HomeMy WebLinkAbout4/18/2012 - STAFF REPORTS - 1C Fp AIM Sp
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°q41FOR" City Council Staff Report
DATE: April 18, 2012 PUBLIC HEARING
SUBJECT: CONDUCTING A PUBLIC HEARING FOR THE PROPOSED ISSUANCE OF
TAX-EXEMPT MOBILE HOME PARK REVENUE BONDS BY THE
INDEPENDENT CITIES FINANCE AUTHORITY (ICFA) NOT TO EXCEED
$15,500,000 AGGREGATE PRINCIPAL AMOUNT FOR THE BENEFIT OF
THE MILLENNIUM HOUSING LLC, A CALIFORNIA LIMITED COMPANY FOR
THE ACQUISTION AND RENOVATION OF A 254-SPACE MOBILE HOME
PARK KNOWN AS THE SAHARA MOBILE HOME PARK LOCATED AT 1955
SOUTH CAMINO REAL; APPROVING, AUTHORIZING, AND DIRECTING
EXECUTION OF AN ASSOCIATE MEMBERSHIP AGREEMENT WITH THE
INDEPENDENT CITIES FINANCE AUTHORITY AND APPROVING THE
ISSUANCE OF BONDS BY THE AUTHORITY FOR SAHARA MOBILE HOME
PARK; APPROVING A RELEASE OF REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS RELATED TO THE
REFUNDING OF THE 2002 BOND ISSUE; AND, CONSENTING TO THE
DIRECTION TO REDEEM BONDS BY MILLENNIUM HOUSING
CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT
CORPORATION; AND, ACTING SOLELY IN ITS CAPACITY AS THE
HOUSING SUCCESSOR AGENCY TO THE FORMER COMMUNITY
REDEVELOPMENT AGENCY, APPROVING AN ASSIGNMENT AND
ASSUMPTION AGREEMENT BY AND AMONG MILLENNIUM HOUSING
CORPORATION, A CALIFORNIA NONPROFIT PUBLIC BENEFIT
CORPORATION (THE "ASSIGNOR") AND MILLENNIUM HOUSING LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY, AND APPROVING A
SUBORDINATION AGREEMENT WITH UNION BANK, N.A., A NATIONAL
BANKING ASSOCIATION RESPECT TO CERTAIN LOANS PREVIOUSLY
MADE BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
PALM SPRINGS TO ASSIST IN FINANCING THE REHABILITATION OF THE
SAHARA MOBILE HOME PARK
FROM: David H. Ready, City Manager
BY: Department of Community & Economic Development
SUMMARY
These actions conduct the required public hearing in conjunction with the refunding of
2002 mobile home park revenue bonds issued by the City of Palm Springs as conduit
issuer on behalf of Millennium Housing Corporation, a California Nonprofit Benefit
Corporation, and the proposed issuance by the Independent Cities Finance Authority (the
"Authority") of its mobile home park revenue bonds in one or more series in the aggregate
principal amount of not to exceed $15,500,000 (the "Authority Bonds") pursuant to
Chapter 8 of Part 5 of Division 31 of the California Health and Safety Code. The proceeds
of the Bonds will be used to make a loan to Millennium Housing LLC, a California limited
ITEM NO. 1(✓
City Council Staff Report
April 18, 2012— Page 2 of 8
Sahara Mobile Home Park Public Hearing
liability company, or an affiliate thereof (the 'Borrower") to be used to (i) refund certain
revenue bonds previously issued by the City of Palm Springs, the proceeds of which were
loaned to the Borrower in order to finance the acquisition and renovation of a 254-space
mobile home park known as the Sahara Mobile Home Park located at 1955 South Camino
Real, Palm Springs, CA (the "Project'), (ii) finance additional renovations to be made to
the Project and (iii) finance certain costs of issuing the Authority Bonds. The Borrower will
be the owner and operator of the Project.
The Low and Moderate Income Housing Fund to the former Community Redevelopment
Agency made loans to the borrower at the time of bond issuance in 2002 and in 2007.
There are two actions required of the City, acting solely in its capacity as Housing
Successor Agency to the former Community Redevelopment Agency: a Subordination
Agreement for the loans, and an Assignment and Assumption Agreement of the former
Agency loans, approving the assignment of the obligation from Millennium Housing
Corporation, a California Nonprofit Benefit Corporation, to Millennium Housing, LLC, a
single purpose entity wholly-owned by the parent, Millennium Housing Corporation.
RECOMMENDATION:
1. Open the Public Hearing under the requirements of Section 147(f) of the Internal
Revenue Code of 1986, as amended (the "Code") for public testimony; and
2. Approve Resolution No. I "APPROVING, AUTHORIZING, AND
DIRECTING EXECUTION OF AN ASSOCIATE MEMBERSHIP AGREEMENT
WITH THE INDEPENDENT CITIES FINANCE AUTHORITY AND APPROVING
THE ISSUANCE OF BONDS BY THE AUTHORITY WITH RESPECT TO THE
SAHARA MOBILE HOME PARK AT 1955 SOUTH CAMINO REAL".
3. Approve Resolution No. I "APPROVING, AUTHORIZING, AND
DIRECTING EXECUTION OF A RELEASE OF REGULATORY AGREEMENT
AND DECLARATION OF RESTRICTIVE COVENANTS."
4. Approve Resolution No. "ACTING SOLELY IN ITS CAPACITY AS
HOUSING SUCCESSOR AGENCY, APPROVING, AUTHORIZING, AND
DIRECTING EXECUTION OF AN ASSIGNMENT AND ASSUMPTION
AGREEMENT BY AND AMONG MILLENNIUM HOUSING CORPORATION, A
CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION (THE
"ASSIGNOR") AND MILLENNIUM HOUSING LLC, A CALIFORNIA LIMITED
LIABILITY COMPANY WITH RESPECT TO CERTAIN LOANS PREVIOUSLY
MADE BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
PALM SPRINGS TO ASSIST IN FINANCING THE REHABILITATION OF THE
SAHARA MOBILE HOME PARK"
5. Approve Resolution No. "ACTING SOLELY IN ITS CAPACITY AS
HOUSING SUCCESSOR AGENCY, APPROVING, AUTHORIZING, AND
DIRECTING EXECUTION OF A SUBORDINATION AGREEMENT WITH .UNION 02
BANK, N.A., A NATIONAL BANKING ASSOCIATION WITH RESPECT TO
City Council Staff Report
April 18, 2012—Page 3 of 8
Sahara Mobile Home Park Public Hearing
CERTAIN LOANS PREVIOUSLY MADE BY THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS TO ASSIST IN
FINANCING THE REHABILITATION OF THE SAHARA MOBILE HOME PARK"
STAFF ANALYSIS:
On June 5, 2002, the Community Redevelopment Agency of the City of Palm Springs
approved an Owner Participation Agreement (OPA) with Millennium Housing LLC, a
California limited liability company, for the rehabilitation of a 254-space mobile home park
known as the Sahara Mobile Home Park located at 1955 South Camino Real.
Millennium Housing purchased the Sahara Mobile Home Park located at 1955 South
Camino Real in Palm Springs in 2002. While the park is attractive and well-maintained, at
the time it was nearly 50 years old and had over the preceding several years experienced
problems with its major systems and utilities, including gas, electricity, and sewer.
Because of its age, it was a rent-controlled park. The City previously issued its Mobile
Home Park Revenue Bonds (Sahara Mobile Home Park) Series 2002A and its Mobile
Home Park Subordinate Revenue Bonds (Sahara Mobile Home Park) Series 2002E
(collectively, the `Bonds") and Millennium used the tax-exempt financing issued by the City
of Palm Springs and its own non-profit status (which reduced the property tax burden) to
create a fund and revenue stream to be able to perform the necessary repairs to the park
without needing a rent-control waiver, which would ordinarily be allowed for an owner
undertaking major capital improvements. The needs analysis identified $1.2 million worth
of necessary improvements to the park. The 2002 bond issue, including $400,000 in
Community Redevelopment Agency ("Agency") participation created an initial $850,000
Repair and Replacement Reserve Fund, with additional funds from the cash flow of the
project that were used for repairs or other property improvements jointly prioritized by the
residents and Millennium.
Millennium committed that 50% of the units shall remain affordable to low- and very-low-
income residents: 25% shall be available for persons of very low income (50% of area
median income) and 25% for persons of low income (80% of area median income). Under
the deal with Millennium, the Agency essentially purchased long-term affordability
covenants form the park owner, another accepted technique for preserving affordability
under Redevelopment Law. In order for the Agency to be able to restrict the units, though,
which is important for its goal of complying with state law, the Agency made two findings
under Section 33413 (2)(B) and (C) of California Health & Safety Code:
1. That the units are presently available at affordable housing cost to this same group
of persons or families, but are units that the agency finds, based upon substantial
evidence, after a public hearing, cannot reasonably be expected to remain
affordable to this same group of persons or families; and
2. Not less than 50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants shall be available at affordable
housing cost to, and occupied by, very low income households (50% of area 03
median income).
City Council Staff Report
April 18, 2012—Page 4 of 8
Sahara Mobile Home Park Public Hearing
In January, 2007, the Agency approved an amendment to the Owner Participation
Agreement with Millennium to loan an additional $450,000 to Millennium to update the
original schedule of improvements and cost estimates. Specifically, the $450,000 paid for
the expedited construction of a 6' block wall on the perimeter of the park, which was a
priority of the residents but was scheduled to be completed after the electrical system
improvements. The owner has been repaying the Agency from cash flow in the amount of
$25,000 per year.
This action is a refinancing of the Sahara Mobile Home Park, against which the prior
Community Redevelopment Agency and the City as the conduit tax exempt bond issuer
have recorded Affordability Covenants. The owners wish to refinance the project in order
to take advantage of historic low interest rates, which would require a new Subordination
Agreement with the City (acting in its new role as Housing Successor Agency of the former
Community Redevelopment Agency). There remains a City of Palm Springs Regulatory
Agreement recorded against the property, which would be terminated and replaced by the
new Regulatory Agreement placed on the property by the new Joint Powers Authority, the
Independent Cities Finance Authority (ICFA).
Since the previous Agency transaction in 2007, the State of California has now eliminated
redevelopment agencies statewide. On December 29, 2011, the California Supreme
Court upheld AB 1X 26, which dissolves all of the redevelopment agencies in the State of
California.
On January 4, 2012, the City Council approved a resolution authorizing the City to become
the Successor Agency and the Housing Successor Agency. The City Council elected to
retain the responsibility for performing housing functions previously performed by the Palm
Springs Community Redevelopment Agency and assume all rights, powers, assets,
liabilities, duties, and obligations associated with the housing activities of in accordance
with Cal. Health and Safety Code §34176.
Actions of the Housing Successor Agency are outside the review of the Oversight Board,
which was created pursuant to Cal. Health and Safety Code §34179. Actions of the City
as well, acting under its own Charter and statutory authority, are not subject to Oversight
Board review, either.
Therefore, the following actions by the City Council, both under its own authority and
acting as the Housing Successor Agency, are as follows:
CITY COUNCIL
• Conduct a public hearing for the proposed bonds under the requirements of Section
147(f) of the Internal Revenue Code of 1986
• Approve an Associate Membership Agreement with ICFA
04
City Council Staff Report
April 18, 2012—Page 5 of 8
Sahara Mobile Home Park Public Hearing
• Approve A RELEASE OF REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS RELATED TO THE REFUNDING OF THE 2002
BOND ISSUE
• CONSENT TO THE "DIRECTION TO REDEEM BONDS" BY MILLENNIUM
HOUSING CORPORATION
HOUSING SUCCESSOR AGENCY
• Approve an ASSIGNMENT AND ASSUMPTION AGREEMENT BY AND AMONG
MILLENNIUM HOUSING CORPORATION, A CALIFORNIA NONPROFIT PUBLIC
BENEFIT CORPORATION (THE "ASSIGNOR") AND MILLENNIUM HOUSING LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
• Approve A SUBORDINATION AGREEMENT WITH UNION BANK, N.A.
Public Hearing
This public hearing and notice is intended to comply with public notice requirements of
Section 147(f) of the Internal Revenue Code of 1986, as amended. The Project is
required to be occupied in part by persons of low and very low income in accordance with
California laws and the requirements of Section 145 of the Internal Revenue Code of
1986, as amended.
Joint Powers Authority Agreement
The Independent Cities Finance Authority (the "Authority") has been formed for the
purpose, among others, of assisting its Members and Associate Members in the raising of
capital to finance the capital improvement needs of Local Agencies to provide for among
other things, to make loans to tax-exempt organizations from the proceeds of mortgage
revenue bonds to finance the acquisition of multi-family rental housing, including mobile
home parks, under the provisions of Chapter 8 of Part 5 of Division 31 (commencing with
Section 52100) of the Health and Safety Code. In order for a project in Palm Springs to
be eligible for Authority financing, the City must be a Member or Associate member.
Release of Regulatory Agreement
As a condition of the issuance of the Bonds and the loan of the proceeds to the Borrower,
the City required the Borrower to agree to certain restrictions running with the land as set
forth in a Regulatory Agreement and Declaration of Restrictive Covenants, dated as of
May 1, 2002, filed in the records of Riverside County, California on the 6th day of June,
2002 as Instrument No. 2002-305969 (the 'Regulatory Agreement'). ICFA is issuing its
Mobile Home Park Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012A,
its Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara Mobile Home
Park) Series 2012E and its Mobile Home Park Subordinate Revenue Refunding Bonds
(Sahara Mobile Home Park) Series 2012C (Federally Taxable) (collectively, the
"Refunding Bonds") for the purpose of refunding the outstanding Bonds and will require
the Borrower will enter into a Regulatory Agreement and Declaration of Restrictive
Covenants dated as of May 1, 2012 (the "2012 Regulatory Agreements") pursuant to 05
which the Borrower will agree to restrict the use of the Projects to ensure that the Projects
City Council Staff Report
April 18, 2012—Page 6 of 8
Sahara Mobile Home Park Public Hearing
will be used and operated in accordance with the Internal Revenue Code of 1986, as
amended (the "Code") and Chapter 8, Part 5 of Division 31 of the California Health and
Safety Code (the "Act").
Therefore, the Borrower has requested that the lien and restrictions of the Regulatory
Agreement be released and terminated in favor of a new Regulatory Agreement by ICFA,
substantially the same as the City's.
Direction to Redeem Bonds
This is actually a letter from the Borrower directing the Trustee to call the existing bonds
for redemption. Under the terms of the Indenture, the City will need to consent to that
direction. The Trustee has to send a conditional notice out by no later than April 24, so
they need this document signed by the Borrower and the City no later than April 20. It is
included in the packet for Council approval so that there is no question as to the City's
approval of consent.
Assignment and Assumption Agreement
Pursuant to the Assignment and Assumption Agreement, Millennium Housing Corporation,
a California Nonprofit Benefit Corporation, assigns and Millennium Housing, LLC, a single
purpose entity wholly-owned by the parent, assumes (i) all of Assignor's right, title and
interest as the borrower of financial assistance in the initial aggregate principal amount of
$850,000 (the "Loan") from the City as the successor agency of the Community
Redevelopment Agency of the City of Palm Springs, and (ii) all of Assignor's right, title and
interest to certain assigned documents related to all other loans on the Property.
Subordination Agreement
The Agency previously entered into an Owner Participation Agreement dated June 5,
2002, as amended by a First Amendment to the Owner Participation Agreement dated
February 20, 2007 (together, the "OPA"), with the Prior Borrower pursuant to which the
Agency provided an initial loan in the amount of $400,000 and a subsequent loan in the
amount of $450,000 (together, the "Agency Loan") to provide additional financing with
respect to the rehabilitation of the Project.
The Agency Notes are secured by a Deed of Trust with Assignment of Rents and Rider
attached thereto containing terms including Security Agreement and Fixture Filing dated
June 5, 2002 (the "Agency Mortgage") encumbering the Project, as well as an Agreement
Containing Covenants dated June 5, 2002 (the "Restrictive Covenant").
In order to facilitate the issuance and sale of the Bonds, the Owner has requested that the
City, acting as the Housing Successor Agency, agree to subordinate the Agency Loan, the
OPA, the Agency Note, the Agency Mortgage and the Restrictive Covenant as contained
in a Subordination Agreement (the "Subordination Agreement") to be entered into with
Union Bank, N.A., as trustee.
OG
City Council Staff Report
April 18, 2012—Page 7 of 8
Sahara Mobile Home Park Public Hearing
FISCAL IMPACT:
There is no fiscal impact to the City or the Housing Successor Agency and issuance of the
bonds by ICFA does not obligate the City financially in any way, nor does it affect the
City's bonding capacity for City-funded projects. The bonds would be repaid by
Millennium through the rents received from the project.
�a eo"-.W 4V6�� /
DALE E. COOK, JR. JOHN OND
Community Development Administrator pity nomic Development Director
THOMAS J.)91LSON DAVID H. READY, Es
Assistant City Manager City Manager
ATTACHMENTS:
• Notice of public hearing for the proposed bonds under the requirements of Section
147(f) of the Internal Revenue Code of 1986
• Vicinity Map
• Resolution Approving Associate Membership Agreement with ICFA
• Associate Membership Agreement with ICFA
• Resolution Approving Release of Regulatory Agreement and Declaration of Restrictive
Covenants related to the Refunding of the 2002 Bond Issue
• Release of Regulatory Agreement and Declaration of Restrictive Covenants
• Consent to the "Direction to Redeem Bonds" by Millennium Housing Corporation
HOUSING SUCCESSOR AGENCY
• Resolution Approving an Assignment and Assumption Agreement by and among
Millennium Housing Corporation, a California Nonprofit Public Benefit Corporation (The
"Assignor") and Millennium Housing LLC, a California Limited Liability Company
• Assignment and Assumption Agreement
• Resolution Approving a Subordination Agreement with Union Bank, N.A.
• Subordination Agreement with Union Bank, N.A.
07
DaleC/Housing/Millennium_Saha MHN CC_SlaffReport_ICFA.Mar12
CITY OF PALM SPRINGS
PUBLIC HEARING NOTIFICATION
City Council
Meeting Date: April 18, 2012
Subject: Issuance of Tax-Exempt Mobile Home Park Revenue Bonds
Sahara Mobile Home Park
AFFIDAVIT OF PUBLICATION
I, Dale E Cook, Jr., Community Development Administrator, of the City of Palm Springs,
California, do hereby certify that a copy of the attached Notice of Public Hearing was
published in the Desert Sun on April 4, 2012.
1 declare under penalty of perjury that the foregoing is true and correct.
Dale E. Cook, Sr.
Community Development Administrator
AFFIDAVIT OF POSTING
I, Dale E. Cook, Jr., Community Development Administrator, of the City of Palm Springs,
California, do hereby certify that a copy of the attached Notice of Public Hearing was
posted at City Hall, 3200 E. Tahquitz Canyon Drive, on the exterior legal notice posting
board on April2, 2012 and in the Office of the City Clerk on April 3, 2012.
1 declare under penalty of perjury that the foregoing is true and correct.
Dale E. Cook,Ar.
Community Development Administrator
MIZ2 18 PlfidawFosUMN list Mioml�B WWhPY_CC PubNa 0 I0F9
The Desert Sun Wednesday, April 4, 2012 1 E3
No 0949
NOTICE OF PUBLIC HEARING
CITY COUNCIL
CITY OF PALM SPRINGS
ISSUANCE OFTAX-EXEMPT MOBILE
HOME PARK REVENUE BONDS
SAHARA MOBILE HOME PARK
NOTICE IS HEREBY GIVEN that the City Council
of the City of Palm Springs,California(the'City'
will hold a public hanng at its meeting of April 1
2012. The City Council meetut bopms at 6:00
Nm.,in the Council Chamber at City Flall,3200 E.
hqudz Canyon Way,Palm Springs,CA 92262.
The purpose of this hearing is to consider appro-
val o the proposed issuance of mobile home park
revenue bonds in one or more series in the aggre-
ggate pprincipal amount of not to exceed
515,500,000(the'Authority Bonds')by the Inde-
pendent Cites Finance Authority(the Authority"
1
pursuant to Chapter 8 of Part 5 of Division 31 of
the California Health and Safety Code. The City
Council will also consider the adoption of a result-
tion authorizing the City to execute an associate
membership agreement with the Authority prior to
taking action on this matter.
The proceeds from the sale of the Authority
Bonds,d any are issued,are intended to be used
to make a loan to Millennium Housing LLC,a Cali-
fornia limited liability comppany, or an affiliate
thereof(the-Borrower')to be used to(i1 refund
certain revenue bends previouslyY issued by the
City of Palm Spprings,the proceeds of which were
leaned to the Borrower in order to finance the ac-
quisition antl renovation of a 254-space mobile
home park known as the Sahara Mobile Home
Park located at 1955 South Camino Real, Palm
Springs,CA(the'Prolact"),th finance additional
renovations to be mane to the Project and(iii)it-
nance certain costs of issuing the Authority Bonds.
The Borrower wit be the owner and operator of
the Pro ad
This public nonce is intended to compply with public
notice requirements of Section 147(f)of the Inter-
nal Revenue Code of 1986, a amended. The
Project is required to be occupied in part by per
sons of low and very low income in accordance
with California laws and the requirements of Sec-
tion 145 of the Internal Revenue Code of 1986,as
amended.
REVIEW OF INFORMATION: The staff report
and other supporting documents regarding this are
available
f ublic review at City Hall between the
Thsauey Na.fo through
ase contact I Office the Ciry
Clerk at 760.323.8204 for a scheduled appoinf-
ment to review these documents.
COMMENTS: Response to this notice may be
made verbally at the Public Hearing and/or in writ-
ing before the haring. Written comments may be
made to the City Council by letter(for mail or hand
delivery)to:
Jame Thompson,City Clerk
3200 E.Tahqudz Canyyon Way
Palm Springs,CA 92262
Any challenge of the final decision in court may be
limited to raising only those issues raised at the
public hearing described in this notice,or in written
correspondence delivered to the City Cleric at,or
7nor, to the public hang. (Government Code
Section 65009(b)(2)). Subject to exhaustion of ad-
ministrative remedies, Code of Civil Procedure
Section 1094.6 requires initiation of such proceed-
ing in court within 90 days of the final decision in
the matter.
An opportunity will be given at aid hearing for all
interested persons to be ham. Questions regard-
mg this may be directed to Dale Cook,Community
Development Administrator at Dale.Cook@palmsp
nngsca.gov,,or 760 323.819&TDD 760.864.9527.
Si necesila ayuda con sate are,podavor Ilame a
Is Ciudad de Palm Springgs yy puede hablar con
Nadine Fieger telefono 760.323.8245.
John S.Raymond,
Director of Community&Economic Development
Published:414112
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS APPROVING,
AUTHORIZING, AND DIRECTING EXECUTION OF
AN ASSOCIATE MEMBERSHIP AGREEMENT WITH
THE INDEPENDENT CITIES FINANCE AUTHORITY
AND APPROVING THE ISSUANCE OF BONDS BY
THE AUTHORITY WITH RESPECT TO THE
SAHARA MOBILE HOME PARK AT 1955 SOUTH
CAMINO REAL.
WHEREAS, certain cities of the State of California (collectively, the "Members")
have entered into a Joint Powers Agreement (the "Joint Powers Agreement")
establishing the Independent Cities Finance Authority (the "Authority") and
prescribing its purposes and powers, and providing, among other things, for
associate members of the Authority (an "Associate Member"); and
WHEREAS, the Authority has been formed for the purpose, among others, of
assisting its Members and Associate Members in the raising of capital to finance
the capital improvement needs of Local Agencies (as defined in the Joint Powers
Agreement), to provide for home mortgage financing with respect to those
Members or Associate Members that are either a city or a county of the State of
California, to provide financing in connection with the improvement, construction,
acquisition, creation, rehabilitation and preservation of affordable housing within
the boundaries of the Members and Associate Members, and to provide
financing in accordance with the provisions of applicable law in connection with
other projects and programs that are in the public interest and which benefit
Members and Associate Members including making loans to tax-exempt
organizations from the proceeds of mortgage revenue bonds to finance the
acquisition of multifamily rental housing, including mobile home parks, under the
provisions of Chapter 8 of Part 5 of Division 31 (commencing with Section 52100)
of the Health and Safety Code; and
WHEREAS, the City of Palm Springs (the "City") has determined that it is in the
public interest and for the public benefit that the City become an Associate
Member of the Authority in order to facilitate the provision of affordable and other
housing opportunities within the City; and
WHEREAS, there is now before this City Council (the "City Council") the form of
an associate membership agreement; and
WHEREAS, the Authority proposes to issue its Mobile Home Park Revenue
Refunding Bonds (Sahara Mobile Home Park) Series 2012A (the "Series A
Bonds'), its Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara
Mobile Home Park) Series 2012B (the "Series B Bonds) and its Mobile Home
Park Subordinate Revenue Refunding Bonds (Sahara Mobile Home Park) Series
11
Resolution No.
Page 2
2012C (Federally Taxable) (the "Series C Bonds" and together with the Series A
Bonds and the Series B Bonds, the 'Bonds"); and
WHEREAS, Millennium Housing LLC, a California limited liability company (the
"Owner'), has requested that the Authority issue and sell the Bonds in an
aggregate principal amount of not to exceed $15,500,000 to (i) refund certain
revenue bonds previously issued by the City, the proceeds of which were loaned
to the Owner in order to finance the acquisition and renovation of a 254-space
mobile home park known as the Sahara Mobile Home Park located at 1955
South Camino Real, Palm Springs, California (the 'Project'), (ii) finance
additional renovations to be made to the Project and (iii) finance certain costs of
issuing the Bonds; and
WHEREAS, the Owner will be the sole owner of the Project; and
WHEREAS, the City Council of the City has determined that the operation of the
Project by the Owner in accordance with the laws and ordinances of the City and
in accordance with a proposed regulatory agreement to be recorded on the
Project shall help the City satisfy its affordable housing obligations and will
lessen the burden of the City to provide affordable housing for low and very low
income residents of the City; and
WHEREAS, the Bonds will be qualified "private activity bonds" for purposes of
the Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, pursuant to Section 147(f) of the Code, the proposed issuance of
private activity bonds is required to be approved by the "applicable elected
representative" of the governmental unit having jurisdiction over the area in which
the Project is to be located, after a public hearing held after reasonable public
notice; and
WHEREAS, the members the City Council are the applicable elected
representatives of the City; and
WHEREAS, there has been published, at least 14 days prior to the date hereof,
in a newspaper of general circulation within the City, a notice that a public
hearing regarding the proposed issuance of the Bonds would be held on the date
hereof, and
WHEREAS, such public hearing was conducted on the date hereof by the City
Council at which time an opportunity was provided to interested parties to be
heard with respect to the proposed issuance of the Bonds and financing of the
Project; and
WHEREAS, it is intended that this resolution shall constitute the approval of the
proposed issuance of the Bonds required by Section 147(f) of the Code.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS: 12
Resolution No.
Page 3
SECTION 1. The City Council hereby approves the City's membership in the
Authority as an Associate Member and the Associate Membership
Agreement, in substantially the form on file with the City Clerk,
pursuant to which the City shall become an Associate Member of
the Authority. The Mayor, City Manager, City Clerk, and any other
proper officers and officials of the City, are hereby authorized and
directed to take all actions and do all things necessary or desirable
hereunder with respect to the Associate Membership Agreement
including, but not limited to, the execution and delivery of any
agreements, certificates, instruments and other documents which
they, or any of them, may deem necessary or desirable and not
inconsistent with the purposes of this Resolution.
SECTION 2. The City Council hereby approves the issuance of the Bonds by the
Authority. It is the purpose and intent of this City Council that this
resolution constitutes approval of issuance of the Bonds for the
purposes of Section 147(f) of the Code.
SECTION 3. The issuance of the Bonds shall be subject to the approval of the
Authority of all financing documents relating thereto to which the
Authority is a party. The City shall have no responsibility or liability
whatsoever with respect to the Bonds or the Project.
SECTION 4. The adoption of this Resolution shall not obligate the City or any
department thereof to (i) provide any financing to acquire or
construct the Project or to provide any refinancing of the Project; (ii)
approve any application or request for or take any other action in
connection with any planning approval, permit or other action
necessary for the acquisition or operation of the project; (iii) make
any contribution or advance any funds whatsoever to the Authority;
or (iv) take any further action with respect to the Authority or its
membership therein.
SECTION 5. This resolution shall take effect upon its adoption.
ADOPTED THIS _ day of April, 2012.
David H. Ready, City Manager
ATTEST:
James Thompson, City Clerk 13
Resolution No.
Page 4
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
DaleC/Housing/Millenninum_sahamMH KCC_Reso.ICFA.Marl
14
ASSOCIATE MEMBERSHIP AGREEMENT
by and between the
INDEPENDENT CITIES FINANCE AUTHORITY
and the
CITY OF PALM SPRINGS, CALIFORNIA
THIS ASSOCIATE MEMBERSHIP AGREEMENT, dated as of , 2012,
by and between THE INDEPENDENT CITIES FINANCE AUTHORITY (the "Authority") and
the CITY OF PALM SPRINGS, a municipal corporation and city duly organized and existing
under the laws of the State of California(the"City");
WITNESSETH:
WHEREAS, certain cities of the State of California (collectively, the "Members") have
entered into a Joint Powers Agreement Creating the Independent Cities Finance Authority (the
"Agreement'), establishing the Authority and prescribing its purposes and powers, and
providing, among other things, for associate members of the Authority (an "Associate
Member");
WHEREAS, the Authority has been formed for the purpose, among others, of assisting its
Members and Associate Members in the raising of capital to finance the capital improvement
needs of Local Agencies (as defined in the Joint Powers Agreement), to provide for home
mortgage financing with respect to those Members or Associate Members that are either a city or
a county of the State of California, to provide financing in connection with the improvement,
construction, acquisition, creation, rehabilitation and preservation of affordable housing within
the boundaries of the Members and Associate Members, and to provide financing in accordance
with the provisions of applicable law in connection with other projects and programs that are in
the public interest and which benefit Members and Associate Members including making loans
to tax-exempt organizations from the proceeds of mortgage revenue bonds to finance the
acquisition of multi-family rental housing, including mobilehome parks, under the provisions of
Chapter 8 of Part 5 of Division 31 (commencing with Section 52100) of the Health and Safety
Code (the"Nonprofit Financing Law");
WHEREAS, the City desires to become an Associate Member of the Authority;
WHEREAS, the Board of Directors of the Authority has determined that the City should
become an Associate Member of the Authority;
NOW, THEREFORE, in consideration of the above premises and of the mutual promises
herein contained, the Authority and the City do hereby agree as follows:
Section 1. Associate Member Status. The City is hereby made an Associate Member of
the Authority for all purposes of the Agreement and the Bylaws of the Authority, the provisions
of which are hereby incorporated herein by reference. From and after the date of execution and
LA#101572 v2 4-
15
delivery of this Associate Membership Agreement by the City and the Authority, the City shall
be and remain an Associate Member of the Authority.
Section 2. Restrictions and Rights of the City. The City shall not have the right, as an
Associate Member of the Authority, to vote on any action taken by the Board of Directors or by
the Authority. In addition,no officer, employee or representative of the City shall have any right
to become an officer or director of the Authority.
Section 3. Effect of Prior Authority Actions. The City hereby agrees to be subject to and
bound by all actions previously taken by the Board of Directors of the Authority to the same
extent as the Members of the Authority are subject to and bound by such actions.
Section 4. No Obligations of the City. The debts, liabilities and obligations of the
Authority shall not be the debts, liabilities and obligations of the City.
Section S. Execution of the Agreement. Execution of this Associate Membership
Agreement shall satisfy the requirements of Article 27 of the Agreement and Article XII of the
Bylaws of the Authority for participation by the City in all programs and other undertakings of
the Authority, including, without limitation, any Home Mortgage Financing Program (as defined
in the Agreement), any financing under the Nonprofit Financing Law, any undertaking to finance
the acquisition, construction, installation and/or equipping of public capital improvements, and
any other financing program.
IN WITNESS WHEREOF, the parties hereto have caused this Associate Membership
Agreement to be executed and attested by their proper officers thereunto duly authorized, on the
day and year first set forth above.
INDEPENDENT CITIES FINANCE
AUTHORITY
By:
Title:
Attest:
Secretary
CITY OF PALM SPRINGS, CALIFORNIA
By:
Title:
Attest:
City Clerk
LA#101572 v2 _2_
16
Resolution No.
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, APPROVING A RELEASE OF
REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS WITH MILLENNIUM
HOUSING CORPORATION, A CALIFORNIA
NONPROFIT PUBLIC BENEFIT CORPORATION, FOR
THE REFINANCING OF A 254-SPACE MOBILE HOME
PARK KNOWN AS THE SAHARA MOBILE HOME
PARK LOCATED AT 1955 SOUTH CAMINO REAL
WHEREAS, the City previously issued its Mobile Home Park Revenue
Bonds (Sahara Mobile Home Park) Series 2002A and its Mobile Home Park
Subordinate Revenue Bonds (Sahara Mobile Home Park) Series 2002B
(collectively, the 'Bonds');
WHEREAS, the City loaned the proceeds of the Bonds to the Borrower
pursuant to a loan agreement dated as of May 1, 2001 (the "Loan Agreement')
among the City, the Trustee and the Borrower to provide financing for a 254-
space mobile home park known as the Sahara Mobile Home Park located on
certain real property in the City of Palm Springs, County of Riverside, California,
more particularly described in Exhibit A attached hereto (the "Project');
WHEREAS, as a condition of the issuance of the Bonds and the loan of
the proceeds thereof to the Borrower, the City required the Borrower to agree to
certain restrictions running with the land as set forth in that certain Regulatory
Agreement and Declaration of Restrictive Covenants, dated as of May 1, 2002,
filed in the records of Riverside County, California on the 6`" day of June, 2002 as
Instrument No. 2002-305969 (the "Regulatory Agreement');
WHEREAS, the Independent Cities Finance Authority ("ICFA") is issuing
its Mobile Home Park Revenue Refunding Bonds (Sahara Mobile Home Park)
Series 2012A, its Mobile Home Park Subordinate Revenue Refunding Bonds
(Sahara Mobile Home Park) Series 2012B and its Mobile Home Park
Subordinate Revenue Refunding Bonds (Sahara Mobile Home Park) Series
2012C (Federally Taxable) (collectively, the "Refunding Bonds") for the purpose
of refunding the outstanding Bonds;
WHEREAS, in connection with the issuance of the Refunding Bonds,
ICFA, the Trustee and the Borrower will enter into a Regulatory Agreement and
Declaration of Restrictive Covenants dated as of May 1, 2012 (the "2012
Regulatory Agreements") pursuant to which the Borrower will agree to restrict the
use of the Projects to ensure that the Projects will be used and operated in
accordance with the Internal Revenue Code of 1986, as amended (the "Code')
and Chapter 8, Part 5 of Division 31 of the California Health and Safety Code
(the "Act');
17
Resolution No
Page 2
WHEREAS, the Borrower has requested and the City and the Trustee
have agreed that the lien and restrictions of the Regulatory Agreement be
released and terminated pursuant to the terms of this Release.
WHEREAS, the City Council of the City has determined that the operation
of the Project by the Owner in accordance with the laws and ordinances of the
City and in accordance with a proposed regulatory agreement to be recorded on
the Project shall help the City satisfy its affordable housing obligations and will
lessen the burden of the City to provide affordable housing for low and very low
income residents of the City; and
NOW, THEREFORE, BE IT RESOLVED, by the City of Palm Springs, as
follows:
1. The above findings are true and correct and are adopted findings of
the City Council of the City of Palm Springs.
2. A Release of Regulatory Agreement and Declaration of Restrictive
Covenants by and between the City of Palm Springs and Millennium
Housing Corporation, a California nonprofit public benefit corporation,
and Union Bank, N.A. a National Banking Association, as Trustee, is
hereby approved.
3. The City Manager is hereby authorized and directed to execute all
documents, related to the Project and the purposes of this Resolution.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS _ DAY OF APRIL, 2012.
David H. Ready, City Manager
ATTEST:
JAMES THOMPSON, CITY CLERK
18
Resolution No
Page 3
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
DaleC/HousinWMillennium_SahamMHPo!_CC_Asgnmt&AsmptinReso.Apr12
19
WHEN RECORDED, RETURN TO:
Fredrick Olsen, Esq.
Ballard Spahr LLP
201 South Main Street, Suite 800
Salt Lake City, UT 84111-2221
RELEASE OF REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS
THIS RELEASE OF REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS (this "Release") is made on this [_--] day of May, 2012 by and
among UNION BANK, N.A. (formerly known as Union Bank of California, N.A.), as trustee
(the "Trustee"), MILLENNIUM HOUSING CORPORATION, a California nonprofit public
benefit corporation (the "Borrower"), and the CITY OF PALM SPRINGS, a chartered city and
municipal corporation duly organized and existing under the laws of the State of California and
the Charter of the City of Palm Springs (the"City").
WITNESSETH:
WHEREAS, the City previously issued its Mobile Home Park Revenue Bonds (Sahara
Mobile Home Park) Series 2002A and its Mobile Home Park Subordinate Revenue Bonds
(Sahara Mobile Home Park) Series 2002B (collectively,the"Bonds");
WHEREAS, the City loaned the proceeds of the Bonds to the Borrower pursuant to a
loan agreement dated as of May 1, 2001 (the "Loan Agreement') among the City, the Trustee
and the Borrower to provide financing for a 254-space mobile home park known as the Sahara
Mobile Home Park located on certain real property in the City of Palm Springs, County of
Riverside, California, more particularly described in Exhibit A attached hereto (the"Project');
WHEREAS, as a condition of the issuance of the Bonds and the loan of the proceeds
thereof to the Borrower, the City required the Borrower to agree to certain restrictions running
with the land as set forth in that certain Regulatory Agreement and Declaration of Restrictive
Covenants, dated as of May 1, 2002, filed in the records of Riverside County, California on the
61h day of June, 2002 as Instrument No. 2002-305969 (the"Regulatory Agreement");
WHEREAS, the Independent Cities Finance Authority ("ICFA") is issuing its Mobile
Home Park Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012A, its Mobile
Home Park Subordinate Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012B
and its Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara Mobile Home Park)
Series 2012C (Federally Taxable) (collectively, the "Refunding Bonds") for the purpose of
refunding the outstanding Bonds;
WHEREAS, in connection with the issuance of the Refunding Bonds, ICFA, the Trustee
and the Borrower will enter into a Regulatory Agreement and Declaration of Restrictive
Covenants dated as of May 1, 2012 (the "2012 Regulatory Agreements") pursuant to which the
Borrower will agree to restrict the use of the Projects to ensure that the Projects will be used and
20
DMWEST#8921806 v1
operated in accordance with the Internal Revenue Code of 1986, as amended (the "Code") and
Chapter 8, Part 5 of Division 31 of the California Health and Safety Code (the "Act');
WHEREAS, the Borrower has requested and the City and the Trustee have agreed that
the lien and restrictions of the Regulatory Agreement be released and terminated pursuant to the
terms of this Release.
NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree and consent as follows:
1. The lien and restrictions of the Regulatory Agreement on the Project are hereby
released and the Regulatory Agreement is hereby terminated.
2. This Release may be executed in any number of counterparts, each of which shall
be deemed an original and all of which, taken together, shall constitute one instrument.
3. This Release shall be governed by the laws of the State of California.
21
DMWEST#8921806 v1 2
IN WITNESS WHEREOF, the parties have executed this Release as of the date
first above written.
CITY OF PALM SPRINGS
By:
Name:
Title:
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
DMWEST#8921806 v1 S-1
MILLENNIUM HOUSING
CORPORATION,
a California nonprofit public benefit
corporation
By:
Name:
Title:
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
23
DMWEST#8921806 v1 S-2
UNION BANK, N.A., as Trustee
By:
Authorized Officer
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
24
DMWEST#8921806 v1 S-3
EXHIBIT A
LEGAL DESCRIPTION OF LAND
The real property is situated in the City of Palm Springs, County of
Riverside, State of California, and is described as follows:
THE WEST HALF OF THE SOUTHEAST QUARTER OF THE NORTHWEST
QUARTER AND THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER
OF THE NORTHWEST QUARTER OF SECTION 26, TOWNSHIP 4 SOUTH,
RANGE 4 EAST, SAN BERNARDINO BASE AND MERIDIAN IN THE CITY OF
PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA.
DMWEST#8921806 v1 A-1
05
DIRECTION TO REDEEM BONDS
Union Bank,N.A.
120 S. San Pedro Street, 4th Floor
Los Angeles, California 90012
Attention: Corporate Trust Department
RE: City of Palm Springs Mobile Home Park Revenue Bonds (Sahara Mobile
Home Park) Series 2002A and Mobile Home Park Subordinate Revenue
Bonds (Sahara Mobile Home Park) Series 2002B (together, the"Bonds")
Reference is made to that certain Trust Indenture dated as of May 1, 2002 (the
"Indenture") between the City of Palm Springs and Union Bank, N.A. (formerly known
as Union Bank of California, N.A.) (the "Trustee"). Capitalized terms not otherwise
defined herein have the meanings set forth in the Indenture.
Pursuant to Section 4.1(b) of the Indenture, the Borrower hereby directs the
Trustee to cause the Bonds to be redeemed in whole on May 24, 2012 from funds
deposited by the Borrower with the Trustee on or prior to May 23, 2012 (the "Defeasance
Date"). The Trustee is hereby directed to give conditional notice of such redemption in
accordance with Section 4.5 of the Indenture.
Upon receipt of the principal of and interest on and Redemption Price of the
Bonds on the Defeasance Date, the Trustee is hereby directed to take such actions as may
be necessary to defease the Bonds in accordance with Section 13.1 of the Indenture.
DMWEST#8920978 vt 26
Dated: April , 2012.
Millennium Housing Corporation,
a California nonprofit public benefit
corporation
By:
George R. Turk,Jr.,President
(Direction to Redeem Bonds—Sahara Mobile Home Park)
S-1 Z 1
The undersigned hereby acknowledges and consents to the Direction to Redeem
Bonds.
Dated: April_ 2012.
City of Palm Springs
By:
Name:
Title:
(Direction to Redeem Bonds—Sahara Mobile Home Park)
S_2 28
Resolution No.
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, CONSENTING TO A
CHANGE IN OWNERSHIP AND APPROVAL OF AN
ASSIGNMENT AND ASSUMPTION AGREEMENT
BY AND AMONG MILLENNIUM HOUSING
CORPORATION, A CALIFORNIA NONPROFIT
PUBLIC BENEFIT CORPORATION, MILLENNIUM
HOUSING LLC, A CALFORNIA LIMITED LIABILITY
COMPANY, AND THE CITY OF PALM SPRINGS AS
SUCCESSOR HOUSING AGENCY AND UNION
BANK, N.A., A NATIONAL BANKING ASSOCIATION
FOR THE REFINANCING OF A 254-SPACE MOBILE
HOME PARK KNOWN AS THE SAHARA MOBILE
HOME PARK LOCATED AT 1955 SOUTH CAMINO
REAL.
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 et. seq. of the California Health and Safety Code;
and
WHEREAS, AB X1 26 was signed by the Governor of California on June
29, 2011, making certain changes to the Redevelopment Law, including adding
Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with
Section 34170) to Division 24 of the California Health and Safety Code,
suspending most redevelopment agency activities and, among other things,
prohibiting redevelopment agencies from incurring indebtedness or entering into
or modifying contracts; and
WHEREAS, effective February 1, 2012, all existing redevelopment
agencies and redevelopment agency components of community development
agencies were dissolved; however, except for those provisions of the
Redevelopment Law that are repealed, restricted, or revised pursuant to AB X1
26, all authority, rights, powers, duties and obligations previously vested with the
former redevelopment agencies under the Redevelopment Law, are vested in the
successor agencies;
WHEREAS, at a meeting of January 4, 2012, the City of Palm Springs
took action to designate itself as the Successor Agency and the Housing
Successor Agency to the Community Redevelopment Agency, as provided in
California Health and Safety Code §§ 34173 and 34176; and
WHEREAS, pursuant to Cal. Health & Safety Code §34176, the City
expressed its intention to retain the housing assets and functions previously
performed by the Palm Springs Community Redevelopment Agency and assume
all rights, powers, assets, liabilities, duties, and obligations associated with the
housing activities of the Palm Springs Community Redevelopment Agency; and
29
Resolution No
Page 2
WHEREAS, in 2002 and 2007, the Agency approved loans at the time of
bond issuance of the project to Millennium Housing Corporation, a California
Nonprofit Benefit Corporation (the "Assignor"), subject to certain covenants; and
WHEREAS, the Assignor has requested the City approve the assignment
and assumption by Millennium Housing, LLC ("Assignee") of Assignor's right, title
and interest as the borrower of financial assistance in the initial aggregate
principal amount of $850,000 (the "Loan") from the City as the successor agency
of the Community Redevelopment Agency of the City of Palm Springs, and all of
Assignor's right, title and interest to certain assigned documents related to the
Loan.
WHEREAS, the Assignee still agrees to restrict, though an existing
Agency Regulatory Agreement, the rents on 50% of the existing spaces (254) to
levels affordable to low- and very-low income residents, of which 25% shall be
available for persons of very-low income (50% of Area Median Income) and 25%
shall be available for persons of low income (80% of Area Median Income) for a
the remaining term; and
NOW, THEREFORE, BE IT RESOLVED, by the City of Palm Springs, in
its capacity as the Successor Housing Agency to the Community Redevelopment
Agency, as follows:
1. The above findings are true and correct and are adopted findings of
the City Council of the City of Palm Springs.
2. An Assignment and Assumption Agreement by and between the City of
Palm Springs and Millennium Housing Corporation, a California
nonprofit public benefit corporation, Millennium Housing, LLC, a
California Limited Liability Corporation, and Union Bank, N.A. a
National Banking Association, as Trustee, is hereby approved.
3. The City Manager is hereby authorized and directed, on behalf of the
City in its capacity as the Successor Housing Agency to the
Community Redevelopment Agency, to execute all documents, related
to the Project and the purposes of this Resolution.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS_ DAY OF APRIL, 2012.
David H. Ready, City Manager
ATTEST:
JAMES THOMPSON, CITY CLERK
30
Resolution No
Page 3
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
DaleC/Housing/Millennium_Saha2MHPk_CC_Asgnmt&AsmptinReso.Apri 2
31
RECORDING REQUESTED BY AND )
WHEN RECORDED MAIL TO: )
Fredrick H. Olsen, Esq. )
Ballard Spahr LLP )
201 S. Main St., Suite 800 )
Salt Lake City, UT 84111-2221 )
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement")
is made this 1st day of May, 2012, by and among Millennium Housing Corporation, a
California nonprofit public benefit corporation (the "Assignor"), Millennium Housing
LLC, a California limited liability company (together with its successors and assigns,
"Assignee") and the City of Palm Springs (the "City"), as the successor agency of The
Community Redevelopment Agency of the City of Palm Springs.
1. PuWose. Pursuant to this Agreement, the Assignor assigns and the
Assignee assumes (i) all of Assignor's right, title and interest as the borrower of financial
assistance in the initial aggregate principal amount of $850,000 (the "Loan") from the
City as the successor agency of The Community Redevelopment Agency of the City of
Palm Springs, and (ii) all of Assignor's right, title and interest to certain assigned
documents related to the Loan listed on Exhibit A attached hereto.
2. Assignment and Assumption. Assignor hereby assigns to Assignee all of
Assignor's right, title and interest: (i) with respect to the Loan, and (ii) in and to the
agreements listed on Exhibit A attached hereto (the "Assigned Agreements"). Assignee
hereby assumes any and all obligations of Assignor under the Assigned Agreements.
3. Representations and Warranties. Assignor represents and warrants that it is
duly authorized to execute and deliver this Agreement, that all necessary consents have
been obtained, that this Agreement is the valid, binding and legally enforceable
obligation of Assignor, that Assignor has not previously assigned any of its rights in the
Assigned Agreements, that the Assigned Agreements remain in full force and effect, and
that no party is currently in default under any Assigned Agreement.
4. Miscellaneous. This Agreement shall be construed under the law of the
State of California determined without reference to principles of conflicts of law. This
Agreement may not be amended except in a writing signed by all parties. This Agreement
may be executed in counterparts, all of which taken together shall constitute one and the
same instrument.
32
DMWEST#8921953 v1
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Agreement as of the date and year first above written.
WITNESS:
MILLENNIUM HOUSING
CORPORATION, a California nonprofit
public benefit corporation
By:
Name:
Title:
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
(Assignment and Assumption Agreement— Sahara Mobile Home Park)
s_1 33
WITNESS:
MILLENNIUM HOUSING LLC,
a California limited liability company
By: Millennium Housing Corporation, a
California nonprofit public benefit
corporation, its Sole Member
By:
Name:
Title:
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
(Assignment and Assumption Agreement— Sahara Mobile Home Park)
s-2
34
WITNESS:
CITY OF PALM SPRINGS
By:
Name:
Title:
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On May _, 2012, before me, a Notary
Public, personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
(Assignment and Assumption Agreement— Sahara Mobile Home Park)
35
S-3
EXHIBIT A
1. Deed of Trust with Assignment of Rents and Rider Attached Hereto Containing
Terms Including Security Agreement and Fixture Filing dated June 5, 2002, from
Millennium Housing Corporation, to First American Title Insurance Company for
the benefit of the City of Palm Springs as the successor agency of the former The
Community Redevelopment Agency of the City of Palm Springs, securing
indebtedness of $400,000.00, recorded June 6, 2002 as Instrument No. 2002-
305973.
2. Agency Note in the original principal sum of$400,000.00 dated June 5, 2002, by
Millennium Housing Corporation, a California nonprofit public benefit
corporation in favor of the City of Palm Springs (the "City"), as the successor
agency of the former The Community Redevelopment Agency of the City of Palm
Springs.
3. UCC Financing Statement between Millennium Housing Corporation and the City
of Palm Springs (the "City"), as the successor agency of the former The
Community Redevelopment Agency of the City of Palm Springs, Secured Party,
recorded June 6, 2002, as Instrument No. 2002-305974.
4. Owner Participation Agreement (Sahara Mobilehome Park) dated June 5, 2002 by
and between the City of Palm Springs (the "City"), as the successor agency of the
former The Community Redevelopment Agency of the City of Palm Springs and
Millennium Housing Corporation as amended by the First Amendment to the
Owner Participation Agreement Between The Community Redevelopment
Agency of the City of Palm Springs and Millennium Housing Corporation dated
February 20, 2007.
4. Agreement Containing Covenants dated June 5, 2002 by and between the City of
Palm Springs (the "City"), as the successor agency of the former The Community
Redevelopment Agency of the City of Palm Springs and Millennium Housing
Corporation recorded June 6, 2002, as Instrument No. 2002-305972.
5. Any and all other documents, instruments, opinions, rights and privileges granted
or assigned to or inuring to the benefit of Assignor relating to the Note now or in
the future.
36
DMWEST#8921953 v1 A-1
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING, AUTHORIZING, AND
DIRECTING EXECUTION OF A SUBORDINATION
AGREEMENT WITH RESPECT TO CERTAIN LOANS
PREVIOUSLY MADE BY THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS AUTHORITY TO ASSIST IN FINANCING THE
REHABILITATION OF THE SAHARA MOBILE HOME PARK
LOCATED AT 1955 SOUTH CAMINO REAL
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 et. seq. of the California Health and Safety Code; and
WHEREAS, AB X1 26 was signed by the Governor of California on June 29,
2011, making certain changes to the Redevelopment Law, including adding Part 1.8
(commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to
Division 24 of the California Health and Safety Code, suspending most redevelopment
agency activities and, among other things, prohibiting redevelopment agencies from
incurring indebtedness or entering into or modifying contracts; and
WHEREAS, effective February 1, 2012, all existing redevelopment agencies and
redevelopment agency components of community development agencies were
dissolved; however, except for those provisions of the Redevelopment Law that are
repealed, restricted, or revised pursuant to AB X1 26, all authority, rights, powers, duties
and obligations previously vested with the former redevelopment agencies under the
Redevelopment Law, are vested in the successor agencies;
WHEREAS, at a meeting of January 4, 2012, the City of Palm Springs took
action to designate itself as the Successor Agency and the Housing Successor Agency
to the Community Redevelopment Agency, as provided in California Health and Safety
Code §§ 34173 and 34176; and
WHEREAS, pursuant to Cal. Health & Safety Code §34176, the City expressed
its intention to retain the housing assets and functions previously performed by the Palm
Springs Community Redevelopment Agency and assume all rights, powers, assets,
liabilities, duties, and obligations associated with the housing activities of the Palm
Springs Community Redevelopment Agency; and
WHEREAS, the City of Palm Springs (the "City") previously issued its Mobile
Home Park Revenue Bonds (Sahara Mobile Home Park) Series 2002A and its Mobile
Home Park Subordinate Revenue Bonds (Sahara Mobile Home Park) Series 2002B
(together, the "Prior Bonds") pursuant to an Indenture of Trust dated as of May 1, 2002
(the "Prior Indenture") between the City and Union Bank, N.A. (formerly known as Union
Bank of California, N.A.), in such capacity (the "Prior Trustee"), and loaned the
proceeds of the Prior Bonds (the "Prior Loan") to Millennium Housing Corporation, a
California nonprofit public benefit corporation (the "Prior Borrower'), in order to provide
DMWEST#8871408v1 37
financing with respect to the acquisition and rehabilitation of the Sahara Mobile Home
Park (the "Project") located in the City; and
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs
(the "Agency') previously entered into an Owner Participation Agreement dated June 5,
2002, as amended by a First Amendment to the Owner Participation Agreement dated
February 20, 2007 (together, the "OPA"), with the Prior Borrower pursuant to which the
Agency provided an initial loan in the amount of $400,000 and a subsequent loan in the
amount of $450,00 (together, the "Agency Loan") to provide additional financing with
respect to the rehabilitation of the Project; and
WHEREAS, the Agency Loan is evidenced by certain promissory notes of the
Prior Borrower (the "Agency Notes") and is secured by a Deed of Trust with Assignment
of Rents and Rider attached thereto containing terms including Security Agreement and
Fixture Filing dated June 5, 2002 (the "Agency Mortgage") encumbering the Project;
and
WHEREAS, as a condition of the OPA, the Borrower also entered into an
Agreement Containing Covenants dated June 5, 2002 (the 'Restrictive Covenant')
encumbering the Project; and
WHEREAS, the Independent Cities Finance Authority, a joint powers authority
organized and existing under the laws of the State of California (the "Authority"),
proposes to issue its Mobile Home Park Revenue Refunding Bonds (Sahara Mobile
Home Park) Series 2012A (the "Series A Bonds"), its Mobile Home Park Subordinate
Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012B (the "Series B
Bonds) and its Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara
Mobile Home Park) Series 2012C (Federally Taxable) (the "Series C Bonds" and
together with the Series A Bonds and the Series B Bonds, the `Bonds"); and
WHEREAS, Millennium Housing LLC, a California limited liability company (the
"Owner"), has requested that the Authority issue and sell the Bonds in an aggregate
principal amount of not to exceed $15,500,000 to (i) refund the Prior Bonds, (ii) finance
additional renovations and improvements to the Project and (iii) finance certain costs of
issuing the Bonds; and
WHEREAS, in order to facilitate the issuance and sale of the Bonds, the Owner
has requested that the City, as the successor to the Agency, agree to subordinate the
Agency Loan, the OPA, the Agency Note, the Agency Mortgage and the Restrictive
Covenant as set forth in a Subordination Agreement (the "Subordination Agreement") to
be entered into with Union Bank, N.A., as trustee; and
WHEREAS, there is now before this City Council (the "City Council") a form of
the Subordination Agreement; and
WHEREAS, the City has determined that the issuance of the Bonds to refinance
the Prior Bonds and to finance additional renovations to the Project will benefit the
DMWEST#8871408 v1 2 38
tenants residing therein and will benefit the City by improving the affordable housing
available within the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL, AS
FOLLOWS:
Section 1. The City Council hereby approves the Subordination Agreement, in
substantially the form on file with the City Clerk, with such changes as are not
inconsistent with the purposes of this Resolution. The Mayor, City Manager, City Clerk,
and any other proper officers and officials of the City are hereby authorized to execute
the same on behalf of the City. The Mayor, City Manager, City Clerk, and any other
proper officers and officials of the City are hereby authorized and directed to take all
steps on behalf of the City to perform and discharge the obligations of the City under
said instrument.
Section 2. The adoption of this Resolution shall not obligate the City or any
department thereof to (i) provide any additional financing with respect to the Project or
(ii) approve any application or request for or take any other action in connection with
any planning approval, permit or other action necessary for the operation of the Project.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS DAY OF APRIL, 2012.
David H. Ready, City Manager
ATTEST:
JAMES THOMPSON, CITY CLERK
DMWEST#8871408 A 3 39
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. _ is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
DMWEST#8871408 v1 4 40
RECORDING REQUESTED BY AND )
WHEN RECORDED MAIL TO: )
Fredrick H. Olsen, Esq. )
Ballard Spahr LLP )
201 S. Main St., Suite 800 )
Salt Lake City, UT 84111-2221 )
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into as of the
day of May, 2012, by and among (i) UNION BANK, N.A., a national banking
association organized and existing under the laws of the United States, in its capacity as trustee
under the Indenture hereinafter defined (in such capacity "Senior Mortgagee"), and (ii) the
CITY OF PALM SPRINGS, a municipal corporation (the "City"), as successor to the
Community Redevelopment Agency of the City of Palm Springs (the "Agency" and, together
with the City, the"Subordinate Mortgagee").
RECITALS
A. Millennium Housing, LLC, a California limited liability company (the
"Borrower"), is the owner of certain land located in the City, described in Exhibit A hereto (the
"Land"). The Land is improved with a mobile home park project and related facilities (the
"Improvements").
B. The City previously issued its Mobile Home Park Revenue Bonds (Sahara Mobile
Home Park) Series 2002A and its Mobile Home Park Subordinate Revenue Bonds (Sahara
Mobile Home Park) Series 2002B (together, the "Prior Bonds") pursuant to an Indenture of
Trust dated as of May 1, 2002 (the "Prior Indenture") between the City and Union Bank, N.A.
(formerly known as Union Bank of California, N.A.), in such capacity (the "Prior Trustee"),
and loaned the proceeds of the Prior Bonds (the "Prior Loan") to Millennium Housing
Corporation, a California nonprofit public benefit corporation (the "Prior Borrower"), in order
to provide financing with respect to the acquisition and rehabilitation of the Land and the
Improvements.
C. The Independent Cities Finance Authority (the "Authority") has issued and sold
its $ Mobile Home Park Revenue Refunding Bonds (Sahara Mobile Home Park)
Series 2012A (the "Series A Bonds"), its $ Mobile Home Park Subordinate
Revenue Refunding Bonds (Sahara Mobile Home Park) Series 2012B (the "Series B Bonds"),
and its $ Mobile Home Park Subordinate Revenue Refunding Bonds (Sahara Mobile
Home Park) Series 2012C (Federally Taxable) (the "Series C Bonds" and, together with the
Series A Bonds and the Series B Bonds, the "Bonds") pursuant to an Indenture of Trust dated as
of May 1, 2012 (the "Indenture") between the Authority and the Senior Mortgagee, as trustee
thereunder. Proceeds of the Bonds are being loaned (the "Loan") by the Authority to the
Borrower upon the terms and conditions of a certain Loan Agreement dated as of May 1, 2012
among the Authority, the Senior Mortgagee and the Borrower (the "Loan Agreement") for the
41
DMWEST#8895317 A
purpose of refinancing the Prior Loan and refunding the Prior Bonds, financing certain additional
rehabilitation and improvements to the Project, and funding certain funds and accounts in the
Indenture, all as described therein. The Loan is further evidenced by a Note from the Borrower
dated May_, 2012 (the"Note").
D. The obligations of the Borrower under the Loan Agreement and the Note will be
secured by a Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement
and Fixture Filing dated as of May 1, 2012 (the "Senior Mortgage") encumbering the Land,
Improvements and other Collateral (as defined in the Senior Mortgage). The Land,
Improvements and Collateral are collectively referred to herein as the"Mortgaged Property."
E. The Agency previously entered into an Owner Participation Agreement dated
June 5, 2002, as amended by a First Amendment to the Owner Participation Agreement dated
February 20, 2007 (together, the "Subordinate Loan Agreement"), with the Prior Borrower,
pursuant to which the Agency provided an initial loan in the amount of $400,000 and a
subsequent loan in the amount of$450,00 (together, the"Subordinate Loan"). The Subordinate
Loan from the Agency is secured by a Deed of Trust with Assignment of Rents and Rider
attached thereto containing terms including Security Agreement and Fixture Filing dated June 5,
2002 (the "Subordinate Mortgage") encumbering the Land and Improvements. [IS THERE
ONLY ONE DEED SECURING BOTH LOANS?] As a condition of the Subordinate Loan
Agreement, the Borrower entered into an Agreement Containing Covenants dated June 5, 2002
(the "Restrictive Covenant"). On April , 2012, the City(as successor to the Agency) agreed
to subordinate the Subordinate Loan Agreement, the Subordinate Mortgage and the Restrictive
Covenant and approved this Agreement.
F. The Senior Mortgage is intended to be recorded in the Official Records
("Recording Offices") of Riverside County, California.
G. The execution and delivery of this Agreement is a condition of the Authority's
issuing the Bonds.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. The following terms, when used in this Agreement (including,
as appropriate, when used in the above recitals), shall have the following meanings.
(a) The terms "Impositions", "Leases" and "Rents", as well as any term
used in this Agreement and not otherwise defined in this Agreement, shall have the
meanings given to those terms in the Senior Mortgage.
(b) `Bankruptcy Proceeding" means any bankruptcy, reorganization,
insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment
for the benefit of creditors, or custodianship action or proceeding under any federal or
state law with respect to the Borrower, any guarantor of any of the Senior Indebtedness,
any of their respective properties, or any of their respective partners, members, officers,
directors, or shareholders.
42
DMWEST#8895317 v1 2
(c) "Borrower" means all persons or entities identified as `Borrower" in the
Paragraph A of the Recitals to this Agreement, together with their successors and assigns,
and any other person or entity who acquires title to the Land and Improvements after the
date of this Agreement; provided that the term `Borrower" shall not include the Senior
Mortgagee in the event that the Senior Mortgagee may acquire title to the Land and
Improvements.
(d) "Casualty" means the occurrence of damage to or loss of any of the
Mortgaged Property by fire or other casualty.
(e) "Condemnation" means any proceeding or action commenced for the
taking of the Mortgaged Property, or any part thereof or interest therein, for public or
quasi public use under the power of eminent domain, condemnation or otherwise, or if
the same be taken or damaged by reason of any public improvement or condemnation
proceeding, or in any other manner.
(f) "Enforcement Action" means the acceleration of all or any part of the
Subordinate Indebtedness, the advertising of or commencement of any foreclosure or
trustee's sale proceedings, the exercise of any power of sale, the acceptance of a deed or
assignment in lieu of foreclosure or sale, the collecting of Rents, the obtaining of or
seeking of the appointment of a receiver, the seeking of default interest, the taking of
possession or control of any of the Mortgaged Property, the commencement of any suit or
other legal, administrative, or arbitration proceeding based upon the Subordinate Note or
any other of the Subordinate Loan Documents, the exercising of any banker's lien or
rights of set-off or recoupment, or the taking of any other enforcement action against the
Borrower, any other party liable for any of the Subordinate Indebtedness or obligated
under any of the Subordinate Loan Documents, or the Mortgaged Property.
(g) "Enforcement Action Notice" means a written notice from the
Subordinate Mortgagee to the Senior Mortgagee, given following a Subordinate
Mortgage Default and the expiration of any notice or cure periods provided for such
Subordinate Mortgage Default in the Subordinate Loan Documents, setting forth in
reasonable detail the Enforcement Action proposed to be taken by the Subordinate
Mortgagee.
(h) "Loss Proceeds" means all monies received or to be received under any
insurance policy, from any condemning authority, or from any other source, as a result or
any Condemnation or Casualty.
(i) "Senior Indebtedness" means all sums evidenced or secured or
guaranteed by, or otherwise due and payable under or pursuant to, the Senior Loan
Documents (except sums, if any, due and payable to the Subordinate Mortgagee
thereunder).
0) "Senior Loan Documents" means the Indenture, the Loan Agreement,
the Senior Mortgage, the Note, Regulatory Agreement and Declaration of Restrictive
Covenants, dated as of May 1, 2012, by and among the Authority, the Senior Mortgagee
and the Borrower (the "Regulatory Agreement") and all other documents at any time
DMWEST#8895317 v1 3 43
evidencing, securing, guaranteeing, or otherwise delivered in connection with the Senior
Indebtedness, as the same may be amended from time to time.
(k) "Senior Mortgage Default" means any act, failure to act, event,
condition, or occurrence which constitutes, or which with the giving of notice or the
passage of time, or both, would constitute, an "Default' as defined in the Senior
Mortgage.
(1) "Senior Mortgagee" means the entity named as such in the first
paragraph of this Agreement and any other person or entity who subsequently becomes
the beneficiary under the Senior Mortgage.
(m) "Subordinate Indebtedness" means the Subordinate Loan and all sums
evidenced or secured or guaranteed by, or otherwise due and payable to the Subordinate
Mortgagee pursuant to, the Subordinate Loan Documents.
(n) "Subordinate Loan Documents" means the Subordinate Loan
Agreement, Subordinate Mortgage, any promissory note and/or other evidence of
Subordinate Indebtedness referred to in the Subordinate Loan Agreement and/or the
Subordinate Mortgage and any replacement thereof (the "Subordinate Note"), the
Restrictive Covenant, and all other documents at any time evidencing, securing,
guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness, as
the same may be amended from time to time.
(o) "Subordinate Mortgage Default' means any act, failure to act, event,
condition, or occurrence which allows (but for any contrary provision of this Agreement),
or which with the giving of notice or the passage of time, or both, would allow (but for
any contrary provision of this Agreement), the Subordinate Mortgagee to take an
Enforcement Action.
(p) "Subordinate Mortgagee" means the person or entity named as such in
the first paragraph of this Agreement and any other person or entity who becomes the
legal holder of the Subordinate Note after the date of this Agreement.
(q) "Surplus Cash" means, with respect to any period, any revenues of the
Borrower remaining after paying, or setting aside funds for paying, the following: (i) all
sums due or currently required to be paid under the Loan Agreement (including but not
limited to any deposits to a principal reserve fund), (ii) all sums due or currently required
to be paid under any of the other Senior Loan Documents (including but not limited to
any Imposition deposits required under the Senior Mortgage), (iii) all deposits to any
replacement reserve, completion/repair reserve or other reserve or escrow required by the
Senior Loan Documents that are due or currently payable, (iv) all fees due or currently
payable by the Borrower in connection with the Bonds, including but not limited to fees
and expenses of the Authority, the bond trustee and any rebate analyst, and (v) all
reasonable operating expenses of the Mortgaged Property, including but not limited to
real estate taxes, insurance premiums, utilities, building maintenance and repairs,
management fees,payroll, administrative expenses, legal expenses and audit expenses.
44
DMWEST#8895317 v1 4
2. SUBORDINATION OF SUBORDINATE INDEBTEDNESS.
(a) The Subordinate Indebtedness is and shall at all times continue to be
subject and subordinate in right of payment to the prior payment in full of the Senior
Indebtedness.
(b) Until the occurrence of a Senior Mortgage Default, the Subordinate
Mortgagee shall be entitled to retain for its own account all payments made on account of
the principal of and interest on the Subordinate Indebtedness in accordance with the
requirements of the Subordinate Loan Documents; provided no such payment is made
more than ten (10) days in advance of the due date thereof, and provided further that no
such payment exceeds then available Surplus Cash. However, immediately upon the
Subordinate Mortgagee's receipt of notice or actual knowledge of a Senior Mortgage
Default, the Subordinate Mortgagee will not accept any payments on account of the
Subordinate Indebtedness, and the provisions of Section 2(c) of this Agreement shall
apply. The Subordinate Mortgagee acknowledges that a Subordinate Mortgage Default
constitutes a Senior Mortgage Default. Accordingly, upon the occurrence of a
Subordinate Mortgage Default, the Subordinate Mortgagee shall be deemed to have
actual knowledge of a Senior Mortgage Default.
(c) If(i) the Subordinate Mortgagee receives any payment, property, or asset
of any kind or in any form on account of the Subordinate Indebtedness (including,
without limitation, any proceeds from any Enforcement Action) after a Senior Mortgage
Default of which the Subordinate Mortgagee has actual knowledge or has been given
notice, or (ii) the Subordinate Mortgagee receives, voluntarily or involuntarily, by
operation of law or otherwise, any payment, property, or asset in or in connection with
any Bankruptcy Proceeding, such payment,property, or asset will be received and held in
trust for the Senior Mortgagee. The Subordinate Mortgagee will promptly remit, in kind
and properly endorsed as necessary, all such payments, properties, and assets to the
Senior Mortgagee. The Senior Mortgagee shall apply any payment, asset, or property so
received from the Subordinate Mortgagee to the Senior Indebtedness in such order,
amount (with respect to any asset or property other than immediately available funds),
and manner as the Senior Mortgagee shall determine in its sole and absolute discretion.
The Subordinate Mortgagee hereby designates and appoints, irrevocably and coupled
with an interest, the Senior Mortgagee (and all persons and entities designated by the
Senior Mortgagee) as the Subordinate Mortgagee's true and lawful attorney-in-fact with
power to endorse the name of the Subordinate Mortgagee upon any check or other
instrument and to take any action necessary to collect any payment, property, or asset
referred to in, or otherwise to effectuate the provisions of, this Section 2(c).
(d) Without limiting the complete subordination of the Subordinate
Indebtedness to the payment in full of the Senior Indebtedness, in any Bankruptcy
Proceeding, upon any payment or distribution (whether in cash, property, securities, or
otherwise) to creditors (i) the Senior Indebtedness shall first be paid in full in cash before
the Subordinate Mortgagee shall be entitled to receive any payment or other distribution
on account of or in respect of the Subordinate Indebtedness, and (ii) until all of the Senior
Indebtedness is paid in full in cash, any payment or distribution to which the Subordinate
45
DMWEST#8895317 v1 5
Mortgagee would be entitled but for this Agreement (whether in cash, property, or other
assets) shall be made to the Senior Mortgagee.
(e) The subordination of the Subordinate Indebtedness shall continue in the
event that any payment under the Senior Loan Documents (whether by or on behalf of the
Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) is
for any reason repaid or returned to the Borrower or its insolvent estate, or avoided, set
aside or required to be paid to the Borrower, a trustee, receiver or other similar party
under any bankruptcy, insolvency, receivership or similar law. In such event, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding to the extent of any repayment, return, or other action, as if
such payment on account of the Senior Indebtedness had not been made.
3. SUBORDINATION OF SUBORDINATE LOAN DOCUMENTS.
(a) The Subordinate Mortgage and each of the other Subordinate Loan
Documents are, and shall at all times remain, subject and subordinate in all respects to the
liens, terms, covenants, conditions, operations, and effects of the Senior Mortgage and
each of the other Senior Loan Documents.
(b) The subordination of the Subordinate Loan Documents and of the
Subordinate Indebtedness shall apply and continue notwithstanding(i)the actual date and
time of execution, delivery, recording, filing or perfection of the Senior Mortgage and
other Senior Loan Documents and of the Subordinate Mortgage and other Subordinate
Loan Documents, and (ii) the availability of any collateral to the Senior Mortgagee,
including the availability of any collateral other than the Mortgaged Property.
(c) By reason of, and without in any way limiting, the full subordination of
the Subordinate Indebtedness and the Subordinate Loan Documents provided for in this
Agreement, all rights and claims of the Subordinate Mortgagee under the Subordinate
Mortgage or under the Subordinate Loan Documents in or to the Mortgaged Property or
any portion thereof, the proceeds thereof, the Leases thereof, the Rents, issues and profits
therefrom, and the Loss Proceeds payable with respect thereto, are expressly subject and
subordinate in all respects to the rights and claims of the Senior Mortgagee under the
Senior Loan Documents in and to the Mortgaged Property or any portion thereof, the
proceeds thereof, the Leases thereof, the Rents, issues and profits therefrom, and the Loss
Proceeds payable with respect thereto.
(d) If the Subordinate Mortgagee, by indemnification, subrogation or
otherwise, shall acquire any lien, estate, right or other interest in any of the Mortgaged
Property, that lien, estate, right or other interest shall be fully subject and subordinate to
the receipt by the Senior Mortgagee of payment in full of the Senior Indebtedness, and to
the Senior Loan Documents, to the same extent as the Subordinate Indebtedness and the
Subordinate Loan Documents are subordinate pursuant to this Agreement.
4. ADDITIONAL REPRESENTATIONS AND COVENANTS.
DMWEST#8895317 A 6 46
(a) The Subordinate Mortgagee represents and warrants that (i) the
Subordinate Mortgagee is now the owner and holder of the Subordinate Loan
Documents; (ii) the Subordinate Loan Documents are now in full force and effect; (c) the
Subordinate Loan Documents have not been modified or amended except as set forth
herein; (iv) no Subordinate Mortgage Default has occurred; (v) the original aggregate
principal amount of the Subordinate Indebtedness was $850,000; and (vi) none of the
rights of the Subordinate Mortgagee under any of the Subordinate Loan Documents are
subject to the rights of any third parties, by way of subrogation, indemnification or
otherwise.
(b) Without the prior written consent of the Senior Mortgagee in each
instance, the Subordinate Mortgagee shall not(i) amend, modify, waive, extend, renew or
replace any provision of any of the Subordinate Loan Documents, or (ii) pledge, assign,
transfer, convey, or sell any interest in the Subordinate Indebtedness or any of the
Subordinate Loan Documents; or (iii) accept any payment on account of the Subordinate
Indebtedness other than a regularly scheduled payment of interest or principal and
interest made not earlier than ten (10) days prior to the due date thereof or as expressly
authorized in Section 4(i) and not in excess then available Surplus Cash; or (iv) take any
action which has the effect of increasing the Subordinate Indebtedness, except for
increases in the Subordinate Indebtedness that result from advances made by the
Subordinate Mortgagee to protect the security or lien priority of the Subordinate
Mortgagee under the Subordinate Loan Documents or to cure defaults under the Senior
Loan Documents as authorized in Section 5(b); or (v) appear in, defend or bring any
action to protect the Subordinate Mortgagee's interest in the Mortgaged Property; or (vi)
take any action concerning environmental matters affecting the Mortgaged Property.
(c) The Subordinate Mortgagee shall deliver to the Senior Mortgagee a copy
of each notice of a Subordinate Mortgage Default delivered by the Subordinate
Mortgagee pursuant to the Subordinate Loan Documents or in connection with the
Subordinate Indebtedness, simultaneously with the Subordinate Mortgagee's delivery of
such notice. The Senior Mortgagee shall deliver to the Subordinate Mortgagee a copy of
each notice of a Senior Mortgage Default delivered by the Senior Mortgagee,
simultaneously with the Senior Mortgagee's delivery of such notice. Neither giving nor
failing to give a notice to the Senior Mortgagee or Subordinate Mortgagee pursuant to
this Section 4(c) shall affect the validity of any notice given by the Senior Mortgagee or
Subordinate Mortgagee to the Borrower, as between the Borrower and such of the Senior
Mortgagee or the Subordinate Mortgagee as provided the notice to the Borrower.
(d) Without the prior written consent of the Senior Mortgagee in each
instance, the Subordinate Mortgagee will not commence, or join with any other creditor
in commencing, any Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding,
the Subordinate Mortgagee shall not vote affirmatively in favor of any plan of
reorganization or liquidation unless the Senior Mortgagee has also voted affirmatively in
favor of such plan. In the event of any Bankruptcy Proceeding, the Subordinate
Mortgagee shall not contest the continued accrual of interest on the Senior Indebtedness,
in accordance with and at the rates specified in the Senior Loan Documents, both for
periods before and for periods after the commencement of such Bankruptcy Proceedings.
DMWEST#8895317 v1 7 47
(e) [INTENTIONALLY DELETED]
(f) [INTENTIONALLY DELETED]
(g) In the event of a Condemnation or a Casualty, the following provisions
shall apply:
(i) the rights of the Subordinate Mortgagee (under the Subordinate
Loan Documents or otherwise) to participate in any proceeding or action relating
to a Condemnation or a Casualty, or to participate or join in any settlement of, or
to adjust, any claims resulting from a Condemnation or a Casualty, shall be and
remain subordinate in all respects to the Senior Mortgagee's rights under the
Senior Loan Documents with respect thereto, and the Subordinate Mortgagee
shall be bound by any settlement or adjustment of a claim resulting from a
Condemnation or a Casualty made by the Senior Mortgagee;
(ii) all Loss Proceeds shall be applied either to payment of the costs
and expenses of restoration of the Mortgaged Property or to payment on account
of the Senior Indebtedness, as and in the manner determined by the Senior
Mortgagee in its sole discretion;
(iii) in the event the Senior Mortgagee applies or releases Loss
Proceeds for the purposes of restoration of the Mortgaged Property, the
Subordinate Mortgagee shall release for such purpose all of its right, title and
interest, if any, in and to such Loss Proceeds. If the Senior Mortgagee holds Loss
Proceeds, or monitors the disbursement thereof, the Subordinate Mortgagee shall
not do so. Nothing contained in this Agreement shall be deemed to require the
Senior Mortgagee to act for or on behalf of the Subordinate Mortgagee in
connection with any restoration of the Mortgaged Property or to hold or monitor
any Loss Proceeds in trust for or otherwise on behalf of the Subordinate
Mortgagee, and all or any Loss Proceeds may be commingled with any funds of
the Senior Mortgagee; and
(iv) if the Senior Mortgagee elects to apply Loss Proceeds to payment
on account of the Senior Indebtedness, and if the application of such Loss
Proceeds results in the payment in full of the entire Senior Indebtedness, any
remaining Loss Proceeds held by the Senior Mortgagee shall be paid to the
Subordinate Mortgagee unless another party has asserted a claim to the remaining
Loss Proceeds.
(h) The Subordinate Mortgagee shall enter into recognition and non-
disturbance agreements with any tenants under commercial or retail Leases to whom the
Senior Mortgagee has granted recognition and non-disturbance, on the same terms and
conditions given by the Senior Mortgagee.
(i) Except as provided in this Section 4(i), and regardless of any contrary
provision in the Subordinate Loan Documents, the Subordinate Mortgagee shall not
collect payments for the purpose of escrowing for any cost or expense related to the
48
DMWEST#8895317 v1 8
Mortgaged Property or for any portion of the Subordinate Indebtedness. However, if the
Senior Mortgagee is not collecting escrow payments for one or more Impositions, the
Subordinate Mortgagee may collect escrow payments for such Impositions; provided that
all payments so collected by the Subordinate Mortgagee shall be held in trust by the
Subordinate Mortgagee to be applied only to the payment of such Impositions.
0) Within fifteen (15) days after request by the Senior Mortgagee, the
Subordinate Mortgagee shall furnish the Senior Mortgagee with a statement, duly
acknowledged and certified setting forth the then-current amount and terms of the
Subordinate Indebtedness, that there exists no default under the Subordinate Loan
Documents (or describing any default that does exist), and such other information with
respect to the Subordinate Indebtedness as the Senior Mortgagee may request.
(k) The Senior Mortgagee may waive, postpone, extend, increase, reduce or
otherwise modify any provisions of the Senior Loan Documents without the necessity of
obtaining the consent of or providing notice to the Subordinate Mortgagee, and without
affecting any of the provisions of this Agreement.
5. DEFAULT UNDER LOAN DOCUMENTS.
(a) For a period of ninety (90) days following delivery of an Enforcement
Action Notice given by the Subordinate Mortgagee as a consequence of the Subordinate
Mortgage Default, the Senior Mortgagee shall have the right to cure any Subordinate
Mortgage Default, provided if such Subordinate Mortgage Default is not capable of being
cured within such ninety (90) days period and Senior Mortgagee has commenced and is
diligently pursuing such cure to completion, such additional period of time as may be
required to cure such Subordinate Mortgage Default. The Senior Mortgagee shall not
have any obligation whatsoever to cure any Subordinate Mortgage Default. The Senior
Mortgagee shall not be subrogated to the rights of the Subordinate Mortgagee under the
Subordinate Loan Documents by reason of the Senior Mortgagee having cured any
Subordinate Mortgage Default. However, the Subordinate Mortgagee acknowledges that
all amounts advanced or expended by the Senior Mortgagee in accordance with the Senior
Loan Documents to cure a Subordinate Mortgage Default shall be added to and become a
part of the Senior Indebtedness under the Senior Mortgage and shall be secured by the lien
of,the Senior Mortgage.
(b) The Senior Mortgagee shall deliver to the Subordinate Mortgagee a copy
of each notice of a Senior Mortgage Default delivered by the Senior Mortgagee,
simultaneously with the Senior Mortgagee's delivery of such notice. Failure of the
Senior Mortgagee to send notice to the Subordinate Mortgagee shall not prevent the
exercise of the Senior Mortgagee's rights and remedies under the Senior Mortgage
Documents, subject to the provisions of this Agreement. The Subordinate Mortgagee
shall have the right, but not the obligation, to cure any such Senior Mortgage Default
within 90 days following the date of such notice; provided, however, that the Senior
Mortgagee shall be entitled during such 90-day period to continue to pursue its remedies
under the Senior Mortgage Documents. Subordinate Mortgagee may have up to 90 days
from the date of the notice to cure a non-monetary default if during such 90-day period
DMWEST#8895317 0 9 49
Subordinate Mortgagee keeps current all payments required by the Senior Mortgage
Documents. In the event that such a non-monetary default creates an unacceptable level
of risk relative to the Mortgaged Property, or Senior Mortgagee's secured position
relative to the Mortgaged Property, as determined by Senior Mortgagee in its sole
discretion, then Senior Mortgagee may exercise during such 90-day period all available
rights and remedies to protect and preserve the Mortgaged Property and the rents,
revenues and other proceeds from the Mortgaged Property. All amounts paid by the
Subordinate Mortgagee to the Senior Mortgagee to cure a Senior Mortgage Default shall
be deemed to have been advanced by the Subordinate Mortgagee pursuant to, and shall
be secured by the lien of, the Subordinate Mortgage.
(c) In the event of a Subordinate Mortgage Default, the Subordinate
Mortgagee will not commence any Enforcement Action until after the expiration of a
period of ninety (90) days after the Subordinate Mortgagee has given the Senior
Mortgagee an Enforcement Action Notice with respect to such Enforcement Action,
provided that during such 90 day period, the Subordinate Mortgagee shall have no
obligation to advance any additional principal amounts to Borrower and shall be entitled
to seek specific performance to enforce covenants and agreements of the Borrower
relating to income, rent, or affordability restrictions contained in the Restrictive Covenant
and subject to Senior Mortgagee's right to cure a Subordinate Mortgage Default set forth
in Section 5(a). The Subordinate Mortgagee may not commence any other Enforcement
Action, including but not limited to any foreclosure action under the Subordinate Loan
Documents, until the earlier of (A) the expiration of such ninety (90) day period or; (B)
the delivery by Senior Mortgagee to the Subordinate Mortgagee of the Senior
Mortgagee's written consent to such Enforcement Action by the Subordinate Mortgagee.
The Subordinate Mortgagee acknowledges that the Senior Mortgagee may grant or refuse
consent to the Subordinate Mortgagee's Enforcement Action in the Senior Mortgagee's
sole and absolute discretion, and that such discretion may be exercised in an arbitrary
manner. At the expiration of such ninety (90) day period, subject to Senior Mortgagee's
right to cure set forth in Section 5(a), Subordinate Mortgagee may commence any
Enforcement Action. Any Enforcement Action on the part of the Subordinate Mortgagee
shall be subject to the provisions of this Agreement. The Subordinate Mortgagee
acknowledges that the provisions of this Section 5(c) are fair and reasonable under the
circumstances, that the Subordinate Mortgagee has received a substantial benefit from the
Senior Mortgagee having granted its consent to the Subordinate Mortgage, and that the
Senior Mortgagee would not have granted such consent without the inclusion of these
provisions in this Agreement.
(d) The Senior Mortgagee may pursue all rights and remedies available to it
under the Senior Loan Documents, at law, or in equity, regardless of any Enforcement
Action Notice or Enforcement Action by the Subordinate Mortgagee. No action or
failure to act on the part of the Senior Mortgagee in the event of a Subordinate Mortgage
Default or commencement of an Enforcement Action shall constitute a waiver on the part
of the Senior Mortgagee of any provision of the Senior Loan Documents or this
Agreement.
DMWEST#8895317 vi 10 50
(e) In the event that an Enforcement Action taken by the Subordinate
Mortgagee is the appointment of a receiver for any of the Mortgaged Property, all of the
rents, issues, profits and proceeds collected by the receiver shall be paid and applied by
the receiver solely to and for the benefit of the Senior Mortgagee until the Senior
Indebtedness shall have been paid in full.
(f) The Subordinate Mortgagee hereby expressly consents to and authorizes
the release by the Senior Mortgagee of all or any portion of the Mortgaged Property from
the lien, operation, and effect of the Senior Loan Documents. The Subordinate
Mortgagee hereby waives to the fullest extent permitted by law, all equitable or other
rights it may have (i) in connection with any release of any portion of the Mortgaged
Property, (ii) to require the separate sales of any portion of the Mortgaged Property or to
require the Senior Mortgagee to exhaust its remedies against any portion of the
Mortgaged Property or any combination of portions of the Mortgaged Property or any
other collateral for the Senior Indebtedness, or (iii) to require the Senior Mortgagee to
proceed against the Borrower, any other party that may be liable for any of the Senior
Indebtedness (including any general partner of the Borrower if the Borrower is a
partnership), any portion of the Mortgaged Property or combination of portions of the
Mortgaged Property, or any other collateral, before proceeding against all or such
portions or combination of portions of the Mortgaged Property as the Senior Mortgagee
determines. The Subordinate Mortgagee waives to the fullest extent permitted by law
any and all benefits under California Civil Code Sections 2845, 2849 and 2850. The
Subordinate Mortgagee hereby expressly consents to and authorizes, at the option of the
Senior Mortgagee, the sale, either separately or together, of all or any portion of the
Mortgaged Property. The Subordinate Mortgagee acknowledges that without notice to
the Subordinate Mortgagee and without affecting any of the provisions of this
Agreement, the Senior Mortgagee may (i) extend the time for or waive any payment or
performance under the Senior Loan Documents; (ii) modify or amend in any respect any
provision of the Senior Loan Documents; and (iii) modify, exchange, surrender, release
and otherwise deal with any additional collateral for the Senior Indebtedness.
(g) If any party other than the Borrower (including the Senior Mortgagee)
acquires title to any of the Mortgaged Property pursuant to a foreclosure of, or trustee's
sale or other exercise of any power of sale under, the Senior Mortgage conducted in
accordance with applicable law, the lien, operation, and effect of the Subordinate
Mortgage and other Subordinate Loan Documents automatically shall terminate with
respect to such Mortgaged Property.
6. MISCELLANEOUS PROVISIONS
(a) In the event of any conflict or inconsistency between the terms of the
Subordinate Loan Documents and the terns of this Agreement, the terms of this
Agreement shall control.
(b) This Agreement shall be binding upon and shall inure to the benefit of the
respective legal successors and assigns of the parties hereto.
KI
DMWEST#8895317 v1 I 1
(c) This Agreement does not constitute an approval by the Senior Mortgagee
of the terms of the Subordinate Loan Documents.
(d) Each notice, request, demand, consent, approval or other communication
(collectively, "notices", and singly, a "notice") which is required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been duly and
sufficiently given if(i) personally delivered with proof of delivery thereof(any notice so
delivered shall be deemed to have been received at the time so delivered), or(ii) sent by a
national overnight courier service (such as FedEx) designating earliest available delivery
(any notice so delivered shall be deemed to have been received on the next business day
following receipt by the courier), or (c) sent by United States registered or certified mail,
return receipt requested, postage prepaid, at a post office regularly maintained by the
United States Postal Service(any notice so sent shall be deemed to have been received on
the date of delivery as confirmed by the return receipt), addressed to the respective
parties as follows:
(i) Notices intended for the Senior Mortgagee shall be addressed to:
Union Bank,N.A.,
120 S. San Pedro St., Ste. 400
Los Angeles, CA 90012
Attn: Corporate Trust Services—Jennifer Earle
Fax 213-972-5694
(ii) Notices intended for the Subordinate Mortgagee shall be addressed
to:
City of Palm Springs
[CITY NOTICE ADDRESS]
Attn:
Any party, by notice given pursuant to this Section, may change the person or persons
and/or address or addresses, or designate an additional person or persons or an additional
address or addresses, for its notices, but notice of a change of address shall only be
effective upon receipt. Neither party shall refuse or reject delivery of any notice given in
accordance with this Section.
(e) Nothing herein or in any of the Senior Loan Documents or Subordinate
Loan Documents shall be deemed to constitute the Senior Mortgagee as a joint venturer
or partner of the Subordinate Mortgagee.
(f) Upon notice from the Senior Mortgagee from time to time, the
Subordinate Mortgagee shall execute and deliver such additional Instruments and
documents, and shall take such actions, as are required by the Senior Mortgagee in order
to further evidence or effectuate the provisions and intent of this Agreement.
(g) This Agreement shall be governed by the laws of the State in which the
Land is located.
DMWEST#8895317 v1 12 52
(h) If any one or more of the provisions contained in this Agreement, or any
application thereof, shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein, and any other
application thereof, shall not in any way be affected or impaired thereby.
(i) The term of this Agreement shall commence on the date hereof and shall
continue until the earliest to occur of the following events: (i) the payment of all of the
Senior Indebtedness; provided that this Agreement shall be reinstated in the event any
payment on account of the Senior Indebtedness is avoided, set aside, rescinded or repaid
by the Senior Mortgagee as described in Section 2(e) hereof, (ii) the payment of all of the
Subordinate Indebtedness other than by reason of payments which the Subordinate
Mortgagee is obligated to remit to the Senior Mortgagee pursuant to this Agreement; (iii)
the acquisition by the Senior Mortgagee or by a third party purchaser, of title to the Land
and Improvements pursuant to a foreclosure of, or trustee's sale or other exercise of a
power of sale under, the Senior Mortgage; or (iv) without limiting the provisions of
Section 5(d), the acquisition by the Subordinate Mortgagee of title to the Land and
Improvements subject to the Senior Mortgage pursuant to a foreclosure, or a deed in lieu
of foreclosure, of(or the exercise of a power of sale under) the Subordinate Mortgage.
0) No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder.
(k) Each party hereto acknowledges that in the event any party fails to comply
with its obligations hereunder, the other parties shall have all rights available at law and
in equity, including the right to obtain specific performance of the obligations of such
defaulting party and injunctive relief.
(1) No party other than the Senior Mortgagee and the Subordinate Mortgagee
shall have any rights under, or be deemed a beneficiary of any of the provisions of, this
Agreement.
(m) No amendment, supplement, modification, waiver or termination of this
Agreement shall be effective against any party unless such amendment, supplement,
modification, waiver or termination is contained in a writing signed by such party.
(n) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the
same instrument.
(o) The Senior Mortgagee is executing this document in its fiduciary capacity
as trustee under the Indenture. Any rights and duties of the Trustee set forth herein are
subject to the terms of the Indenture and, in acting hereunder, the Trustee is entitled to all
the protections granted to it pursuant to the Indenture.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]
53
DMWEST#8895317 v1 13
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
SENIOR MORTGAGEE:
UNION BANK, N.A., as Trustee
By:
Name:
Title:
SUBORDINATE MORTGAGEE:
CITY OF PALM SPRINGS, a municipal
corporation
By:
Name:
Title:
[Signature Page to Subordination Agreement]
54
CONSENT OF BORROWER
Borrower hereby acknowledges receipt of a copy of this Subordination Agreement, dated
May , 2012, by and between Union Bank, N.A. and City of Palm Springs and consents to the
agreement of the parties set forth herein.
MILLENNIUM HOUSING, LLC,
a California limited liability company
By: Millennium Housing Corporation,
a California nonprofit public benefit corporation, its
Sole Member
By:
George Turk, President
[Borrower Signature Page to Subordination Agreement]
55
STATE OF CALIFORNIA )
COUNTY OF )
On before me, a
Notary Public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
56
STATE OF CALIFORNIA )
COUNTY OF )
On before me, a
Notary Public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
57
STATE OF CALIFORNIA )
COUNTY OF )
On before me, a
Notary Public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
5
EXHIBIT A
LEGAL DESCRIPTION
DMWEST#8895317 vi A_] 59
CITY OF PALM SPRINGS
PUBLIC HEARING NOTIFICATION
i
City Council
Meeting Date: April 18, 2012
Subject: Issuance of Tax-Exempt Mobile Home Park Revenue Bonds
Sahara Mobile Home Park
AFFIDAVIT OF PUBLICATION
I, Dale E Cook, Jr., Community Development Administrator, of the City of Palm Springs,
California, do hereby certify that a copy of the attached Notice of Public Hearing was
published in the Desert Sun on April 4, 2012.
1 declare under penalty of perjury that the foregoing is true and correct.
Dale E. Cook,Jr.
Community Development Administrator
AFFIDAVIT OF POSTING
I, Dale E. Cook, Jr., Community Development Administrator, of the City of Palm Springs,
California, do hereby certify that a copy of the attached Notice of Public Hearing was
posted at City Hall, 3200 E. Tahquitz Canyon Drive, on the exterior legal notice posting
board on April 2, 2012 and in the Office of the City Clerk on April 3, 2012.
1 declare under penalty of perjury that the foregoing is true and correct.
4- ee K,;
Dale E. Cook,Or.
Community Development Administrator
60
30II-0418JMdavVostinBPub4sain9_Millennium SaaamMMPk_=PubNuilue_ICFA
The Desert Sun Certificate of Publication
750 N Gene Autry Trail
Palm Springs, CA 92262
760-778-4578/Fax 760-778-4731
State Of California ss:
County of Riverside
Advertiser:
CITY OF PALM SPRINGSILEGALS Na0NKTC1 OF PUBLIC HEAwNG
PO BOX 2743 CM omPAciM OU SPRINGS
PALM SPRINGS CA 922632 ISSUANCE DFTAX-EXEMPT MOBILE
HOME P IRK REVENUE BONDS
SAMM it MOBILE HOME PARK
NOTICE IS HI REBY GIVEN that the C!ty Council
of Ere City of aim Springs,,Califom is(the"City'
2000311221 will hold a pub Itheanng at its me III of April 1
2012. the C -Council msob[1g.hea111521�;00
-pp m.,in ttia unglLYtamfierat Orly I,3200-E.
Tahqusz Way,Palm Springs.CA 92262.
The Purpose this hearing is to consider appro
val of the pro set issuance of mobile home park
revenue bon in one or more series 1n the aggre-
ogaalte ppnnnclp I amount of not to exceed
I am over the age of 18 years old, a Citizen of the United 515,500,000 he'Authority Bonds'1 by the Inde-
Cilie Finance Auuwntv( e Aldho'
States and not a party to. or have interest in this matter. I pup reuant to apter 8 of Part 5ai Division 3
herebycertify that the attached advertisement appeared the Cal"rfoi t n and Safe Cade. The City
�' PP Council will I consider the adoption. a resCu-
in said newspaper (set in type not smaller than non panel) tic n authorize the me i reemenf C� ,.with the Authority prior to
execute an associate
mbershp
in each and entire issue of said newspaper and not in any taking action this matter.
supplement thereof on the following dates,to wit: The from the sale of the A
Bondss,,if arty re issued,are intended to be used
to make a I to Millennium Housing LLC,a Cali-
Newspaper: .The Desert Sun fornia limits liability company, or an afhliate
thereof(the" orrower")to be used to(I)refund
certain reven a bonds previouWY I by the
City of Palm dogs,the proceeds of which were
4/4/2 012 loaned to the rtower in oNer te fins the ac-
quisifion and renovation of a 25q-sp2ca mobile
home park k own as the Sahara Mobil's Home
Park located 1'1955 South Camino Real, Palm
Springs,CA he"Prol'ect'), (ii)finance additional
renovations be mane to the Project and(III)ii-
motcacertain of iSSnlrlg the Autlfonly,Balls.
The Borrow will be the owns and opereror of
the P opt[
This public n ice is intended tocompply with public
notice requi ants of-Section 147(t1 of the enter-
pal Revenue Code of 1986, as amended. The
I acknowledge that I am a principal clerk of the printer of Project is req imd to be occupied in pan by per-
9 P P P sons of bw nd very low income m accordance
The Desert Sun, printed and published weekly in the City wNt Gal laws and the requirements of Sec
Ban 145 of Internal Revenue Code of 1986,as
of Palm Springs, County of Riverside, State of California. amended.
The Desert Sun was adjudicated a newspaper of general REVIEW OF INFORMATION: The staff rep on
circulation on March 24, 1988 by the Superior Court of the and her Ming documents rearding this are
Countyof Riverside, State of California Case No. available for 1crevrewa[City Fig an between to
hours of-8: a.m.and 6:00 m.MaMay th
191236, Thursday.78 ease contact-the Office W the C
-Clerk at 0323.8204 for a scheduled appoin-
mend to rev! those documents,
I declare under penalty of perjury that the foregoing is true COMMENTS Response to this notice may be
P LY P N ry 9 9 made verbs at the Public Hearing and/or in wrt-
mgbefore hearing. WriKat comments maybe
and correct. Executed on this 4th day of April, 2012 in m&detothe fly Council by letter(for mail or hard
delivery)to:
Ja ea Thompson,City Clerk
Palm Springs,California. 32 0 E.Tahquitz Canyon Way
Im Springs,CA 92262'
Any chap of the final derision in court may be
limited to rat ing only those Issues raised at the,
-- public hea.n described in this notice,or in written
come spo ce delivered to the City Clerk at,or
porior, to the ublic hearing.(Government Code
Secbon650 (b)(21). Subject oexhaustionofad-
ministrafiva meedd''ies, Code of Civil Procedure
Declarant ig afore nino final decisionSen6euirtliniaationofsuprn
th s ir
matter.
.An opportun will be given at said hearing for all
interested p no to be heard. Questions regard-
ing this may directed to Dale Cook,Community
Develop AdmI istreterat%le.CcokO%rn
rirgsce.gov, 760.323.8198RDD Z8t1.864.9527.
Si necesita uda Con esta carte,portaver Here a
la Ciudad d Palm Springs.,y%eds hablar'con
Nadine Fieg r telefono 76 .323:8245.
John S.Ra o
Dire mct.of unifty&Faonanic Development
PuMNbed:}W2
NOTICE OF PUBLIC HEARING
CITY COUNCIL
CITY OF PALM SPRINGS
ISSUANCE OF TAX-EXEMPT MOBILE HOME PARK REVENUE BONDS
SAHARA MOBILE HOME PARK
NOTICE IS HEREBY GIVEN that the City Council of the City of Palm Springs, California (the "City"), will hold a
public hearing at its meeting of April 18, 2012. The City Council meeting begins at 6:00 p.m., in the Council
Chamber at City Hall, 3200 E. Tahquitz Canyon Way, Palm Springs, CA 92262.
The purpose of this hearing is to consider approval of the proposed issuance of mobile home park revenue bonds
in one or more series in the aggregate principal amount of not to exceed $15,500,000 (the "Authority Bonds") by
the Independent Cities Finance Authority (the "Authority") pursuant to Chapter 8 of Part 5 of Division 31 of the
California Health and Safety Code. The City Council will also consider the adoption of a resolution authorizing the
City to execute an associate membership agreement with the Authority prior to taking action on this matter.
The proceeds from the sale of the Authority Bonds, if any are issued, are intended to be used to make a loan to
Millennium Housing LLC, a California limited liability company, or an affiliate thereof(the"Borrower")to be used to
(i) refund certain revenue bonds previously issued by the City of Palm Springs, the proceeds of which were
loaned to the Borrower in order to finance the acquisition and renovation of a 254-space mobile home park known
as the Sahara Mobile Home Park located at 1955 South Camino Real, Palm Springs, CA (the "Project"), (ii)
finance additional renovations to be made to the Project and (iii) finance certain costs of issuing the Authority
Bonds. The Borrower will be the owner and operator of the Project.
This public notice is intended to comply with public notice requirements of Section 147(f) of the Internal Revenue
Code of 1986, as amended. The Project is required to be occupied in part by persons of low and very low income
in accordance with California laws and the requirements of Section 145 of the Internal Revenue Code of 1986, as
amended.
REVIEW OF INFORMATION: The staff report and other supporting documents regarding this are available for
public review at City Hall between the hours of 8:00 a.m. and 6:00 p.m. Monday through Thursday. Please
contact the Office of the City Clerk at 760.323.8204 for a scheduled appointment to review these documents.
COMMENTS: Response to this notice may be made verbally at the Public Hearing and/or in writing before the
hearing. Written comments may be made to the City Council by letter(for mail or hand delivery)to:
James Thompson, City Clerk
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Any challenge of the final decision in court may be limited to raising only those issues raised at the public hearing
described in this notice, or in written correspondence delivered to the City Clerk at, or prior, to the public hearing.
(Government Code Section 65009(b)(2)). Subject to exhaustion of administrative remedies, Code of Civil
Procedure Section 1094.6 requires initiation of such proceeding in court within 90 days of the final decision in this
matter.
An opportunity will be given at said hearing for all interested persons to be heard. Questions regarding this may
be directed to Dale Cook, Community Development Administrator at Dale.Cook(a oalmsorinasca.gov, or
760.323.8198/TDD 760.864.9527.
Si necesita ayuda con esta carta, porfavor Ilame a la Ciudad de Palm Springs y,puede hablar con Nadine Fieger
telefono 760.323.8245. 4q/
Jo S. aym
Di ector Co m ity & Economic Development
61