HomeMy WebLinkAbout9/7/2005 - STAFF REPORTS (9) U N
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Community Redevelopment Agency Staff Report
I
DATE: SEPTEMBER 7, 2005 NEW BUSINESS
SUBJECT: APPROVAL OF AMENDMENT NO. 1 TO A DDA IMPLEMENTATION
AGREEMENT WITH VISTA SUNRISE APARTMENTS, LP TO APPROVE
A MINOR CHANGE IN PROJECT SCOPE
FROM: David H. Ready, Executive Director
BY: Community & Economic Development Department
SUMMARY:
On May 18, 2005 the Agency and City Council approved a DDA Implementation
Agreement and a Public Improvements Reimbursement Agreement to allow Vista
Sunrise Apartments, L.P. to close on their CaIHFA financing to begin construction of the
85-unit low-income housing project. The Implementation Agreement clarified and
provided several minor changes to the DDA, including the addition of an affiliate of
Desert AIDS Project to the partnership and the division of responsibilities for the
construction of the off-site improvements, as well as further restructuring of the Agency
notes to allow debt capacity to service debt acquired to purchase the Desert Health
Care District parcel, as required by CaIHFA. The project financing is scheduled to close
on September 2, 2005 with the sale of the parcels from the Desert Health Care District
and the transfer of the parcel from the Community Redevelopment Agency, and
subsequent lot line adjustment, scheduled for September 9, 2005.
There are a number of other actions necessary to undertake before the project can
close which can be accomplished either by resolution or by amending the
Implementation Agreement rather than the DDA. One is the recission of Section 5 of
Agency Resolution 740 and Section 4 of Agency Resolution No. 742, both of which
state that 'The property shall be held as an asset of the Low and Moderate Income
Fund for the development of a congregate care facility for low-income elderly." This
restriction showed up as a title exception in the Preliminary Title Report from First
American Title.
Second, the project scope has changed slightly. Due to rising project costs in materials
and labor because of the tight development market (without any corresponding increase
in project financing), the Developer was forced to redesign the project to reduce the
REM NO.
number of buildings from seven to six. As a result, the project lost a total of five units,
and the project mix also changed to eliminate all of the two bedroom units. The
Restated and Amended DDA ("RADDA") does not give staff any discretion to allow any
deviations from the scope administratively, though it does defer any change in design to
the City of Palm Springs, as all of our DDAs do. Coupled with the Agency's August
recess (which meant we couldn't bring it earlier), it was necessary to bring this action
back on this date after the scheduled close of financing. The Implementation
Agreement adopted in May, 2005 gave the Agency some flexibility in making last-
minute changes to the financing documents to facilitate closing, though it was silent on
the Scope of Development. Adding the changes to the Scope of Development to the
Implementation Agreement should satisfy the senior lenders and equity investors that
the Agency concurs with the changes in the project.
RECOMMENDATION:
I
1. Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,
CALIFORNIA, RESCINDING SECTION 5 OF RESOLUTION 740 AND SECTION
4 OF RESOLUTION 742, AND APPROVING AMENDMENT NO. 1 TO AN
IMPLEMENTATION AGREEMENT WITH VISTA SUNRISE APARTMENTS, LP
TO AMEND TO PROJECT DESCRIPTION FROM 85 UNITS WITH 7 TWO-
BEDROOM UNITS TO 80 UNITS WITH NO TWO-BEDROOM UNITS TO
EFFECTUATE THE DEVELOPMENT OF A LOW-INCOME HIV/AIDS
APARTMENT COMPLEX AND FAMILY CARE FACILITY WEST OF SUNRISE
WAY, SOUTH OF VISTA CHINO ROAD"
STAFF ANALYSIS:
FISCAL IMPACT:
There is no additional fiscal impact to the City or Agency due to these changes, though
the Agency's per-unit project subsidy due to the reduced number of restricted units will
rise from $35,833 per restricted unit to $38,590 per restricted unit, though no more
additional funds have been com itted.
ohn . Ray o d, Director of David H. Ready, Executive=D rector
'oar unity conomic Development -'
Attachments:
1. CRA Resolution
2. Amendment No. 1 to the Implementation Agreement
RESOLUTION NO.
"A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF
PALM SPRINGS, CALIFORNIA, RESCINDING
SECTION 5 OF RESOLUTION 740 AND SECTION
4 OF RESOLUTION 742, AND APPROVING
AMENDMENT NO. 1 TO AN IMPLEMENTATION
AGREEMENT WITH VISTA SUNRISE
APARTMENTS, LP TO AMEND TO PROJECT
DESCRIPTION FROM 85 UNITS WITH 7 TWO-
BEDROOM UNITS TO 80 UNITS WITH NO TWO-
BEDROOM UNITS TO EFFECTUATE THE
DEVELOPMENT OF A LOW-INCOME HIV/AIDS
APARTMENT COMPLEX AND FAMILY CARE
FACILITY WEST OF SUNRISE WAY, SOUTH OF
VISTA CHINO ROAD"
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, the Agency and the Developer have entered into that certain Restated and
Amended Disposition and Development Agreement ("RADDA") dated February 15,
2005 which provides for the construction of 85 affordable housing units pursuant to the
terms of the RADDA; and
WHEREAS, as the parties are beginning the implementation of the terms of the
RADDA and as a result of that endeavor have discovered that certain assumptions
concerning financing requirements and timing of the adjacent health care facility project
have necessitated some non-material revisions for purposes of the Agency in the form
of the Promissory Notes and Deeds of Trust which have to be clarified but which do not
affect the Agency's basic financial contribution to the Project or the Scope of the
Project; and
WHEREAS, the Agency and Developer wish to clarify their understandings of how the
RADDA will be implemented by setting forth those understandings in this
Implementation Agreement, including a change in scope of development.
NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of
the City of Palm Springs, as follows:
SECTION 1. The above recitals are true and correct and incorporated herein.
Community Redevelopment Agency
May 18,2005
Page 4
SECTION 2. This Amendment No. 1 to the Implementation Agreement with
Vista Sunrise Apartments, LP, is hereby approved and
incorporated herein by this reference.
SECTION 3. Section 5 of Agency Resolution 740 and Section 4 of Agency
Resolution No. 742, both of which state that 'The property shall be
held as an asset of the Low and Moderate Income Fund for the
development of a congregate care facility for low-income elderly"
are rescinded.
SECTION 4. The Executive Director, or his designee, is hereby authorized to
execute on behalf of the Agency the Amendment No. 1 to the
Implementation Agreement and other documents necessary to the
Agreement, to amend the project description to 80 one bedroom
and studio units, and make minor changes as may be deemed
necessary, in a form approved by Agency Counsel.
ADOPTED this day of 2005.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS,
CALIFORNIA
By
Assistant Secretary airman
(REVIEWED & APPROVED AS TO FORM �' �
Community Redevelopment Agency
May 18, 2005
Page 5
RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM
i SPRINGS, CALIFORNIA, APPROVING A PUBLIC
IMPROVEMENT REIMBURSEMENT AGREEMENT
WITH THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, VISTA
SUNRISE APARTMENTS, L.P., AND THE HOUSING
AUTHORITY OF THE COUNTY OF RIVERSIDE IN
THE AMOUNT OF $125,000 FOR THE
CONSTRUCTION OF CERTAIN OFF-SITE
IMPROVEMENTS TO EFFECTUATE THE
DEVELOPMENT OF A LOW-INCOME HIV/AIDS
APARTMENT COMPLEX AND FAMILY CARE
FACILITY WEST OF SUNRISE WAY, SOUTH OF
VISTA CHINO ROAD, MERGED PROJECT AREA #1
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs
that a Public Improvement Reimbursement Agreement with the Community
Redevelopment Agency of the City of Palm Springs, Vista Sunrise Apartments, L.P.
and the Housing Authority of the County of Riverside in the amount of $125,000 to
effectuate the development of a low-income HIV/AIDS apartment complex west of
Sunrise Way, South of Vista Chino Road, Merged Project Area #1, is hereby approved.
ADOPTED this day of 2005.
,AYES:
NOES:
,ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
[REVIEWED & APPROVED AS TO FORM
FIRST AMENDMENT TO
i IMPLEMENTATION AGREEMENT
' This First Amendment to Implementation Agreement ("Amendment") is made and
entered into as of September _, 2005 by and between the Community
Redevelopment Agency of the City of Palm Springs, a public body, corporate and politic
("Agency"), and Vista Sunrise Apartments, L.P., a California limited partnership
("Developer"), with reference to the following recitals of fact:
RECITALS:
A. WHEREAS, the Agency and the Developer have entered into that certain
Restated and Amended Disposition and Development Agreement ("RADDA") dated
February 15, 2005, which provides, among other things, for the construction of 85
affordable housing units pursuant to the terms of the RADDA;
B. WHEREAS, the Agency and the Developer have entered into that certain
Implementation Agreement ("Original Agreement ") dated , 2005, for
purposes of clarifying the parties' understandings of how the RADDA will be
implemented and to make certain non-material revisions to the terms of the RADDA as
more particularly set forth therein;
C. WHEREAS, subsequent to the Agency's approval of the Original
Agreement, the parties have discovered that, in connection with the financing of the
(Project, certain additional revisions are required to the terms of the RADDA, which do
not materially affect the Agency's basic financial contribution to the Project or materially
change the Scope of the Project.
D. WHEREAS, the Agency and the Developer now desire to modify the
Original Agreement in accordance with the terms and conditions set forth in this
Amendment. For purposes hereof, the Original Agreement and this Amendment are
collectively referred to as the "Agreement."
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable considerable considerations the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Original Agreement. The Agency and the Developer acknowledge that the
Original Agreement is in full force and effect, except as modified by this Amendment.
All capitalized terms not otherwise defined herein shall have the meaning set forth in the
Original Agreement. In the event of any inconsistency between the terms and
conditions set forth in the Original Agreement and the terms and conditions set forth in
this Amendment, the terms and conditions in this Amendment shall control.
2. Unit Chanqe. The Developer has informed the Agency that due to the
escalating costs of construction materials, the Developer was required to redesign the
Project. The Project, as redesigned, shall consists of 80 units rather than 85 units. Of
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such 80 units, thirty-nine (39) shall be Restricted Units and one (1) shall be a Manager's
Unit. The Units, including the Manager's Unit, shall be composed of 48 studio units and
32 1-bedroom units. The placement of the Restricted Units may float in the Project as
long as a minimum of thirty-nine (39) meet the criteria. All references in the RADDA
and the Original Agreement to 85 units, 41 of which shall be Restricted Units, are not
applicable to the Project.
3. Acquisition of the District Parcel. The Developer has informed the Agency
that the Developer will be acquiring fee simple title to the District Parcel. The Housing
Authority of the County of Riverside (the "Housing Authority") will purchase the District
Parcel from the District, and subsequently the Developer will purchase the District
Property from the Housing Authority pursuant to that certain Disposition and
Development Agreement by and between the Developer and the Housing Authority.
Thus, all references to a long-term lease with the District and/or a sublease of the
District Parcel from the Housing Authority or the County are not applicable to the
Project.
4. Land Note and Deed of Trust. The $205,000 land contribution note (the
"Land Note") and the deed of trust securing the Land Note (the "Land Deed of Trust")
shall be in the forms attached hereto as Exhibit "A" and Exhibit "B", respectively. The
parties agree that (i) the borrower under the Land Note shall be the Developer; (ii) the
Land Note will be for a term of 45 years; (iii) the Land Note will be repaid solely from
.25% of the Project's Residual Receipts (as defined in the Land Note); and (iv) the
Developer will deliver the Land Deed of Trust to the Agency concurrently with the
,Agency's transfer of the Agency Parcel to Developer, however, the Land Deed of Trust
will not be recorded until the deeds of trust for the construction financing for the Project
have been recorded. Notwithstanding the foregoing term, the Land Note shall provide
that if there is an outstanding balance remaining under the Land Note at the end of such
forty-five year term, then upon the written request by the lender under the MHP Loan
(as defined in the Land Note), the Agency may extend the term of the Land Note for a
period not to exceed 10 years for a total of 55 years, or such other similar language as
may be required by the lender under the MHP Loan and approved by the Executive
Director of the Agency.
5. Cash Contribution Note and Deed of Trust. The $1,300,000 cash
contribution note (the "Cash Contribution Note") and the deed of trust securing the Cash
Contribution Note (the "Cash Contribution Deed of Trust") shall be in the forms attached
hereto as Exhibit "C" and Exhibit "D", respectively. The parties agree that (i) 46% of
monthly draw requests shall be funded under the Cash Contribution Note; (ii) the
Agency shall pay, or cause to be paid, any approved disbursements under the Cash
Contribution Note within fifteen (15) business days following the Agency's receipt of the
corresponding Application for Disbursement; (iii) the Cash Contribution Note will be
repaid solely from 1.55% of the Project's Residual Receipts; and (iv) the Cash
Contribution Note will be for a term of 45 years. Notwithstanding the foregoing term, the
Cash Contribution Note shall provide that if there is an outstanding balance remaining
under the Cash Contribution Note at the end of such forty-five year term, then upon the
written request by the lender under the MHP Loan, the Agency may extend the term of
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the Cash Contribution Note for a period not to exceed 10 years for a total of 55 years, or
such other similar language as may be required by the lender under the MHP Loan and
approved by the Executive Director of the Agency.
6. Requlatory Aqreement. The Regulatory Agreement is being amended
regarding the above-referenced change in the number of units in the Project and to
provide the Agency's acknowledgement that the other lenders for the Project are also
restricting the same 49% (or lesser percentage) of the units at the Project and that the
most restrictive rents will apply with respect to such units. The Regulatory Agreement
shall be in the form attached hereto as Exhibit "E".
7. Qualified Tax Credit Investor.
7.1 The Agency hereby acknowledges that SunAmerica Housing Fund
1305, A Nevada Limited Partnership ("Sun") is a Qualified Tax Credit Investor, as such
term is defined in Section 222 of the RADDA, and the admission of Sun as a limited
partner of the Developer is a transfer permitted under Section 303(3)(f) of the RADDA.
7.2 The following transfers shall be deemed additional exceptions to
the transfer restrictions contained in Sections 303(1) and (2) of the RADDA: (i) the
pledge by the general partner of Developer to the limited partner of Developer of the
general partners partnership interests in the Developer pursuant to Developer's limited
partnership agreement, (ii) any transfer of a limited partnership interest in Developer by
the limited partner of Developer to an affiliate of such limited partner, (iii) any transfer of
a partnership interest in the entity that is the limited partner of Developer and (iv) any
transfer of a general partnership interest in Developer to the limited partner of
Developer or to an affiliate thereof in connection with the removal of the general partner
of Developer pursuant to Developer's limited partnership agreement.
7.3 The rights given to holders of mortgages under the RADDA shall
also apply to the limited partner of Developer.
7.4 The Agency acknowledges and agrees that the Hazardous
Materials indemnity contained in Section 409(3) of the RADDA is not applicable to the
limited partner of Developer.
8. Notices. The Developer hereby designates the following persons at the
following addresses as additional notice parties to also receive copies of all notices
delivered to the Developer, including, without limitation, any notices delivered to
Developer under Section 900 of the RADDA:
SunAmerica Housing Fund 1305, A Nevada Limited Partnership
c/o AIG Retirement Services, Inc.
One SunAmerica Center, Century City
Los Angeles, California 90067
Attn: Michael Fowler
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LN40320695 1
Coachella Valley AIDS Consortium
1695 North Sunrise Way
I Palm Springs CA 92262
Attn: Executive Director
9. Covenant re Senior Housinq. In connection with a previously
contemplated development of the Agency Parcel by a different developer, the Agency
adopted Resolutions No. 740 — 742, pursuant to which the Agency, among other things,
resolved to hold the property as an asset of the Low and Moderate Income Housing
Fund for the development of a congregate care facility for low-income elderly (the
"Senior Restriction"). The Agency agrees that the Senior Restriction does not apply to
the Project. At or prior to the Closing of the Escrow for the conveyance of the Agency
Parcel from Agency to Developer, the Agency shall deliver to Escrow Agent the
documentation reasonably required by the Title Company to remove the Senior
Restriction as an exception to title for the Agency Parcel, including, without limitation,
Agency resolutions confirming that the Senior Restriction does not apply to the Agency
Parcel.
10. No Other Modifications. Except as otherwise provided herein, all other
terms and provisions of the Agreement shall remain in full force and effect, unmodified
by this Amendment.
11. Bindinq Effect. The provisions of this Amendment shall be binding upon
and inure to the benefit of the heirs, representatives, successors and permitted assigns
of the parties hereto.
12. Counterparts. This Amendment may be executed in any number of
original counterparts. Any such counterpart, when executed, shall constitute an original
of this Amendment, and all such counterparts together shall constitute one and the
same Amendment. For purposes of this Amendment, facsimile signatures shall be
deemed to be originals.
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L/U40320695.1
IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties hereto as of the day and year written above.
DEVELOPER:
VISTA SUNRISE APARTMENTS, L.P., a
California limited partnership
By: MBA Development Corp.,
a Missouri corporation
Its: Development General Partner
By:
Name:
Title:
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its: Managing General Partner
By:
Name:
Title:
AGENCY:
ATTEST: THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
SPRINGS, a public body, corporate and
politic
By:
Executive Director
5
LAA0320695.1
i
EXHIBIT A
Land Note
$205,000 Palm Springs, California
FOR VALUE RECEIVED, VISTA SUNRISE APARTMENTS, L.P., a California
limited partnership ("Maker"), promises to pay the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic
("Holder") at 3200 E. Tahquitz Canyon Way, Palm Springs, California 92262, or at such
other address as Holder may direct from time to time in writing, the sum of Two
Hundred and Five Thousand Dollars ($205,000.00) (the "Note Amount"), pursuant to the
terms set forth herein. All sums payable hereunder shall be payable in lawful money of
the United States of America. This Promissory Note ("Agency Property Note") is made
in connection with the provision by the Holder of funds equal to the Agency Property
Note pursuant to that certain Restated and Amended Disposition and Development
Agreement by and among Maker and Holder, dated as of February 15, 2005 (the
"Agreement").
t. Interest Rate. No interest shall accrue on the Note Amount.
2. Term. The term of this Agency Property Note shall be forty-five years;
provided, however, if there is an outstanding balance remaining hereunder at the end of
such forty-five year term, then upon the written request by the lender under the MHP
Loan, the Agency may extend the term for a period not to exceed 10 years for a total of
55 years.
3. Repayment. The principal amount of the Note Amount shall be
immediately due and payable upon any default of the Agreement, which is not cured
within the time set forth in Section 801 of the Agreement.
The Agency Property Note shall be repaid on an annual basis solely from
one-fourth of one percent (.25%) of the Project's Residual Receipts. Residual Receipts
are defined as gross receipts less costs actually incurred for the operation and
maintenance of the Project, including, without limitation, auditing and accounting fees, a
property management fee not to exceed 6% of gross income, an annual tax credit
limited partner asset management fee not to exceed $5,000, an annual managing
general partner partnership management fee not to exceed $5,000, an annual incentive
management fee to the development general partner of Maker not to exceed $7,500,
developer fees, operating costs, reserves, repayment of limited partner loans funded
pursuant to Maker's partnership agreement and payments of principal and interest on
loans and indebtedness senior to the indebtedness evidenced by this Agency Property
Note and which have been approved by the Agency, including, without limitation, the
CaIHFA Loan (as defined below), the Home Loan and the MHP Loan have been
completely repaid. The Agency Property Note shall be subordinated to (i) that certain
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Iconstruction and permanent loan from the California Housing Finance authority (the
"CalHFA Loan"), the; (ii) the MHP Senior Debt; (iii) the County Home Loan; (iv) the
t ,Agency Note and (v) the AHP Loan. Available Residual Receipts shall be determined
(based on a review of financial statements for the project. Quarterly financial statements
shall be submitted within 45 days of the close of each quarter of the project fiscal year.
Vn addition, annual audited financial statements shall be submitted within 120 days of
the close of the calendar year. All outstanding principal along with accrued interest
shall be due and payable on December 31, 2051. The first payment shall be due on
December 31, 2007, to the extent of available Residual Receipts, as set forth above.
For purposes of this Agency Property Note, defined terms used in this paragraph but
not defined herein shall have the meaning given to such terms in the Home Loan
Agreement.
5. Prepayment of Aqencv Note Amount. Maker may prepay to Holder the full
Note Amount, at any time prior to the due date of the Note Amount without penalty.
6. Security. This Agency Property Note is secured by a deed of trust by and
between Maker, as trustor and Holder, as beneficiary (the "Deed of Trust").
7. Holder May Assiqn. Holder may, at its option, assign its right to receive
payment under this Agency Property Note without necessity of obtaining the consent of
the Maker.
8. Maker Assiqnment Prohibited. In no event shall Maker assign or transfer
any portion of this Agency Property Note without the prior express written consent of the
Holder, which consent may be given or withheld in the Holder's sole discretion.
9. Attorneys' Fees and Costs. In the event that any action is instituted with
respect to this Agency Property Note, the non-prevailing party promises to pay such
sums as a court may fix for court costs and reasonable attorneys' fees. Holder's right to
such fees shall not be limited to or by its representation by staff counsel, and such
representation shall be valued at customary and reasonable rates for private sector
legal services.
10. Non-Waiver. Failure or delay in giving any notice required hereunder shall
not constitute a waiver of any default or late payment, nor shall it change the time for
any default or payment.
11. Successors Bound. This Agency Property Note shall be binding upon the
parties hereto and their respective heirs, successors and assigns.
12. Definitions. Any terms not separately defined herein shall have the same
meanings as set forth in the Agreement.
13. Non-Recourse. Notwithstanding anything to the contrary herein
contained, (i) the liability of Maker shall be limited to its interest in the Site and any
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LAJ40320695 1
rents, issues, and profits arising from the Site and, in addition, with respect to any
Iobligation to hold and apply insurance proceeds, proceeds of condemnation or other
monies hereunder, any such monies received by it to the extent not so applied in
accordance with the terms of this Agency Property Note; (ii) no other assets of Maker
shall be affected by or subject to being applied to the satisfaction of any liability which
Maker may have to Holder or to another person by reason of this Agency Property Note;
and (iii) any judgment, order, decree or other award in favor of Holder shall be
collectible only out of, or enforceable in accordance with, the terms of this Agency
Property Note by termination or other extinguishment of Maker's interest in the Site.
Notwithstanding the foregoing, it is expressly understood and agreed that the aforesaid
limitation on liability shall in no way restrict or abridge Maker's continued personal
liability for: (A) fraud or willful or grossly negligent misrepresentation made by Maker in
connection with this Agency Property Note or any of the Agency Agreements; (B)
misapplication of (a) proceeds of insurance and condemnation or (b) rent received by
Maker under rental agreements entered into for any portion of the Site after default of
the Note; (C) the retention by Maker of all advance rentals and security deposits of
tenants not refunded to or forfeited by such tenants; or (D) the indemnification
undertakings of Maker under the Agency Agreements.
"MAKER"
VISTA SUNRISE APARTMENTS, L.P.
a California limited partnership
By: MBA Urban Development Co.
Its Development General Partner
By:
Date Name:
Title:
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its: Managing General Partner
By:
Name:
Title:
"HOLDER"
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
SPRINGS,
8
LA/40320695.1
' a public body, corporate and politic
Date By:
Chairman
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency Special Counsel
9
LA140320695.1
EXHIBIT B
Land Contribution Deed of Trust
RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of , 2005, by VISTA SUNRISE APARTMENTS,
L.P., a California limited partnership, herein "Trustor," in favor of the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body,
corporate and politic, herein the "Beneficiary,") the same parties to that certain form
Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is
attached. This Rider is made a part of and is incorporated into said Deed of Trust. This
[Rider shall supersede any conflicting term or provision of the form Deed of Trust to
which it is attached.
Reference is made to the following agreements and documents: (i) Agency
Property Note by and between Trustor and Beneficiary, dated on or about the date set
forth above, the repayment of which by Trustor is secured by this Deed of Trust (the
"Agency Property Note"); (ii) Restated and Amended Disposition and Development
Agreement by and between Trustor, and Beneficiary, dated February 15, 2005 (the
"RADDA"), providing for Trustor's development of the Property; and (iii) Regulatory
Agreement and Declaration of Covenants and Restrictions, dated , 2005, by
and between Trustor and Beneficiary, providing for the use, operation, and maintenance
of the Property ("Agreement Containing Covenants").
The parties hereto agree:
1, Propertv. The estate subject to this Deed of Trust is Trustor's fee estate in
the real property legally described in the Deed of Trust (the "Property"). In addition,
Trustor grants to beneficiary a security interest in all of Trustor's rights, title, and interest
in and to the following:
(a) All present and future inventory and equipment, as those terms are
defined in the California Commercial Code, and all other present and future personal
property of any kind or nature whatsoever, now or hereafter located at, upon or about
the Property or used or to be used in connection with or relating or arising with respect
to the Property and/or the use thereof or any improvements thereto, including without
limitation all present and future furniture, furnishings, fixtures, goods, tools, machinery,
plumbing and plumbing material and supplies, concrete, lumber, hardware, electrical
wiring and electrical material and supplies, heating and air conditioning material and
supplies, roofing material and supplies, window material and supplies, doors, paint,
drywall, insulation, cabinets, ceramic material and supplies, flooring, carpeting,
appliances, fencing, landscaping and all other materials, supplies and property of every
kind and nature.
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(b) All present and future accounts, general intangibles, chattel paper,
contract rights, deposit accounts, instruments and documents as those terms are
l defined in the California Commercial Code, now or hereafter relating or arising with
respect to the Property and/or the use thereof or any improvements thereto, including
without limitation: (i) all rights to the payment of money, including escrow proceeds
arising out of the sale or other disposition of all or any portion of the Property; (ii) all
architectural, engineering, design and other plans, specifications and drawings relating
to the development of the Property and/or any construction thereon; (iii) all use permits,
occupancy permits, construction and building permits, and all other permits and
approvals required by any governmental or quasi-governmental authority in connection
with the development, construction, use, occupancy or operation of the Property; (iv)
any and all agreements relating to the development, construction, use, occupancy
and/or operation of the Property between Trustor and any contractor, subcontractor,
project manager or supervisor, architect, engineer, laborer or supplier of materials; (v)
all lease, rental or occupancy agreements and payments received thereunder; (vi) all
names under which the Property is now or hereafter known and all rights to carry on
business under any such names or any variant thereof; (vii) all trademarks relating to
the Property and/or the development, construction, use, occupancy or operation thereof;
(viii) all goodwill relating to the Property and/or the development, construction, use,
occupancy or operation thereof; (ix) all insurance proceeds and condemnation awards
arising out of or incidental to the ownership, development, construction, use, occupancy
or operation of the Property; (x) all reserves, deferred payments, deposits, refunds, cost
savings, bonds, insurance policies and payments of any kind relating to the Property;
(xi) all loan commitments issued to Trustor in connection with any sale or financing of
the Property; (xii) all water stock, if any, relating to any Property and all shares of stock
or other evidence of ownership of any part of or interest in any Property that is owned
by Trustor in common with others; and (xiii) all supplements, modifications and
amendments to the foregoing.
(c) All fixtures located upon or within the Property or now or hereafter
attached to, installed in, or used or intended for use in connection with the Property,
including without limitation any and all partitions, generators, screens, awnings, boilers,
furnaces, pipes, plumbing, elevators, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, heating ventilating, air
conditioning and air cooling equipment, and gas and electric machinery and equipment.
(d) All present and future accessories, additions, attachments,
replacements and substitutions of or to any or all of the foregoing.
(e) All cash and noncash proceeds and products of any and all of the
foregoing, including without limitation all monies, deposit accounts, insurance proceeds
and other tangible or intangible property received upon a sale or other disposition of any
of the foregoing.
2. Obligations Secured. Trustor makes this grant and assignment for the
purpose of securing the following obligations ("Secured Obligations"):
11
LA/40320695.1
i
(a) Payment to Beneficiary of all indebtedness at any time owing under
the terms of the Agency Property Note;
(b) Payment and performance of all obligations of Trustor under this
Deed of Trust, the RADDA, and the Agreement Containing Covenants;
(c) Payment and performance of all future advances and other
obligations of Trustor or any other person, firm, or entity with the approval of Trustor,
may agree to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it
is secured by this Deed of Trust; and
(d) All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
3. Obligations. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without limitation, all
interest and charges, prepayment charges, late charges and fees at any time accruing
or assessed on any of the Secured Obligations.
4. Incorporation. All terms of the Agency Property Note and the Secured
Obligations are incorporated herein by this reference. All persons who may have or
acquire an interest in the Property shall be deemed to have notice of the terms of all of
the foregoing documents.
5. Mortgagee-in-Possession. Neither the assignment of rents set forth in the
Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder
shall be deemed to make Beneficiary a "mortgagee-in-possession" or otherwise liable in
any manner with respect to the Property, unless Beneficiary, in person or by agent,
assumes actual possession thereof. Nor shall appointment of a receiver for the
Property by any court at the request of Beneficiary or by agreement with Trustor, or the
entering into possession of the Property by such receiver, be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise liable in any manner with respect
to the Property.
6. No Cure. In the event Beneficiary collects and receives any rents under
the Deed of Trust upon any event of default hereof, such collection or receipt shall in no
way constitute a curing of such default.
7. Opportunity to Cure. Trustor's failure or delay to perform any term or
provision of this Deed of Trust constitutes a default under this Deed of Trust; however,
Trustor shall not be deemed to be in default if (i) Trustor cures, corrects, or remedies
such default within thirty (30) days after receipt of a notice specifying such failure or
delay, or (ii) for such defaults that cannot reasonably be cured, corrected, or remedied
within thirty (30) days, if Trustor commences to cure, correct, or remedy such failure or
12
LA/40320695.1
delay within thirty (30) days after receipt of a written notice specifying such failure or
delay, and diligently prosecutes such cure, correction or remedy to completion.
Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by Trustor. Copies of any notice of default given to Trustor shall
also be delivered to any permitted lender, if it has requested in writing to receive such
notice, and the limited partner of Trustor. Beneficiary may not institute proceedings
against Trustor until thirty (30) days after giving such notice or such longer period of
time as may be provided herein. In no event shall Beneficiary be precluded from
exercising remedies if its security becomes or is about to become materially jeopardized
Iby any failure to cure a default.
Except as otherwise expressly provided in this Deed of Trust, any failure
or delay in giving such notice or in asserting any of its rights and remedies as to any
default shall not constitute a waiver of any default, nor shall it change the time of
default, nor shall it deprive either party of its rights to institute and maintain any actions
or proceedings which it may deem necessary to protect, assert or enforce any such
rights or remedies.
In the event of any inconsistency in the terms of this Rider and the
provisions set forth in the standard deed of trust recorded in the Recorder's Office of the
County of Riverside, the terms of this Rider shall control.
8. Possession Upon Default. Subject to Section 7 above, upon the
occurrence of a default, and after delivery of notice and the expiration of all applicable
cure periods, Beneficiary may, at its option, without any action on its part being required
and without in any way waiving such default, take possession of the Property and have,
hold, manage, lease and operate the same, on such terms and for such period of time
as Beneficiary may deem proper, and may collect and receive all rents and profits, with
full power to make, from time to time, all alterations, renovations, repairs or
replacements thereto as may seem proper to Beneficiary, and to apply such rents and
profits to the payment of (a) the cost of all such alterations, renovations, repairs and
replacements, and all costs and expenses incident to taking and retaining possession of
the Property, and the management and operation thereof, and keeping the same
properly insured; (b) all taxes, charges, claims, assessments, and any other liens which
may be prior in lien or payment of the Note, and premiums for insurance, with interest
on all such items; and (c) the indebtedness secured hereby, together with all costs and
attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole
diiscretion may determine, any statute, law, custom or use to the contrary
notwithstanding. Any amounts received by Trustor or its agents in the performance of
any acts prohibited by the terms of this assignment, including, but not limited to, any
amounts received in connection with any cancellation, modification or amendment of
any lease prohibited by the terms of this assignment and any rents and profits received
b1/ Trustor after the occurrence of a default shall be held by Trustor as trustee for
Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be
commingled with other funds of the Trustor. Any person receiving any portion of such
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LA/40320695.1
trust funds shall receive the same in trust for Beneficiary as if such person had actual or
constructive notice that such funds were impressed with a trust in accordance therewith.
9. Receiver. In addition to any and all other remedies of Beneficiary set forth
under this Deed of Trust or permitted at law or in equity, if a default shall have occurred,
Beneficiary, to the extent permitted by law and without regard to the value, adequacy or
occupancy of the security for the Agency Property Note and other sums secured
hereby, shall be entitled as a matter of right if it so elects to the appointment of a
receiver to enter upon and take possession of the Property and to collect all rents and
profits and apply the same as the court may direct, and such receiver may be appointed
by any court of competent jurisdiction by ex parte application and without notice, notice
of hearing being hereby expressly waived. The expenses, including receiver's fees,
attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein
contained shall be secured by this Deed of Trust.
10, Security Aqreement. This Deed of Trust also constitutes a Security
Agreement with respect to all personal property in which Beneficiary is granted a
security interest hereunder, and Beneficiary shall have all of the rights and remedies of
a secured party under the Uniform Commercial Code as enacted in California (the
"California Uniform Commercial Code") as well as all other rights and remedies
available at law or in equity. Trustor hereby agrees to execute and deliver on demand
and hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of
Trustor, to execute, deliver and, if appropriate, to file with the appropriate filing officer or
office such security agreements, financing statements, continuation statements or other
instruments as Beneficiary may request or require in order to impose, perfect or
continue the perfection of, the lien or security interest created hereby. Trustor and
Beneficiary agree that the filing of a financing statement in the record normally having to
do with personal property shall never be construed as in any way derogating from or
impairing the lien of this Deed of Trust and the intention of Trustor and Beneficiary that
everything used in connection with the operation or occupancy of the Property is and at
all times and for all purposes and in all proceedings, both legal and equitable, shall be
regarded as real property or goods which are or are to become fixtures, irrespective of
whether (i) any such item is physically attached to the buildings and improvements on
the Property; (ii) serial numbers are used for the better identification of certain
equipment items capable of being filed by the Beneficiary; or (iii) any such item is
referred to or reflected in any such financing statement so filed at any time. Such
mention in the financing statements is declared to be for the protection of the
Beneficiary in the event any court or judge shall at any time hold that notice of
Beneficiary's priority of interest must be filed in the California Commercial Code records
to be effective against a particular class of persons, including, but not limited to, the
federal government and any subdivision or entity of the federal government. Trustor
covenants and agrees to reimburse Beneficiary for any costs incurred in filing such
financing statement and any continuation statements.
Upon the occurrence of default hereunder, and after delivery of notice and the
expiration of all applicable cure periods, Beneficiary shall have the right to cause any of
14
LN40320695 1
the Property which is personal property and subject to the security interest of
Beneficiary hereunder to be sold at any one or more public or private sales as permitted
by applicable law, and Beneficiary shall further have all other rights and remedies,
whether at law, in equity, or by statute, as are available to secured creditors under
applicable law, specifically including without limitation the right to proceed as to both the
real property and the personal property contained within the Property as permitted by
Uniform Commercial Code Section 9501(4), including conducting a unified sale thereof.
.Any such disposition may be conducted by an employee or agent of Beneficiary or
Trustee. Any person, including both Trustee and Beneficiary, shall be eligible to
purchase any part or all of such property at any such disposition.
This Deed of Trust constitutes a fixture filing under Sections 9313 and 9402(6) of
the California Uniform Commercial Code, as amended or recodified from time to time.
11. Notices, Demands, and Communications. Formal notices, demands, and
communications between Trustor and Beneficiary shall be given either by (i) personal
service, (ii) delivery by reputable document delivery service such as Federal Express
that provides a receipt showing date and time of delivery, or (iii) mailing in the United
States mail, certified mail, postage prepaid, return receipt requested, addressed to:
To Beneficiary: Community Redevelopment Agency
of the City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
Attn: Executive Director
With a copy to: Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 400
Irvine, California 92612
Attn: David J. Aleshire, Esq.
To Trustor: VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
c/o McCormack Baron Salazar
801 South Grand Ave. Suite 780
Los Angeles, CA. 90017-4635
Attn: Development General Partner
With a copy to: VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
c/o Coachella Valley AIDS Consortium
1695 North Sunrise Way
Palm Springs CA 92262
Attn: Executive Director
15
LA/40320095.1
I
I
SunAmerica Housing Fund 1305,
A Nevada Limited Partnership
c/o AIG Retirement Services, Inc.
One SunAmerica Center, Century City
Los Angeles, California 90067
Attn: Michael Fowler
Notices personally delivered or delivered by document delivery service shall be
deemed effective upon receipt. Notices mailed shall be deemed effective on the second
business day following deposit in the United States mail. Such written notices,
demands, and communications shall be sent in the same manner to such other
addresses as either party may from time to time designate by mail.
12. Extended Low-Income Housinq Commitment. This Deed of Trust shall be
subject to any "extended low-income housing commitment' (as defined in Section
42(h)(6)(B) of Internal Revenue Code of 1986, as amended (the "Code")) (the
"Extended Use Agreement") to be recorded in Riverside County, California; provided
that under the terms of the Extended Use Agreement, if the Trustor or its successors or
:assigns (collectively, the "REO Owner") acquires the Property by foreclosure (or
instrument in lieu of foreclosure), then the "extended use period" (as defined in Section
42(h)(6)(D) of the Code) shall terminate, except for the obligation of the REO Owner to
comply with the limitations on evictions, termination of tenancy and increase in rents for
the three year period following the REO Owner's acquisition of the Property, as set forth
in Code Section 42(h)(6)(E)(ii).
[SIGNATURES TO FOLLOW]
16
LPJ40320695 1
I
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of
Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day
and year first set forth above.
TRUSTOR:
VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
By: MBA Urban Development Co.
Its Development General Partner
By:
Its
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its Managing General Partner
By:
Its
17
LA40320695.1
EXHIBIT "A"
LEGAL DESCRIPTION
j Real property located in the City of Palm Springs, County of Riverside, State of
California, legally described as:
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LA/40320696 1
EXHIBIT C
Cash Contribution Note
$1,300,000.00 Palm Springs, California
FOR VALUE RECEIVED, VISTA SUNRISE APARTMENTS, L.P., a California
limited partnership ("Maker"), promises to pay the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic
("Holder") at 3200 E. Tahquitz Canyon Way, Palm Springs, California 92262, or at such
other address as Holder may direct from time to time in writing, the sum of One Million
Three Hundred Thousand Dollars ($1,300,000.00) (the "Note Amount"), together with
interest thereon at the rate set forth herein. All sums payable hereunder shall be
payable in lawful money of the United States of America. This Promissory Note
("Agency Note") is made in connection with the provision by the Holder of funds equal to
the Agency Note pursuant to that certain Restated and Amended Disposition and
Development Agreement by and among Maker and Holder, dated as of February 15,
2005 (the "Agreement").
1. Interest Rate. The interest rate is zero percent (0%).
2. Term. The term of this Agency Note shall be forty-five years; provided,
however, if there is an outstanding balance remaining hereunder at the end of such
forty-five year term, then upon the written request by the lender under the MHP Loan,
the Agency may extend the term for a period not to exceed 10 years for a total of 55
years.
3. Disbursement. Funds under this Agency Note shall be disbursed as
follows: after funding in full of that certain loan in the amount of $850,000 made to
Maker from Affordable Housing Program funds (the "AHP Loan"), 46% of monthly draw
requests during the construction of the Project. Funds under this Agency Note shall be
disbursed in accordance with the procedures contained in Sections 403(2) and (3) of
the Agreement; provided, however, the Agency shall pay, or cause to be paid, any
approved disbursements under this Agency Note within fifteen (15) business days
following the Agency's receipt of the corresponding Application for Disbursement. The
remaining 54% of monthly draw requests shall be funded under that certain Amended
and Restated Loan Agreement for the Use of Home Funds ("Home Loan Agreement")
by and between Maker and the County of Riverside (the "County"); provided, however,
the Agency acknowledges and agrees that the County is entitled to retain ten percent
(10%) of each disbursement by the County as set forth in the Home Loan Agreement.
For clarification purposes the Agency Note is referred to as the "City Loan" in the Home
Loan Agreement.
4. Repavment. The principal amount of the Note Amount shall be
immediately due and payable upon any default of the Agreement, which is not cured
Within the time set forth in Section 801 of the Agreement.
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LFV40320695 1
The Agency Note shall be repaid on an annual basis solely from one and
fifty-five one-hundredths of one percent (1.55%) of the Project's Residual Receipts.
Residual Receipts are defined as gross receipts less costs actually incurred for the
operation and maintenance of the Project, including, without limitation, auditing and
accounting fees, a property management fee not to exceed 6% of gross income, an
annual tax credit limited partner asset management fee not to exceed $5,000, an annual
managing general partner partnership management fee not to exceed $5,000, an
annual incentive management fee to the development general partner of Maker not to
exceed $7,500, developer fees, operating costs, reserves, repayment of limited partner
loans funded pursuant to Maker's partnership agreement and payments of principal and
interest on loans and indebtedness senior to the indebtedness evidenced by this
Agency Note and which have been approved by the Agency, including, without
limitation, the CaIHFA Loan (as defined below), the Home Loan and the MHP Loan
have been completely repaid. The Agency Note shall be subordinated to (i) that certain
construction and permanent loan from the California Housing Finance authority (the
"CaIHFA Loan"), (ii) the MHP Senior Debt and (iii) the County Home Loan. Available
Residual Receipts shall be determined based on a review of financial statements for the
project. Quarterly financial statements shall be submitted within 45 days of the close of
each quarter of the project fiscal year. In addition, annual audited financial statements
shall be submitted within 120 days of the close of the calendar year. All outstanding
principal along with accrued interest shall be due and payable on December 31, 2051.
The first payment shall be due on December 31, 2007, to the extent of available
Residual Receipts, as set forth above. For purposes of this Agency Note, defined terms
used in this paragraph but not defined herein shall have the meaning given to such
terms in the Home Loan Agreement.
5. Prepayment of Aqencv Note Amount. Maker may prepay to Holder the full
Note Amount, at any time prior to the due date of the Note Amount without penalty.
6. Security. This Agency Note is secured by a subordinate deed of trust by
and between Maker, as trustor and Holder, as beneficiary (the "Deed of Trust").
7. Holder May Assiqn. Holder may, at its option, assign its right to receive
payment under this Agency Note without necessity of obtaining the consent of the
Maker.
8. Maker Assiqnment Prohibited. In no event shall Maker assign or transfer
any portion of this Agency Note without the prior express written consent of the Holder,
which consent may be given or withheld in the Holder's sole discretion.
9. Attorneys' Fees and Costs. In the event that any action is instituted with
respect to this Agency Note, the non-prevailing party promises to pay such sums as a
court may fix for court costs and reasonable attorneys' fees. Holder's right to such fees
shall not be limited to or by its representation by staff counsel, and such representation
shall be valued at customary and reasonable rates for private sector legal services.
20
LA/40320695 1
10. Non-Waiver. Failure or delay in giving any notice required hereunder shall
not constitute a waiver of any default or late payment, nor shall it change the time for
any default or payment.
11. Successors Bound. This Agency Note shall be binding upon the parties
hereto and their respective heirs, successors and assigns.
12. Terms. Any terms not separately defined herein shall have the same
meanings as set forth in the Agreement.
13. Non-Recourse. Notwithstanding anything to the contrary herein
contained, (i) the liability of Maker shall be limited to its interest in the Site and any
rents, issues, and profits arising from the Site and, in addition, with respect to any
obligation to hold and apply insurance proceeds, proceeds of condemnation or other
monies hereunder, any such monies received by it to the extent not so applied in
accordance with the terms of this Note; (ii) no other assets of Maker shall be affected by
or subject to being applied to the satisfaction of any liability which Maker may have to
Holder or to another person by reason of this Note; and (iii) any judgment, order, decree
or other award in favor of Holder shall be collectible only out of, or enforceable in
accordance with, the terms of this Note by termination or other extinguishment of
Maker's interest in the Site. Notwithstanding the foregoing, it is expressly understood
and agreed that the aforesaid limitation on liability shall in no way restrict or abridge
Maker's continued personal liability for: (A) fraud or willful or grossly negligent
misrepresentation made by Maker in connection with this Note or any of the Agency
Agreements; (B) misapplication of (a) proceeds of insurance and condemnation or (b)
rent received by Maker under rental agreements entered into for any portion of the Site
after default of the Note; (C) the retention by Maker of all advance rentals and security
deposits of tenants not refunded to or forfeited by such tenants; or (D) the
indemnification undertakings of Maker under the Agency Agreements.
[NO FURTHER TEXT]
21
L4/40329695 1
"MAKER"
VISTA SUNRISE APARTMENTS, L.P.
a California limited partnership
By: MBA Urban Development Co.
Its Development General Partner
Date By:
Name:
Title:
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its: Managing General Partner
By:
Name:
Title:
"HOLDER"
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
SPRINGS,
a public body, corporate and politic
Date
By:
ATTEST: Chairman
Agency Secretary
APPROVED AS TO FORM:
Special Agency Counsel
22
LA/40320695 1
EXHIBIT D
Cash Contribution Deed of Trust
RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
executed this day of , 2005, by VISTA SUNRISE APARTMENTS,
L.P., a California limited partnership, herein "Trustor," in favor of the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body,
corporate and politic, herein the "Beneficiary,") the same parties to that certain form
Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is
attached. This Rider is made a part of and is incorporated into said Deed of Trust. This
Rider shall supersede any conflicting term or provision of the form Deed of Trust to
which it is attached.
Reference is made to the following agreements and documents: (i) Agency Note
by and between Trustor and Beneficiary, dated on or about the date set forth above, the
epayment of which by Trustor is secured by this Deed of Trust (the "Agency Note"); (ii)
Restated and Amended Disposition and Development Agreement by and between
Trustor, and Beneficiary, dated February 15, 2005 (the "RADDA"), providing for
Trustor's development of the Property; and (iii) Regulatory Agreement and Declaration
of Covenants and Restrictions, dated , 2005, by and between Trustor and
Beneficiary, providing for the use, operation, and maintenance of the Property
("Agreement Containing Covenants").
The parties hereto agree:
1. Property. The estate subject to this Deed of Trust is Trustor's fee estate in
the real property legally described in the Deed of Trust (the "Property"). In addition,
Trustor grants to beneficiary a security interest in all of Trustor's rights, title, and interest
in and to the following:
(a) All present and future inventory and equipment, as those terms are
defined in the California Commercial Code, and all other present and future personal
property of any kind or nature whatsoever, now or hereafter located at, upon or about
the Property or used or to be used in connection with or relating or arising with respect
to the Property and/or the use thereof or any improvements thereto, including without
limitation all present and future furniture, furnishings, fixtures, goods, tools, machinery,
plumbing and plumbing material and supplies, concrete, lumber, hardware, electrical
wiring and electrical material and supplies, heating and air conditioning material and
supplies, roofing material and supplies, window material and supplies, doors, paint,
drywall, insulation, cabinets, ceramic material and supplies, flooring, carpeting,
appliances, fencing, landscaping and all other materials, supplies and property of every
kind and nature.
23
LA/40320695.1
(b) All present and future accounts, general intangibles, chattel paper,
contract rights, deposit accounts, instruments and documents as those terms are
defined in the California Commercial Code, now or hereafter relating or arising with
respect to the Property and/or the use thereof or any improvements thereto, including
without limitation: (i) all rights to the payment of money, including escrow proceeds
arising out of the sale or other disposition of all or any portion of the Property; (ii) all
architectural, engineering, design and other plans, specifications and drawings relating
to the development of the Property and/or any construction thereon; (iii) all use permits,
occupancy permits, construction and building permits, and all other permits and
approvals required by any governmental or quasi-governmental authority in connection
with the development, construction, use, occupancy or operation of the Property; (iv)
any and all agreements relating to the development, construction, use, occupancy
and/or operation of the Property between Trustor and any contractor, subcontractor,
project manager or supervisor, architect, engineer, laborer or supplier of materials; (v)
all lease, rental or occupancy agreements and payments received thereunder; (vi) all
names under which the Property is now or hereafter known and all rights to carry on
business under any such names or any variant thereof; (vii) all trademarks relating to
the Property and/or the development, construction, use, occupancy or operation thereof;
(viii) all goodwill relating to the Property and/or the development, construction, use,
occupancy or operation thereof; (ix) all insurance proceeds and condemnation awards
arising out of or incidental to the ownership, development, construction, use, occupancy
or operation of the Property; (x) all reserves, deferred payments, deposits, refunds, cost
savings, bonds, insurance policies and payments of any kind relating to the Property;
(A) all loan commitments issued to Trustor in connection with any sale or financing of
i.he Property; (xii) all water stock, if any, relating to any Property and all shares of stock
or other evidence of ownership of any part of or interest in any Property that is owned
by Trustor in common with others; and (xiii) all supplements, modifications and
:amendments to the foregoing.
(c) All fixtures located upon or within the Property or now or hereafter
attached to, installed in, or used or intended for use in connection with the Property,
including without limitation any and all partitions, generators, screens, awnings, boilers,
furnaces, pipes, plumbing, elevators, cleaning, call and sprinkler systems, fire
extinguishing apparatus and equipment, water tanks, heating ventilating, air
conditioning and air cooling equipment, and gas and electric machinery and equipment.
(d) All present and future accessories, additions, attachments,
replacements and substitutions of or to any or all of the foregoing.
(e) All cash and noncash proceeds and products of any and all of the
foregoing, including without limitation all monies, deposit accounts, insurance proceeds
and other tangible or intangible property received upon a sale or other disposition of any
of the foregoing.
2. Obligations Secured. Trustor makes this grant and assignment for the
purpose of securing the following obligations ("Secured Obligations"):
24
LA/40320695.1
(a) Payment to Beneficiary of all indebtedness at any time owing under
the terms of the Agency Property Note;
(b) Payment and performance of all obligations of Trustor under this
Deed of Trust, the RADDA, and the Agreement Containing Covenants;
(c) Payment and performance of all future advances and other
obligations of Trustor or any other person, firm, or entity with the approval of Trustor,
may agree to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it
is secured by this Deed of Trust; and
(d) All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
3. Obligations. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without limitation, all
interest and charges, prepayment charges, late charges and fees at any time accruing
or assessed on any of the Secured Obligations.
4. Incorporation. All terms of the Agency Property Note and the Secured
Obligations are incorporated herein by this reference. All persons who may have or
acquire an interest in the Property shall be deemed to have notice of the terms of all of
the foregoing documents.
5. Mortgagee-in-Possession. Neither the assignment of rents set forth in the
Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder
shall be deemed to make Beneficiary a "mortgagee-in-possession" or otherwise liable in
any manner with respect to the Property, unless Beneficiary, in person or by agent,
assumes actual possession thereof. Nor shall appointment of a receiver for the
Property by any court at the request of Beneficiary or by agreement with Trustor, or the
Entering into possession of the Property by such receiver, be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise liable in any manner with respect
to the Property.
6. No Cure. In the event Beneficiary collects and receives any rents under
the Deed of Trust upon any event of default hereof, such collection or receipt shall in no
way constitute a curing of such default.
7. Opportunity to Cure. Trustor's failure or delay to perform any term or
provision of this Deed of Trust constitutes a default under this Deed of Trust; however,
Trustor shall not be deemed to be in default if (i) Trustor cures, corrects, or remedies
such default within thirty (30) days after receipt of a notice specifying such failure or
delay, or (ii) for such defaults that cannot reasonably be cured, corrected, or remedied
within thirty (30) days, if Trustor commences to cure, correct, or remedy such failure or
25
LPJ40320695 1
delay within thirty (30) days after receipt of a written notice specifying such failure or
delay, and diligently prosecutes such cure, correction or remedy to completion.
Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by Trustor. Copies of any notice of default given to Trustor shall
also be delivered to any permitted lender, if it has requested in writing to receive such
notice, and the limited partner of Trustor. Beneficiary may not institute proceedings
against Trustor until thirty (30) days after giving such notice or such longer period of
time as may be provided herein. In no event shall Beneficiary be precluded from
exercising remedies if its security becomes or is about to become materially jeopardized
by any failure to cure a default.
Except as otherwise expressly provided in this Deed of Trust, any failure
or delay in giving such notice or in asserting any of its rights and remedies as to any
default shall not constitute a waiver of any default, nor shall it change the time of
default, nor shall it deprive either party of its rights to institute and maintain any actions
or proceedings which it may deem necessary to protect, assert or enforce any such
ights or remedies.
In the event of any inconsistency in the terms of this Rider and the
provisions set forth in the standard deed of trust recorded in the Recorder's Office of the
County of Riverside, the terms of this Rider shall control.
8. Possession Upon Default. Subject to Section 7 above, upon the
occurrence of a default, and after delivery of notice and the expiration of all applicable
cure periods, Beneficiary may, at its option, without any action on its part being required
and without in any way waiving such default, take possession of the Property and have,
hold, manage, lease and operate the same, on such terms and for such period of time
as Beneficiary may deem proper, and may collect and receive all rents and profits, with
full power to make, from time to time, all alterations, renovations, repairs or
replacements thereto as may seem proper to Beneficiary, and to apply such rents and
profits to the payment of (a) the cost of all such alterations, renovations, repairs and
replacements, and all costs and expenses incident to taking and retaining possession of
the Property, and the management and operation thereof, and keeping the same
properly insured; (b) all taxes, charges, claims, assessments, and any other liens which
may be prior in lien or payment of the Note, and premiums for insurance, with interest
on all such items; and (c) the indebtedness secured hereby, together with all costs and
attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole
discretion may determine, any statute, law, custom or use to the contrary
notwithstanding. Any amounts received by Trustor or its agents in the performance of
any acts prohibited by the terms of this assignment, including, but not limited to, any
amounts received in connection with any cancellation, modification or amendment of
any lease prohibited by the terms of this assignment and any rents and profits received
by Trustor after the occurrence of a default shall be held by Trustor as trustee for
Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be
commingled with other funds of the Trustor. Any person receiving any portion of such
26
LN40320695.1
trust funds shall receive the same in trust for Beneficiary as if such person had actual or
constructive notice that such funds were impressed with a trust in accordance therewith.
9. Receiver. In addition to any and all other remedies of Beneficiary set forth
under this Deed of Trust or permitted at law or in equity, if a default shall have occurred,
Beneficiary, to the extent permitted by law and without regard to the value, adequacy or
occupancy of the security for the Agency Note and other sums secured hereby, shall be
entitled as a matter of right if it so elects to the appointment of a receiver to enter upon
and take possession of the Property and to collect all rents and profits and apply the
same as the court may direct, and such receiver may be appointed by any court of
competent jurisdiction by ex parte application and without notice, notice of hearing being
hereby expressly waived. The expenses, including receiver's fees, attorneys' fees,
costs and agent's compensation, incurred pursuant to the power herein contained shall
be secured by this Deed of Trust.
10. Security Aqreement. This Deed of Trust also constitutes a Security
,Agreement with respect to all personal property in which Beneficiary is granted a
security interest hereunder, and Beneficiary shall have all of the rights and remedies of
a secured party under the Uniform Commercial Code as enacted in California (the
"California Uniform Commercial Code") as well as all other rights and remedies
available at law or in equity. Trustor hereby agrees to execute and deliver on demand
and hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of
Trustor, to execute, deliver and, if appropriate, to file with the appropriate filing officer or
office such security agreements, financing statements, continuation statements or other
unstruments as Beneficiary may request or require in order to impose, perfect or
continue the perfection of, the lien or security interest created hereby. Trustor and
Beneficiary agree that the filing of a financing statement in the record normally having to
do with personal property shall never be construed as in any way derogating from or
impairing the lien of this Deed of Trust and the intention of Trustor and Beneficiary that
everything used in connection with the operation or occupancy of the Property is and at
all times and for all purposes and in all proceedings, both legal and equitable, shall be
regarded as real property or goods which are or are to become fixtures, irrespective of
whether (i) any such item is physically attached to the buildings and improvements on
the Property; (ii) serial numbers are used for the better identification of certain
equipment items capable of being filed by the Beneficiary; or (iii) any such item is
referred to or reflected in any such financing statement so filed at any time. Such
mention in the financing statements is declared to be for the protection of the
Beneficiary in the event any court or judge shall at any time hold that notice of
Beneficiary's priority of interest must be filed in the California Commercial Code records
to be effective against a particular class of persons, including, but not limited to, the
federal government and any subdivision or entity of the federal government. Trustor
covenants and agrees to reimburse Beneficiary for any costs incurred in filing such
financing statement and any continuation statements.
Upon the occurrence of default hereunder, and after delivery of notice and the
expiration of all applicable cure periods, Beneficiary shall have the right to cause any of
27
LA/40320695 1
the Property which is personal property and subject to the security interest of
Beneficiary hereunder to be sold at any one or more public or private sales as permitted
by applicable law, and Beneficiary shall further have all other rights and remedies,
whether at law, in equity, or by statute, as are available to secured creditors under
applicable law, specifically including without limitation the right to proceed as to both the
real property and the personal property contained within the Property as permitted by
Uniform Commercial Code Section 9501(4), including conducting a unified sale thereof.
Any such disposition may be conducted by an employee or agent of Beneficiary or
Trustee. Any person, including both Trustee and Beneficiary, shall be eligible to
purchase any part or all of such property at any such disposition.
This Deed of Trust constitutes a fixture filing under Sections 9313 and 9402(6) of
the California Uniform Commercial Code, as amended or recodified from time to time.
11. Notices, Demands, and Communications. Formal notices, demands, and
communications between Trustor and Beneficiary shall be given either by (i) personal
service, (ii) delivery by reputable document delivery service such as Federal Express
that provides a receipt showing date and time of delivery, or (iii) mailing in the United
States mail, certified mail, postage prepaid, return receipt requested, addressed to:
To Beneficiary: Community Redevelopment Agency
of the City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
Attn: Executive Director
With a copy to: Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 400
Irvine, California 92612
Attn: David J. Aleshire, Esq.
To Trustor: VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
c/o McCormack Baron Salazar
801 South Grand Ave. Suite 780
Los Angeles, CA. 90017-4635
Attn: Development General Partner
With a copy to: VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
c/o Coachella Valley AIDS Consortium
1695 North Sunrise Way
Palm Springs CA 92262
Attn: Executive Director
28
LA/40320695 1
SunAmerica Housing Fund 1305,
A Nevada Limited Partnership
c/o AIG Retirement Services, Inc.
One SunAmerica Center, Century City
Los Angeles, California 90067
Attn: Michael Fowler
Notices personally delivered or delivered by document delivery service shall be
deemed effective upon receipt. Notices mailed shall be deemed effective on the second
business day following deposit in the United States mail. Such written notices,
demands, and communications shall be sent in the same manner to such other
addresses as either party may from time to time designate by mail.
12. Extended Low-Income Housinq Commitment. This Deed of Trust shall be
subject to any "extended low-income housing commitment" (as defined in Section
42(h)(6)(B) of Internal Revenue Code of 1986, as amended (the "Code")) (the
"Extended Use Agreement") to be recorded in Riverside County, California; provided
that under the terms of the Extended Use Agreement, if the Trustor or its successors or
assigns (collectively, the "REO Owner") acquires the Property by foreclosure (or
instrument in lieu of foreclosure), then the "extended use period" (as defined in Section
42(h)(6)(D) of the Code) shall terminate, except for the obligation of the REO Owner to
comply with the limitations on evictions, termination of tenancy and increase in rents for
the three year period following the REO Owner's acquisition of the Property, as set forth
in Code Section 42(h)(6)(E)(ii).
[SIGNATURES TO FOLLOW]
29
LA/40320695.1
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of
Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day
and year first set forth above.
TRUSTOR:
VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
By: MBA Urban Development Co.
Its Development General Partner
By:
Its
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its Managing General Partner
By:
Its
30
LA140320695.1
EXHIBIT "A"
LEGAL DESCRIPTION
Real property located in the City of Palm Springs, County of Riverside, State of
California, legally described as:
31
LFV40320696 1
EXHIBIT E
Requlatory Aqreement
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: Executive Director
(Space Above This Line for Recorder's Office Use Only)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS
AND RESTRICTIONS ("Agreement") is made and entered into this day of
2005, by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic
('Agency"), the CITY OF PALM SPRINGS, a municipal corporation and charter city
("City"), and VISTA SUNRISE APARTMENTS, L.P., a California limited partnership
("Owner").
RECITALS :
A. Pursuant to a Restated and Amended Disposition and Development
Agreement by and between Agency and Owner dated February 15, 2005 (the "DDA"),
Agency has provided to Owner real property and financial assistance in the amount of
approximately One Million Five Hundred Five Thousand Dollars ($1,505,000.00)
(collectively, the "Agency Assistance"), all for the purpose of assisting Owner in the
acquisition of real property and the development of a residential apartment complex
thereon wherein forty nine percent (49%) of the units shall be rented to very low and
Dower income households, on that certain real property located in the City of Palm
Springs, County of Riverside, State of California, more particularly described in Exhibit
"A" attached hereto and incorporated herein by reference (the "Site").
B. Pursuant to the DDA, Owner has agreed to develop, construct, and
maintain a rental apartment housing project consisting of eighty (80) total residential
units (including one (1) resident manager's unit) (hereinafter referred to collectively as
the "Project") on the Site. The Project is also referred to in the DDA as the "Project,"
and is further described in the Scope of Development attached to the DDA.
C. The Agency and the City have fee or easement interests in various
streets, sidewalks and other property within the City and are responsible for the
LA/40320695.1 I
planning and development of land within the City in such a manner so as to provide for
the health, safety and welfare of the residents of the City. That portion of the Agency's
and City's interest in real property most directly affected by this Agreement is depicted
in Exhibit "B" attached hereto and incorporated herein by reference ("Public Parcel").
D. Agency, City, and Owner now desire to place restrictions upon the use
and operation of the Project, in order to ensure that forty nine percent (49%) the Project
shall be operated continuously as a rental apartment housing project available for rental
by very low and lower income persons for the term of this Agreement.
E. It is the intent of the parties that the title vested in Owner by the Grant
Deed for the Site dated ("Grant Deed"), recorded concurrently herewith in
Office of the County Recorder for the County of Riverside be subject to this Regulatory
,Agreement, and that the terms hereof shall be binding on the Owner and its successors
in interest in the Site for so long as the Regulatory Agreement shall remain in effect.
AGREEMENT :
NOW, THEREFORE, the Owner, City, and Agency declare, covenant and agree,
by and for themselves, their heirs, executors, administrators and assigns, and all
persons claiming under or through them, that the Site shall be held, transferred,
encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and
restrictions hereinafter set forth, all of which are declared to be in furtherance of a
common plan for the improvement and sale of the Site, and are established expressly
and exclusively for the use and benefit of the Agency, the residents of the City of Palm
Springs, and every person renting a dwelling unit on the Site.
A. DEFINITIONS.
1. Affordable Low Income Rent. As used in this Agreement, the term
"Affordable Low Income Rent" shall mean annual rentals whose amount does not
exceed the maximum percentage of income that can be devoted to rent as set forth by
Health & Safety Code Section 50053, or its successor, which is currently thirty percent
(30%) of sixty percent (60%) of the Riverside County Median_ Income adjusted for the
family size appropriate for the Unit.
2. Affordable Rent. As used in this Agreement, the term "Affordable
Rent" shall refer to Affordable Low Income Rent.
3. Affordable Very Low Income Rent. As used in this Agreement, the
term "Affordable Very Low Income Rent" shall mean annual rentals whose amount does
not exceed the maximum percentage of income that can be devoted to rent as set forth
by Health & Safety Code Section 50053, or its successor, which is currently thirty
percent (30%) of fifty percent (50%) of the Riverside County Median Income adjusted
for the family size appropriate for the Unit.
4. Eligible Tenant. As used in this Agreement, the term "Eligible
Tenant" shall refer to a Low Income Tenant.
LA/40320695 1 2
5. Riverside County Median Income. For purposes of this Agreement,
the "Riverside County Median Income" shall be determined by reference to the
regulations published by the California Department of Housing and Community
Development pursuant to Health and Safety Code Section 50093, or its successor.
6. Low Income Tenant. As used in this Agreement, the term "Low
Income Tenant" shall mean those tenants whose household income does not exceed
eighty percent (80%) of the Riverside County Median Income.
7. Project Manaqer. As used in this Agreement, the term "Project
Manager" shall refer to that entity, to be designated by Owner and approved by Agency,
who shall be responsible for operating and maintaining the Project in accordance with
the terms of this Agreement. Prior to Agency's approval, Owner shall act as Project
Manager.
8. Resident Manaqer. As used in this Agreement, the term "Resident
Manager" shall refer to that individual (or those individuals) who may reside in the
(Project and who are responsible for day-to-day management of the Project.
9. Unit. As used in this Agreement, the term "Unit" shall refer to any
of the eighty (80) residential units reserved for Eligible Tenants or the Resident
Manager.
10. Very Low Income Tenant. As used in this Agreement, the term
"Very Low Income Tenant" shall mean those tenants whose income does not exceed
fifty percent (50%) of the Riverside County Median Income.
B. RESIDENTIAL RENTAL PROPERTY. The Owner hereby agrees that the
Project is to be owned, managed, and operated as a project for low income residential
rental purposes for a term equal to fifty-five (55) years, commencing upon the date of
the recordation of the Certificate of Completion for the Site in accordance with the DDA
(the "Term"). To that end, and for the term of this Agreement, the Owner hereby
represents, covenants, warrants and agrees as follows:
1. Purpose. The Site is being acquired and the Project constructed
for the purpose of providing very low and lower income rental housing and the Owner
shall own, manage, and operate the Project as a project to provide very low and lower
income rental housing comprised of several interrelated buildings or structures, together
with any functionally related and subordinate facilities.
2. Residential Use. None of the Units in the Project will at any time be
utilized on a transient basis or used as a hotel, motel, dormitory, fraternity house,
sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or
park without the Agency's prior consent which consent may be given or withheld in its
sole and absolute discretion.
3. Conversion of Project. No part of the Project will at any time be
owned by a cooperative housing corporation, nor shall the Owner take any steps in
LA/40320695.1 3
connection with the conversion to such ownership or uses to condominiums, or to any
other form of ownership, without the prior written approval of Agency which approval
may be given or withheld in its sole and absolute discretion.
4. Preference to Eliqible Tenants. All of the Units will be available for
rental in accordance with the terms of this Agreement, and the Owner shall not give
preference to any particular class or group in renting the Units in the Project, except to
the extent that the Units are required to be leased or rented to Eligible Tenants and
except as provided in Section C.6 below.
5. Resident Manaqer. One, and only one, Unit in the Project may be
occupied by a Resident Manager.
6. Liability of Owner. Owner and Resident Manager shall not incur
any liability under this Agreement as a result of fraud or intentional misrepresentation by
a tenant.
7. Restricted Units. The Agency and the City acknowledge and agree
that the other lenders for the Project are also restricting the same 49% (or lesser
percentage) of the units at the Project and that the most restrictive rents will apply with
respect to such units.
C. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Owner hereby
represents, warrants, and covenants as follows:
1. Occupancy. Except as expressly provided herein, throughout the
term of this Agreement the occupancy of the 39 Restricted Units in the Project
(excluding the Resident Manager Unit) shall be restricted to Eligible Tenants and
qualified members of the Eligible Tenant's household.
2. Expiration of Occupancy and Rent Restrictions. The Units shall be
subject to the restrictions contained in this Section C for the Term of this Agreement. All
tenants residing in the Units during the final two (2) years of the Term shall be given
notice of the expiration of the Term at least once every six (6) months during the final
two years. After the expiration of the Term, the rents payable on the Units may be
raised to market rates.
3. Rental Rates. Owner hereby agrees to rent those Restricted Units
occupied by Low Income Tenants at no greater than Affordable Low Income Rent, and
to rent those Units occupied by Very Low Income Tenants at no greater than Affordable
Very Low Income Rent,
4. Occupancy By Eligible Tenant. A Unit occupied by an Eligible
Tenant shall be treated as occupied by an Eligible Tenant until a recertification of such
tenant's income in accordance with Section C.8 below demonstrates that such tenant no
Longer qualifies as an Eligible Tenant.
LA/40320695.1 4
5. Income Computation Certificate. Immediately prior to an Eligible
Tenant's occupancy of a Unit, Owner shall obtain and maintain on file an Income
Computation and Certification form (which form shall be approved in advance by the
Agency) from each such Eligible Tenant dated immediately prior to the date of initial
occupancy in the Project by such Eligible Tenant. In addition, the Owner will provide
such further information as may be required in the future by the Agency. Owner shall
use its best efforts to verify that the income provided by an applicant is accurate by
taking the following steps as a part of the verification process: (i) obtain three (3) pay
stubs for the most recent pay periods; (ii) obtain a written verification of income and
employment from applicant's current employer; (iii) obtain an income verification form
from the Social Security Administration and/or California Department of Social Services
if the applicant receives assistance from either agency; (iv) if an applicant is
unemployed or did not file a tax return for the previous calendar year, obtain other
verification of such applicant's income as is satisfactory to the Agency; or (v) such other
information as may be requested by the Agency. A copy of each such Income
Computation and Certification shall be filed with the Agency prior to the occupancy of a
Unit by an Eligible Tenant whenever possible, but in no event more than thirty (30) days
after initial occupancy by said tenant.
6. Rental Priority. During the term of this Agreement, Owner shall use
its best efforts to lease vacant Units reserved for Eligible Tenants in the following order
of priority: (i) displaced persons entitled to a preference pursuant to California Health
and Safety Code Section 33411.3 or successor statute, and (ii) other persons meeting
the eligibility requirements of this Agreement. Owner shall and Agency may maintain a
list (the "Housing List") of persons who have notified Owner and/or Agency of their
desire to rent a Unit in the Project and who have incomes which would qualify them as
-an Eligible Tenant, and Owner shall offer to rent Units on the above-referenced priority
basis. Should multiple tenants be equally eligible and qualified to rent a Unit, Owner
shall rent available Units to Eligible Tenants on a first-come, first-served basis.
7. Rentinq Vacant Units. When a Unit becomes available as a result
of a tenant vacation, Owner shall rent the Unit to an Eligible Tenant in accordance with
the order of priority set forth in Section C.6.
8. Income Recertification. Immediately prior to the first anniversary
date of the occupancy of a Unit by an Eligible Tenant and on each anniversary date
thereafter, Owner shall recertify the income of such Eligible Tenant by obtaining a
completed Income Computation and Certification based upon the current income of
each occupant of the Unit. In the event the recertification demonstrates that such
household's income exceeds the income at which such household would qualify as an
E=ligible Tenant, such household will no longer qualify as an Eligible Tenant. If the
occupants upon recertification do not qualify as an Eligible Tenant, then the occupants'
lease shall be terminated in accordance with Section C.9. Owner shall provide the
Agency with a copy of each such recertification with the next submission of Certificate of
Continuing Program Compliance pursuant to Section C.10.
L>/40320595.1 5
9. Terminatinq Ineliqible Tenant. Upon recertification, if an Eligible
Tenant has become ineligible under the definition in Section 1, paragraph 6, Owner
shall allow such ineligible tenant to occupy the Unit provided the ineligible tenant to
occupy the Unit provided the ineligible tenant's income does not exceed one-hundred
forty percent (140%) of Area Median Income (AMI). The unit shall be deemed occupied
by qualified tenant, but "ineligible tenant" for the purposes of reporting under Section
C(10.)(i), Certificate of Continuing Program Compliance. During the period the ineligible
tenant occupies the unit, the tenant's rent shall be adjusted to 30% of the tenant's gross
income or the maximum rent allowable under Section 42 of the IRC (the "Tax Credit
Rent"), whichever is less. If the ineligible tenant's income exceeds 140% of AMI, then
Owner shall allow such ineligible tenant to occupy the Unit for a period of twenty-four
(24) months ("Grace Period"). The ineligible tenant shall pay rent as adjusted and
increased according to California law but not in excess of the Tax Credit Rent. If the
ineligible tenant becomes an Eligible Tenant under Section 1, paragraph 6, while
remaining a qualified tenant under Section 42, upon recertification during the Grace
Period, Owner shall continue to rent the Unit to the Eligible Tenant at the Affordable
[Rent of the income category that the Eligible Tenant falls within following recertification.
If after the Grace Period the tenant remains ineligible, the ineligible tenant's lease shall
not be renewed and such tenant shall be required to vacate the unit in accordance with
the laws of California.
10. Certificate of Continuinq Proqram Compliance. Upon the issuance
of the Certificate of Completion and annually by January 31 of each year, or at any time
upon the written request of Agency, Owner shall advise the Agency of the occupancy of
the Project by delivering a Certificate of Continuing Program Compliance in the form
attached hereto as Exhibit "C," certifying: (i) the number of Units of the Project which
were occupied or deemed occupied pursuant to Section CA by an Eligible Tenant
during such period, and (ii) to the knowledge of Owner either (a) no unremedied default
has occurred under this Agreement, (b) a default has occurred, in which event the
Certificate shall describe the nature of the default and set forth the measures being
taken by the Owner to remedy such default.
11. Maintenance of Records. Owner shall maintain complete and
accurate records pertaining to the Units, and shall permit any duly authorized
representative of the Agency to inspect the books and records of Owner pertaining to
the Project including, but not limited to, those records pertaining to the occupancy of the
Units.
12. Reliance on Tenant Representations. Each lease shall contain a
provision to the effect that Owner has relied on the income certification and supporting
information supplied by the tenant in determining qualification for occupancy of the Unit,
and that any material misstatement in such certification (whether or not intentional) will
be cause for immediate termination of such lease.
13. Conflicts. The leasing preference provision set forth in Section C.6
shall apply only in the event, and to the extent, such provisions are not in conflict with
Internal Revenue Code provisions or IRS regulations.
LA/40320695.1 6
14. Agency Remedy For Excessive Rent Charqe.
a. It shall constitute a default for Owner to charge or accept for
a Unit rent amounts in excess of the amount provided for in Section C.3 of this
Agreement. In the event that Owner charges or receives such higher rental amounts, in
addition to any other remedy Agency shall have for such default, Owner shall be
required to pay to Agency the entire amount of rent received in excess of the amount
permitted pursuant to this Agreement.
b. It shall constitute a default for Owner to rent any Unit to a
tenant who is not an Eligible Tenant for the particular Unit pursuant to the rental rate
requirements set forth in Section C.3 of this Agreement. In the event Owner rents a
Unit to an ineligible tenant, in addition to any other equitable remedy Agency shall have
for such default, Owner, for each separate violation shall be required to pay to Agency
an amount equal to (i) two times the greater of (A) the total rent Owner received from
such ineligible tenant, or (B) the total rent Owner was entitled to receive for renting that
Unit, plus (ii) any relocation expenses incurred by Agency or City as a result of Owner
having rented to such ineligible person.
C. It shall constitute a default for Owner to rent any of the Units
in violation of the leasing preference requirements of Sections C.6 of this Agreement. In
the event Owner rents a Unit in violation of the leasing preference requirements, in
addition to any other equitable remedy Agency shall have for such default, Owner, for
each separate violation shall be required to pay Agency an amount equal to two (2)
months of rental charges for the Unit with the highest rent. The terms of this Section
C.14 shall not apply if Owner rents to an ineligible person as a result of such person's
fraud or misrepresentation.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SUBPARAGRAPHS (a) THROUGH (c) OF THIS SECTION C.14 (THE "DAMAGE
AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL
DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY OWNER
;iET FORTH IN SUBPARAGRAPHS (a) THROUGH (c), CONSIDERING ALL OF THE
CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT,
INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF
HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF
ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE
TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION
THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT.
THE AMOUNTS SET FORTH IN THIS SECTION C.14 SHALL BE THE SOLE
MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS
SECTION C.14, BUT NOTHING IN THIS SECTION C.14 SHALL BE INTERPRETED
TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES
REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW,
EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS
MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY
COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED
LA/40320695.1 7
i
DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS
AGREEMENT.
I
OWNER'S INITIALS: AGENCY'S INITIALS:
15. Section 8 Tenants. Owner shall accept as tenants on the same
basis as all other Eligible Tenants, persons who are recipients of federal certificates for
Trent subsidies pursuant to the existing program under Section 8 of the United States
Housing Act of 1937, or its successor. Owner shall not apply selection criteria to
Section 8 certificate holders that are more burdensome than criteria applied to all other
Eligible Tenants.
D. MAINTENANCE.
1. Maintenance Obliqation. Owner, for itself and its successors and
assigns, hereby covenants and agrees to maintain and repair or cause to be maintained
and repaired the Site and all related on-site improvements and landscaping thereon,
including, without limitation, buildings, parking areas, lighting, signs and walls in a first
class condition and repair, free of rubbish, debris and other hazards to persons using
the same, and in accordance with all applicable laws, rules, ordinances and regulations
of all federal, state, and local bodies and agencies having jurisdiction, at Owner's sole
cost and expense. Such maintenance and repair shall include, but not be limited to, the
following: (i) sweeping and trash removal; (ii) the care and replacement of all
shrubbery, plantings, and other landscaping in a healthy condition; and (iii) the repair,
replacement and restriping of asphalt or concrete paving using the same type of
material originally installed, to the end that such pavings at all times be kept in a level
and smooth condition. In addition, Owner shall be required to maintain the Property in
:such a manner as to avoid the reasonable determination of a duly authorized official of
the City that a public nuisance has been created by the absence of adequate
maintenance such as to be detrimental to the public health, safety or general welfare or
that such a condition of deterioration or disrepair causes appreciable harm or is
materially detrimental to property or improvements within one thousand (1,000) feet of
such portion of the Site.
2. Parkinq and Driveways. The driveways and traffic aisles on the
Site shall be kept clear and unobstructed at all times. No vehicles or other obstruction
shall project into any of such driveways or traffic aisles. Vehicles associated with the
operation of the Site, including delivery vehicles, vehicles of employees and vehicles of
persons with business on the Site shall park solely on the Site.
3. Tenant Compliance. Owner shall provide any proposed tenants of
any portion of the Site with a copy of this Agreement and shall, prior to entering into any
lease agreement, have the proposed tenant execute an affidavit agreeing to comply
with the provisions of this Agreement. All lease agreements shall be in writing and shall
contain provisions which make compliance with the conditions of this Agreement
express covenants of the lease.
LIU40320695.1 8
4. Right of Entry. In the event Owner fails to maintain the Site in the
above-mentioned condition, and satisfactory progress is not made in correcting the
condition within thirty (30) days from the date of written notice from Agency, City or
Agency may, at their option, and without further notice to Owner, declare the
unperformed maintenance to constitute a public nuisance. Thereafter, either Agency or
City, their employees, contractors or agents, may cure Owner's default by entering upon
the Site and performing the necessary landscaping and/or maintenance. The Agency or
City shall give Owner, its representative or the residential manager reasonable notice of
the time and manner of entry, and entry shall only be at such times and in such manner
as is reasonably necessary to carry out this Regulatory Agreement. Owner shall pay
such costs as are reasonably incurred by Agency or City for such maintenance,
including attorneys' fees and costs.
5. Lien. If such costs are not reimbursed within thirty (30) days after
Owner's receipt of notice thereof, the same shall be deemed delinquent, and the
amount thereof shall bear interest thereafter at a rate of the lower of ten percent (10%)
per annum or the legal maximum until paid. Any and all delinquent amounts, together
with said interest, costs and reasonable attorney's fees, shall be an obligation of Owner
as well as a lien and charge, with power of sale, upon the property interests of Owner,
and the rents, issues and profits of such property. City and/or Agency may bring an
action at law against Owner obligated to pay any such sums or foreclose the lien
against Owner's property interests. Any such lien may be enforced by sale by the City
or Agency following recordation of a Notice of Default of Sale given in the manner and
time required by law as in the case of a deed of trust; such sale to be conducted in
accordance with the provisions of Section 2924, et seq., of the California Civil Code,
applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any
other manner permitted by law.
Any monetary lien provided for herein shall be subordinate to any bona fide
mortgage or deed of trust covering an ownership interest or leasehold or subleasehold
estate in and to any Site approved by Agency pursuant to the DDA, and any purchaser
at any foreclosure or trustee's sale (as well as any deed or assignment in lieu of
foreclosure or trustee's sale) under any such mortgage or deed of trust shall take title
free from any such monetary lien, but otherwise subject to the provisions hereof;
provided that, after the foreclosure of any such mortgage and/or deed of trust, all other
assessments provided for herein to the extent they relate to the expenses incurred
subsequent to such foreclosure, assessed hereunder to the purchaser at the
foreclosure sale, as owner of the subject Site after the date of such foreclosure sale,
shall become a lien upon such Site upon recordation of a Notice of Assessment or
Notice of Claim of Lien as herein provided.
E. MANAGEMENT.
1. Approval of Project Manaqer; Desiqnation of Resident Manaqer.
Subject to the terms and conditions contained hereinbelow, Owner shall at all times
during the operation of the Project pursuant to this Agreement retain an entity to
perform the management and/or supervisory functions ("Project Manager") with respect
L/V40320695.1 9
to the operation of the Project including day-to-day administration, maintenance and
repair. Owner shall, before execution or any subsequent amendment or replacement
thereof, submit and obtain Agency's written approval of a management contract
("Management Contract") entered into between Owner and a Project Manager
acceptable to Agency. Subject to any regulatory or licensing requirements of any other
applicable governmental agency, the Management Contract may be for a term of up to
fifteen (15) years and may be renewed for successive terms in accordance with its
terms, but may not be amended or modified without the written consent of Agency. The
Management Contract shall also provide that the Project Manager shall be subject to
termination for failure to meet project maintenance and operational standards set forth
herein or in other agreements between Owner and Agency. Owner shall promptly
terminate any Project Manager which commits or allows such failure, unless the failure
is cured within a reasonable period in no event exceeding 60 days from Project
Manager's receipt of notice of the failure from Owner or Agency. Owner's obligation to
retain a Project Manager shall remain in force and effect for the same duration as the
use covenants set forth in Section B of this Agreement. Notwithstanding anything to the
contrary in this Section, the Project may be self-managed by Owner with the prior
approval of the Agency Executive Director. Any change in the Project Manager shall be
:approved, in writing, by the Executive Director, which approval shall not be
unreasonably withheld.
In addition to the Project Manager, one Resident Manager shall be designated as
necessary by Owner or Project Manager, with written notice to Agency of the Resident
Manager's name, address and telephone number.
2. Serious Mismanaqement. In the event of "Serious
Mismanagement" (as that term is defined below) of the Project, Agency shall have the
authority to require that such Serious Mismanagement cease immediately, and further
to require the immediate replacement of the Project Manager or Resident Manager. For
purposes of this Agreement the term "Serious Mismanagement" shall mean
management of the Project in a manner which violates the terms and/or intent of this
Agreement and/or the Management Contract to operate an affordable housing complex
of the highest standard, and shall include, but is not limited to, the following:
a. Knowingly leasing to ineligible tenants or tenants whose
income exceeds the prescribed levels;
b. Knowingly allowing the tenants to exceed the prescribed
occupancy levels without taking immediate steps to stop such overcrowding;
C. Repeatedly failing to timely maintain the Project and the Site
in the manner required by this Agreement;
d. Failing to timely submit the reports as required by this
Agreement or failing to submit materially complete reports;
LN40320695.1 10
e. Fraud in connection with any document or representation
relating to this Agreement or embezzlement of Project monies; and
f. Failing to fully cooperate with the City's Police Department in
maintaining a crime-free environment on the Site.
G. COMPLIANCE WITH LAWS.
1. State and Local Laws. Owner shall comply with all ordinances,
regulations and standards of the City and Agency applicable to the Site. Owner shall
comply with all rules and regulations of any assessment district of the City with
jurisdiction over the Site.
2. Lease Approval. Agency shall have the right but is not required to
approve any lease forms, revisions, amendments or modification made to same, used
by the Project Manager or Resident Manager for leasing Units within the Site.
H. INSURANCE.
1. Duty to Procure Insurance. Owner covenants and agrees for itself,
and its assigns and successors-in-interest in the Site that from completion of the Project
as evidenced by City's issuance of a certificate of occupancy, and continuing thereafter
until the expiration of the Term of this Agreement, Owner or such successors and
assigns shall procure and keep in full force and effect or cause to be procured and kept
in full force and effect for the mutual benefit of Owner and Agency, and shall provide
Agency evidence reasonably acceptable to Executive Director, insurance policies
meeting the minimum requirements set forth below:
a. Commercial General Liability insurance with respect to the
Site and the operations of or on behalf of Owner, in an amount not less than Two Million
Dollars ($2,000,000) per occurrence combined single limit including products,
completed operations, contractual, bodily injury, personal injury, death and property
damage liability per occurrence, subject to such increases in amount as Agency may
reasonably require from time to time. The insurance to be provided by Owner may
provide for a deductible or self-insured retention of not more than Ten Thousand Dollars
($10,000), with such maximum amount to increase at the same rate as the periodic
increases in the minimum amount of total insurance coverage set forth above.
b. With respect to the improvements and any fixtures and
furnishings to be owned by Owner on the Site, All Risk Property insurance against fire,
extended coverage, vandalism, and malicious mischief, and such other additional perils,
hazards, and risks as now are or may be included in the standard "all risk" form in
general use in Riverside County, California, with the standard form fire insurance
coverage in an amount equal to full actual replacement cost thereof, as the same may
change from time to time. The above insurance policy or policies shall not require
coverage for earthquake. Agency shall be a loss payee under such policy or policies
and such insurance shall contain a replacement cost endorsement.
LN40320695 1 11
C. All policies of insurance required to be carried by Owner
shall be written by responsible and solvent insurance companies licensed in the State of
California and having a policy-holder's rating of A or better, in the most recent edition of
"Best's Key Rating Guide -- Property and Casualty." A copy of each paid-up policy
Evidencing such insurance (appropriately authenticated by the insurer) or a certificate of
the insurer, certifying that such policy has been issued, providing the coverage required
herein, and containing the provisions specified herein, shall be delivered to Agency prior
to its issuance of the Certificate of Completion for the Project and thereafter, upon
renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may,
cat any time, and from time to time, inspect and/or copy any and all insurance policies
required to be procured by Owner hereunder. In no event shall the limits of any policy
be considered as limiting the liability of Owner hereunder.
d. Each insurance policy required to be carried by Owner
pursuant to this Agreement shall contain the following endorsements, provisions or
clauses:
(1) The insurer will not cancel or materially alter the
coverage provided by such policy in a manner adverse to the interest of the insured
without first giving Agency a minimum of thirty (30) days prior written notice by certified
mail, return receipt requested; and
(2) A waiver by the insurer of any right to subrogation
against Agency, its agents, employees, or representatives, which arises or might arise
by reason of any payment under such policy or policies or by reason of any act or
omission of Agency, its agents, officers, members, officials, employees, or
representatives.
(3) The City, Agency, their respective agents, officers,
members, officials, employees, volunteers, and representatives shall be named
insureds on the Commercial General Liability policies.
(4) The City and Agency shall be loss payees on the All
Risk Property insurance policies.
(5) Coverage provided by these policies shall be primary
and non-contributory to any insurance carried by the City, Agency, their officers,
officials, employees, volunteers, agents, or representatives.
(6) Failure to comply with reporting provisions shall not
affect coverage provided to City, Agency, their officers, employees, volunteers, agents,
or representatives.
2. Failure to Procure Insurance. If Owner fails to procure and
maintain the above-required insurance despite its availability, then Agency, in addition
to any other remedy which Agency may have hereunder for Owner's failure to procure,
maintain, and/or pay for the insurance required herein, may (but without any obligation
to do so) at any time or from time to time, after thirty (30) days written notice to Owner,
LA/40320695.1 12
procure such insurance and pay the premiums therefor, in which event Owner shall
immediately repay Agency all sums so paid by Agency together with interest thereon at
the maximum legal rate.
I. OBLIGATION TO REPAIR.
1. Obligation to Repair and Restore Damaqe Due to Casualty
Covered by Insurance. Subject to Section 1.3 below, if the Project shall be totally or
partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty
required to be insured against by Owner, Owner shall promptly proceed to obtain
insurance proceeds and take all steps necessary to begin reconstruction and,
irnmediately upon receipt of insurance proceeds, to promptly and diligently commence
the repair or replacement of the Project to substantially the same condition as the
Project is required to be maintained in pursuant to this Agreement, whether or not the
insurance proceeds are sufficient to cover the actual cost of repair, replacement, or
restoration, and Owner shall complete the same as soon as possible thereafter so that
the Project can continue to be operated and occupied as an affordable housing project
in accordance with this Agreement. Subject to extensions of time for "force majeure"
events described in the DDA, in no event shall the repair, replacement, or restoration
period exceed one (1) year from the date Owner obtains insurance proceeds unless
Agency's Executive Director, in his or her sole and absolute discretion, approves a
longer period of time. Agency shall cooperate with Owner, at no expense to Agency, in
obtaining any governmental permits required for the repair, replacement, or restoration.
If, however, the then-existing laws of any other governmental agencies or lenders with
jurisdiction over the Property do not permit the repair, replacement, or restoration,
Owner may elect not to repair, replace, or restore the Project by giving notice to Agency
(in which event Owner shall be entitled to all insurance proceeds but Owner shall be
required to remove all debris from the Site) or Owner may reconstruct such other
improvements on the Site as are consistent with applicable land use regulations and
approved by the City, Agency, and the other governmental agency or agencies with
jurisdiction.
If Owner fails to obtain insurance as required by the DDA or this Agreement (and
Agency has not procured such insurance and charged Owner for the cost), Owner shall
be obligated to reconstruct and repair any partial or total damage to the Project and
improvements located on the Site in accordance with this Section 1.1.
2. Continued Operations. During any period of repair, Owner shall
continue, or cause the continuation of, the operation of the Project to the extent
reasonably practicable from the standpoint of prudent business management.
3. Damage or Destruction Due to Cause Not Required to be Covered
by Insurance. If the improvements comprising the Project are completely destroyed or
substantially damaged by a casualty for which Owner is not required to (and has not)
insure against, then Owner shall not be required to repair, replace, or restore such
improvements and may elect not to do so by providing Agency with written notice of
election not to repair, replace, or restore within ninety (90) days after such substantial
LUN40320695 1 13
damage or destruction. In such event, Owner shall remove all debris from the Property.
As used in this Section 1.3, "substantial damage" caused by a casualty not required to
be (and not) covered by insurance shall mean damage or destruction which is fifty
percent (50%) or more of the replacement cost of the improvements comprising the
Project. In the event Owner does not timely elect not to repair, replace, or restore the
improvements as set forth in the first sentence of this Section 1.3, Owner shall be
conclusively deemed to have waived its right not to repair, replace, or restore the
improvements and thereafter Owner shall promptly commence and complete the repair,
replacement, or restoration of the damaged or destroyed improvements in accordance
with Section 1.1 above and continue operation of the apartment complex during the
period of repair (if practicable) in accordance with Section 1.2 above.
J. LIMITATION ON TRANSFERS. The Owner covenants that Owner shall
not transfer the Site or any of its interests therein except as provided in this Section.
1. Transfer Defined. As used in this Section, the term "Transfer" shall
include any assignment, hypothecation, mortgage, pledge, conveyance, or
encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer
shall also include the transfer to any person or group of persons acting in concert of
more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or
control of any person or entity constituting Owner or its general partners, taking all
transfers into account on a cumulative basis, except transfers of such ownership or
control interest between members of the same immediate family, or transfers to a trust,
testamentary or otherwise, in which the beneficiaries are limited to members of the
transferor's immediate family, or among the entities constituting Owner or its general
partners or their respective shareholders. In the event any entity constituting Owner, its
successor or the constituent partners of Owner or any successor of Owner, is a
corporation or trust, such transfer shall refer to the transfer of the issued and
outstanding capital stock of such corporation, of beneficial interests of such trust; in the
event that any entity constituting Owner, its successor or the constituent partners of
Owner or any successor of Owner is a limited or general partnership, such transfer shall
refer to the transfer of more than twenty-five percent (25%) of such limited or general
partnership interest; in the event that any entity constituting Owner, its successor or the
constituent partners of Owner or any successor of Owner is a joint venture, such
transfer shall refer to the transfer of more than twenty-five percent (25%) of the
ownership and/or control of any such joint venture partner, taking all transfers into
account on a cumulative basis.
2. Agency Approval of Transfer Required. Owner shall not Transfer
the Site or any of Owner's rights hereunder, or any interest in the Site or in the
improvements thereon, directly or indirectly, voluntarily or by operation of law, except as
provided below, without the prior written approval of Agency, and if so purported to be
Transferred, the same shall be null and void. In considering whether it will grant
approval of any Transfer by Owner of its interest in the Site, Agency shall consider
factors such as (i) whether the completion and operation of the Project is jeopardized;
(ii) the financial credit, strength, and capability of the proposed transferee to perform
Owner's obligations hereunder; and (iii) the proposed transferee's experience and
LA/40320695 1 14
expertise in the planning, financing, development, ownership, and operation of similar
projects.
In the absence of specific written agreement by Agency, no transfer by Owner of
all or any portion of its interest in the Site (including without limitation a transfer not
requiring Agency approval hereunder) shall be deemed to relieve it or any successor
party from the obligation to complete the Project or any other obligations under this
Agreement. In addition, no attempted transfer of any of Owner's obligations hereunder
shall be effective unless and until the successor party executes and delivers to Agency
an assumption agreement in a form approved by the Agency assuming such
obligations.
3. Exceptions. The foregoing prohibition shall not apply to any of the
following:
(a) Any mortgage, deed of trust, sale/lease-back, or other form
of conveyance for financing, but Owner shall notify Agency in advance of any such
mortgage, deed of trust, or other form of conveyance for financing pertaining to the Site.
(b) Any mortgage, deed of trust, sale/lease-back, or other form
of conveyance for restructuring or refinancing of any amount of indebtedness described
in subsection (a) above, provided that the amount of indebtedness incurred in the
restructuring or refinancing does not exceed the outstanding balance on the debt
incurred to finance the acquisition of the Site and construction of improvements on the
Site, including any additional costs for completion of construction, whether direct or
indirect, based upon the estimates of architects and/or contractors.
(c) After recordation of the Certificate of Completion, any
mortgage, deed of trust, sale/lease-back, or other form of conveyance for financing
provided that the principal amount of the loan does not exceed eighty-five percent
(85%) of the value of the land and improvements thereon.
(d) The granting of easements to any appropriate governmental
agency or utility to facilitate the development of the Site.
(e) A sale or transfer resulting from or in connection with a
reorganization as contemplated by the provisions of the Internal Revenue Code of 1986,
as amended or otherwise, in which the ownership interests of a corporation are
assigned directly or by operation of law to a person or persons, firm or corporation
which acquires the control of the voting capital stock of such corporation or all or
substantially all of the assets of such corporation.
(f) A transfer of twenty-five percent (25%) or more ownership
interest to a member of the transferor's immediate family, a trust, testamentary or
otherwise, in which immediate family members of the transferor are the sole
beneficiaries, or a corporation or partnership in which the immediate family members or
shareholders of the transferor have controlling majority interest of more than fifty
percent (50%).
LN40320695.1 15
(g) A change in the respective percentage ownership interests
exclusively of the present owners of Owner (as of the date of this Agreement), but this
shall not authorize the transfer of any interest to any person or entity who is not a
present owner of Owner.
(h) A sale or transfer to a Qualified Tax Credit Investor.
(i) Notwithstanding anything to the contrary contained in this
Agreement, Developer shall have the right, at its option, to have the Site granted from
Agency to a nonprofit general partner who is subsequently admitted to the Developer.
0) A sale or transfer of general partner interests to a nonprofit
general partner.
(k) (i) The pledge by the general partner of Developer to the
limited partner of Developer of the general partner's partnership interest pursuant to
Developer's limited partnership agreement, (ii) any transfer of a limited partnership
interest in Developer by the limited partner of Developer to an affiliate of such limited
partner, (iii) any transfer of a partnership interest in the entity that is the limited partner
of Developer and (iv) any transfer of a general partnership interest in Developer to the
limited partner of Developer or to an affiliate thereof in connection with the removal of
the general partner of Developer pursuant to Developer's limited partnership agreement.
K. ENCUMBRANCES PROHIBITED. Prior to issuance of the Certificate of
Completion by Agency as provided in the DDA, the Grantee shall not place or suffer to
be placed on the Site any lien or encumbrance other than mortgages, deeds of trust,
sales and leases back or any other form of conveyance required for financing of the
acquisition of the Site, the construction of improvements on the Site, and any other
expenditures necessary and appropriate to develop the Site, except as specifically
provided in the DDA and attachments thereto.
L. ENFORCEMENT. In the event Owner defaults in the performance or
observance of any covenant, agreement or obligation of Owner pursuant to this
Agreement, and if such default remains uncured for a period of thirty (30) days after
written notice thereof shall have been given by Agency, or, in the event said default
cannot be cured within said time period, Owner has failed to commence to cure such
default within said thirty (30) days and thereafter fails to diligently prosecute said cure to
completion, then Agency shall declare an "Event of Default" to have occurred
hereunder, and, at its option, may take one or more of the following steps:
1. By mandamus or other suit, action or proceeding at law or in equity,
require Owner to perform its obligations and covenants hereunder or enjoin any acts or
things which may be unlawful or in violation of this Agreement; or
2. Take such other action at law or in equity as may appear necessary
or desirable to enforce the obligations, covenants and agreements of Owner hereunder;
or
UV40320695.1 16
3. Enter the Site and cure the Event of Default as provided in Section
E hereof.
4. Impose, through Agency's Executive Director, an administrative fine
for each day the violation continues. The amount of the fine shall be Twenty-Five
dollars ($25.00) per day, unless the violation is deemed a major violation, in which case
the fine shall be Seventy-Five dollars ($75.00) per day. A "major" violation shall be one
which affects adjacent property or the health and safety of persons. Owner may appeal
the assessment of any fine to the City Council who may reverse, modify or uphold the
decision of the Executive Director. In making this decision, the City Council shall
determine whether the violation exists and whether the amount of the fine is appropriate
under the circumstances.
Except as otherwise expressly stated in this Agreement, the rights and remedies
of the parties are cumulative, and the exercise by any party of one or more of its rights
or remedies shall not preclude the exercise by it, at the same or different times, of any
other rights or remedies for the same default or any other default by another party.
M. NONDISCRIMINATION. There shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed,
religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall
Owner, or any person claiming under or through it, establish or permit any such practice
or practices of discrimination or segregation with. reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of
the Site, or any part thereof (except as permitted by this Agreement).
N. FORM OF NONDISCRIMINATION CLAUSES IN AGREEMENTS. Subject
to the tenancy/occupancy restrictions not prohibited by federal law as embodied in the
DDA, which may modify the following nondiscrimination clauses, the following shall
apply: Owner shall refrain from restricting the rental, sale, or lease of any portion of the
Site on the basis of race, color, creed, religion, sex, marital status, age, physical or
mental disability, ancestry, or national origin of any person. All such deeds, leases, or
contracts shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
a. Deeds: In deeds the following language shall appear: "The
grantee herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, age, physical or mental disability,
ancestry, or national origin in the sale, lease, rental, sublease, transfer, use, occupancy,
tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any
persons claiming under or through it, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use,
or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land
herein conveyed. The foregoing covenants shall run with the land."
LFV40320095.1 17
b. Leases: In leases the following language shall appear: "The
lessee herein covenants by and for itself, its heirs, executors, administrators,
successors, and assigns, and all persons claiming under or through them, and this
lease is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, marital status, age,
physical or mental disability, ancestry, or national origin in the leasing, subleasing,
renting, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor
shall the lessee itself, or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the land herein leased."
C. Contracts: In contracts the following language shall appear:
"There shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, marital status, age, physical or
mental disability, ancestry, or national origin in the sale, lease, rental, sublease,
transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself,
or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of
the land."
The foregoing nondiscrimination covenants shall remain in effect in perpetuity.
O. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the
Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency
and Owner hereby declare their express intent that all such covenants, reservations,
and restrictions shall be deemed covenants running with the land and shall pass to and
be binding upon the Owner's successors in title to the Site; provided, however, that on
the termination of this Agreement said covenants, reservations and restrictions shall
expire. All covenants without regard to technical classification or designation shall be
binding for the benefit of the Agency, and such covenants shall run in favor of the
Agency for the entire term of this Agreement, without regard to whether the Agency is or
remains an owner of any land or interest therein to which such covenants relate. Each
and every contract, deed or other instrument hereafter executed covering or conveying
the Site or any portion thereof shall conclusively be held to have been executed,
delivered and accepted subject to such covenants, reservations, and restrictions,
regardless of whether such covenants, reservations, and restrictions are set forth in
such contract, deed or other instrument.
Agency and Owner hereby declare their understanding and intent that the burden
of the covenants set forth herein touch and concern the land in that Owner's legal
interest in the Site is rendered less valuable thereby. Agency and Owner hereby further
declare their understanding and intent that the benefit of such covenants touch and
concern the land by enhancing and increasing the enjoyment and use of the Project by
LA140320695.1 is
Eligible Tenants, the intended beneficiaries of such covenants, reservations, and
restrictions, and by furthering the public purposes for which the Agency was formed.
Owner, in exchange for the Agency entering into the DDA, hereby agrees to hold,
sell, and convey the Site subject to the terms of this Agreement. Owner also grants to
the Agency and the City the right and power to enforce the terms of this Agreement
against the Owner and all persons having any right, title or interest in the Site or any
part thereof, their heirs, successive owners and assigns.
P. INDEMNIFICATION. Owner agrees for itself and its successors and
assigns to indemnify, defend, and hold harmless Agency, City, and their respective
officers, members, officials, employees, agents, volunteers, and representatives from
and against any loss, liability, claim, or judgment relating in any manner to the Project
excepting only any such loss, liability, claim, or judgment arising out of the intentional
wrongdoing or gross negligence of Agency, City, or their respective officers, officials,
employees, members, agents, volunteers, or representatives. Owner, while in
possession of the Site, and each successor or assign of Owner while in possession of
the Site, shall remain fully obligated for the payment of property taxes and assessments
in connection with the Site. The foregoing indemnification, defense, and hold harmless
agreement shall only be applicable to and binding upon the party then owning the Site
or applicable portion thereof.
Q. ATTORNEYS' FEES. In the event that a party to this Agreement brings
an action against the other party hereto by reason of the breach of any condition,
covenant, representation or warranty in this Agreement, or otherwise arising out of this
Agreement, the prevailing party in such action shall be entitled to recover from the other
reasonable expert witness fees, and its reasonable attorney's fees and costs.
Attorney's fees shall include attorney's fees on any appeal, and in addition a party
entitled to attorney's fees shall be entitled to all other reasonable costs for investigating
such action, including the conducting of discovery.
R. AMENDMENTS. This Agreement shall be amended only by a written
instrument executed by the parties hereto or their successors in title, and duly recorded
in the real property records of the County of Riverside.
S. NOTICE. Any notice required to be given hereunder shall be made in
writing and shall be given by personal delivery, certified or registered mail, postage
prepaid, return receipt requested, at the addresses specified below, or at such other
addresses as may be specified in writing by the parties hereto:
Agency: Community Redevelopment Agency
of the City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: Executive Director
LA/40320695 1 19
Copy to: Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 400
Irvine, CA 92612
Attn: David J. Aleshire, Esq.
Owner: VISTA SUNRISE APARTMENTS, L.P.
c/o McCormack Baron Salazar
801 South Grand Ave. Suite 780
Los Angeles, CA. 90017-4635
Attn: Development General Partner
Copy to: Bingham McCutchen, LLP
355 South Grand Avenue, Suite 4400
Los Angeles, CA 90071
Attn: Lance Bocarsly, Esq.
VISTA SUNRISE APARTMENTS, L.P.,
c/o Coachella Valley AIDS Consortium
1695 North Sunrise Way
Palm Springs CA 92262
Attn: Executive Director
SunAmerica Housing Fund 1305,
A Nevada Limited Partnership
c/o AIG Retirement Services, Inc.
One SunAmerica Center, Century City
Los Angeles, California 90067
Attn: Michael Fowler
The notice shall be deemed given three (3) business days after the date of
mailing, or, if personally delivered, when received.
T. SEVERABILITY/WAIVER/INTEGRATION.
1. Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining portions
hereof shall not in any way be affected or impaired thereby.
2. Waiver. A waiver by either party of the performance of any
covenant or condition herein shall not invalidate this Agreement nor shall it be
considered a waiver of any other covenants or conditions, nor shall the delay or
forbearance by either party in exercising any remedy or right be considered a waiver of,
or an estoppel against, the later exercise of such remedy or right.
3. Integration. This Agreement contains the entire Agreement
between the parties and neither party relies on any warranty or representation not
contained in this Agreement.
LA140320695 1 20
U. FUTURE ENFORCEMENT. The parties hereby agree that should the
Agency cease to exist as an entity at any time during the term of this Agreement, the
City of Palm Springs shall have the right to enforce all of the terms and conditions
herein, unless the Agency had previously specified another entity to enforce this
Agreement.
V. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California.
W. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute one original and all of which shall be one
wind the same instrument.
[END -- SIGNATURES ON NEXT PAGE]
L4140320695.1 21
IN WITNESS WHEREOF, the Agency and Owner have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized
representatives on the date first written hereinabove.
"AGENCY"
COMMUNITY REDEVELOPMENT
AGENCY
OF THE CITY OF PALM SPRINGS
a public body, corporate and politic
By:
Chair
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
David J. Aleshire
Agency Counsel
"OWNER"
VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
By: MBA Urban Development Co.
Its Development General Partner
By:
Name:
Title:
By: Coachella Valley AIDS Consortium,
a California nonprofit public benefit
corporation
Its: Managing General Partner
By:
Name:
Title:
LN40320695.1
1
I
I STATE OF CALIFORNIA )
I
) ss.
COUNTY OF )
On before me, personally
appeared
personally known to me (or 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 signatures(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally
appeared
personally known to me (or 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 signatures(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
LW40320095.1
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally
' appeared
personally known to me (or 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 signatures(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally
appeared
personally known to me (or 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
c:apacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
LAf40320695.1
i
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
'That certain real property located in the City of Palm Springs, County of Riverside, State
of California, more particularly described as:
I_A/40320695.1