HomeMy WebLinkAbout0464C - VISTA SUNRISE APARTMENTS DDA DAP HIV AIDS HOUSING PROJECT Vista Sunrise Apts.
DDA HIV/AIDS Housing
AGREEMENT#0464C
R21091, 9-15-04
RESTATED AND AMENDED
DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
a public body, corporate and politic
and
VISTA SUNRISE APARTMENTS, L.P.,
a California limited partnership
ORBGwm- BID
AND/OR AGR£ENIENI-
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RESTATED AND AMENDED DISPOSITION AND
DEVELOPMENT AGREEMENT
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs (the
"Agency") has established an affordable housing set aside fund in accordance with Section
33000 et. seq. of the California Health and Safety Code; and
WHEREAS, the funds are earmarked for the acquisition, construction, or rehabilitation of
affordable housing to benefit the community; and
WHEREAS, DAP HIV/AIDS Housing Project, proposed for low-income persons with
HIV/AIDS, was approved on July 16, 2003 by the Palm Springs City Council; and
WHEREAS, the property developer, Vista Sunrise Apartments, LP, sought Agency
financial assistance to cover a portion of the development cost; and
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, at its
July 16, 2003 meeting, conducted a joint public hearing and approved a Disposition and
Development Agreement ("DDA")with Vista Sunrise Apartments, LP; and
WHEREAS, the property developer submitted a Low Income Housing Tax Credit
(LIHTC) application to the California Tax Credit Allocation Corn mittee for the July 24, 2003
application round and requested Agency assistance to strengthen the application, but was
unsuccessful in receiving a LIHTC commitment; and
WHEREAS, the property developer has applied for state Multifamily Housing Prograrn
(MHP) fiords for the development of the project, which requires minor modifications to the
Agency financing structure; and
WHEREAS, Section 33430 of the Community Redevelopment Law allows that an
agency may, "for purposes of redevelopment, sell, lease for a period not to exceed 99 years,
exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or otherwise,
or otherwise dispose of any real or personal property or any interest in property;" and
WHEREAS, the owners still agree to restrict, though a Regulatory Agreement approved
as an attachrnent to the DDA, the rents on 49% of the proposed units (41) to levels affordable to
families with incomes of no more than 60% of Area Median Income (AMI); and
WHEREAS, the Agency approved on November 19, 2003 certain changes in the DDA,
adding the fair market value of the Agency-contributed property to the Note, adding a Grant
Deed, and amending the Rider to Property Deed of Trust and Assignment of Rents for the
purposes of conforming the Agency assistance to the State of California's requirements in its
MHP Program.
WHEREAS, Riverside County has asked the Parties to change sections in the Regulatory
Agreement on tenant preferences and the termination of ineligible tenants to conform to TCAC
requirements and the County's HOME Loan Agreement, both drafted under the Code of Federal
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Regulations (CFR), and thereby prevent incompatible regulations in the project; and that the
Agency consider granting its parcel to the County rather than to either the Partnership or non-
profit general partner for the purposes of consolidating all of the land prior to adjusting the lot
lines for the separate health care facility project.
WHEREAS, the scope of the project will be limited to the housing portion and the health
care facility shall be constructed separately by the County of Riverside.
THIS RESTATED AND AMENDED DISPOSITION AND DEVELOPMENT
AGREEMENT ("Agreement") is entered into as of the date executed by the Agency, by 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"). The parties agree as follows:
1. (§100) Purpose of the Agreement(§101) Purpose of the AgreementThis
Agreement and the Attachments hereto are intended to effectuate the Redevelopment Plan for the
Palm Springs Redevelopment Merged Project Area No. 1 (the 'Redevelopment Project Area")
by providing for the disposition and development of property owned by the City which has
approved a transfer to the Agency (the "Agency Parcel') located in the Redevelopment Project
Area which together with the Parcel to be transferred from Desert Healthcare District (the
"District Parcel") constitutes the "Site" and the development of the "Project" thereon (as those
teens are defined herein). The development of the Site pursuant to this Agreement, and the
fulfillment generally of this Agreement, are in the vital and best interests of the City of Palm
Springs ("City") and the welfare of its residents, and in accordance with the public puuposes and
provisions of applicable federal, state and local laws and requirements.
This Agreement is intended to set forth a comprehensive plan for the disposition and
development of affordable housing, including land assembly and the design, processing,
financing and construction necessary to complete the Project on the Site. The Project, as further
defined below, will provide family residential rental units. Forty-nine (49) percent of the units
will be available at rents affordable to Very Low and Lower Income households.
II. (§200) DefinitionsThe following terns as used in this Agreement shall have the
meanings given unless expressly provided to the contrary:
A. (§201) Affordable Rent. The teen "Affordable Rent" shall have the
meaning prescribed for that teen in Health and Safety Code Section 50053(b) and the regulations
promulgated pursuant to or incorporated therein, including, without limitation, any applicable
regulations promulgated pursuant to Health and Safety Code Section 50093 (i.e., for Very Low
Income Households, a rent, including a reasonable utility allowance, not exceeding the product
of 30 percent times 50 percent of the area median income adjusted for family size appropriate for
the unit).
B. (§ 202)Affordable Housing Parcel. The term "Affordable Housing
Parcel' shall mean the new parcel which will contain the housing units as shown in Attachment
1-B.
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C. (§203) Agency Financial Assistance. The term "Agency Financial
Assistance" shall mean the total amount of the financial assistance made by Agency to
Developer to fund the acquisition of the Site and development costs for the Project, as further
described in Section 403 below.
D. W04) Agency Note. The term "Agency Note" shall mean that certain
promissory note for an amount of One Million Five Hundred Five Thousand Dollars
($1,505,000) representing the land and cash loan contribution from the Agency to the Developer
for the Project. A form of the Agency Note is attached hereto as Attachment No. 6 and
incorporated herein by this reference.
E. (§205) Agreement. The term "Agreement" shall mean this entire Restated
and Amended Disposition and Development Agreement, including all attachments, which
attachments are a part hereof and incorporated herein in their entirety, and all other documents
incorporated herein by reference.
F. (§206) Certificate of Completion. The terns "Certificate of Completion"
shall mean that document prepared in accordance with Section 514 of this Agreement, in the
form attached as Attachment No. 8, which shall evidence that the construction and development
of the improvements required by this Agreement have been satisfactorily completed.
G. 0207) City. The term "City" shall mean the City of Palm Springs, a
chartered municipal corporation.
H. (§208) Closing. The tern "Closing" or "Closing Date" shall mean the
closing of the Escrow for the conveyance of the Agency Parcel from Agency to Developer by the
Escrow Agent's distributing the finds and documents received through Escrow to the party
entitled thereto as provided herein, which closing shall occur on or before the date established in
the Schedule of Performance.
I. (§209) Days. The tern "days" shall mean calendar days and the statement
of any time period herein shall be calendar days, and not working days, unless otherwise
specified.
J. (§210) Deed. The teen "Deed" shall mean that grant deed in substantially
the form attached hereto as Attachment No. 5 by which Agency as Grantor will convey fee title
to the Agency's portion of the Site to Developer as Grantee.
K. (§211) Deed of Trust. The teen "Deed of Trust" shall refer to that deed of
trust and assignment of rents attached hereto as Attachment No. 7, securing Developer's
obligations pursuant to the Agency Note, the Agreement and the Regulatory Agreement which
shall be recorded on the Site.
L. (§212) District.. The tern "District" shall mean the Desert Healthcare
District a California public agency, which owns the District Parcel on the Site and which shall
transfer its interest in that Parcel to the Housing Authority of the County of Riverside by long
tern lease and from the County to Developer by sublease.
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M. (§213) Effective Date. The Effective Date of this Agreement shall occur
after public hearing and approval hereof by the Agency, and shall mean the date this Agreement
is executed on behalf of Agency.
N. (§214) Enforced Delay. The term "Enforced Delay" shall mean any delay
described in Section 903 caused without fault and beyond the reasonable control of a party,
which delay shall justify an extension of time to perform as provided in Section 903.
O. 0215) Escrow. The term "Escrow" shall mean the escrow established
pursuant to this Agreement for the conveyance of title to the Agency Parcel from Agency to
Developer.
P. 0216) Escrow Agent. The "Escrow Agent" shall be mutually agreed upon
by the Parties.
Q. (§217) Lower Income Household. The tern "Lower Income Household"
shall mean a household whose annual household income does not exceed eighty percent (80%)
of area median income for Riverside County, adjusted for applicable household size, as
computed in accordance with the Cormmunity Redevelopment Law and the regulations
promulgated pursuant thereto or incorporated therein, including, without limitation, all
regulations promulgated pursuant to Health and Safety Code Section 50093, or any successor
statute.
R. (§218) Manager's Unit. The term "Manager's Unit" shall mean the one (1)
unit of the Project that shall be designated by Developer as a residence for a "Qualified
Manager." The Manager's Unit shall not be an income-restricted Unit.
S. (§219) Project. The term "Project" shall mean all of the improvements
required to be constructed by Developer on the Site pursuant to this Agreement, including, but
not limited to, construction of buildings, glass and concrete work, landscaping, construction of
parking areas, and related improvements. The overall Project is more particularly described in
the Scope of Development attached hereto as Attachment No. 4. Upon completion, the Project
will be an eighty-five (85) unit residential apartment complex including forty-nine (49) percent
or forty-one (41) of the units restricted for rent to Very Low and Lower Income Households.
T. (§220) Purchase Price. The terns "Purchase Price" shall mean that amount
agreed upon by the parties as the payment to be made by Developer to Agency for the transfer of
the Agency Parcel, which Purchase Price shall be the amount of Two Hundred Thousand and
Five Dollars ($205,000) and which shall be in the form of a portion of the Agency Note and
secured by the Deed of Trust.
U. L§221) Qualified Manager. The teen "Qualified Manager" shall mean the
resident Project Manager selected and retained by Developer pursuant to the Regulatory
Agreement. The Qualified Manager shall reside in the "Manager's Unit" designated by
Developer. The Manager's Unit shall be restricted to occupancy by the Qualified Manager and
their households, but shall not be subject to any income restriction.
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V. (§222) Qualified Tax Credit Investor. The term "Qualified Tax Credit
Investor" shall mean a person or entity who (i) is an experienced investor in multifamily housing
developments receiving low income housing tax credits issued by the State of California or the
United States federal government ("Tax Credits"), and (ii) has obtained or is contractually
obligated to obtain a limited partnership or limited liability company membership interest in the
Developer whereby it will receive the allowable arnount of tax credits under the low-income
housing tax credit program.
W. (§223) Qualified Tenant. The term "Qualified Tenant" shall mean those
households seeking to rent a Restricted Unit who satisfy all of the following requirements:
a. Upon execution of a lease with Developer pursuant to this
Agreement, each member of the household will occupy a Restricted Unit as its principal
residence, and each member intends to thereafter continuously occupy such Restricted Unit as its
principal residence.
b. Upon execution of a lease with Developer pursuant to this
Agreement, the household is a Very Low or Lower Income Household.
C. The household has been selected in accordance with the
tenant selection criteria set forth in the Regulatory Agreement.
X. (§224) Redevelopment Plan. The term "Redevelopment Plan" shall mean
the Redevelopment Plan for the Merged Redevelopment Project Area No. 1 in the City of Palm
Springs, as adopted by Ordinance No. 1584 of the City Council on May 31, 2000 and as such
Redevelopment Plan has been amended from time to time. Agency hereby warrants and
represents that the Redevelopment Plan was validly adopted and is in full force and effect, that
the applicable limitations period for challenging the validity of the Redevelopment Plan has
expired and that the proposed Project is in accordance with and permissible under the
Redevelopment Plan. A copy of the Redevelopment Plan is on file in the office of the City Clerk
of the City, located at 3200 E. Tahquitz Canyon Way, Palm Springs, California 92262. The
Redevelopment Plan is incorporated herein by reference and made a part hereof as though fully
set forth herein.
Y. 0225)Redevelopment Project Area. The term "Redevelopment Project
Area" shall mean the Palm Springs Merged Redevelopment Project Area No. 1, which is located
in the City of Palm Springs, California. The exact boundaries of the Redevelopment Project
Area are specifically described in the Redevelopment Plan.
Z. (§226) Regulatory Agreement. The tern 'Regulatory Agreement" shall
mean that Regulatory Agreement attached hereto as Attachment No. 9, running with the land and
providing for the proper maintenance of common facilities and improvements and the
management and use of the Project and to insure the Restricted Units remain affordable pursuant
to the terns of this Agreement.
AA. 0227)Reimbursable Costs. The Term 'Reimbursable Costs" shall be
those development costs specified in Exhibit 1 to the Scope of Development (Attachment No. 4).
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BB. (§228) Restricted Unit. The term "Restricted Unit" shall mean and refer to
one of the forty-one (41) apartment units in the Project which are restricted to occupancy by this
Agreement and the Regulatory Agreement to a Very Low or Lower Income Household at an
Affordable Rent. "Restricted Units" shall mean and refer collectively to each and every
Restricted Unit located on the Site.
CC. (§229) Schedule of Performance. The tern "Schedule of Performance"
shall mean that certain Schedule of Performance attached hereto as Attachment No. 3.
DD. 0230) Site and Site Map. The Project shall be located upon that real
property located in the City of Palm Springs, hereinafter referred to as the "Site", to be acquired
by and developed by Developer pursuant to this Agreement and the agreement with the District.
The parcels as currently existing are shown in the "Site Map" attached hereto as Attachment No.
1-A. The proposed Project Site and Parcels including the Affordable Housing Parcel are shown
on the "Proposed Site Map" attached hereto as attachment No. 1B. The Agency Parcel is legally
described in the "Legal Description" attached hereto as Attaclmnent No. 2.
EE. (§231) Title Company. The term "Title Company" shall mean the
company that the Parties mutually agree to utilize.
FF. (§232) Very Low Income Household. The term "Very Low Income
Household" shall mean a household whose annual household income does not exceed fifty
percent (50%) of area median income for Riverside County, adjusted for applicable household
size, as computed in accordance with the Community Redevelopment Law and the regulations
promulgated pursuant thereto or incorporated therein, including, without limitation, all
regulations promulgated pursuant to Health and Safety Code Section 50093, or any successor
statute.
III. N333) Parties to the Agreement.
A. (§301) Agency. Agency is a public body, corporate and politic, exercising
govemmnental functions and powers, organized and existing under the Conmmmity
Redevelopment Law of the State of California (Health and Safety Code Sections 33000, et seq.).
The office of Agency is located at 3200 E. Tahquitz Canyon Way, Palm Springs, California
92262. The term "Agency," as used in this Agreement, includes the Palm Springs
Redevelopment Agency and any assignee of, or successor to, its rights, powers and
responsibilities.
B. N302) Developer.
1. Identification. Developer is Vista Sunrise Apartments, L.P., a California limited
partnership, or its approved transferee as described in Section 303. The principal office of
Developer for the purposes of this Agreement is located at c/o McCormack Baron Salazar, 655
S. Hope Street, Suite 1100, Los Angeles, CA 90017. Developer warrants and represents to
Agency that Developer is qualified to do business in good standing under the laws of the State of
California and has all requisite power and authority to cant'out Developer's business as now and
whenever conducted and to enter into and perform Developer's obligations under this
Agreement.
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2. Successors and Assigns. Except as may be expressly provided hereinbelow, all of
the teens, covenants and conditions of this Agreement shall be binding on, and shall inure to the
benefit of, Developer and the permitted successors, assigns and nominees of Developer.
Wherever the tern "Developer" is used herein, such teen shall include any permitted successors
and assigns of Developer as herein provided.
3. Qualifications. The qualifications and identity of Developer are of particular
concern to the Agency, and it is because of such qualifications and identity that Agency has
entered into this Agreement with Developer. The Agency has considered the experience,
financial capability of Developer in building successful affordable housing projects. Based upon
these considerations, the Agency has imposed those restrictions on transfer set forth in this
Agreement.
C. (§303) Restrictions on Transfer.
1. Transfer Defined. As used in this section, the tern "Transfer" shall include any
assigrnnent, 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%) of the present
ownership and/or control of Developer in the aggregate, taking all transfers into account on a
cumulative basis, except transfers of such ownership or control interest between members of the
sarne immediate family, or transfers to a trust, testamentary or otherwise, in which the
beneficiaries are limited to members of the transferor's inmiediate family. In the event
Developer or its successor is a corporation or trust, such transfer shall refer to the transfer of the
issued and outstanding capital stock of Developer, or of beneficial interests of such host; in the
event that Developer is a limited or general partnership, such transfer shall refer to the transfer of
more than twenty-five percent (25%) of the limited or general partnership interest; in the event
that Developer 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. Restrictions Prior to Completion. Prior to issuance of the Certificate of
Completion, Developer shall not Transfer this Agreement or any of Developer'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 to any Transfer by Developer of its interest in the Site before the issuance of the
Certificate of Completion, which Transfer requires Agency approval, Agency shall consider
factors such as (i)whether the completion or implementation of the Project is jeopardized; (ii)
the financial strength and capability of the proposed assignee to perform Developer's obligations
hereunder; and(iii) the proposed assignee's experience and expertise in the planning, financing,
development, ownership, and operation of similar projects.
In the absence of specific written agreement by Agency, prior to the issuance of a
Certificate of Completion no Transfer by Developer of all or any portion of its interest in the Site
or this Agreement (including without limitation an assigmnent or transfer not requiring Agency
approval hereunder) shall be deemed to relieve it or any successor party from any obligations
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under this Agreement with respect to the completion of the development of the Project with
respect to that portion of the Site which is so transferred. In addition, no attempted assignment
of any of Developer'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, or other form of conveyance
for financing, as provided in Section 513, but Developer 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, 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 and the
construction of the 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. The granting of easements to any appropriate govermnental
agency or utility or permits to facilitate the development of the Site.
d. 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.
C. A sale or transfer of 49% or more of ownership or control
interest between members of the same immediate farnily, or transfers to a trust, testamentary or
otherwise, in which the beneficiaries consist solely of irmnediate family members of the Truster
or transfers to a corporation or partnership in which the immediate family members or
shareholders of the transferor have a controlling majority interest of 5 1% or more.
f. A sale or transfer to a Qualified Tax Credit Investor;
provided that such Qualified Tax Credit Investor shall be in a non-managing role.
g. 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.
h. A sale or transfer of general partner interests to a nonprofit
general partner.
i. Notwithstanding anything to the contrary contained herein,
Developer shall have the right to replace MBA Development Corp. as a general partner of
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Developer with an affiliated entity which is wholly owned by McCormack Baron Salazar, Inc, a
Missouri Corporation.
4. Restrictions After Completion. It is hereby acknowledged by Developer and
Agency that the Site is being conveyed to the Developer by the Agency at below market value
and with significant Agency Financial Assistance. Therefore, subsequent to the issuance of the
Certificate of Completion, Developer may not sell, transfer, convey, hypothecate, assign or lease
all or any portion of its interest in the Site without complying with any transfer restrictions
contained within the Deed of Trust or the Regulatory Agreement, as applicable.
IV. ($400) Disposition of the Site.
A. 0401) Housing Program Funds. The parties acknowledge that Developer
intends to finance the acquisition and development costs for the Project with various
government-sponsored subsidized housing funds including the Agency Financial Assistance
described in Section 403. All of the foregoing financing shall be referred to herein collectively
as "Housing Program Funds." Developer shall demonstrate to Agency's reasonable satisfaction
by the dates set forth in the Schedule of Performance that Developer has secured a bona fide
award, commitment or reservation of Housing Program Funds in an amount sufficient to provide
for the acquisition, development, and operation of the Project.
B. (5402) Acquisition of the Site. The Agency Parcel was acquired from the
City which approved at its meeting of July 16, 2003 a resolution approving the sale of the
Agency Parcel to the Agency for Two Hundred and Five Thousand Dollars ($205,000.00), for
the purpose of use for affordable housing development. The remainder of the Site necessary for
the housing project is currently owned by the District and shall be transferred by a long teen
lease to Housing Authority of the County of Riverside, which will in turn be subleased to
Developer on or before the transfer of the Agency Parcel.
C. ($403) Disposition of the Site. Agency shall convey the Agency Parcel to
Developer and Developer shall acquire the Agency Parcel from Agency, upon the tenns and
conditions hereinafter set forth. The conveyance of the Agency Parcel shall be by the form of
Grant Deed as provided in Attachment No. 5, attached hereto and incorporated by this reference.
Consideration for the transfer shall be the performance of the terms and conditions of this
Agreement including the Regulatory Agreement and CC&Rs in attachment No. 9. A promissory
note in the amount of One Million Five Hundred and Five Thousand dollars ($1,505,000) and
deed of trust to be recorded on the Affordable Housing Parcel securing the land value of
$205,000 and the additional Agency cash assistance described below in a form substantially as
provided in attaclunent No. 6 and No. 7 respectfully shall be executed and recorded
simultaneously with the transfer of the Agency Parcel,
1. Purpose of Transfer. Upon attaining required financing as described herein,
Developer agrees to develop the Site with eighty-five (85) rental units, forty-one (41) of which
shall be restricted for fifty-five years (55) for rental to persons of Very Low and Lower hicome,
all as described in the Scope of Development.
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2. Agency Financial Assistance. In addition to the value of the Agency Parcel,
Agency agrees to provide certain financial assistance to Developer to assist the Developer in the
construction costs of the Project.
The cash amount of the loan shall be dispersed as follows: (i) Predevelopment
Contribution. Three Hundred Thousand Dollars ($300,000) shall be dispersed within thirty (30)
days of the approval of this Agreement as a partial reimbursement of predevelopment costs for
this Project; (ii) Construction Assistance; and (iii) Public Improvement Reserve. The
Construction Assistance of Eight Hundred and Seventy-Five Thousand ($875,000) shall be
disbursed, only after the construction loan has been approved and recorded; in increments not to
exceed twenty percent (20%) of the monthly drawdown of the construction costs of the Project.
The remaining eighty percent (80%) of the monthly draws shall be prorated between the other
sources of Construction financing during the construction of the Project (the "Tax Credit
Construction Equity"). The remaining One Hundred and Twenty-Five Thousand of the Public
Improvement Reserve shall be held until all public improvement offsites required by the Project
for the entire Site including the health center portion are complete. In no event shall the
Agency's cash contribution exceed a total of$1.3 Million Dollars.
The Agency Financial Assistance and the completion and operation of the Project shall
be secured by the Agency's right of reverter described in Section 805 and by the Deed of Trust
attached hereto as Attachment No. 7; provided that Agency's security shall be subordinated to
Developer's construction and permanent financing for the Project as approved by Agency. The
total cost of the Project as approved by Agency is estimated to be Nine Million Eight Hundred
Twenty-Five Thousand Dollars ($9,825,000). The estimated amount of the Developer's
construction financing is estimated to be Nine Million Seventy-Five Thousand Dollars
($9,075,000).
3. Application for Disbursement. On or about the 15th and 30th day of each month
after the Conveyance, continuing until all of the Agency Assistance has been disbursed, the
Developer shall submit to the Agency an "Application for Disbursement" which shall include:
a. A written, itemized statement, signed by a representative of
the Developer which sets forth: (i) a description of the work performed, material supplied, and/or
costs incurred or due for which disbursement is requested; and (ii) the total armorult incurred,
expended and/or due for the requested disbursement. The statement shall also show the prorated
breakdown of payments from each source (County, Tax Credits Construction Equity and
Agency). The Agency's pro-rata share may be less than 20% but in no event shall it be greater
than 20% of each month's invoice. All moneys applied for and disbursed pursuant to this
Section shall be applied only for the corresponding improvements and the statement(s)by the
representative of the Developer shall so affirm.
b. Copies of billing invoices, statements, receipts and other
documents evidencing the total amount expended, incurred or due for any requested
disbursement.
C. Mechanics lien waivers including: (i) a Conditional
Waiver and Release Upon Progress Payment (California Civil Code Section 3262(d)(1)) for itself
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and each contractor covered by such Request Payment, (ii) an Unconditional Waiver and Release
Upon Progress Payment (California Civil Code Section 3262(d)(2)) for itself and each of its
contractors covering the full amount of all previous payments made to Developer, and (iii) an
Unconditional Waiver and Release Upon Final Payment (California Civil Code Section
3262(d)(4)) for its contractors who have completed their work and for whom Developer has
received full payment.
d. A statement by the City Engineer or his designee that the
percentage and/or stage of constriction corresponding to the application for Disbursement has
been substantially completed and substantially conforms to the Plans based upon such engineer's
inspections of the respective hnprovements.
C. An engineer's certificate of substantial completion,prior to
the final disbursements.
f. Certification that in completing constriction pursuant to
this Section, the Developer has complied with all applicable laws.
Each Application for Payment by the Developer shall constitute a representation and
warranty by the Developer that all work encompassed by the Application has been accomplished
in accordance with City standards for such work and sound constriction practices, and that the
Developer is in compliance with all of the provisions of this Agreement.
4. Approval and Pavment. Upon receipt of the Application for Disbursement the
Agency shall review the same and shall approve the same subject to such exceptions as the
Agency deems reasonably necessary and appropriate under the then current circumstances. Such
approval may not unreasonably be withheld or delayed. The Agency shall pay, or cause to be
paid, any approved disbursements within thirty(30) days following the Agency's receipt of the
corresponding Application for Disbursement.
D. ($404) Escrow. Escrow shall be opened within the time period specified
in the Schedule of Performance. This Agreement shall constitute the joint escrow instructions of
the Agency and the Developer for the Agency Parcel, and a duplicate original of this Agreement
shall be delivered to the Escrow Agent upon the opening of Escrow. The Escrow Agent is
empowered to act under these instructions. Agency and Developer shall promptly prepare,
execute, and deliver to the Escrow Agent such additional escrow instructions consistent with the
terms herein as shall be reasonably necessary. No provision of any additional escrow
instructions shall modify this document without specific written approval of the modifications by
both Developer and Agency.
E. W05) Conditions to Close of Escrow.
1. Developer's Conditions to Closing. Developer's obligation to acquire the Agency
Parcel and to close Escrow hereunder, shall, in addition to any other conditions set forth herein in
favor of Developer, be conditional and contingent upon the satisfaction, or waiver by Developer,
of each and all of the following conditions (collectively the "Developer's Conditions to Closing")
within the time provided in the Schedule of Performance:
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a. Title shall be conveyed in a good condition, free and clear
of all liens, encumbrances, clouds, conditions, rights of occupancy and possession, except
conditions and exceptions recited in the Regulatory Agreement, those exceptions to title
approved pursuant to Section 407, the Deed of Trust, and the Regulatory Agreement.
b. Agency shall have deposited into escrow a certificate
("FIRPTA Certificate") in such forni as may be required by the Internal Revenue service
pursuant to Section 1445 of the Internal Revenue Code.
C. Developer shall have obtained evidence of financing
commitments including the Tax Credit Allocation approval, for the development of the Site in
accordance with Section 408, and Agency shall have approved such commitments.
d. Agency shall have deposited into escrow all the documents
required under Section 406.3.
e. Developer shall have approved the physical and
environmental condition of the Site in accordance with Section 409.
f. Developer shall have obtained from the City all required
approvals and permits (other than building permits), including site plan review, conditional use,
subdivision, building, grading, landscaping, and others for development of the Site.
Any waiver of the foregoing conditions must be express and in writing. In the event that
the foregoing conditions have not been satisfied within the time provided therefor in the
Schedule of Performance, either party may terminate this Agreement by delivering a written
notice in accordance with Section 411.
2. Agency's Conditions to Closing. Agency's obligation to transfer the Agency
Parcel and to close escrow hereunder, shall, in addition to any other conditions set forth herein in
favor of Agency, be conditional and contingent upon the satisfaction, or waiver by Agency, of
each and all of the following conditions (collectively the "Agency's Conditions to Closing")
within the time provided in the Schedule of performance:
a. Developer shall have obtained evidence of financing
commitments for the development, of the Site in accordance with Section 408, and Agency shall
have approved such commitments.
b. Developer shall have timely submitted to Agency and
Agency shall have approved plans and drawings for all improvements to be constructed on the
Site, including for site plan review, conditional use, subdivision, building, grading, landscaping
and other plans and drawings, as provided in Section 502.
C. Developer shall not have made or attempted to make a
transfer in violation of Section 303, provided that Agency shall give notice of any violation of
Section 303 and afford Developer the opportunity to cure the violation.
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d. Developer shall have deposited into escrow all the
documents required under Section 406.4.
e. Developer shall have deposited into escrow an executed
lease from the District to the County and an executed sublease from the County to the Developer
for that portion of the District Parcel necessary to construct the Project.
Any waiver of the foregoing conditions must be express and in writing. In the event that
Developer fails to satisfy Agency's foregoing conditions or defaults in the performance of its
obligations hereunder and such failure or default continues beyond the notice and cure period set
forth in Section 801, Agency may terminate this Escrow.
3. Both Parties' Conditions to Closing. Prior to the Closing Date, Agency shall
execute and deliver a certificate ("Taxpayer ID Certificate") in such form as may be required by
the IRS pursuant to Section 6045 of the Internal Revenue Code, or the regulations issued
pursuant thereto, certifying as to the description of the Site, date of closing, gross price, and
taxpayer identification number for Agency. Prior to the Closing, Developer and Agency shall
cause to be delivered to the Escrow Agent such other items, instruments and documents, and the
parties shall take such fiuther actions, as may be necessary or desirable in order to complete the
Closing. At the Closing neither party shall be in breach of its obligations hereunder.
F. ($406) Conveyance of the Agency Parcel.
1. Time for Conveyance. Escrow shall close after satisfaction of all conditions to
close of escrow,but not later than the date specified in the Schedule of Performance, unless
extended by the mutual agreement of the parties or any Enforced Delay. Possession of the
Agency Parcel shall be delivered to Developer concurrently with the conveyance of title free of
all tenancies and occupants other than any title matters approved in accordance with Section 407.
2. Escrow Agent to Advise of Costs. On or before the date set in the Schedule of
Performance, the Escrow Agent shall advise the Agency and the Developer in writing of the fees,
charges, and costs necessary to clear title and close escrow, and of any documents which have
not been provided by said party and which must be deposited in Escrow to permit timely
Closing.
3. Deposits By Agency Prior to Closing. On or before, but not later than 1:00 p.m.
of the date set in the Schedule of Performance, Agency shall execute, acknowledge and deposit
into escrow (i) the Grant Deed; (ii) an estoppel certificate certifying that Developer has
completed all acts, other than as specified, necessary for conveyance, if such be the fact; and(iii)
payment to Escrow Agent of Agency's share of costs as determined by the Escrow Agent
pursuant to Section 410.
4. Deposits By Developer Prior to Closing. On or before, but not later than 1:00
p.m. of the date set in the Schedule of Performance, Developer shall execute and acknowledge as
may be required and deposit into escrow: (i) the Regulatory Agreement; (ii) Agency Note; (iii)
the Deed of Trust; (iv) executed Lease with District; (v) executed sublease with County; (vi) an
estoppel certificate certifying that Agency has completed all acts, other than as specified,
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necessary to conveyance, if such be the fact; and (vii) payment to Escrow Agent of Developer's
share of costs as determined by the Escrow Agent pursuant to Section 410.
5. Recordation. Upon the completion by the Agency and Developer of the deliveries
and actions specified in these escrow instructions precedent to Closing, the Escrow Agent shall
be authorized to buy, affix and cancel any docrunentary stamps and pay any transfer tax and
recording fees, if required by law, and thereafter cause to be recorded in the appropriate records
of Riverside County, California, the Deed, the Regulatory Agreement, the Deed of Trust, and
any other appropriate instruments delivered through this escrow, if necessary or proper to, and
provided that the fee title interest can vest in Developer in accordance with the terms aid
provisions herein. Concurrent with recordation, Escrow Agent shall deliver the Title Policy to
Developer insuring title and conforming to the requirements of Section 407. Following
recordation, the Escrow Agent shall deliver copies of said instruments to Developer and Agency.
G. 0407) Title Matters.
1. Condition of Title. Agency shall convey to Developer fee interest in the Site,
subject only to: (i) the Redevelopment Plan, this Agreement, the Deed of Trust, and the
Regulatory Agreement; (ii) current taxes, a lien not yet payable; (iii) quasi-public utility, public
alley and public street easements of record approved by Developer, which approval shall not be
unreasonably withheld; and(iv) covenants, conditions and restrictions, reciprocal easements, and
other encumbrances and title exceptions approved by Developer under this Section. Agency
shall convey title pursuant to the Deed in the form set forth in Attachment No. 5 hereto.
2. Exclusion of Oil, Gas, and Hydrocarbons. Title shall be conveyed subject to the
exclusion therefrom to the extent now or hereafter validly excepted and reserved by the parties
named in deeds, leases and other documents of record of all oil, gas, hydrocarbon substances and
minerals of every kind and character lying more than five hundred feet (500') below the surface,
together with the right to drill into, through, and to use and occupy all parts of the Site lying
more than five hundred feet(500') below the surface thereof for any and all purposes incidental
to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the
Site but, without, however, any right to use either the surface of the Site or any portion thereof
within five hundred feet(500') of the surface for any purpose or purposes whatsoever.
3. Agency Not to Encumber Agency Parcel. Agency hereby warrants to Developer
that it has not and will not, from the time of Developer's review of the Preliminary Title Report
to close of escrow, transfer, sell, hypothecate, pledge, or otherwise encumber the Site without
express written pennission of Developer.
4. Approval of Title Exceptions. Prior to the date in the Schedule of Performance,
Agency shall deliver a preliminary title report, dated no earlier than the date of this Agreement,
to Developer including copies of all documents referenced therein. Prior to the date in the
Schedule of Performance, Developer shall deliver to Agency written notice, with a copy to
Escrow Agent, specifying in detail any exception disapproved and the reason therefor. Prior to
the date in the Schedule of Performance, Agency shall deliver written notice to Developer as to
whether Agency will or will not cure the disapproved exceptions; provided, however, that
Agency shall elect to cure all disapproved exceptions which arose due to acts of Agency. If
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Agency so elects to cure the disapproved exceptions, Agency shall do so on or before the
Closing. If escrow fails to timely close due to exceptions which arose due to acts of Agency not
authorized by Developer, and if Agency cannot cure said defects within the time provided in
Section 411, then Developer may elect to terminate the escrow and/or pursue any available
remedies, including specific performance, in accordance with Article 8. In the event the failure
to close is due to the existence of other conditions of title not approved by Developer which (i)
are not the result of acts of Agency and (ii) are not reasonably acceptable to Developer, then the
parties shall negotiate in good faith to correct the title problem, and shall consider courses of
action with the title company, bonding and indemnities, reimbursement of architectural and
design expenses, and other modifications of this Agreement.
5. Title Policy At the close of escrow, Escrow Agent shall famish Developer with
an ALTA Policy of Title Insurance (the "Title Policy") for the Developer's interest, wherein the
Title Company shall insure that title to the Site shall be vested in Developer, containing no
exception to such title which has not been approved or waived by Developer in accordance with
this Section. The Title Policy shall include any available additional title insurance, extended
coverage or endorsements that Developer has reasonably requested. The Agency shall pay only
for that portion of the title insurance premiu n attributable to the standard coverage ("CLTA")
and any special endorsements attributable to disapproved exceptions that Agency is required to,
or agrees to, cure, and Developer shall pay for the extra premium for the ALTA form and any
additional title insurance, extended coverage or special endorsements for which Agency is not
responsible.
H. ($408) Evidence of Financial Capability. Within the time set forth in the
Schedule of Performance, Developer shall submit to Agency's Executive Director for approval
evidence reasonably satisfactory to the Executive Director that Developer has the financial
capability necessary for the acquisition of the Site and development of the Project thereon
pursuant to this Agreement. Such evidence of financial capability shall include all of the
following:
1. Documentation that Developer has secured adequate Housing Program Funds
including approval of Tax Credit allocation, for the development of the Project as described in
Section 401.
2. Reliable cost estimates for Developer's total cost of acquiring the Site and
developing the Project (including both "hard" and "soft" costs).
3. A complete copy of the constriction loan commitment obtained by Developer to
finance the development of the Project, or such other documentation reasonably satisfactory to
the Executive Director sufficient to demonstrate that Developer has adequate fiords available and
committed to finance the development of the Project; that any such funds are to be exclusively
used for the Project and that the amount shall not exceed Ten Million Dollars ($10,000,000).
4. A financial statement and/or other documentation reasonably satisfactory to the
Executive Director sufficient to demonstrate that Developer has adequate fiords available and/or
committed to cover the difference between the total acquisition costs of the Site and development
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costs of the Project (subparagraph(1) above) and the proceeds of the construction loan
commitment (subparagraph(2) above).
5. A copy of the proposed contract between Developer and its general contractor for
all of the improvements required to be constructed by Developer hereunder, certified by
Developer to be a true and correct copy thereof. The Executive Director shall also have the right
to review and approve any revisions that are made to the proposed contract after its approval by
the Executive Director.
Developer covenants and agrees to take all action, fim ish all information, give all
consents and pay all sums reasonably required to keep the construction loan commitment in full
force and effect and shall comply with all conditions thereof, and shall promptly execute,
acknowledge and deliver all applications, credit applications and data, financial statements, and
documents reasonably required in connection therewith.
I. W09) Condition of Site.
1. Disclaimer of Warranties. Upon the Close of Escrow, Developer shall acquire the
Agency Parcel in its "AS-IS" condition and shall be responsible for any defects in the Agency
Parcel, whether patent or latent, including, without limitation, the physical, environmental and
geotechnical condition of the Agency Parcel, and the existence of any contamination, Hazardous
Materials, vaults, debris, pipelines, abandoned wells or other structures located on, under or
about the Agency Parcel. Agency makes no representation or warranty concerning the physical,
environmental, geotechnical or other condition of the Agency Parcel, the suitability of the
Agency Parcel for the Project, or the present use of the Site, and specifically disclaims all
representations or warranties of any nature concerning the Site made by it, the City and their
employees, agents and representatives. The foregoing disclaimer includes, without limitation,
topography, climate, air, water rights, utilities, present and firture zoning, soil, subsoil, existence
of Hazardous Materials or similar substances, the purpose for which the Agency Parcel is suited,
or drainage. The Agency makes no representation or warranty concerning the compaction of soil
upon the Agency Parcel, nor of the suitability of the soil for construction.
2. Right to Enter Site, Indemnification. Developer shall have the right to enter upon
the Agency Parcel to conduct soils, engineering, or other tests and studies, to perform
preliminary work or Agency Parcel investigation or for any other purposes to carry out the terns
of this Agreement. Developer shall indemnify, defend and hold Agency harmless from and
against any claims, injuries or damages arising out of damage to persons or property caused by
Developer in comiection with any such entry or activity as provided in Section 506. Any such
activity shall be undertaken only after securing any necessary permits from the appropriate
goverrnnental agencies and providing Agency with certificates of insurance evidencing the
coverages required in Section 507.
3. Hazardous Materials. (i) Developer and each
of the entities constituting Developer, shall, from and after the Closing, defend, indemnify and
hold harmless Agency, City and their officers, directors, employees, agents and representatives
(collectively, the "Agency Indemnified Parties") from and against any and all Environmental
Claims, Environmental Cleanup Liability, Environmental Compliance Costs, and any other
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claims, actions, suits, legal or administrative orders or proceedings, demands or other liabilities
resulting from the physical and/or environmental conditions of the Site which arise from and
after the Closing from the existence of any Hazardous Materials or the release or threatened
release of any Hazardous Materials of any kind whatsoever, in, on or under the Agency Parcel,
including, but not limited to, all foreseeable and unforeseeable damages, fees, costs, losses and
expenses, including any and all attomeys' fees and environmental consultant fees and
investigation costs and expenses, directly or indirectly arising therefrom, and including fines and
penalties of any nature whatsoever, assessed, levied or asserted against any Agency Indemnified
Parties to the extent that the fines and/or penalties are the result of a violation or an alleged
violation of any Environmental Law. Developer further agrees that in the event Developer
obtains, from former or present owners of the Agency Parcel or any other persons or entities,
releases from liability, indemnities, or other forms of hold harmless relating to the subject matter
of this section, Developer shall use its diligent efforts to obtain for Agency and City the same
releases, indemnities and other comparable provisions. (ii) Agency shall
defend, indemnify and hold harmless Developer, each of the entities constituting Developer, and
their respective officers, directors, employees, agents and representatives (collectively, the
"Developer Indemnified Parties") from and against any and all Environmental Claims,
Environmental Cleanup Liability, Enviromnental Compliance Costs, and any other claims,
actions, suits, legal or administrative orders or proceedings, demands or other liabilities resulting
from the physical and/or environmental conditions of the Site which exist as of, or arose prior to,
the Closing from the existence of any Hazardous Materials or the release or threatened release of
any Hazardous Materials of any kind whatsoever, in, on or under the Site, including, but not
limited to, all foreseeable and unforeseeable damages, fees, costs, losses and expenses, including
any and all attorneys' fees and environmental consultant fees and investigation costs and
expenses, directly or indirectly arising therefrom, and including fines and penalties of any nature
whatsoever, assessed, levied or asserted against any Developer Indemnified Parties to the extent
that the fines and/or penalties are the result of a violation or an alleged violation of any
Enviromnental Law. Agency further agrees that in the event Agency or City obtains, from
former or present owners of the Agency Parcel or any other persons or entities, releases fi-om
liability, indemnities, or other forms of hold harmless relating to the subject matter of this
section, Agency shall use its diligent efforts to obtain for Developer the same releases,
indermrities and other comparable provisions.
For purposes of this Section 409, the following terns shall have the following meanings:
a. "Environmental Claim" means any claim for personal
injury, death and/or property damage made, asserted or prosecuted by or on behalf of any third
party, including, without limitation, any governmental entity, relating to the Agency Parcel or its
operations and arising or alleged to arise under any Enviromnental Law.
b. "Environmental Cleanup Liability" means any cost or
expense of any nature whatsoever incurred to contain, remove, remedy, clean up, or abate any
contamination or any Hazardous Materials on or under all or any part of the Agency Parcel,
including the ground water thereunder, including, without limitation, (A) any direct costs or
expenses for investigation, study, assessment, legal representation, cost recovery by
governmental agencies, or ongoing monitoring in comieetion therewith and (B) any cost,
expense, loss or damage incurred with respect to the Site or its operation as a result of actions or
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measures necessary to implement or effectuate any such contaimnent, removal, remediation,
treatment, cleanup or abatement.
C. "Environmental Compliance Cost" means any cost or
expense of any nature whatsoever necessary to enable the Agency Parcel to comply with all
applicable Environmental Laws in effect. "Environmental Compliance Cost" shall include all
costs necessary to demonstrate that the Agency Parcel is capable of such compliance.
d. "Enviromnental Law" means any federal, state or local
statute, ordinance, rule, regulation, order, consent decree,judgment or common-law doctrine,
and provisions and conditions of permits, licenses and other operating authorizations relating to
(A)pollution or protection of the enviromnent, including natural resources, (B) exposure of
persons, including employees, to Hazardous Materials or other products, raw materials,
chemicals or other substances, (C) protection of the public health or welfare from the effects of
by-products, wastes, emissions, discharges or releases of chemical sub-stances from industrial or
commercial activities, or (D) regulation of the manufacture, use or introduction into commerce
of chemical substances, including, without limitation, their manufacture, formulation, labeling,
distribution, transportation, handling, storage and disposal.
e. "Hazardous Material' is defined to include any hazardous
or toxic substance, material or waste which is or becomes regulated by any local goverrnnental
authority, the State of California, or the United States Government. The term "Hazardous
Material' includes, without limitation, any material or substance which is: (A)petroleurn or oil
or gas or any direct or derivative product or byproduct thereof, (B) defined as a "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under Sections 25115,
25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law); (C) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter
6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (D) defined as a "hazardous
material," "hazardous substance," or "hazardous waste" under Sections 255010) and (k) and
25501.1 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous
Materials Release Response Plans and Inventory); (E) defined as a "hazardous substance" under
Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substances); (F) "used oil' as defined under Section 25250.1 of the
California Health and Safety Code; (G) asbestos; (H) listed under Chapter 11 of Division 4.5 of
Title 22 of the California Code of Regulations, or defined as hazardous or extremely hazardous
pursuant to Chapter 10 of Division 4.5 of Title 22 of the California Code of Regulations; (I)
defined as waste or a hazardous substance pursuant to the Porter-Cologne Act, Section 13050 of
the California Water Code; (J) designated as a "toxic pollutant" pursuant to the Federal Water
Pollution Control Act, 33 U.S.C. § 1317; (K) defined as a "hazardous waste" pursuant to the
Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903);
(L) defined as a "hazardous substance" pursuant to the Comprehensive Enviromnental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); (M) defined as
"Hazardous Material" pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 5101
et se�u.; or(1) defined as such or regulated by any "Superfund" or "Superlien" law, or any other
federal, state or local law, statute, ordinance, code, rile, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning Hazardous Materials and/or
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oil wells and/or underground storage tanks and/or pipelines, as now, or at any time here-after, in
effect. Hazardous Materials shall not include those materials routinely used in the development
or operation of multi-fancily housing in accordance with all environmental and workplace safety
laws.
Notwithstanding any other provision of this Agreement, Developer's indemnification as
set forth in the provisions of this Section, as well as all provisions of this Section shall survive
the termination of this Agreement and shall continue in perpetuity.
Notwithstanding anything to the contrary in this Section, Developer's indemnification of
Agency and City from liability pursuant to this Section shall not extend to Hazardous Materials
brought onto the Site by Agency or City. Agency agrees that it, its employees and agents shall
not bring onto or use on the Site any Hazardous Materials during the time Agency has possession
and/or ownership of the Site.
J. 0410) Costs of Escrow.
1. Allocation of Costs. The Escrow Agent is authorized to allocate costs as follows:
Agency shall pay the cost of the Title Policy as provided above while Developer shall pay
premiums for any additional insurance, extended coverage or special endorsements as provided
above. Agency shall pay the documentary transfer tax as well as all recording fees. Developer
and Agency shall each pay one-half of all escrow and similar fees, except that if one party
defaults under this Agreement and escrow is terminated as a result thereof, the defaulting party
shall pay all escrow fees and charges. Each party shall pay its own attorneys' fees.
2. Proration and Adjustments. Ad valorem taxes and assessments on the Site and
insurance for the current year shall be prorated by the Escrow Agent as of the date of Closing
with the Agency responsible for those levied, assessed or imposed prior to Closing and the
Developer responsible for those after Closing. If the actual taxes are not known at the date of
Closing, the proration shall be based upon the most current tax figures. When the actual taxes
for the year of Closing become known, Developer and Agency shall, within thirty days
thereafter, reprorate the taxes in cash between the parties.
3. Extraordinary Services of Escrow Agent. It is understood that escrow fees and
charges contemplated by this Agreement incorporate only the ordinary services of the Escrow
Agent as listed in these instructions. In the event that the Escrow Agent renders any service not
provided for in this Agreement as amended, or that there is any assignment of any interest in the
subject matter of this escrow as amended, or that any controversy arises hereunder, or that the
Escrow Agent is made a party to, or reasonably intervenes in, any litigation pertaining to this
escrow or the subject matter thereof, then the Escrow Agent shall be reasonably compensated for
such extraordinary services and reimbursed for all reasonable costs and expenses occasioned by
such default, controversy or litigation.
4. Escrow Agent's Right to Retain Documents. Escrow Agent shall have the right to
retain all documents and/or other things of value at any time held by it hereunder until such
compensation, fees, costs and expenses shall be paid. The undersigned hereby jointly and
severally promise to pay such sums upon demand.
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K. W11) Termination of Escrow.
1. Termination. Escrow may be terminated by demand of either party who then
shall have fully performed its obligations hereunder if:
a. The Conditions to Closing have not occurred or have not
been approved, disapproved, or waived as the case may be, by the approving party by the date
established herein for the occurrence of such Condition, including any grace period pursuant to
this Section; or
b. Escrow is not in a condition to close by the date set for
Closing; or
C. Either party is in breach of the terns and conditions of this
Agreement.
In the event of the foregoing, the terminating party may, in writing, demand return of its
money, papers, or documents from the Escrow Agent and shall deliver a copy of such demand to
the non-terminating party. No demand shall be recognized by the Escrow Agent until thirty (30)
days after the Escrow Agent shall have mailed copies of such demand to the non-terminating
party, and if no objections are raised in writing to the terminating party and the Escrow Agent by
the non-terminating party within the thirty (30) day period. In the event of such objections, the
opportunity to cure shall be provided as stated below in subsection 2 of this Section. In addition,
the Escrow Agent is authorized to hold all money, papers, and documents until instructed in
writing by both Developer and Agency or, upon failure thereof, by a court of competent
jurisdiction. If no such demands are made, the Escrow shall be closed as soon as possible and
neither party shall have any further liability to the other.
2. Opportunity to Cure. Prior to Closing, in the event any of the Conditions to
Closing are not satisfied or waived by the party with the power to approve said Conditions (the
"approving party"), then such party shall explain in writing to the other party(the "nonapproving
party") the reason for the disapproval. Thereafter, the nonapproving party shall have an
additional thirty(30) days to satisfy any such Condition to Closing, and only if such Conditions
still camiot be satisfied may the approving party terminate the Escrow. In the event Escrow is
not in a condition to close because of a default by any party, and the performing party has made
demand as stated in Subsection 1 of this Section, then upon the non-performing party's delivering
its objection to Escrow Agent and the performing party within the above thirty(30) day period,
the non-performing party shall have the right to cure the default in accordance with and in the
time provided in Section 801.
3. Delivery of Plans, Drawings, and Reports. Upon termination of escrow for any
reason, all plans, drawings, specifications, reports, and other documents prepared by Developer
or Developer's contractors or vendors for the Project shall become the property of the Agency
and shall be delivered to Agency by Developer within ten(10) days of receipt of notice from
Agency.
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L. (§412)Responsibility of Escrow Agent.
1. Deposit of Funds. In accordance with Section 404, all fiends received in Escrow
shall be deposited by the Escrow Agent in a special escrow account with any state or national
bank doing business in the State of California and may not be combined with other escrow funds
of Escrow Agent or transferred to any other general escrow account or accounts.
2. Notices. All cormnunications from the Escrow Agent shall be directed to the
addresses and in the manner provided in Section 901 of this Agreement for notices, demands and
communications between Agency and Developer.
3. Sufficiency of Documents. The Escrow Agent is not to be concerned with the
sufficiency, validity, correctness of form, or content of any document prepared outside of escrow
and delivered to Escrow. The sole duty of the Escrow Agent is to accept such documents and
follow Developer's and Agency's instructions for their use.
4. Exculpation of Escrow Agent. The Escrow Agent shall in no case or event be
liable for the failure of any of the Conditions to Closing of this escrow, or for forgeries or false
personation, unless such liability or damage is the result of negligence or willful misconduct by
the Escrow Agent.
5. Responsibilities in the Event of Controversies. If any controversy documented in
writing arises between Developer and Agency or with any third party with respect to the subject
matter of this Escrow or its terms or conditions, the Escrow Agent shall not be required to
determine the same, to return any money, papers or documents, or take any action regarding the
Site prior to settlement of the controversy by a final decision of a court of competent jurisdiction
or written agreement of the parties to the controversy. The Escrow Agent shall be responsible
for timely notifying Developer and Agency of the controversy. In the event of such a
controversy, the Escrow Agent shall not be liable for interest or damage costs resulting from
failure to timely close escrow or take any other action unless such controversy has been caused
by the failure of the Escrow Agent to perform its responsibilities hereunder.
V. (§500) Development of the Site.
A. 0501) Scope of Development. The Site shall be developed by Developer
substantially as provided in the Scope of Development, the Planned Development District
approved by City, the Regulatory Agreement, and the plans and permits approved by Agency
and City pursuant to Section 502.
B. (§502) Development Plans; Final Building Plans.
1. Proposed Development's Consistency With Plan and Codes. Agency warrants
and represents that the City's General Plan, Zoning Ordinance, and Redevelopment Plan permits
Developer's proposed development, and constriction, operation, and use of the Agency Parcel as
provided in this Agreement, including without limitation the Scope of Development, subject only
to approval of the Project pursuant to Health and Safety Code Sections 33433; provided that it is
expressly understood by the parties hereto that Agency makes no representations or warranties
with respect to approvals required by any other governmental entity or with respect to approvals
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hereinafter required from City and Agency, Agency and City reserving fall police power
authority over the Project. Nothing in this Agreement shall be deemed to be a prejudgment or
commitment with respect to such items nor a guarantee that such approvals or permits will be
issued within any particular time or with or without any particular conditions.
2. Development Plan. Concurrently with or prior to the approval of this Agreement,
the Agency has approved the Developer's Basic Concept Drawings, and the City has approved
the Planned Development District for the Project. On or before the date set forth in the Schedule
of Performance, Developer shall submit to the City all other necessary preliminary, and
thereafter final drawings and specifications for development of the Site in accordance with the
Scope of Development, and all in accordance with the City's requirements. The tern preliminary
and final drawings shall be deemed to include site plans, building plans and elevations, grading
plans, if applicable, landscaping plans, parking plans, signage, a description of structural,
mechanical, and electrical systems, and all other plans, drawings and specifications. Final
drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and
specifications shall be consistent with the Scope of Development and the various development
approvals referenced hereinabove, except as such items may be amended by City(if applicable)
and by mutual consent of Agency and Developer. Plans (concept,preliminary and constriction)
shall be progressively more detailed and will be approved if a logical evolution of plans,
drawings or specifications previously approved. Plans in sufficient detail to obtain all
discretionary land use approvals, including for site plan approval, conditional use pennit, and
other actions requiring Planning Commission approval, shall be submitted and processed
concurrently for the Site.
3. Developer Efforts to Obtain Approvals. Developer shall exercise its
commercially reasonable efforts to timely submit all documents and information necessary to
obtain all development and building approvals from the City in a timely manner. Not by way of
limitation of the foregoing, in developing and constructing the Project, Developer shall comply
with all applicable development standards in City's Municipal Code and shall comply with all
building code, landscaping, signage, and parking requirements, except as may be pennitted
through approved variances and modifications.
4. Agency Assistance. Subject to Developer's compliance with(i) the applicable
City and Agency development standards for the Site, and (ii) all applicable laws and regulations
governing such matters as public hearings, site plan review and enviromnental review, Agency
agrees to provide reasonable assistance to Developer, at no cost to Agency, in the expeditious
processing of Developer's submittals required under this Section in order that Developer can
obtain a final City action on such matters within the time set forth in the Schedule of
Perfomance. City or Agency's failure to provide necessary approvals or pen-nits within such
time periods, after and despite Developer's reasonable efforts to submit the documents and
information necessary to obtain the sarne, shall constitute an Enforced Delay.
5. Disapproval. The Agency shall approve or disapprove, in its reasonable
discretion, any submittal made by Developer pursuant to this Section within forty-five (45) days
after such submittal. All submittals made by Developer will note the 45-day time limit, and
specifically reference this Agreement and this section. Any disapproval shall state in writing the
reason for the disapproval and the changes which the Agency requests be made. Developer shall
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make the required changes and revisions and resubmit for approval as soon as is reasonably
practicable but no more than thirty(30) days after the date of disapproval. Thereafter, Agency
shall have an additional thirty(30) days for review of the resubmittal, but if the Agency
disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been
obtained. The foregoing time periods may be shortened if so specified in the Schedule of
Performance.
6. CEO A. The Agency shall be responsible for obtaining the approval of this
Agreement and the Project as required by the California Enviromnental Quality Act. Without
limitation of the foregoing, Developer specifically acknowledges and agrees that the Developer
shall satisfy all conditions necessary to ensure that the Project conforms to all applicable CEQA
requirements. The Developer agrees to supply information and otherwise assist Agency, upon
Agency's request, to determine the environmental impact of the proposed development and to
allow Agency to prepare and process such environmental documents, if any, as may need to be
completed for the development pursuant to the requirements of CEQA.
C. N503) Developer Responsibilities During Construction. Except to the
extent of the Agency Financial Assistance, the cost of constructing all of the improvements
required to be constricted for the Project shall be borne by Developer, except for any work
expressly set forth in this Agreement to be performed or funded by the Agency or others. In
addition, in developing the Site, Developer shall conduct watering of the ground as reasonably
required by Agency, and take such other actions as Agency shall reasonably require to minimize
the impact of constriction and airborne debris on nearby property.
D. (§504) Reserved.
E. (§505) Schedule of Performance; Progress Reports. Subject to Enforced
Delays, Developer shall begin and complete all plans, reviews, construction and development
specified in the Scope of Development within the times specified in the Schedule of Performance
or such reasonable extensions of said dates as may he mutually approved in writing by the
parties.
Once construction is commenced, it shall be diligently pursued to completion, and shall
not be abandoned for more than thirty (30) consecutive days, except when due to an Enforced
Delay. Developer shall keep the Agency informed of the progress of constriction and shall
submit monthly to the Agency written reports of the progress of the construction in the form
required by the Agency.
F. 0506) Indemnification During Construction. During the periods of
construction on the Site and until such time as the Agency has issued a Certificate of Completion
with respect to the construction of the improvements thereon, the Developer agrees to and shall
indemnify and hold the Agency and the City harmless from and against all liability, loss,
damage, costs, or expenses (including reasonable attorneys' fees and court costs) arising from or
as a result of the death of any person or any accident, injury, loss, or damage whatsoever caused
to any person or to the property of any person which shall occur on the Site and which shall be
directly or indirectly caused by any acts done thereon or any errors or omissions of the
Developer or its agents, servants, employees, or contractors. The Developer shall not be
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responsible for (and such indemnity shall not apply to) any acts, errors, or omissions of the
Agency or the City, or their respective agents, servants, employees, or contractors. The Agency
and City shall not be responsible for any acts, errors, or omissions of any person or entity except
the Agency and the City and their respective agents, servants, employees, or contractors, subject
to any and all statutory and other immunities. The provisions of this Section shall survive the
termination of this Agreement.
G. (�, 507) Insurance. Prior to the entry by Developer on the Site pursuant to
Section 409 and prior to the cormnencement of any construction by Developer on the Project,
Developer shall procure and maintain, at its sole cost and expense, in a form and content
satisfactory to Agency, during the entire term of such entry or constriction, the following
policies of insurance:
1. Commercial General Liability Insurance. A policy of commercial general
liability insurance written on a per occurrence basis in an amount not less than a combined single
limit of TWO MILLION DOLLARS ($2,000,000.00)
2. Worker's Compensation Insurance. A policy of worker's compensation insurance
in such amount as will (ally comply with the laws of the State of California and which shall
indemnify, insure and provide legal defense for both the Developer, Agency, and the City against
any loss, claim or damage arising from any injuries or occupational diseases occurring to any
worker employed by or any persons retained by the Developer in the course of carrying out the
work or services contemplated in this Agreement.
3. Automobile hisurance. A policy of automobile liability insurance written on a per
occurrence basis in an amount not less than ONE MILLION DOLLARS ($1,000,000.00)
combined single limit per accident for bodily injury and property damage covering owned,
leased, hired, and non-owned vehicles.
4. Builder's Risk Insurance. A policy of"builder's risk" insurance covering the frill
replacement value of all of the improvements to be constructed by Developer pursuant to this
Agreement, and Developer's personal property and equipment.
All of the above policies of insurance, except the Builder's Risk Insurance, shall be
primary insurance and shall name Agency, City, and their officers, employees, and agents as
additional insureds. The insurer shall waive all rights of subrogation and contribution it may
have against Agency, City, and their officers, employees and agents and their respective insurers.
All of said policies of insurance shall provide that said insurance may not be amended or
cancelled without providing thirty (30) days prior written notice by registered mail to Agency
and City. hi the event any of said policies of insurance are cancelled, the Developer shall, prior
to the cancellation date, submit new evidence of insurance in conformance with this Section to
the Executive Director. No work or services under this Agreement shall commence until the
Developer has provided Agency with Certificates of Insurance or appropriate insurance binders
evidencing the above insurance coverages and said Certificates of Insurance or binders are
approved by Agency. The above policies of insurance shall not require coverage for earthquake.
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The policies of insurance required by this Agreement shall be satisfactory only if issued
by companies qualified to do business in California, rated "A" or better in the most recent edition
of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a
financial category Class VII or better, unless such requirements are waived by the Risk Manager
of the City("Risk Manager") due to unique circumstances.
Developer shall provide in all contracts with contractors, subcontractors, architects, and
engineers that said contractor, subcontractor, architect, or engineer shall maintain the same
policies of insurance required to be maintained by Developer pursuant to this Section, unless
waived or modified by the Risk Manager.
The Developer agrees that the provisions of this Section shall not be construed as limiting
in any way the extent to which the Developer may be held responsible for the payment of
damages to any persons or property resulting from the Developer's activities or the activities of
any person or persons for which the Developer is otherwise responsible.
H. N508) City and Other Governmental Agency Permits. Before
commencement of construction or development of any buildings, strictures, or other works of
improvement upon the Site which are Developer's responsibility under the Scope of
Development, Developer shall at its own expense secure or cause to be secured any and all
pen-nits which may be required by City or any other govermnental agency affected by such
constriction, development or work. The Developer shall not be obligated to commence
constriction if any such permit is not issued despite good faith effort by Developer. If there is
delay beyond the usual time for obtaining any such permits due to no fault of Developer, the
Schedule of Performance shall be extended to the extent such delay prevents any action which
could not legally or would not in accordance with good business practices be expected to occur
before such permit was obtained. Any such delay shall constitute an Enforced Delay. Developer
shall pay all normal and customary fees and charges applicable to such permits and any fees or
charges hereafter imposed by City or Agency which are standard for and uniformly applied to
similar projects in the City.
I. 0509) Rights of Access. Representatives of the Agency shall have the
reasonable right of access to the Site without charges or fees, at any time during normal
construction hours during the period of construction, for the purpose of assuring compliance with
this Agreement, including but not limited to the inspection of the construction work being
perfonned by or on behalf of Developer. Such representatives of Agency shall be those who are
so identified in writing by the Executive Director of Agency. Each such representative of
Agency shall identify himself or herself at the job site office upon his or her entrance to the Site,
and shall provide Developer, or the construction superintendent or similar person in charge on
the Site, a reasonable opportunity to have a representative accompany him or her during the
inspection. Agency shall indemnify, defend, and hold Developer harmless from any injury or
property damage caused or liability arising out of Agency's exercise of this right of access.
J. (§510) Applicable Laws. Developer shall carry out the construction of the
improvements to be constructed by Developer in confonnity with all applicable laws, including
all applicable federal and state labor laws.
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K. (§511)Nondiscrimination During Construction. Developer, for himself
and his successors and assigns, agrees that in the construction of the improvements to be
constructed by Developer, it shall not discriminate against any employee or applicant for
employment because of race, color, creed, religion, sex, marital status, ancestry or national
origin.
L. (§512) Taxes, Assessments, Encumbrances and Liens. Developer shall
pay, when due, all real estate taxes and assessments assessed or levied subsequent to conveyance
of title. Until the date Developer is entitled to the issuance by Agency of a Certificate of
Completion, Developer shall not place or allow to be placed thereon airy mortgage, trust deed,
encumbrance or lien (except mechanic's liens prior to suit to foreclose the same being filed)
prohibited by this Agreement. Developer shall remove or have removed any levy or attachment
made on the Site, or assure the satisfaction thereof, within a reasonable time, but in any event
prior to a sale thereunder. Nothing herein contained shall be deemed to prohibit Developer from
contesting the validity or amounts of any tax, assessment, encumbrance or lien, nor to limit the
remedies available to Developer in respect thereto.
M. (§513) Rights of Holders of Approved Security Interests in Site
1. Definitions. As used in this Section, the temp "mortgage" shall include any
mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or
sale and lease-hack, or any other form of conveyance for financing. The term "holder" shall
include the holder of airy such mortgage, deed of trust, or other security interest, or the lessor
under a lease-back, or the grantee under any other conveyance for financing.
2. No Encumbrances Except Mortgages to Finance The Project. Notwithstanding
the restrictions on transfer in Section 303, mortgages required for any reasonable method of
financing of the construction of the improvements are permitted before issuance of a Certificate
of Completion but only for the purpose of securing loans of funds used or to be used for
financing the acquisition of the Site, for the construction of improvements thereon, and for any
other expenditures necessary and appropriate to develop the Site under this Agreement, or for
restructuring or refinancing any for same, so long as the refinancing does not exceed the then
outstanding balance of the existing financing, including any additional costs for completion of
construction, whether direct or indirect, based upon the estimates of architects and/or contractors.
The Developer(or any entity permitted to acquire title under this Section) shall notify the
Agency in advance of any mortgage, if the Developer or such entity proposes to enter into the
same before issuance of the Certificate of Completion. The Developer or such entity shall not
enter into any such conveyance for financing without the prior written approval of the Agency as
provided in Section 408, which approval shall not he unreasonably withheld or delayed. Any
lender approved by the Agency pursuant to Section 408 shall not be bound by any amendment,
implementation, or modification to this Agreement subsequent to its approval without such
lender giving its prior written consent thereto. In any event, the Developer shall promptly notify
the Agency of any mortgage, encumbrance, or lien that has been created or attached thereto prior
to issuance of a Certificate of Completion, whether by voluntary act of the Developer or
otherwise.
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3. Developer's Breach Not to Defeat Mortgage Lien. Developer's breach of any of
the covenants or restrictions contained in this Agreement shall not defeat or render invalid the
lien of any mortgage made in good faith and for value as to the Site, or any part thereof or
interest therein, but unless otherwise provided herein, the terns, conditions, covenants,
restrictions, easements, and reservations of this Agreement shall be binding and effective against
the holder of any such mortgage of the Site whose interest is acquired by foreclosure, trustee's
sale or otherwise.
4. Holder Not Obligated to Construct or Complete Improvements. The holder of
any mortgage shall in no way be obligated by the provisions of this Agreement to constrict or
complete the improvements or to guarantee such construction or completion. Nothing in this
Agreement shall be deemed or construed to permit or authorize any such holder to devote the
Site or any portion thereof to any uses, or to construct any improvements thereon, other than
those uses or improvements provided for or authorized by this Agreement.
5. Notice of Default to Mortgages, Deed of Trust or other Security Interest Holders.
Whenever Agency shall deliver any notice or demand to Developer with respect to any breach or
default by Developer hereunder, Agency shall at the same time deliver a copy of such notice or
demand to each holder of record of any mortgage who has previously made a written request to
Agency therefor, or to the representative of such lender as may be identified in such a written
request by the lender. No notice of default shall be effective as to the holder unless such notice
is given.
6. Right to Cure. Each holder(insofar as the rights of Agency are concerned) shall
have the right, at its option, within ninety(90) days after the receipt of the notice, to:
a. obtain possession, if necessary, and to commence and
diligently pursue said cure until the same is completed, and
b. add the cost of said cure to the security interest debt and the
lien or obligation on its security interest;
provided that in the case of a default which carmot with diligence be remedied or cured within
such ninety (90) day period, such holder shall have additional time as reasonably necessary to
remedy or cure such default.
In the event there is more than one such holder, the right to cure or remedy a breach or
default of Developer under this Section shall be exercised by the holder first in priority or as the
holders may otherwise agree among themselves, but there shall be only one exercise of such
right to cure and remedy a breach or default of Developer under this Section.
No holder shall undertake or continue the construction or completion of the
improvements (beyond the extent necessary to preserve or protect the improvements or
construction already made) without fast having expressly assumed Developer's obligations to
Agency by written agreement satisfactory to Agency with respect to the Site or any portion
thereof in which the holder has an interest. The holder must agree to complete, in the manner
required by this Agreement, the improvements to which the lien or title of such holder relates,
and submit evidence satisfactory to the Agency that it has the qualifications and financial
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responsibility necessary to perform such obligations. Any holder properly completing such
improvements shall be entitled, upon written request made to Agency, to a Certificate of
Completion from Agency.
7. Agency's Rights upon Failure of Holder to Complete Improvements. In any case
where one hundred eighty(180) days after default by Developer in completion of constriction of
improvements under this Agreement, the holder of any mortgage creating a lien or encumbrance
upon the Site or improvements thereon has not exercised the option to construct afforded in this
Section or if it has exercised such option and has not proceeded diligently with construction,
Agency may, after ninety (90) days'notice to such holder and if such holder has not exercised
such option to constrict within said ninety(90) day period, purchase the mortgage, upon
payment to the holder of an amount equal to the sum of the following:
a. The unpaid mortgage debt plus any accrued and unpaid
interest (less all appropriate credits, including those resulting from collection and application of
rentals and other income received during foreclosure proceedings, if any);
b. All expenses incurred by the holder with respect to
foreclosure, if any;
C. The net expenses (exclusive of general overhead), incurred
by the holder as a direct result of the ownership or management of the Site, such as insurance
premiums or real estate taxes, if any;
d. The costs of any improvements made by such holder, if
any; and
e. An amount equivalent to the interest that would have
accrued on the aggregate of such amounts had all such amounts become part of the mortgage
debt and such debt had continued in existence to the date of payment by the Agency.
In the event that the holder does not exercise its option to construct afforded in this
Section, and Agency elects not to purchase the mortgage of holder, upon written request by the
holder to Agency, Agency agrees to use reasonable efforts to assist the holder selling the holder's
interest to a qualified and responsible party or parties (as determined by Agency), who shall
assume the obligations of making or completing the improvements required to be constructed by
Developer, or such other improvements in their stead as shall be satisfactory to Agency. The
proceeds of such a sale shall be applied first to the holder of those items specified in
subparagraphs a. through e. hereinabove, and any balance remaining thereafter shall be applied
as follows:
(1) First, to reimburse Agency, on its own behalf and
on behalf of the City, for all costs and expenses actually and reasonably incurred by Agency,
including but not limited to payroll expenses, management expenses, legal expenses, and others.
(2) Second, to reimburse Agency, on its own behalf and
on behalf of the City, for all payments made by Agency to discharge any other encumbrances or
liens on the Site or to discharge or prevent from attaching or being made any subsequent
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encumbrances or liens due to obligations, defaults, or acts of Developer, its successors or
transferees.
(3) Third, to reimburse Agency, on its own behalf and
on behalf of the City, for all costs and expenses actually and reasonably incurred by Agency, in
connection with its efforts assisting the holder in selling the holder's interest in accordance with
this Section.
(4) Fourth, any balance remaining thereafter shall be
paid to Developer.
8. Right of Agency to Cure Mortgage, Deed of Trust or Other Security Interest
Default. In the event of a default or breach by Developer(or entity permitted to acquire title
under this Section), which continues beyond any applicable notice and cure period, of a
mortgage prior to the issuance by Agency of a Certificate of Completion for the Site or portions
thereof covered by said mortgage, and the holder of any such mortgage has not exercised its
option to complete the development, Agency may cure such default prior to completion of any
foreclosure. In such event, Agency shall be entitled to reimbursement from Developer or other
entity of all costs and expenses incurred by Agency in curing the default, to the extent permitted
by law, as if such holder initiated such claim for reimbursement, including legal costs and
attorneys' fees, which right of reimbursement shall be secured by a lien upon the Site to the
extent of such costs and disbursements. Any such lien shall be subject to:
a. Any mortgage for financing pennitted by this Agreement;
and
b. Any rights or interests provided in this Agreement for the
protection of the holders of such mortgages for financing;
provided that nothing herein shall be deemed to impose upon Agency any affirmative obligations
(by the payment of money, construction or otherwise) with respect to the Site in the event of its
enforcement of its lien.
9. Right of Agency to Satisfy Other Liens on the Site After Conveyance of Title.
After the conveyance of title and prior to the recordation of a Certificate of Completion for
constriction and development, and after the Developer has had a reasonable time to challenge,
cure, or satisfy any liens or encumbrances on the Site or any portion thereof, the Agency shall
have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this
Agreement shall require the Developer to pay or make provision for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or
amount thereof, and so long as such delay in payment shall not subject the Site or any portion
thereof to forfeiture or sale.
Notwithstanding anything to the contrary contained herein, the terns and
conditions contained in this Agreement and the Regulatory Agreement will be subordinated to
the liens securing any financing permitted under this Agreement.
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N. (§514) Certificate of Completion. Upon the substantial completion of all
construction required to be completed by Developer on the Site, Agency shall furnish Developer
with a Certificate of Completion for the Site in the form attached hereto as Attachment No. 8
upon written request therefor by Developer. The Certificate of Completion shall be executed and
notarized so as to permit it to be recorded in the office of the Recorder of Riverside County. A
Certificate of Completion shall be, and shall state that it constitutes, conclusive determination of
satisfactory completion of the construction and development of the improvements required by
this Agreement upon the Site and of full compliance with the terms of this Agreement with
respect thereto. A partial Certificate of Completion applicable to less than the entire Site shall
not be permitted.
After the issuance of a Certificate of Completion, airy party then owning or thereafter
purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of such
ownership, purchase, lease, or acquisition) incur any obligation or liability raider this Agreement
with respect to the Site, except that such party shall be bound by the covenants, encumbrances,
and easements contained in the Regulatory Agreement attached hereto. After issuance of a
Certificate of Completion, the Agency shall not have any rights or remedies render this
Agreement with respect to the Site, except as otherwise set forth or incorporated in the
Regulatory Agreement.
Agency shall not mueasonably withhold a Certificate of Completion. If Agency refuses
or fails to furnish a Certificate of Completion within thirty (30) days after written request from
Developer or any entity entitled thereto, Agency shall provide a written statement of the reasons
Agency refitsed or failed to famish a Certificate of Completion. The statement shall also contain
Agency's opinion of the action Developer must take to obtain a Certificate of Completion. If the
reason for such refusal is confined to the immediate availability of specific items or materials for
landscaping, or other minor so-called "punch list" items, Agency will issue its Certificate of
Completion upon the posting of a bond in an amount representing one hundred fifty percent
(150%) of the fair value of the work not yet completed or other assurance reasonably satisfactory
to Agency.
A Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to finance the improvements, or any part thereof. Such
Certificate of Completion is not a notice of completion as referred to in the California Civil Code
Section 3093. Nothing herein shall prevent or affect Developer's right to obtain a Certificate of
Occupancy from the City before the Certificate of Completion is issued.
O. (§515) Estoppels. No later than thirty(30) days after the request of
Developer or any holder of a mortgage or deed of trust, Agency shall, from time to time and
upon the request of such holder, execute and deliver to Developer or such holder a written
statement of Agency that no default or breach exists (or would exist with the passage of time, or
giving of notice or both) by Developer under this Agreement, if such be the determination of the
Agency, and certifying as to whether or not Developer has at the date of such certification
complied with any obligation of Developer hereunder as to which such holder may inquire. The
form of any estoppel letter shall be prepared by the holder or Developer and shall be at no cost to
Agency.
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VI. (§600) Uses and Maintenance of the Site.
A. (§601) Uses of the Site. The Developer covenants and agrees for itself, its
successors and assigns, which covenants shall run with the land and bind every successor or
assign in interest of Developer, that during development of the Site pursuant to this Agreement
and thereafter, neither the Site nor the improvements, nor any portion thereof, shall be improved,
used or occupied in violation of any applicable governmental restrictions or the restrictions of
this Agreement. Furthermore, Developer and its successors and assigns shall not initiate,
maintain, corrunit, or permit the maintenance or commission on the Site or in the improvements,
or any portion thereof, of any nuisance, public or private, as now or hereafter defined by any
statutory or decisional law applicable to the Site or the improvements, or any portion thereof.
Notwithstanding anything to the contrary or that appears to be to the contrary in this
Agreement, Developer hereby covenants, on behalf of itself, and its successors and assigns,
which covenants shall nm with the land and bind every successor and assign in interest of
Developer, that, Developer and such successors and assigns shall use the Site solely for the
purpose of constricting, maintaining and operating a residential rental project meeting the
requirements and restrictions of this Agreement and the Regulatory Agreement, including,
without limitations, restriction of the rental and occupancy of the Restricted Units only to
Qualified Tenants for a rent not in excess of an Affordable Rent for the period specified herein.
B. (§602) Affordable Housing.
1. Construction of Affordable Housing. The Developer covenants and agrees to
construct a total of eighty-five (85) Units, including forty-one (41) Restricted Units and one (1)
Manager's Unit, in conformity with the Scope of Development. All of the Restricted Units shall
be restricted to rental at an Affordable Rent to Very Low and Lower Income Households. The
Units, including the Manager's Unit, shall be composed of 36 studio units with kitchens, 42 one-
bedroom units and 7 two-bedroom units. The placement of the Restricted Units may float in the
Project as long as a minimum of forty-one (41) meet the criteria. All Restricted Units shall be
subject to and shall be leased in compliance with the Tenant Selection Criteria attached thereto.
2. Restricted Unit Requirements. All Restricted Units constructed pursuant to this
Agreement shall be occupied at all times only by the household of the Qualified Tenant who has
rented that Restricted Unit. Developer covenants to cooperate with Agency in taking all steps
necessary to implement this requirement with respect to all Qualified Tenants. In addition, all
Qualified Tenants shall meet and shall be prioritized in accordance with the Tenant Selection
Criteria. The restrictions upon rental and use of each Restricted Unit shall continue for a period
of fifty-five (55) years from the recordation of Certificate of Completion.
3. Leasing of Residences by Developer.
a. Marketing Program. Prior to the deadline specified in the
Schedule of Performance, Developer shall prepare and obtain Agency's approval (which shall not
be unreasonably witliheld) of a marketing and leasing program ("Approved Marketing Program")
for the selection of tenants for the Restricted Units at the Project. The Restricted Units shall
thereafter be marketed in accordance with the Approved Marketing Program as the same may be
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amended by Developer from time to time with Agency's prior written approval, which shall not
be unreasonably withheld. Monthly during the initial lease-up period, and annually thereafter,
Developer shall provide Agency with a report with respect to Restricted Units under lease, leases
in default, status of implementation of the Approved Marketing Program, and such other
information as Agency may reasonably request. Agency agrees to exercise reasonable efforts to
assist Developer in comiection with implementation of the Approved Marketing Program;
provided, Agency shall not be under any obligation to incur any out-of-pocket expenses in
con section therewith.
b. Restricted Residences. As set forth above, each of the
Restricted Units shall be rented to a Qualified Tenant for a rental rate which does not exceed an
Affordable Rent for the applicable Restricted Unit.
C. Annual Tenancy Report. Developer shall provide Agency
annually, by January 31, with a report on Project occupancy for each Restricted Unit, including
infonmation concerning the number of months during which each Restricted Unit was occupied,
and the income category of each tenant household occupying a Restricted Unit. The annual
report and Developer's records related to each tenancy shall be subject to inspection and audit
upon Agency's written request.
C. ($603) Obligation to Refrain from Discrimination. There shall be no
discrimination against, or segregation of, any persons, or group of persons, on account of race,
color, creed, religion, sex, marital status, national origin or ancestry in the rental, sale, lease,
sublease, transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall
Developer, or any person claiming under or through Developer, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site or
any portion thereof (except as permitted by this Agreement). The nondiscrimination and
nonsegregation covenants contained herein shall remain in effect in perpetuity.
D. (§604) Form of Nondiscrimination and Nonsegregation Clauses. Subject
to the tenancy/occupancy restrictions on the Restricted Units not prohibited by federal law as
embodied in this Agreement, which may modify the following nondiscrimination clauses, the
following shall apply: Developer 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, 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:
1. Deeds. In Deeds the following language shall appear: "The grantee herein
covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns,
and all persons claiming under or through them, that there shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any persons claiming
under or thorough him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
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lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants
shall run with the land."
2. Leases. hi Leases the following language shall appear: "The lessee herein
covenants by and for himself or herself, his or her heirs, executors, administrators and assigns,
and all persons claiming under or through him or her, and this lease is made and accepted upon
and subject to the following conditions: 'That there shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex,
marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the premises herein leased nor shall the lessee, or any person claiming
under or through him or her, 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 premises herein leased."
3. Contracts. Any contracts which Developer or Developer's heirs, executors,
administrators, or assigns propose to enter into for the sale, transfer, or leasing of the Site shall
contain a nondiscrimination and nonsegregation clause substantially as set forth in Section 603
and in this Section. Such clause shall bind the contracting party and subcontracting party or
transferee under the instrument.
E. (§605) Maintenance of Improvements. Developer covenants and agrees
for itself, its successors and assigns, and every successor in interest to the Site or any part
thereof, that, after Agency's issuance of its Certificate of Completion the Developer shall be
responsible for maintenance of all improvements that may exist on the Site from time to time,
including without limitation buildings, parking lots, lighting, signs, and walls, in good condition
and repair, and shall keep the Site free from any accumulation of debris or waste materials. The
Developer shall also maintain all landscaping required pursuant to Developer's approved
landscaping plan in a healthy condition, including replacement of any dead or diseased plants.
The foregoing maintenance obligations shall run with the land in accordance with and for the
term of the Regulatory Agreement. Developer's further obligations to maintain the Site, and
Agency's remedies in the event of Developer's default in performing such obligations, are set
forth in the Regulatory Agreement. Developer hereby waives any notice, public hearing, and
other requirements of the public nuisance laws and ordinances of the City that would otherwise
apply, except as specified in said Regulatory Agreement. Upon the sale of any portion of the
Site, Developer (but not Developer's successor) shall be released from the requirements imposed
by this Section 605, and the financial liability therefor, as to the portion of the Site conveyed.
F. (§606) Effect of Covenants. Agency is deemed a beneficiary of the terns
and provisions of this Agreement and of the restrictions and covenants running with the land
appearing in the Regulatory Agreement, for and in its own right for the purposes of protecting
the interests of the community in whose favor and for whose benefit the covenants running with
the land have been provided. The covenants in favor of Agency shall run without regard to
whether Agency has been, remains or is an owner of any land or interest therein in the Site, or in
the Redevelopment Project Area, and shall be effective as both covenants and equitable
servitudes against the Site. Agency shall have the right, if any of the covenants set forth in this
Agreement which are provided for its benefit are breached, to exercise all rights and remedies
and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the
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curing of such breaches to which it may be entitled. With the exception of the City, no other
person or entity shall have any right to enforce the terns of this Agreement under a theory of
third-party beneficiary or otherwise. The covenants ruining with the land and their duration are
set forth in the Regulatory Agreement.
VIL 0700) Special Provisions.
A. [Reserved].
VIII. (§800) Defaults, Remedies and Termination.
A. 0801) Defaults, Right to Cure and Waivers. Subject to any Enforced
Delay, failure or delay by either party to timely perform any covenant of this Agreement
constitutes a default under this Agreement, but only if the party who so fails or delays does not
commence to cure, correct or remedy such failure or delay within thirty (30) days after receipt of
a written notice specifying such failure or delay, and does not thereafter prosecute such cure,
correction or remedy with diligence to completion.
The injured party shall give written notice of default to the party in default, specifying the
default complained of by the injured party. Except as required to protect against further
damages, the injured party may not institute proceedings against the party in default until thirty
(30) days after giving such notice. Failure or delay in giving such notice shall not constitute a
waiver of any default, nor shall it change the time of default.
Except as otherwise provided in this Agreement, waiver by either party of the
performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor
shall it be considered a waiver of any other covenant, condition, or promise. Waiver by either
party of the time for performing any act shall not constitute a waiver of time for performing any
other act or an identical act required to be performed at a later time. The delay or forbearance by
either party in exercising any remedy or right as to any default shall not operate as a waiver of
any default or of any rights or remedies or to deprive such party of its right to institute and
maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce
any such rights or remedies.
B. (002) Legal Actions.
1. Institution of Legal Actions. hi addition to any other rights or remedies, and
subject to the requirements of Section 801, either party may institute legal action to cure, correct
or remedy any default, to recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Legal actions must be instituted and maintained
in the Superior Court of the County of Riverside, State of California, in any other appropriate
court in that comity, or in the Federal District Court in the Eastern Division of the Central
District of California.
2. Applicable Law and Forum. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
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3. Acceptance of Service of Process. In the event that any legal action is
commenced by Developer against Agency, service of process on Agency shall be made by
personal service upon the Executive Director or Secretary of Agency, or in such other manner as
may be provided by law.
In the event that any legal action is corn menced by Agency against Developer, service of
process on Developer shall be made in such manner as may be provided by law and shall be
valid whether made within or without the State of Califonua.
C. 0803) Rights and Remedies are Cumulative. Except as otherwise
expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the
exercise by either party of one or more of its rights or remedies shall not preclude the exercise by
it, at the same or different times, of any other rights or remedies for the same default or any other
default by the other party.
D. (004) Specific Performance. In addition to any other remedies permitted
by this Agreement, if either party defaults hereunder by failing to perform any of its obligations
herein, each party agrees that the other shall be entitled to the judicial remedy of specific
performance, and each party agrees (subject to its reserved right to contest whether in fact a
default does exist) not to challenge or contest the appropriateness of such remedy. In this regard,
Developer specifically acknowledges that Agency is entering into this Agreement for the purpose
of assisting in the redevelopment of the Site and not for the purpose of enabling Developer to
speculate with land.
E. (§805) Right of Reverter. The Agency shall have the right, at its option, to
reenter and take possession of the Agency Parcel or the Affordable Housing Parcel or any
portion thereof with all improvements thereon and to terminate and revest in the Agency the
estate conveyed to the Developer, if after conveyance of the estate and prior to the recordation of
the Certificate of Completion, the Developer (or its successors in interest) shall:
1. Fail to commence construction of the improvements as required by this
Agreement, if such failure is in violation of the Schedule of Performance, for a period of 90 days
after written notice to proceed from the Agency, provided that the Developer shall not have
obtained an extension or postponement to which the Developer may be entitled pursuant to this
Agreement; or
2. Abandon or substantially suspend constriction of the improvements for a period
of 90 days after written notice of such abandomuent or suspension from the Agency, provided
that the Developer shall not have obtained an extension of time to which the Developer may be
entitled pursuant to this Agreement; or
3. Assign or attempt to assign this Agreement, or any rights herein, or transfer, or
suffer any involuntary transfer of, the Site, or any part thereof, in violation of this Agreement,
and such violation shall not be cured within one hundred twenty(120) days after the date of
receipt of written notice thereof by the Agency to the Developer.
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Agency's right to re-enter, repossess, terminate, and revest shall be secured by the Deed
of Trust attached hereto as Attachment No. 7; provided, however, that Agency's rights shall be
subject to and be limited by and shall not defeat, render invalid, or limit:
1. Any mortgage, deed of trust, or other security interests permitted
by this Agreement.
2. Any rights or interests provided in this Agreement for the
protection of the holders of such mortgages, deeds of trust, or other security interests.
Upon the revesting in the Agency of possession of the Site, or any part thereof, as
provided in this Section 805, the Agency shall, pursuant to its responsibilities under state law,
use its best efforts to release, or resell the Site, as the case may be, or any part thereof, as soon
and in such manner as the Agency shall find feasible and consistent with the objectives of such
law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined
by the Agency), who will assume the obligation of malting or completing the improvements, or
such other improvements in their stead, as shall be satisfactory to the Agency and in accordance
with the uses specified for the Site, or any part thereof, in the Redevelopment Plan.
In the event of a resale, the proceeds thereof shall be applied as follows:
a. First, to reimburse the Agency on its own behalf or on
behalf of the City for all costs and expenses incurred by the Agency, including but not limited to,
salaries to persomiel, legal costs and attorneys' fees, and all other contractual expenses in
connection with the recapture, management, and resale of the Site (but less any income derived
by the Agency from the Site or part thereof in connection with such management); all taxes,
assessments and water and sewer charges with respect to the Site (or, in the event the Site is
exempt from taxation or assessment or such charges during the period of ownership, then such
taxes, assessments, or charges, as determined by the City, as would have been payable if the Site
were not so exempt); any payments made or necessary to be made to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations incurred with
respect to the making or completion of the agreed improvements or any part thereof on the Site
or part thereof; and amounts otherwise owing the Agency by the Developer, its successors, or
transferees; and
b. Second, to reimburse the Developer, its successor or
transferee, up to the amount equal to (i) the sum of the Purchase Price paid to the Agency by the
Developer for the Site, (ii) the costs incurred for the development of the Site and for the agreed
improvements existing on the Site at the time of the re-entry and repossession, less (iii) any gains
or income withdrawn or made by the Developer from the Site or the improvements thereon.
C. Any balance remaining after such reimbursements shall be
retained by the Agency as its property.
To the extent that the right established in this Section involves a forfeiture, it must be
strictly interpreted against the Agency, the party for whose benefit it is created. The rights
established in this Section are to be interpreted in light of the fact that the Agency will transfer
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the Site to the Developer for less than fair market value for development as an affordable
housing project, and not for speculation in undeveloped land.
Notwithstanding anything to the contrary contained in this Agreement, the Agency shall
have no fiuther rights pursuant to this Section 805 from and after the issuance of the Certificate
of Completion.
F. 0. 806) Attorney's Fees. If either party to this Agreement is required to
initiate or defend any action or proceeding in any way arising out of the parties' agreement to, or
performance of, this Agreement, or is made a party to any such action or proceeding by the
Escrow Agent or other third party, such that the parties hereto are adversarial, the prevailing
party, as between the Developer and Agency only, in such action or proceeding, in addition to
any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable
attorney's fees from the other. As used herein, the "prevailing party" shall be the party
determined as such by a court of law, pursuant to the definition Code of Civil Procedure Section
1032(a)(4), as it may be subsequently amended. 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, taking depositions and discovery and all other
necessary costs the court allows which are incurred in such litigation. All such fees shall be
deemed to have accrued on commencement of such action and shall be enforceable whether or
not such action is prosecuted to judgment.
IX. (§900) General Provisions.
A. (§901)Notices, Demands and Communications Between the Parties.
Except as expressly provided to the contrary herein, any notice, consent, report, demand,
document or other such item to be given, delivered, famished or received hereunder shall be
deemed given, delivered, furnished, and received when given in writing and personally delivered
to an authorized agent of the applicable party, or upon delivery by the United States Postal
Service, first-class registered or certified mail, postage prepaid, return receipt requested, or by a
national "overnight courier" such as Federal Express, at the time of delivery shown upon such
receipt; or by facsimile, if such facsimile is followed by a notice sent out the same day by mail;
in any case, delivered to the address, addresses and persons as each party may from time to time
by written notice designate to the other and who initially are:
Agency: Community Redevelopment Agency of the
City of Palm Springs
3200 E. Tahquitz Carryon Way
Palm Springs, CA 92262
Attn: Executive Director
Copy to: Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 400
Irvine, CA 92612
Attn: David J. Aleshire, Esq.
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Developer: Vista Sunrise Apartments, L.P.
c/o McCormack Baron Salazar
655 S. Hope Street, Suite 1100
Los Angeles, CA 90017
Attn: General Partner
Copy to: Bingham McCutchen, LLP
355 South Grand Avenue, Suite 4400
Los Angeles, CA 90071
Attn: Lance Bocarsly, Esq.
B. 0902)Nonliability of City and Agency Officials and Employees;
Conflicts of Interest; Commissions.
1. Personal Liability. No member, official, employee, agent or contractor of City or
Agency shall be personally liable to Developer in the event of any default or breach by Agency
or for any arnount which may become due to Developer or on any obligations under the terms of
the Agreement; provided, it is understood that nothing in this Section 902 is intended to limit
Agency's liability.
2. Financial Interest. No member, official, employee or agent of City or Agency
shall have any financial interest, direct or indirect, in this Agreement, nor participate in any
decision relating to this Agreement which is prohibited by law.
3. Commissions. Neither the Agency nor the Developer has retained any broker or
finder or has paid or given, and will not pay or give, any third person any money or other
consideration for obtaining this Agreement. Neither party shall be liable for any real estate
commissions, brokerage fees or finders fees which may arise from this Agreement, and each
party agrees to hold the other harmless from any claim by any broker, agent, or finder retained
by such party.
C. (§903) Enforced Delay: Extension of Times of Performance. Time is of
the essence in the performance of this Agreement.
Notwithstanding the foregoing, in addition to specific provisions of this Agreement,
performance by either party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock-outs; riots, floods; earthquakes; fires;
casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions;
freight embargoes; lack of transportation; subsurface conditions on the Site and unknown soils
conditions; governmental restrictions or priority litigation; unusually severe weather; inability to
secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier;
acts of the other party; acts or the failure to act of a public or govemmnental agency or entity
(except that acts or the failure to act of Agency or City shall not excuse performance by Agency
unless the act or failure is caused by the acts or omissions of Developer); or any other causes
beyond the reasonable control or without the fault of the party claiming an extension of time to
perform. In the event of such a delay(herein "Enforced Delay"), the party delayed shall continue
to exercise reasonable diligence to minimize the period of the delay. An extension of time for
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any such cause shall be limited to the period of the Enforced Delay, and shall cormnence to run
from the time of the commencement of the cause, provided notice by the patty claiming such
extension is sent to the other party within ten(10) days of the commencement of the cause.
The following shall not be considered as events or causes beyond the control of
Developer, and shall not entitle Developer to an extension of time to performs: (i) Developer's
failure to obtain financing for the Project (except as provided in Section 401), and (ii)
Developer's failure to negotiate agreements with prospective users for the Project or the alleged
absence of favorable market conditions for such uses.
Times of performance under this Agreement may also be extended by mutual written
agreement by Agency and Developer. The Executive Director of Agency shall have the
authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of
one hundred eighty(180) days with respect to the development of the Site.
D. 0904) Books and Records.
1. Developer to Deep Records. Developer shall prepare and maintain all books,
records and reports necessary to substantiate Developer's compliance with the terns of this
Agreement or reasonably required by the Agency.
2. Right to Inspect. Either party shall have the right, upon not less than seventy-two
(72) hours notice, at all reasonable times, to inspect the books and records of the other party
pertaining to the Site as pertinent to the purposes of this Agreement.
3. Ownership of Documents. All drawings, specifications, reports, records,
documents and other materials prepared by Developer, its employees, agents and subcontractors,
in the perfonnance of this Agreement, shall be delivered to Agency in the event of a termination
of this Agreement, and Developer shall have no claim for additional compensation as a result of
the exercise by Agency of its rights hereunder. The Agency shall have an unrestricted right to
use such documents and materials as the owner of the same. Developer makes no warranty or
representation regarding the accuracy or sufficiency of such documents for any future use by
Agency, and Developer shall have no liability therefor.
E. 0905) Assurances to Act in Good Faith. Agency and Developer agree to
execute all documents and instruments and to take all action, including deposit of fiords in
addition to such funds as may be specifically provided for herein, and as may be required in
order to consurmnate conveyance and development of the Site as herein contemplated, and shall
use their best efforts, to accomplish the closing and subsequent development of the Site in
accordance with the provisions hereof. Agency and Developer shall each diligently and in good
faith pursue the satisfaction of any conditions or contingencies subject to their approval.
F. 0906) Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
party by reason of the authorship of this Agreement or any other rule of construction which
might otherwise apply. The Section headings are for purposes of convenience only, and shall not
be construed to limit or extend the meaning of this Agreement. This Agreement includes all
attachments attached hereto, which are by this reference incorporated in this Agreement in their
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entirety. This Agreement also includes the Redevelopment Plan and any other documents
incorporated herein by reference, as though frilly set forth herein.
G. (§907) Entire Agreement, Waivers and Amendments. This Agreement
integrates all of the teens and conditions mentioned herein, or incidental hereto, and this
Agreement supersedes all negotiations and previous agreements between the parties with respect
to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement,
unless specified otherwise herein, must be in writing and signed by the appropriate authorities of
Agency or Developer, as applicable, and all amendments hereto must be in writing and signed by
the appropriate authorities of Agency and Developer.
H. N908) Severabilitv. In the event any tern, covenant, condition,provision
or agreement contained herein is held to be invalid, void or otherwise unenforceable, by any
court of competent jurisdiction, such holding shall in no way affect the validity or enforceability
of any tern, covenant, condition,provision or agreement contained herein.
1. N909) Effect of Redevelopment Plan Amendment. Pursuant to the
provisions of the Redevelopment Plan for modification or amendment thereof, Agency agrees
that no further amendment to the Redevelopment Plan which changes the uses or development
permitted on the Site, or changes the restrictions or controls that apply to the Site, or otherwise
affects the Site, shall be made or become effective as to the Site without the prior written consent
of Developer. Further amendments to the Redevelopment Plan applying to other property in the
Project Area shall not require the consent of Developer.
J. ($910) Time for Acceptance of Agreement by Agency. This Agreement,
when executed by Developer and delivered to Agency, must be authorized, executed and
delivered by Agency, not later than the time set forth in the Schedule of Performance or this
instrument shall be void, except to the extent that Developer shall consent in writing to further
extensions of time for the authorization, execution, and delivery of this Agreement. After
execution by Developer, this Agreement shall be considered an irrevocable offer until such time
as such offer shall become void due to the failure of the Agency to authorize, execute and deliver
the Agreement in accordance with this Section.
K. 0911) Execution.
1. This Agreement may be executed in counterparts, each of which shall be deemed
to be an original, and such counterparts shall constitute one and the same instrument.
2. Agency represents and warrants that: (i) it is a Redevelopment Agency duly
organized and existing under the laws of the State of California; (ii) by proper action of Agency,
Agency has been duly authorized to execute and deliver this Agreement, acting by and through
its duly authorized officers; and(iii) the entering into this Agreement by Agency does not violate
any provision of any other agreement to which Agency is a party.
Developer represents and warrants that: (i) it is duly organized and existing under the laws of
the State of California; (ii) by proper action of Developer, Developer has been duly authorized to
execute and deliver this Agreement, acting by and through its duly authorized officers; and (iii)
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the entering into this Agreement by Developer does not violate any provision of any other
agreement to which Developer is a party.
L. (012) Standard of Approval. Any consents or approvals required or
permitted Linder this Agreement shall not be unreasonably withheld or made, except where it is
specifically provided that a sole discretion standard applies.
[END -- SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
of execution by the Agency.
"AGENCY"
THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
SPRINGS,
a public body, corporate and politic
Date k1rP.CS Chairman�
ATTEST:
���1: ency Secretary
APPROVED AS TO FORM: ".f`d'40YED QDY frUl: C�u1:�.Uliti�S' =i d:
ALESHIRE &WYNDER, LLP �
,✓'(7 // /�1 /
Gi,.r,,.tiL /�1L'/7�r 1��./d,;J PJ�t��
David J. Aleshire, Agency Counsell
"DEVELOPER"
VISTA SUNRISE APARTMENTS, L.P.
a California limited partnership
By: MBA De elopment Corp.
Date: Its: General artner
B
[END OF SIGNATURES]
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M E M O R A N D U M
TO: John Raymond
Director of Community & Economic Development
FROM: ,I I Kathie Hart
�r�'J. / Chief Deputy City Clerk
DATE: February 15, 2005
SUBJECT: Vista Sunrise Apartments
DDA
A0464C
cc: Jay Thompson, City Clerk
File
Attached are two (2) duplicate original copies of the above referenced agreement. We have
retained the original our files.
Please feel free to contact me if there are any questions, ext. 8206.
/kdh
attach.