19-0903_C & C DEVELOPMENT CO., LLC_Affordable Housing Disposition and Development Agr61147.00145\32162022.3
AFFORDABLE HOUSING DISPOSITION
AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
among
THE CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation
C & C DEVELOPMENT CO., LLC,
a California limited liability company
and
SEAN RAWSON,
an individual
TAB LE OF ONTENTS
ARTICLE I. DEFINITIONS; REPRESENT A TIO NS AND WARRANTIES;
EFFECTIVE DA TE .............................................................................................. 2
1.1
1.2
Definitions ................................................................................................... 2
Representations and Warranties ............................................................ 12
ARTICLE II. PROPERTY DISPOSITION .............................................................................. 15
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Purchase and Sale .................................................................................... 15
Payment of Purchase Price ..................................................................... 15
Eminent Domain ...................................................................................... 15
Title Approval .......................................................................................... 16
Developer Investigations ......................................................................... 17
Developer to Obtain all Project Entitlements ....................................... 18
Delivery of Property Free of Occupants ................................................ 20
Project Marketing Plan ........................................................................... 21
ARTICLE III. ESCROW INSTRUCTIONS ............................................................................ 21
3.1 Opening of Escrow ................................................................................... 21
3.2 Conditions to Close of Escrow ................................................................ 2 1
3.3 Developer's Escrow Deposits .................................................................. 23
3.4 City's Escrow Deposits ............................................................................ 25
3.5 Closing Procedure .................................................................................... 25
3.6 Close of Escrow ........................................................................................ 26
3. 7 Recordation and Distribution of Documents ........................................ 26
3.8 Escrow Closing Costs, Taxes and Title Policy Premium ...................... 27
3.9 Escrow Cancellation Charges ................................................................. 27
3.10 Escrow Cancellation ................................................................................ 27
3.11 Report to IRS ........................................................................................... 2
ARTICLE IV. PROJECT DEVELOPMENT ........................................................................... 28
4.1 Developer Covenant to Undertake Project ............................................ 28
4.2 Developer Changes to Plans and Specifications During Course
of Construction ......................................................................................... 28
4.3 Construction Start and Completion of Project ..................................... 29
4.4 Compliance with Laws ............................................................................ 29
4.5 Schedule of Performance ........................................................................ 29
4.6 Developer Attendance at City Meetings ................................................ 29
4.7 City's Right to Inspect Project and Property ........................................ 30
4.8 Cost of Construction ................................................................................ 30
4.9 Prevailing Wages ..................................................................................... 31
4.10 Certificate of Completion ........................................................................ 31
61147.00145 \32162022.3 1
TA B LE OF ONTENTS
ARTICLE V. DEVELOPER COVENANTS ............................................................................ 33
5.1
5.2
5.3
5.4
Obligation to Refrain from Discrimination ........................................... 33
Form of Non-Discrimination and Non-Segregation Clauses ............... 33
Environmental Indemnity of the City by the Developer ...................... 35
Insurance .................................................................................................. 36
ARTICLE VI. PROJECT FINANCING .................................................................................. .40
6.1
6.2
6.3
6.4
6.5
Project Financing ..................................................................................... 40
Project Budget. ......................................................................................... 41
Only Permitted Exceptions .................................................................... .41
City Right to Discharge Prohibited Encumbrances ............................ .41
Rights of Lender and City Regarding Permitted Security
Instruments .............................................................................................. 42
ARTICLE VII. DEFAULTS, REMEDIES AND TERMINATION ...................................... .44
7.1
7.2
7.3
7.4
7.5
Defaults -General. ................................................................................... 44
Developer's Election Re: Specific Enforcement of Agreement
or Waiver of Right to Specific Performance and Limitation on
Recovery of Damages Prior to Close of Escrow ................................... .45
Legal Actions ............................................................................................ 46
Rights and Remedies are Cumulative ................................................... .46
Developer Indemnification of the City .................................................. .46
ARTICLE VIII. GENERAL PROVISIONS ............................................................................ .47
8.1 Incorporation of Recitals ....................................................................... .4 7
8.2 Restrictions on Transfers ........................................................................ 4 7
8.3 Notices, Demands and Communications Between the Parties ............ .48
8.4 Conflict of Interest ................................................................................... 49
8.5 Warranty Against Payment of Consideration for Agreement ........... .49
8.6 Non-liability of City, Officials and Employees ..................................... .49
8. 7 Unavoidable Delay; Extension of Time of Performance ...................... 50
8.8 Inspection of Books and Records ........................................................... 50
8.9 Real Estate Commissions ........................................................................ 50
8.10 Binding on Successors and Assigns ........................................................ 50
8.11 Entire Agreement ..................................................................................... 5 1
8.12 Execution of this Agreement ................................................................... 5 1
8.13 Survival of Indemnity Obligations ......................................................... 51
8.14 Time Declared to be of the Essence ........................................................ 5 1
8.15 Approvals .................................................................................................. 51
8.16 Further Assurances ................................................................................. 5 1
8.17 City Approvals and Actions .................................................................... 52
8.18 Investor Limited Partner Provisions ..................................................... 52
61147.00145 \32162022 .3 11
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
61147.00145\32162022.3 Ill
T ABLE OF ON TENT
Legal Description of Property
Scope of Development
Schedule of Performance
Form of Grant Deed
Form of Notice of Agreement
Form of Official Action of Developer
Form of Certificate of Completion
Form of Regulatory Agreement
Form of Deed of Trust
Form of Land Note
Form of Project Note
List of Impact Fees Applicable to Project
This AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT
AGREEMENT (The Groves at Williams Ranch) ("Agreement") is dated as of July 16, 2019
("Date of Agreement"), for reference purposes only, and is entered into by and among the City
of San Juan Capistrano, a California municipal corporation ("City"), C & C DEVELOPMENT
CO., LLC a California limited liability company ("C&C") and SEAN RAWSON, an individual
("Rawson", together with C&C, "Developer"). The City and the Developer are sometimes
referred to in this Agreement, each individually, as a "Party," or collectively, as the "Parties."
RECITALS
This Agreement is entered into with reference to the following recitals of fact
("Recitals") that City and Developer believe to be true as of the Effective Date of this
Agreement:
A. The City is the owner of that certain real property located at the northeast corner
of Camino Capistrano and Junipero Serra Road, San Juan Capistrano (APN 121-050-21) and
more specifically described in Ex hibit A attached hereto and incorporated herein by this
reference ("Property")
B. On April 2, 2019, the City approved an exclusive negotiation agreement with the
Developer's members for potential development of the Property. The Developer proposed the
acquisition and redevelopment of the Property as senior multi-family affordable rental housing
complex.
C. The Developer's proposed acquisition of the Property and subsequent
construction and completion of the Project (as defined in Section 1.1.58) on the Property
pursuant to the terms of this Agreement is in the best interest of the City and the health, safety
and welfare of the City's taxpayers and residents and is in accordance with the public purposes
set forth in applicable law. Implementation of this Agreement will further the goals and
objectives of the City's general plan by promoting development of affordable housing on a site
identified in the City's housing element for low income housing, and will provide new housing
for low, very-low and extremely low income households which will help to accommodate the
City's Regional Housing Needs Assessment (RHNA) obligation.
D. To facilitate the development of the Project, the City desires to convey the
Property to Developer, take-back a loan for the Purchase Price for the Property and provide a
loan to the Developer to pay certain development and construction costs, subject to terms and
conditions in this Agreement.
E. Approval of this Agreement is exempt from the California Environmental Quality
Act ("CEQA") as development of the Property as required in this Agreement is an "use by right"
under Government Code Section 65583.2(i),
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which is acknowledged
by City and Developer, the Parties agree as follows:
61147.00145132162022.3 1
·.
TERMS AND CONDITIONS
ARTICLE I.
DEFINITIONS; REPRESENTATIONS AND WARRANTIES;
EFFECTIVE DA TE
1.1 Definitions. All initially capitalized terms not otherwise defined in this
Agreement shall have the following meanings:
1.1.1 "Additional Insureds" has the meaning ascribed to such term in
Section 5.4.
1.1.2 "Affiliate" means and refers to any person or entity, directly or indirectly,
Controlling or Controlled by or under common Control with the applicable person or entity,
whether by direct or indirect ownership of equity interests, by contract or otherwise.
1.1.3 "Agreement" means this Affordable Housing Disposition and
Development Agreement (The Groves at Williams Ranch).
1.1.4 "C&C'' means C & C Development Co ., LLC, a California limited liability
company, and its successors and assigns that are pei:mitted by this Agreement.
1.1.5 "CalHFA" means the California Housing Finance Agency or successor in
function.
1.1.6 "CDLAC" means the California Debt Limitation Allocation Committee or
successor in function.
1.1. 7 "CEQA" means the California Environmental Quality Act, Public
Resources Code Sections 21000, et seq.
1.1.8 "Certificate of Completion" means the written certification of City that
the construction of the Project has been completed in compliance with the terms and conditions
of this Agreement, substantially in the form of Ex hibit 0 attached to this Agreement.
1.1.9 "City" means the City of San Juan Capistrano, California, a California
municipal corporation.
1.1.10 "City Manager" means the City Manager of the City or his or her
designee or successor in function.
1.1.11 "City Requirements" has the meaning ascribed to the term in Section
2.6.1.
1.1.12 "City's Title Notice Response" means the written response of the City to
the Developer's Title Notice, in which the City either (i) elects to cause the removal from the
Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions
to coverage under the proposed Title Policy that were objected to in the Developer's Title
61147.00145\32162022.3 2
Notice, or (ii) elects not to cause the removal from the Preliminary Report of any matters shown
in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title
Policy that were objected to in the Developer's Title Notice.
1.1.13 "Close of Escrow" or "Closing" means the recording of the Grant Deed
for the Property in the official records of the Recorder of the County, and completion of each of
the actions set forth in ARTICLE III by the Escrow Holder for the City to sell the Property to the
Developer and the Developer to purchase the Property from the City.
1.1.14 "Completion of Construction" means the issuance of a Certificate of
Completion confirming that the final certificate of occupancy for the Project, based on the plans
submitted by the Developer to the City, has been issued.
1.1.15 "Construction Financing" means one or more loans that Developer shall
obtain from one or more Institutional Lenders, the proceeds of which are to be used and applied
to pay the reasonable costs of obtaining such loan(s) and either: (a) the Project Costs; or (b) to
refinance only the outstanding amount owed under a prior loan obtained by Developer to finance
the amount described in "(a)" of this Section 1.1.15 (without any other amounts). Such loan(s)
shall provide for normal and customary disbursement controls for the payment of Project Costs
and normal and customary fees and expenses for loan(s) of similar size and purpose. The
Construction Financing is set forth in the Project Budget.
1.1.16 "Construction Financing Documents" means the various documents and
instruments made by and between Developer and one or more Institutional Lenders that evidence
or perfect the Construction Financing or the security for repayment of the Construction
Financing, including any associated Security Instrument.
1.1.17 "Control" means and refers to possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a person or entity,
whether by ownership of equity interests, by contract or otherwise.
1.1.18 "Controlling" and "Controlled" mean and refer to exercising or having
Control.
1.1.19 "County" means the County of Orange, California.
1.1.20 "County Loan(s)" means, collectively, the SNHP Loan and the County
Perm Loan.
1.1.21 "County Perm Loan" means that certain loan from the County in the
original principal amount of approximately $500,000 for permanent financing of the Project,
with any interest and principal due annually from residual receipts and all principal and accrued
interest due fifty-five (55) years after the date of the recordation of the Certificate of Completion,
and which is secured by a Permitted Security Instrument Senior in lien priority to the Deed of
Trust.
61147.00145132162022.3 3
1.1.22 "Deed of Trust" means the Deed of Trust made by Developer for the
benefit of City in substantially the form of Exhibit l attached to this Agreement, which pledges
the Property as collateral to secure repayment of the Land Loan and the Project Loan.
1.1.23 ''Developer" means C & C Development Co., LLC, a California limited
liability company, together with Sean Rawson, an individual, and their successors and assigns
that are permitted by this Agreement.
1.1.24 "Developer's Title Notice" means a written notice from the Developer to
the City indicating the Developer's objection to specific matters shown in Schedule B of the
Preliminary Report as exceptions to coverage under the proposed Title Policy for the Property,
describing in suitable detail the actions that the Developer reasonably believes are indicated to
cure or correct each of the Developer's objections.
1.1.25 "Due Diligence Investigations" means the Developer's due diligence
investigations of the Property to determine the suitability of the Property for development and
operation of the Project, including, without limitation, investigations of the environmental and
geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of the
Developer, all at the sole cost and expense of the Developer.
1.1.26 "Due Diligence Investigation Rejection Notice" means a written notice
of the Developer delivered to the City and the Escrow Holder, prior to the end of the Due
Diligence Period, indicating the Developer's rejection of the condition of the Property and
refusal to accept a conveyance of fee title to the Property, describing in reasonable detail the
actions that the Developer reasonably believes are indicated to allow the Developer to accept the
condition of the Property.
1.1.27 "Due Diligence Period" means the date commencing on the Effective
Date and ending at 5 :00 p.m. on the ninetieth (90 1h) day following the Effective Date.
1.1.28 "Effective Date" has the meaning ascribed to the term in Section 1.2.3.
1.1.29 "ENA" means the Exclusive Negotiation Agreement (The Groves at
Williams Ranch), dated April 2, 2019, by and between City and members of the Developer.
1.1.30 "Environmental Claims" has the meaning ascribed to the term in Section
5.3.
1.1.31 "Environmental Laws" means all federal, state, local, or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any
government authority regulating, relating to, or imposing liability of standards of conduct
concerning any hazardous substance (as later defined), or pertaining to occupational health or
industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws,
ordinances, or regulations relate to Hazardous Substances on, under, or about the Property),
occupational or environmental conditions on, under, or about the Property, as now or may at any
later time be in effect, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.];
the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.];
61147.00145\32162022.3 4
the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33
USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601
et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.];
the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [ 42
USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid
Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation
Act [30 USC Section 101 et seq .] the Emergency Planning and Community Right to Know Act
[42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655
and 657]; the California Underground Storage of Hazardous Substances Act [California Health
& Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act
[California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and
Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-
Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any
amendments of or regulations promulgated under the statutes cited above and any other federal,
state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to
occupational health or industrial hygiene, and only to the extent the occupational health or
industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or
about the Property, or the regulation or protection of the environment, including ambient air, soil,
soil vapor, groundwater, surface water, or land use.
1.1.32 "Environmental Matters" has the meaning ascribed to the term in
Section 5.3.
1.1.33 "Escrow" has the meaning ascribed to the term in Section 2.1.
1.1.34 "Escrow Closing Date" means, subject to extension due to Unavoidable
Delay, the earlier of: (a) on or before the fifth (5th) business day following the Escrow Holder's
receipt of written confirmation from both City and Developer of the satisfaction or waiver of all
conditions precedent to the Close of Escrow; or (b) the date by which tax-exempt bonds for the
Project must close as set forth in Developer's receipt of written confirmation from CD LAC of
the allocation of tax-exempt bonds for the Project
1.1.35 ."Escrow Holder" means Ticor Title Company of California, through its
office located at 1500 Quail Street, 3rd Floor, Newport Beach, CA 92660, or such other escrow
holder mutually agreed upon in writing by both City and Developer.
1.1.36 "Escrow Opening Date" has the meaning ascribed to the term in Section
3 .1.
1.1.37 "Event of Default" has the meaning ascribed to the term in Section 7.1.
1.1.38 "FIRPTA Affidavit" means an affidavit complying with Section 1445 of
the United States Internal Revenue Code.
1.1.39 "Governmental Agency" means any and all courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal,
state, county, district, municipal, city, or otherwise) whether now or later in existence.
61147.00145132162022.3 5
1.1.40 "Governmental Requirements" means all codes, statutes, ordinances,
laws, permits, orders, and any rules and regulations promulgated thereunder of any
Governmental Agency.
1.1.41 "Grant Deed" means a deed in the form of E xhibit 0 to this Agreement,
conveying all of the City's interest in the Property to the Developer.
1.1.42 "Hazardous Substances" means, without implied limitation, substances
defined as "hazardous substances," "hazardous material," "toxic substance," "solid waste," or
"pollutant or contaminate" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the TSCA; the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States
Department of Transportation (DOT) Table [ 49 CFR 172 .101 ], or by the EPA, or any successor
authority, as hazardous substances [ 40 CFR Part 302]; and those substances defined as
"hazardous waste" in Section 25117 of the California Health and Safety Code or, as "hazardous
substances" in Section 25316 of the California Health and Safety Code; other substances,
materials, and wastes that are, or become, regulated or classified as hazardous or toxic under
federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws,
and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives,
radioactive material, petroleum products, and substances designated as a hazardous substance
pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317. Notwithstanding
the foregoing, "Hazardous Substances" shall not include such products in quantities as are
customarily used in the construction, maintenance, development or management of residential
developments or associated buildings and grounds, or typically used in residential activities in a
manner generally used in other comparable residential developments, or substances commonly
ingested by a significant population living within the Project including, without limitation,
alcohol, aspirin, tobacco and saccharine.
1.1.43 "Indemnified Parties" has the meaning ascribed to the term in Section
5.3.
1.1.44 "Institutional Lender" means any of the following: (a) a bank (State,
Federal or foreign), trust company (in its individual or trust capacity), insurance company, credit
union, savings bank (State or Federal), pension, welfare or retirement fund or system, real estate
investment trust (or an umbrella partnership or other entity of which a real estate investment trust
is the majority owner), Federal or State agency regularly making or guaranteeing mortgage
loans, investment bank or a subsidiary of a Fortune 500 company; or (b) any person or entity that
is an Affiliate of or is a combination of any one or more of the persons or entities described in
"(a)" of this Section.
1.1.45 "Land Loan" means the loan from the City to the Developer in an amount
equal to Four Million One Hundred Thousand Dollars ($4,100,000), which is the appraised value
established by Kinetic Valuation Group, Inc., real estate appraisers, in an appraisal report
effective as of May 23, 2019 and dated as of May 30, 3019, and which is equal to the Purchase
Price for the Property. The Land Loan is made by City to finance Developer's acquisition of the
Property, and shall be repaid by Developer pursuant to the terms of the Land Note .
61147.00145\32162022.3 6
1.1.46 "Land Note" means the promissory note made by Developer in favor of
City in substa ntially the form of Exhibi t J attached to this Agreement evidencing the Land Loan.
1.1.47 "Lender" means the holder of any Security Instrument and its successors
and assigns.
1.1.48 "Notice of Agreement" means the notice in the form of E xhibit E to thi s
Agreement to be recorded against the Property at the Close of Escrow to provide constructive
record notice of the existence and application of this Agreement to the Property.
1.1.49 "Parties" means, collectively, the City and the Developer.
1.1.50 "Party" means, individually, the City or the Developer, as applicable.
1.1.51 "PCO Statement" means a preliminary change of ownership statement
provided for in California Revenue and Taxation Code Section 480.3 .
1.1.52 "Permanent Loan" means any loan that the Developer shall obtain from
an Institutional Lender, the proceeds of which are to be used and applied solely to pay: ( l) the
reasonable costs of obtaining such loan; (2) the then current outstanding principal and interest
under any Construction Financing; and (3) any reasonable and customary fees or charges of the
Institutional Lender providing the Construction Financing relating to pay-off of the Construction
Financing. The Permanent Loans are set forth in the Project Budget.
1.1.53 "Permitted Exceptions" means (i) any and all items shown in Schedule B
of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the
Developer accepts, pursuant to Section 2.4; (ii) any exceptions from coverage under the
proposed Title Policy; (iii) non-delinquent property taxes and assessments ; (iv) this Agreement;
(v) the Grant Deed; (vi) the Notice of Agreement; (vii) the Regulatory Agreement ; (viii) the
Deed of Trust; (ix) any Permitted Security Instrument; (x) the TCAC Regulatory Agreement; (xi)
any agreement restricting occupancy and rents of the Project required by an Institutional Lender
or the Subordinate Loan Lender; (xii) any encumbrance recorded against the Property with
Developer's consent or as a result of the activities of Developer; and (xiii) any other document or
encumbrance expressly required or allowed to be recorded against the Property or the Project
under the terms of this Agreement.
1.1.54 "Permitted Security Instrument" means any Security Instrument: (a)
that encumbers only the Property or any interest in the Property; (b) that is held by a Le nder that
is an Institutional Lender, subject to the jurisdiction of the courts of the State, not immune from
suit and cannot elect to be immune from suit; and (c) only secures: (i) the repayment of money
used to pay or reimburse the Project Costs; (ii) a bona fide Permanent Loan; (iii) a delivery
assurance fee regarding a Permanent Loan that is refundable to Developer at the close of the
Permanent Loan; or (iv) any Refinancing. The deeds of trust securing the County Loans are
Permitted Security Instruments . Promptly after execution, Developer shall promptly delivery a
copy of any Security Instrument to the City, with the Lender's name and notice address.
1.1.55 "Permitted Transfer" means any of the following types of Transfer by
Developer, which unless otherwise provided do not require the City's prior written approval and
61147.00145\32162022.3 7
where, except for a Transfer described in subsections .1, .2, .3, .4, .6, . 7 and .9 below, the person
or entity to which such Transfer is made expressly and unconditionally assumes in a written
assignment and assumption agreement between such person or entity, Developer and City that is
in a form reasonably acceptable to City (as evidenced by execution of such assignment and
assumption agreement by the City Manager), all obligations of Developer under this Agreement:
1.1.55.1 Any Transfer to Institutional Lender: (I) pursuant to a
Permitted Security Instrument as collateral for bona fide Construction Financing to pay all or any
part of the Project Costs; or (2) pursuant to a Permitted Security Instrument as collateral for a
bona fide Permanent Loan.
1.1.55.2 Any Transfer directly resulting from the foreclosure or
deed in lieu of foreclosure of a Permitted Security Instrument for a loan from an Institutional
Lender to the Project or as otherwise permitted under Section 6.5.7.
1.1.55.3 Any Transfer of stock or equity in the Party that does not
change management or operational Control of the Project, with no material change in beneficial
ownership (with the exception of any conveyance to member(s) of the immediate family(ies) of
the transferor(s) or trusts for their benefit) and which constitutes a tax-free transaction under
Federal income tax law and California real estate transfer tax.
1.1.55.4
the Regulatory Agreement.
The lease of residential units in the Project consistent with
1.1.55.5 Any Transfer of this Agreement and the Property to a
limited partnership in which a general partner is an Affiliate of C&C and Rawson and the
managing general partner is a 501(c)(3) tax exempt nonprofit corporation or its Affiliate.
1.1.55.6 The Transfer and sale of limited partnership interests in
Developer while the Developer is in the form of a limited partnership .
1.1.55.7 In the event that any general partner of the Developer,
while the Developer is in the form of a limited partnership, is removed by the limited partner of
such limited partnership for cause following default under the partnership agreement, the
Transfer of the general partner interest to a 50l(c)(3) tax exempt nonprofit corporation or its
Affiliate selected by the limited partner and approved by the City, which approval shall not be
withheld unreasonably, delayed or conditioned.
1.1.55.8 The Transfer of the Project from Developer, while the
Developer is in the form of a limited partnership, to one or more of the general partners of the
Developer or their Affiliates at the end of the tax credit compliance period for the Project; and
1.1.55.9 Any dilution of a general partner's interest in the Developer
while the Developer is in the form of a limited partnership, in accordance with the Developer's
limited partnership agreement.
1.1.56 "Plans and Specifications" has the meaning ascribed to the term in
Section 2.6.1.
61147.00145\32162022.3 8
1.1.57 "Preliminary Report" means a preliminary report issued by the Title
Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of
all documents listed in Schedule B of the report as exceptions to coverage under the proposed
Title Policy. The Parties acknowledge that they may prepare one ( 1) or more Preliminary
Reports for each parcel, or group of parcels, comprising the Property. In such case, all reports,
notices, and objection letters which pertain to the Preliminary Report for the entirety of the
Property shall apply separately to each Preliminary Report associated with a parcel or a group of
parcels.
1.1.58 "Project" means the construction and redevelopment of the Property as a
senior affordable multi-family housing development, including all required or associated on-site
and off-site improvements, all hardscape and all landscaping, all as specifically described in the
Scope of Development, and all to be developed in accordance with the Plans and Specifications
to be approved by the City and any conditions imposed by the City in its approval of the Plans
and Specifications.
1.1.59 "Project Budget" means the Project Costs and anticipated sources of
funds to pay the Project Costs as set forth in the Project proforma, dated as of June 13, 2019 and
approved by the City Manager as of the Effective Date, as may be modified from time to time
pursuant to Section 6.2.
1.1.60 "Project Commencement Date" means no later than the date thirty (30)
days after the date that Developer is required to issue the tax-exempt bonds for the Project as set
forth in the written notice from CD LAC of the allocation of tax-exempt bonds for the Project, as
may be modified by CDLAC.
1.1.61 "Project Completion Date" means that date set forth therefor by which a
Certificate of Completion shall be issued for the Project, as more particularly provided in the
Schedule of Performance. The Project Completion Date shall be no later than the date which is
twenty four (24) months after the Close of Escrow, subject to Unavoidable Delay.
1.1.62 "Project Costs" means all of the costs of acquisition of the Property and
development and construction of the Project.
1.1.63 "Project Loan" means a loan of Four Million Eight Hundred Thousand
Dollars ($4,800,000.00) made by City to Developer to finance Project's predevelopment,
development and construction costs, which shall be repaid by Developer pursuant to the terms of
the Project Note.
1.1.64 "Project Note" means a promissory note made by Developer in favor of
the City in substantially the form of Exhibit K attached to this Agreement evidencing the Project
Loan.
1.1.65 "Property" means that real property, and all current and future
improvements thereon (including, without implied limitation, the Project), legally described in
Exhibit A.
61147.00145132162022.3 9
1.1.66 "Property Transfer" means and refers to any "change in ownership," as
defined in Revenue and Taxation Code Sections 60, et seq., of all or any portion of the Property.
1.1.67 "Purchase Price" means the purchase price for the Property in the amount
of Four Million One Hundred Thousand Dollars ($4, 100,000).
1.1.68 "Rawson" means Sean Rawson, an individual, and his successors and
assigns that are permitted by this Agreement.
1.1.69 "Record", "recorded", "recording" or "recordation" each mean and
refer to recordation of the referenced document in the official records of the Recorder of the
County of Orange, California.
1.1.70 "Refinancing" means any loan secured by a Permitted Security
Instrument that the Developer obtains from an Institutional Lender subsequent to recordation of
the Permanent Loan for any of the following purposes: (1) to pay off all or a portion of an
existing loan secured by a Permitted Security Instrument where the Lender providing the new
loan will disburse loan proceeds to or on behalf of Developer exceeding the amount of principal
and interest under the existing loan being paid plus the amount of any reasonable and customary
fees and costs associated with obtaining such new loan that are actually paid by Developer and
not rebated or refunded to Developer; (2) disbursing funds to or on behalf of Developer without
paying off any existing loan secured by a Permitted Security Instrument; or (3) any loan
extension, modification or equivalent regarding an existing loan to Developer secured by a
Permitted Security Instrument that results in the Lender of the existing loan disbursing additional
loan proceeds to or on behalf of Developer in excess of the original principal amount of the loan.
1.1.71 "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants, Conditions and Restrictions Restricting the Use of
Property for Affordable Housing in substantially the form of Exhibit H attached to this
Agreement, which shall be recorded against the Property in its entirety.
1.1.72 "Schedule of Performance" means the schedule for the performance of
certain actions by the Parties pursuant to this Agreement, attached to this Agreement as Exhibit
C.
1.1. 73 "Scope of Development" means the detailed description of the Project
attached to this Agreement as Exhibit B.
1.1. 74 "Security Instrument" means any security instrument, deed of trust,
security deed, contract for deed, deed to secure debt, or other voluntary real property (including
leasehold) security instrument(s) or agreement(s) intended to grant real property (including
leasehold) security for any obligation (including a purchase-money or other promissory note)
encumbering the Property, as e'ntered into, renewed, modified, consolidated, increased,
decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or
supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two
or more such security instruments are consolidated or restated as a single lien or held by the
same Lender (as applicable), then all such security instruments so consolic4lted or restated shall
61 147.00145\32 162022.3 10
constitute a single Security Instrument. A participation interest in a security instrument (or
partial assignment of the secured loan) does not itself constitute a Security Instrument.
1.1.75 "Senior" means, referring to multiple Security Instruments, the Security
Instrument that is most senior in lien of the same type. Where Senior is used as a comparative
term as against any specified Security Instrument, such term refers to any Security Instrument of
the same type that is senior in lien to such specified Security Instrument. If only one Security
Instrument of a particular type exists , then it shall be deemed the Senior Security Instrument of
such type.
1.1.76 "Senior Loan" had the meaning as set forth in Section 2.2.3 .
1.1.77 "SNHP Loan" means that certain loan from CalHFA through the County
of Local Government Special Needs Housing Program (SNHP) funds in the original principal
amount of approximately $1,57 4,810 for construction and permanent financing of the Project,
with any interest and principal due annually from residual receipts and all principal and accrued
interest due fifty-five (55) years after the date of the recordation of the Certificate of Completion,
and which is secured by a Permitted Security Instrument junior in lien priority to the Deed of
Trust
1.1. 78 "State" means the State of California.
1.1.79 "Subordinate Loan" means the SNHP Loan and any loan approved
through revisions to the Project Budget by the City Manager pursuant to Section 6.2, and which
is secured by a Permitted Security Instrument junior in lien priority to the Deed of Trust.
1.1.80 "Tax Credit Equity" means the equity investment toward the cost of
development and construction of the Project contributed to the Developer (when in the form of a
limited partnership) by the Tax Credit Investor, in the amount set forth in the Project Budget.
1.1.81 "Tax Credit Investor" means the limited partner in Developer (when in
the form of a limited partnership) that provides the Tax Credit Equity for the development and
construction of the Project.
1.1.82 "Tax Credits" means an allocation from TCAC of four percent (4%)
federal low income housing tax credits to finance a portion of the Project Costs , all in accordance
with Section 42 of the Internal Revenue Code of 1986, as amended , all associated Internal
Revenue Service regulations and all associated TCAC regulations.
1.1.83 "TCAC" means the California Tax Credit Allocation Committee or
successor in function .
1.1.84 "TCAC Regulatory Agreement" means the regulatory agreement
required to be recorded against the Property by TCAC to obtain the Tax Credits.
1.1.85 "Title Company" means Ticor Title Company of California, through its
office located at 1500 Quail Street, 3rd Floor, Newport Beach, CA 92660 , or such other title
company mutually agreed upon in writing by both City and Developer
61147 .00145\32162022.3 11
1.1.86 "Title Policy" means a standard CL TA owners ' policy of title insurance
issued by the Title Company, with coverage in the full amount of the Purchase Price and insuring
fee title to the Property, subject only to the Permitted Exceptions. However, at Developer 's
option, Developer may acquire an AL TA extended coverage policy. City shall pay for the
standard CLTA policy. Developer shall pay for any additional or ALTA extended coverage
policy.
1.1.87 "Transfer" means any of the following:
1.1.87.1 Any assignment, conveyance, grant, hypothecation,
mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such
property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such
property, right or obligation or any part of it (including the grant of any easement, lien, or other
encumbrance); or
1.1.87.2 Any conversion, exchange, issuance, modification,
reallocation, sale, or other transfer of any direct or indirect equity interest( s) in the owner of such
property, right or obligation by the holders of such equity interest( s ); or
1.1.87.3 Any merger, consolidation , sal e , or lease of all or
substantially all of the assets of the Developer or a series of such sales, assignments and the like
that , in the aggregate, result in a disposition of more than a 49% interest of all or substantially all
of the assets of the Developer; or
1.1.87.4 Any Property Transfer; or
1.1.87.5 The recordation of any deed of trust, mortgage, lien or
similar encumbrance against all or any portion of the Property or the Project.
1.1.88 "Unavoidable Delay" means any delay that is caused by the exclusively
by the other Party or that is beyond the control of the City or the Developer, including delay
caused by strikes, acts of God , weather, inability to obtain labor or materials, inability to obtain
governmental permits or approvals , governmental restrictions, civil commotion, fire or similar
causes, but excluding circumstances subject to Section 8. 7.2.
1.2 Representations and Warranties.
1.2.1 City Representations and Warranties. The representations and
warranties of City contained in this Section 1.2.1 shall be based upon the actual knowledge of the
City Manager as of the Effective Date. All representations and warranties contained in this
Section 1.2.1 are true and correct as of the Effective Date. City's liability for misrepresentation
or breach of warranty , representation or covenant, wherever contained in this Agreement, shall
survive the execution and delivery of this Agreement and the Closing. City hereby makes th e
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by Developer has been made in material reliance by Developer on such covenants,
representations and warranties:
61147.00145\32162022.3 12
1.2.1.1 City is a California municipal corporation, duly formed and
operating under the laws of the State of California. City has the legal power, right and authority
to enter into this Agreement and to execute the instruments and documents referenced herein,
and to consummate the transactions contemplated hereby.
1.2.1.2 The persons executing any instruments for or on behalf of City
have been authorized to act on behalf of City and this Agreement is valid and enforceable against
City in accordance with its terms and each instrument to be executed by City pursuant hereto or
in connection therewith will, when executed, shall be valid and enforceable against City in
accordance with its terms. No approval, consent, order or authorization of, or designation or
declaration of any other person, is required in connection with the valid execution and delivery
of and compliance with this Agreement by City.
1.2.1.3 City has taken all requisite action and obtained all requisite
consents for agreements or matters to which City is a party in connection with entering into this
Agreement and the instruments and documents referenced herein and in connection with the
consummation of the transactions contemplated hereby.
1.2.1.4 The Property is a legally formed parcel in the approximate size of
3.853 acres.
1.2.1.5 If the City becomes aware of any act or circumstance that would
change or render incorrect, in whole or in part, any representation or warranty made by the City
under this Agreement, whether as of the date given or any time thereafter, whether or not such
representation or warranty was based upon the City's knowledge and/or belief as of a certain
date, the City will give immediate written notice of such changed fact or circumstance to the
Developer.
1.2.2 Developer Representations and Warranties. The representations and
warranties of Developer contained in this Section 1.2.2 shall be based upon the actual knowledge
of Todd R. Cottle as of the Effective Date. All representations and warranties contained in this
Section 1.2.2 are true and correct as of the Effective Date. The Developer's liability for
misrepresentation or breach of warranty, representation or covenant, wherever contained in this
Agreement, shall survive the execution and delivery of this Agreement and the Closing. The
Developer hereby makes the following representations, covenants and warranties and
acknowledges that the execution of this Agreement by City has been made in material reliance
by City on such covenants, representations and warranties:
1.2.2.1 The Developer is a California limited liability company, lawfully
entitled to do business in the State of California and the City. The Developer has the legal right,
power and authority to enter into this Agreement and the instruments and documents referenced
herein and to consummate the transactions contemplated hereby. The persons executing this
Agreement and the instruments referenced herein on behalf of the Developer hereby represent
and warrant that such persons have the power, right and authority to bind the Developer.
1.2.2.2 The Developer has taken all requisite action and obtained all
requisite consents in connection with entering into this Agreement and the instruments and
61147.00145\32162022.3 13
documents referenced herein and the consummation of the transactions contemplated hereby, and
no consent of any other party is required for the Developer's authorization to enter into
Agreement.
1.2.2.3 Neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby shall result in a breach of or constitute a default under any
other agreement, document, instrument or other obligation to which the Developer is a party or
by which the Developer may be bound, or under law, statute, ordinance, rule, governmental
regulation or any writ, injunction, order or decree of any court or governmental body applicable
to the Developer or to the Property.
1.2.2.4 This Agreement is, and all agreements, instruments and documents
to be executed by the Developer pursuant to this Agreement shall be, duly executed by and shall
be valid and legally binding upon the Developer and enforceable in accordance with their
respective terms. No approval, consent, order or authorization of, or designation or declaration
of any other person, is required in connection with the valid execution and delivery of in
compliance with this Agreement by the Developer.
1.2.2.5 If the Developer becomes aware of any act or circumstance that
would change or render incorrect, in whole or in part, any representation or warranty made by
the Developer under this Agreement, whether as of the date given or any time thereafter, whether
or not such representation or warranty was based upon the Developer's knowledge and/or belief
as of a certain date, the Developer will give immediate written notice of such changed fact or
circumstance to the City.
1.2.3 Effective Date. This Agreement is dated July 16, 2019 for reference
purposes only. This Agreement shall not become effective until the date on which all of the
following are true ("Effective Date"): (a) this Agreement is approved and executed by the
appropriate authorities of Developer and delivered to City; (b) Developer has delivered to City a
certified copy of the official action taken by all of the entities comprising the Developer
approving this Agreement, substantially in the form attached to this Agreement as Ex hibit F; (c)
following all legally required notices and hearings, this Agreement is approved by the City
Council; and ( d) this Agreement is executed by the authorized representatives of City.
1.2.4 Exhibit List. The following is a list of the Exhibits attached to this
Agreement. Each of the Exhibits is incorporated by this reference into the text of this
Agreement.
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
61147.00145 \32162022.3 14
Legal Description of Property
Scope of Development
Schedule of Performance
Form of Grant Deed
Form of Notice of Agreement
Form of Official Action of Developer
Form of Certificate of Completion
Form of Regulatory Agreement
Form of Deed of Trust
Exhibit J
E xhibit K
E hibit L
Form of Land Note
Form of Project Note
List of Impact Fees Applicable to Project
ARTICLE II.
PROPERTY DISPOSITION
2.1 Purchase and Sale. In exchange for the Purchase Price and the Developer's
other covenants and undertakings set forth in this Agreement, the City shall sell the Property to
the Developer and the Developer shall purchase the Property from the City pursuant to the terms
and conditions of this Agreement. For the purposes of exchanging funds and documents to
complete the sale from the City to the Developer and the purchase by the Developer from the
City of the Property pursuant to the terms of this Agreement, the City and the Developer agree to
open an escrow ("Escrow") with the Escrow Holder. ARTICLE III of this Agreement
constitutes the joint escrow instructions of the Parties to the Escrow Holder for completion of the
Escrow for the sale of the Property, as contemplated by this Agreement. The Developer and the
City shall execute such further escrow instructions, consistent with the provisions of this
Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict
between the provisions of this Agreement and any other escrow instructions requested by the
Escrow Holder, the provisions of this Agreement shall control.
2.2 Payment of Purchase Price.
2.2.1 Land Note and Deed of Trust. The Developer shall pay the Purchase
Price by depositing the Land Note and the Deed of Trust into the Escrow, at least one (1)
business day preceding the Escrow Closing Date.
2.2.2 Non-Recourse. The Developer shall not have any direct or indirect
personal liability for payment of the principal of, or interest on, the Land Note, the Project Note
or the performance of the covenants of the Developer under the Deed of Trust. The sole recourse
of the City with respect to the principal of, or interest on, the Land Note or the Project Note and
defaults by Developer in the performance of its covenants under the Deed of Trust shall be to the
Property, as described in the Deed of Trust.
2.2.3 Subordfoation. Except for any Subordinate Loan, the Deed of Trust and
Regulatory Agreement shall be subordinated to other loans from Institutional Lenders (in each
case, a "Senior Loan"), provided all of the proceeds of the proposed Senior Loan, less any
transaction costs, must be used to provide financing for the Project. The Deed of Trust and
Regulatory Agreement shall be subordinated to the lien( s) securing the County Perm Loan as
well as any occupancy and affordability restrictions recorded by the County in connection with
the County Perm Loan. The City Manager or his/her designee on behalf of the City is authorized
to execute the subordination agreement without the necessity of any further action or approval.
2.3 Eminent Domain. If any portion of the Property or any interest in any portion of
the Property, becomes the subject of any eminent domain proceeding prior to Close of Escrow,
61147.00145\32162022.315
other than such a proceeding by the City, including the filing of any notice of intended
condemnation or proceedings in the nature of eminent domain commenced by any Governmental
Agency, the City shall immediately give the Developer notice of such occurrence, and the
Developer shall have the option, exercisable within ten ( 10) business days after receipt of such
notice from the City, to either: (1) cancel the Escrow and terminate this Agreement and the Escrow,
in which case the Parties and the Escrow Holder shall proceed in accordance with Section 3 .1 O; or
(2) continue with this Agreement in accordance with its terms, in which event the City shall assign
to the Developer any right of the City to receive any condemnation award attributable to the
Property.
2.4 Title Approval. As soon as practicable following the Effective Date, the City shall
obtain from Title Company the Preliminary Report and deliver a copy of the Preliminary Report
to the Developer. Within thirty (30) days following the Developer's receipt of a Preliminary
Report for the entire Property, the Developer shall deliver the Developer's Title Notice to the City.
If the Developer fails to deliver the Developer's Title Notice to the City within thirty (30) days
following the Developer's receipt of the Preliminary Report, the Developer will be deemed to
approve the status of title to the Property. Within twenty (20) days following receipt by the City
of Developer's Title Notice, if any, the City shall serve City's Title Notice Response. If the City
does not serve City's Title Notice Response, if necessary, within twenty (20) days following its
receipt of Developer's Title Notice, the City shall be deemed to elect not to remove any matter
objected to in Developer's Title Notice, if any, from the Preliminary Report. If the City elects in
City's Title Notice Response to cause the removal of any matter objected to in Developer's Title
Notice from the Preliminary Report, the City shall cause the removal of each such objectionable
matter from the Preliminary Report within sixty (60) days following receipt by the Developer of
City's Title Notice Response or such other period of time that may be agreed to in writing by both
the City and the Developer. If the City is unwilling or unable to cause the removal of any matter
objected to in Developer's Title Notice from the Preliminary Report, then, within ten (10) days
following the Developer's receipt of City's Title Notice Response stating that the City is unwilling
to remove or cause the removal of any matter objected to in Developer's Title Notice or upon the
expiration of the above sixty (60) day time period during which the City elected to remove such
objectionable matters from the Preliminary Report and was unable to do so, the Developer may
either ( 1) refuse to accept the title to and conveyance of the Property, in which case the Parties
shall have the right, subject to Section 2.4.2, to cancel the Escrow and terminate this Agreement
without liability to either Party or any other person, by delivery of a written notice of termination
to the Escrow Holder, or (2) be deemed to waive its objection to any items set forth in Developer's
Title Notice.
2.4.1 If at any time prior to the Close of Escrow the Title Company issues an
updated Preliminary Report containing any previously undisclosed matter affecting title to the
Property, or the City becomes aware of any previously undisclosed matter affecting title to the
Property, following the delivery of the Developer's Title Notice, the City shall provide written
notice to the Developer of such matter, together with any updated Preliminary Report related to
such matter. The City and the Developer shall have such rights and obligations with respect to
such previously undisclosed title matters as they did with respect to any title matters set forth in
the original Preliminary Report as set forth in Section 2.4.
61 147.00145\32162022.3 16
2.4.2 Before exercising any right a Party may have under this Section 2.4 to
cancel the Escrow and terminate this Agreement, such Party shall notify the non-terminating
Parties in writing of its election to terminate and shall, upon a non-terminating Party's request,
which must be delivered, if at all, within three (3) days following its receipt of the terminating
Party's notice of election to terminate, meet and confer with the non-terminating Parties for a
period of thirty (30) days. During such time, the Parties shall meet as often as reasonably requested
by any Party to negotiate, in good faith, methods and means by which the objectionable title matter
may be eliminated or mitigated. Nothing herein shall constitute an agreement, representation, or
warranty by any Party that an acceptable resolution of the objectionable title matter will be
achieved, nor shall any Party be obligated to expend any funds or undertake any other action
whatsoever with respect to such title matter unless such agreement is reduced to a writing which
is approved by all Parties, in their sole and absolute discretion. If, at the end of such thirty (30)
day period, the Parties have not been able to agree on a mutually acceptable method of resolving
such title matter, or if any proposed agreement is disapproved by the City Council, the Escrow
shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties
shall proceed pursuant to Section 3 .10.
2.4.3 The City agrees not to place any matters of record against the Property
(other than Permitted Exceptions and any matters arising from City's issuance or exercise of any
remedy related to any approval for the Project), prior to the Close of Escrow, without the prior
written consent of Developer.
2.5 Develope r Inv estigations.
2.5.1 The Developer shall have until the expiration of the Due Diligence Period
to complete all of its Due Diligence Investigations with respect to the entirety of the Property.
The Developer shall complete all of its Due Diligence Investigations within the Due Diligence
Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense. The
Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations
of the Property, including, without limitation, investigations regarding geotechnical soil
conditions, compliance with applicable laws pertaining to the use of the Property by the
Developer and any other matters relevant to the condition or suitability of the Property for the
Project, as the Developer may deem necessary or appropriate. City makes no representation or
warranty to the Developer relating to the condition of the Property or suitability of the Property
for any intended use or development by the Developer. The Developer shall deliver a Due
Diligence Investigation Rejection Notice to the City prior to the end of the Due Diligence Period.
If the Developer does not timely deliver its Due Diligence Investigation Rejection Notice prior to
the end of the Due Diligence Period, the Developer shall be deemed to have accepted the
condition of the Property in its current condition. If the condition of the Property is rejected,
then either Party shall have the right, subject to Section 2.4.2, to cancel the Escrow and terminate
this Agreement, in its sole discretion, without liability to the other Party or any other person, by
delivery of a written notice of termination to the other Party and Escrow Holder. The Developer
shall accept all conditions of the Property, without any liability of the City whatsoever, upon the
Developer's deemed acceptance of the condition of the Property by its failure to timely deliver
its Due Diligence Investigation Rejection Notice. The Developer's failure to timely deliver its
Due Diligence Investigation Rejection Notice shall evidence the acceptance of the condition of
the Property by the Developer in its existing "AS IS," "WHERE IS" and "SUBJECT TO ALL
61147.00145\32162022 .3 17
FAULTS" condition, as of the last day of the Due Diligence Period . In its sole discretion, the
Developer may accept the Property in its "AS IS," "WHERE IS" and "SUBJECT TO ALL
FAULTS" condition at any time before the end of the Due Diligence Period. The Developer
shall conduct during the Due Diligence Period such environmental assessment(s) of the Property
as the Developer deems appropriate. If such assessment(s) do not reveal the presence of any
Hazardous Substances on the Property in levels that exceed applicable Governmental
Requirements, then the City shall promptly and at its sole cost and expense install security
fencing around the Property. If such assessment(s) do reveal the presence of any Hazardous
Substances on the Property in levels that exceed applicable Governmental Requirements, then
the City and the Developer shall negotiate in good faith in an effort to reach agreement as to the
allocation of responsibility and cost of remediation thereof.
2.5.2 Any Due Diligence Investigations of the Property by the Developer shall
not unreasonably disrupt any then existing use or occupancy of the Property or the operations of
the City. The Developer shall be liable for any damage or injury to any person or property
arising from the acts of the Developer, its employees, agents or representatives during the course
of any Due Diligence Investigations on the Property and the Developer shall indemnify, defend
with counsel reasonably acceptable to the City and hold harmless the City and its elected
officials, officers, directors , attorneys, contractors , agents and employees from any and all actual
or alleged liens, claims, demands or liability arising from any Due Diligence Investigations by
the Developer on the Property other than for discovery of existing conditions on the Property.
Prior to commencing any Due Diligence Investigations on the Property, the Developer shall
deliver copies of policies or certificates of insurance to the City evidencing compliance by the
Developer with the liability insurance requirements of Section 5 .3 .
2.5.3 Before exercising any right a Party may have under this Section 2.5 to
cancel the Escrow and terminate this Agreement, such Party shall notify the non-terminating
Parties in writing of its election to terminate and shall , upon a non-terminating Party's request ,
which must be delivered, if at all, within three (3) days following its receipt of the terminating
Party's notice of election to terminate, meet and confer with the non-terminating Parties for a
period of thirty (30) days. During such time, the Parties shall meet as often as reasonably
requested by any Party to negotiate, in good faith, methods and means by which the
objectionable due diligence matter may be eliminated or mitigated. Nothing herein shall
constitute an agreement, representation, or warranty by any Party that an acceptable resolution of
the objectionable due diligence matter will be achieved, nor shall any Party be obligated to
expend any funds or undertake any other action whatsoever with respect to such due diligence
matter unless such obligation is reduced to a writing which is approved by all Parties, in their
sole and absolute discretion. If, at the end of such thirty (30) day period, the Parties have not
been able to agree on a mutually acceptable method of resolving the objectionable due diligence
matter, or if any proposed agreement is disapproved by the City Council, the Escrow shall be
cancelled, this Agreement shall be terminated without liability to any Party, and the Parties shall
proceed pursuant to Section 3.10.
2.6 Developer to Obtain all Project Entitlements.
2.6.1 Pursuant to the ENA , Developer has developed and presented to City staff
and the City Council, for review, the following (collectively, the "Plans and Specifications"):
61147.00145\32162022.3 18
2.6.1.1 A proposed complete conceptual development plan for the Project
on the Property that describes and depicts: ( l) the location and placement of proposed buildings
and (2) the architecture and elevations of the proposed buildings;
2.6.1.2 The proposed unit mix, showing unit size and affordability levels,
including one manager's unit, for the Project;
2.6.1.3 A proposed time schedule and cost estimates for the development
of the Project on the Property; and
2.6.1.4 A proposed financing plan identifying financing sources for all
private and public improvements proposed for the Project
2.6.2 The City's zoning, building and land use regulations (whether contained in
ordinances, the City's municipal code, conditions of approval, policies, practice or elsewhere)
(collectively, the "City Requirements"), shall be applicable to the use and development of the
Project on the Property by the Developer. The Developer acknowledges that all Plans and
Specifications and any changes to the Plans and Specifications shall be subject to the City
Requirements. No action by the City with reference to this Agreement or any related documents
shall be deemed to constitute a waiver of any City Requirements regarding the Property, the
Project, the Developer, any successor-in-interest of the Developer or any successor-in-interest to
the Property. The City Requirements may only be changed or waived by modification or
variance approved by the City and consistent with this Agreement. Notwithstanding any other
provision of this Agreement, the City agrees that the only City entitlement necessary for the
Project under the City Requirements is design review which requires the City's Architectural
Control application, and no other City entitlements are required for the Project. The City also
confirms that it has waived any requirement for the Developer to relocate or underground
existing overhead utilities on the Property. No entitlement, permit or other approval from the
City for development of the Project on the Property shall attach to any portion of the Property or
otherwise become effective to allow the Developer to develop the Project on the Property until
after the Developer owns fee title to that portion of the Property to which such entitlement,
permit or other approval pertains. Under no circumstances shall the Developer commence
development of any portion of the Project on the Property prior to the Developer owning fee title
to the Property.
2.6.3 The approval of the Scope of Development shall not be binding on the
City Council or the Planning Commission of the City regarding any approvals of the Project
required by such bodies. The Developer obtains no right to develop the Project on the Property
or any portion of the Property by virtue of this Agreement, except that following the Close of
Escrow, the Developer shall possess the same rights as any other owner of property within the
Property that desires to develop its property in a manner consistent with the City's General Plan.
If any revisions of the Scope of Development are required by a Governmental Agency (other
than the City) having jurisdiction over the Property or the Project, the Developer shall promptly
make any such revisions that are generally consistent with the Scope of Development.
2.6.4 Notwithstanding any provision to the contrary in this Agreement,
following the Close of Escrow, the Developer agrees to accept and comply fully with any and all
61147.00145\32162022.3 19
conditions of approval applicable to all approvals, permits and other governmental actions
regarding the development or operation of the Project on the Property, so long as such conditions
of approval are consistent with the Scope of Development and this Agreement in all material
respects.
2.6.5 Developer to Pay All Costs and Expenses. The Parties agree that the
City shall not provide any financial assistance to the Developer in connection with the Project
except as may be expressly set forth in this Agreement. The Developer shall be solely
responsible for paying for the costs of all design work, construction, labor, materials, fees and
permit expenses associated with the Project. The Developer shall pay any and all fees pertaining
to the review and approval of the Project by the City, any other Governmental Agency and utility
service providers, including the costs of preparation of all required construction, planning and
other documents reasonably required by a Governmental Agency pertinent to the development or
operation of the Project on the Property, including, but not limited to, specifications, drawings,
plans, maps, permit applications, land use applications, zoning applications, environmental
review and disclosure documents and design review documents. The Developer shall pay for
any and all costs, including, but not limited to , the costs of design, construction, relocation and
securing of permits for sewer or utility improvements and connections, that may be required in
development of the Project, whether located on or off of the Property. Notwithstanding any
other provision of this Section 2.6, the Developer shall not be required to bear the cost to relocate
or underground existing overhead utilities on the Property as that City Requirement as been
waived by the City. The Developer shall obtain any and all necessary approvals, prior to the
commencement of applicable portions of construction, and the Developer shall take reasonable
precautions to ensure the safety and stability of surrounding properties during said construction.
In accordance with this Section 2.6.5, Developer shall be responsible for the costs, or immediate
reimbursement to the City upon delivery of an invoice for the costs, of the following:
2.6.5.1 all fees or expenses of engineers, architects, financial consultants,
legal, planning or other consultants or contractors, retained by the Developer for any study,
analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design
activities, drawings, specifications or other activity or matter relating to the Property or the
Project or the negotiation of this Agreement that may be undertaken by the Developer;
2.6.5.2 all fees, charges and costs, make all deposits and provide all bonds
or other security associated with the submission to and processing by the City of any and all
applications and other documents and information to be submitted to the City by the Developer
pursuant to this Agreement or otherwise associated with the Project; and
2.6.6 The Developer shall obtain all entitlements, permits and other approvals
for use and development of the Project on the Property from each Governmental Agency, within
the time period for such actions specifically set forth in the Schedule of Performance, subject to
any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable
Delay.
2.7 Delivery of Property Free of Occupants. At the Close of Escrow, the City will
deliver possession of the Property to Developer free and clear of any contractual rights created
61147.00145\32162022.3 20
by or with the consent of the City for any person or entity (other than Developer) to use or
occupy the Property.
2.8 Project Marketin2 Plan. At least forty-five ( 45) calendar days prior to the Close
of Escrow, Developer shall submit to the City an affirmative fair housing marketing plan for the
Project. Within ten ( 10) calendar days after the City receives such marketing plan submitted by
Developer, the City shall approve or disapprove such marketing plan. The City's failure to
approve such marketing plan within the specified ten ( 10) calendar day period, shall constitute
City's deemed approval of such marketing plan.
ARTICLE III.
ESCROW INSTRUCTIONS
3.1 Openjng of Escrow. For purposes of this Agreement, the opening of Escrow
shall be the first date on which a fully executed copy of this Agreement is deposited with Escrow
Holder ("Escrow Opening Date"). The Developer shall cause the Escrow to be opened within
five (5) days following the Effective Date. Escrow Holder shall promptly confirm in writing to
each of the Parties the date of the Escrow Opening Date. This ARTICLE III shall constitute the
joint escrow instructions of the City and the Developer to Escrow Holder for conduct of the
Escrow to complete the purchase and sale of the Property between them, as contemplated in this
Agreement.
3.2 Conditions to Close of Escrow. The conditions set forth below shall be satisfied
or waived in writing by the respective benefited Party on or before the Escrow Closing Date or
the Party benefited by any unsatisfied condition shall not be required to proceed to close Escrow .
3.2.1 Developer's Conditions to Close of Escrow. The Developer's obligation
to purchase the Property from the City on the Escrow Closing Date shall be subject to the
satisfaction of the following conditions precedent, each of which can only be waived in writing
by the Developer:
3.2.1.1 The Developer agrees, or is deemed, to accept the title to and
conveyance of the Property, pursuant to Section 2.4;
3.2.1.2 The Developer fails to deliver a Due Diligence Investigation
Rejection Notice to the City prior to the expiration of the Due Diligence Period;
3.2.1.3 The City's planning commission finds, pursuant to Government
Code Section 65402, that the Project is consistent with the City's General Plan;
3.2.1.4 Developer has received an allocation of tax-exempt bonds for the
Project from CD LAC and a Tax Credit reservation for the Project from TCAC;
3.2.1.5 Developer has received the commitments for funding to make the
construction and operation of the Project financially feasible in the Developer's discretion;
61147.00145\32162022 .3 21
3.2.1.6 The Title Company is unconditionally committed to issue the Title
Policy for the Property, subject to any Permitted Exceptions, to the Developer;
3.2.1.7 Developer approves the Escrow Holder's estimated Escrow
closing/settlement statement;
3.2.1.8 The representations, warranties and covenants of the City set forth
in Section 1.2.1 are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date;
3.2.1.9 The Developer has obtained all entitlements required in connection
with the development of the Property, subject to conditions of approval acceptable to Developer
in Developer's sole discretion, any applicable appeal period has expired without appeal having
been filed or, if an appeal is filed, such appeal has been denied, and no legal action has been
instituted against Developer or the City alleging the invalidity of such entitlements;
3.2.1.10 The City has completed all of its material obligations
required by this Agreement to be completed prior to the Close of Escrow; and
3.2.1.11 The City deposits the items into the Escrow required by
Section 3.3.
3.2.2 City's Conditions to Close of Escrow. The City's obligation to sell the
Property to the Developer on or before the Escrow Closing Date shall be subject to the
satisfaction of the following conditions precedent, which can only be waived in writing by the
City:
3.2.2.1 The Developer agrees, or is deemed, to accept the title to and
conveyance of the Property, pursuant to Section 2.4;
3.2.2.2 The Developer fails to deliver a Due Diligence Investigation
Rejection Notice to the City prior to the expiration of the Due Diligence Period;
3.2.2.3 The City's planning commission finds, pursuant to Government
Code Section 65402, that the Project is consistent with the City's General Plan;
3.2.2.4 The Title Company is unconditionally committed to issue the Title
Policy for the Property, subject to any Permitted Exceptions, to the Developer;
3.2.2.5 The Developer submits to the City evidence satisfactory to the
City, in the City's reasonable discretion, that the Developer has obtained all entitlements
necessary for the development of the Property from each applicable Governmental Agency,
including the City;
3.2.2.6 The Developer has completed all of its material obligations
required by this Agreement to be completed prior to the Close of Escrow;
61147.00145132162022.3 22
3.2.2.7 The Developer submits to the City the Developer's organizational
documents;
3.2.2.8 The Developer submits to the City the marketing plan for the
Project pursuant to Section 2.8 ;
3.2.2.9 The Developer submits to the City a copy of the construction
contract for the Project in substantially final form (with a copy of the final construction contract
being delivered to the City by Close of Escrow);
3.2.2.10 The Developer submits to the City copies of the
Construction Financing Documents in substantially final form (with copies of the final
Construction Financing Documents being delivered to the City through Close of Escrow);
3.2.2.11 The Developer submits to the City a document evidencing
a commitment from the Tax Credit Investor to Developer to provide the Tax Credit Equity;
3.2.2.12 The Developer submits to the City documents evidencing a
commitment from an Institutional Lender to Developer to provide the Permanent Loan and
evidencing a commitment from the County to Developer to provide the County Perm Loan;
3.2.2.13
evidencing the SNHP Loan;
The Developer submits to the City the documents
3.2.2.14 The Developer submits to the City documents evidencing a
commitment from the Lender(s) of all Subordinate Loan(s) to Developer to provide the
Subordinate Loan(s);
3.2.2.15 The representations, warranties and covenants of the
Developer set forth in Section 1.2.2 are true and correct in all material respects on the Effective
Date and on the Escrow Closing Date; and
3.2.2.16 The Developer deposits the items into the Escrow required
by Section 3.3.
3.3 Developer's Escrow Deposits. Following satisfaction or waiver of each of the
Developer's conditions to Close of Escrow set forth in Section 3.2.1, the Developer shall deposit
the following funds and documents into Escrow at least one ( 1) business days prior to the Escrow
Closing Date in a writing delivered to the Parties:
3.3.1 PCO Statement. A PCO Statement executed by the authorized
representative(s) of the Developer.
3.3.2 Acceptance of Grant Deed. The Certificate of Acceptance of the Grant
Deed, in the form attached to the Grant Deed, executed by the authorized representative(s) of the
Developer in recordable form.
61147.00145132162022.3 23
3.3.3 Notice of Agreement. The Notice of Agreement executed by the
authorized representative(s) of the Developer in recordable form, to be recorded against the
Property at the Close of Escrow .
3.3.4 Regulatorv Agreement. The Regulatory Agreement executed by the
authorized representative(s) of Developer in recordable form, to be recorded against the Property
at the Close of Escrow.
3.3.5 Construction Financing Security lnstrument(s). A Permitted Security
Instrument(s) securing repayment of the Construction Financing, executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the Property at the
Close of Escrow.
3.3.6 Bond Regulatory Agreement. A regulatory agreement as required by the
issuer of tax-exempt bonds for the Project, executed by the authorized representative(s) of
Developer in recordable form, to be recorded against the Property at the Close of Escrow .
3.3.7 Land Note. The Land Note signed by the authorized representative(s) of
Developer.
3.3.8 Project Note . The Project Note signed by the authorized representative(s)
of Developer.
3.3.9 Deed of Trust. The Deed of Trust executed by the authorized
representative( s) of Developer in recordable form, to be recorded against the Property at the
Close of Escrow.
3.3.10 Subordinate Loan(s) Security Instrumcnt(s). Permitted Security
Instrument(s) securing repayment of the Subordinate Loan(s) executed by the authorized
representative(s) of Developer in recordable form, to be recorded against the Property at the
Close of Escrow.
3.3.11 Subordinate Loan Land Use Restriction Agreement(s). Agreement(s)
restricting occupancy and rents in the Project as required by the Subordinate Loans, executed by
the authorized representative( s) of Developer in recordable form, to be recorded against the
Property at the Close of Escrow.
3.3.12 Subordination Agreements. Subordination agreement(s) subordinating
the Deed of Trust and Regulatory Agreement in the form provided by an Institutional Lender,
reasonably approved by the City and executed by the authorized representative(s) of Developer
in recordable form, to be recorded ag~inst the Property at the Close of Escrow.
3.3.13 Other Funds and Documents. Such documents required from Developer
under the terms of this Agreement to close the Escrow, including funds as required to pay all
Escrow closing costs, which shall be the sole responsibility of Developer, or by the Escrow
Holder in the performance of the Escrow Holder's contractual or statutory obligations relating to
the Escrow.
61147.00145 \32162022 .3 24
3.4 City's Escrow Deposits. Following satisfaction or waiver of each of the City's
conditions to Close of Escrow set forth in Section 3.2 .2, the City shall deposit the following
documents into Escrow at least one (1) business days prior to the Escrow Closing Date:
3.4.1 Grant Deed. The Grant Deed executed by the authorized
representative(s) of the City in recordable form .
3.4.2 FIRPTA Affidavit (City). The FIRPTA Affidavit completed and
executed by the authorized representative(s) of the City.
3.4.3 Notice of Agreement. The Notice of Agreement executed by the
authorized representative(s) of the City in recordable form.
3.4.4 Regulatory Agreement. The Regulatory Agreement signed by the
authorized representative(s) of the City in recordable form, which shall be recorded against the
entire Property.
3.4.5 Deposit Funds Under ENA. Any remaining and refundable portion of
the deposit made by Developer under the ENA to be applied to any costs of Escrow to be borne
by Developer and then, if any funds still remain, be returned to the Developer by Escrow Holder.
3.4.6 Subordination Agreements. Subordination agreement(s) subordinating
the Deed of Trust in the form provided by an Institutional Lender, reasonably approved by the
City and executed by the authorized representative(s) of the City in recordable form, which shall
be recorded against the Property.
3.4.7 Other Funds and Documents. The principal amount of the Project Loan
and such other funds or documents required from the City under the terms of this Agreement to
close the Escrow or by the Escrow Holder in the performance of the Escrow Holder's contractual
or statutory obligations regarding the Escrow.
3.5 Closing Procedure. When each of the Developer's Escrow required deposits, as
set forth in Section 3.3, and each of the City's Escrow required deposits, as set forth in Section
3.4, are deposited into Escrow, Escrow Holder shall request confirmation in writing from both
the City and the Developer that each of their respective conditions to the Close of Escrow, as set
forth in Section 3.2, are satisfied or waived. Upon Escrow Holder's receipt of written
confirmation from both the City and the Developer that each of their respective conditions to the
Close of Escrow are either satisfied or waived, Escrow Holder shall close the Escrow for the
Property by doing all of the following:
3.5.1 Recordation of Documents. File the documents set forth in Section 3.7
with the Office of the Recorder of the County, for recordation in the order set forth in Section
3.7.
3.5.2 Distribution of Recorded Documents. Distribute each recorded
document to the Party or person designated for such distribution in Section 3.7.
61147 .00145\32162022 .3 25
3.5.3 PCO Statement. File the PCO Statement with the Office of the Recorder
of the County.
3.5.4 FIRPTA Affidavit. File the FIRPT A Affidavit with the United States
Internal Revenue Service.
3.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.
3.5.6 Original Notes. Deliver the original Land Note and Project Note to the
City.
3.5.7 Funds. Deliver all funds held by the Escrow Holder for the account of
City to City, less any charges to the account of City pursuant to the terms of this Agreement, and
deliver the sum of Four Million Eight Hundred Thousand Dollars ($4,800,000.0Q), which is the
principal portion of the Project Loan to be used to finance the Project's predevelopment,
development and construction costs, and all other remaining funds held by the Escrow Holder
for the account of Developer to Developer and less any other charges to the account of
Developer pursuant to the terms of this Agreement.
3.6 Close of Escrow. The Close of Escrow shall occur on or before the Escrow
Closing Date. The City and the Developer may mutually agree to change the Escrow Closing
Date by joint written instruction to the Escrow Holder. The City Manager is authorized to agree
to one or more extensions of the Escrow Closing Date on behalf of the City up to a maximum
time period extension of six (6) months in the aggregate, in the City Manager's sole and absolute
discretion. If for any reason the Close of Escrow has not occurred by the Escrow Closing Date,
then any Party not then in default of this Agreement may cancel the Escrow and terminate this
Agreement, subject to the notice and cure provisions of Section 7 .1 (to the extent applicable),
without liability to any other Party or any other person for such termination and cancellation, by
delivering written notice of termination to the other Party(ies) and Escrow Holder and, thereafter,
the Parties shall proceed pursuant to Section 3.10 if the non-terminating Party is not in default or
pursuant to Section 7 .1 or 7 .2 (as applicable) if the non-terminating Party is in default. Without
limiting the right of any Party to terminate this Agreement, pursuant to the preceding sentence, if
Escrow does not close on or before the Escrow Closing Date, and no Party has exercised its
contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow
shall close as soon as reasonably possible following the first date on which Escrow Holder is in a
position to close the Escrow pursuant to the terms and conditions of this Agreement.
3.7 Recordation and Distribution of Documents. As applicable, Escrow Holder
shall cause the following documents to be recorded in the official records of the Recorder of the
County in the following order of priority at the Close of Escrow: (a) the Grant Deed; (b) the
regulatory agreement required by the issuer of tax-exempt bonds for the Project; (c) Permitted
Security Instrument(s) securing the Construction Financing; (d) the Regulatory Agreement; (e)
the Notice of Agreement; (f) the Deed of Trust; (g) the land use restriction agreement required by
the Lender(s) of the Subordinate Loan(s); (h) the deed(s) of trust securing the Subordinate
Loan(s); (i) the Subordination Agreements described in Sections 3.3.14 and 3.4.6; and (j) any
other documents to be recorded through the Escrow upon the joint instructions of the City and
the Developer. The Escrow Holder shall deliver conformed copies of all documents filed for
6 1147.00 145\32 162022.3 26
recording in the official records of the County through the Escrow to the City, the Developer and
any other entity or person designated in the written joint escrow instructions of the Parties to
receive an original or confonned copy of each such document. Each copy of a document filed
for recording shall show all recording information. The Parties intend and agree that this Section
3.7 shall establish the relative priorities of the documents to be recorded in the official records of
the County through the Escrow, by providing for recordation of Senior interests prior in time to
junior interests, as provided in this Section 3. 7.
3.8 Escrow Closing Costs, Taxes and Title Policy Premium. The City and the
Developer shall each pay one-half ( 112) of the Escrow fees and such other costs as Escrow
Holder may charge for the conduct of the Escrow. Escrow Holder shall notify the Developer and
the City of the costs to be borne by each of them at the Close of Escrow by delivering the Escrow
Holder's estimated closing/settlement statement to both the City and the Developer at least four
(4) business days prior to the Escrow Closing Date. The City shall pay the premium charged by
the Title Company for the standard Title Policy for the Property, exclusive of any endorsements
or other supplements to the coverage of such Title Policy that may be requested by the
Developer, as well as documentary transfer taxes and any and all other charges, fees and taxes
levied by a Governmental Agency relative to the conveyance of any portion of the Property
through the Escrow transaction contemplated in this Agreement. The Developer shall pay any
and all recording fees relative to the conveyance of any portion of the Property through the
Escrow transaction contemplated in this Agreement.
3.9 .Escrnw Cancellation Charges. If the Escrow fails to close due to either the
City's material default under this Agreement and the Escrow is cancelled and this Agreement is
terminated, the City shall pay all ordinary and reasonable Escrow and title order cancellation
charges. If the Escrow fails to close due to the Developer's material default under this
Agreement and the Escrow is cancelled and this Agreement is terminated, the Developer shall
pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails
to close for any reason other than the material default of either the Developer or the City and the
Escrow is cancelled and this Agreement is terminated, the Developer and the City shall each pay
one-half ( 112) of any ordinary and reasonable Escrow and title order cancellation charges.
3.10 Escrow Cancellation. If this Agreement is terminated and the Escrow cancelled
pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement
and cancel the Escrow, other than due to the material default of another Party, the Parties shall
do each of the following:
3.10.1 Cancellation Instructions. The Parties shall, within three (3) business
days ofreceipt of Escrow Holder's written request, execute any reasonable Escrow cancellation
instructions requested by Escrow Holder;
3.10.2 Return of Funds and Documents. Within ten (10) days of receipt by the
Parties of a settlement statement of Escrow and title order cancellation charges from Escrow
Holder: (a) the Developer or Escrow Holder shall return to the City any documents previously
delivered by the City to the Developer or Escrow Holder, (b) the City or Escrow Holder shall
return to the Developer all documents previously delivered by the Developer to the City or
Escrow Holder; ( c) Escrow Holder shall return to the Developer any funds deposited by
6 1147 .00145\32162022.3 27
Developer into Escrow, less the Developer's share of customary and reasonable Escrow and title
order cancellation charges, if any; and ( d) Escrow Holder shall return to the City any funds
deposited by City into Escrow if it has already been deposited, less the City's share of customary
and reasonable Escrow and title order cancellation charges, if any.
3.11 Report to IRS. Following the Close of Escrow and prior to the last date on
which such report is required to be filed with the Internal Revenue Service, if such report is
required pursuant to Section 6045( e) of the Internal Revenue Code, Escrow Holder shall report
the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on
Form 1099-B, W-9 or such other form(s) as may be specified by the Internal Revenue Service
pursuant to Section 6045( e ). Upon the filing of such reporting form with the Internal Revenue
Service, Escrow Holder shall deliver a copy of the filed form to the City and the Developer.
ARTICLE IV.
PROJECT DEVELOPMENT
4.1 Developer Covenant to Undertake Project. The Developer covenants, for
itself, its successors and assigns, to and for the benefit of the City, that the Developer shall
commence and complete the development of the Project on the Property within the time period
for such actions set forth in the Schedule of Performance. The Developer covenants and agrees
for itself, its successors, and assigns, that the Property shall be improved and developed with the
Project in substantial conformity with the terms and conditions of this Agreement, the Scope of
Development, the Schedule of Performance, any and all plans, specifications and similar
development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations,
orders and conditions of each Governmental Agency with jurisdiction over the Property or the
Project. The covenants of this Section 4.1 shall run with the land of the Property until the date of
recordation of the Certificate of Completion.
4.2 Developer Changes to Plans and Specifications During Course of
Construction. The Developer shall have the right during the course of construction of the
Project to make "minor field changes," without seeking the approval of the City, if such
changes do not affect the type of use to be conducted within all or any portion of a structure.
"Minor field changes" shall be defined as those changes from the approved Plans and
Sp cification that have no ubstantial effect on the Project or are made in order to expedite the
work of con truction in response to field conditions. The Developer shall submit all other
changes, i.e. those changes which are not "minor field changes", to the City for its review and
approval no less than fifteen ( 15) days prior to the date that the Developer intends to implement
such changes. The City shall have ten (10) days from its receipt of such proposed changes to
review the same and advise the Developer in writing whether such changes are acceptable to the
City in its reasonable discretion. Any proposed changes which are not disapproved by the City
within such ten (10) day period shall be deemed approved. Nothing contained in this Section 4.2
shall be deemed to constitute a waiver of or change in the City Requirements governing "minor
field changes" or other changes or in any approvals by the City otherwise required for "minor
field changes." or other changes.
6 1147.00 145 \32 162022.3 28
4.3 Construction Start and Completion of Project. The Developer shall
commence construction of the Project no later than the Project Commencement Date and,
thereafter, shall diligently proceed to complete the construction of the Project in a good and
workmanlike manner in substantial conformity with the approved plans, specifications, and
conditions for the Project approved by the City and the Schedule of Performance , subject to
Unavoidable Delays. The Developer shall obtain a Certificate of Completion on or before the
Project Completion Date, subject to Unavoidable Delays. The Developer will, promptly upon
Completion of Construction of the Project, cause the Project to be inspected by each
Governmental Agency with jurisdiction over the Project, shall correct any defects and
deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all
occupancy certificates and other licenses, permits and authorizations necessary for the operation
and occupancy of the completed Project. The Developer shall do and perform all of the
foregoing acts and things and cause to be issued and executed all such occupancy certificates,
licenses, and authorizations for the Project on or before the date set forth therefor in the Schedule
of Performance as the completion date for the Project. After commencement of the work of
improvement of the Project, the Developer shall not permit the work of improvement of the
Project to cease or be suspended for a time period in excess of thirty (30) consecutive calendar
days, subject to Unavoidable Delays.
4.4 Compliance with Laws. All work performed in connection with the
development of the Project shall comply with all Governmental Requirements .
4.5 chedule of Performance. The Schedule of Performance establishes various
dates and times for the accomplishment of various tasks assigned to the City and the Developer
and the satisfaction of the conditions precedent to the close of the Escrow. The Parties agree that
time is of the essence in the performance of such tasks and the satisfaction of conditions
precedent, in view of the large investment ofresources that all Parties recognize will be required
for the undertaking of the Project. If the date or time for the performance of a task or the
satisfaction of a condition, as set forth in either the text of this Agreement or in the Schedule of
Performance, may not be achieved, then prior to such date or time set forth in the text of this
Agreement or the Schedule of Performance, the Parties shall consider whether a modification to
the text of this Agreement or to the Schedule of Performance is indicated. Any decision to
approve a modification to a time or date established in either the text of this Agreement or the
Schedule of Performance shall be subject to the sole discretion of each Party. Any modification
of a time or date for performance of a particular task or satisfaction of a particular condition that
does not result in a change of more than one hundred eighty (180) days may be approved on
behalf of the City by the City Manager, in his or her reasonable discretion. A modification of a
time or date for performance of a task or satisfaction of a condition (or a series of such
modifications) that results in an aggregate change of more than one hundred eighty ( 180) days
shall be subject to the approval of the City Council, in its sole and absolute discretion. If
performance of a task or satisfaction of a condition in the Schedule Performance is prevented or
delayed by Unavoidable Delays, the deadline for completion of such task or satisfaction of such
condition shall be extended by the period of such Unavoidable Delays.
4.6 Developer Attendance at City Meetings. The Developer agrees to have one or
more of its employees or consultants who are knowledgeable regarding this Agreement and the
development of the Project, such that such person(s) can meaningfully respond to City questions
61147.00145 \32162022.3 29
regarding the progress of the Project, attend City Council meetings, when requested to do so on
not less than ten (10) days prior written notice by City staff.
4.7 City's Right to Inspect Project and Property. Officers, employees, agents and
representatives of the City shall have the right ofreasonable access to the Property, without the
payment of charges or fees, during normal construction hours, during the period of construction
of the Project. Such officers, employees, agents or representatives of the City shall be those
persons who are designated by the City Manager. Any and all officers, employees, agents or
representatives of the City who enter the Property shall identify themselves at the construction
management office on the Property, upon their entrance on to the Property, and shall at all times
be accompanied by a representative of the Developer, while on the Property. The Developer
shall make a representative of the Developer available for this purpose at all times during normal
construction hours, upon reasonable notice from the City. The City shall indemnify and hold the
Developer harmless from injury, property damage or liability arising out of the exercise by the
City of the right of access to the Property provided in this Section 4. 7, other than injury, property
damage or liability arising from the negligence or willful misconduct of the Developer or its
officers, agents or employees. The City shall inspect relevant portions of the Property, prior to
issuing any written statements reflecting adversely on the Developer's compliance with the terms
and conditions of this Agreement pertaining to development of the Project. If in the City's
reasonable judgment it is necessary, the City shall have the further right, from time to time, to
retain a consultant or consultants to inspect the Project and verify compliance by the Developer
with the provisions of this Agreement. The Developer acknowledges and agrees that any such
inspections are for the sole purpose of protecting the City's rights under this Agreement, are
made solely for the City's benefit, that the inspections may be superficial and general in nature,
and are for the purposes of informing the City of the progress of the Project and the conformity
of the Project with the terms and conditions of this Agreement, and that the Developer shall not
be entitled to rely on any such inspection(s) as constituting an approval, satisfaction or
acceptance of any materials, workmanship, conformity of the Project with this Agreement or
otherwise. The Developer agrees to make its own regular inspections of the work of construction
of the Project to determine that the quality of the Project and all other requirements of the work
of construction of the Project are being performed in a manner satisfactory to the Developer.
The Developer also agrees to immediately notify the City in writing should the Developer's
inspections show any matters that will prevent the entire Project from being completed by the
Project Completion Date set forth therefore in the Schedule of Performance. Without limiting the
foregoing, the Developer shall permit the City upon reasonable notice to examine and copy all
books and account records and other papers relating to the Property and the construction of the
Project. The Developer will use commercially reasonable efforts to cause all contractors,
subcontractors and materialmen to cooperate with the City to enable such examination.
4.8 Cost of Construction. The cost and expense of undertaking and completing the
Project, including, without limitation, constructing all legally imposed on-and off-site
improvements, and providing all utilities therefor, shall be borne by Developer at its sole cost,
expense and liability except as otherwise provided in this Agreement. Developer shall be solely
responsible for payment of all City land use, construction, inspection , plan check and
development impact fees imposed by the City with respect to the development of the Project.
Developer shall bear all costs and expenses associated with the processing and obtaining of the
entitlements and shall bear all costs and expenses (except to the extent expressly set forth
61147.00145\32162022 .3 30
otherwise in this Agreement), associated with any and all terms, conditions, requirements,
mitigation measures and other exactions imposed on, or required in connection with, the
entitlements.
4.9 Prevailing Wages.
4.9.1 The Developer acknowledges that the City has not made any
representation, express or implied, to the Developer or any person associated with the Developer
regarding whether or not laborers employed relative to the construction of the Project must be
paid the prevailing per diem wage rate for their labor classification, as determined by the State of
California, pursuant to Labor Code Sections 1720, et seq. The Developer agrees with the City
that the Developer shall assume the responsibility and be solely responsible for determining
whether or not laborers employed relative to the construction of the Project must be paid the
prevailing per diem wage rate for their labor classification.
4.9.2 The Developer, on behalf of itself, its successors, and assigns, waives and
releases the City from any right of action that may be available to it pursuant to Labor Code
Sections 1726 and 1781. The Developer acknowledges the protections of Ci vii Code Section
1542 relative to the waiver and release contained in this Section 4.9, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HA VE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR."
BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY
WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE
WAIVERS AND RELEASES OF THIS SECTIONA .9.2.
-tL ~fl__--
Developer's Initials
4.9.3 Additionally, in accordance with Section 7.5, the Developer shall
indemnify, defend with counsel acceptable to the City and hold the City harmless against any
claims pursuant to Labor Code Sections 1726 and 178 l arising from this Agreement or the
construction or operation of the Project.
4.10 Certificate of Completion.
4.10.1 Following the substantial Completion of Construction of the Project, and
upon written request from the Developer for issuance of a Certificate of Completion for the
Project, the City shall inspect the Project to determine whether or not the Project has been
substantially completed in compliance with this Agreement. If the City determines that the
Project is complete and in compliance with this Agreement, the City Manager shall furnish the
Developer with a Certificate of Completion for the Project. If the City determines that the
Project is not in compliance with this Agreement, the City Manager shall send written notice of
61147 00145\32162022 3 31
each non-conformity to the Developer. Upon issuance of the final certificate of occupancy for
the development of the Project, based on the plans submitted by the Developer to the City, the
City shall furnish the Developer with a Certificate of Completion for the Project.
4.10.2 The Certificate of Completion, upon issuance, shall be evidence of the
City's conclusive determination of satisfactory substantial completion of the entirety of the
Project pursuant to the terms of this Agreement.
4.10.3 The City shall not unreasonably withhold the issuance of a Certificate of
Completion. After the recordation of a Certificate of Completion for the Project, any person then
owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property
improved with the Project shall not (because of such ownership, purchase, lease or acquisition)
incur any obligation or liability under this Agreement regarding construction or installation of
the Project except that such person shall be bound by any reservations, covenants, conditions,
restrictions and other interests recorded against the Property pursuant to this Agreement and the
Grant Deed.
4.10.4 If the City fails or refuses to issue a Certificate of Completion following
written request from the Developer, the City shall, within fifteen (15) calendar days of the
Developer's written request or within three (3) calendar days after the next regular meeting of
the City Council, whichever date occurs later, provide the Developer with a written statement
setting forth the reasons for the City's failure or refusal to issue a Certificate of Completion. The
statement shall also contain the City's opinion of the action(s) the Developer must take to obtain
a Certificate of Completion from the City. If the reason for the Developer's failure to complete
the Project is confined to the immediate unavailability of specific items or materials for
construction or landscaping at a price reasonably acceptable to the Developer or other minor
building "punch-list" items, the City may issue its Certificate of Completion upon the posting of
a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to
the City in an amount representing the fair value of the work on the Project remaining to be
completed, as reasonably determined by the City. If the City fails to provide such written
statement, within the specified time period, the Developer shall be deemed conclusively and
without further action of the City to have satisfied the requirements of this Agreement with
respect to the Project, as if a Certificate of Completion had been issued by the City pursuant to
this Agreement.
4.10.5 A Certificate of Completion shall not constitute evidence of compliance
with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any
insurer of a mortgage securing money loaned to finance the Project, or any parts thereof. A
Certificate of Completion shall not be deemed to constitute a notice of completion under Section
3093 of the California Civil Code, nor shall it act to terminate the continuing covenants,
restrictions or conditions contained in the Grant Deed or any other instruments recorded against
the Property pursuant to this Agreement. A Certificate of Completion is not evidence of the
compliance of the Project with any City Requirements or any building code, conditions of
approval, land use, zoning or other requirements of the City or any Governmental Agency with
jurisdiction over the Property, other than the City.
61147.00145 \32162022.3 32
ARTICLE V.
DEVELOPER COVENANTS
5.1 Obligation to Refrain from Discrimination. The Developer for itself, its
successors and assigns to all or any part or portion of the Property and/or Project, covenants and
agrees that there shall be no discrimination against or segregation of any person, or group of
persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor
shall the Developer, itself or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the
Property. With respect to familial status, this Section 5.1 shall not be construed to apply to
housing for older persons, as defined in Section 12955.9 of the Government Code. With respect
to familial status, nothing in this Section 5.1 hall be construed to affect Section 51.2, 51.3, 51.4,
51.10, 51.11 and 799 .5 of the Civil Code relating to housing for senior citizens. Subdivisions ( d)
of Section 51 and Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section
12955 of the Government Code shall apply to this Section 5.1. The covenant of this Section 5.1
shall run with the land of the Property and shall be enforceable against the Developer and its
successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of
Agreement.
5.2 Form of Non-Discrimination and Non-Segregation Clauses. The Developer
for itself, its successors and assigns to all or any part or portion of the Property and/or Project,
covenants and agrees that:
5.2.1 The Developer, such successors and such assigns shall refrain from
restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the
Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed,
ancestry or national origin of any person. With respect to familial status, this Section 5 .2. l shall
not be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in this Section 5.2.1 shall be
construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code relating to
housing for senior citizens. Subdivisions ( d) of Section 51 and Section 1360 of the Civil Code
and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to this
Section 5.2.1.
5.2.2 All deeds, leases or contracts pertaining to the Property shall contain or be
subject to substantially the following non-discrimination or non-segregation covenants:
5.2.2.1 In deeds: "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the
grantee or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
61147.00145132162022.3 33
or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land.
Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in
the foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and
799.5 of the Civil Code relating to housing for senior citizens. Subdivisions (d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to foregoing paragraph."
5.2.2.2 In leases: "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this lease is made
and accepted upon and subject to the following conditions: That there shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or
any person claiming und r or through it, establish or permit any such practice or practices of
discrimination or egregation with reference to the election location, number, use or
occupancy, of tenants lessees, sub-lessee, sub-tenant , or vendee in the premi e herein leased.
Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in
the foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and
799 .5 of the Ci vii Code relating to housing for senior citizens. Subdivisions ( d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to the foregoing paragraph"
5.2.2.3 In contracts: "There shall be no discrimination against or
segregation of any p rson or group of persons on account of race, color creed, religion ex
marital tatu , national origin, or ancestry, in the sale, lease, sublea e tran fer, use, occupancy,
tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy of tenant , le ee-, sub-I es ee sub-tenants or vendee of the premises herein
transferred." The foregoing provision shalI be binding upon and hall obligate the contracting
party or parties and any subcontracting party or pa1ties , or other transferee Lmder the in trument.
"Notwithstanding the foregoing paragraph, with respect to familial
status, the foregoing paragraph shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in
the foregoing paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and
799 .5 of the Civil Code relating to housing for senior citizens. Subdivisions ( d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to the foregoing paragraph."
61 147 .00145 \32 162022 .3 34
5.2.3 The covenant of this Section 5.2 shall run with the land of the Property in
perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be
covenants set forth in the Grant Deed.
5.3 Environmental Indemnity of the City by the Developer. The Developer
agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with
counsel selected by the Developer and approved by the City) the City and its commissions,
agents, attorneys, officers, employees, and authorized representatives (collectively, the
"Indemnified Parties"), from and against any and all claims, demands, damages , losses,
liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings,
costs, disbursements and expenses, including, without limitation, attorney fees, disbursements
and costs of attorneys, environmental consultants and other experts, and all foreseeable and
unforeseeable damages or costs of any kind or of any nature whatsoever (collectively,
"Environmental Claims") that may, at any time, be imposed upon, incurred or suffered by, or
claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or
arising from any of the following "Environmental Matters" existing or occurring during or
arising from the Developer's ownership of the Property or construction or operation of the
Project:
5.3.1 The presence of Hazardous Substances on, in, under, from or affecting all
or any portion of the Property or the Project.
5.3.2 The storage, holding, handling, release, threatened release, discharge,
generation, leak, abatement, removal or transportation of any Hazardous Substances on, in,
under, from or affecting the Property or the Project.
5.3.3 The violation of any law, rule, regulation, judgment, order, permit, license ,
agreement, covenant, restriction, requirement or the like by the Developer, its agents or
contractors, relating to or governing in any way Hazardous Substances on, in, under, from or
affecting the Property or the Project.
5.3.4 The failure of the Developer, its agents or contractors, to properly
complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations,
covenants and the like in connection with the Developer's activities on the Property or regarding
the Project.
5.3.5 The implementation and enforcement by the Developer, its agents or
contractors of any monitoring, notification or other precautionary measures that may, at any
time, become necessary to protect against the release, potential release or discharge of Hazardous
Substances on, in, under, from or affecting the Property or the Project.
5.3.6 The failure of the Developer, its agents or contractors, iri compliance with
all applicable Environmental Laws, to lawfully remove, contain , transport or dispose of any
Hazardous Substances existing, stored or generated on, in, under or from the Property or the
Project.
5.3.7 Any investigation, inquiry, order, hearing, action or other proceeding by or
before any Governmental Agency in connection with any Hazardous Substances on, in, under,
61147.00145\32162022 .3 35
from or affecting the Property or the Project or the violation of any Environmental Law relating
to the Property or the Project.
5.3.8 The Developer shall pay to the Indemnified Parties all costs and expenses
including, without limitation, reasonable attorneys' fees and costs, incurred by the Indemnified
Parties in connection with enforcement of the aforementioned environmental indemnity.
5.4 Insurance. In order to protect the City and its commissions, agents, attorneys,
officers, employees and authorized representatives (collectively, "Additional Insureds") against
any and all claims and liability for death, injury, loss and damage resulting from the Developer's
actions in connection with this Agreement, the Property, and the Project, the Developer shall
secure and maintain the insurance coverage, described in and required by this Section 5.4. The
City shall not have any obligation under this Agreement until the Developer provides the
required policies and/or certificates evidencing the insurance required by this Section 5.4 to the
City and the City approves such evidence of insurance. The Developer shall pay any deductibles
and self-insured retentions under all insurance policies issued in satisfaction of the terms of this
Agreement. Developer shall retain all insurance policies as set forth in this Section 5.4 until
recordation of the Certificate of Completion.
5.4.1 Workers' Compensation Insurance Requirement. The Developer shall
submit written proof that the Developer is insured against liability for workers' compensation in
accordance with the provisions of Section 3 700 of the Labor Code. By executing this
Agreement, the Developer makes the following certification, required by Section 1861 of the
Labor Code:
"I am aware of the provisions of section 3 700 of the Labor Code
which require every employer to be insured against liability for
workers' compensation or to undertake self-insurance in accordance
with the provisions of that code, and I will comply with such
provisions before commencing the performance of the work of the
Agreement."
The Developer shall require each contractor and sub-contractor performing work on the Project to
provide workers' compensation coverage for all of such contractor's or sub-contractor's
employees, unless the contractor's or sub-contractor's employees are covered by workers'
compensation insurance provided by the Developer. If any class of employees engaged in work
or services performed in connection with the Project is not covered by Labor Code Section 3700,
the Developer shall provide and/or require each contractor or sub-contractor to provide adequate
workers' compensation insurance covering such employees. Each workers' compensation policy
procured pursuant to this Section 5.4.1 shall contain a full waiver of subrogation clause in favor
of the Additional Insureds.
6\ \47.00145\32162022 .3 36
5.4.2 Liability and Permanent Insurance Requirements.
5.4.2.1 The Developer shall maintain in full force and effect, from the
Effective Date until the issuance of the Certificate of Completion, subject to Section 5 .4.2.4, the
following insurance coverage:
5.4.2.1.l Commercial General Liability Insurance coverage,
including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically
covering all indemnity obligations of the Developer pursuant to this Agreement), Products-
Completed Operations Hazards, Personal Injury (including bodily injury and death), and
Property Damage for liability arising out of the construction of the Project and/or the
Developer's operations concerning the Property or the Project. The commercial general liability
insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability
of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS
($2 ,000,000) aggregate.
5.4.2.1.2 Automobile Liability Insurance against claims of
Personal Injury (including bodily injury and death) and Property Damage covering all owned,
leased, hired and non-owned vehicles used by the Developer with minimum limits for Bodily
Injury and Property Damage of ONE MILLION DOLLARS ($1 ,000,000) each occurrence and
ONE MILLION DOLLARS ($1,000,000) aggregate. Such insurance shall be provided by a
business or commercial vehicle policy.
5.4.2.1.3 If the Developer hires a consultant to provide design
services, such as architectural or engineering services in connection with the Project, or any
portion of the Project, the Developer shall require each such consultant to provide Professional
Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the
performance of such design services, with limits of not less than ONE MILLION DOLLARS
($1 ,000,000).
5.4.2.1.4 Upon acceptance of the Project or any portion
thereof, from each contractor, the Developer shall maintain Fire and Extended Coverage
Insurance, excluding earthquake coverage, on the Project on a blanket basis or with an agreed
amount clause in amounts not less than 100% of the replacement value of all portions of the
Project so accepted.
5.4.2.2 During the construction of the Project, the Developer shall require
that each contractor performing work on the Project maintain the following insurance coverage,
as specified below, at all times during the performance of said work, or the Developer shall
provide for such contractors "wrap" coverage, as specified below, at all times during the
performance of said work:
5.4.2.2.1 The Developer shall maintain Builder's Risk
Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to
100% of the completed insurable value of the Project or portion of the Project on which such
contractor is performing work.
61147.00145\32162022.3 37
5.4.2.2.2 Each general contractor and each sub-contractor
shall maintain Commercial General Liability Insurance with limits of not less than ONE
MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS
($2,000,000) aggregate to protect the Developer during the construction of the Project from
claims involving bodily injury and/or death and damage to the property of others.
5.4.2.2.3 Each general contractor and each sub-contractor
shall maintain Automobile Liability Insurance against claims of personal injury (including bodily
injury and death) and property damage covering all owned, leased, hired and non-owned vehicles
used in the performance of the contractor's obligations with minimum limits for bodily injury
and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO
MILLION DOLLARS ($2,000,000) aggregate. Such automobile liability insurance shall be
provided by a business or commercial vehicle policy.
5.4.2.3 The insurance required in Section 5 .4.2.1 and Section 5 .4.2.2
above shall include endorsements naming the Additional Insureds as additional insured for
liability arising out of this Agreement and any operation related to this Agreement.
5.4.2.4 Any insurance coverage required under this Agreement shall not
be written on a "claims made" basis. The applicable certificate of insurance must clearly provide
that the coverage is on an "occurrence" basis. The requirements of this Section 5.4.2.4 shall
survive any expiration or termination of this Agreement and the recordation of the Grant Deed
and any Certificate of Completion.
5.4.2.5 Receipt by the City of evidence of insurance that does not comply
with the above requirements shall not constitute a waiver of the insurance requirements of this
Agreement.
5.4.2.6 Subject to Section 5.4.2.4, all of the insurance coverage required
under this Section 5.4 shall be maintained by the Developer or its contractors, as required by the
terms of this Agreement, until the issuance of the Certificate of Completion and shall not be
reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the City.
Also, phrases such as "endeavor to" and "but failure to mail such notice shall impose no
obligation or liability of any kind upon the company" shall not be included in the cancellation
wording of any certificates of insurance or any coverage for the Additional Insureds. The
Developer shall immediately obtain replacement coverage for any insurance policy that is
terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of
the insurer that issued the policy.
5.4.2.7 All insurance to be obtained and maintained by the Developer
under this Section 5.4 shall be issued by a company or companies listed in the then current
"Best's Key Rating Guide" publication with a minimum of an "A:VII" rating and be admitted to
conduct business in the State of California by the State of California Department of Insurance.
5.4.2.8 The City will not accept self-insurance in satisfaction of the
insurance requirements of this Section 5.4.
61147.00145\32162022.3 38
5.4.2.9 All insurance obtained and maintained by the Developer in
satisfaction of the requirements of this Agreement shall be primary to and not contributing to any
insurance maintained by the Additional Insureds.
5.4.2.10 Insurance coverage in the minimum amounts set forth in
this Section 5.4 shall not be construed to relieve the Developer of any liability, whether within,
outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer
that issues the coverage; nor shall it preclude the Additional Insureds from taking such other
actions as are available to them under any other provision of this Agreement or otherwise at law.
5.4.3 Failure by the Developer to maintain all insurance coverage required by
this Section 5 .4 in effect shall be an Event of Default by the Developer. The City, at its sole
option, may exercise any remedy available to them in connection with such an Event of Default.
Alternatively, the City may, at its sole option, purchase any such required insurance coverage
and the City shall be entitled to immediate payment from the Developer for any premiums and
associated costs paid by the City for such insurance coverage. Any election by the City to
purchase or not to purchase insurance otherwise required to be carried by the Developer shall not
relieve the Developer of its obligation to obtain and maintain the insurance coverage required by
this Agreement
5.5 Deve loper Covenant to Defend t hi s Agreement. The Developer acknowledges
that the City is a "public entity" and/or "public agency" as defined under applicable California
law. Therefore, the City must satisfy the requirements of certain California statutes relating to
the actions of public entities and public agencies including, without limitation, CEQA. Also, as
a public body, the City's action in approving this Agreement may be subject to proceedings to
invalidate this Agreement or mandamus. The Developer assumes the risk of delays and damages
that may result to the Developer from any third-party legal actions related to the City's approval
of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the
event that an error, omission or abuse of discretion by the City is determined to have occurred. If
a third-party files a legal action regarding the City's approval of this Agreement or the pursuit of
the activities contemplated by this Agreement, either the City may terminate this Agreement on
thirty (30) days written notice to the Developer of the City's intent to terminate this Agreement,
referencing this Section 5.5, without any further obligation to perform the terms of this
Agreement and without any liability to the Developer resulting from such termination, unless the
Developer unconditionally agrees to indemnify and defend the City, with legal counsel
acceptable to the City, against such third-party legal action, as provided in the next sentence.
Within thirty (30) days ofreceipt of the City's notice of intent to terminate this Agreement, as
provided in the preceding sentence, the Developer may offer to defend the City, with legal
counsel reasonably acceptable to the City, in the third-party legal action and pay all of the court
costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and
consulting fees, and the expenses of any and all financial or performance obligations resulting
from the disposition of the legal action. Any such offer from the Developer must be in writing
and reasonably acceptable to the City in both form and substance. Nothing contained in this
Section 5.5 shall be deemed or construed to be an express or implied admission that the City is
liable to the Developer or any other person or entity for damages alleged from any alleged or
established failure of the City to comply with any statute, including, without limitation, CEQA.
61147.00145\32162022 .3 39
The Developer's defense of such third party actions as described in this Section 5.5 shall
constitute an Unavoidable Delay.
ARTICLE VI.
PROJECT FINANCING
6.1 Project Financing. Developer shall finance the development of the Project in
accordance with the Project Budget. Further, City and Developer agree that the financing of the
Project shall comply with all of the following:
6.1.1 Tax-Exempt Bonds and Tax Credit Financing. To provide funds for
the development and construction of the Project, Developer shall in good faith apply for and
obtain an allocation of tax-exempt bonds and an allocation of the Tax Credits to finance a portion
of the Project Costs. Developer shall use commercially reasonably efforts to submit applications
for an allocation of tax-exempt bonds and a reservation of the Tax Credits by the November
2019 deadline for CDLAC's and TCAC's January 2020 allocation and reservation meetings. If
Developer does not receive the allocation of tax-exempt bonds and Tax Credits as a result of
such application, the Developer agrees to use commercially reasonably efforts to submit
applications for an allocation of tax-exempt bonds and a reservation of the Tax Credits for the
next round of CDLAC's and TCAC's allocation and reservation meetings. If Developer does
not receive the allocation of tax-exempt bonds and Tax Credits as a result of such second
app li cati-on the Developer agrees to use commercially reasonably efforts to submit a third round
of application for an allocation of tax-exempt bonds and a reservation of the Tax Credits for the
next round ofCDLAC's and TCAC's allocation and reservation meetings. If Developer does not
receive the allocation of tax-exempt bonds and Tax Credits as a result of all three (3) rounds of
applications, the Parties agree to meet and confer in good faith for a period of ninety (90) days to
determine if a feasible and mutually acceptable alternate arrangement can be made to finance
development and construction of the Project. If no agreement is reached by the Parties within
such ninety (90) day period regarding the alternative courses of action described in the preceding
sentence, this Agreement may be terminated upon fifteen (15) days' notice to the other Parties.
Any agreement that is reached between the Parties on an alternative financing plan for the
Project shall be memorialized in an implementation agreement to this Agreement. If Developer
fails to make the required applications to CD LAC and TCAC, then the City or the Developer
may terminate this Agreement upon fifteen (15) days' notice to the other Parties. Failure of
Developer to obtain tax-exempt bond allocation or Tax Credits shall not constitute an Event of
Default under the terms of this Agreement, unless due to the intentional misconduct of
Developer.
6.1.2 Construction Financing. Prior to the Close of Escrow, Developer shall
provide for the City's review and approval, which may be withheld or conditioned in City's
reasonable discretion and which shall not be unreasonably delayed, the terms of the Construction
Financing, and shall provide the City the opportunity to review such terms with the Insitutional
Lender providing such Construction Financing.
6.1.3 Permanent Loan. Prior to the Close of Escrow, Developer shall obtain
for the City's review and approval, which may be withheld or conditioned in City's reasonable
6 11 47.00 145\32 162022 .3 40
discretion and which shall not be unreasonably delayed, a conditional forward loan commitment
for each Permanent Loan .
6.2 Project Budget. By its execution of this Agreement, the City has given its
approval to the Project Budget. The approved Project Budget is based on the following
assumptions: (a) relocation or undergrounding of existing overhead utilities will not be an
obligation on the Project; and (b) that only certain City Impact Fees are applicable to the Project
and others are not since the Project is an affordable senior housing development as set forth on
the attached Ex hibit L. The City agrees to not require any changes in the Project or Project
Budget that would change these two assumptions . While the Project Budget has been prepared
based on the best , good faith estimate of Developer of the costs which are likely to be incurred
for the Project, the Parties recognize that events and circumstances not currently contemplated,
some of which are outside of the control of the Parties, could result in changes in the Project
Costs, necessitating changes in the Project Budget. To the extent that Developer is required to
make changes to the Project Budget, Developer shall immediately submit a revised Project
Budget to the City Manager for review and approval, which review and approval shall not be
unreasonably withheld, conditioned or delayed , as to the sufficiency of the financing secured by
Developer to meet the revised Project Costs.
6.3 Only Permitted Exceptions . Developer shall not record and shall not allow to be
recorded against the Property any Security Instrument, lien or other encumbrance that is not a
Permitted Exception. Developer shall remove or cause to be removed (or providing title
insurance in form and substance reasonably acceptable to the City and issued by a title insurance
company reasonably acceptable to the City, insuring the priority of this Agreement and the Deed
of Trust securing the Land Loan and Project Loan as superior to such lien, with such title
insurance being in the minimum amount of the outstanding principal and interest under the Land
Loan and the Project Loan plus 125 % of the amount of the lien claim or providing a statutory
bond resulting in removal of such lien) any non-Permitted Exception made or recorded against
the Property or shall assure the complete satisfaction of any such non-Permitted Exception to the
satisfaction of the City, in the City's sole and absolute discretion. The covenants of Developer
set forth in this Section regarding the placement of encumbrances on the Property shall run with
the land of the Property and bind successive owners of the Property, until recordation (or deemed
issuance) of the Certificate of Completion for the Project.
6.4 Citv Right to Discharge Prohibited Encumbrances. After sixty (60) calendar
days' Notice to Developer of a non-Permitted Exception and provided that Developer has not
caused such non-Permitted Exception to be removed pursuant to Section 6.3, the City shall have
the right, but not the obligation, to satisfy or remove any non-Permitted Exception against the
Property or the Project and receive reimbursement from Developer for any amounts paid or
incurred in satisfying or removing any such non-Permitted Exception, upon demand. Any
amount expended by the City to discharge a non-Permitted Exception that is not reimbursed to
the City by Developer within thirty (30) calendar days following written demand for payment
from the City shall accrue interest at an annual rate equal to the lesser of eight percent (8%) per
annum or the maximum highest rate of interest allowed by law under the circumstances , until
paid in full. Nothing in this Section 6.4, though, shall require Developer to pay or make
provisions for the payment of any tax, assessment, lien or charge that Developer is in the process
6 1147.00145\32162022 .3 41
of contesting the validity or amount thereof, in good faith, and so long as such contest shall not
subject all or any portion of the Property to forfeiture or sale.
6.5 Rights of Lender and City Regarding Permitted Sec.urity lnstruments.
6.5.1 Notice of Liens. The Developer shall promptly notify the City of any
Security Instrument or lien asserted against or attached to all or any portion of the Project or the
Property, other than as listed in Section 3. 7, prior to the date of issuance of a Certificate of
Completion for the Project, whether by voluntary act of Developer or otherwise; provided,
however, that no notice of filing of preliminary notices or mechanic's liens need be given by
Developer to the City, prior to suit being filed to foreclose any such mechanic's lien.
6.5.2 Notice of Default to Lenders. Whenever the City delivers any notice of
default to Developer under this Agreement, the City shall send a copy of such notice of default to
each Lender holding a Permitted Security Instrument of which the City has received notice and a
contact address for transmittal of such notices. Each Lender receiving a copy of any such notice
of default shall have the right, at its option, to commence the cure or remedy of any default of
Developer set forth in such notice and to diligently and continuously proceed with such cure or
remedy such default, within the cure period allowed to Developer under this Agreement. The
City shall accept such performance by a Lender with the same force and effect as if furnished by
Developer. If such default can only be remedied or cured by the Lender upon obtaining
possession of the Property, the City shall allow the Lender an opportunity to obtain possession
with diligence and continuity through exercise of remedies under such Lender's Permitted
Security Instrument and to remedy or cure such default within ninety (90) days after obtaining
possession of the Property. If the default reasonably requires more than ninety (90) days to cure,
however, then the time available to a Lender to cure pursuant to this Section 6.5 shall be the
reasonable time required to complete such cure, as long as the Lender has commenced the cure
of the default within such ninety (90) day period and diligently pursues the cure to completion.
During such extension of time, the City shall not terminate this Agreement or exercise other
remedies under this Agreement by reason of such default. All Developer specific defaults shall
be deemed cured upon Transfer of Developer's interest in the entire Property to the Lender, its
assignee or nominee, pursuant to exercise of remedies under a Permitted Security Instrument. In
addition, any Lender properly completing the Project with the consent of the City shall be
entitled, upon written request made to the City, to a Certificate of Completion from the City.
Nothing contained in this Agreement shall be deemed to permit, authorize or require any Lender
to undertake or continue the construction or installation of any portion of the Project (beyond the
extent necessary to conserve or protect improvements or construction already made) prior to or
after acquiring title to or possession of the entire Property, without expressly assuming
Developer's obligations under this Agreement by written agreement reasonably satisfactory to
the City, in which the Lender agrees to complete the Project in the manner provided in this
Agreement. Any Lender desiring to complete the Project must provide the City with evidence
reasonably satisfactory to the City that the Lender has the qualifications (or will engage one or
more licensed contractor(s) or consultant(s) with such qualifications) and financial capability
necessary to perform such obligations .
6.5.3 No Termination of Permitted Security Instruments by Default. An
Event of Default by Developer under this Agreement shall not defeat or render invalid the lien of
61147.00145132162022.3 42
any Permitted Security Instrument made in good faith and for value as to all or any part of the
Property, whether or not the Lender is subordinated to this Agreement ; but unless otherwise
provided in this Agreement, this Agreement shall be binding and effective against any owner of
the Property, whose title thereto is acquired pursuant to exercise of remedies under a Permitted
Security Instrument or from a person or entity exercising any such remedies.
6.5.4 Lender Rights on Termination or Modification. No termination of this
Agreement shall be binding upon a Lender unless the termination occurs after notice to such
Lender and such Lender's failure to cure all then existing defaults under this Agreement (except
any Developer specific defaults), pursuant to this Section 6.5, or with such Lender's prior written
consent. No modification of this Agreement that materially affects the rights of a Lender shall
be binding upon the Lender without its prior written consent.
6.5.5 No Construction Obligation of Lender. A Lender shall in no way be
obligated by the provisions of this Agreement to construct or complete the development of the
Project or to guarantee such construction or completion, but may do so pursuant to and in
accordance with this Section 6.5. Nothing in this Agreement shall be deemed to construe,
permit , or authorize any Lender to devote all or any portion of the Property to any uses, or to
construct any improvements thereon, other than those uses or the Project provided for or
authorized by this Agreement.
6.5.6 Citv Right to Cure Obl igations . In the event of a default by Developer
under any Permitted Security Instrument, where the Lender has not exercised its option to
complete the Project under Section 6.5.2, the City may cure the default of Developer under the
applicable Permitted Security Instrument, but is under no obligation to do so, prior to completion
of any sale or foreclosure of all or any portion of the Property under the applicable Permitted
Security Instrument. The City shall be entitled to reimbursement from Developer of all costs and
reasonable expenses incurred by the City in curing any default of Developer under any Permitted
Security Instrument, under demand. Any amount expended by the City to cure a default of
Developer under any Permitted Security Instrument that is not reimbursed to the City, by
Developer within thirty (30) calendar days after notice of such amount to Developer, shall accrue
interest at an annual rate equal to the lesser of eight percent (8%) per annum or the maximum
highest rate of interest allowed by law under the circumstances until paid in full. City's rights to
cure under this Section shall remain in effect until Developer has repaid the Land Note and the
Project Note in full.
6.5.7 Forec losure of Permitted Security Instrument. Foreclosure of any
Permitted Security Instrument, whether by judicial proceedings or by power of sale, or any
conveyance by deed in lieu of foreclosure , shall not require the consent of the City or constitute a
default under this Agreement.
61147.00145 \32162022.3 43
ARTICLE VII.
DEFAULTS, REMEDIES AND TERMlNATION
7.1 Defaults -General.
7.1.1 Subject to any extensions of time provided for in this Agreement, failure
or delay by any Party to perform any term or provision of this Agreement shall constitute an
"Event of Default" under this Agreement; provided, however, that if a Party otherwise in default
commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt
of written notice from the injured Party specifying such default, and shall diligently and
continuously prosecute such cure, correction or remedy to completion (and where any time limits
for the completion of such cure, correction or remedy are specifically set forth in this Agreement,
then within said time limits), such Party shall not be deemed to be in default under this
Agreement and no Event of Default shall be deemed to have occurred.
7.1.2 The injured Party shall give written notice of default to the Party in
default, specifying the default complained of by the non-defaulting Party. Delay in giving such
notice shall not constitute a waiver of any default nor shall it change the time of default.
7.1.3 Any failure or delays by any Party in asserting any of their rights and/or
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by any Party in asserting any of its rights and/or remedies shall not deprive
that Party of its right to institute and maintain any actions or proceedings that it may deem
necessary to protect, assert or enforce any such rights or remedies.
7.1.4 In addition to other acts or omissions of the Developer that may legally or
equitably constitute a default or breach of this Agreement, the occurrence of any of the following
specific events, prior to the issuance of a Certificate of Completion for the Project, shall
constitute an "Event of Default" under this Agreement and shall not be subject to the notice and
cure provisions of Section 7 .1.1 :
7.1.4.1 Any material default by the Developer under any Security
Financing Instrument for any purpose or reason that remains uncured following any applicable
notice and expiration of any applicable cure period under such Security Financing Instrument.
7.1.4.2 Any representation, warranty or disclosure made to the City by the
Developer regarding this Agreement or the Project is materially false or misleading, whether or
not such representation or disclosure appears in this Agreement.
7.1.4.3 The construction of the Project is delayed or suspended for a
period in excess of that permitted under Section 4.3 or the Developer has not been issued, or
entitled to be issued, a Certificate of Completion by the Project Completion Date.
7.1.4.4 There occurs any event of dissolution, reorganization or
termination of the Developer that adversely and materially affects the operation or value of the
Property or the Project, and such event is not corrected within five (5) days following written
notice of such event from the City to the Developer.
61147.00145 \32162022 .3 44
7.1.4.5 The Developer Transfers its interest in this Agreement, the
Property, or the Project, or any portion thereof, whether voluntarily or involuntarily or by
operation oflaw, in violation of the terms and conditions of this Agreement and such action is
not cured within the period prescribed in Section 8.2.2.
7.1.4.6 The Developer becomes insolvent or a receiver is appointed to
conduct the affairs of the Developer under state or federal law.
7.1.4.7 The Developer's legal entity status authorized by the Secretary of
State of the State of California to transact business in California is suspended or terminated.
7.2 DEVELOPER'S ELECTION RE: SPECIFIC ENFORCEMENT OF
AGREEMENT OR WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW.
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT PERTAINING TO THE
CONVEYANCE OF THE PROPERTY BY THE CITY UNDER THIS AGREEMENT PRIOR
TO CLOSE OF ESCROW, THE DEVELOPER SHALL, AS ITS SOLE AND EXCLUSIVE
REMEDY, HA VE THE RIGHT TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES
DESCRIBED IN SECTIONS 7.2.1 AND 7.2.2. THE DEVELOPER'S ELECTION, ONCE
MADE, SHALL BE IRREVOCABLE.
7.2.1 WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES. THE DEVELOPER MAY WAIVE THE
REMEDIES SET FORTH IN SECTION 7.2.2 AND MAY CANCEL THE ESCROW
PURSUANT TO SECTION 3.10, AND UPON CANCELLATION OF THE ESCROW, THE
DEVELOPER SHALL BE RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT
TO PURCHASE OR ACCEPT TITLE TO THE PROPERTY AND ANY SUCH ESCROW
CANCELLATION SHALL BE WITHOUT ANY LIABILITY OF THE DEVELOPER TO THE
CITY OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. THE DEVELOPER
SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY EXPENDED BY
THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT PRIOR TO THE
DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE CITY, NOT TO
EXCEED FIFTY THOUSAND DOLLARS ($50,000). THE DEVELOPER WAIVES ANY
RIGHT TO RECOVER ANY OTHER SUMS FROM THE CITY ARISING FROM AN
EVENT OF DEFAULT BY THE CITY PRIOR TO THE CLOSE OF ESCROW. THE
DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542
RELATIVE TO THEW AIYER AND RELEASE CONTAINED IN THIS SECTION 7.2.1,
WHICH CIVIL CODE SECTION READS AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST
HA VE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR."
61147.00145 132162022 .3 45
BY INlTIALfNG BELOW, THE DEVELOPER K."NOWINGLY AND VOLUNTARILY
WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE
WAIVERS AND RELEASES OF THIS SECTION 7.2.1.
DEVELOPER'S INITIALS ,f'c__ s
IN CONNECTION WITH THE WAIVERS OF THIS SECTION 7.2.l, THE
DEVELOPER FURTHER WA IVES THE RIGHT TO RECORD A NOTICE OF PEND ENCY
OF ACTION AGAINST ALL OR ANY PORTION OF THE PROPERTY EXCEPT
DEVELOPER MAY RECORD SUCH A NOTICE IN CONNECTION WITH ANY SUIT FOR
SPECIFIC PERFORMANCE PERMITTED HEREUNDER IN THE EVENT DEVELOPER
ELECTS NOT TO WAIVE ITS RIGHT TO SEEK SPECrFIC PERFORMANCE UNDER
SECTION 7.2.2.
7.2.2 SPECIFIC PERFORMANCE. THE DEVELOPER MAY WAIVE
THE REMEDIES SET FORTH IN SECTION 7.2. l AND, IN ACCORDANCE WITH CIVIL
CODE SECTION 3384, ET SEQ., INSTITUTE AN ACTION AGAINST THE CITY FOR
SPECIFIC PERFORMANCE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT
WHICH WERE TO HAVE BEEN COMPLETED BY THE CITY PRIOR TO THE CLOSE OF
ESCROW.
7.3 Legal Actions.
7.3.1 Except as otherwise provided by Section 7.2, any Party may institute legal
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any
other remedy available to that Party under this Agreement or at law or in equity. Such legal
actions must be instituted in the Superior Court of the State of California in and for the County of
Orange, California, in any other appropriate court within the County of Orange, California.
7 .3.2 The procedural and substantive laws of the State of California shall govern
the interpretation and enforcement of this Agreement, without regard to conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the City of San Juan Capistrano, County of
Orange, California.
7.4 Rights and Remedies arc Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the Parties set forth in this ARTICLE VII are non-
exclusive and cumulative, and the exercise by any Party of one or more of such 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(ies).
7.5 Developer Indemnification of the City. In addition to any other specific
indemnification or defense obligations of the Developer set forth in thjs Agreement, the
Developer agrees to indemnify, defend (upon written request by the City and with counsel
reasonably acceptable to the City) and hold harmless the Indemnified Parties, from any and all
losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and
expenses, including, but not limited to reasonable attorney's fees of counsel retained by the
61 147 ,00145\32162022._i 46
Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or
nature, that are in any manner directly or indirectly caused, occasioned or contributed to in whole
or in part, through any act, omission, fault or negligence, whether active or passive, of the
Developer or the Developer's officers, agents, employees, independent contractors or
subcontractors of any tier, relating in any manner to this Agreement, any work to be performed
by the Developer related to this Agreement, the Property, or the Project, or any authority or
obligation exercised or undertaken by the Developer under this Agreement. Without limiting the
generality of the foregoing, the Developer's obligation to indemnify the Indemnified Parties shall
include injury or death to any person or persons, damage to any property, regardless of where
located, including the property of the Indemnified Parties, any workers' compensation or
prevailing wage determination, claim or suit or any other matter arising from or connected with
any goods or materials provided or services or labor performed regarding the Project or the
Property on behalf of the Developer by any person or entity.
ARTICLE VIII.
GENERAL PROVISIONS.
8.1 Incorporation of Recitals. The Recitals of fact set forth preceding this
Agreement are true and correct and are incorporated into this Agreement in their entirety by this
reference.
8.2 Restrictions on Transfers.
8.2.1 The Developer acknowledges that the qualifications and identity of the
Developer are of particular importance to the City. The Developer further recognizes and
acknowledges that the City has relied and is relying on the specific qualifications and identity of
the Developer in entering into this Agreement with the Developer and, as a consequence,
Transfers are permitted only as expressly provided in this Agreement. The Developer shall
promptly notify the City in writing of any and all changes whatsoever in the identity of the
business entities or individuals either comprising or in Control of the Developer, as well as any
and all changes in the interest or the degree of Control of the Developer by any such person, of
which information the Developer or any of its partners, members or officers are notified or may
otherwise have knowledge or information.
8.2.2 Except as expressly permitted in this Agreement, the Developer represents
to the City that it has not made and agrees that it will not make or create, or suffer to be made or
created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by
operation of law, until after the recordation of a Certificate of Completion for the Project subject
to the Transfer; provided, however, that the City may approve in its reasonable discretion,
Transfers other than Permitted Transfers prior to the recordation of a Certificate of Completion.
In deciding whether to approve or disapprove any proposed Transfer, the City may consider the
proposed transferee's financial strength and the experience of the proposed transferee and its
senior management in undertaking and successfully completing projects of a similar type and
size as the Project or that portion of the Project proposed to be transferred. Any Transfer made
in contravention of this Section 8.2 shall be voidable at the election of the City and this
61147.00145\32162022.3 47
Agreement may be terminated by the City or the City may exercise any other remedy available to
the City under the terms of this Agreement, provided , however, that (i) the City shall first notify
the Developer in writing of its intention to terminate this Agreement or to exercise any other
remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such
written notice to commence and, thereafter, diligently and continuously proceed to cure the
default of the Developer and submit evidence of the initiation and satisfactory completion of
such cure to the City, in a form and substance reasonably satisfactory to the City.
8.2.3 The Developer shall provide the City no less than thirty (30) days prior
written notice of any proposed Permitted Transfer which the Developer desires to enter into prior
to the recordation of a Certificate of Completion for the Project subject to the Transfer, other
than a Permitted Transfer for which no notice shall be required. The Developer shall have the
burden of demonstrating to the City's reasonable satisfaction that the proposed Permitted
Transfer meets the conditions and requirements of this Agreement with respect to Permitted
Transfers.
8.2.4 Anything in this Agreement to the contrary notwithstanding, the
restrictions and prohibitions on Transfers contained in this Section 8.2 shall terminate upon
issuance of a Certificate of Completion for the Project.
8.3 Notices, Demands and Communications Between the Parties.
8.3.1 Any and all notices, demands or communications submitted by any Party
to another Party pursuant to or as required by this Agreement shall be proper, if in writing and
dispatched by messenger for immediate personal delivery, by a nationally recognized overnight
courier service or by registered or certified United States Mail, postage prepaid, return receipt
requested, to the principal office of the City or the Developer, as applicable, as designated in
Section 8.3.2. Such written notices, demands or communications may be sent in the same
manner to such other addresses as either Party may from time to time designate. Any such
notice, demand or communication shall be deemed to be received by the addressee, regardless of
whether or when any return receipt is received by the sender or the date set forth on such return
receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally
recognized overnight courier service or three (3) calendar days after it is placed in the United
States Mail, as provided in this Section 8.3.
8.3.2 The following are the authorized addresses for the submission of notices,
demands or communications to the Parties:
TO DEVELOPER:
61147.00145\32162022.3 48
C & C Development Co., LLC
14211 Yorba Street, Suite 200
Tustin, California 92780
Attn: Todd R. Cottle
(T)(714)288-7600
(F) (866) 570-0728
COPY TO:
COPY TO:
TO CITY:
COPY TO:
Sean Rawson
c/o The Waterford Group, Inc .
PO Box 10175
Newport Beach, CA 92658
(T) (949) 289-3438
(F)
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
Attn: Lynn Hutchins
(T) 510-836-6336
(F) 510-836-1035
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attention: City Manager
(T) 949-493-11 71
(F)
Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T) 949-263-2600
(F) 949-260-0972
8.4 Conflict of Interest. No member, official or employee of the City, having any
conflict of interest, direct or indirect, related to this Agreement, the Property, or the development
or operation of the Project shall participate in any decision relating to this Agreement. The
Parties represent and warrant that they do not have knowledge of any such conflict of interest.
8.5 Warranty Against Payment of Consideration for Agreement. The Developer
warrants that it has not paid or given, and will not pay or give, any third party any money or
other consideration for obtaining this Agreement. Third parties, for the purposes of this Section
8.5, shall not include persons to whom fees are paid for professional services, if rendered by
attorneys, financial consultants, accountants, engineers, architects and the like when such fees
are considered necessary by the Developer.
8.6 Non-liability of City, Officials and Employees. No member, official or
employee of the City shall be personally liable to the Developer, or any successor in interest of
the Developer, in the event of any default or breach by the City under this Agreement or for any
amount that may become due to the Developer or to its successor, or on any obligations under
the terms of this Agreement, except as may arise from the gross negligence or willful acts of
such member, official or employee.
61147,00145 \32162022.3 49
8.7 navoidable Delay; Extension of Time of Performance.
8.7.1 Subject to specific provisions of this Agreement, performance by any
Party under this Agreement shall not be deemed, or considered to be, in default where any such
default is due to an Unavoidable Delay that is not attributable to the fault of the Party claiming
an extension of time to perform. An extension of time for any Unavoidable Delay shall be for
the period of the Unavoidable Delay and shall commence to run from the date of occurrence of
the Unavoidable Delay, if the Party asserting the existence of the Unavoidable Delay provides
the other Parties with written notice of the occurrence of the Unavoidable Delay, within ten (10)
days of the commencement of such asserted Unavoidable Delay. Otherwise, the extension of
time for an Unavoidable Delay shall commence on the date ofreceipt of written notice of the
occurrence of the Unavoidable Delay by the Parties not requesting an extension of time to
perform due to such Unavoidable Delay.
8.7.2 The Parties expressly acknowledge and agree that changes in either
general economic conditions or changes in the economic assumptions of either of them that may
have provided a basis for entering into this Agreement and that occur at any time after the
execution of this Agreement, do not constitute an Unavoidable Delay and do not provide any
Party with grounds for asserting the existence of an Unavoidable Delay in the performance of
any covenant or undertaking arising under this Agreement. Each Party expressly assumes the
risk that changes in general economic conditions or changes in such economic assumptions
relating to the terms and covenants of this Agreement could impose an inconvenience or
hardship on the continued performance of such Party under this Agreement.
8.8 Inspection of Books and Records. The City shall have the right at all reasonable
times, at the City's cost and expense, to inspect the books and records of the Developer
pertaining to the Property and/or the Project. The Developer shall also have the right at all
reasonable times, at the Developer's sole cost and expense, to inspect the books and records of
the City pertaining to the Property and/or the Project, to the extent relevant to the Developer's
obligations under this Agreement. Nothing in this Section 8.8 or elsewhere in this Agreement
shall, however, constitute a waiver or modification of any right or privilege which any Party may
have with respect to any document, statement, or other record, including, without implied
limitation, the attorney-client privilege, the attorney-work product privilege, any privilege
arising under any state or federal evidentiary code or rule, or any privilege or exclusionary right
arising under any state or federal freedom of information or public records disclosure law.
8.9 Real Estate Commissions. The City and the Developer each represent and
warrant to the other that no real estate brokerage commission is payable to any person or entity
in connection with the transactions contemplated hereby on account of or due to the acts or
omissions of such representing party, and each agrees to and does hereby indemnify, defend and
hold the other harmless from and against the payment of any commission to any other person or
entity claiming by, through or under the City or the Developer, as applicable.
8.10 Binding on Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective heirs, executors, administrators, legal
representatives, successors, and assigns.
61147.00145 \32162022.3 50
8.11 Entire Agreement.
8.11.1 This Agreement shall be executed in three (3) duplicate originals, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument. This Agreement includes fifty-three (53) pages (exclusive of signature pages)
and eleven ( 11) exhibits, that constitute the entire understanding and agreement of the Parties
regarding the Property, the Project, and the other subjects addressed in this Agreement.
8.11.2 This Agreement integrates all of the terms and conditions mentioned in
this Agreement or incidental to this Agreement, and supersedes all negotiations or previous
agreements between the Parties with respect to the Property, the Project, and the other subjects
addressed in this Agreement.
8.11.3 None of the terms, covenants, agreements or conditions set forth in this
Agreement shall be deemed to be merged with any deed conveying title to the Property and this
Agreement shall continue in full force and effect before and after such conveyances.
8.11.4 All waivers of the provisions of this Agreement and all amendments to
this Agreement must be in writing and signed by the authorized representative(s) of all Parties.
8.12 Execution of this Agreement. Following execution of three (3) originals of this
Agreement by the authorized representative(s) of the Developer and prompt delivery of such
originals, thereafter, to the City, accompanied by an official action of the governing body of the
Developer authorizing the individuals executing this Agreement on behalf of the Developer to
execute and perform this Agreement, in form and substance acceptable to the City, this
Agreement shall be subject to the review and approval by the City Council, in its sole and
absolute discretion, no later than forty-five (45) calendar days after such date of delivery to the
City. If the City have not approved, executed, and delivered an original of this Agreement to the
Developer within the foregoing time period, then no provision of this Agreement shall be of any
force or effect for any purpose.
8.13 Survival of Indemnity Obligations. All general and specific indemnity and
defense obligations of the Parties set forth in this Agreement shall survive the expiration or
termination of this Agreement, the execution or recordation of the Grant Deed, and/or the
issuance and recordation of any Certificate of Completion.
8.14 Time Declared to be of the Essence. As to the performance of any obligation
hereunder as to which time is a component thereof, the performance of such obligation within the
time provided is of the essence.
8.15 Approvals. Except as otherwise provided in this Agreement, approvals required
of the City or the Developer, or any officers, agents or employees of the City or the Developer,
shall not be unreasonably withheld and approval or disapproval shall be given within the time set
forth in this Agreement or, if no time is given, within a reasonable time.
8.16 Further Assurances. The Parties agree to reasonably consider such additional
actions or the execution of such other documents as may be reasonably necessary or convenient
to the financing , development, and operation of the Project, although nothing in this Section 8.16
61147 .00145\32162022.3 51
shall be deemed a representation, guaranty or commitment by any Party to take any action or
execute any document.
8.17 City Approvals and Actions. The City Manager shall have the authority, on
behalf of the City (to the extent not provided otherwise in this Agreement), to make approvals,
issue interpretations, waive provisions, grant extensions of time, approve amendments to this
Agreement and changes to the attached exhibits prior to their execution and execute documents,
including, without limitation, the Notice of Completion and any documents necessary to
implement any changes in the number or affordability of the Qualifying Units (as defined in the
Regulatory Agreement), as may be required by TCAC, CD LAC, CalHF A or the County, so long
as such actions do not reduce the length of affordability of the Qualifying Units (as defined in the
Regulatory Agreement) or add to the costs incurred or to be incurred by the City as specified
herein. The City Manager reserves the right, in his or her sole and absolute discretion, to submit
any requested modification, interpretation, amendment or waiver to the City Council if the City
Manager determines or believes that such action could increase the risk, liability or costs to City,
or reduce the length of affordability of the Project.
8.18 Investor Limited Partner Provisions. If and when the Developer is in the form
of a limited partnership and admits an investor limited partner into Developer's partnership, the
City agrees to the following provisions for the benefit of the Developer's investor limited
partner:
8.18.1 The City will give the limited partner a copy of any notice (at the limited
partner's address provided in a notice by Developer to the City) that the City gives to the
Developer under this Agreement, the Regulatory Agreement and the other Land Loan and
Project Loan documents, provided that Developer has provided the address and contact
information for the investor limited partner in writing to the City;
8.18.2 The City will give the limited partner thirty (30) days after the limited
partner's receipt of such Notice to cure a non-payment of any sum due under the Land Loan and
Project Loan;
8.18.3 The City will give the limited partner sixty (60) days after the limited
partner's receipt of such notice to cure any other default under this Agreement, the Regulatory
Agreement and other Land Loan and Project Loan documents;
8.18.4 If a non-monetary default is incapable of being cured within sixty (60)
days, the City will give the limited partner an additional ninety (90) days to cure such default
provided the limited partner has commenced to cure such default and is diligently proceeding to
cure such default through the end of such period;
8.18.5 If the limited partner makes any such payment or otherwise cures such
default, the City will accept such action as curing such default as if such payment or cure were
made by the Developer;
8.18.6 The City will permit the limited partner to transfer the limited partner's
interest to any person or entity at any time provided that, if at the time of such transfer the
limited partner has not made one hundred percent ( 100%) of the capital contributions the limited
61147.00145132162022.3 52
partner is required to make to the Partnership, the limited partner shall remain liable to the
Developer for such capital contributions;
8.18.7 The City will permit the limited partner to remove the general partner of
the partnership in accordance with the partnership agreement, provided that the substitute general
partner is reasonably acceptable to the City; and
8.18.8 The City will permit insurance and condemnation proceeds to be used to
rebuild the Project provided that (i) sufficient funds are provided from other sources to
effectively rebuild the Project to a lawful senior affordable housing multi-family complex, and
(ii) subject to the rights of any Senior Lenders, the City shall hold all such proceeds and disburse
them based on the progress of construction, subject to such additional reasonable conditions as
the City may impose.
[Signatures on Following Pages]
61147.00145132162022.3 53
SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Dated: ~J-U 2019
ATTEST:
~*
APPROVED AS TO LEGAL FORM :
BEST & KRIEGER LLP
61141 .0014s1321 62022 .3 S-1
CITY :
THE CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Dated: J 0 \ '( 2 L . 2019
Dated: J J \'( ). L 2019
611410014su2162022.3 S-2
DEVELOPER:
C&C:
C & C DEVELOPMENT CO., LLC, a
California limited liability company
By:
Todd R. Cottle, Trustee of the 2007 Todd R.
Cottle and Jennifer N. Cottle Revocable Trust,
its member
RAWSON:
By:~ ~ onaniildiVidual
EXHIBIT A
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Legal Description of the Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COUNTY OF ORANGE, STA TE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30, 1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITH THE EAST-
WEST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO . 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89 °01 '53" WEST 417.62 FEET TO THE TRUE POINT OF
BEGINNING;
THENCE NORTH 00°56'38" EAST 58.57 FEET;
THENCE NORTH 26 °21 '02" WEST 12.70 FEET;
THENCE NORTH 47 °09 '31" EAST 120.82 FEET;
THENCE NORTH 45 °44'28" EAST 144.28 FEET;
THENCE NORTH 46 °25'09" EAST 74.13 FEET;
THENCE NORTH 37 °40'58" EAST 94.88 FEET;
THENCE NORTH 28°02'57" EAST 111.60 FEET;
THENCE NORTH 33 °02'08" EAST 37.69 FEET;
THENCE NORTH 25 °17'01" EAST 132.27 FEET;
THENCE SOUTH 73 °21 '32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
61147.00145\32162022 .3
EXHIBIT A
A-1
CONTAINING: 3.853 ACRES, MORE OR LESS
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS , RIGHT OF WAY AND
EASEMENTS OF RECORD.
61147.00145\32162022.3
EXHIBIT A
A-2
EXHIBIT B
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Scope of Development
The Groves Apartments
The Groves Apartments, to be located at the northwest comer of Junipero Serra Road and Camino
Capistrano, consist of the development of an approximately 75 unit affordable senior apartment
community with a single, three story, elevator serviced building. It is anticipated that the building
will have Spanish/Mediterranean architectural influences.
The approximately 3.853 acre site is currently comprised of a vacant, City owned parcel. The
proposed unit mix for the community is:
Units
60
15
~
One Bedroom Multifamily
Two Bedroom Multifamily
The unit mix will consist of one and two bedroom units. These units are designed for the needs
of seniors. Each unit will have air conditioning, storage and private open space. Refrigerators and
stoves will be provided in each unit. The project will provide up to 75 parking spaces.
The project will feature open space amenities and onsite laundry facilities. A community room
with kitchen, exercise room , and leasing office are anticipated onsite community spaces. The
project will also feature multiple passive open space areas.
The new development is designed to meet California Title 24 requirements and will utilize
sustainable building methods such as "low-E" windows, grass bio swales, filtera units, water
saving plumbing fixtures, formaldehyde-free insulation, install CRI Green label plus carpet, and
will vent all kitchen range hoods and bathroom fans to the exterior of the building. The property
will be landscaped throughout with trees, shrubs, and grass to provide aesthetic value, shade, and
to aid in the retention of water prior to run off.
61147.00145\32162022.3
EXHIBIT B
B-1
EXHIBIT C
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Schedule of Performance
Schedule Prior to Submitting Applications to CDLAC and TCAC:
Date Action to be
Completed By
See Section 1.3
Effective Date
As soon as
practicable after the
Effective Date
Within 30 days
following
Developer's receipt
of the Preliminary
Report
Within 20 days
following City's
Receipt of
Developer's Title
Notice
60 days after
Effective Date
30 days after
Submittal of
Working Drawings
On or before the
end of the Due
Diligence Period
On the 901h day
following the
Effective Date
61147.00145\32162022.3
Action
Effective Date
Due Dili gence Period commences
City to deliver Preliminary Report to Developer
Developer to deliver Developer's Title Notice to City, if applicable
City to deliver City's Title Notice Response to Developer, if
appropriate
Submit to City 100% Complete Working Drawings
Comments Received from City.
Developer to deliver its Due Diligence Investigation Rejecting
Notice, if appropriate
Due Diligence Period ends
EXHIBIT
C-1
Date Action to be Action
Completed By
30 days after Submit Revised Working Drawings to City.
receipt of City
Comments
15 days after Comments on Revised Working Drawings Received from City.
Submittal of
Revised Working
Drawings
15 days after Submit Re-revised Working Drawings to City.
receipt of City
Comments on
Revised Working
Drawings
15 days after Comments on Re-revised Working Drawings Received from City.
Submittal of Re-Same timeframes to apply to any additional rounds of submittals of
Revised Working and comments on working drawings until plans approved.
Drawings
Schedule for the Applications to the CDLAC and TCAC:
Date
November 2019
CDLAC/TCAC
Submittal Date
January 2020
Next 2020
CDLAC/TCAC
Submittal Date
Applicable
CDLAC/TCAC
Meeting Date
Next 2020
CDLAC/TCAC
Submittal Date
Applicable
CDLAC/TCAC
Meeting Date
61 147.00145\32162022 .3
Task
Submittal to CD LAC for tax-exempt bond allocation and TCAC for
an allocation of 4% Tax Credits.
CDLAC/TCAC Awards Announced. If unsuccessful, Developer to
submit new applications CD LAC for tax-exempt bond allocation and
TCAC for an allocation of 4% Tax Credits in next round.
Submittal to CD LAC for tax-exempt bond allocation and TCAC for
an allocation of 4% Tax Credits.
CDLAC/TCAC Awards Announced. If unsuccessful, Developer to
submit new applications CD LAC for tax-exempt bond allocation and
TCAC for an allocation of 4% Tax Credits in next round.
Submittal to CD LAC for tax-exempt bond allocation and TCAC for
an allocation of 4% Tax Credits.
CDLAC/TCAC Awards Announced. If unsuccessful, Developer,
Developer and City to meet and confer.
EXHIBIT
C-2
I
*Note -CDLAC and TCAC funding deadlines and award dates are based upon currently
available schedules and are subject to change.
chedule for Construction following the receipt of the Tax-Exempt Bond Allocation from
CDLAC and 4% Tax Credit Allocation from TCAC:
Date
Day 1
No later than 45
days prior to Close
of Escrow
No later than 10
days after receipt of
Marketing Plan
Day 175
Day 180 or 195
Day 925
61147.00145\32162022.3
Task
Receipt of CD LAC Tax-Exempt Bond Allocation and TCAC Tax
Credit Allocation
Developer to deliver Marketing Plan
City to deliver to approval or disapproval of Marketing Plan.
Obtain Ready to Issue Permit Letter Pending Payment of Permit Fees.
Close of Escrow and CD LAC Deadline to Issue Tax-Exempt Bonds
as set forth in CDLAC Resolution Allocating Tax-Exempt Bonds to
Project, as may be revised from time to time
Completion of Construction.
EXHIBIT
C-3
EXHIBIT D
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
61147.00145\32162022.3
Form of Grant Deed
[Attached Behind This Page]
EXHIBIT D
D-1
RECORDING REQUESTED BY:
City of San Juan Capistrano
WHEN RECORDED MAIL TO AND MAIL
TAX STATEMENTS TO:
~~~~~----~'LP
14211 Yorba Street, Suite 200
Tustin, California 92780
Attn: Todd R. Cottle
GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(S):
Documentary Transfer Tax is $ _______ .,
PART ONE
SPACE ABOVE FOR RECORDER 'S USE ONLY
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE
CITY OF SAN JUAN CAPISTRANO, a California municipal corporation ("Grantor"), hereby
grants to , a California limited partnership ("Grantee"), that certain real property
located in the City of San Juan Capistrano, County of Orange, State of California, specifically
described in Exhibit "A" attached to this Grant Deed ("Property") and made a part of this Grant
Deed by this reference.
PART TWO
The conveyance of the Property by the Grantor to the Grantee in Part One is subject to the
following community development terms, conditions, covenants and restrictions:
Section 1. Conveyance Subject to Tenn of an Affordable Hou sing Dispo ition and
Development Agreement. The Property is conveyed subject to that certain Affordable Housing
Disposition and Development Agreement (The Groves at Williams Ranch), dated as of July 16,
2019, between the Grantor and the Grantee 's predecessor-in-interest (the "Agreement"). The
provisions of the Agreement are incorporated into this Grant Deed by this reference and are
deemed to be a part of this Grant Deed, as though fully set forth in this Grant Deed.
Section 2. Condition of Property. The Grantee acknowledges and agrees that the
Property is conveyed by the Grantor to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT
TO ALL FAULTS CONDITION," as of the date ofrecordation of this Grant Deed, with no
EXHIBIT D
D-2
61147.00145\32162022.3
warranties, expressed or implied, as to the environmental or other physical condition of the
Property, the presence or absence of any patent or latent environmental or other physical
condition on or in the Property, or any other matters affecting the Property.
Section 3. Obligation to Refrain from Discrimination. The Grantee for itself, its
successors and assigns to all or any part or portion of the Property and/or Project, covenants and
agrees that:
3.1. There shall be no discrimination against or segregation of any person, or
group of persons, on account of sex, marital status, race, color, religion, creed, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property
nor shall the Grantee, itself or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the
Property. With respect to familial status, this Section 3.1 shall not be construed to apply to
housing for older persons, as defined in Section 12955.9 of the Government Code. With respect
to familial status, nothing in this Section 3.1 hall be construed to affect Section 51.2, 51.3, 51.4 ,
51.10, 51.11 and 799 .5 of the Civil Code relating to housing for senior citizens. Subdivisions ( d)
of Section 51 and Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section
12955 of the Government Code shall apply to this Section 3.1.
3.2. The covenant of this Section 3 shall run with the land of the Property in
perpetuity and shall be enforceable against the Grantee and its successors and assigns in
perpetuity.
Section 4. Form of Non-Di crimination and Non-Segregation
for itself, its successors and assigns to all or any part or portion of the Property and/or Project,
covenants and agrees that:
4.1. The Grantee, such successors and such assigns shall refrain from
restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the
Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed,
ancestry or national origin of any person. All deeds, leases or contracts pertaining to the
Property shall contain or be subject to substantially the following non-discrimination or non-
segregation covenants:
(a) In deeds: "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the
grantee or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein
conveyed . The foregoing covenants shall run with the land.
61147.00145\32162022 .3
EXHIBIT D
D-3
Notwithstanding the foregoing paragraph, with respect to familial
status, paragraph 5.2. l.2 shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code . With respect to familial status, nothing in the foregoing
paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51. l 0, 51.11 and 799.5 of the Civil
Code relating to housing for senior citizens. Subdivisions ( d) of Section 51 and Section 1360 of
the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall
apply to foregoing paragraph."
(b) In leases: "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this lease is made
and accepted upon and subject to the following conditions : That there shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed,
religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or
any person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.
Notwithstanding the foregoing paragraph, with respect to familial
status, paragraph 5.2.1.2 shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in the foregoing
paragraph shall be construed to affect Section 51.2, 51.3, 51.4, 51.10, 51.11 and 799 .5 of the Civil
Code relating to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of
the Civil Code and subdivision (n), ( o ), and (p) of Section 12955 of the Government Code shall
apply to foregoing paragraph."
( c) In contracts: "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 premises herein conveyed or leased, nor shall the transferee or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use , or
occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of the premises herein
transferred." The foregoing provision shall be binding upon and shall obligate the contracting
party or parties and any subcontracting party or parties, or other transferees under the instrument.
"Notwithstanding the foregoing paragraph, with respect to familial
status, paragraph 5 .2.1.2 shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code . With respect to familial status, nothing in the foregoing
paragraph shall be construed to affect Section 51.2, 51.3, 51.4 , 51.10, 51.11 and 799.5 of the Civil
Code relating to housing for senior citizens. Subdivisions ( d) of Section 51 and Section 1360 of
the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall
apply to foregoing paragraph."
4 .2. The covenants of this Section 4 shall run with the land of the Property in
perpetuity.
61147.00145\32162022.3
EXHIBIT D
D-4
PART THREE
Section 5 . Grantee ovenant to Undeitake Project. The Grantee covenants, for itself,
its successors and assigns, to and for the exclusive benefit of the City, that the Grantee shall
commence and complete the development of the Project on the Property within the time period
for such actions set forth in the Schedule of Performance. The Grantee covenants and agrees for
itself, its successors, and assigns, that the Property shall be improved and developed with the
Project in substantial conformity with the terms and conditions of this Agreement, the Scope of
Development, the Schedule of Performance, any and all plans, specifications and similar
development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations,
orders and conditions of each Governmental Agency with jurisdiction over the Property or the
Project. The covenants of this Section 5 shall run with the land of the Property until the earlier
of the date ofrecordation of the Certificate of Completion.
Section 6. Covenants Run with the Land of the Property. Each of the covenants and
agreements contained in this Grant Deed touch and concern the Property and each of them is
expressly declared to be a community development covenant that runs with the land for the
benefit of the Grantor and such covenants run with the land in favor of the Grantor for the entire
period that such covenants are in full force and effect, regardless of whether the Grantor is or
remains an owner of any land or interest in land to which such covenants relate. The Grantor, in
the event of any breach of any such covenants, has the right to exercise all of the rights and
remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to
enforce the curing of such breach, as provided in the Agreement or by law. The covenants
contained in this Grant Deed are for the benefit of and are enforceable only by the Grantor, and
shall survive the execution and recordation of this Grant Deed and the issuance and recordation
of each and every Certificate of Completion, for the time period set forth above for each
covenant.
Section 7. o ts and Attorney Fe s for Enforcement Proceeding. Iflegal
proceedings are initiated to enforce the rights, duties or obligations of any of the covenants set
forth in this Grant Deed, then the prevailing party in such proceeding shall be entitled to collect
its reasonable attorney fees and costs from the other party in addition to any other damages or
relief obtained in such proceedings.
Section 8. Effi ct of Unlawful Provision; S verability. In the event that any provision
of this Grant Deed is held to be invalid or unlawful by a final judgment of a court of competent
jurisdiction, such invalidity shall not affect the validity of any other provision of this Grant Deed.
61147.00145\32162022.3
GRANTOR:
THE CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
By:
Ben Siegel, City Manager
[ALL SIGN A TURES MUST BE NOTARY ACKNOWLEDGED]
EXHIBIT D
D-5
CERTIFICATE OF ACCEPTANCE OF
GRANT DEED
The undersigned hereby acknowledges acceptance by a California limited
partnership, the Grantee in the within Grant Deed, of the delivery of the subject Property described
in the within Grant Deed from the City of San Juan Capistrano.
Dated: ________ , 20_
GRANTEE:
______ , a California limited partnership
By: -------,LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation,
its sole member
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC, a
California limited liability company,
its member and manager
By:
Todd R. Cottle, Trustee of the
2007 Todd R. Cottle and
Jennifer N. Cottle Revocable
Trust, its member
[ALL SIGN A TURES MUST BE NOTARY ACKNOWLEDGED]
61147.00145\32162022 .3
EXHIBITD
D-6
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
ST A TE OF CALIFORNIA )
)
)
On , before me, Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
61147.00145\32162022 .3
Name:
Notary Public
EXHIBIT D
D-7
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
)
)
On , before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
61147.00145\32162022.3
Name:
Notary Public
EXHIBIT D
D-8
61147.00145132162022.J
EXHIBIT 1
TO
GRANT DEED
Property Legal Description
EXHIBIT D
0-9
·--
EXHIBIT l
TO
GRANTDEED
(San Juan Capistrano -The Groves at Williams Ranch)
Legal Description of Subject Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO ,
COUNTY OF ORANGE, STATE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30 , 1995, ASINSTRUMENT NO. 95-0376669 OF OFFiCIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281 , PAGE 245 OF DEEDS, WITH THE EAST-
WEST CENTERLINE OF SECTION 36 , T7S, R8W , SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30 , 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89 °01'53" WEST 417 .62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°56'38" EAST 58.57 FEET;
THENCE NORTH 26 °21'02" WEST 12.70 FEET;
THENCE NORTH 47 °09'31" EAST 120.82 FEET;
THENCE NORTH 45°44'28" EAST 144.28 FEET;
THENCE NORTH 46 °25'09" EAST 74.13 FEET;
THENCE NORTH 37 °40'58" EAST 94.88 FEET;
THENCE NORTH 28°02'57" EAST 111.60 FEET;
THENCE NORTH 33 °02'08" EAST 37.69 FEET;
THENCE NORTH 25 °17'01" EAST 132.27 FEET;
THENCE SOUTH 73°21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
CONTAINING: 3 .853 ACRES , MORE OR LESS
1603 \40\2603420.3
61147.00145\32181929.l
D-1
SUBJECT TO: COVENANTS , CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
1603 \40\2603420.3
61147 .00145 \321 8 1929 .I
D-2
EXHIBIT E
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
61147.00145\32162022.3
Form of Notice of Agreement
[Attached Behind This Page]
EXHIBIT E
E-1
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO :
The City of San Juan Capistrano
32400 Pas eo Adelanto.
San Juan Capistrano, California 92675
Attn: City Manager
NOTICE OF AGREEMENT
Exempt from Recording fee
purs uant to Gov't Code§ 27383
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that C & C
DEVELOPMENT CO., LLC a California limited liability company ("C&C"), and SEAN
RAWSON, an individual ("Rawson "), and the City of San Juan Capistrano, a California municipal
corporation (the "City") entered into an agreement entitled Affordable Housing Disposition and
De velopment Agreement (The Groves at Williams Ranch), dated as of July 16, 2019 (the
"Agreement"). As permitted under the Agreement, C&C's and Rawson's rights and interests in
and obligations under the Agreement have been assigned to LP, a California
limited partnership ("Developer"), pursuant to an Assignment and Assumption Agreement among
C&C, Rawson and City dated 20_. A copy of the Agreement is on file with the City
and is available for inspection and copying by interested persons as a public record of the City at
the City's offices located at 32400 Paseo Adelanto ., San Juan Capistrano, California 92675, during
the City's regular business hours.
The Agreement affects the real property described in Ex hibit A attached to this Notice of
Agreement (the "Property"). The meaning of defined terms , indicated by initial capitalization,
used in this Notice of Agreement shall be the same as the meaning ascribed to such terms in the
Agreement.
PLEASE TAKE FURTHER NOTICE that the Agreement contains certain development
covenants running with the land of the Property and other agreements between the Developer and
the City affecting the Property, as set forth below (all section references are to the Agreement):
Section 4. I of the Agreement provides:
4.1 Developer Covenant to Undertake Project. The Developer covenants, for itself,
its successors and assigns, to and for the exclusive benefit of the City, that the Developer shall
commence and complete the development of the Project on the Property within the time period for
such actions set forth in the Schedule of Performance. The Developer covenants and agrees for
itself, its successors, and assigns, that the Property shall be improved and developed with the
Project in substantial conformity with the terms and conditions of this Agreement, the Scope of
6 114 7.001 45\32 162022 .3
EXHIBIT E
E-2
Development, the Schedule of Performance, any and all plans, specifications · and similar
development documents required by this Agreement, except for such changes as may be mutually
agree d upon in wri t in g by a nd a mo ng the Paitie , and all applicable laws , regulations, orders and
condi tions of each Go emme nta l Agency with jurisdiction over the Property or the Project. The
covenants of this Section 4.1 shall run with the land of the Property until the earlier of the date of
recordation of the Certificate of Completion.
Se ction 5.1 of the Agreement provides :
5.1 Obligation to Refrain from Discrimination. The Developer for itself, its
successors and assigns to all or any part or portion of the Property and/or Project, covenants and
agrees that there shall be no discrimination against or segregation of any person, or group of
persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall
the Developer, itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimin ation or se gregation with reference to the selection, location,
number, use or occup an cy of ten a nt , lessees , ub-tenants, sub-lessees or vendees of the Property.
With respect to familial status, this Section 5 .1 shall not be construed to apply to housing for older
persons , as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in this Section 5 .1 shall be construed to affect Section 51.2, 51.3, 51.4 , 51.10, 51. l l and
799.5 of the Civil Code relating to housing for senior citizens. Subdivisions ( d) of Section 51 and
Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to this Section 5 .1. The covenant of this Section 5 .1 shall run with
the land of the Property in perpetuity, shall be enforceable against the Developer and its successors
and assigns , and shall be covenants set forth in the Grant Deed.
61147.00145\32162022.3
EXHIBIT E
E-3
This NOTICE OF AGREEMENT is dated as of , 20_, and has been
executed on behalf of the Developer and the City by and through the signatures of their authorized
representative(s) set forth below . This Notice of Agreement may be executed in counterparts and
when fully executed each counterpart shall be deemed to be one original instrument.
Dated: 2018 --------·
ATTEST:
City Clerk
APPROVED AS TO LEGAL FORM:
BEST & KRIEGER LLP
By:
City Attorney
61147.00145\32162022.3
CITY:
THE CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
By:
City Manager
EXHIBIT E
E-4
,...;.. -
Dated: 2019 --------·
DEVELOPER:
, LP, a California
~~-------~---
limited partnership
By: , LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation,
its sole member
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC, a
California limited liability company,
its member and manager
By:
Todd R. Cottle, Trustee of the
2007 Todd R. Cottle and
Jennifer N. Cottle Revocable
Trust, its member
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
61147.00145\32162022.3
EXHIBIT E
E-5
61147 .00145\32162022 .3
EXHIBIT A
TO
NOTICE OF AGREEMENT
Legal Description of Property
EXHIBIT E
E-6
EXHIBIT A
TO
NOTICE OF AGREEMENT
(San Juan Capistrano -The Groves at Williams Ranch)
Legal Description of Subject Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COUNTY OF ORANGE, STATE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30, 1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITH THE EAST-
WEST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89°01'53" WEST 417.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00 °56'38" EAST 58.57 FEET;
THENCE NORTH 26 °21'02" WEST 12.70 FEET;
THENCE NORTH 47°09'31" EAST 120.82 FEET;
THENCE NORTH 45°44'28" EAST 144.28 FEET;
THENCE NORTH 46 °25'09" EAST 74.13 FEET;
THENCE NORTH 37 °40'58" EAST 94.88 FEET;
THENCE NORTH 28 °02'57" EAST 111.60 FEET;
THENCE NORTH 33 °02'08" EAST 37.69 FEET;
THENCE NORTH 25°17'01" EAST 132.27 FEET;
THENCE SOUTH 73°21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
CONTAINING: 3.853 ACRES, MORE OR LESS
1603\40\2603420.3
61147.00145\32181929.1
E-6
SUBJECT TO: COVENANTS , CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
1603 \40\2603420 .3
61147.00145\32181929.1
E-7
EXHIBIT F
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
Form of Official Action of Developer
The undersigned, do certify that together C & C Development Co., LLC a California
limited liability company ("C&C"), and Sean Rawson ("Rawson"), an individual, will serve as
the Developer of The Groves at Williams Ranch under the Agreement described below. No
consent or approval of any other person is required for the undersigned to make the certifications
set forth in this Certificate.
Each of us, only on behalf of the entity or person identified below, further certify that the
following named person(s):
1. Todd R. Cottle, Trustee of the 2007 Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, as a member of C & C Development Co., LLC
2. Sean Rawson for himself
are, without any additional or further consent of any person, authorized and empowered for and
on behalf of and in the name of the respective entity set forth above to: ( 1) sign and deliver that
certain Affordable Housing Disposition and Development Agreement (The Groves at Williams
Ranch), dated as of July 16, 2019 ("Agreement"), regarding the development of certain real
property located in the City of San Juan Capistrano, California, and performance of other
obligations of the "Developer" as set forth in the Agreement; (2) sign and deliver all other
documents on behalf of the respective entity identified set forth above to be signed or executed in
connection with the transactions contemplated in the Agreement; and (3) take all actions on behalf
of the respective entity identified above that may be considered necessary to conclude the
transactions and complete the development contemplated in the Agreement.
The authority conferred and certified to in this Certificate shall be considered retroactive
and any and all acts authorized in this Certificate that were performed before the execution of this
Certificate are approved and ratified by each entity identified above. The authority conferred and
certified to in this Certificate shall continue in full force and effect until the City Manager of the
City of San Juan Capistrano receives written notice of the revocation of this Certificate.
We further certify that the activities covered by the authorities conferred and certified to in
this Certificate and the foregoing certifications constitute duly authorized activities of each entity
or person identified above; that these authorities and certifications are now in full force and effect;
and that there is no provision in any document under which the entity identified above is organized
and/or that governs such entity's continued existence or limits the power of the undersigned to
confer the authorities or make the certifications set forth in this Certificate, and that the same are
in conformity with the provisions of all such documents.
61 147 .00145\32 162022 .3
EXHIBIT F
F-1
Da ted: ___________ _
61147.00145\32162022.3
DEVELOPER:
C&C:
C & C Development Co., LLC, a
California limited liability company, its member and
manager
By:
By:
Todd R. Cottle, Trustee of the 2007 Todd R.
Cottle and Jennifer N . Cottle Revocable Trust
Barry A. Cottle, Trustee of The
Cottle Family Trust Dated 3/8/1987
RAWSON:
By:
Sean Rawson, an individual
EXHIBIT F
F-2
EXHIBIT G
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
61147.00145\32162022.3
Form of Certificate of Completion
[Attached Behind This Page]
EXHIBITG
G-1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
LP
----------~ 14211 Yorba Street, Suite 200
Tustin , California 92780
Attention: Todd R. Cottle
Exempt from Recording fee
pursuant to Gov 't Code§ 27383
CITY OF SAN JUAN CAPISTRANO
CERTIFICATE OF COMPLETION
(The Groves at Williams Ranch)
I ________ ,City Manager of the City of San Juan Capistrano (the
"City") certify that:
Section l. The Project required to be constructed in accordance with that certain
Affordable Housing Disposition and Development Agreement (The Groves at Williams Ranch),
dated July 16, 2019 (the "Agreement"), among the City, C & C Development Co., LLC a
California limited liability company ("C&C"), and Sean Rawson, an individual ("Rawson"), as
assigned to LP , a California limited partnership, as permitted under the
Agreement, on that certain real property specifically described in the legal description(s)
attached to this Certificate of Completion as Exhibit A (the "Property"), is complete in
accordance with the provisions of the Agreement.
This Certificate of Completion constitutes conclusive evidence of the City's determination
of the Developer's satisfaction of its obligation under the Agreement to construct and install the
Project on the Property, including any and all buildings, parking areas, landscaping areas and
related improvements necessary to support or meet any requirements applicable to the Project and
its use and occupancy on the Project, whether or not such improvements are located on or off the
Property or on other property subject to the Agreement. Notwithstanding any provision of this
Certificate of Completion, the City may enforce any covenant surviving this Certificate of
Completion in accordance with the terms and conditions of the Agreement and the Regulatory
Agreement recorded against the Property by the Developer and the City under the Agreement. The
Agreement is an official record of the City and a copy of the Agreement may be inspected at the
City's office located at 32400 Paseo Adelanto, San Juan Capistrano, California 92675, during the
City's regular business hours.
6I147.00145\32162022.3
EXHIBITG
G-2
DA TED AND ISSUED this __ day of ______ , __ .
61147 .00145 \32162022.3
THE CITY OF SAN JUAN CAPISTRANO
a California municipal corporation
EXHIBIT G
G-3
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STA TE OF CALIFORNIA
COUNTY OF ______ _
)
)
)
On before me, Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person( s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
61 14 7.00 145\32162022.3
Name:
Notary Public
EXHIBITG
G-4
I --}I
61147.00145\32162022.3
EXHIBIT A
TO
CERTIFICATE OF COMPLETION
Legal Description of the Property
EXHIBITG
G-5
EXHIBIT A
TO
CERTIFICATE OF COMPLETION
(San Juan Capistrano -The Groves at Williams Ranch)
Legal Description of Subject Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COUNTY OF ORANGE, ST A TE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30, 1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITfl THE EAST-
WEST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89°01'53" WEST 417.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°56'38" EAST 58.57 FEET;
THENCE NORTH 26°21'02" WEST 12.70 FEET;
THENCE NORTH 47 °09'31" EAST 120.82 FEET;
THENCE NORTH 45°44'28" EAST 144.28 FEET;
THENCE NORTH 46°25'09" EAST 74.13 FEET;
THENCE NORTH 37°40'58" EAST 94.88 FEET;
THENCE NORTH 28°02'57" EAST 111.60 FEET;
THENCE NORTH 33°02'08" EAST 37.69 FEET;
THENCE NORTH 25°17'01" EAST 132.27 FEET;
THENCE SOUTH 73°21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
CONTAINING: 3.853 ACRES, MORE OR LESS
1603 \40\2603 420.3
61147.00145\32181929.1
G-5
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
1603 \40\2603420.3
61147.00145\32181929.1
G-6
EXHIBIT H
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
61147.00145\32162022.3
Form of Regulatory Agreement
[Attached Behind This Page]
EXHIBIT H
H-1
...
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: City Manager
APN: 121-050-21 SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §273 83
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
by and between
THE CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation,
and
_________ LP,
a California limited partnership
[Dated as of ______ , 2020 for reference purposes only]
61147.00145\32162314.2
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
This REGULATORY AGREEMENT (The Groves at Williams Ranch) ("Regulatory
Agreement") is made and entered into as of 2020, by and between THE
CITY OF SAN JUAN CAPISTRANO, a California municipal corporation ("City") and
______ LP , a California limited partnership ("Owner").
RECITALS
A. The City and the Owner's predecessor-in-interest entered into that certain
Affordable Housing Disposition and Development Agreement (The Groves at Williams Ranch)
dated as of July 16, 2019 (the "Affordable Housing Agreement"), which provides that the City
will convey to the Owner that certain property located at the northeast comer of Camino Capistrano
and Junipero Serra Road, San Juan Capistrano (APN 121-050-21 ), more specifically described in
Attachm ent No . I , incorporated herein by this reference (the "Property"), subject to the terms and
conditions of the Affordable Housing Agreement. Under the Affordable Housing Agreement, the
City has agreed to provide financial assistance to the Owner for acquisition of the Property and the
construction thereon by the Owner of a seventy-five (75)-unit multifamily residential development
for seniors (the "Project").
B. The City and the Owner desire that the Project be operated as a multifamily
residential community on the Property with the residential units made available to Qualified
Households at an Affordable Rent as more specifically defined herein. This Regulatory
Agreement establishes terms and conditions which govern the operation of the Property.
C. The terms of the Affordable Housing Agreement require that certain covenants and
affordability restrictions remain in full force and effect on the Project for a term commencing on
the date of recordation of this Regulatory Agreement and continuing for fifty-five (55) years
following the recordation of Certificate of Completion as defined herein.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE
CONS ID ERA TION , THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE OWNER AND THE CITY DO HEREBY COVENANT AND
AGREE FOR THEMSEL YES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS:
1. De fin iti ons of Certain T erm s . AS USED IN THIS REGULATORY AGREEMENT,
THE FOLLOWING WORDS AND TERMS SHALL HAVE THE MEANING AS
PROVIDED IN THE RECITALS OR IN THIS SECTION 1, UNLESS THE SPECIFIC
CONTEXT OF USAGE OF A PARTICULAR WORD OR TERM MAY OTHERWISE
REQUIRE. ALL INITIALLY CAPITALIZED TERMS USED AND NOT OTHERWISE
DEFINED IN THE RECITALS OR IN THIS SECTION SHALL HAVE THE MEANING
ASCRIBED TO SUCH TERM BY THE AFFORDABLE HOUSING AGREEMENT.
1.1 . 30% Ho u e hol d . An individual or household that has a household income equal to
or less than thirty percent (30%) of then current AMI adjusted for household size, as published by
61147.00145 \32162314 . 21
TCAC annually.
1.2. 50% Household. An individual or household that has a household income equal to
or less than fifty percent (50%) of then current AMI adjusted for household size, as published by
TCAC annually.
1.3. 60% Household. An individual or household that has a household income equal to
or less than sixty percent (60%) of then current AMI adjusted for household size, as published by
TCAC annually.
1.4. 70 % Hou sehold. An individual or household that has a household income equal to
or less than seventy percent (70%) of then current AMI adjusted for household size, as published
by TCAC annually.
1.5. Affordable Rent. In reference to each Qualifying Unit, the maximum rent, with
allowance for utilities, for the applicable household income as published by the TCAC annually to
qualify for, receive and be in compliance with the applicable program for the Tax Credits. For
purposes of the calculation of Affordable Rent "adjusted for household size" shall be the federally-
mandated household size assumptions as set forth in federal statutes or regulations for the Tax
Credit program.
1.6. AMI. The Area Median Family Income for the Santa Ana-Anaheim-Irvine, CA
HUD Metro FMR Area, as published annually by HUD.
1. 7. Annual R port. The Certification of Continuing Program Compliance attached to
this Regulatory Agreement as Attachment o . 3 and incorporated by this reference or comparable
report filed annually by the Owner with TCAC or other governmental agencies.
1.8. .Automobile Liability [nsurance. Insurance coverage against claims of personal
injury (including bodily injury and death) and property damage covering all the Owner owned,
leased, hired and non-owned vehicles, with minimum limits for bodily injury and property damage
of One Million Dollars ($1,000,000). Such insurance shall be provided by a business or
commercial vehicle policy and may be provided through a combination of primary and excess or
umbrella policies, all of which shall be subject to pre-approval by the City, which approval shall
not be unreasonably withheld, delayed or conditioned.
1.9. e1tificate of Compl etion. The written certification of the City, in substantially the
form of Exhibit G attached to the Affordable Housing Agreement, certifying that the Project has
been completed in compliance with the terms and conditions of this Regulatory Agreement.
1.10. C ity Partie s . Collectively, the City and its commissions, agents, attorneys, officers,
employees, and authorized representatives.
1.11. HUD. The United States Department of Housing and Urban Development.
1.12. fncome Ce rtification Form. The Certification of Tenant Eligibility attached to this
Regulatory Agreement as Attachment No. 2 and incorporated by this reference, or comparable
income certification form required by TCAC or other governmental agencies.
61 147.00145\32 162314 . 22
1.13. L.iability In suranc e . Commercial general liability insurance against claims for
bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property,
the Project or adjoining streets or passageways, at least as broad as Insurance Services Office
Occurrence Form CGOOO 1, with a minimum liability limit of Two Million Dollars ($2,000,000)
for any one occurrence and which may be provided through a combination of primary and excess
or umbrella insurance policies. If commercial general liability insurance or other form with a
general aggregate limit is used, either the general aggregate limit shall apply separately to the
Project or the general aggregate limit shall be twice the required minimum liability limit for any
one occurrence.
1.14. Management Agent. A person with significant experience in management of
affordable rental housing projects substantially similar to the Project and that is, at the time,
managing other financially self-supporting, successful affordable rental housing projects
substantially similar to the Project.
1.15. Manager Unit. The one (1) Three Bedroom Unit within the Project reserved
exclusively for use by the on-site manager employed by the Owner or the Management Agent, as
applicable.
1.16. One Bedroom Unit. Any one of the one bedroom residential accommodations
within the Project.
1.17. Project. The operation of a multi-family rental housing project which shall include
not less than seventy-five (75) units, thirty-seven (37) of which shall be rented to Qualified
Households at Affordable Rents, and all related on-and off-site improvements, as more
particularly described in the Affordable Housing Agreement.
1.18. Property Insurance. Insurance providing coverage for the Property and all
improvements on or to the Property against loss, damage, or destruction by fire and other hazards
encompassed under the broadest form of property insurance coverage then customarily used for
like properties in the County of Orange, excluding earthquake coverage, in an amount equal to one
hundred percent (100%) of the replacement value (without deduction for depreciation) of all
improvements comprising the Project (excluding excavations and foundations) and in any event
sufficient to avoid co-insurance and with no co-insurance penalty provision, with "ordinance or
law" coverage. To the extent customary for like properties in the County of Orange at the time,
such insurance shall include coverage for explosion of steam and pressure boilers and similar
apparatus located on the Property;. an "increased cost of construction" endorsement; and an
endorsement covering demolition and cost of debris removal, all subject to policy sublimits.
Property Insurance shall also include rental or business interruption insurance in an amount, at
least, equal to the average annual gross income from the Project for the preceding three (3) calendar
years and providing for a 12-month extended period of indemnity.
1.19. Qua I ified Hou eholds. A household that (1) intends to reside in the Qualifying
Unit; (2) is a Senior Household; and (3) whose income does not exceed the maximum income
allowable for the subject Qualifying Unit.
1.20. Qualifying Units. The thirty-seven (37) One Bedroom Units and Two Bedroom
61147.00145\32162314. 23
Units within the Project restricted to occupancy by Qualified Households as set forth in Section 6
(exclusive of the Manager Unit).
1.21. Senior Hou ehold. A household consisting of a person who is 55 years of age or
older and any qualified permanent residents, as described in California Civil Code Section 51.3;
provided that if the TCAC regulations impose a different definition for senior households, then the
definition under the TCAC regulations shall apply
1.22. Tax Credits. An allocation from TCAC of four percent (4%) federal low income
housing tax credits to finance a portion of the costs of the Project, in accordance with Section 42
of the Internal Revenue Code of 1986, as amended, all associated Internal Revenue Service
regulations and all associated TCAC regulations.
1.23. TCAC. The California Tax Credit Allocation Committee or its successor m
function.
1.24. Term. The period of time following the date ofrecorda:tion of this Regulatory
Agreement, and ending on the fifty-fifth (55th) anniversary of recordation of the Certificate of
Completion.
1.25. Tlu-ee B droom Unit. Any one of the three bedroom residential accommodations
within the Project.
1.26. Two Bedroom Unit. Any one of the two bedroom residential accommodations
within the Project.
1.27. Workers Compensation ln urance. Workers compensation insurance complying
with the provisions of California law and an employer's liability insurance policy or endorsement
to a liability insurance policy, with a minimum liability limit of One Million Dollars ($1,000,000)
per accident for bodily injury or disease, covering all employees of the Owner.
2. Re ervation of Property for Affordable Hou ing. The Owner covenants and agrees to
reserve and restrict the Property for construction of the Project and, thereafter, reserve and restrict
use and residential occupancy of the Qualifying Units by households who, at the time of initial
occupancy of a Qualifying Unit and continuously thereafter (subject to the other provisions of this
Regulatory Agreement), until the end of the Term, are members of a Qualifying Household. One
(l) Three Bedroom Unit within the Project may be used as a Manager Unit at any given time
provided that no Qualifying Unit shall be used a~ a Manager Unit.
3. Affordable Multi-Family Residential Rental Property Re trictive Covenant. The Owner
covenants to and for the benefit of the City that the Owner shall develop, own, manage and operate,
or cause the management and operation of, the Project to provide multi-family residential rental
housing in the Qualifying Units only to Qualifying Households at an Affordable Rent. The Owner
hereby confirms and remakes its covenant set forth in Section 4.1 of the Affordable Housing
Agreement to develop the Property with the Project and such covenant is incorporated into this
Regulatory Agreement in its entirety by this reference. The Owner will not knowingly permit any
Qualifying Unit to be used on a transient basis and will not lease or rent any Qualifying Unit for
an initial period of less than twelve (12) months. No Qualifying Unit will, at any time, be leased
61147.00145 \32162314. 24
or rented for use as a hotel, motel,time share, dormitory, fraternity house, sorority house, rooming
house, hospital,nursing home, sanitary or rest home.
4. Continuous Operation Covenant. The Owner covenants to and for the benefit of the City to
cause the Project to be continuously operated, in accordance with the other provisions of this
Regulatory Agreement, throughout the Term.
5. Abandonment. The Owner shall not abandon or surrender the operation of all or any part
of the Project during the Term, except due to material casualty or condemnation.
6. Rental of Qualifying Units. , The Owner covenants that each Qualifying Unit shall be
occupied or available for occupancy by a Qualifying Household at an Affordable Rent on a
continuous basis throughout the Term, in accordance with the following tenant income level mix:* •f .
6.1. Not less than ten (10) of the One Bedroom Units shall be occupied or available for S�
occupancy by Qualifying Households that are 30%Households; and 714(
6.2. Not less than twenty-three (23) of the One Bedroom Units shall be occupied or •(�
available for occupancy by Qualifying Households that are 60%Households;and
6.3. Not less than two (2) of the Two Bedroom Units shall be occupied or available for
occupancy by Qualifying Households that are 50%Households; and
6.4. Not less than two (2) of the Two Bedroom Units shall be occupied or available for
occupancy by Qualifying Households that are 60%Households.
7. Affordable Rent. The monthly rent charged to a Qualifying Household for the occupancy
of a Qualifying Unit shall never exceed an Affordable Rent for such Qualifying'Unit set forth in
Section 1.5. •
7.1. Rent for Qualifying Units may be increased only once per calendar year, based on
changes.in Area Median Income; provided 'that the rent for each Qualifying Unit must never
exceed an Affordable Rent for the Qualifying Unit as necessary to maintain the tenant income mix
specified in Section 6.
7.2. Determination of Qualifying Household income shall be made by the Owner at the
time of initial application by an individual or family for occupancy of a Qualifying Unit. At the
time of initial application, the Owner shall require an applicant to complete the Income
Certification Form and certify the accuracy of the information provided on such form. On or
before March 31 of each calendar year during the Term, the Owner shall require each Qualifying
Household occupying a Qualifying Unit to recertify the Qualifying Household's income on the
Income Certification Form. The Owner shall make a good faith effort to verify the accuracy of
income information provided in any Income Certification Form by an applicant for occupancy of a
Qualifying Unit or by a Qualifying Household occupying a Qualifying Unit, by taking one or more
of the following steps, as reasonably required or indicated: (1) obtain an income tax return and
copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year;
(2) conduct a credit reporting agency or similar search; (3) obtain an income verification form
from the applicant's or the Qualifying Household's current employer(s); (4) obtain an income
61147,00145\32162314.25
verification form from the United States Social Security Administration and/or the California
Department of Social Services, if the applicant or the Qualifying Household receives assistance
from either of such agencies; or ( 5) if the applicant or an adult member of a Qualifying Household
is unemployed and has no such income tax return, obtain another form of independent verification.
For purposes of this Section 7.2, the Owner may conclusively rely upon the evidence of the age of
the occupant( s) of a Qualifying Unit as presented in a valid California Driver's License, other form
of identification issued by the State of California or the United States Government, which includes
a date of birth. All such verification information shall only be obtained by the Owner after
obtaining the applicant's or the Qualifying Household's written consent for the release of such
information to the Owner. Failure to consent in writing to the release of such income verification
information to the Owner may disqualify an applicant for occupancy of a Qualifying Unit or be
grounds for termination of Qualifying Household's occupancy of a Qualifying Unit.
7.3. The Qualifying Units are not specifically assigned to any qualifying income
category (i.e., 30% Household, 50% Household, 60% Household or 70% Household). The
restricted income level of each Qualifying Unit may change as Qualifying Units become vacant, a
Qualifying Household tenant's income changes or other Qualifying Units are occupied by
Qualifying Households. In all circumstances, though, the rent for each Qualifying Unit shall be
an Affordable Rent for the Qualifying Unit as necessary to maintain the restricted income tenant
mix required under Section 6. If, upon any recertification, the income of a previously Qualifying
Household exceeds one hundred forty percent ( 140%) of the qualifying income for a 60%
Household, then the Owner or Management Agent shall notify such household that its lease for its
Qualifying Unit will not be renewed upon the expiration of its lease, unless the household again
becomes a Qualifying Household upon recertification prior to the expiration of its lease. In any
event, if the income category of a Qualifying Household upon recertification is different from the
previous income of the Qualifying Household (i.e. a 30% Household becomes a 50% Household,
a 60% Household or a 70% Household; a 50% Household becomes a 30% Household, a 60%
Household or a 70% Household; a 60% Household becomes a 30% Household, a 50% Household
or a 70% Household; or 70% Household becomes a 30% Household, a 50% Household or a 60%
Household; or any similar change in the income of a Qualifying Household tenant of the Project),
the Owner or Management Agent shall rent the next available Unit to a Qualifying Household with
an income level that will maintain the tenant income level mix set forth in Section 6. To the extent
the federal low-income housing tax credit requirements conflict with the requirements in this
Section 7 .3 relative to the continued occupancy by households that do not qualify as Qualifying
Households, the federal low-income housing tax credit requirements shall apply in place of the
provisions in this Section 7 .3.
7.4. The Owner shall maintain on file all Income Certification Forms completed by
applicants for occupancy of Qualifying Units and by Qualifying Households that occupied or are
occupying Qualifying Units in accordance with Section 6 and shall provide copies of the rent roll
and Income Certification Forms to the City for its review and approval within fifteen (15) days
following Notice to the Owner.
7.5. The Owner and each Qualifying Household occupying a Qualifying Unit shall
permit the City to conduct inspections of the Property, the Project and each Qualifying Unit, from
time-to-time, for purposes of verifying compliance with this Regulatory Agreement, upon fifteen
( 15) days prior written notice to the Owner.
61147.00 145\32 162314 . 26
7.6. The Owner shall submit its first Annual Report to the City on the April 30th
immediately following the issuance of the final Certificate of Occupancy for the Project by the
City. Thereafter, on each April 30 during the Term, the Owner shall submit an Annual Report to
the City. The City shall maintain the confidentiality of the information contained in any Annual
Report specifically relating to any particular Qualifying Household occupying a Qualifying Unit,
to the extent reasonably allowed by Law, as determined by the City's general or special counsel.
8. The Owner ovenant Regarding Lea e of Qualifying Unit . The Owner, for itself, its
successors and assigns, covenants and agrees that, if any Qualifying Unit is rented or leased during
the Term, the rental or lease of the Qualifying Unit shall be accomplished through a written lease
agreement and all of the following restrictions shall apply:
8.1. A Qualifying Household shall be the record tenant and only occupant of the
Qualifying Unit.
8.2. The lease for each Qualifying Unit shall be for an initial term of not less than twelve
( 12) months.
8.3. Each lease for a Qualifying Unit shall contain all of the following provisions:
8.3.1. An agreement authorizing the Owner to immediately terminate the tenancy
of a Qualifying Household occupying a Qualifying Unit, where one or more members of that
Qualifying Household misrepresented any fact material to the qualification of such household as
a Qualifying Household;
8.3.2. An agreement providing that each Qualifying Household occupying a
Qualifying Unit shall be subject to annual certification or recertification of income as a condition
to continued occupancy of the Qualifying Unit;
8.3.3. An agreement providing that each Qualifying Household occupying a
Qualifying Unit may be subject to rental increases in accordance with this Regulatory Agreement;
and
8.3.4. An agreement providing that the Owner will not discriminate on the basis
of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation,
marital status, national origin, ancestry, familial status (except as may legally be permitted for
Senior Households), source of income, disability, genetic information or receipt of public
assistance or housing assistance in connection with rental of a Qualifying Unit, or in connection
with the employment or application for employment of persons for operation and management of
the Project, and all contracts, applications and leases entered into for such purposes shall contain
similar non-discrimination clauses to such effect.
8.4. The Owner shall not terminate the tenancy or refuse to renew the lease or rental
agreement of a Qualifying Household except for: (i) serious or repeated violations of the terms and
conditions of the lease; (ii) because the previously Qualifying Household is no longer a Qualifying
Household; (iii) for violation of applicable Federal, State, or local law; or (iv) for other good cause.
The Owner shall follow all applicable laws in connection with termination of the tenancy of a
Qualifying Household or a refusal to renew the lease or rental agreement of a Qualifying
6 11 47.00145\321623 14. 27
Household.
8.5. Tenant e lection Policie and Criteria. The Owner shall adopt written tenant
selection policies and criteria that:
8.5.1. are consistent with the purpose of providing affordable rental housing for
Qualifying Households at an Affordable Rent;
8.5.2. are reasonably related to tenant eligibility and ability to perform the
obligations of the lease for a Qualifying Unit;
8.5.3. subject to applicable fair housing laws, give reasonable preference and
consideration to the housing needs of households residing in the City of San Juan Capistrano that
are involuntarily displaced by natural disaster, or by activities of the City, including but not limited
to priority placement on a written waiting list of available units;
8.5.4. subject to applicable fair housing laws, give reasonable preference and
consideration to the housing needs of households residing in, employed in, or offered employment
in the City of San Juan Capistrano, including but not limited to priority placement on a written
waiting list of available units;
8.5.5. provide for the selection of tenants from a written waiting list in the
chronological order of their application subject to Sections 8.5.3 and 8.5.4, insofar as is practicable;
8.5.6. give prompt written notice to any rejected applicant of the grounds for
rejection;
8.5.7. provide for all of the Qualifying Units to be available for occupancy on a
continuous basis to Qualifying Households at an Affordable Rent; and
8.5.8. do not give preference to any particular class or group of persons in leasing
or renting the Qualifying Units, except as provided in Sections 8.5.3 and 8.5.4 and to the extent
that a tenant must be a Qualifying Household.
9. Non-Di c1imination. All units in the Project shall be available at an Affordable Rent for
occupancy on a continuous basis to Qualified Households. Except as provided in Sections 8.5.3
and 8.5.4 and except as legally permitted for Senior Households, the Owner shall not give
preference to any particular class or group of persons in renting the units in the Project. There
shall be no discrimination against or segregation of any person or group of persons, on account of
race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation,
marital status, national origin, ancestry, familial status, source of income, disability, or genetic
information in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any
Unit. Neither the Owner nor any person claiming under or through the Owner, shall 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 of any Unit or in connection with the employment of persons for the operation and
management of any Unit, the Project or the Property. All deeds, leases or contracts made or entered
into by the Owner as to the units, the Project or the Property or any portion thereof, shall contain
61147.00145\32162314_ 28
covenants prohibiting discrimination, as prescribed by this Regulatory Agreement. The Owner
shall include a statement in all advertisements, notices and signs for the availability of units in the
Project for rent to the effect that the Owner is an Equal Housing Opportunity Provider.
10. Equal Hou ing Notice. Provide for a statement in all advertisements , notices and signs for
the availability of Qualifying Units for lease or rent to the effect that the Owner is an equal housing
opportunity provider, and include an equal housing opportunity logotype in all notices, signs and
advertisements in print media for the Qualifying Units.
11. D velopment and Management of the Proj ct.
11.1. Management of Project. The Owner shall be responsible for management of the
Project including, without limitation, the selection of Qualified Households, certification and
recertification of household size, income, gender and the age of the head of household and relation
of head of household to the household, of all Qualified Households, evictions, collection of rents
and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The City shall have bear no responsibility for the management or operation
of the Project or the Property. The Project shall at all times be managed by a Management Agent
reasonably acceptable to the City, with demonstrated ability to operate residential rental facilities
similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the
purposes hereof, if the Owner directly performs the functions of the Management Agent by its
employees or by means of a service contract with an entity which is a partner or an affiliate of a
partner in the Owner, such Management Agent shall be deemed approved by the City. If the
Management Agent is an entity or person other than the Owner, its employees, a partner in the
Owner or an entity owned or controlled by the Owner or which owns and/or controls the Owner,
the Owner shall submit for the City's approval the identity of any proposed Management Agent,
together with additional information relevant to the background, experience and financial
condition of any proposed Management Agent, as reasonably requested by the City. If the
proposed Management Agent meets the standard for a qualified Management Agent set forth
above, the City shall approve the proposed Management Agent by notifying the Owner in writing
within thirty (30) days following the Owner's written request for such approval. Unless the
proposed Management Agent is disapproved by the City within thirty (30) days, which disapproval
shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. The
City hereby approves Advanced Property Services, LLC, as the initial property manager.
11.1.1. If the Owner directly performs the functions of the Management Agent by
its employees or by means of a service contract with an entity which is a partner or an affiliate of
a partner in the Owner and the City determines the Owner has not met its management
responsibilities, the City shall have the right to enter the Project, to review relevant documentation
to determine if the Owner is acting in a reasonable manner and to require the Owner to hire a third
party management company acceptable to the City.
11.2. Insurance.
11.2.1. Required in urance. The Owner shall maintain, to protect the City Parties
against all insurable claims resulting from the actions of the Owner in connection with this
Regulatory Agreement, the Property and the Project, at the sole cost and expense of the Owner
61147 .00145 \32162314 . 29
during the Term hereof the following insurance (or its then reasonably available equivalent): (a)
Liability Insurance; (b) Automobile Liability Insurance to the extent required by this Regulatory
Agreement; ( c) Property Insurance; and ( d) Workers Compensation Insurance. The Owner shall
require all subcontractors to maintain the same insurance required of the Owner set forth in this
Section 11.2 prior to performing any work on the Property or the Project.
11.2 .2. Policy Requirement and Endorsement . All insurance policies required by
this Regulatory Agreement shall contain (by endorsement or otherwise) the following provisions:
Insured. The Owner's Liability Insurance and Automobile Liability
Insurance policies shall name the City Parties as "additional insured." The Owner's Property
Insurance policy shall name the City as a "loss payee." The coverage afforded to the City Parties
shall be at least as broad as that afforded to the Owner regarding the Property and the Project and
may not contain any terms, conditions, exclusions, or limitations applicable to the City Parties
that do not apply to the Owner.
Primary Coverage. Any insurance or self-insurance maintained by the
City Parties shall be in excess of all insurance required under this Regulatory Agreement and
shall not contribute to any insurance required under this Regulatory Agreement.
Contractual Liability. The Owner's Liability Insurance policy shall
contain contractual liability coverage for the Owner's indemnity obligations under this
Regulatory Agreement. The Owner's obtaining or failure to obtain such contractual liability
coverage shall not relieve the Owner from nor satisfy any indemnity obligation of the Owner
under this Regulatory Agreement.
Deliveries to the City. The Owner shall deliver to the City evidence of all
insurance policies required by this Regulatory Agreement. No later than three (3) days before
any insurance required by this Regulatory Agreement expires, is cancelled or its liability limits
are reduced or exhausted, the Owner shall deliver to the City evidence of the Owner's
maintenance of all insurance this Regulatory Agreement requires. Each insurance policy
required by this Regulatory Agreement shall be endorsed to state that coverage shall not be
cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar
days' advance written notice of such action has been given to the City by certified mail, return
receipt requested; provided that if a thirty (30) days' notice of cancellation endorsement is not
available the Owner shall notify the City of this unavailability in writing and shall forward any
notice of cancellation to the City within two (2) business days from date of receipt by the Owner;
and further provided, however, that only ten (10) days' advance written notice shall be required
for any such action arising from non-payment of the premium for the insurance. Phrases such as
"endeavor to" and "but failure to mail such Notice shall impose no obligation or liability of any
kind upon the company" shall not be included, to the extent commercially available, in the
cancellation wording of any certificates or policies of insurance applicable to the City Parties
pursuant to this Regulatory Agreement.
Waiver of Certain Claims. The Owner shall cause each insurance carrier
providing insurance coverage under this Regulatory Agreement to endorse their applicable
policy(ies) with a Waiver of Subrogation with respect to the City Parties, if not already in the
61147.00145\32 162314. 210
policy. To the extent that the Owner obtains insurance with a Waiver of Subrogation, the parties
release each other, and their respective authorized representatives, from any claims for damage
to any person or property to the extent such claims are paid by such insurance policies obtained
pursuant to and in satisfaction of the provisions of this Regulatory Agreement.
No Claims Made Coverage. None of the insurance coverage required
under this Regulatory Agreement may be written on a claims-made basis.
11.2.3. Fully Paid and on-A ·sessable. All insurance obtained and maintained by
the Owner pursuant to this Section 11.2 shall be fully paid for and non-assessable. However~ such
insurance policies may be subject to insurer audits.
11.2.4. ity Option to Obtain Coverage. During the continuance of an Event of
Default arising from the failure of the Owner to carry any insurance required by this Regulatory
Agreement, the City may, at its option, purchase any such required insurance coverage and the
City shall be entitled to immediate payment from the Owner of any premiums and associated
reasonable costs paid by the City for such insurance coverage. Any amount becoming due and
payable to the City under this Section 11.2.4 that is not paid within fifteen (15) calendar days after
written demand from the City for payment of such amount, within an explanation of the amounts
demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per
annum or the maximum interest rate allowed by applicable law, whichever is less. Any election
by the City to purchase or not to purchase insurance otherwise required by the terms of this
Regulatory Agreement to be carried by the Owner shall not relieve the Owner of its obligation to
obtain and maintain any insurance coverage required by this Regulatory Agreement.
11.2.5. Separation of In ured. The Owner's Liability Insurance and Automobile
Liability Insurance policies shall provide for separation of insured for the Owner and the City
Parties. Insurance policies obtained in satisfaction of or in accordance with the requirements of
this Regulatory Agreement may provide a cross-suits exclusion for suits between named insureds,
but shall not exclude suits between named insureds and additional insureds.
11.2.6. Deductible and Self-[n ured Retentions. Any deductibles or self-insured
retentions under insurance policies required by this Regulatory Agreement shall be declared to and
approved by the City. The Owner shall pay all such deductibles or self-insured retentions
regarding the City Parties or, alternatively, the insurer under each insurance policy required by this
Section 11.2 shall eliminate such deductibles or self-insured retentions with respect to the City
Parties.
11.2. 7. No Separate In urance. The Owner shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that required under this
Regulatory Agreement, unless the City is made an additional insured thereon, as required by this
Regulatory Agreement.
11.2.8. In surance Independent of Indemnification. The insurance requirements of
this Regulatory Agreement are independent of the Owner indemnification and other obligations
under this Regulatory Agreement and shall not be construed or interpreted in any way to satisfy,
restrict, limit, or modify the Owner's indemnification or other obligations or to limit the Owner's
61 147.00145\32162 314. 211
liability under this Regulatory Agreement, whether within, outside, or in excess of such coverage,
and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the
provision of such insurance preclude the City from taking such other actions as are available to it
under any other provision of this Regulatory Agreement or otherwise at law or in equity.
11.2.9. Nature of Lnsurance . The policies of insurance required by this Regulatory
Agreement shall be issued by carriers that: (a) are listed in then current "Best's Key Rating
Guide-Property/Casualty-United States & Canada" publication (or its equivalent, if such
publication ceases to be published) with a minimum financial strength rating of "A-" and a
minimum financial size category of "XI" (exception may be made for the California Compensation
Insurance Fund when not specifically rated); and (b) are authorized to do business in California.
The Owner may provide any insurance under a "blanket" or "umbrella" insurance policy, provided
that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance
allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s)
required by this Regulatory Agreement; and (ii) such policy otherwise complies with this
Regulatory Agreement.
12. Maintenance of the Project. The Owner, for itself, its successors and assigns, hereby
covenants and agrees that the exterior areas of the Project which are subject to public view (e.g.:
all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good
repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event
that at any time during the Term, there is an occurrence of an adverse condition on any area of the
Project which is subject to public view in contravention of the general maintenance standard
described above ("Maintenance Deficiency"), then the City shall notify the Owner in writing of
the Maintenance Deficiency and give the Owner thirty (30) calendar days from the date of such
notice to cure the Maintenance Deficiency as identified in the notice. "Maintenance Deficiency"
includes, without limitation, the following inadequate or non-conforming property maintenance
conditions and/or breaches of residential property use restrictions: (i) failure to properly maintain
the windows, structural elements, and painted exterior surface areas of the units in a clean and
presentable manner; (ii) failure to keep the common areas of the Project free of accumulated debris,
appliances, inoperable motor vehicles or motor vehicle parts, or free of storage oflumber, building
materials or equipment not regularly in use on the Property; (iii) failure to regularly maintain,
replace and renew the landscaping in a reasonable condition free of weed and debris; and (iv) the
use of garage areas on the Project for purposes other than the parking of motor vehicles and the
storage of personal possessions and mechanical equipment of persons residing in the Project.
12.1. In the event the Owner fails to cure or commence to cure the Maintenance
Deficiency within the time allowed, the City may thereafter conduct a public hearing following
transmittal of written notice thereof to the Owner ten (10) calendar days prior to the scheduled date
of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the
Owner has failed to comply with the provision of this Section 12. If, upon the conclusion of a
public hearing, the City makes a finding that a Maintenance Deficiency exists and that there
appears to be non-compliance with the general maintenance standard, as described above, then the
City shall have the right to enter the Project (exterior areas of the Project which are subject to
public view only) and perform all acts necessary to cure the Maintenance Deficiency, or to take
other action at law or equity that the City may then have to accomplish the abatement of the
Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance
61147.00145 \32162314. 212
Deficiency as authorized by this Section 12.1 shall become a lien on the Project. If the amount of
the lien is not paid within thirty (30) calendar days after written demand for payment by the City
to the Owner, the City shall have the right to enforce the lien in the manner as provided in Section
12.3.
12.2. Graffiti which is visible from any public right-of-way which is adjacent or
contiguous to the Project shall be removed by the Owner from any exterior surface of a structure
or improvement on the Project by either painting over the evidence of such vandalism with a paint
which has been color-matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on
the Project (exterior areas only) and such graffiti is visible from an adjacent or contiguous public
right-of-way and thereafter such graffiti is not removed within seventy-two (72) hours following
the time of its application, or the Owner's actual knowledge of its existence, whichever occurs
later; then in such event and without notice to the Owner, the City shall have the right to enter the
Project and remove the graffiti. Notwithstanding any provision of the Regulatory Agreement to
the contrary, any sum expended by the City for the removal of graffiti from the Project as
authorized by this Section 12.2 shall become a lien on the Project. If the amount of the lien is not
paid within thirty (30) calendar days after written demand for payment by the City to the Owner,
the City shall have the right to enforce its lien in the manner as provided in Section 12.3.
12.3. The parties hereto further mutually understand and agree that the rights conferred
upon the City under this Section 12 expressly include the power to establish and enforce a lien or
other encumbrance against the Property in the manner provided under California Civil Code
Sections 2924, 2924b and 2924c, as such sections may be amended or superseded, in the amount
as reasonably necessary to restore the Project to the maintenance standards required under this
Section 12, including attorneys fees and costs of the City associated with the abatement of the
Maintenance Deficiency or removal of graffiti and the collection of the costs of the City in
connection with such action. In any legal proceeding for enforcing such a lien against the Project,
the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. The provisions
of this Section 12 shall be a covenant running with the land for the Term and shall be enforceable
by the City in its discretion, cumulative with any other rights or powers granted to the City under
applicable law. Nothing in the foregoing provisions of this Section 12 shall be deemed to preclude
the Owner from making any alterations, additions, or other changes to any structure or
improvement or landscaping on the Project, provided that such changes comply with the zoning
and development regulations of the City and other applicable law.
12.4. Capital Replacement R erve Account. The Owner shall establish an account for
the payment of repair and replacement of capital items ("Capital Replacement Reserve
Account") in an initial amount as required by the Institutional Lenders for the Project or the
investor limited partner of the Owner. Each year thereafter, the Owner shall deposit into the Capital
Reserve Replacement Account additional amounts as required by the Institutional Lenders for the
Project or the investor limited partner of the Owner, but not less than Two Hundred Fifty Dollars
($250) per Unit per year.
12.4.1. Capital Repair and Replace ment s. Capital repairs and replacements shall
include, but not be limited to, the following: wet and dry utilities; roof repair and replacement as
necessary; repair and replacement of boilers and the major operating components thereof; stucco
61147.00145\32162314. 213
repair and replacement; exterior painting; replacement of carpeting and vinyl or other hard surface
flooring; replacement of drapes; replacement of dishwashers, garbage disposals and other interior
appliances; repair and replacement of heating, ventilating and air conditioning systems, equipment
and components; and installation of solar panels. All of the foregoing and other similar
expenditures on the Project shall be considered to be qualifying capital repair and replacement
expenses. Interior painting and servicing, repair or replacement of interior hardware shall not be
considered to be a capital repair, but shall be ordinary operating expenses for the Project. The
Owner shall withdraw funds from the Capital Replacement Reserve Account to pay such capital
repair and replacement expenses as the Owner may deem necessary for the purposes of meeting
the maintenance and replacement obligations described herein.
12.4.2. Insured Depository. The Capital Replacement Reserve Account shall be
maintained in a depository insured by an agency of the federal government.
12.4.3. Documentation. Annually, or more frequently at the City's, the Owner shall
document the level of capital repairs and replacements for the preceding period. The Owner shall
maintain and shall provide as requested documentation showing the quantity and price of items
purchased, price of materials and the cost of contracted labor or other services incurred in
connection with such capital repair and replacement, and such other items as the City may
reasonably request.
12.4.4. Withdrawals from Reserve Account. On an annual basis, the Owner shall
notify the City of the anticipated cash requirements which will need to be withdrawn from the
Capital Replacement Reserve Account. Amounts so budgeted and approved by the City may be
withdrawn by the Owner from the indicated Capital Replacement Reserve Account without further
the City approval. Other withdrawals for unbudgeted, unanticipated or emergency Project
expenditures may be withdrawn by the Owner without prior the City approval, but the Owner shall
notify the City in writing within ten (10) calendar days .after withdrawal. All amounts so
withdrawn by the Owner shall be expended on the Project and in accordance with this Regulatory
Agreement. Withdrawals in excess of Twenty-Five Thousand Dollars ($25,000) in any one
calendar year shall be pre-approved by the City in its reasonable discretion, subject to the rights of
any Senior Lenders or the investor limited partner of the Owner.
12.4.5. Interest Earned on Funds in the Capital Replacement Reserve Account.
Any interest or other earnings from sums deposited into the Capital Replacement Reserve Account
shall be retained in and added to the balance in said account.
12.4.6. apital Need As essment. If requested in writing by the City, the Owner
shall deliver to the City, for the City's reasonable review and approval, a capital needs assessment
("CN A") no more often than every ten (10) years after the date of the Certificate of Completion
for the Project. The CNA shall include an analysis of the Owner's actual expenditures for capital
needs compared to the most recently approved CNA, the Owner's original operating budget and
its then-current operating budget. Each CNA shall include a ten (10) year capital needs assessment
or analysis of replacement reserve requirements prepared by a qualified third party in accordance
with reasonable and customary standards for similar residential rental projects.
12.4.7. Di placement of Re idents and Relocation. The Owner shall make best
61147.00145\32162314. 214
efforts to conduct capital repairs and replacements and ordinary repair and maintenance
(collectively, "Repairs") in good faith and in a manner that does not result in the displacement of
any of the residents of the Units. If any of the Owner's actions to conduct Repairs result in
displacement of any of the Units' residents, the Owner shall notify the City in writing, prior to
conducting such Repairs, of the identities of the residents to be displaced, the Units they will be
displaced from, and the estimated length of time such residents shall be displaced. If the
displacement of the residents triggers relocation obligations, the Owner shall be responsible, at its
sole cost and expense, for any and all such relocation obligations and related expenses. The Owner
shall comply with all applicable federal, state and local laws, mles and regulations regarding such
relocation obligations and related expenses, including any relocation requirements set forth by the
City. The Owner shall defend, indemnify and hold harmless the City Parties from and against all
liability for any relocation obligations and related expenses attributable to any Repairs.
13. Covenants to Run With the Land. The Owner and the City hereby declare their specific
intent that the covenants, reservations and restrictions set forth herein are part of a plan for the
promotion and preservation of affordable housing within the territorial jurisdiction(s) of the City
and that each shall be deemed covenants mnning with the land and shall pass to and be binding
upon the Property and each successor-in-interest of the Owner in the Property for the Term. The
Owner hereby expressly assumes the duty and obligation to perform each of the covenants and to
honor each of the reservations and restrictions set forth in this Regulatory Agreement. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Property or
any interest therein shall conclusively be held to have been executed, delivered and accepted
subject to such covenants, reservations, and restrictions, regardless of whether such covenants,
reservations and restrictions are set forth in such contract, deed or other instrument.
14. Burden and Benefit. The City and the Owner hereby declare their understanding and intent
that the burden of the covenants set forth herein touch and concern the land in that the Owner's
legal interest in the Property is affected by the affordable dwelling use and occupancy covenants
hereunder. The City and the Owner hereby further declare their understanding and intent that the
benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment
and use of the Property by the intended beneficiaries of such covenants, reservations and
restrictions, and by furthering the affordable housing goals and objectives of the City and in order
to make the Property available for acquisition by the Owner.
15. Defaults.
15 .1. Events of Default. The occurrence of any of the following is a default and shall
constitute a material breach of this Regulatory Agreement and, if not corrected, cured or remedied
in the time period set forth in Section 15 .2, shall constitute an "Event of Default" hereunder:
15 .1.1. failure of the Owner or any person under its direction or control to comply
with or perform when due any material term, obligation, co~enant or condition contained in this
Regulatory Agreement;
15.1.2. any warranty, representation or statement made or furnished to the City by
the Owner under this Regulatory Agreement that is false or misleading in any material respect
either now or at the time made or furnished;
6 1147.00145\32 162314. 2 1 5
15 .1.3. the dissolution or termination of the existence of the Owner as. an ongoing
business, insolvency, appointment of a receiver for any part of the Property of the Owner , any
assignment for the benefit of creditors, any type of creditor workout or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against the Owner; or
15 .1.4 . an Event of Default pursuant to the Affordable Housing Agreement.
15.2 . otice of D efa ult. The City shall give written notice of default to the Owner, in
accordance with Section 22, stating that such notice is a "Notice of Default", specifying the default
complained of by the City and requiring the default to be remedied within thirty (30) calendar days
of the date of the Notice of Default. Except as required to protect against further material damage,
the City may not institute legal proceedings against the Owner until thirty (30) calendar days after
providing the Notice of Default. Failure or delay in giving a Notice of Default shall not constitute
a waiver of any default , nor shall it change the time of occurrence of the default. If the default
specified in the Notice of Default is such that it is not reasonably capable of being cured within
thirty (30) calendar days, and if the Owner initiates corrective action within said thirty (30)
calendar day period and diligently works to effect a cure as soon as possible, then the Owner may
have such additional time as authorized in writing by the City as reasonably necessary to complete
the cure of the default prior to exercise of any other remedy for the occurrence of an Event of
Default. Such authorization for additional time to cure shall not be unreasonably withheld,
conditioned or delayed. The City shall give the investor limited partner in the Owner the following
notice and cure rights:
15.2.1. The City will give the limited partner a copy of any Notice (at the limited
partner's address provided in a notice by the Owner to the City) that the City gives to the Owner
under this Regulatory Agreement, provided that Owner has provided the address and contact
information for the investor limited partner in writing to , the City;
15.2.2. The City will give the limited partner thirty (30) days after the limited
partner's receipt of such Notice to cure a non-payment of any sum due under this Regulatory
Agreement;
15.2.3. The City will give the limited partner sixty (60) days after the limited
partner's receipt of such Notice to cure any other default under this Regulatory Agreement;
15 .2.4. If a non-monetary default is incapable of being cured within sixty ( 60) days ,
the City will give the limited partner an additional ninety (90) days to cure such default provided
the limited partner has commenced to cure such default and is diligently proceeding to cure such
default through the end of such period; and
15 .2 .5. If the limited partner makes any such payment or otherwise cures such
default, the City will accept such action as curing such default as if such payment or cure were
made by the Owner.
If the Owner fails to take corrective action relating to a default within thirty (30) calendar days
following the date of Notice of Default (or to complete the cure within the additional as may be
authorized by the City or set forth above for the limited partner of the Owner), an Event of
Default shall be deemed to have occurred .
61147.00145 132162314. 216
15.3. Inaction Not a Waiver of Default. Any failure or delays by the City in asserting
any of its rights and remedies as to any default shall not operate as a waiver of any default or of
any such rights or remedies. Delays by the City in asserting any of its rights and remedies shall
not deprive the City 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.
16. Remedies. Upon the occurrence of an Event of Default, the City shall, in addition to the
remedial provisions of Section 12 as related to a Maintenance Deficiency at the Property, be
entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i)
by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to
perform its obligations and covenants hereunder, or enjoin any acts or things which may be
unlawful or in violation of the rights of the City; or (ii) by other action at law or in equity as
necessary or convenient to enforce the obligations, covenants and Agreements of the Owner to the
City.
16.1. Rights and Remedies are umulati e. The rights and remedies of the City as set
forth in this Section 16 are cumulative and the exercise by the City of one or more of such 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 Owner.
16.2. Enforcement by Third Parties. No third party shall have any right or power to
enforce any provision of this Regulatory Agreement on behalf of the City or to compel the City to
enforce any provision of this Regulatory Agreement against the Owner or the Project.
17. Go erning Law. This Regulatory Agreement shall be governed by the laws of the State of
California and applicable federal laws, without regard to its conflicts of laws principles.
18. Amendment. This Regulatory Agreement may be amended after its recordation only by a
written instrument executed by the Owner and the City.
19. Attorney ' Fee . In the event that a party to this Regulatory Agreement brings an action to
enforce any condition or covenant, representation or warranty in this Regulatory Agreement or
otherwise arising out of this Regulatory Agreement, the prevailing party(ies) in such action shall
be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court in
which a judgment is entered, as .well as the costs of such suit. for the purposes of this Section 19,
the words "reasonable attorneys' fees," in the case of the City, shall include the salaries, costs and
overhead of the City Attorney as well as any other legal counsel hired by the City in such action,
as allocated on an hourly basis.
20. Severability. If any provision of this Regulatory Agreement shall be declared invalid,
inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction
such invalidity or unenforceability of such provision shall not affect the remaining parts of this
Regulatory Agreement which are hereby declared by the parties to be severable from any other
part which is found by a court to be invalid or unenforceable.
21. Time is of the E sence. For each provision of this Regulatory Agreement which states a
specific amount of time within which the requirements thereof are to be satisfied, time shall be
deemed to be of the essence.
61147.00145\32162314. 217
22. Notice , D emand · a nd ommunjcation B twee n til e Pa11i e . Any and all notices
submitted by any party to another party pursuant to or as required by this Regulatory Agreement
shall be dispatched by messenger for immediate personal delivery, or by registered or certified
United States mail, postage prepaid, return receipt requested, to the address of the party, as set
forth in this Section. Such notice may be sent in the same manner to such other addresses as any
[arty may from time to time designate by notice. Any notice shall be deemed to be received by
the addressee, regardless of whether or when any return receipt is received by the sender or the
date set forth on such return receipt, on the day that it is dispatched by messenger for immediate
personal delivery, or two (2) calendar days after it is placed in the United States mail, as provided
in this Section. Rejection, other refusal to accept or the inability to deliver any notice because of
a changed address of which no notice was given or other action by a person or entity to whom
notice is sent, shall be deemed receipt of the notice.
The following are the authorized addresses for the submission of notices to the parties, as of the
date of this Regulatory Agreement:
To the Owner:
With copies to :
To the City:
C & C Development Co., LLC
14211 Yorba Street, Suite 200
Tustin, CA 92780
Attn: Todd Cottle
The Waterford Group, Inc.
PO Box 10175
Newport Beach, CA 92658
Attn: Sean Rawson
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
Attn: Lynn Hutchins
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: City Manager
23 . R ecording. The parties hereto shall cause this Regulatory Agreement to be recorded in the
official records of the County of Orange .
24. . o Third Party Bene fici a ry. No claim as a third-party beneficiary under this Regulatory
61147.00145\32162314. 218
Agreement by any person, corporation or any other entity, shall be made or be valid against the
City or the Owner.
25. Prohibition Again t Tran f er.
25.1. Except as expressly provided in the Affordable Housing Agreement, the Owner
shall not, without prior written approval of the City, which may not be unreasonably withheld,
delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right
herein ; or (ii) make any total or partial sale, transfer , conveyance , lease , leaseback, or assignment
of the whole or any part of the Property or the improvements thereon , with the exception ofleases
of the residential units as permitted by this Regulatory Agreement, or permit to be placed on any
of the Property '1:ny unauthorized mortgage, trust deed, deed of trust, encumbrance or lien.
25.2. In the absence of specific written agreement or approval by the City, no
unauthorized sale, transfer , conveyance, lease , leaseback or assignment of the Property shall be
deemed to relieve the Owner or any other party from any obligations under this Regulatory
Agreement.
26 . ity Approv a ls and Action s . The City Manager shall have the authority to make approval s,
issue interpretations , waive provisions, grant extensions of time, approve amendments to this
Regulatory Agreement and execute documents on behalf of the City (to the extent not provided
otherwise in this Regulatory Agreement), including, without limitation, any documents necessary
to implement any changes in the number or affordability of the Qualifying Units, as may be
required by TCAC, so long as such actions do not reduce the length of affordability of the
Qualifying Units or add to the costs incurred or to be incurred by the City as specified herein. The
City Manager reserves the right , in his or her sole and absolute discretion , to submit any requested
modification , interpretation, amendment or waiver to the City Council if the City Manager
determines or believes that such action could increase the risk, liability or costs to the City, or
reduce the length of affordability of the Project.
IN WITNESS WHEREOF, the Owner and the City have caused this Regulatory
Agreement to be signed, acknowledged and attested on their behalf by duly authorized
representatives in counterpart original copies which shall upon execution by all of the parties be
deemed to be one original document.
[Signatures on following pages]
6 1147 .00145\32162314. 219
CITY:
CITY SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation
By: __________ _ Date:
~-------
City Manager
ATTEST:
City Clerk
61147.00145\32162314. 220
OWNER SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
OWNER:
______ LP, a California limited partnership
By: __________ LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C&C Development Co., LLC,
a California limited liability company,
its member and manager
By:
61147.00145\32162314. 221
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
ATTACHMENT NO. 1
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
Property Legal Description
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO,
COUNTY OF ORANGE, STATE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30, 1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS, WITH THE EAST-
WEST CENTERLINE OF SECTION 36, T7S, R8W, SBM, SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89°01 '53" WEST 417.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°56'38" EAST 58.57 FEET;
THENCE NORTH 26°21'02" WEST 12.70 FEET;
THENCE NORTH 47°09'31" EAST 120.82 FEET;
THENCE NORTH 45°44'28" EAST 144.28 FEET;
THENCE NORTH 46°25'09" EAST 74.13 FEET;
THENCE NORTH 37°40'58" EAST 94.88 FEET;
THENCE NORTH 28°02'57" EAST 111.60 FEET;
THENCE NORTH 33°02'08" EAST 37.69 FEET;
THENCE NORTH 25°17'01" EAST 132.27 FEET;
61147 .00145\32162314.2
ATTACHMENT NO. 1
-1-
THENCE SOUTH 73°21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS;
CONTAINING: 3.853 ACRES, MORE OR LESS
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
61147.00145\32162314 .2
ATTACHMENT NO. 1
-2-
ATTACHMENT NO. 2
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
Certification of Tenant Eligibility
NOTE TO PROPERTY OWNER: This form is designed to assist you in computing Annual
Income.
Re: The Groves at Williams Ranch, San Juan Capistrano, California
I/We, the undersigned, state that I/we have read and answered fully, frankly and personally each
of the following questions for all persons who are to occupy the unit being applied for in the
property listed above. Listed below are the names of all persons who intend to reside in the unit:
1.
Names of
Members of
Household
2.
Relationship
to Head of
Household
6. Head of Household (check one):
Mother:
Father:
3.
Age
4.
Social
Security
Number
5.
Place of
Employment
Other: ______ (specify relationship -i.e. legal guardian, sister, brother, etc.)
6114 7.00145\32162314.2
ATTAC HMENT NO. 2
-I -
Income Computation
7. The total anticipated income, calculated in accordance with the provisions of this Section
7, of all persons over the age of 18 years listed above for the 12-month period beginning the date
that I/we plan to move into a unit is $ _________ _
Included in the total anticipated income listed above are:
(a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other
compensation for personal services, before payroll deductions;
(b) the net income from the operation of a business or profession or from the rental of
real or personal property (without deducting expenditures for business expansion or amortization
of capital indebtedness or any allowance for depreciation of capital assets);
(c) interest and dividends (including income from assets excluded below);
( d) the full amount of periodic payments received from social security, annuities,
insurance policies, retirement funds, pensions, disability or death benefits and other similar types
of period receipts, including any lump sum payment for the delayed start of a periodic payment;
( e) payments in lieu of earnings, such as unemployment and disability compensation,
workmen's compensation and severance pay;
(t) the maximum amount of public assistance available to the above persons other than the
amount of any assistance specifically designated for shelter and utilities;
(g) periodic and determinable allowances, such as alimony and child support payments
and regular contributions and gifts received from persons not residing in the dwelling;
(h) all regular pay, special pay and allowances of a member of the Armed Forces
(whether or not living in the dwelling) who is the head of the household or spouse; and
(i) any earned income tax credit to the extent that it exceeds income tax liability.
Excluded from such anticipated income are:
(a) casual, sporadic or irregular gifts;
(b) amounts which are specifically for or in reimbursement of medical expenses;
(c) lump sum additions to family assets, such as inheritances, insurance payments
(including payments under health and accident insurance and workmen's compensation), capital
gains and settlement for personal or property losses;
61147.00145\32162314 .2
ATTACHMENT NO. 2
-2 -
( d) amounts of educational scholarship paid directly to the student of the educational
institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition,
6 1147.00145\32162314.2
ATTACHMENT NO. 2
-3 -
fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used
for the above purposes, are to be included in income;
( e) special pay to a household member who is away from home and exposed to hostile
fire;
(f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970;
(g) foster child care payments;
(h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp
Act of 1977;
(i) payments to volunteers under the Domestic Volunteer Service Act of 1973;
payments received under the Alaska Native Claims Settlement Act.
U) income derived from certain submarginal land of the United States that is held in
trust for certain Indian tribes;
(k) payments or allowances made under the Department of Health and Human
Services' Low-Income Home Energy Assistance Program;
(1) payments received from the Job Training Partnership Act;
(m) the first $2,000 of per capita shares received from judgment funds awarded by the
Indian Claims Commission or the Court of Claims.
8. Do the persons whose income or contributions are included in item 6 above:
(a) have savings, stocks, bonds, equity in real property or other form of capital
investment (excluding the values of necessary items of personal property such as furniture and
automobiles and interests in Indian trust land)? Yes No; or ----
(b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale)
during the last two years at less than fair market value? _Yes _No
(c) If the answer to (a) or (b) above is yes, does the combined total value of all such
assets owned or disposed of by all such persons total more than $5,000? _Yes _No
(d) If the answer to (c) is yes, state:
(i) the amount of income expected to be derived from such assets in the 12-
month period beginning on the date of initial occupancy in the unit that you propose to rent:
$ ; and
61147.00145\32162314.2
ATTACHMENT NO. 2
-4 -
(ii) the amount of such income, if any, that was included in item 6 above:
$ ---
9.
(a) Are all of the individuals who propose to reside in the unit full-time students*?
Yes No
*A full-time student is an individual enrolled as a full-time student during each of five calendar
months during the calendar year in which occupancy of the unit begins at an educational
organization which normally maintains a regular faculty and curriculum and normally has a
regularly enrolled body of students in attendance and is not an individual pursuing a full-time
course of institutional or farm training under the supervision of an accredited agent of such an
educational organization or of a state or political subdivision thereof.
(b) If the answer to 8( a) is yes, is at least one of the proposed occupants of the unit a
husband and wife entitled to file a joint federal income tax return? __ Yes __ No
10. Neither myself nor any other occupant of the unit I/we propose to rent is the Owner of the
property in which the unit is located (hereinafter the "Owner"), has any family relationship to the
Owner or owns, directly or indirectly, any interest in the Ownership. For purposes of this section,
indirect the Ownership by an individual shall mean the Ownership by a family member, the
Ownership by a corporation, partnership, estate or trust in proportion to the Ownership or
beneficial interest in such corporation, partnership, estate or trust held by the individual or a family
member, and the Ownership, direct or indirect, by a partner of the individual.
11. This certificate is made with the knowledge that it will be relied upon by the Owner to
determine maximum income for eligibility to occupy the unit; and I/we declare that all information
set forth herein is true, correct and complete and, based upon information I/we deem reliable and
that the statement of total anticipated income contained in Section 7 is reasonable and based upon
such investigation as the undersigned deemed necessary.
12. I/we will assist the Owner in obtaining any information or documents required to verify
the statements made herein, including either an income verification from my/our present
employer( s) or copies of federal tax returns for the immediate} y preceding calendar year.
13. I/we acknowledge that I/we have been advised that the making of any misrepresentation or
misstatement in this declaration will constitute a material breach of my/our agreement with the
Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of
the unit by institution of an action for eviction or other appropriate proceedings.
61 l47.00l45\321623l4.2
ATTACHMENT NO. 2
-5 -
14. Housing Issuer Statistical Information (Optional--will be used for reporting purposes only):
Marital Status:
------------~
Race (Head of Household)
White Asian Hispanic ------------
African-American Native American Other -------~ ----
Physical Disability: Yes ____ No ___ _
I/we declare under penalty of perjury that the foregoing is true and correct.
Executed this ____ day of _____ , __ in the County of Orange, California.
Applicant
Applicant
[Signature of all persons over the age of 18 years listed in number 2 above required]
61147.00145\32162314.2
ATTACHMENT NO . 2
-6 -
FOR COMPLETION BY PROPERTY THE OWNER ONLY:
1. Calculation of eligible income:
(a) Enter amount entered for entire household in 6 above:$ _____ _
(b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(l),
subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance
($ );
(2) Multiply the amount entered in 7(c) times the current passbook savings rate
to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook
61147.00145132162314.2
ATTACHMENT NO. 2
-7 -
savmgs ($ ___ _, subtract from that figure the amount entered in 7(d)(2) and enter the
remaining balance
(3) Enter at right the greater of the amount calculated under ( 1) or (2) above :
$ _____ _
(c) TOTAL ELIGIBLE INCOME
(Line l(a) plus line l(b)(3): $ _____ _
2. The amount entered in l(c):
__ Qualifies the applicant(s) as a Qualified Household.
__ Does not qualify the applicant(s) as Qualified Household.
3. Apartment unit assigned:
Bedroom Size: Rent: $ ----
4. This apartment unit [was/was not] last occupied for a period of 31 consecutive days by
persons whose aggregate anticipated annual income, as certified in the above manner upon their
initial occupancy of the apartment unit, qualified them as a Qualified Household.
5. Method used to verify applicant(s) income:
__ Employer income verification.
__ Copies of tax returns.
Other --..__ ________ _,
Manager
The undersigned employee has applied for a rental unit located in a project financed in part by the
City of San Juan Capistrano for persons of very low income. Every income statement of a
prospective tenant must be stringently verified. Please indicate below the employee's current
61147.00145\32162314.2
ATTACHMENT NO. 2
-8 -
annual income from wages, overtime, bonuses, commissions or any other form of compensation
received on a regular basis.
Annual wages Overtime ----Bonuses ----
Commissions ----
Total current income ------
I hereby certify that the statements above are true and complete to the best of my knowledge.
Signature Date Title
I hereby grant you permission to disclose my income to m
order that they may determine my income eligibility for rental of an apartment at
_________ j.
Signature Date
Please send to:
I hereby attach copies of my individual federal and state income tax returns for the immediately
preceding calendar year and certify that the information shown in such income tax returns is true
and complete to the best of my knowledge.
Signature
61147.00145 \32162314.2
Date
ATTACHMENT NO. 2
-9 -
ATTACHMENT NO. 3
TO
REGULATORY AGREEMENT
(The Groves at Williams Ranch)
Certificate of Continuing Program Compliance
For Annual Reporting Period Ending
The undersigned, as the authorized representative of LP,
a California limited partnership ("Owner"), has read and is thoroughly familiar with the provisions
of the various documents associated with the financial assistance provided by the City of San Juan
Capistrano ("City"), as established in numerous documents including the Regulatory Agreement,
dated as of 2020, between the Owner and the City.
As of the date of this Certificate, the following percentage ofresidential units in the Project are (i)
occupied by Qualified Households (as such term is defined in the Regulatory Agreement) or (ii)
are currently vacant and being held available for such occupancy and have been so held
continuously since the date a Qualified Household vacated such unit, as indicated:
Number of Units occupied by Qualified Households:
Number of Vacant Units:
Number of Qualified Households who commenced
occupancy during the preceding reporting period:
Attached is a separate sheet ("Occupancy Summary") listing, among other items, the appropriate
information for each residential unit in the Project, the occupants of each unit and the rent paid for
each unit. The information contained thereon is true and accurate and reasonable and is based on
information submitted to the Owner and is certified under penalty of perjury by each tenant.
61147.00145\32 162314.2
[Signatures on following page]
ATTACHMENT NO. 3
-1 -
The undersigned hereby certifies that (1) a review of the activities of the Owner during such
reporting period and of the Owner's performance under the Regulatory Agreement has been made
under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned,
based on the review described in clause ( 1) hereof, the Owner is not in default under any of the
terms and provisions of the above documents.
61147.00145\32162314.2
OWNER
~~~~~~~~-
LP, a California limited
partnership
By:
Name:
~~~~~~~~~~~~~~-
Its:
~~~~~~~~~~~~~~~
ATTACHMENT NO. 3
-2 -
OCCUPANCY SUMMARY
Total Number of Units in the Project:
Total Units occupied by Qualified Households:
Total Units available for rent to Qualified Households:
ATTACHED IS THE FOLLOWING INFORMATION :
A. Resident and rental information on each occupied apartment in the complex.
B. Certification of Tenant Eligibility for all Qualified Households who have moved
into , San Juan Capistrano, California, since the filing of the last
Occupancy Summary. The same are true and correct to the best of the undersigned's
knowledge and belief.
61147.00145\32162314.2
OWNER:
~~~~~~~~~-
LP, a California limited
partnership
By:
Name:
~~~~~~~~~~~~~~
Its:
~~~~~~~~~~~~~~~
ATTACHMENT NO. 3
-3 -
EXHIBIT I
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
1603\40\2595738.4
61147.00145\32162022.3
(The Groves at Williams Ranch)
Form of Deed of Trust
[Attached Behind This Page]
EXHIBIT I
I-1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: City Manager
APN: 121-050-21 SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
CWlTH ASSIGNMENT OF RENTS)
(City of San Juan Capistrano -The Groves at Williams Ranch)
This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) ("Deed
of Trust") is dated as of , 2020, by LP, a California
limited partnership, whose address is ("Trustor"), to TICOR
TITLE COMPANY OF CALIFORNIA, a California corporation ("Trustee"), for the benefit of
the CITY OF SAN JUAN CAPISTRANO, a municipal corporation, whose address is 32400
Paseo Adelanto, San Juan Capistrano, California 92675 ("Beneficiary"), and is executed to
secure those two certain Promissory Notes each of even date herewith, in the principal amounts
of Four Million One Hundred Thousand Dollars ($4,100,000.00) and Four Million Eight
Hundred Thousand Dollars ($4,800,000.00), respectively, executed by Trustor in favor of
Beneficiary (such Promissory Notes, as it may from time to time be supplemented, amended
extended, renewed or otherwise modified), the provisions of which are incorporated in the Deed
of Trust by this reference.
This Deed of Trust is made with respect to that certain Affordable Housing Disposition
and Development Agreement (City of San Juan Capistrano -The Groves at Williams Ranch),
dated July 16, 2019, for reference purposes only, between the Trustor's predecessor-in-interest
and the Beneficiary (the "Affordable Housing Agreement").
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION, the following property ("Trust Estate"):
(a) All of that certain real property in the City of San Juan Capistrano, County
of Orange, State of California, more particularly described in Exhibit "A" attached hereto and by
this reference made a part hereof ("Subject Property");
(b) All buildings, structures and other improvements now or in the future
located or to be constructed on the Subject Property ("Improvements");
1603 \40\2603420.3
61147.00145\32181929.1
(c) All tenements, hereditament, appurtenances, privileges, franchises and
other rights and interests now or in the future benefitting or otherwise relating to the Subject
Property or the Improvements, including easements, rights-of-way and development rights
("Appurtenances"). (Appurtenances, together with the Subject Property and the Improvements,
are hereafter collectively referred to as the "Real Property");
(d) Subject to the assignment to Beneficiary set forth in Paragraph 4 below,
all rents, issues, income, revenues, royalties and profits now or in the future payable with respect
to or otherwise derived from the Trust Estate or the ownership, use, management operation,
leasing or occupancy of the Trust Estate, including those past due and unpaid ("Rents");
( e) All present and future right, title and interest of Trustor in and to all
inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the
California Uniform Commercial Code ("UCC"), whether existing now or in the future) located
at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used
in connection with or otherwise relating to the Real Property or the ownership, use, development,
construction, maintenance, management, operation, marketing, leasing or occupancy of the Real
Property, including furniture, furnishings, machinery, appliances, building materials and
supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air conditioning
equipment and all other types of tangible personal property of any kind or nature, and all
accessories, additions, attachments, parts, proceeds, products, repairs, replacements and
substitutions of or to any of such property ("Goods," and together with the Real Property,
collectively the "Property"); and
(t) All present and future right, title and interest of Trustor in and to all
accounts, general intangibles, chattel paper, deposit accounts, money, instruments and
documents (as those terms are defined in the UCC) and all other agreements, obligations, rights
and written material (in each case whether existing now or in the future) now or in the future
relating to or otherwise arising in connection with or derived from the Property or any other part
of the Trust Estate or the ownership, use, development, construction, maintenance, management,
operation, marketing, leasing, occupancy, sale or financing of the Property or any other part of
the Trust Estate, including (to the extent applicable to the Property or any other portion of the
Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement
plans and specifications and architectural drawings, (iii) agreements with contractors,
subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales
agents, leasing agents , consultants and property managers, (iv) takeout, refinancing and
permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies,
together with insurance payments and unearned insurance premiums, (vi) claims, demands,
awards, settlements, and other payments arising or resulting from or otherwise relating to any
insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation
(or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license
agreements, service and maintenance agreements, purchase and sale agreements and purchase
options, together with advance payments, security deposits and other amounts paid to or
deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred
payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other
1603\40\2603420.3
61147.00145\32181929.1
2
rights to the payment of money, trade names, trademarks, goodwill and all other types of
intangible personal property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such
property (collectively, "Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest
in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and
all of the Trust Estates described above in which a security interest may be created under the
UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security
agreement under the UCC, conveying a security interest in the Personal Property to Trustee and
Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided
herein, all the rights and remedies of a "secured party" under the UCC and other applicable
California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing
under Sections 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURfNG, in such order of priority as Beneficiary may elect,
the following: (a) payment of that certain Land Promissory Note dated 2020 in the
original principal amount of Dollars ($ (the "Land
Note"), (b) payment of that certain Project Promissory Note dated , 2020 in the
original principal amount of Four Million Eight Hundred Thousand Dollars ($4,800,000.00) (the
"Project Note'', and together with the Land Note referred to herein as the "Notes"); and (c) due,
prompt and complete observance, performance and discharge of each and every monetary and
non-monetary condition, obligation, covenant and agreement contained herein or contained in
the Affordable Housing Agreement. The Affordable Housing Agreement, that certain
Regulatory Agreement (San Juan Capistrano -The Groves at Williams Ranch) dated ----2020, for reference purposes only, between the Trustor and the Beneficiary ("Regulatory
Agreement") and the Notes (collectively, "Secured Obligations") and all of their terms are
incorporated herein by reference and this conveyance shall secure any and all extensions,
amendments, modifications or renewals thereof, however evidenced.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall perform its obligations as set forth in the Secured Obligations
at the time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the property for any
purpose other than the use for which the same was intended at the time this Deed of Trust was
executed;
3. That the Secured Obligations are incorporated in and made a part of this Deed of
Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of
any applicable cure period, the Beneficiary, at its option, may declare the whole of the
indebtedness secured hereby to be due and payable. This Deed of Trust shall cover, and the
property subject hereto shall include, all property now or hereafter affixed or attached to or
incorporated upon the Subject Property in, to or under which Trustor now has or hereafter
acquires any right, title or interest, which, to the fullest extent permitted by law , shall be deemed
1603\40\2603420.3
61147.00145 \32181929.1
3
fixtures and a part of the Subject Property. To the extent any of the property subject to this Deed
of Trust consists of rights in action or personal property covered by the UCC, this Deed of Trust
shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured
party, a security interest in such property, including all proceeds thereof, for the purpose of
securing the Secured Obligations. In addition, for the purpose of securing the Secured
Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of
the property described herein in, to, or under which Trustor now has or hereafter acquires any
right, title or interest, whether present, future or contingent, including, but not limited to, all
equipment, inventory, accounts, general intangibles, instruments , documents and chattel paper,
as those terms are defined in the UCC, and all other personal property of any kind (including,
without limitation, money and rights to the payment of money), whether now existing or
hereafter created, that are now or at any time hereafter (i) in the possession or control of
Beneficiary in any capacity; (ii) erected upon, attached to or appurtenant to the Subject Property;
(iii) located or used on the Subject Property or identified for use on the Subject Property
(whether stored on the Subject Property or elsewhere); or (iv) used in connection with, arising
from, related to, or associated with the Subject Property or any of the personal property
described herein, the construction of any improvements on the Subject Property, the ownership,
development, maintenance, management or operation of the Subject Property, the use or
enjoyment of the Subject Property or the operation of any business conducted thereon, including,
without limitation, all such property described as the Trust Estate hereinabove. The security
interests granted in this Paragraph 3 are hereinafter severally and collectively called the
"Security Interest". The Security Interest shall be self-operative with respect to the real property
described herein but Trustor shall execute and deliver on demand such additional security
agreements, financing statements and other instruments as· may be requested in order to impose
the Security Interest more specifically upon the real and personal property encumbered hereby.
The Security Interest, at all times, shall be prior to any other interest in the personal property
encumbered hereby. Trustor shall act and perform as necessary and shall execute and file all
security agreements, financing statements, continuation statements and other documents
requested by Beneficiary to establish, maintain and continue the perfected Security Interest.
Trustor, on demand, shall promptly pay all costs and expenses of filing and recordation, to
ensure the continued priority of the Security Interest. Trustor shall not sell, transfer, assign or
otherwise dispose of any personal property encumbered hereby without obtaining the prior
written consent of Beneficiary, except that the Trustor may, in the ordinary course of business,
replace personal property or dispose of personal property that will not be replaced because of its
obsolescence. Unless Beneficiary then agrees otherwise in writing, all proceeds from any
permitted sale or disposition in excess of that required for full replacement shall be paid to
Beneficiary to be applied on the Notes subject to the rights of any senior lenders. Although
proceeds of personal property are covered hereby, this shall not be construed to mean that
Beneficiary consents to any sale of such personal property. Upon its recordation in the real
property records of Orange County, this Deed of Trust shall be effective as a financing statement
filed as a fixture filing. In addition, a carbon, photostatic or other reproduced copy of this Deed
of Trust and/or any financing statement relating hereto shall be sufficient for filing and/or
recording as a financing statement;
4. That all rents, profits and income from the property covered by this Deed of Trust
are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured.
Permission is hereby given to Trustor so long as no default exists hereunder after the giving of
4
1603 \40\2603420.3
61147 .00145 \32181929 .1
notice and the expiration of any applicable cure period, to collect such rents, profits and income
for use in accordance with the provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after
the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled
to the appointment of a receiver by any court having jurisdiction, without notice, to take
possession and protect the property described herein and operate same and collect the rents,
profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the
property insured against loss by fire and such other hazards, casualties, and contingencies as may
be required by applicable provisions of the Secured Obligations, and all such insurance shall be
evidenced by standard fire and extended coverage insurance policy or policies. Such policies
shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and
certificates thereof together with copies of original policies, ifrequested, shall be deposited with
. the Beneficiary;
7. To pay before delinquency any taxes and assessments affecting said Property; to
pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part
thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of
this trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall
not be required to pay and discharge any such tax, assessment charge or levy so long as Trustor
is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has
adequate funds to pay any liabilities contested pursuant to this Paragraph 7;
8. As it is provided more specifically in the Secured Obligations, to keep said
property in good condition and repair, subject to ordinary wear and tear, casualty and
condemnation, not to remove or demolish any buildings thereon; to complete or restore promptly
and in good and workmanlike manner any building which may be constructed, damaged, or
destroyed thereon and to pay when due all claims for labor performed and materials furnished
therefor; to comply with all laws affecting said property or requiring any alterations or
improvements to be made thereon (subject to Trustor's right to contest the validity or
applicability oflaws or regulations); not to commit or permit waste thereof; not to commit, suffer
or permit any act upon said property in violation of law and/or covenants, conditions and/or
restrictions affecting said property; not to permit or suffer any material alteration of or addition
to the buildings or improvements hereafter constructed in or upon said property without the
consent of the Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses,
including cost of evidence ohitle and reasonable attorney's fees in a reasonable sum, in any such
action or proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable
cure period, to make any payment or do any act as herein provided, then Beneficiary or Trustee,
but without obligation so to do and without notice to or demand upon Trustor and without
releasing Trustor from any obligation hereof, may make or do the same in such manner and to
1603 \40\2603420.3
61147.00145\32181929 .1
5
such extent as either may deem necessary to protect the security hereof. Following default, after
the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee,
being authorized to enter upon said property for such purposes, may commence, appear in and/or
defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or
lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any
such powers, may pay necessary expenses, employ counsel, and pay his reasonable fees;
11. Beneficiary shall have the right to pay all insurance premiums required by the
Secured Obligations when due should Trustor fail to make any required premium payments. All
such payments made by the Beneficiary shall be added to the sums secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, under permission given under this Deed of Trust, with interest from date of expenditure,
at the highest rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with
applicable provisions of the Secured Obligations; upon the failure of Trustor to do so, after the
giving of notice and the expiration of any applicable cure period, Trustor shall be in default
hereunder;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the property subject to this Deed of Trust any lien or liens except as authorized
by Beneficiary and/or as provided in the Secured Obligations and further that it will keep and
maintain the property free from the claims of all persons supplying labor or materials which will
enter into the construction of any and all buildings now being erected or to be erected on said
premises. Notwithstanding anything to the contrary contained in this Deed of Trust , Trustor
shall not be obligated to pay any claims for labor, materials or services which Trustor in good
faith disputes and is diligently contesting, provided that Trustor shall, at Beneficiary's written
request, within thirty (30) days after the filing of any claim or lien (but in any event, and without
any requirement that Beneficiary must first provide a written request prior to foreclosure) record
in the Office of the Recorder of Orange County, a surety bond in the amount required by law to
protect against a claim of lien, or provide such other security reasonably satisfactory to
Beneficiary;
15. That any and all improvements made or about to be made upon the premises
covered by this Deed of Trust and all plans and specifications, comply with all applicable
municipal ordinances and regulations and all other applicable regulations made or promulgated,
now or hereafter, by lawful authority, and that the same will upon completion comply with all
such municipal ordinances and regulations and with the rules of the applicable fire rating or
inspection organization, bureau, association or office.
IT IS MUTUALLY AGREED THAT:
16. Trustor confirms that ifTrustor should sell, enter into a contract of sale, convey,
or in any way transfer all or any interest of Trustor in the Real Property encumbered by this Deed
of Trust or suffer Trustor's title or any interest therein to be divested, whether voluntarily or
1603\40\2603420.3
61147.00145\32181929 .1
6
involuntarily, unless the same is a Permitted Transfer as defined in the Affordable Housing
Agreement, without the prior written consent of the Beneficiary being first obtained, then
Beneficiary shall have the right, at Beneficiary's sole option, to declare all sums payable under
the Notes secured hereby immediately due and payable in full, irrespective of the maturity date
otherwise specified in the Notes. No waiver of this right shall be effective unless in writing and
signed by the Beneficiary. Consent by the Beneficiary to any one such transaction shall not be
deemed a waiver of the right to require such consent to future or successive transactions.
Further, upon default under one of the Secured Obligations, and after the giving of notice and the
expiration of any applicable cure period provided therein, the Beneficiary, at its option, may
declare the whole of the indebtedness secured hereby to be immediately due and payable in full,
irrespective of the maturity date otherwise specified in the Notes;
17. As provided more specifically in the Secured Obligations, should the Property or
any part thereof be taken or damaged by reason of any public improvement or condemnation
proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of
any senior lenders, Beneficiary shall be entitled to all compensation, awards, and other payments
or relief therefor which are not used to reconstruct, restore or otherwise improve the property or
part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in
and prosecute in its own name, any action or proceedings, or to make any compromise or
settlement, in connection with such taking or damage subject to the rights of any senior lenders.
All such compensation, awards, damages, rights of action and proceeds which are not used to
reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged,
including the proceeds of any policies of fire and other insurance affecting said property, are
hereby assigned to Beneficiary subject to the rights of any senior lenders;
18. Notwithstanding Sections 16 and 17, in the event that a portion of the Property is
taken for a public improvement or pursuant to a condemnation proceeding and the Qualifying
Units (as defined in the Regulatory Agreement) remain intact and continue to be owned and
operated by Trustor in conformance with the Affordable Housing Agreement and the Regulatory
Agreement, Beneficiary shall not declare all sums due and payable under the Notes, nor shall the
Beneficiary be entitled to any compensation, awards and other payments therefor, provided that
such compensation, awards and other payments are used for (1) paying principal and interest
owed on the Permanent Loan (as defined in the Affordable Housing Agreement), (2) making
improvements to the Property that are approved by Beneficiary, in its reasonable discretion, or
(3) payment of principal owing under the Notes. In the event that Trustor receives such
compensation, awards or other payments and fails to expend the funds in conformance with
subsections (1) and (2) this section within thirty (30) days ofreceipt of such funds, Trustor shall
be in default under this Deed of Trust.
19. Upon default by Trustor in taking any action or in making any payments provided
for herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or
agreement in this Deed of Trust within thirty (30) days after written demand therefor by
Beneficiary (or, in the event that more than thirty (30) days is reasonably required to cure such
default, should Trustor fail to promptly commence such cure, and diligently prosecute same to
completion), after the giving of notice and the expiration of any applicable cure period,
Beneficiary may declare all sums secured hereby immediately due and payable by delivery to
Trustee of written declaration of default and demand for sale, and of written notice of default and
1603\40\2603420.3
61147.00145\32181929.1
7
of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for
record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with
Trustee this Deed of Trust and all documents evidencing expenditures secured hereby;
20. After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as then required by
law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it
in said notice of sale, either as a whole or in separate parcels, and in such order as it may
determine at public auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of said property by
public announcement at the time and place of sale, and from time to time thereafter may
postpone the sale by public announcement at the time and place of sale, and from time to time
thereafter may postpone the sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to the purchaser its Deed conveying the property so sold,
but without any covenant or warranty, express or implied. The recitals in the Deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including
Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds
of sale to payment of ( 1) the expenses of such sale, together with the reasonable expenses of this
trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale, and
the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any
search and/or other evidence of title procured in connection with such sale and revenue stamps
on Trustee's Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued
interest at the maximum rate allowed by law; ( 4) all other sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled thereto ;
21. Beneficiary may from time to time substitute a successor or successors to any
Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such
appointment, and without conveyance to the successor trustee, the latter shall be vested with all
title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each
such appointment and substitution shall be made by written instrument executed by Beneficiary,
containing reference to this Deed of Trust and its place ofrecord, which, when duly recorded in
the proper office of the county or counties in which the property is situated, shall be conclusive
proof of proper appointment of the successor trustee;
22. The pleading of any statute oflimitations as a defense to any and all obligations
secured by this Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have
been paid and all obligations secured hereby have been satisfied, and upon surrender of this Deed
of Trust to Trustee for cancellation and retention and upon payment of its fees, Trustee shall
reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance
of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto";
24. The trust created hereby is irrevocable by Trustor;
1603\40\2603420.3
61147.00145\32181929.1
8
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Beneficiary" shall include not only the original Beneficiary hereunder but also any future
successor in interest to Beneficiary. In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural. All obligations of Trustor hereunder are joint and several;
26. Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made public record as provided by law. Except as otherwise provided by law,
the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or
of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless
brought by Trustee;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to it at the address set forth in the Deed of Trust;
28. Trustor agrees at any time and from time to time, upon receipt of a written request
from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents,
profits, and operating expenses of the premises, and the names of the occupants and tenants in
possession, together with the expiration dates of their leases and full information regarding all
rental and occupancy agreements, and the rents provided for by such leases and rental and
occupancy agreements, and such other information regarding the premises and their use as may
be requested by Beneficiary;
29. Trustor agrees that the obligations secured by this Deed of Trust are made
expressly for the purpose of acquiring the Property, completing the construction work necessary
to construct a new 75-unit affordable housing development on the Property, as is more
specifically provided in the Secured Obligations;
30. As is provided more specifically in the Secured Obligations, the obligations of
Trustor thereunder are nonrecourse obligations of the Trustor. The sole recourse of Beneficiary
shall be the exercise of its rights against the Property;
31. Notwithstanding specific provisions of this Deed of Trust, non-monetary
performance 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; acts of God; acts
of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governrnental restrictions or priority; litigation; unusually severe weather;
inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of
the other party; acts or failure to act of the Authority or any other public or governmental agency
or entity (except that any act or failure to act of Beneficiary shall not excuse performance by
Beneficiary unless such act or failure to act is allowed or required by law); or any other causes
beyond the reasonable control or without the fault of the party claiming an extension oftime to
perform. An extension of time for any such cause (a "Force Majeure Delay") shall be for the
period of the enforced delay and shall commence to run from the time of the commencement of
the cause. If, however, notice by the party claiming such extension is sent to the other party
more than thirty (30) days after the commencement of the cause, the period shall commence to
1603\40\2603420.3
61147.00145\32181929.1
9
run only thirty (30) days prior to the giving of such notice. Times of performance under this
Deed of Trust may also be extended in writing by the Beneficiary and Trustor;
32. If the rights and liens created by this Deed of Trust shall be held by a court of
competent jurisdiction to be invalid or unenforceable as to any part of the obligations described
herein, the unsecured portion of such obligations shall be completely performed and paid prior to
the performance and payment of the remaining and secured portion of the obligations, and all
performance and payments made by Trustor shall be considered to have been performed and paid
on and applied first to the complete payment of the unsecured portion of the obligations;
33. (a) Subject to the extensions of time set forth in Paragraph 31, and subject to
the further provisions of this Paragraph 33, failure or delay by Trustor to perform any term or
provision respectively required to be performed under the Secured Obligations or this Deed of
Trust constitutes a default under this Deed of Trust;
(b) Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by the Beneficiary. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default;
(c) Any failures or delays by Beneficiary in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive
Beneficiary 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;
( d) If an event of default occurs under the terms of this Deed of Trust, prior to
exercising any remedies hereunder or thereunder , Beneficiary shall give Trustor written notice of
such default. Trustor shall have a reasonable period of time after such notice is given within
which to cure the default prior to exercise of remedies by Beneficiary under this Deed of Trust.
In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is
about to become materially jeopardized by any failure to cure a default or the default is not cured
within thirty (30) days after the notice of default is first given;
( e) If an event of default occurs under the terms of the Secured Obligations,
prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of
such default. As is provided more specifically in the Secured Obligations, if the default is
reasonably capable of being cured within thirty (30) days, Trustor shall have such period to
effect a cure prior to exercise of remedies by the Beneficiary under the Secured Obligations, or
this Deed of Trust. If the default is such that it is not reasonably capable of being cured within
thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently
and in good faith works to effect a cure as soon as possible, then Trustor shall have such
additional time as is reasonably necessary to cure the default prior to exercise of any remedies by
Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security
becomes or is about to become materially jeopardized by any failure to cure a default.
34. This Deed of Trust shall be subject and subordinate to the terms of that certain
extended use agreement executed by the Trustor in connection with the Trustor's allocation of
1603\40\2603420.3
61147 .00145\32181929.l
10
low-income housing tax credits under Section 42 of the Code (the "Extended Use Agreement").
If Beneficiary or its successors or assigns (collectively, the "Subsequent Owner") acquires the
Property by foreclosure (or instrument in lieu of foreclosure), then the "extended use period" (as
defined in Section 42(h)(6)(D) of the Internal Revenue Code) shall terminate, except for the
obligation of the Subsequent Owner to comply with the limitations on evictions, termination of
tenancy and increase in rents for the three year period following the Subsequent Owner's
acquisition of the Property, as set forth in Section 42(h)(6)(E)(ii) of the Internal Revenue Code.
As provided in the Affordable Housing Agreement, upon request when appropriate, Beneficiary
shall execute such documentation as is necessary to subordinate this Deed of Trust to a Senior
Loan.
1603\40\2603420.3
61147.00145132181929 .1
[Signatures on Following Page]
11
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first set forth above.
TR US TOR:
------------· a California limited partnership
By:
--------~
LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC,
a California limited liability company, its member and manager
By:
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
[SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
1603\40\2603420.3
61147.00145\32181929.1
12
EXHIBIT A TO
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(San Juan Capistrano -The Groves at Williams Ranch)
Legal Description of Subject Property
THAT PORTION OF REAL PROPERTY IN THE CITY OF SAN JUAN CAPISTRANO ,
COUNTY OF ORANGE, STA TE OF CALIFORNIA AS DESCRIBED IN THE DEED
RECORDED ON AUGUST 30, 1995, ASINSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE ORANGE COUNTYRECORDER, LYING
SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245 OF DEEDS , WITH THE EAST-
WEST CENTERLINE OF SECTION 36 , T7S, R8W, SBM , SAID POINT ALSO BEING THE
SOUTHEAST CORNER OF REAL PROPERTY AS DESCRIBED IN SAID DEED
RECORDED ON AUGUST 30, 1995, AS INSTRUMENT NO. 95-0376669 OF OFFICIAL
RECORDS;
THENCE WESTERLY ALONG SAID EAST-WEST CENTERLINE OF SECTION 36, T7S,
R8W, SBM, NORTH 89 °01'53" WEST 417.62 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00 °56'38" EAST 58.57 FEET;
THENCE NORTH 26°21'02" WEST 12.70 FEET;
THENCE NORTH 47 °09'31" EAST 120.82 FEET;
THENCE NORTH 45 °44'28" EAST 144.28 FEET;
THENCE NORTH 46 °25'09" EAST 74.13 FEET ;
THENCE NORTH 37°40'58" EAST 94 .88 FEET;
THENCE NORTH 28 °02'57" EAST 111.60 FEET;
THENCE NORTH 33°02'08" EAST 37.69 FEET;
THENCE NORTH 25 °17'01" EAST 132.27 FEET;
THENCE SOUTH 73°21'32" EAST 148.43 FEET TO SAID CENTERLINE OF CAMINO
CAPISTRANO AS DESCRIBED IN BOOK 281, PAGE 245, OF DEEDS ;
CONTAINING: 3.853 ACRES, MORE OR LESS
1603\40\2603420 .3
61147.00145\32181929.I
A-1
SUBJECT TO: COVENANTS, CONDITIONS, RESTRICTIONS, RIGHT OF WAY AND
EASEMENTS OF RECORD.
1603\40\2603420.3
61147.00145\32181929.1
A-2
EXHIBIT J
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
1603\40\2595738.4
61147.00145\32162022.3
(The Groves at Williams Ranch)
Form of Land Note
[Attached Behind This Page]
EXHIBIT J
J-1
LAND PROMISSORY NOTE SECURED BY DEED OF TRUST
(San Juan Capistrano -The Groves at Williams Ranch)
Principal Amount: $4, 100,000
Maker: LP, a
California limited partnership
Maturity Date: Fifty-five (55) years
from the date on which the Certificate of
Completion is issued
1. Land Loan.
Date of Note: ___ , 20_
Lender: CITY OF SAN JUAN
CAPISTRANO, a municipal corporation
Interest Rate: One-Quarter Percent (0.25%)
FOR VALUE RECEIVED, the undersigned LP, a California limited
partnership ("Maker"), with its principal place of business located at _________ _
promises to pay to the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"
or "Holder") at 32400 Paseo Adelanto, San Juan Capistrano, California 92675, or such place as
the Holder may, from time to time, designate by written notice to the Maker, the principal sum of
FOUR MILLION ONE HUNDRED THOUSAND DOLLARS ($4,100,000), (the "Land Loan"),
together with any accrued interest, if applicable, as set forth in this Note. This Promissory Note
(the "Note") is made and given pursuant to that certain Affordable Housing Disposition and
Development Agreement between the City and Maker's predecessor-in-interest, dated July 16,
2019 (the "Affordable Housing Agreement"). The Affordable Housing Agreement is
incorporated herein by this reference. All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Affordable Housing Agreement. The Land Loan is
made for the conveyance of the Property by City to Maker in accordance with the terms and
conditions of the Affordable Housing Agreement.
2. Term of Loan and Right of Prepayment.
a. Maturity Date. All accrued interest, if any, and principal shall be due and
payable in full without any further demand or notice fifty-five (55) years from the date on which
the Certificate of Completion is recorded pursuant to the Affordable Housing Agreement
("Maturity Date").
b. Prepayment. This Note may be prepaid in whole or in part at any time and
from time to time without penalty or premium.
3. Security for Note.
This Note is secured by a Deed of Trust executed by Maker which creates a lien on that
certain real property as described therein and in the Affordable Housing Agreement.
1603\40\2603416.2
61147.00145\32162353.2
4. Interest Calculation.
The principal outstanding under this Note shall accrue simple interest at the rate of one-
quarter percent (0.25%) per annum, except in the case of Default as set forth in Section 9 of this
Note. Principal and interest shall be payable in lawful money of the United States of America. If
applicable, interest shall be computed based on an actual day year and the actual number of days
elapsed. Interest shall commence on amounts disbursed hereunder from the date of disbursement.
5. Annual Paym e nt.
Following completion of the Project as evidenced by the issuance by the City of a
Certificate of Completion as set forth in the Affordable Housing Agreement, and continuing each
year thereafter until the Maturity Date, a portion of the Residual Receipts (as defined below) from
the Project shall be paid to Holder and applied to pay down the amounts due and owing under this
Note. The payments described below shall be paid to Holder no later than April 1 each year, with
the first payment due on the April 1 following the issuance of a Certificate of Occupancy for the
Project, and continuing each year thereafter.
a. Annual Payments from Re idual Receipt . Maker shall make repayments
of the outstanding principal and accrued interest, if any, equal to the City's Land Percentage of
Fifty Percent (50%) of the Residual Receipts from the Project as repayment of amounts due and
owing under this Note. For the purposes of this Note, "City's Land Percentage" means the
percentage calculated by dividing (1) the original principal amount of the Land Loan actually
disbursed to Borrower by (2) the sum of Total Assistance from all other government entities
obtained by the Borrower, any portion of which is a loan to be repaid utilizing Residual Receipts.
"Total Assistance" means the original principal amounts of loans and grants made by the other
government entities plus the cumulative value of Project Based Section 8 or similar housing
vouchers provided by the other government entities.
Such annual payments shall be accompanied by the Maker's report of Residual
Receipts. The Maker shall provide the Holder with the audited financial statement provided for
in Section 6, and any other documentation reasonably requested by Holder to substantiate the
Maker's determination of Residual Receipts.
All payments made hereunder shall be credited first to any accrued but unpaid
interest (if applicable), then to current interest due and owing and lastly to principal. Interest not
paid current each year shall be added to and thereafter be considered additional principal due
hereunder.
Notwithstanding the foregoing, the entire outstanding balance of principal and any
interest owing under this Note shall be due and payable in full fifty-five (55) years from the date
hereof.
Prior to any sale of all or any portion of the Project, or Refinancing of all or any
portion of the outstanding debt from the Project, and so long as there is any outstanding amount due
and owing under this Note, Maker shall notify Holder of any such proposed or intended sale or
Refinancing. In such event, Maker and Holder shall meet and confer, and shall use good faith efforts,
1603\40\26034 l 6.2
61147.00145\32162353.2
2
to determine the feasibility of the payoff or restructuring of the remaining balance owing under this
Note as part of any such sale or Refinancing to provide for repayment of this Note sooner than the
fifty-five (55) year repayment period.
b. Definition of Residual Receipts. For the purposes of this Note, "Residual
Receipts" shall mean the sum of money computed as follows:
(i) All rents, revenues, consideration or income (of any form) received
by Maker in connection with or relating to the ownership or operation of the Project, including
any net revenue derived from any Refinancing of the Project and any revenue from
contributions, loans or grants which is not required to meet future Project obligations (but
excluding tenants' security deposits, partner capital contributions and similar advances) ("Gross
Revenue") less all of the following: all customary and reasonable costs (i.e., mandatory (hard)
mortgage payments) and expenses reasonably and actually incurred in connection with the
operation and maintenance of the Project, including but not limited to premiums for property and
liability insurance; utility services not paid directly by tenants; maintenance and repair; security
services and payments for social/supportive services ; any adjuster payments to the investor
limited partner required under Maker's partnership agreement; payment of principal or interest
on any indebtedness of Maker to any affiliate of Maker (individual or entity) or partner of Maker
to repay completion and operating deficit loans relating to the Project; asset management fee
payable to the limited partner of Maker in an amount approved as part of the Project Budget (as
defined in the Affordable Housing Agreement); partnership management fee payable to Maker,
not to exceed the amount approved as part of the Project Budget (as defined in the Affordable
Housing Agreement); reasonable property management fees not to exceed 8% of gross revenue;
deferred developer fee in an amount approved as part of the Project Budget (as defined in the
Affordable Housing Agreement); amounts (approved by Holder) expended to restore the Project
after a casualty loss or condemnation; reasonable and customary cost for accounting and auditing
the books and records of the Project; taxes; franchise tax filing fees; and any other reserves
reasonably required by the investors or the lenders approved by the City for the Project
(collectively "Operating Expenses").
(ii) Notwithstanding the generality of the foregoing, the following
items are not expenses or deductible in computing Residual Receipts:
(A) Depreciation, cost recovery, amortization and similar items
which do not involve the expenditure of cash.
6. Audited Financial Statement.
Maker shall annually provide Holder with an audited financial statement documenting the
calculation of Residual Receipts for the previous calendar year ending December 31. The audited
financial statement shall be provided on or before April 1, together with payment of the Residual
Receipts payment due to Holder. Holder shall have the right to inspect and audit Maker's books
and records concerning the calculation of the Residual Receipts Payment and to object within
ninety (90) days from receipt of Maker's statement. Failure to timely object shall be deemed
acceptance. If Holder does object, Holder shall specify the reasons for disapproval. Maker shall
have thirty (30) days to reconcile any disapproved item. If Maker and Holder cannot agree on the
1603\40\2603416.2
61147.00145\32162353.2
3
amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and
Holder shall resolve any disputed items. The cost of the auditor shall be shared equally by Maker
and Holder.
7. Annual Budget.
Maker shall prepare and submit to Holder a proposed annual operating budget for the
management and operation of the Project ("Annual Budget") no later than 60 days preceding the
effective year of such budget. The Annual Budget shall include the projected Gross Revenue and
Operating Expenses for the year and a line item showing the projected Residual Receipts from the
Project for the year. Holder will review the Annual Budget and, if acceptable, approve it, which
approval shall not be unreasonably withheld. If the Annual Budget is not acceptable, Holder shall
specify the reasons for disapproval. The intent of this section is to provide Holder an opportunity
to disapprove any unreasonable expenses which would diminish the Residual Receipts from the
Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of
the total Annual Budget shall require Holder's prior written consent, which consent shall not be
unreasonably withheld.
8. Acceleration Upon Certain Events or Upon Default.
In the event of any Default under the terms of this Note, the Affordable Housing Agreement
or the Regulatory Agreement, the Deed of Trust which is the security for this Note, or under any
Senior loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker,
providing Maker with thirty (30) days in which to cure any Default, and such Default not having
been cured within thirty (30) days (or if a greater amount of time is reasonably necessary to effect
a cure, if actions to cure such Default are not undertaken within said thirty (30) day period and
pursued with reasonable diligence thereafter), all principal and interest due under this Note shall
immediately become due and payable, upon thirty (30) day written notice from the Holder to the
Maker. Failure to exercise such option shall not constitute a waiver of the right to exercise it in
the event of any subsequent Default.
Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real
property described in the Deed of Trust securing this Note or any part thereof or interest therein,
without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as
defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and
interest due hereunder shall immediately become due and payable upon thirty (30) days written
notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a
waiver of the right to require consent to future or successive transactions.
Notwithstanding the generality of the foregoing, certain transfers permitted under the
Affordable Housing Agreement shall not constitute a Default hereunder or under the Affordable
Housing Agreement, and any such action shall not accelerate the maturity of this Promissory Note,
provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing
Agreement or is reasonably acceptable to the Authority with reasonable promptness, and any
transferee under such a transfer agrees to be bound by any and all instruments in favor of the
Authority.
1603\40\26034 l 6 .2
61147 .00145 \32162353.2
4
9. Interest on Default.
From and after a Default, the entire outstanding principal balance of this Note shall
automatically bear an annual interest rate equal to the lesser of: (a) eight percent (8%)
compounding annually; or (b) the maximum interest rate allowed by law.
10. Costs Paid by Maker.
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by
the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs
of collection, costs and expenses and attorneys fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such
sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment of this
instrument.
11. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this instrument, and expressly agrees that, without in any way
affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the
time for payment of any installment due hereunder, accept additional security, release any party
liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives,
to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a
defense to any demand on this instrument or any deed of trust, security agreement, guarantee or
other agreement now or hereafter securing this Note.
12. Indemnification.
Maker shall indemnify, defend, protect and hold the Authority harmless from and against
any and all loss, damage, liability, action, cause of action, cost or expense, including, without
limitation, reasonable attorneys fees and expenses incurred by the Holder hereof, arising as a result
of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or related agreements; (ii) intentional bad faith waste of the real
property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from
Maker's failure to maintain insurance as required under the provisions of the deed of trust securing
this Note and the Affordable Housing Agreement.
13. Nonrecourse.
This Note shall become a nonrecourse obligation of Maker on the date that Maker files a
valid and timely Notice of Completion for the Project and the Holder must resort only to the Project
or the Property, or both, for repayment should the Maker fail to repay the sums evidenced hereby.
At such time as this Note becomes nonrecourse, neither Maker nor any of its general and limited
partner shall have any personal liability for repayment of the Land Loan and no deficiency
judgment may be obtained against Maker or any of its general and limited partners except for
actual or constructive fraud, material misrepresentation, intentional bad faith waste of or on the
Project and such other matters as are referred to below. Notwithstanding the generality of the
foregoing, however, Maker shall indemnify, defend, protect and hold Holder harmless from and
5
1603\40\2603416.2
61147.00145\32162353.2
against any and all loss, damage, liability, action, cause of action, cost or expense, including,
without limitation, reasonable attorneys' fees and expenses incurred by the Holder arising as a
result of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or any other agreements or documents provided in connection
therewith; (ii) intentional bad faith waste of the Property encumbered by the deed of trust which
secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required
under the provisions of the deed of trust securing this Note. Maker's obligation to indemnify the
Holder hereof as aforesaid shall be recourse obligations of the Maker, and in the event of any
breach of such obligations, the Holder shall have the right to proceed directly against the Maker to
recover any and all losses, damages, liability, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) and may bring any action and institute any proceeding to
obtain a deficiency judgment in or following foreclosure for any and all such losses, damages,
liabilities, costs and expenses resulting from such breach.
14. Severability.
If any provision of this Note is determined by a court of competent jurisdiction to be void
or unenforceable, such determination shall not affect any other provision of this instrument, and
all other provisions hereof shall remain valid and in full force and effect.
15. Non-Waiver.
No delay in demanding or failure to demand performance hereunder shall constitute a
waiver by the Holder hereof of its right to subsequently demand such performance or to exercise
any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of the
Holder's rights and remedies hereunder shall be expressed in a writing signed by a duly appointed
representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder
shall not constitute a waiver of any other right, including, but not limited to, the right to exercise
any and all remedies for a different or subsequent event of Default hereunder.
1603 \40\2603416 .2
61147.00145\32162353.2
[Signatures on Following Page]
6
MAKER:
__________ LP, a California limited partnership
By: ---------LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC,
a California limited liability company, its sole member and manager
By:
1603140\2603416.2
61147.00145132162353.2
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
7
EXHIBIT K
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
1603\40\2595738.4
61147.00145\32162022.3
(The Groves at Williams Ranch)
Form of Project Note
[Attached Behind This Page]
EXHIBIT K
K-1
PROJECT PROMISSORY NOTE SECURED BY DEED OF TRUST
(San Juan Capistrano -The Groves at Williams Ranch)
Principal Amount: $4,800,000.00
Maker: LP, a
California limited partnership
Maturity Date: Fifty-five (55) years
from the date on which the Certificate of
Completion is issued
1. Project Loan.
Date of Note: ___ , 20_
Lender: CITY OF SAN JUAN
CAPISTRANO, a municipal corporation
Interest Rate: One-Quarter Percent (0.25%)
FOR VALUE RECEIVED, the undersigned LP, a California limited
partnership ("Maker"), with its principal place of business located at ________ _
promises to pay to the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"
or "Holder") at 32400 Paseo Adelanto, San Juan Capistrano, California 92675, or such place as
the Holder may, from time to time, designate by written notice to the Maker, the principal sum of
FOUR MILLION EIGHT HUNDRED THOUSAND DOLLARS ($4,800,000.00), (the "Project
Loan"), together with any accrued interest, if applicable, as set forth in this Note. This Promissory
Note (the "Note") is made and given pursuant to that certain Affordable Housing Disposition and
Development Agreement between the City and Maker's predecessor-in-interest, dated July 16,
2019 (the "Affordable Housing Agreement"). The Affordable Housing Agreement is
incorporated herein by ~his reference. All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Affordable Housing Agreement. Funds for the
Project Loan consist of City In-Lieu Fees. The Project Loan is made to finance the Project's
predevelopment, development and construction costs in accordance with the terms and conditions
of the Affordable Housing Agreement.
2. Term of Loan and Right of Prepayment.
a. Maturity Date. All accrued interest, if any, and principal shall be due and
payable in full without any further demand or notice fifty-five (55) years from the date on which
the Certificate of Completion is recorded pursuant to the Affordable Housing Agreement
("Maturity Date").
b. Pre pa yment. This Note may be prepaid in whole or in part at any time and
from time to time without penalty or premium.
3. Security for Note.
This Note is secured by a Deed of Trust executed by Maker which creates a lien on that
certain real property as described therein and in the Affordable Housing Agreement.
1603\40\2603099. I
61147.00145\32162378.2
4. Interest Calculation.
The principal outstanding under this Note shall accrue simple interest at the rate of one-
quarter percent (0.25%) per annum, except in the case of Default as set forth in Section 9 of this
Note. Principal and interest shall be payable in lawful money of the United States of America. If
applicable, interest shall be computed based on an actual day year and the actual number of days
elapsed. Interest shall commence on amounts disbursed hereunder from the date of disbursement.
5. Annua l Payment.
Following completion of the Project as evidenced by the issuance by the City of a
Certificate of Completion as set forth in the Affordable Housing Agreement, and continuing each
year thereafter until the Maturity Date, a portion of the Residual Receipts (as defined below) from
the Project shall be paid to Holder and applied to pay down the amounts due and owing under this
Note. The payments described below shall be paid to Holder no later than April 1 each year, with
the first payment due on the April 1 following the issuance of a Certificate of Occupancy for the
Project, and continuing each year thereafter.
a. Annual Payments from Residual Receipts. Maker shall make repayments
of the outstanding principal and accrued interest, if any, equal to the City's Project Percentage of
Fifty Percent (50%) of the Residual Receipts from the Project as repayment of amounts due and
owing under this Note. For the purposes of this Note, "City's Project Percentage" means the
percentage calculated by dividing (1) the original principal amount of the Project Loan actually
disbursed to Borrower by (2) the sum of Total Assistance from all other government entities
obtained by the Borrower, any portion of which is a loan to be repaid utilizing Residual Receipts.
"Total Assistance" means the original principal amounts of loans and grants made by the other
government entities plus the cumulative value of Project Based Section 8 or similar housing
vouchers provided by the other government entities.
Such annual payments shall be accompanied by the Maker's report of Residual
Receipts. The Maker shall provide the Holder with the audited financial statement provided for
in Section 6, and any other documentation reasonably requested by Holder to substantiate the
Maker's determination of Residual Receipts.
All payments made hereunder shall be credited first to any accrued but unpaid
interest (if applicable), then to current interest due and owing and lastly to principal. Interest not
paid current each year shall be added to and thereafter be considered additional principal due
hereunder.
Notwithstanding the foregoing, the entire outstanding balance of principal and any
interest owing under this Note shall be due and payable in full fifty-five (55) years from the date
hereof.
Prior to any sale of all or any portion of the Project, or Refinancing of all or any
portion of the outstanding debt from the Project, and so long as there is any outstanding amount due
and owing under this Note, Maker shall notify Holder of any such proposed or intended sale or
Refinancing. In such event, Maker and Holder shall meet and confer, and shall use good faith efforts,
2
1603\40\2603099. I
61147.00145\32162378.2
to determine the feasibility of the payoff or restructuring of the remaining balance owing under this
Note as part of any such sale or Refinancing to provide for repayment of this Note sooner than the
fifty-five (55) year repayment period.
b. Definition of Residual Receipt . For the purposes of this Note, "Residual
Receipts" shall mean the sum of money computed as follows:
(i) All rents, revenues, consideration or income (of any form) received
by Maker in connection with or relating to the ownership or operation of the Project, including
any net revenue derived from any Refinancing of the Project and any revenue from
contributions, loans or grants which is not required to meet future Project obligations (but
excluding tenants' security deposits, partner capital contributions and similar advances) ("Gross
Revenue") less all of the following: all customary and reasonable costs (i.e., mandatory (hard)
mortgage payments) and expenses reasonably and actually incurred in connection with the
operation and maintenance of the Project, including but not limited to premiums for property and
liability insurance; utility services not paid directly by tenants; maintenance and repair; security
services and payments for social/supportive services; any adjuster payments to the investor
limited partner required under Maker's partnership agreement; payment of principal or interest
on any indebtedness of Maker to any affiliate of Maker (individual or entity) or partner of Maker
to repay completion and operating deficit loans relating to the Project; asset management fee
payable to the limited partner of Maker in an amount approved as part of the Project Budget (as
defined in the Affordable Housing Agreement); partnership management fee payable to Maker,
not to exceed the amount approved as part of the Project Budget (as defined in the Affordable
Housing Agreement); reasonable property management fees not to exceed 8% of gross revenue;
deferred developer fee in an amount approved as part of the Project Budget (as defined in the
Affordable Housing Agreement); amounts (approved by Holder) expended to restore the Project
after a casualty loss or condemnation; reasonable and customary cost for accounting and auditing
the books and records of the Project; taxes; franchise tax filing fees; and any other reserves
reasonably required by the investors or the lenders approved by the City for the Project
(collectively "Operating Expenses").
(ii) Notwithstanding the generality of the foregoing, the following
items are not expenses or deductible in computing Residual Receipts:
(A) Depreciation, cost recovery, amortization and similar items
which do not involve the expenditure of cash.
6. Audited Financial Statement.
Maker shall annually provide Holder with an audited financial statement documenting the
calculation of Residual Receipts for the previous calendar year ending December 31. The audited
financial statement shall be provided on or before April 1, together with payment of the Residual
Receipts payment due to Holder. Holder shall have the right to inspect and audit Maker's books
and records concerning the calculation of the Residual Receipts Payment and to object within
ninety (90) days from receipt of Maker's statement. Failure to timely object shall be deemed
acceptance. If Holder does object, Holder shall specify the reasons for disapproval. Maker shall
have thirty (30) days to reconcile any disapproved item. If Maker and Holder cannot agree on the
3
1603\40\2603099. I
61147.00145\321623 78 .2
amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and
Holder shall resolve any disputed items. The cost of the auditor shall be shared equally by Maker
and Holder.
7. nnual Budget.
Maker shall prepare and submit to Holder a proposed annual operating budget for the
management and operation of the Project ("Annual Budget") no later than 60 days preceding the
effective year of such budget. The Annual Budget shall include the projected Gross Revenue and
Operating Expenses for the year and a line item showing the projected Residual Receipts from the
Project for the year. Holder will review the Annual Budget and, if acceptable, approve it, which
approval shall not be unreasonably withheld. If the Annual Budget is not acceptable, Holder shall
specify the reasons for disapproval. The intent of this section is to provide Holder an opportunity
to disapprove any unreasonable expenses which would diminish the Residual Receipts from the
Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of
the total Annual Budget shall require Holder's prior written consent, which consent shall not be
unreasonably withheld.
8. Acceleration Upon Certain Events or Upon D efa ult.
In the event of any Default under the terms of this Note, the Affordable Housing Agreement
or the Regulatory Agreement, the Deed of Trust which is the security for this Note, or under any
Senior loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker,
providing Maker with thirty (30) days in which to cure any Default, and such Default not having
been cured within thirty (30) days (or if a greater amount of time is reasonably necessary to effect
a cure, if actions to cure such Default are not undertaken within said thirty (30) day period and
pursued with reasonable diligence thereafter), all principal and interest due under this Note shall
immediately become due and payable, upon thirty (30) day written notice from the Holder to the
Maker. Failure to exercise such option shall not constitute a waiver of the right to exercise it in
the event of any subsequent Default.
Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real
property described in the Deed of Trust securing this Note or any part thereof or interest therein,
without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as
defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and
interest due hereunder shall immediately become due and payable upon thirty (30) days written
notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a
waiver of the right to require consent to future or successive transactions.
Notwithstanding the generality of the foregoing, certain transfers permitted under the
Affordable Housing Agreement shall not constitute a Default hereunder or under the Affordable
Housing Agreement, and any such action shall not accelerate the maturity of this Promissory Note,
provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing
Agreement or is reasonably acceptable to the Authority with reasonable promptness, and any
transferee under such a transfer agrees to be bound by any and all instruments in favor of the
Authority.
4
1603\40\2603099 .1
61147 .00145\32162378 .2
9. Interest on Default.
From and after a Default, the entire outstanding principal balance of this Note shall
automatically bear an annual interest rate equal to the lesser of: (a) eight percent (8%)
compounding annually; or (b) the maximum interest rate allowed by law.
10. Costs Paid by Maker.
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by
the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs
of collection, costs and expenses and attorneys fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such
sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment of this
instrument.
11. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this instrument, and expressly agrees that, without in any way
affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the
time for payment of any installment due hereunder, accept additional security, release any party
liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives,
to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a
defense to any demand on this instrument or any deed of trust, security agreement, guarantee or
other agreement now or hereafter securing this Note.
12. Indemni ft cation.
Maker shall indemnify, defend, protect and hold the Authority harmless from and against
any and all loss, damage, liability, action, cause of action , cost or expense, including, without
limitation, reasonable attorneys fees and expenses incurred by the Holder hereof, arising as a result
of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or related agreements; (ii) intentional bad faith waste of the real
property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from
Maker's failure to maintain insurance as required under the provisions of the deed of trust securing
this Note and the Affordable Housing Agreement.
13. Nonrecourse.
This Note shall become a nonrecourse obligation of Maker on the date that Maker files a
valid and timely Notice of Completion for the Project and the Holder must resort only to the Project
or the Property, or both, for repayment should the Maker fail to repay the sums evidenced hereby.
At such time as this Note becomes nonrecourse, neither Maker nor any of its general and limited
partner shall have any personal liability for repayment of the Project Loan and no deficiency
judgment may be obtained against Maker or any of its general and limited partners except for
actual or constructive fraud, material misrepresentation, intentional bad faith waste of or on the
Project and such other matters as are referred to below. Notwithstanding the generality of the
5
1603\40\2603099. 1
61147.00145\32162378.2
foregoing, however, Maker shall indemnify, defend, protect and hold Holder harmless from and
against any and all loss, damage, liability, action, cause of action, cost or expense, including,
without limitation, reasonable attorneys ' fees and expenses incurred by the Holder arising as a
result of any (i) fraud or material misrepresentation by the Maker under or in connection with the
Affordable Housing Agreement or any other agreements or documents provided in connection
therewith; (ii) intentional bad faith waste of the Property encumbered by the deed of trust which
secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required
under the provisions of the deed of trust securing this Note. Maker's obligation to indemnify the
Holder hereof as aforesaid shall be recourse obligations of the Maker, and in the event of any
breach of such obligations, the Holder shall have the right to proceed directly against the Maker to
recov e r any and all losses, damages, liability, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) and may bring any action and institute any proceeding to
obtain a deficiency judgment in or following foreclosure for any and all such losses, damages,
liabilities, costs and expenses resulting from such breach .
14. Se ve ra bili.ty.
If any provision of this Note is determined by a court of competent jurisdiction to be void
or unenforceable, such determination shall not affect any other provision of this instrument, and
all other provisions hereof shall remain valid and in full force and effect.
15. Non-Waiver.
No delay in demanding or failure to demand performance hereunder shall constitute a
waiver by the Holder hereof of its right to subsequently demand such performance or to exercise
any remedies for any Default hereunder. Further, in order to be effective , any waiver of any of the
Holder's rights and remedies hereunder shall be expressed in a writing signed by a duly appointed
representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder
shall not constitute a waiver of any other right, including, but not limited to, the right to exercise
any and all remedies for a different or subsequent event of Default hereunder.
[Signatures on Following Page]
6
1603\40\2603099. I
61147.00145\32162378 .2
MAKER:
__________ LP, a California limited partnership
By: ________ LLC,
a California limited liability company,
its managing general partner
By:
a California nonprofit corporation, its sole member and manager
By:
By: SJC Groves CCR LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC,
a California limited liability company, its sole member and manager
By:
1603\40\2603099. I
61147.00145\32162378.2
Todd R. Cottle, Trustee of 2007
Todd R. Cottle and Jennifer N. Cottle
Revocable Trust, its member
7
EXHIBIT L
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
(The Groves at Williams Ranch)
List oflmpact Fees Applicable to Project
The following City D velopment Impact Fee are applicabl e to the Project:
• Parks and Recreation Facilities Development Fee (Ordinance 210, as amended)
• Agricultural Preservation Fee (Ordinance 316, as amended)
• Sewer Connection Fees (Resolution No. 04-11-16-05)
• Capistrano Circulation Fee Program Traffic Impact Fees (Resolution No. 02-05-21-02)
• Domestic Water (Resolution No. 04-05-18-04)
• Non-Domestic Water (Recycled Water) (CVWD Resolution No. 00-9-5-1)
The following ity Development Impact Fees are not Applicable to the Project (which is an
affordable senior housing development):
• Systems Development Fee (Ordinance #364)
• New Building Construction Fee (Ordinance 211)
• Housing In-Lieu Fee (Ordinance 767)
1603\40\2595738.4
61147.00145\32162022.3
EXHIBIT L
L-1