal, state, and local laws,
regulations, and rules regarding environmental compliance subsequent to conveyance and other
similar matters, and pay any costs and take any other actions required to prepare the Site for
development.
.3 Evidence of Financial Capability
Within the time set forth in the Schedule of Performance, Participant shall submit to
Agency's Executive Director evidence reasonably satisfactory to the Executive Director that
Participant has the financial resources and commitments necessary for the development of the
Project in accordance with this Agreement ("Evidence of Financial Capability'). Participant's
complete submittal of the Evidence of Financial Capability shall include one or more of the
following as reasonably required by Agency's Executive Director:
(i) A copy of the commitment or commitments obtained by Participant to
assist in financing the Project, including construction and take-out financing, and a preliminary
tax credit reservation or carry-over allocation (if applicable). All copies of commitments
submitted by Participant to Agency shall be certified by Participant to be true and correct copies
thereof. Each commitment for financing shall be in such form and content reasonably acceptable
to the Executive Director as reasonably evidences a firm and enforceable commitment,with only
those conditions which are standard or typical for similar lenders involved for similar projects.
(ii) If the total costs of that portion of the Project to be paid by Participant
exceeds the amount of financing commitments received pursuant to subparagraph (i) of this
Section 3.3, Participant shall provide to Agency documentation reasonably satisfactory to
Agency's Executive Director to demonstrate that Participant has adequate specific, and
identifiable funds committed to cover the difference, including working capital for a period of
not less than twelve(12)months after the scheduled date for completion of construction.
If the Executive Director shall disapprove such Evidence of Financial Capability, he or
she shall do so by written notice to Participant stating the reasons for such disapproval within ten
(10)business days following the Executive Director's receipt of Participant's complete submittal.
Participant shall have thirty(30) days within which to cure any deficiencies noted in the written
notice, unless a longer period of time is agreed upon in writing by the parties hereto prior to the
expiration of such thirty(30)day period.
In addition, as part of Participants submittal the Evidence of Financial Capability, the
Executive Director may require a project pro forma reflecting adequate cash flow and showing
revenues,expenses,debts,etc.
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.4 Development Project Plan.
Concurrently with the approval of this Agreemen4,the Agency has approved the
Participant's basic concept drawings. On or before the date set forth in the Schedule of
Performance, Participant shall submit to the City final drawings and specifications for
development of the Project in accordance with the Scope of Development described at
Attachment No. 3,and all in accordance with the City s requirements("Development Project
Plan"). The term final drawings shall be deemed to include site plans,building plans and
elevations,grading plans,if applicable,landscaping plans,panting plans,material pallets,a
description of structural,mechanical,and electrical systems,and all other plans,drawings and
specifications. Final drawings will be in sufficient detail to obtain a building permit. Said plans,
drawings and specifications shall be consistent with the Scope of Development and the various
development approvals referenced heremabove,except as such items may be amended by City(if
applicable)and by mutual consent of Agency and Participant. Plans,(concept and construction)
shall be progressively more detailed and will be approved if said plans are a logical evolution of
the plans,drawings or specifications previously approved by the Agency.
.5 Other City and Governmental Agency Permits.
Before commencement of any demolition work or any construction or development of
any buildings,structures,or other works of improvement upon the Site,Participant at its own
expense shall secure or cause to be secured any and all permits which may be required by City or
any other governmental agency with jurisdiction over the Site,including,but not limited to,
necessary building permits and all approvals required under the California Environmental
Quality Act(CEQA). Failure of ParticipanCto timely obtain all required permits and approvals
shall be grounds for termination of this Agreement by Agency in Agency's sole and absolute
discretion. Agency shall provide reasonable assistance to Participant in securing these permits,at
no cost to Agency;provided,however,that Agency does not warrant or represent that any such
approvals shall be granted.
.6 Cost of Construction
Except as specifically provided at Section 6.1,Participant shall bear all costs of preparing
and developing the Site and constructing all improvements thereon and in connection therewith,
including, but not limited to, any and all costs for demolition, clearance, interim and permanent
financing, broker's and leasing commissions, development and building fees and charges, and all
on-site improvements. Participant shall additionally be responsible for designs, plans,
calculations, bonding, permitting, and payment of fees for, and installation of, all off-site
improvements necessary for the Project. Participant shall be responsible for verifying the
adequacy and availability of all utilities. Any upgrades of existing utilities to service the Project
shall be the sole responsibility of Participant.
.7 Construction Schedule:Participant's Progress Reports
Within the time set forth in the Schedule of Performance, Participant shall furnish to the
Agency Executive Director a construction schedule indicating completion dates for each portion
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of work for the Project in accordance with the requirements of the Schedule of Performance
("Construction Schedule"). Subject to Section 8.3,all revisions to the construction schedule shall
be approved in advance in writing by Agency's csecutive Director. Subject to Section 8.3
herein, Participant shall begin, continue, and complete the construction required of it within the
times set forth in the Construction Schedule and the Schedule of Performance. once
construction is commenced, it shall be diligently and continuously pursued to completion and
shall not be abandoned for more than twenty (20) consecutive days, except when delays are due
to causes beyond the reasonable control and without the fault of Participant, as set forth in
Section 8.3 herein. Prior to issuance of the Release of Construction Covenants, Participant shall
keep Agency informed of the progress of Participant's construction of the Site upon request of
Agency-
.8 Bodily In Mu Property Damage and Workers' Compensation Insurance:
Indemnification
During construction and for a period terminating at the end of fifty-five (55) years
following the date of recordation of the Agreement Containing Covenants, Participant shall
conform to the indemnification and insurance set forth in Section 7.0.
.9 Rights of Access
Prior to the issuance of the Release of Construction Covenants, representatives of
Agency, for the purpose of assuring compliance with this Agreement, shall have, in addition to
any other rights of access to the Site granted to Agency in this Agreement,the reasonable right of
access to the Site, without charges or fees, at normal construction hours during the period of
construction to inspect the work being performed by Participant in constructing the Project. Any
inspection by Agency shall be performed without interference to the work being done at the Site.
Agency shall indemnify, defend, and hold Participant and its officers, agents, representatives,
employees, and volunteers harmless from any damage caused or liability arising out of its
exercise of this right of access; provided that it is understood that Agency does not by this
Section 3.11 assume any responsibility or liability for a negligent inspection or failure to inspect,
not shall any inspection by Agency substitute for inspections by the City as may be required by
City.
.10 Applicable Laws
Participant shall carry out the construction of the improvements to be constructed by
Participant in conformity with all applicable laws, regulations, and rules of all federal, state, and
local governmental agencies with jurisdiction over the Site and the Project, including without
limitation applicable labor standards.
.11 Anti-Discrimination Durina Construction
Participant, for itself and its successors and assigns, agrees that Participant will not
discriminate against any employee or applicant for employment because of race, color, creed,
religion,sex,marital status,national origin,or ancestry.
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.12 Taxes. Assessments.Encumbrances.and Liens
Participant shall pay prior to delinqua cy all real estate taxes and assessments properly
assessed and levied on the Site.
Until the date Participant is entitled to the issuance by Agency of Release of Construction
Covenants Participant (a) shall not place or allow to be placed thereon any mortgage, trust deed,
encumbrance or lien (except mechanic's liens prior to suit to foreclose the same being filed)not
authorized under Section 3.14 of this Agreement or otherwise hereunder, and(b)shall remove or
have removed any levy or attachment made on the Site, or assure the satisfaction thereof, within
a reasonable time,but in any event prior to a sale thereunder.
Nothing herein contained shall be deemed to prohibit Participant from contesting the
validity or amounts of any tax, assessment, encumbrance, or lien, nor to limit the remedies
available to Participant in respect thereto.
.13 Prohibition Against Assignment and Transfer
The qualifications and identity of Participant are of particular concern to Agency. It is
because of those qualifications and identity that Agency has entered into this Agreement with
Participant. Accordingly, prior to Agency's issuance of the Release of Construction Covenants
with respect to the Site, as provided in Section 3.16 herein, Participant shall not, except as
permitted in this Section and Section 3.14 below, assign all or any part of this Agreement or any
rights hereunder or in the Site without Agency's prior written approval, which approval shall not
be unreasonably withheld.
Notwithstanding the foregoing, the following shall not be considered an assignment or
transfer and shall not require Agency approval hereunder:
(i) Transfers to any entity or entities owned or controlled by Participant or any
of its respective members, shareholders or partners, or to any parent corporation or subsidiary
corporation of any partner, member, or shareholder of Participant, or to any entity or entities
controlled by any of such members,shareholders,or partners.
(it) Transfers resulting from the death or mental or physical incapacity of an
individual.
OR) Transfers or assignments in trust for the benefit of a spouse, children,
grandchildren,other family members,or for charitable purposes.
(iv) Transfers of stock in a publicly-held corporation or of the beneficial
interest in any publicly-held partnership or real estate investment trust.
(v) Any mortgage, deed of trust, sale and leaseback or other form of
conveyance required for any reasonable method of financing the acquisition and/or development
of the Site, including al I direct and indirect costs related thereto.
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(vi) A sale, conveyance, or transfer of the Site at foreclosure (or a conveyance
thereof in lieu of a foreclosure) pursuant to a foreclosure thereof to any lender meeting the
requirements of sub-paragraph(v)abovA,
(vii) A sale or transfer of some or all of Participant's interest in the Site, or any
individual parcel thereof, to a lender or real estate investment trust meeting the requirements of
sub-paragraph (v) above upon the exercise by such lender of a right to acquire Participant's
interest.
(viii) The conveyance or dedication of portions of the Site to the City or other
appropriate governmental agency for the formation of an assessment district, or the granting of
easements or permits to facilitate the development of the Site.
(xii) The leasing of the Units.
Participant shall deliver written notice to Agency requesting approval of any assignment
or transfer requiring Agency approval hereunder.
In considering whether it will grant approval to any assignment by Participant of its
interest in the Site or any portion thereof, which assignment requires Agency approval, Agency
shall consider factors such as (A)the financial strength and capability of the proposed assignees
to perform Participant's obligations hereunder and (B) the proposed assignee's experience and
expertise in the planning, financing, development, ownership and operation of similar projects.
No assignment, including assignments which do not require Agency approval hereunder, but
excluding assignments for financing purposes, shall be effective unless and until the proposed
assignee executes and delivers to Agency an agreement in form reasonably satisfactory to
Agency's attorney assuming the obligations of the assignor which have been assigned
Thereafter, the assignor shall be relieved of all responsibility to Agency for performance of the
obligations assumed by the assignee.
Participant shall compensate Agency for its actual expenses (not including personnel or
overhead expenses) incurred in investigating a proposed assignee's qualifications as a permitted
assignee hereunder; provided,however, Participant's compensation to Agency for Agency's legal
costs incurred in investigating and reviewing a proposed assignee's qualifications shall not
exceed One Thousand Five Hundred Dollars ($1,500.00). Agency shall submit an invoice to
Participant requesting compensation for Agency expenses consistent with this paragraph.
No lender approved by Agency pursuant to Section 3.14 shall be required to execute an
assumption agreement and such lender's rights and obligations hereunder shall be as set forth in
Section 3.15.
The restrictions of this Section shall terminate upon Agency's issuance of the Release of
Construction Covenants.
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.14 Security Financing; Right of Holders
.14.1 Permitted Encumbrances.
Mortgages, deeds of trust, conveyances, and leases-back or any other form of
conveyance required for any reasonable method of financing are permitted before Agency's
issuance of the Release of Construction Covenants but only for the purpose of securing loans of
funds to be used for the construction of improvements on the Site (including both construction
and permanent financing), and any other expenditures necessary and appropriate to acquire,
Lease, or develop the Site under this Agreement. Prior to Agency's issuance of the Release of
Construction Covenants, Participant shall not enter into any such conveyance for financing
purposes without the prior written consent of Agency's Executive Director, which consent shall
be given if such conveyance is for the purposes permitted herein and is given to a financial or
lending institution or other reasonably acceptable person or entity capable of performing or
causing to be performed Participant's obligations under this Agreement, including without
limitation entities owned or controlled by Participant,a pension fund, insurance company,or real
estate investment trust. Any disapproval shall be in writing and state the reasons therefor.
Failure of Agency to disapprove of such lender within ten (10) days after notice to Agency shall
be deemed as approval of that specific request for consent of Agency. If, after and despite
Participant's exercise of reasonable diligence to obtain Agency's approval,the Executive Director
disapproves the identity of Participant's proposed lender or the terms and conditions of the loan
in accordance with the terms hereof, Participant's time for commencement and completion of
construction of the Project or such portion thereof which was to have been financed by such
lender shall be extended under the Schedule of Performance for that period of time(not to exceed
one hundred twenty (120) days) during which Participant is diligently proceeding to procure
acceptable alternative financing and submit evidence of such financing to the Executive Director.
Agency further agrees to amend the terms of this Agreement if reasonably requested by an
approved lender, provided that Agency's rights and remedies hereunder are not materially
adversely affected; provided, however, that the foregoing is not intended to restrict or limit the
Agency's legislative discretion.
.14.2 Holder Not Obligated to Construct Improvements.
The holder of any mortgage or deed of trust or other security interest authorized
by this Agreement shall in no way be obligated by the provisions of this Agreement to construct
or complete the improvements or to guarantee such construction or completion; nor shall any
covenant or any provision in the deed for the Site be construed so to obligate such holder.
Nothing in this Agreement shall be deemed or construed to,permit, or authorize any such holder
to devote the Site or any part thereof to any uses,or to construct any improvements thereon,other
than those uses or improvements provided for or authorized by this Agreement.
.14.3 Notice of Default to Mortgage. Deed of Trust or Other Security Interest
Holders;Right to Cure.
Whenever Agency shall deliver any notice or demand to Participant with respect
to any breach or default by Participant in completion of construction of the improvements,
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Agency shall at the same time deliver a copy of such notice or demand to each approved holder
of record of any mortgage,deed of trust or other security interest which has previously requested
such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned)
have the right, at its option within ninety (90) days after the receipt of the notice,to commence
and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the
security interest debt and the lien on its security interest. Nothing contained in this Agreement
shall be deemed to permit or authorize such holder to undertake or continue the construction or
completion of the improvements (beyond the extent necessary to preserve and protect the
improvements or construction already begun if holder has elected to undertake construction)
without first having expressly assumed Participant's obligations to Agency by written agreement
satisfactory to Agency. The holder in that event must agree to complete, in the manner provided
in this Agreement, the improvements to which the lien or title of such holder relates. Any such
holder properly completing such improvements shall be entitled upon written request made to the
Agency,to a Release of Construction Covenants from Agency.
.14.4 Right of Agency to Cure Mortgage. Deed of Trust. or Other Security
Interest Default.
In the event of a default or breach by Participant of a mortgage, deed of trust, or
other security interest or leaseback or conveyance for financing prior to the issuance by Agency
of the Release of Construction Covenants for the Site, Agency may cure the default prior to
completion of any foreclosure. In such event, Agency shall be entitled to reimbursement from
Participant of all costs and expenses reasonably incurred by Agency in curing the default, which
right of reimbursement shall be secured by a lien upon the Site to the extent of such costs and
disbursements. Any such Gen shall be subject to:
(i) Any mortgage, deed of trust or other security Instnanent or sale and
leaseback or other conveyance for financing permitted by this Agreement;or
(ii) Any rights or interests provided in this Agreement for the protection of the
holders of such mortgages, deeds of trust, or other security instruments, the lessor under a sale
and lease-back, or the grantee under such other conveyance for financing; provided that nothing
herein shalt be deemed to impose upon Agency any affirmative obligations (by the payment of
money, construction or otherwise) with respect to the Site in the event of its enforcement of its
Hen.
15 Right of Agency to Satisfy Liens
Prior to the issuance by Agency of the Release of Construction Covenants for the Site,
and after Participant has had a reasonable time to challenge, cure, or satisfy any liens or
encumbrances on the Site, Agency, after sixty (60) days prior written notice to Participant, shall
have the right, but not the obligation, to satisfy any such liens or encumbrances on the Site;
provided, however, that nothing in this Agreement shall require Participant to pay or make
provision for the payment of any tax, assessment, lien, or charge so long as Participant in good
faith shall contest the validity or amount thereof, and so long as such delay in payment shall not
subject the Site to forfeiture or sale.
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.16 Release of Construction Covenants
•Upon Participant's satisfactory completion of construction of the Project, Agency, i
within the time set forth in the Schedule of Performance, shall furnish Participant with a Release
of Construction Covenants upon written request therefor by Participant. Such Release of
Construction Covenants shall be in a form so as to permit recordation in the Office of the
Recorder of the County of Riverside as set forth in Attachment No. 6.
The Release of Construction Covenants shall be, and shall so state, a conclusive
determination of satisfactory completion of the construction of the Project and of full compliance
with the terms of this Agreement relating to such construction. After the date Participant is
entitled to the issuance of the Release of Construction Covenants, and notwithstanding any other
provisions of this Agreement to the contrary, any party then owning or thereafter purchasing,
leasing, or otherwise acquiring any interest in the Site shall not (because of such ownership,
purchase, lease, or acquisition) incur any obligatiori or liability under this Agreement for which
such Release of Construction Covenants is issued, except that such party shall be bound by the
covenants that survive the issuance of the Release of Construction Covenants, including the
covenants contained in Sections 4.1 through 4.5 herein, inclusive, and the surviving covenants
set forth in the Agreement Containing Covenants in accordance therewith.
Agency shall not unreasonably withhold the Release of Construction Covenants.
If Agency refuses or fails to firmish the Release of Construction Covenants after written request
from Participant, Agency shall, within fifteen (15) days after such written request, provide
Participant with a written statement of the reasons Agency refused or failed to furnish such
Release of Construction Covenants. The statement shall also contain Agency's opinion of the
action Participant must take to obtain such Release of Construction Covenants. If the reason for
such refusal is confined to the immediate availability of specific items or materials for
landscaping,Agency shall issue its Release of Construction Covenants upon the posting of a cash
deposit or an irrevocable letter of credit in favor of Agency in an amount representing the fair
value of the work not yet completed and in a form reasonably acceptable to Agency's attorney.
A Release of Construction Covenants is not a notice of completion as referred to
in California Civil Code Section 3093.
.17 Estoppels
At the request of Participant or any holder of a mortgage or deed of trust,Agency
shall, from time to time and upon the request of such holder, timely execute and deliver to
Participant or such holder an estoppel letter that no default or breach exists(or would exist with
the passage of time, or giving of notice,or both)by Participant under this Agreement, if such be
the case, and certifying as to whether or not Participant has at the date of such certification
complied with any obligation of Participant hereunder as to which such holder may inquire. The
form of any estoppel letter shall be prepared by the holder or Participant and shall be reasonably
acceptable to Agency's attorney. Agency shall provide the estoppel letter within fifteen(15)days
following receipt from Participant of such reasonably acceptable form of estoppel letter or shall
provide, within such fifteen (15) day period written notice to Participant of the reasons for
627 MM-0012
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Agency's refusal to issue such estoppel letter. Participant shall compensate Agency for its actual
expenses (not including personnel or overhead expenses) incurred in connection with each such
estopri letter; provided, however, that Participant's compensation to Agency for Agency's legal n.
costs incurred with respect to each such estoppel letter request shall not exceed One Thousand
Five Hundred Dollars ($1,500.00). Agency shall submit an invoice to Participant requesting
compensation for Agency expenses consistent with this paragraph.
4.0 USES OF THE SM
1 Use of the Site
.1.1 Participant covenants and agrees for itself, and its successors and assigns,
to its interest in the Site, that for the period set forth in the Agreement Containing Covenants,
Participant and such successors and assigns shall not devote the Site to uses inconsistent with the
Approved Project Plans and Permits, this Agreement, or the Agreement Containing Covenants,
whichever is the most restrictive.
.1.2 From the date of issuance of the Release of Construction Covenants until
the termination of the affordability restrictions set forth in the Agreement Containing Covenants,
Participant shall maintain and shall finnish or cause to be fiumished to Agency duplicate originals
or appropriate endorsements of insurance or certificates of insurance as set forth in Section 7.0
herein.
.1.3 In the event that Participant breaches any of the covenants contained in
this Section 4.1 or Section 4.2 below,and such default continues for a period of five(5)business
days after written notice from Agency (with respect to landscaping, graffiti, debris, waste
material, and general maintenance) or thirty (30) days after written notice from Agency (with
respect to building improvements), then Agency, in addition to whatever other remedy it may
have at law or in equity, shall have the right to enter upon the Site and perform or cause to be
performed all such acts and work necessary to cure the default. Pursuant to such right of entry,
Agency and/or City shall be permitted(brit are not required) to enter upon the Site and perform
all acts and work necessary to protect,maintain,and preserve the improvements landscaped areas
on the Site, and to attach alien on the Site, or to assess the Site, in the amount of the
expenditures arising from such acts and work of protection, maintenance, and preservation by
Agency and/or costs of such cure, including a fifteen percent(15%)administrative charge which
shall be promptly paid by Participant to Agency upon demand.
.2 Maintenance of the Site.
Participant,for itself and its successors and assigns,hereby covenants and agrees to
maintain and repair or cause to be maintained and repaired the Site and all related on-site
improvements and landscaping thereon at its sole cost and expense,including, without limitation,
buildings,parking areas, lighting,signs and walls,in a first class condition and repair,firee of
rubbish,debris and other hazards to persons using the same, and in accordance with all
applicable laws, rules,ordinances and regulations of all federal,state,and local bodies and
agencies having jurisdiction over the Site. Such maintenance and repair shall include,but not be
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limited to,sweeping and trash removal;and the care and replacement of all shrubbery,plantings,
and other landscaping in a healthy condition. In addition,Participant shall be required to
.uaintain the Site in such a manner as to avoid the reasonable determination of a duly authorizd
official of the Agency or City that a public nuisance has been created by the absence of adequate
maintenance such as to be detrimental to the public health,safety or general welfare or that such
a condition of deterioration or disrepair causes appreciable harm or is materially detrimental to
property or improvements within one thousand(1,000)feet of such portion of the Site.
.3 Obligation to Refrain from Discrimination
There shall be no discrimination against, or segregation of, any persons, or group of
persons, on account of race, color, creed, religion, sex, marital status,national origin or ancestry
in the enjoyment of the Site, nor shall Participant itself,or any person claiming under or through
it, establish or pen-nit 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 of the Site or any portion thereof. The foregoing covenants shall nm with
the land and shall remain in effect in perpetuity.
.4 Form of Nondiscrimination and Nonsegrelration Clauses
Participant shall refrain from restricting the rental,sale,or lease of any portion of the Site,
or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status,
national origin, or ancestry of any person. All such deeds, leases or contracts shall contain or be
subject to substantially the following nondiscrimination or nonsegregation clauses:
.4.1 In deeds: "The grantee herein covenants by and for himself, his heirs,
executors, administrators, and assigns, and all persons claiming under or through them,that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease,
sublease,transfer,use,occupancy,tenure,or enjoyment of the land herein conveyed,nor shall the
grantee himself, or any persons claiming under or through him, 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 land
herein conveyed. The foregoing covenants shall run with the land."
.4.2 In leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators, and assigns, and all persons claiming under or through him, and this
lease is made and accepted upon and subject to the following conditions:
.4.3 "That there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed,religion, sex, marital status, national origin,
or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the
land herein leased, nor shall the lessee himself, or any person claiming under or through him,
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, sublessees, subtenants,
or vendees in the land herein leased."
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.4.4 In contracts: "There shall be no discrimination against or segregation of
any persons or group of persons on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of
land, nor shall the transferee himself, or any person claiming under or through him, 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 of land."
.5 Effect and Duration of Covenants
After issuance of the Release of Construction Covenants with regard to the Site,all of the
terms, covenants, agreements, or conditions set forth in Article III of this Agreement shall cease
and terminate. Thereafter, the only terms,covenants,and conditions to survive shall be those set
forth in the Agreement Containing Covenants Affecting Real Property, this Article 4.0, Article
5.0, and the provisions in Articles 1.0, 2.0, 3.0, 5.0 and 8.0 applicable to the interpretation and
enforcement of such matters, which terms, covenants, and conditions shall survive as herein
stated
Agency is deemed a beneficiary of the terms and provisions of this Agreement and of the
restrictions and covenants running with the land for and in its own right and for the purposes of
protecting the interests of the community and other parties,public or private, in whose favor and
for whose benefit the covenants running with the land have been provided. The covenants in
favor of Agency shall run without regard to whether Agency has been,remains,or is an owner of
any land or interest therein in the Site, or in the Redevelopment Project Area Agency shall have
the right, if any of the covenants set forth in this Agreement or the Agreement Containing
Covenants that are provided for its benefit are breached,to exercise all rights and remedies and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing
of such breaches to which it or any other beneficiaries of such covenants may be entitled
5.0 DEFAULTS AND REMEDIES
.1 Defaults—General
Subject to all of the extensions of time available in Section 8.3, failure or delay by any
party to perform any term or provision of this Agreement constituta a default under this
Agreement; however, the party shall not be deemed to be in default if (i) such party cures,
corrects, or remedies such default within thirty (30) days (or five [5] days for certain defaults
specified in Section 4.1) after receipt of a notice specifying such failure or delay, or(ii)for such
defaults that cannot reasonably be cured, corrected, or remedied within thirty (30) days (or five
[5]days for certain defaults specified in Section 4.1),if such party commences to cure,correct,or
remedy such failure or delay within such thirty(30)day period (or five (5] day period for certain
defaults specified in Section 4.1) after receipt of a notice specifying such failure or delay, and
diligently prosecutes such cure,correction or remedy to completion.
The injured party shall give written notice of default to the party in default,specifying the
default complained of by the injured party. Copies of any notice of default given to Participant
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shall also be delivered to any permitted lender requesting such notice. Except as provided in
Section 4.1 above or as required to protect against further damages, the injured party may not
institute proceedings against the party in default until expiration of the applicable cure period.
Except as otherwise expressly provided in this Agreement, any failure or delay in giving such
notice or in asserting any of its rights and remedies as to any default shall not constitute a waiver
of any default, nor shall it change the time of default, nor shall it deprive either party of its rights
to institute and maintain any actions or proceedings to which it is entitled under this Agreement
to protect,assert or enforce any such rights or remedies.
.2 Legal Actions
.2.1 Institution of Legal Actions. In addition to any other rights or remedies,
either party may institute legal action to cure,correct or remedy any default,to recover actual
damages for any default,or to obtain any other remedy consistent with the purposes of this
Agreement;provided, however,that Section 5.5 shall supersede any conflicting provisions of this
Section 5.2.1. Such legal actions must be instituted and maintained in the Superior Court of the
County of Riverside, State of California,or in any other appropriate court in that county.
.2.2 Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
.2.3 Acceptance of Service of Process. In the event that any legal action is
commenced by Participant against Agency,service of process on Agency shall be made by
personal service upon the Executive Director or Secretary of Agency,or in such other manner as
may be provided by law. In the event that any legal action is commenced by Agency against
Participant,service of process on Participant shall be made by personal service upon Participant
or in such other manner as may be provided by law,and shall be valid whether made within or
without the State of California.
.3 Rights and Remedies are Cumulative
Except as otherwise expressly stated in this Agreement, the rights and remedies of the
parties are cumulative, and the exercise by either party of one or more of its rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other party.
.4 Notice of Default:Damages
If either party defaults with regard to any of the provisions of this Agreement, the
nondefaulting party shall serve written notice of such default upon the defaulting party. If the
default is not cured or commenced to be cured in accordance with Section 5.1 herein: (i) if
Participant is the defaulting party, Participant shall be liable to Agency for any damages to
Agency caused by such default,except as otherwise expressly provided herein,and(H)if Agency
is the defaulting party,Participant's exclusive remedy shall be as set forth in Section 5.5.
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69989.01.OSN2N6 C
.5 Specific Performance As participant's Exclusive Remedy
Subject to Participant's right to terminate this Agreement in accordance with the terms of
Section 5.7.2, Participant's exclusive remedy for an uncured Agency default under this
Agreement is institute an action for specific performance of the terms of this Agreement, and in
no event shall Participant have the right, and Participant expressly waives the right, to seek
monetary damages of any kind (including but not limited to actual damages, economic damages,
consequential damages, or lost profits) from the Agency in the event of a default by Agency
under this Agreement or any action related to this Agreement. Notwithstanding the foregoing,
Participant shall retain the right to seek a writ of mandate in the event of any final denial by
Agency of any Agency permit approval pertaining to the project.
.6 Attorneys Fees
If either party to this Agreement is required to initiate or defend litigation in any way
connected with this Agreement, the prevailing party in such litigation, in addition to any other
relief which may be granted, whether legal or equitable, shall be entitled to its actual and
reasonable attorney's fees. If either party to this Agreement is required to initiate or defend
litigation with a third party because of the violation of any term or provision of this Agreement
by the other party, then the party so litigating shall be entitled to its actual and reasonable
attorney's fees from the other party to this Agreement. Attorneys fees shall include attorneys
fees on any appeal, and in addition a parry entitled to attorneys fees shall be entitled to all other
reasonable costs for investigating such action, retaining expert witnesses, taking depositions and
discovery,and all other necessary costs incurred in such litigation. All such fees shall be deemed
to have accrued on commencement of such action and shall be enforceable whether or not such
action is prosecuted to judgment.
The parties hereto acknowledge and agree that each such party shall bear its own legal
costs incurred in connection with the negotiation,approval,and execution of this Agreement.
.7 Termination
.7.1 Agency's Riaht to Terminate.
In the event Agency is not in default under this Agreement, and any of the
following matters fail to occur on or before the time specified in the Schedule of Performance for
such matter, or any extension thereto as permitted in this Agreement,then in such event,Agency,
at its option, may deliver a thirty (30) day written notice of termination to Participant and, if the
applicable requirement has not been satisfied(or waived by Agency)within said time period,this
Agreement shall terminate:
i. Participant does not timely execute and deliver to Agency for recordation
the Agreement Containing Covenants in accordance with this Agreement,or
07)014084-0012 69989 �012051" - 16- / • Moab
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ii. Participant modifies,without Agency's prior written consent, the approved
final building plans, or other of the Approved Project Plans and Permits as set forth in Sections
3.4 and 3.5 herein; or
iii. Participant does not timely submit complete applications for all permits
for the Project in accordance with Sections 3.4 and 3.5 herein;provided that nothing herein shall
be construed as a representation or warranty by Agency that Agency or City will approve any of
such items;or
iv. Participant does not timely submit a complete Evidence of Financial
Capability submittal in accordance with Section 3.3 herein; or
V. Participant does not timely submit to Agency Executive Director the
required evidence of insurance in accordance with Section 3.8 herein;or
vi. Participant does not (A) timely commence the Project in accordance with
Section 3.7 herein,or(B)timely complete the Project in accordance with Section 3.7;or
vii. Participant transfers or encumbers the Site or any portion thereof or
assigns any of its rights or obligations under this Agreement in violation of Sections 3.13 or 3.14
herein,unless the transfer or encumbrance is permitted under this Agreement;or
viii. Participant fails to timely submit a complete submittal of Participant's
monitoring compliance system in accordance with Section 6.2 herein;or
ix. Participant is in material default of any of the terms, covenants, and
conditions of this Agreement or the Agreement Containing Covenants following expiration of
any applicable cure period.
In the event of termination under this Section 5.7.1, neither party shall have any frther
rights or obligations against the other(except Agency shall reserve its rights under Sections 5.1-
5.5,inclusive,if Agency is not in default).
.7.2 Participant's Right to Terminate
In the event that Participant is not in default under this Agreement, and Agency is in
default of this Agreement prior to the Agency's payment of the Agency Assistance, then, subject
to, the terms of this Agreement, Participant, at its option, may deliver a thirty (30) day notice of
termination to Agency and, if the Agency Assistance is not provided within that thirty (30) day
period, Participant, as an alternative to Participant's specific performance remedy set forth in
Section 5.5, may terminate this Agreement by delivery of written notice to Agency. In the event
of termination under this Section 5.7.2, neither party shall have any further rights or obligations
against the other.
6VID14 eaaoiz
6.0 SPECIAL PROVISIONS
.1 Construction Costs for Proi Agency assistance
Agency hereby agrees to assist Participant in the construction of the Project by paying the
costs for construction of the improvements listed at Attachment No. 3 ("Eligible Improvements")
Agency from Agency s Low Income Housing Set Aside Fund;provided that the Agency shall not
be obligated to expend more than FOUR HUNDRED FIFTY THOUSAND DOLLARS
($450,000.00)("Agency Assistance")pursuant to this Agreement. In the event that the total of
the Agency Assistance plus the Minimum Participant Expenditure,as defined at Section 6.1.1(a)
below,is greater than the total cost and fees required for construction of the Eligible
Improvements, the Agency Assistance shall be reduced by such difference. In the event that the
total of the Agency Assistance plus the Minimum Participant Expenditures is less than the total
cost and fees required to pay all of the Eligible Improvements,Participant shall be responsible for
any additional costs and fees required to pay for all of the Eligible Improvements. In exchange
for the Agency Assistance,Participant agrees to restrict the affordability, use,and occupancy of
the Affordable Units in accordance with this Agreement and the Agreement Containing
Covenants. Thus, upon completion of the Project,Agency,by provision of the Agency
Assistance,shall have assured the affordability,use,occupancy,and other restrictions applicable
to the Affordable Units and the Site as set forth in this Agreement and in the Agreement
Containing Covenants.
.1.1 Payment and Billing Procedures
Upon execution of this Agreement,and after evidence satisfactory to Agency that(1)
Participant requires the Agency Assistance to implement the Project,(2)the Agency's fiscal
interests will be protected,and(3)Participant has caused improvements to.be made to the Site in
an amount equal to at least the Minimum participant Expenditure,as defied immediately below,
the Agency shall provide Participant with payment of that portion of the Agency Assistance as
reflected on any invoice submitted to Agency and approved by the Executive Director,or his or
her designee,to pay for the construction of any Eligible Improvemerr The Agency Assistance
shall be disbursed based upon the following limitations;
(a) Participant shall be required to spend at least Two Hundred
Twenty-Five Thousand Dollars($225,000)("Minimum participant
Expenditure")for the construction of the Eligible Improvements
described at Attachment No.3,as confirmed by invoices,cancelled
checks and reports,as required by the Executive Director,
submitted by Participant to Agency describing the improvements to
the Site and amounts paid by participant therefor. No Agency
Assistance payments shall be made to Participant unless and until
Participant provides the Executive Director with such
documentation,as listed in this Section 6.1.1(a)confirming that
Participant has caused to be made the improvements at a value
equal to at least the Minimum Participant Expenditure.
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(b) Costs incurred in violation of any of the terms of this Agreement,
or prior to any required approval of changes herein,will not be
accepted.
(c) All requests for Agency Assistance,quarterly reports,and other
documents shall be signed and dated by Participant's authorized
signatory.
(d) Any previous payment of Agency Assistance shall have been used
to begin and diligently pursue construction of the Eligible
Improvement(s)within twenty(20)days of the date paid by
Agency.
.1.2 Budget and Program Changes.
No changes shall be made in the distribution of Agency Assistance as herein approved
without express prior written approval of the Agency. The Agency shall be informed of,and
must approve,all program changes prior to participant making the change. The Agency shall
approve the forms for requesting program changes. Without prior written approval of the
Agency,no portion of the Agency Assistance shall be used for any purposes other than for the
payment of constructing the Eligible Improvements,as described at Section 6.1.
.1.3 Periodic Reports.
Unless otherwise specified,within fifteen(15)days after the end of each quarter,
Participant shall submit to Agency a quarterly progress report, including a breakdown of Agency
Assistance. Such quarterly reports shall demonstrate to the satisfaction of the Agency reasonable
progress in accomplishing the project. Within thirty(30)working days after the completion of
the Project,Participant will submit a final report and evaluation in lieu of the last quarterly
report,which will summarize the progress and problems of the Project,the funding obtained
from other sources,the client response,and the progress and accomplishment of the Project.
.1.4 Return of Unexpended Agency Assistance Funds•
Participant agrees to return to the Agency all unexpended Agency Assistance,as set forth
at Section 6.1 herein,and to relieve the Agency of any further obligation under this Agreement.
.2 Participant's Accountability System• Annual Report
.2.1 Within the time set forth in the Schedule of Performance,Participant,at no
expense to Agency, shall develop, and obtain Agency Executive Director's reasonable approval
of, and shall thereafter maintain, a system to monitor compliance with the affordability
requirements set forth in the Agreement Containing Covenants. Participant, following approval
of the monitoring system by Agency's Executive Director, shall maintain the monitoring
compliance system for the period of the affordability covenant set forth in the Agreement
Containing Covenants.
69969A1 a03A7A0 CM
.2.2 In accordance with Health & Safety Code Section 33418 (or successor
statute), Participant shall submit to Agency the annual report required by Section 33418. The
report shall contain the information specified in Section 33418. In accordance with Section
33418(c),the Agency is authorized to annually impose a fee upon Participant to defray Agency's
costs in complying with the requirements of Section 33418. If Agency elects to impose such a
fee, Agency shall notify Participant of the amount prior to the due date of the report and
Participant shall remit the fee with the report;provided,however,that the fee imposed by Agency
on Participant shall not exceed the greater of(i)the actual cost to prepare the report, or (ii) One
Thousand Five Hundred Dollars ($1,500.00). If Participant fails to remit the fee with the report,
or fails to submit the report, Participant shall be in breach of this Agreement and the Agreement
Containing Covenants and shall be subject to the penalties and remedies specified in this
Agreement and the Agreement Containing Covenants. By executing this Agreement, Participant
represents and warrants that it has reviewed Health & Safety Code Section 33418 and has
familiarized itself with the reporting requirements contained therein.
.2.3 Participant and Agency acknowledge and agree that Agency is required to
monitor the affordability of units in the Project and must verify the information contained in each
annual report prepared by Participant in accordance with Health & Safety Code Section 33418
and submitted to Agency. Therefore, Participant shall submit with each annual Section 33418
report an audited statement prepared at Participants cost and certified by Participant's financial
officer verifying the information in that Section 33418 report.
.3 Relocation
Participant represents to the Agency that the improvements contemplated under this
Agreement may be undertaken without the need to relocate any existing tenant. Should any
tenant require temporary relocation during construction of the Project,Participant represents that
it can accomplish any and all such relocation to vacant Units within the Site,which Units are
available,and shall be provided to any and all such displaced tenants with minimum hardship to
those affected. Participant agrees that it shall provide any relocation assistance required pursuant
to Health and Safety Code sections 33410 et 1296 and agrees that Agency shall in no event be
responsible to provide any relocation assistance,whether in payment or in kind. Additionally,
Participant warrants that it shall provide the following to any eligible tenants required to be
relocated:
(a) Fair and reasonable relocation payments;and
(b) A relocation assistance program,which shall be available to
eligible tenants and describe available assistance,benefits,policies,
practices and procedures,including grievance procedures provided
in the State Guidelines,at California Code of Regulations,title 25,
sections 6000 et. seu.:and
(c) Comparable replacement housing sufficient in number,size and
cost for eligible tenants, based upon a recent survey and analysis of
the needs of such tenants;and
62W0140844013 -20-
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(d) Adequate accommodations made to assure orderly,timely and
efficient relocation of eligible tenants to comparable housing,
without iogard to such tenants'race,color,religion,sex,marital
status or national origin.
Participant agrees that the indemnification provisions of Section 7.1 herein shall
specifically apply to Participant's obligations to provide relocation benefits to any tenant claiming
a right to such benefits.
In the completed Project,Participant shall bear all relocation expenses for ineligible
tenants that have rented Affordable Units and tenants renting Affordable Units admitted but later
found to exceed the income levels identified in the Agreement Containing Covenants,to the
extent such tenants are eligible for relocation assistance.
.4 Agreement Containing Covenants
Concurrently with the issuance of building permits for the Project or any portion thereof,
the Participant shall execute, within the time set forth in the Schedule of Performance, Agency
shall record against the entire Site the Agreement Containing Covenants. Each and every term,
provision,agreement,covenant, condition and restriction contained in the Agreement Containing
Covenants is hereby expressly incorporated herein by reference as if fully set forth herein. The
Agreement Containing Covenants shall be signed and acknowledged by all parties having record
title interest in the Site, shall make the Agency and City parties thereto and shall be enforceable
by the Agency and the City.
7.0 INSURANCE AND INDEMNIFICATION
.1 Indemnification
Participant shall indemnify,defend,and hold harmless the Agency and City and their
respective officers,officials,members,employees,agents,representatives,and volunteers from
all loss,cost,and expense,including but not limited to any judgments against same and attorneys'
fees and costs,arising out of any liability or claim of liability for personal injury,bodily injury to
persons,contractual liability,and damage to property sustained or claimed to have been sustained
arising out of acts or activities of Participant or Participants officers,employees,agents,
representatives, or volunteers,whether or not such act or activity is authorized by this
Agreement;and Participant shall pay for any and all damage to the property of Agency and City,
or loss or theft of such property,done or caused by such persons. Agency and City assume no
responsibility whatsoever for any property placed on the premises. Participant fiuther agrees to
waive all rights of subrogation against Agency and City. The indemnification provisions set
forth herein do not apply to any damage or loss caused solely by the willful misconduct of
Agency or City or any of their respective officers,officials,members,employees,agents,
representatives or volunteers.
669M.Ot AVOW Vro1e0tM0012 -21 -
.2 Insurance R,eauirements
Participant shall procure and maintain during both construction and subsequent operation
of the Project, and in all cases for the duration of this Agreement, insurance against claims for
injury and property damage which may arise from or in connection with the performance of this
Agreement.
2.1 Minimum Scope of Insurance. Coverage shall be at least as broad as:
(a) Commercial General Liability insurance to include products and
completed operations,contractual,independent contractors,broad
form property damage,fire,legal,and personal injury.
(1) Comprehensive Automobile Liability insurance to include
all autos owned,hired,and non-owned
(2) "Builder's Risk Property Insurance"to include Participant's
improvements and betterment;and following construction but prior to
Agency's disbursement of the Agency Assistance hereunder,Participant
shall provide All Risk Property insurance to include Participant's
improvements and betterment(continuously for the duration of this
Agreement).
(b) Workers'Compensation as required by the Labor Code of the State
of California and Employers'Liability insurance.
.2.2 Minimum Limits of Insurance. Participant shall maintain limits no less
than:
(a) Commercial General Liability: One Million Dollars($1,000,000)
combined single limit per occurrence for bodily injury,personal
injury.and property damage.
(b) Automobile Liability: Five Hundred Thousand Dollars($500,000)
combined single limit per occurrence for bodily injury and Property
damage.
(c) All Risk Proper�t : Following construction of the Project,ninety
(90%)percent of the replacement value of the building(s)on the
Property and Participant's improvement and betterment.
(d) Workers'Compensation and Emplovers'Liability: Workers'
Compensation limits as required by the Labor Code of the State of
California and Employers'Liability limits of One Million Dollars
($1,000,000)per accident.
69969AI tOkU7l00
.2.3 Deductibles and Self-Insured Retentions.
The All Risk Property insurance and the Builder's Risk insurance shall each have a
maximum deductible of $10,000. All other deductibles or self-insured retentions must be
declared to and approved in advance by the Agency's Executive Director, who in his/her sole
discretion may require the insurer to reduce or eliminate such deductibles or self-insured
retentions with respect to Agency and City and Agency's and City's respective officers, officials,
members, employees, agents, representatives, and volunteers; or Participant may be required to
procure a bond guaranteeing payment of losses and related investigation, claims administration,
and defense expenses.
.2.4 Other Insurance Provisions.
The policies are to contain,or be endorsed to contain,the following provisions:
(a) General and Automobile Liability Coverage. Agency and City and
Agency's and City's respective officers,officials, members
employees,agents,representatives,and volunteers are to be named
as additional insureds with respect to liability arising out of the acts
or activities performed by or on behalf of Participant.
(b) Property Coverage(and Builder's Risk)If Inclusive. Agency shall
be named as a loss payee on the policies and any settlement will
accordingly include the Agency on the draft or check.
(c) Workers'Compensation and Employers'Liability Coverage The
insurer shall agree to waive all rights of subrogation against the
Agency and City and Agency's and City�s respective officers,
officials,members,employees,agents,representatives and
volunteers,for losses arising from work performed by Participant
for the Agency.
(d) All Coverage.
(1) Participant's insurance coverage shall be primary insurance
and non-contributory with respect to Agency and City and Agency's and
City's respective officers,officials,members,employees,agents,
representatives,and volunteers,and with respect to any insurance
Agency and Agency's officers,officials,employees,agents,
representatives,and volunteers may have.
(2) Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to Agency and City and
Agency's and City's respective officers,officials,members employees,
agents,representatives,and volunteers.
(3) No coverage shall be suspended,voided,cancelled,reduced
in coverage or in limits,or non-renewed,except after thirty(30)days'
prior written notice by personal delivery or certified mail has been given
to Agency's Executive Director.
(4) All insurance with respect to Agency and City and Agency's
and City's officers, officials,members,employees,agents,
representatives,and volunteers shall be "date of occurrence" insurance
and not"claims made"insurance.
(5) All insurance shall apply separately to each insured against
whom claims is made or suit is brought,except with respect to the limits
of the insurer's liability.
5. Acceptability of Insurers.
Insurance is to be placed with insurers with a BEST rating of nb less than B+Class X.
The procuring of insurance by Participant shall not be construed as a limitation on
Participant liability or as hull performance of Participant's obligation under the Indemnification
Provisions of this Agreement, including as set forth in Section 7.2 herein, and Participant
understands and agrees that, notwithstanding any insurance, Participant's indemnification
obligation, as set forth in Section 7.2 herein, extends to the full and total amount of any damage,
injuries, loss, expense, costs, or liabilities suffered or incurred by Agency or City or Agency's or
City's respective officers,officials,members,employees,agents,representatives,and volunteers.
8.0 GENERAL PROVISIONS
.1 Notices.Demands and Communications Between the Parties
Formal notices, demands, and communications between Agency and Participant shall be
given either by (i)personal service, (ii) delivery by reputable document delivery service such as
Federal Express that provides a receipt showing date and time of delivery, or(iii) or by mailing
in the United States mail,certified mail,postage prepaid,return receipt requested,addressed to:
To Agency: Community Redevelopment Agency of Palm Springs
3200 E.Tahquuitz Canyon Way
Palm Springs,CA 92263
Attn: Executive Director
With a copy to: Rutan&Tucker,LLP
611 Anton Blvd., Suite 1400
Costa Mesa,California 92626
Attn: David J. Aleshire
anroiwae ooiz 69 -24- w� • O _�7
sa,o1,051MM `
To Participant: Heritage Apartments
300 South Calle El Segundo
Palm Springs,California 92262
Attu: Rose Mihata
Notices personally delivered or delivered by document delivery service shall be deemed effective
upon receipt. Notices mailed in the manner provided above shall be deemed effective on the
second business day following deposit in the United States mail. Such written notices, demands,
and communications shall be sent in the same manner to such other addresses as either party may
from time to time designate by mail.
.2 Nonliability of City and Agency Officials and Employees:Conflicts of Interest
No member, official, employee, or contractor of City or Agency shall be personally liable
to Participant in the event of any default or breach by Agency or for any amount which may
become due to Participant or on any obligations under the terms of the Agreement.
No member, official, employee, or agent of City or Agency shall have any direct or
indirect interest in this Agreement nor participate in any decision relating to this Agreement
which is prohibited by law.
.3 Enforced Delay.Extension of Times of Performance
In addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default where delays or defaults are due to war,
insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, supernatural causes,
acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of
transportation,governmental restrictions or priority,litigation,unusually severe weather,inability
to secure necessary labor, materials or tools, delays of any contractor, subcontractor or supplies,
acts of the other party, acts or failure to act of City or any other public or governmental agency or
entity(except that any act or failure to act of Agency shall not excuse performance by Agency)or
any other causes beyond the reasonable control or without the fault of the party claiming an
extension of time to perform. Notwithstanding the foregoing, inability to secure satisfactory
financing, tenant commitments, or market and economic conditions shall not entitle Participant
to an extension of time to perform. An extension of time for any such cause shall be for the
period of the enforced delay and shall commence to run from the time of the commencement of
the cause, if notice by the party claiming such extension is sent to the other party within thirty
(30) days of knowledge of the commencement of the cause. In addition, times of performance
under this Agreement may be extended by mutual written agreement by Agency and Participant.
.4 Inspection of Books and Records
Participant shall have the right at all reasonable times and without interference with the
business or operation of Agency, to inspect the books and records of Agency pertaining to the
Site as pertinent to the purposes of the Agreement. Agency shall retain a copy of this Agreement
in the office of Agency Secretary.
R7/014 uaol7 -25 -
avravoi wsovao � ®-�
Agency shall have the right at all reasonable times to inspect the books and records of
Participant pertaining to the Site as pertinent to the purposes of this Agreement. Participant shall
maintain its books and records within the County of Riverside. Agency shall not request
inspection of Participant's books and records more than once in any twelve (12) month period,
unless Agency is required to obtain information in order to comply with reporting or other
requirements of law, including but not limited to verifying the information set forth in
Participant's annual report filed with the Agency pursuant to Health & Safety Code Section
33418 and Section 602.3 of this Agreement.
.5 Intgyretation
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the authorship of
this Agreement or any other rule of construction which might otherwise apply. The Section
headings are for purposes of convenience only, and shall not be construed to limit or extend the
meaning of this Agreement.
.6 Entire Aereemea Waivers and Amendments
This Agreement integrates all of the terms and conditions mentioned herein,or incidental
hereto, and supersedes all negotiations or previous agreements between the parties with respect
to all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities of the party to be charged, and all amendments and modifications hereto
must be in writing and signed by the appropriate authorities of Agency and Participant.
.7 Consent,Reasonableness
Except when this Agreement specifically authorizes a party to withhold its approval or
consent m its sole discretion, when either Agency or Participant shall require the consent or
approval of the other party in fulfilling any agreement, covenant, provision, or condition
contained in this Agreement, such consent or approval shall not be unreasonably withheld,
conditioned,or delayed by the party from whom such consent or approval is sought.
.8 Counterparts
This Agreement may be executed in counterparts, each of which, after all the parties
hereto have signed this Agreement, shall be deemed to be an original,and such counterparts shall
constitute one and the same instrument.
.9 Successors
This Agreement shall be binding upon and shall inure to the benefit of the permitted
successors of each of the parties hereto.
eoM.oi,osaioo
ATTACHMENT NO. 3
SCOPE OF DEVELOPMENT
Participant shall construct the Project in accordance with the approvals granted to it by the City
and City and include the following Eligible Improvements:
1. Perimeter Wall. Replace the perimeter wall at the Site with a block wall that shall be
constructed in a condition which appears new and clean, and shall be fimctional and sturdy
sufficient to meet the requirements of all applicable codes,regulations and City specifications.
2. Parking Lot. Resurface and re-stripe the parking lot at the Site,as well as install fighting
thereon. Participant shall resurface the parking lot shall using materials approved by the City and
in a manner sufficient to avoid dilapidation due to weather and normal use,and remove cracks,
breaks,significantly uneven surfaces,and unpaved areas of the existing parking lot at the Site.
Re-striping shall be sufficient to provide adequate parking to all units at the Site,pursuant to
applicable codes and regulations, including handicapped stalls and logos as required by
applicable state,federal and local codes. All lighting fixtures installed at the property shall be of
a size and intensity as may be approved by the City pursuant to City codes,rules and regulations.
3. Pool and sna. Replaster and retile pool and spa to repair cracks and discoloration. All
replastering and retiling shall be conform to any applicable state,federals or local code or
regulation.
4. Air Conditioning Units. Replace air conditioning units with energy efficient units for all
Units and common buildings at the Site.
5. Staircases. Repair,and where needed,replace staircases throughout the Site sufficient to
assure that the staircases appear new and clean,and are structurally sturdy and free from cracks,
and broken parts.
6. Roof. Repair and/or replace any portion of the roof of the apartment complex or any Unit
at the Site where such roof is deteriorated,leaking,unsightly or violates any applicable code or
regulation.
7. Mechanical and Plumbing. Repair and/or replace any mechanical or plumbing fixture at
the apartment complex or any Unit at the Site where such mechanical or plumbing fixture is
subject to leaks, breaks,excessive noise,rust,or other dilapidated condition.
8. AM-liances. Replace and/or repair any appliance at any Unit at the Site that does not
fimction as intended,broken,excessively unsightly or in need of upgrading to accomplish
significant energy savings.
o� - 1 a,30
-
9. Paintin¢. Repaint all units,from inside and out and all exteriors of any improvements at
the Site. Painting shall require stripping of old paint,where necessary to prevent chipping,
cracking or peeling of new paint,and priming all paint surfaces,
ATTACHMENT NO. 4
SCHEDULE OF PERFORN4ANCE
Item of Performance Time for Performance
1. Agency approves Participant's Basic Concurrently with execution of this
Concept Drawings(§ 3.4) Agreement.
2. Participant executes and delivers to Concurrent with execution of this Agreement.
Agency Agreement and Agreement
Containing Covenants. (§ 6.4)
3. Participant submits evidence of Within ten(10)days after the Effective Date.
ownership status to Agency's Executive
Director and obtains approval of same.
(§ 3.1)
4. Agency executes and delivers Agreement Within fifteen(15)days after performance of
Containing Covenants to County Item No. 1 of this Attachment No.4 and
Recorder for recordation against the Site. Agency approval and execution of the Owner
(§ 6.4) Participation Agreement.
5. Participant prepares and submits to Within thirty(30)days after the Effective Date.
Agency and City final working drawings,
grading plan and landscaping plan. (§ 3.4
and 3.5)
6. Agency and City review and approve(or Within thirty(30)days of the date Participant
request corrections of)Participant's final submits final drawings and plans.
drawings and plans. (§ 3.4 and 3.5)
7. Participant makes corrections and Within thirty(30)days of the date Agency or
resubmits final drawings and plans with City retums final drawings and plans to
any revisions required by the Agency(if Participant with requested changes.
applicable). (§ 3.4 and 3.5)
8. Agency and City review and approve or Within thirty(30)days after Participant
disapprove resubmitted final drawings resubmits revised final drawings and plans.
and plans. (§ 3.4. and 3.5)
9. If necessary,Participant resubmits to Within seven(7)days of performance of Item
Agency and City final corrected set of No. 8 of this Attachment No.4.
site and building plans for the Project.
62710140Ma12 _3 _
69M.01 03102100 32
CCG -� -
(§ 3.4 and 3.5)
10. Participant submits required evidence of` Within thirty(30)days of the Effective Date of
insurance to Agency's Executive Director. this Agreement.
(§ 3.8)
11. Participant submits Evidence of Financial Prior to the issuance of building permits for the
Capability. (§ 3.3) Project,
12. Participant obtains building permits for Upon satisfaction of all above conditions set
the Project. (§3.5) forth in this Attachment No.4.
13. Participant submits Construction Within 30 days of the Effective Date of this
Schedule to Agency's Executive Director Agreement.
indicating completion dates for each
portion of the Project. (§ 3.7)
14. Participant submits a monitoring system Within thirty(30)days of the Effective Date of
plan for compliance with affordability this Agreement.
requirements. (§6.2.1)
15. Participant commences construction of Within forty-five(45)days of receipt of
the Project on the Site after obtaining all building permits.
required permits and approvals. (§§4.1,
4.2,4.3,4.6).
16. Participant completes Project on the Site Not later than April 30,2001.
and obtains Agency's Certificate of
Completion. (§§ 3.6,3.9)
It is understood that the foregoing Schedule is subject to all of the terms and conditions of
the text of the Agreement. The summary of items of performance in this Schedule is not
intended to supersede or modify any more complete description in the text. In the event of any
conflict between this Schedule and the text of the Agreement, the text shall govern. The times
for performance set forth in the Schedule may be extended due to "force majeure" events and in
addition Agency's Executive Director may approve extensions of time not to exceed a cumulative
total of one hundred eighty(180)days.
627N.01 Ao-0O1r C M a V Z 3
a�esaisvnw -4-
ATTACIRKENT NO.5
AGREEMENT CONTAINING COVENANTS
[SEE FOLLOWING PAGES]
6271011081.0012
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
Community Redevelopment Agency of the
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs,CA 92263
Attn: Executive Director
(SPACE ABOVE THIS LINE FOR RECORDING USE)
(EXEMPT FROM RECORDING FEE PER GOV.CODE§6103)
AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY
THIS AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY
("Agreement") is entered into this day of May, 2000 ("Effective Date"), by and between
THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a
public body corporate and politic ("Agency"), and ROSE MIHATA, an individual, and SCOTT
TRABERLAKE,an individual(collectively"Owner"),with reference to the following:
A. Owner is the fee owner of record of the parcels that comprise that certain real
property (the "Site") located in the City of Palm Springs, County of Riverside, State of
California,legally described in the attached Exhibit No. "1:'
B. The Property is within the Tahquitz Andreas Project Area(the "Project Area") in
the City of Palm Springs ("City") and is subject to the provisions of the Redevelopment Plan for
the Project Area approved and adopted on July 19, 1993, by the City Council of the City by
Ordinance No. 1187, as amended on December 21, 1994 by Ordinance No. 1489, and again on
December_, 1999 by Ordinance No.
C. Owner entered into an Owner Participation Agreement ("OPA") with Agency,
dated as of May ,2000,concerning the development and operation of the Property,which
OPA is on file with the Agency as a public record and is incorporated herein by reference. All
defined terms used herein shall have the same meaning as set forth in the OPA unless otherwise
stated.
NOW,THEREFORE,AGENCY AND OWNER AGREE AS FOLLOWS:
1. Commencing on the date of this Agreement and continuing in effect for a period of
fifty-five (55) years following the date of recordation of the Release of Construction Covenants
for the Project(as defined in the OPA), Owner,on behalf of itself, its successors,its assigns,and
each and every successor in interest to the Property, or any part thereof, hereby covenants and
agrees that Owner and such successors and assigns, shall develop, maintain, and use not the Site
and related interior and exterior improvements in accordance with the terms and conditions
hereinbelow:
627M[40944012
a. Distribution of Rental Units,• Income ElidLdity, Rental Cost: Occupancy
Limits.
The Site shall contain not fewer than one hundred thirty-six (136) apartment units. Not
fewer than sixty-eight (68) of the apartment units shall be made available to eligible persons(the
"Affordable Units")as follows:
The Affordable Units shall be(A)rented to persons whose annual household income does
not exceed eighty-eight percent (88%) of the median income for Riverside County as published
annually by the State of California based on income figures from the United States Department
of Housing and Urban Development, and (B) rented to such eligible persons at a monthly rental
cost, including utilities, which is not more than the amount derived as follows: (i)thirty percent
(30%)of eighty-eight percent(88%)of the annual median income for a two person household for
Riverside County as published annually by the State of California based on income figures from
the United States Department of Housing and Urban Development,(ii)divided by 12.
Commencing July 1, 2001, the initial maximum monthly rent for the Affordable Units
may be adjusted in accordance with the most recent median income figures for Riverside County
published by the State of California, and may be adjusted on July 1 of each calendar year
thereafter,as may be necessary.
The maximum occupancy of each of the dwelling units on the Site, including the
Affordable Units, shall be the lesser of(i) two persons per bedroom plus one additional person,
or (ii) the maximum number of persons that are permitted to occupy the square footage of the
unit under the applicable uniform building and housing code as adopted by the City of Palm
Springs("City")as of the time building permits are issued for the Project.
b. Amenities:Maintenance.
Owner,for itself and its successors and assigns,hereby covenants and agrees to maintain
and repair or cause to be maintained and repaired the Site and all related on-site improvements
and landscaping thereon at its sole cost and expense,including,without limitation,buildings,
parking areas, lighting,signs and walls,in a first class condition and repair,free of rubbish,
debris and other hazards to persons using the same, and in accordance with all applicable laws,
rules,ordinances and regulations of all federal,state,and local bodies and agencies having
jurisdiction over the Site. Such maintenance and repair shall include,but not be limited to,
sweeping and trash removal;and the care and replacement of all shrubbery,plantings,and other
landscaping in a healthy condition. In addition,Owner shall be required to maintain the Site in
such a manner as to avoid the reasonable determination of a duly authorized official of the
Agency or City that a public nuisance has been created by the absence of adequate maintenance
such as to be detrimental to the public health,safety or general welfare or that such a condition of
deterioration or disrepair causes appreciable harm or is materially detrimental to property or
improvements within one thousand(1,000)feet of such portion of the Site.
In the event that Owner breaches any of the covenants contained in this subparagraph(c),
and such default continues for a period of five(5)business days after written notice from Agency
(with respect to landscaping, graffiti, debris, waste material, and general maintenance) or thirty
C7ro140844012 _2
MM.01 SOSIOM
Cam. •
(30) days after written notice from Agency (with respect to building improvements), then
Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right
to enter upon the Prop6ity and perform or cause to be performed all such acts and work necessary
to cure the default. Pursuant to such right of entry, Agency and/or City shall be permitted (but
are not required) to enter upon the Property and perform all acts and work necessary to protect,
maintain and preserve the improvements and landscaped areas on the Property, and to attach a
lien on the Property, or to assess the Property in the amount of the expenditures arising from such
acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure,
including a fifteen percent(15%) administrative charge,which amount shall be promptly paid by
Owner to Agency upon demand.
c. Rental Process.
The Affordable Units shall be rented to eligible tenants in accordance with the following
terms:
(1) Leasing Preference
(a) Owner shall provide a preference in the initial leasing of the
Affordable Units to individuals residing or working in the City of Palm Springs,(i)who meet the
eligibility requirements and who are on a preference list established by the Owner subject to
audits by the Agency,or(h)who meet the eligibility requirements and are entitled to a preference
pursuant to California Health and Safety Code Section 33411.3, or successor statute. To
encourage the greatest possible opportunity for such residents of, or persons working in, Palm
Springs to lease the Affordable Units, Owner, for both initial leasing and ongoing leasing shall
create and maintain a system to establish a list of eligible potential tenants identified by Agency
as eligible for preference pursuant to Health&Safety Code Section 33411.3,or successor statute.
Owner shall contact those individuals on the list established by Owner and offer available
Affordable Units in the Project to such individuals in accordance with this Agreement.
(2) Leasing of Affordable Units to Tenants Whose Income Increases
Beyond Eligibility Level.
(a) Owner shall maintain the eligibility lists referenced in
subparagraph c(1)immediately above. When an Affordable Unit becomes available,Owner shall
contact individuals on the list and offer the available Affordable Unit to such individuals in
accordance with this Agreement. Owner shall rent available Affordable Units to eligible tenants
on a first-come, first-serve basis. Affordable Units that become available as a result of tenant
vacation shall be rented to a new eligible tenant as soon as possible following the date the
Affordable Unit becomes available. Owner shall notify the appropriate housing authorities on
the list maintained by, and available from, the Agency,of any Affordable Units remaining vacant
for more than thirty(30)days.
(b) In the event a tenant in an Affordable Unit is
determined to have an income greater than the affordability level set forth in this Agreement,
Owner shall allow that tenant to remain in that rented unit and may treat that unit as a non-
Affordable Unit and may increase the rent to the rent for the non-Affordable Units in the Project;
627/0140"M12 -3 -
6vsas.oi 1099ioo
Co. -)- 37
provided, however, that if Owner treats that unit as a non-Affordable Unit by raising the rent
beyond the level permitted by the Agreement Containing Covenants, Owner shall rent the next
available one-bedraom unit in the Project as an Affordable Unit with the rent for that Affordable
Unit not to exceed the maximum rent provided for in the Agreement Containing Covenants.
Owner shall notify Agency within fifteen (15) days of Owner's actions authorized by this
subparagraph(b).
(3) Verification and Monitoring.
Owner shall execute, administer, and enforce a plan approved by Agency to verify the
eligibility of prospective tenants and then to monitor the tenants' continuing eligibility. All costs
associated with such plan and its execution, administration, and enforcement shall be borne by
Owner. Owner shall bear all relocation expenses for all eligible and ineligible tenants and
tenants admitted but later found to have incomes) in excess of the levels set forth in Paragraph
1(a), to the extent such tenants are eligible for relocation assistance. During the period of time
covered by this Paragraph 1,Owner,at its expense, shall submit,or cause its property manager to
submit, to Agency, on or before the August 31 that follows the first June 30 after completion of
construction of the Project, and no later than August 31 of each fiscal year thereafter, the annual
reports required pursuant to Health and Safety Code Section 33418,as the same may be amended
from time to time, with each such report to be in a form prescribed by Agency. Each annual
report shall cover the immediately preceding fiscal year. Any fee imposed by Agency on Owner
pursuant to Health and Safety Code Section 33418(c) shall be subject to the terms of Section
6.2.2 of the OPA. In addition, Owner and Agency acknowledge and agree that Agency is
required to monitor the affordability of units in the Project and must verify the information
contained in each annual report prepared by Owner in accordance with Health & Safety Code
Section 33418 and submitted to Agency. Therefore, Owner shall submit with each annual
Section 33418 report an audited statement prepared at Owner's cost and certified by Owner's
financial officer verifying the information in that Section 33418 report.
(4) Rental Amement.
The initial form rental agreement for the Affordable Units and any changes to such form
rental agreement to be used by Owner shall be approved by Agency prior to the rental or leasing
of any of the Affordable Units.
(5) Remedy for Excessive Rental Charges
(a) It shall constitute a default for Owner to knowingly and intentionally
charge or accept rent amounts for the Affordable Units in excess of the amount provided for in
Agreement. In the event that Owner knowingly and intentionally charges or receives such higher
rental amounts, in addition-to any other remedy Agency shall have for such default, Owner shall
be required to pay to Agency the entire amount of rent received in excess of the amount
permitted pursuant to this Agreement.
(b) It shall constitute a default for Owner to knowingly and intentionally rent
any Affordable Unit to a tenant who is not eligible for the particular Affordable Unit pursuant to
the affordability requirements set forth in this Agreement. In the event Owner does knowingly
62710140844012
69M.01.0so2roo "4
C ra.- O-3$
and intentionally rent an Affordable Unit to an ineligible tenant, in addition to any other equitable
remedy Agency shal l have for such default,Owner shall be required to pay to Agency an amount
equal to (i) two [2] times the greater of(A) the total rent Owner received from such ineligible
tenant, or (B) the total rent Owner was entitled to receive for renting that Affordable Unit, plus
(ii) any relocation expenses incurred by Agency or City as a result of Owner having rented to
suc]tineligible person.
(c) It shall constitute a default for Owner to knowingly and intentionally rent
any of the Affordable Units in violation of the leasing preference requirements set forth in
Section l.c(1) of this Agreement. In the event Owner does knowingly and intentionally rent an
Affordable Unit in violation of the leasing preference requirements, in addition to any other
equitable remedy Agency shall have for such default, Owner shall be required to pay to Agency
an amount equal to two (2) months of rental charges for the Affordable Unit with the highest
rent.
(d) THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH
IN SUBPARAGRAPHS (a) THROUGH (c) IMMEDIATELY ABOVE (THE "DAMAGE
AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL
DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY OWNER
SET FORTH IN SUBPARAGRAPHS (a) THROUGH (c), CONSIDERING ALL OF THE
CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT,
INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF
HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF
ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE
HOUSEHOLDS THAT REASONABLY COULD BE ANTICIPATED AND THE
ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR
INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION i.c(5) SHALL BE THE
SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION
l.c(5), BUT NOTHING IN THIS SECTION lc.(5) SHALL BE INTERPRETED TO LIlvff
AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN
PLACING ITS INITIAL AT THE PLACES PROVIDED HEREIN BELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE
AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO
HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION
AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT.
OWNER'S INITIALS: AGENCY'S INITIALS
(6) Management.
Owner shall obtain the approval of Agency's Executive Director,which approval shall not
be unreasonably withheld, any management entity engaged by Owner to manage the Site,
including Owner's self-management if applicable. Any change in such management team or
entity for the Site, shall be approved by the Agency's Executive Director, which approval shall
not be unreasonably withheld.
69M.01 ROOM 69,p, 1z -5 - Gam,. t - 34
In the event of "Gross Mismanagement" (as that term is defined below) of the Project,
Agency shall have the authority to require that such Gross Mismanagement cease immediately,
and fiuthLr to require the immediate replacement of the Property Manager. For purposes of this
Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner
which violates the terms and/or intention of this Agreement to operate an affordable housing
complex of the highest standard,and shall include,but is not limited to,the following:
(a) Knowingly and intentionally leasing Affordable Units to ineligible tenants
or tenants whose income exceeds the prescribed levels;
(b) Allowing the tenants to exceed the prescribed occupancy levels without
taking immediate steps to stop such overcrowding;
(c) Failing to timely maintain the Project and the Site in the manner required
by this Agreement;
(d) Failing to submit timely and/or adequate annual Section 33418 reports as
required by this Agreement;
(e) Fraud or embezzlement of Project monies;and
(f) Failing to fully cooperate with the Palm Springs Police Department in
maintaining a crime-free environment on the Site.
2. Owner, on behalf of itself, its successors, its assigns, and each and every successor in
interest to the Site, or any part thereof hereby covenants and agrees that Owner and such
successors and assigns:
a. prior to the recordation of a Release of Construction Covenants issued by -
Agency for the improvements to be constructed on the Property, as provided in Section 3.16 of
the OPA, shall not make any sale,transfer, conveyance or assignment of the Property or any part
thereof or the buildings or structures thereon,and Owner shall not place or suffer to be placed on
the Property any lien or encumbrance other than as permitted in Sections 3.13 and 3.14 of the
OPA;
b. that there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, marital status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
Property, nor shall Owner itself or any person claiming under or through it, 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;
c. that all deeds, leases, or contracts made relative to the Property, improvements
thereon, or any part thereof, shall contain or be subject to substantially the following
nondiscrimination or non-segregation clauses:
-6-
69osoi:
avM 01 C.M. �40
Bosmroo
(1) In deeds: "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,
transfer,use, occupancy,tenure, or enjoyment of the land herein conveyed, nor shall the grantee
itself or any person claiming under or through it, establish or permit any such practice or
practices of discrumination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed.
The foregoing covenants shall run with the land."
(2) In leases: "The lessee herein covenants by and for itself,its successors
and assigns, and all persons claiming under or through them,and this lease is made and accepted
upon and subject to the following conditions: That there shall be no discrimination against or
segregation of any person or group of persons, on account of race, color, creed, religion, sex,
marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use,
occupancy, tenure, or enjoyment of the land herein leased, nor shall lessee itself, or any person
claiming under or through it, establish or permit such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy of tenants,
lessees,sublessees,subtenants,or vendees in the land herein leased."
(3) In contracts: "There shall be no discrimination against or segregation
of any person or group of persons on account of race, color, religion, creed, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the land, nor shall the transferee itself or any person claiming under or through it,
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 of the land."
d. to maintain in effect and to furnish or cause to be furnished to Agency
duplicate originals or appropriate certificates of insurance policies as set forth in Section 6 and 7
herein and by this reference incorporated herein, and, in the event of total or partial destruction
and subject to the rights of any lender,to effect restoration of the Project subject to the provisions
of paragraph 3 of this Agreement;
e. shall protect,maintain and preserve the improvements located on the Site, and
shall not make any substantial alteration or modification to the architectural style and treatment
of the facade of such improvements without the prior written approval of Agency;and
f. shall indemnify, defend, and hold harmless Agency, City, and their respective
officers, officials, members, employees, agents, and representatives from and against any loss,
liability, claim, or judgment relating in any manner to the Site excepting only (i) any such loss,
liability, claim, or judgment arising out of the intentional wrongdoing or active negligence of
Agency, City, or their respective officers, officials, members, employees, agents, or
representatives, and (ii) costs and expenses which are Agency's responsibilities pursuant to
express provisions of the OPA. Owner, while in possession of the Site, and each successor or
assign of Owner while in possession of the Site, shall remain fully obligated for the payment of
627ro140846612 _7
property taxes and assessments in connection with the Site. The foregoing indemnification,
defense,and hold harmless agreement shall only be applicable to and binding upon the party then
owning the Site or applicable portion thereof.
3. The following covenants and conditions shall apply to repairs of damage:
a. Obligation to Repair and Restore Damage Due to Casualty Required to Be
Covered by Insurance or Covered by Insurance .
Subject to subparagraph c below, if the Project shall be totally or partially destroyed or
rendered wholly or partly uninhabitable by fire or other casualty required by this Agreement to be
insured against by Owner, or is insured against by Owner whether or not required by this
Agreement, Owner shall take the steps set forth in either(1)or(2)below:
(1) Owner shall promptly proceed to obtain insurance proceeds and
take all steps necessary to begin reconstruction and, immediately upon receipt of insurance
proceeds, to promptly and diligently commence the repair or replacement of the Project to
substantially the same condition as the Project is required to be maintained in pursuant to this
Agreement,whether or not the insurance proceeds are sufficient to cover the actual cost of repair,
replacement, or restoration, and Owner shall complete the same as soon as possible thereafter so
that the Project can continue to be operated and occupied as an affordable housing project in
accordance with this Agreement. Subject to Section 8.3 of the OPA, in no event shall the repair,
replacement, or restoration period exceed eighteen (18) months from the date Owner obtains
insurance proceeds unless Agency's Executive Director, in his or her sole and absolute discretion,
approves a longer period of time. Agency shall cooperate with Owner, at no expense to Agency,
in obtaining any governmental permits required for the repair, replacement, or restoration. If,
however, the then-existing laws of any other governmental agencies with jurisdiction over the
Site do not permit the repair, replacement,or restoration, Owner may elect not to repair, replace,
or restore the Project by giving notice to Agency and paying Agency the amount set forth in
subparagraph (2) below (in which event Owner will be entitled to all insurance proceeds but
Owner shall be required to remove all debris from the Property), and thereafter Owner may
reconstruct such other improvements on the Property as are consistent with applicable land use
regulations and approved by the City, Agency, and the other governmental agency or agencies
with jurisdiction.
(2) Owner shall promptly (but in no event later than sixty [601 days) after the
casualty event, repay to Agency an amount defined herein as the "Owner's Casualty Payment"
The Owner's Casualty Payment shall be an amount calculated by (A) adding (i) Four Hundred
Fifty Thousand Dollars ($450,000), which is the "Agency Affordability Covenants Acquisition
Amount" defined in the OPA, plus (ii) the amount derived by multiplying $450,000, by the
percentage increase in the Consumer Price Index published by the United States Department of
Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles-
Long Beach-Anaheim Average, All Items (1984 = 100) (the "Index) (or if the Index is
discontinued the most nearly equivalent index established for similar consumer price index
purposes), dating from the date of Agency's disbursement to Owner of the$450,000 to the date of
Owner's Casualty Payment pursuant to this subparagraph(2), and (13) multiplying the amount of
627MI4094-0012 - 8 -
clause (A) by the fraction in which the numerator is the number of full calendar years remaining
in the fifty-five (55) year affordability covenant period set forth in this Agreement and the
denominator is fifty-five (55). The following example illustrates the operation of this
subparagraph(2):
Example: The casualty event occurs in the eleventh(I Vh)year of the 55-
year affordability covenant period. The Index is 369/6. The amount in
subparagraph(b) is$450,000 plus the Index amount of$162,000,for a
subtotal of$612,000,multiplied by the fraction 44/55 (or.80),which
yields an Owner's Casualty Payment of$489,600.
b. Continued Operations.
During any period of repair, Owner shall continue, or cause the continuation of, the
operation of the housing complex on the Property to the extent reasonably practicable from the
standpoint of prudent business management.
C. Damage or Destruction Due to Cause Not Required to be Covered by
Insurance
If the improvements comprising the Project are completely destroyed or substantially
damaged by a casualty for which Owner is not required to (and has not) insure against, then
Owner shall not be required to repair, replace, or restore such improvements and may elect not to
do so by providing Agency with written notice of election not to repair,replace,or restore within
ninety(90)days after such substantial damage or destruction. In such event, Owner shall remove
all debris from the Property. As used in this subparagraph(c), "substantial damage" caused by a
casualty not required to be (and not) covered by insurance shall mean damage or destruction
which is fifty percent(50%)or more of the replacement cost of the improvements comprising the
Project. In the event Owner does not timely elect not to repair, replace, or restore the
improvements as set forth in the first sentence of this subparagraph (c), Owner shall be
conclusively deemed to have waived its right not to repair, replace,or restore the improvements
and thereafter Owner shall promptly commence and complete the repair, replacement, or
restoration of the damaged or destroyed improvements in accordance with subparagraphs (a)
above and continue operation of the housing complex during the period of repair(if practicable)
in accordance with subparagraph(b)above.
4. Owner shall not, whether voluntarily, involuntarily, or by operation of law, effect any
transfer or assignment (as defined in Section 3.13 of the OPA), including any transfer of
management responsibilities for the Project including as set forth in Section 3.13 of the OPA,
without Agency's prior written approval, except as permitted by Section 3.13 of the OPA. The
procedures to be followed in obtaining such approval, the criteria to be utilized by Agency in
determining whether to grant such approval, and certain exceptions to the foregoing prohibitions
and restrictions are set forth in Section 3.13.
5. The covenant set forth in Paragraph 2.a shall be for the period therein stated. The
covenants set forth in Paragraphs La, Lb, l.c, 1.d,2.d,2.e,2.f, 3,and 4 shall remain in effect for
69M.01251M -9 - Co- _may j
69969A1 ASprAO
fifty-five(55) years. The covenants contained in Paragraphs 2.b and 2.c shall remain in effect in
perpetuity.
Notwithstanding the foregoing, Owner,after the thirtieth(30')annual anniversary date of
the recordation of the Release of Construction Covenants, shall be permitted,upon written notice
to Agency, to cancel and terminate the covenants set forth in Paragraphs l.a, Lb, Lc, Ld, 2.d,
2.e, 2.f, 3, and 4, provided that concurrent with Owner's written notice to Agency, Owner repays
Agency the "Owner's Repayment" as hereinafter defined. The Owner's Repayment shall be an
amount calculated by (A) adding (i) Four Hundred Fifty Thousand Dollars ($450,000), which is
the "Agency Assistance" defined in the OPA, plus (ii) the amount derived by multiplying
$450,000 by the percentage increase in the Consumer Price Index published by the United States
Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers,
Los Angeles-Long Beach-Anaheim Average,All Items (1984= 100) (the"Index)(or if the Index
is discontinued the most nearly equivalent index established for similar consumer price index
purposes), dating from the date of Agency's disbursement to Owner of the $450,000 to the date
Owner makes the Owners Repayment, and (B) multiplying the amount of clause (A) by the
fraction in which the numerator is the number of years (including the pro-rata portion of any
partial year) remaining in the fifty-five (55) year affordability covenant period set forth in this
Agreement, and the denominator is fifty-five (55). The following example illustrates the
operation of the calculation of the Owner Payment Amount
Example: Owner makes the Owner's Repayment as of the date that
is in the middle of the 490' year of the 55-year covenant period.
There are five and one-half(5%) years remaining in the 55-year
covenant period. The Index is 152%. The amount is subparagraph
(b) is $450,000 plus the Index amount of$694,000, for a subtotal
of$1,134,000,multiplied by the Suction 5.5155 (.10), which yields
a total Owner's Repayment of$113,400.
6. Indemnification. Owner shall indemnify,defend,and hold harmless the Agency and
City and their respective officers,officials,members,employees,agents,representatives,and
volunteers from all loss,cost,and expense,including but not limited to any judgments against
same and attorneys'fees and costs,arising out of any liability or claim of liability for personal
injury,bodily injury to persons,contractual liability,and damage to property sustained or claimed
to have been sustained arising out of acts or activities of Owner or Owner's officers,employees,
agents,representatives,or volunteers,whether or not such act or activity is authorized by this
Agreement;and Owner shall pay for any and all damage to the property of Agency and City,or
loss or theft of such property,done or caused by such persons. Agency and City assume no
responsibility whatsoever for any property placed on the premises. Owner further agrees to
waive all rights of subrogation against Agency and City. The indemnification provisions set
forth herein do not apply to any damage or loss caused solely by the willful misconduct of
Agency or City or any of their respective officers,officials,members,employees,agents,
representatives or volunteers.
7. Insurance Requirements. Owner shall procure and maintain during both construction
and subsequent operas ion of the Project,and in all cases for the duration of this Agreement,
69Mo, J
insurance against claims for injury and property damage which may arise from or in connection
with the performance of this Agreement.
a. Minimum Scope of Insurance. Coverage shall be at least as broad as:
(1) Commercial General Liability insurance to include products and
completed operations,contractual,independent contractors,broad form property damage,fire,
legal,and personal injury.
(2) .Comprehensive Automobile Liability insurance to include all autos
owned,hired, and non-owned.
(3) "Builder's Risk Property Insurance"to include Owner's improvements
and betterment;and following construction but prior to Agency's disbursement of the Agency
Assistance hereunder, Owner shall provide All Risk Property insurance to include Owner's
improvements and betterment(continuously for the duration of this Agreement).
(4) Workers' Compensation as required by the Labor Code of the State of
California and Employers'Liability insurance.
b. Minimum Limits of Insurance. Owner shall maintain limits no less thanA
(1) Commercial General Liability: One Million Dollars($1,000,000)
combined single limit per occurrence for bodily injury,personal injury,and property damage.
(2) Automobile Liability: Five Hundred Thousand Dollars($500,000)
combined single limit per occurrence for bodily injury and property damage.
(3) All Risk Property: Following construction of the Project,ninety
(90%)percent of the replacement value of the building(s)on the Property and Owner's
improvement and betterment.
(4) Workers' Compensation and Emplovers'Liability Workers'
Compensation limits as required by the Labor Code of the State of California and Employers'
Liability limits of One Million Dollars($1,0M,000)per accident.
c. Deductibles and Self-Insured Retentions. The All Risk Property insurance and
the Builder's Risk insurance shall each have a maximum deductible of$10,000. All other
deductibles or self-insured retentions must be declared to and approved in advance by the
Agency's Executive Director,who in his/her sole discretion may require the insurer to reduce or
eliminate such deductibles or self-insured retentions with respect to Agency and City and
Agency's and City's respective officers, officials,members,employees,agents,representatives,
and volunteers; or Owner may be required to procure a bond guaranteeing payment of losses and
related investigation, claims administration,and defense expenses.
d. Other Insurance Provisions. The policies are to contain,or be endorsed to
contain,the following provisions:
627AI40814012 w
69069.01*SWM - 11 - / _
(1) General and Automobile Liability Coverage. Agency and City and
Agency's and City's respective officers, officials,members employees,agents,representatives,
and volunteers are to be named as additional insureds with respect to liability arising out of the
acts or activities performed by or on behalf of Owner.
(2) Property Coverage(and Builder's Risk)If Inclusive. Agency shall be
named as a loss pavee on the policies and any settlement will accordingly include the Agency on
the draft or check.
(3) Workers'Compensation and Employers'Liability Coverage. The
insurer shall agree to waive all rights of subrogation against the Agency and City and Agency's
and City's respective officers,officials,members,employees,agents,representatives and
volunteers,for losses arising from work performed by Owner for the Agency.
(4) All Coverage.
1 Owner's insurance coverage shall be primary insurance and
non-contributory with respect to Agency and City and
Agency's and City's respective officers,officials,members,
employees,agents,representatives,and volunteers,and
with respect to any insurance Agency and Agency's
officers,officials,employees,agents,representatives,and
volunteers may have.
2 Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to Agency and
City and Agency's and City's respective officers,officials,
members employees,agents,representatives,and
volunteers.
3 No coverage shall be suspended,voided,cancelled,reduced
in coverage or in limits,or non-renewed,except after thirty
(30)days'prior written notice by personal delivery or
certified mail has been given to Agency's Executive
Director.
4 All insurance with respect to Agency and City and Agency's
and City's officers,officials,members,employees,agents,
representatives,and volunteers shall be "date of
occurrence"insurance and not"claims made" insurance.
5 All insurance shall apply separately to each insured against
whom claims is made or suit is brought,except with respect
to the limits of the insurer's liability.
e. Acceptability of Insurers. Insurance is to be placed with insurers with a BEST
rating of no less than B+Class X.
6n10140 NWN2,66 6 - 12- C ca - SD • YS�
99�0,a05
The procuring of insurance by Owner shall not be construed as a limitation on
Owner liability or as full performance of Owner's obligation under the Indemnification
Provisions of this Agreement,including as set forth in Section 7 herein,and Owner understands
and agrees that, notwithstanding any insurance,Owner's indemnification obligation,as set forth
in Section 7 herein, extends to the full and total amount of any damage,injuries,loss,expense,
costs,or liabilities suffered or incurred by Agency or City or Agency's or City's respective
officers,officials,members,employees,agents,representatives, and volunteers.
g. All conditions, covenants and restrictions contained in this Agreement Containing
Covenants Affecting Real Property shall be covenants running with the land, and shall, in any
event, and without regard to technical classification or designation, legal or otherwise,be,to the
fullest extent permitted by law and equity, binding for the benefit and in favor of, and
enforceable by Agency, its successors and assigns, and the City and its successors and assigns,
against Owner, its successors and assigns, to or of the Site or any portion thereof or any interest
therein,and any party in possession or occupancy of said Site or portion thereof.
9. In amplification and not in restriction of the provisions set forth hereinabove, it is
intended and agreed that Agency shall be deemed a beneficiary of the agreements and covenants
provided heremabove both for and in its own right and also for the purposes of protecting the
interests of the community. All covenants without regard to technical classification or
designation shall be binding for the benefit of Agency and such covenants shall run in favor of
Agency for the entire period during which such covenants shall be in force and effect, without
regard to whether Agency is or remains an owner of any land or interest therein to which such
covenants relate. Agency shall have the right, in the event of any breach of any such agreement
or covenant to exercise all the rights and remedies, and to maintain any action at law or suit in
equity or other proper proceedings to enforce the curing of such breach of agreement or covenant.
10. Both Agency and its successors and assigns, and Owner and the successor; and
assigns of Owner in and to all or any part of the fee title to the Site, shall have the right to
consent and agree to changes in, or to eliminate in whole or in part, any of the covenants,
conditions, or restrictions contained in this Agreement Containing Covenants Affecting Real
Property without the consent of any tenant,lessee, easement holder, licensee, mortgagee, trustee,
beneficiary under a deed of trust,or any person or entity having any interest less than a fee in the
Site. That covenants contained in this Agreement Containing Covenants Affecting Real
Property, without regard to technical classification shall not benefit or be enforceable by any
owner of any other real property within or outside the Project Area, or any person or entity
having any interest in any other such property.
[end -signature page follows]
~'01 osfa — 13 —
69989A1 a03A2K10
ATTACHMENT NO. 6
&ELFASE OF CONSTRUCTION COVENANTS
[SEE FOLLOWING PAGES]
6271014O84-0012 -I- cm 9►> MM 4 7
6999M1 905102n ••
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
Community Redevelopment Agency of the
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs,CA 92263
Attn: Executive Director
(Space Above Line for Recorder's Use)
(Exempt from Recording Fee per Gov.Code§6103)
(Note To Recorder: Record As
Partial Release of Agreement]
RELEASE OF CONSTRUCTION COVENANTS
WHEREAS, ROSE MIHATA, an individual, and SCOTT TIMBERLAKE, an individual
(collectively "Participant"), is the owner of fee title to the real property legally described in
Exhibit"A"hereto (the "Property");and
WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the
"Agreement") dated May _, 2000, by and between the Participant and the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate
and politic ("Agency"), Participant has redeveloped the Property according to the terms and
conditions of said Agreement;and
WHEREAS,pursuant to Section 3.16 of the Agreement,promptly after completion of all
construction work to be completed by Participant on the Property, Agency shall furnish
Participant with a Release of Construction Covenants upon written request therefor by
Participant;and
WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be
conclusive evidence that Participant has complied with the terms of the Agreement pertaining to
the redevelopment of the Property; and
WHEREAS, Participant has requested that Agency frtrnish Participant with the Release of
Construction Covenants;and
WHEREAS, Agency has determined that the redevelopment of the Property has been
satisfactorily completed as required by the Agreement;
NOW, THEREFORE:
699N.01 a0% 12 Cm _O • v�
69%9AI�OSNZI00 -2- I
1. As provided in the Agreement, Agency does hereby certify that
redevelopment of the Property has been fully and satisfactorily performed and completed, and
that such redevelopment is in full compliance with said Agreement.
2. This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or
any insurer of a mortgage, securing money loaned to finance construction work on the Property,
or any part thereof. Nothing contained herein shall modify in any way any other provision of said
Agreement.
3. This Release of Construction Covenants shall not constitute evidence of
Participant's compliance with those covenants in the Agreement that survive the issuance of this
Certificate, or of the covenants in the Agreement Containing Covenants Affecting Real Property
recorded on . 2000, as Instrument No. in the Official
Records of Riverside County.
4. This Release of Construction Covenants is not a Notice of Completion as
referred to in California Civil Code Section 3093.
IN WITNESS WHEREOF, Agency has executed this Certificate as of this _ day of
2
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS
By:
Executive Director
ana14oe4012
69M.01.M= -3-
CONSENT TO RECORDATION
ROSE MIHATr, an individual, and SCOTT T MBERLAKE, an individual, owners of fee title
to the herein described real property, hereby consents to the recordation of the foregoing Release
of Construction Covenants Against the real property herein described,
ROSE MIHATA,an individual
SCOTT TMMERLAKE,an individual
C
627M14084-0OI2
690t0.01405102100 -4-
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS, CALIFORNIA,
APPROVING AN OWNER PARTICIPATION
AGREEMENT WITH ROSE MIHATA AND SCOTT
TIMBERLAKE TO REHABILITATE THE HERITAGE
APARTMENTS,A 136-UNIT APARTMENT COMPLEX AT
300 SOUTH CALLE EL SEGUNDO IN THE BARISTO-
FARRELL PROJECT AREA(AREA#8)
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs (the
"Agency") has established an affordable housing setaside fund in accordance with
Section 33000 at seq. of the California Health and Safety Code; and
WHEREAS, the funds are earmarked for the acquisition, construction, or rehabilitation
of affordable housing to benefit the community; and
WHEREAS, the Heritage Apartments, constructed in 1979 as mature adult units for
low-to moderate-income seniors, is in significant need of rehabilitation, including
improving the energy efficiency of the units and the amenities of the complex; and
WHEREAS, the property owners, Rose Mihata and Scott Timberlake, desire to
participate with the Agency in Its affordable housing program by dedicating up to half
(68) of the units for low-income residents in the Heritage Apartments, which is in the
Baristo-Farrell Redevelopment Project Area (Project Area#8).
NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of
the City of Palm Springs, as follows:
SECTION 1. An Owner Participation Agreement with Rose Mihata and Scott
Timberlake for the rehabilitation of 136 units at the Heritage Apartments,
300 South Calle El Segundo, is approved.
SECTION 2. The Agency authorizes an allocation of up to$450,000 for this project
SECTION 3. The Executive Director, or his designee, is hereby authorized to execute
on behalf of the Agency the Owner Participation Agreement and other
documents necessary to the Agreement, and make minor changes as
may be deemed necessary, in a form approved by Agency Counsel.
ADOPTED this day of 2000.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Executive Director
REVIEWED&APPROVED AS TO FORM r •O s!