01-1022_NHPAHP VILLA PALOMA LIMITED PARTNEERSHIP_Density Bonus Agr & Restrct CovenantsMEMORANDUM
TO: Memo to File
FROM: Dawn Schanderl, Deputy City Clerk
DATE: February 12, 2001
SUBJECT: Villa Paloma Limited Partnership
This file contains:
Density Bonus Agreement & Restrictive Covenants
Subordinate Deed of Trust and Assignment of Rents
Original Promissory Note
See additional files for information:
440.25 - Villa Paloma GPA 00-1
600.30 - Deferral of Development Fees (with Willow Partners LLC)
Recording requested by, and
when recorded return to:
CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.: City Clerk
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIINO FEE
20010820603 08:58am 11116101
109 39 NO3 4
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Above For Recorder's Use
NOTICE OF ADDITIONAL ADVANCE
THIS AGREEMENT is made this 7�c& ay of 2001, by and between, NHPAHP Villa
Paloma Limited Partnership, a California limited partnership ("Trustor"), whose address is c/o Willow Partner,
310 N. Westlake Blvd., Suite 250, Westlake Village, CA 91362, Attn.: Mr. Davis Slajchert, and the City of San
Juan Capistrano, a Municipal Corporation of the State of California ("Beneficiary').
WITNESSETH
WHEREAS, Trustor is the owner of that certain real property in the County of Orange, State of California,
being more particularly described as:
SEE ATTACHMENT 1
APN 666-241-06
; and,
WHEREAS, Beneficiary is the owner and holder of one promissory note secured by that certain deed of trust
dated December 14, 2001, and recorded January 21, 2001, as instrument number 20010049842, Official
Records of Orange County, California, securing one promissory note dated December 14, 2001, the principal
balance of which is $500,000.00; and,
WHEREAS, the deed of trust hereinabove referred to provides that the same is also given as security for the
payment of such additional sums which may thereafter be advanced or loaned by Beneficiary; and
WHEREAS, Trustor has applied for an advance of additional funds in the amount of $450,000.00, said
advance to also be secured by the aforesaid deed of trust, and
WHEREAS, Beneficiary will, upon recordation of this instrument, advance to Trustor the sum of $450,000.00,
and Trustor has executed and delivered to Beneficiary a modified promissory note dated, December 14,
2000, modified March 6, 2001, in the restated sum of $950,000.00 in favor of Beneficiary which note is also
secured by the deed of trust hereinabove referred to.
NOW THEREFORE, the undersigned Trustor hereby acknowledges payment of the said sum of $950,000.00
and certifies that the modified promissory note evidencing said sum is given to evidence an advance as
provided for by the terms and provisions of said deed of trust, and by executing this instrument agrees to be
bound and faithfully perform all obligations, promises, covenants, and provisions hereof, together with those
contained in said deed of trust and promissory notes hereinabove referred to.
In witness whereof, said Trustor and Beneficiary have executed this instrument on the date and year first
above set forth.
Note: All signatures must be acknowledged
NOTICE OF ADDITIONAL ADVANCE Page 1 of 2
142542v1
TRUSTOR
NHPAHP VILLA PALOMA LIMITED
PARTNERSHIP, a California limited partnership
By: W.P. Villa Paloma, LLC, a California
limited liability company, its General
Q�Partner
neC
By: G. Da ' c art
III of I18 Yh c
Couniv Gf Ire 6 z w
SUIN06011.ne OM MIA PHOr.q 1100110M
I @OFFlCIALSEAL
ADRIAN EDWARD NEWSOM
NOTARY PUBLIC - CALIFORNIA N
COMMISSION • 1254009 C
LOS ANGELES COUNTY
My Commission Exp. Mar. 17, 2004
NOTICE OF ADDITIONAL ADVANCE
1425420
0
BENEFICIARY
CITY OF SAN JUAN CAPISTRANO, a Municipal
Corporation
By: May, Wyatt Hart
ATTEST:
Margaret R. Monahan
Page 2 of 2
0
0
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
(Government Code 40814 & Civil Code 1181)
State of California )
County of Orange County ) ss.
City of San Juan Capistrano )
On 0 i?AVbeA, Aa R00 before me, Margaret R. Monahan, City Clerk,
personally appeared 6JqG2A personally known to me
to be the person whose name is subscribed to the within instrument and acknowledged
to me that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
(Spal)
Capacity Claimed by Signer
Municipal Corporate Officer
WITNESS my hand and official seal.
Monahan, City Clerk
Description of Attached Document
M Q,Uo n- l A -a ej kdACnZ'Ku,D AeeUu�uet
Title FTitle/Type of Document
SIGNER IS RESPRESENTING
CITY OF SAN JUAN CAPISTRANO Number of Pages
0((. ga aC0
Date of Document
Signer(s) other than named above
• 0
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
RECORDING REQUESTED BY AND 1111111 IIIII111111111111111111111111111111111111111111111 NO FEE
AFTER RECORDATION, MAIL TO: 20010049844 01:21 pm 01129101
107 23 Al2 C38 9
CITY OF SAN JUAN CAPISTRANO 0.00 0-00 0.00 0.00 0.00 0.00 0.00 0.00
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Arm.: City'Clerk
RecovderR usQ
This Agreement is recorded at the request and for the benefit of the City of San Juan Capistrano and is exempt from the
payment of a recording fee pursuant to Government Code Section 6103.
DENSITY BONUS AGREEMENT i
AND RESTRICTIVE COVENANTS
THIS DENSITY BONUS AGREEMENT AND RESTRICTIVE COVENANTS
("Agreement") is executed as of the 14`h day of December, 2000 by and between the CITY OF SAN
JUAN CAPISTRANO, a municipal corporation ("City"), and NHPAHP VILLA PALOMA
LIMITED PARTNERSHIP, a California limited partnership ("Owner"), with reference to the
following:
A. City on February 22, 2000 approved a Planning Commission resolution ("Project
Approval") authorizing, subject to the issuance of building permits and other conditions, a new
multifamily rental housing development containing 84 studio, one- and two-bedroom senior citizen
apartment units ("Project") on a 1.92 acre site at 27191 Paseo Espada in the City of San Juan
Capistrano ("Site") legally described on Exhibit "A" to this Agreement.
B. The Project requires a densitybonus as authorized by Section 9-3.511 of the San Juan
Capistrano Municipal Code.
C. As a condition to the Project Approval and pursuant to Government Code Section
65915 and San Juan Capistrano Municipal Code Section 9-3.511, this Agreement and the terms and
covenants herein are required as a condition to Owner's utilization of the density bonus.
NOW THEREFORE, in consideration of the representations, covenants, and
obligations of Owner contained in this Agreement, Owner, on behalf of itself and its successors and
assigns, hereby covenants and agrees as follows:
55627.3 001205-0006 12/4/00 - 2:47 pm
N�
Income -Restricted Units.
Owner hereby covenants on behalf of itself, and its successors and assigns, which covenant
shall run with the land and bind every successor and assign in interest of Owner, that, throughout the
55 -year term of this Agreement:
(a) not less than twenty percent (20%) of all dwelling units in the Project (the "Lower
Income Units") shall be rented only at an "Affordable Rent' to "Lower Income
Households" (as defined below); and
(b) separate from and in addition to the foregoing "Lower Income Units", not less than
ten percent (10%) of all dwelling units in the Project (the "Very Low Income Units")
shall be rented only at an "Affordable Rent' to "Very Low Income Households" (as
defined below).
2. Definitions.
For purposes of this Agreement, "Area Median Income" shall mean the median income for
Orange County, California, adjusted for household size, as published and periodically updated by
the State Department of Housing and Community Development pursuant to Section 50079.5 of the
California Health and Safety Code.
"Affordable Rent" shall mean a rental rate which results in monthly payments which,
including a reasonable utility allowance, do not exceed:
(a) for a Very Low Income Household, one -twelfth (1/12) of thirty percent (30%) of fifty
percent (50%) of Area Median Income; and
(b) for a Lower Income Household, one -twelfth (1/12) of thirty percent (30%) of
sixty percent (60%) of Area Median Income.
"Very Low Income Household" shall mean a household whose annual income does not
exceed fifty percent (50%) of the Area Median Income.
"Lower Income Household" shall mean a household whose annual income does not exceed
eighty percent (80%) of the Area Median Income.
Location of Restricted Units: Age Limitations.
The Lower Income Units and the Very Low Income Units (collectively, "Restricted Units")
shall be those units identified by unit number, unit size and number of bedrooms on Exhibit "B"
attached hereto. The selection of particular units as Restricted Units may be amended from time to
time with the prior written approval of the Planning Director of the City. The Restricted Units shall
55627.7 001205-0006 12/4/00-2:47pm
not differ in appearance from other rental units in the Project.
At least one person in residence in each Restricted Unit shall be a senior citizen 55 years of
age or older, and each other resident in a Restricted Unit shall be a "qualified permanent resident"
as defined in Civil Codi Section 51.3(c).
4. Tenant Selection and Reporting Requirements. Tenant applicants for the Restricted Units
shall be screened by Owner for compliance with the income and age restrictions of this Agreement.
Income verification documentation, proof of age, lease agreements and rent rolls for each Restricted
Unit shall be maintained by Owner for a period of not less than 5 years from origination of each
tenancy, and shall be subject to inspection by the City at any time upon 48 -hours advance written
notice to Owner. Annually not later than April 15t° of each calendar year during the term of this
Agreement following completion of the Project, Owner shall provide to the City a report which
includes the name, address and income of each person occupying a Restricted Unit during the
preceding calendar year, and identifying the bedroom size and monthly rent received for each
Restricted Unit. City acknowledges that the Project is being financed in party with federal low
income housing tax credits under Internal Revenue Code Section 142, and that submission to City
of copies of the annual reports prepared by Owner in connection with the federal tax credit program
will satisfy the annual reporting requirements of this Section 5, provided that such reports contain
substantially all of the information described above.
5. Term of this Agreement.
This Agreement and the covenants herein shall be effective on the date hereof and shall
continue in full force and effect for a period of fifty-five (55) years hereafter, whereupon this
Agreement shall terminate and be of no further force or effect; provided, however, that if the Project
is for any reason not completed by Owner and substantially occupied in accordance with this
Agreement on or before December 31, 2002, then Owner at its election on written notice to City may
thereupon terminate this Agreement, surrender and waive the benefits of the Project Approval, and
sell or develop the Site without a density bonus under applicable zoning requirements.
6. Covenants Run With the Land.
The covenants and agreements established in this Agreement shall be covenants running with
the land and shall, without regard to technical classification and designation, be binding on Owner
and any successor -in -interest to Owner's interest in the Site, or any part thereof, for the benefit of and
in favor of City and its successors and assigns.
7. Recordation.
City and Owner shall cause a fully executed copy of this Agreement to be recorded in the
Official Records of the Orange County Recorder.
55627.3 001205-0006 12/4/00-2:47pn, 3
1]
8. Enforcement.
•
City shall have the right, if any of the covenants set forth in this Agreement which are
provided for its benefit are breached, and if such breach is not cured by Owner within forty-five (45)
days of City's providing written notice to Owner specifying the nature and extent of the breach, to
exercise all rights and remedies and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breach to which it may be entitled, including but
not limited to withdrawal of a certificate of occupancy, foreclosure of any monetary lien, and
maintaining an action for specific performance. Except for City, the covenants and restrictions
contained in this Agreement shall not benefit nor be enforceable by any owner of any other real
property or any other person or entity.
9. Attorneys' Fees.
hi the event of litigation arising out of this Agreement, the prevailing party shall be entitled
to recover reasonable costs and attorney's fees.
10. Miscellaneous Provisions.
a. Time of the Essence. Time is of the essence of this Agreement.
b. Notices. Formal notices, demands, and communications between City and Owner
shall be given either by personal service, by overnight courier, or by mailing in the United States
mail, certified mail, postage prepaid, return receipt requested, addressed to the principal offices of
City or Owner, as follows:
If to City: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.: William Ramsey, AICP, Principal Planner
With a copy to: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn: City Attorney
If to Owner: NHPAHP Villa Poloma Limited Partnership
c/o Willow Partners
310 N. Westlake Blvd., Suite 250
Westlake Village, CA 91362
Attn.: Mr. Davis Slajchert
With a copy to: Joshua C. Gottheim, Esq.
55627.3 001205-0006 12/4/00-247p. 4
BROWN, WINFIELD & CANZONERI
300 S. Grand Avenue, Suite 1500
Los Angeles, CA 90071
Notices shall be effective upon receipt. Each party shall promptly notify the other party of
any change(s) of address to which notice shall be sent pursuant to this Agreement.
C. Execution in Counterparts. The parties may execute this document in two or more
counterparts; each counterpart shall be deemed an original instrument as against any party who has
executed it.
d. Pro -Forma Unit Cost Analysis. The parties acknowledge that San Juan Capistrano
Municipal Code Section 9-3511(f) requires a pro -forma analysis to demonstrate per unit cost of
construction if assistance is requested. Owner has previously provided this analysis, which is on file
with the City and is hereby incorporated by this reference as if set forth in full at this point.
IN WITNESS WHEREOF, City and Owner have caused this instrument to be executed as
of date first written above.
City:
CITY OF SAN JUAN CAPISTRANO, a municipal
corporation
r
By:
Mayo
C-/ ST:
City Clerk
APPROVED AS TO FORM:
City A to ney
55627.3 001205-0006 12/4/00-2:47p.
0
STATE OF CALIFORNIA
COUNTY OF
9
OWNER:
NHPAHP VILLA PALOMA LIMITED PARTNERSHIP,
a California limited partnership
By: W.P. Villa Paloma, LLC, a California limited liability
comp its General Partner
By: C
Manager
) SS.
On b2w Akt 1q, 2000, before me ra&-INClC S. yroE , Notary Public, personally
appeared personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(&) whose name( is/are
subscribed to the within instrument and acknowledged to me thatdie/she/fey executed the same in
-kis/her/thcir authorized capacity(ias), and that by iris/her/their signature(s) on the instrument the
person(e), or the entity upon behalf of which the person(&) acted, executed the instrument.
WITNESS and and offici 1.
Signature
STATE OF CALIFORNIA )
) SS.
COUNTY OF
On , 2000, before me
appeared
proved to me on the basis of satisfactory
subscribed to the within instrument and aclo
his/her/their authorized capacity(ies), and t
person(s), or the entity upon behalf of wW.
WITNESS my hand and official
Signature
55627.3 001205-0006 12/4/00 - 2:47 pm
, Notary Public, personally
personally known to me (or
widen3K to be the person(s) whose name(s) is/are
)wjp&ged to me that he/she/they executed the same in
by his/her/their signature(s) on the instrument the
the person(s) acted, executed the instrument.
0 0
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
State of California )
County of Orange ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 1181)
On December 18. 2000 , before me, Cheryl Johnson , City Clerk,
personally appeared - - - Wyatt Hart - - - , personally known to me to
be the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
OPTIONAL
Capacity Claimed by Signer Description of Attached
Document
Municipal Corporate Officer
Density Bonus Agreement and
Mayor Restrictive Covenants (Villa Paloma)
Title Title or Type of Document
Signer is Representing Nine
City of San Juan Capistrano Number of Pages
December 14, 2000
Date of Document
Laura Sluichert
Signer(s) Other Than Named Above
0 0
EXHIBIT "A"
Legal Description of Site
All that certain land situated in the State of California, County of Orange, City of San
Juan Capistrano, described as follows:
That portion of the southwest quarter of Section 6, township 8 south, range 7 west,
San Bernardino base and meridian, described as follows:
Beginning at a point in the east line of the west half of the southwest quarter of said
section 6, said point being the northeast corner of that certain 1.247 -acre parcel of
land conveyed to Ada B. Forster, a widow, by deed recorded July 28, 1945 in book
1327, page 138 of official records; thence north 74 degrees 29'00" east 120.97 feet;
thence south 3 degrees 20'10" west 309.28 feet; thence south 44 degrees 01'50" west
38.77 feet; thence north 82 degrees 55'00" west 242.37 feet; thence north 23 degrees
00'30" west 221.12 feet; thence north 74 degrees 29'00" east 264.97 feet to the point
of beginning.
Excepting therefrom, one-half of all oil, gas and other hydrocarbon substances and
minerals in and under said land, as reserved in the deed from Arley H. Leck and
others, to Paul Y. Goya, a single man, recorded May 7, 1956 in book 3499, page 346
of official records.
A.P. # 666-241-06
55627.3 001205-0006 12/4/00-2,471„„
•
EXHIBIT `B"
Identification of Restricted Units
11
I. LOWER INCOME UNITS (84 total units x 20 percent = 17 units):
Lower income units shall be dispersed throughout the Project, and shall not be less desirable
on average, in terms of height, view, access to parking, and other amenities than the other Project
units.
II. VERY -LOW INCOME UNITS (84 total units x 10 percent = 9 units):
Very -Low income units shall be dispersed throughout the Project, and shall not be less
desirable on average, in terms of height, view, access to parking, and other amenities than the other
Project units.
55627.3 001205-0006 12/4/00 - 2:47 pm 8
PROMISSORY NOTE
(Residual Receipts)
$500,000.00
December 14, 2000
For value received, the undersigned, NHPAHP VILLA PALOMA LIMITED PARTNERSHIP, a
California limited partnership ('Borrower") whose principal address is set forth hereinbelow,
promises to pay to the order of the CITY OF SAN JUAN CAPISTRANO, a public body corporate
and politic ("City") at 32400 Paseo Adelanto, San Juan Capistrano, California, 93675 (or to such
designee and/or at such other address as City may from time to time designate in writing), the
principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) (the "Loan"), or such
greater amount which may from time to time be owing as a result of accrued and unpaid interest
being added to principal as provided hereinbelow. The purpose of the Loan is to provide Borrower
with funds for use in connection with development of an 84 -unit affordable senior housing
development ("Development") on a site ("Site") more particularly described in the Deed of Trust and
the Density Bonus Agreement and Restricted Covenants executed concurrently herewith.
Interest.
1.1 Basic Interest. The disbursed and unpaid principal balance of the Loan shall bear
interest commencing on the date on which the Loan proceeds are first disbursed for the account of
Borrower, and ending on the date paid, at the rate of three percent (3%) per annum, simple interest.
Interest shall be computed on the basis of actual number of days elapsed and a 360 -day year.
1.2 Payment Dates and Amounts. Except as otherwise provided in this Note, Borrower
shall repay the Loan with interest in arrears in annual installments on March 15th of each calendar
year for the previous calendar year, commencing March 15, 2003. Absent prepayment or
acceleration, each of the annual payments due March 15, 2003 through and including March 15,
2033 ("Maturity Date") shall be in an amount equal to fifty percent (50%) of "Residual Receipts"
for the prior calendar year, as defined herein. Residual Receipts shall be calculated by Borrower
(and certified by an authorized officer of Borrower) and reported by Borrower to City annually for
each calendar year no later than March 15th of the following calendar year on forms required by the
California Tax Credit Allocation Commission ("TCAC") in connection with Borrower's award of
tax credits for the Development. All calculations and records are subject to audit by City.
Notwithstanding any other provision of this Note, unless due sooner, any outstanding principal
balance of the Loan remaining at the Maturity Date, together with any outstanding interest and any
other sums payable under this Note, shall be forgiven on the Maturity Date.
1.3 Default Rate. Any amounts (including but not limited to amounts of principal and
interest on the Loan) which Borrower does not pay when otherwise due under the terms of this Note,
shall bear interest at the rate of seven percent (7%) per annum ("Default Rate"), simple interest, from
the date otherwise due until the date paid.
56526.3 001205-0006 12/4/00-2:42pm -l-
0 0
1.4 Definition of Residual Receipts.
1.4.1 "Residual Receipts" shall mean, with respect to each calendar year, the amount
by which "Gross Rents," as defined herein, for such calendar year exceed the "Operating Expenses",
as defined herein, for that calendar year.
1.4.2 With the exception of the "Excluded Items" (as defined below), "Gross Rents"
shall mean, with respect to each calendar year or portion thereof, all gross income, rentals, revenues,
payments and consideration, of whatever form or nature, whether direct or indirect, received by or
paid to or for the account or benefit of Borrower or any "Affiliate" (as defined below) of Borrower
or any of their agents or employees, from any and all sources, resulting from or attributable to the
ownership, operation, leasing and occupancy of the Development, determined on the basis of
generally accepted accounting principles applied on a consistent basis, and shall include, but not be
limited to: (i) gross rentals paid by occupancy tenants of the Development under occupancy leases
and payments and subsidies ofwhatever nature, including without limitation any payments, vouchers
or subsidies from the United States Department of Housing and Urban Development ("HUD") or
any other person or organization, received on behalf of tenants under occupancy leases, (ii) amounts
paid to Borrower or any Affiliate of Borrower on account of "Operating Expenses" (as defined
herein), for further disbursement by Borrower or such Affiliate to a third party or parties, (iii) late
charges and interest paid on rentals, (iv) rents and receipts from licenses, concessions, vending
machines, coin laundry and similar sources; (v) other fees, charges or payments not denominated as
rental but payable to Borrower in connection with the rental of office, retail, storage, or other space
in the Development; and (vi) consideration received in whole or in part for the cancellation,
modification, extension or renewal of occupancy leases. The term "Affiliate" shall mean any person
or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with Borrower which, if Borrower is a partnership or limited liability
company, shall include each of the constituent members or partners, respectively, thereof. The term
"control" as used in this immediately preceding sentence, means, with respect to a person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights
attributable to the shares of the controlled corporation, and, with respect to a person that is not a
corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled person. Notwithstanding the foregoing, Gross Rents shall
not include the following items ("Excluded Items"): (aa) security deposits from tenants (except when
applied by Borrower to rent or other amounts owing by tenants); (bb) capital contributions to
Borrower by its members, partners or shareholders; (cc) condemnation or insurance proceeds, to the
extent used for reconstruction; or (dd) funds received from any source actually and directly used for
acquisition and/or initial development of the Development.
1.4.3 "Operating Expenses" shall mean, with respect to each calendar year or
portion thereof, the sum of the following expenses to the extent reasonably paid by Borrower during
such period: (i) amounts paid with respect to costs of initial development of the Project or with
respect to Project Financing to which the City's Deed of Trust is subordinated; (ii) all taxes and
assessments imposed upon the Development and required to be paid by Borrower but only to the
extent such taxes and assessments are paid or set aside as a reserve by Borrower during such calendar
56526.3 001205-0006 12/4/00-2:42pm -2-
• 0
year; (iii) all amounts paid or set aside as a reserve by Borrower on account of insurance premiums
for insurance carried in connection with the Development, provided that if insurance on the
Development is maintained as part of a blanket policy covering the Development and other
properties, the insurance premium included in this definition shall be the portion of the premium
fairly allocable to the Development for the period; (iv) ownership and operating costs incurred by
Borrower for the management, operation, cleaning, leasing, marketing, maintenance and repair of
the Development (including without limitation, property management fees and administrative fees),
properly chargeable against income according to generally accepted accounting principles, including
without limitation wages, payroll and accounting costs, utility and heating charges, material costs,
maintenance costs, costs of services, water and sewer charges, travel expenses allocable to the
Development, and license fees and business taxes, all or a portion of each of which may be paid to
Borrower and/or an Affiliate of Borrower; (v) reasonable and ordinary reserves actually set aside for
replacement of roofing, furniture, fixtures, equipment, and other capital expenditures; and (vi) to the
extent not otherwise included in Operating Expenses, amounts paid from any account as a reserve
account for the purpose for which such reserve was created so long as such purpose would constitute
an Operating Expense.
2. Acceleration.
Notwithstanding the payment terms set forth in Section 1 above, upon the occurrence of any
"Event of Default" as set forth in Section 8 below, the entire outstanding principal balance of the
Note, together with any outstanding interest and other amounts payable thereunder, shall, at the
election of City and upon notice to Borrower thereof, become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by
Borrower.
3. Prepayment; Application of Pam.
At any time after the disbursement of the Loan proceeds, Borrower may prepay all or a
portion of the unpaid principal amount of the Loan and accrued interest and any other sums
outstanding without penalty. All payments, including any prepayments or funds received upon
acceleration pursuant to Section 2 above, shall be applied first toward any outstanding costs of
collection or other amounts (excluding Loan principal or interest thereon) due under this Note, then
toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest
accrued at the basic interest rate of three percent (3%) per annum (simple interest), if any, then
toward any deferred principal, and finally toward the remaining principal balance under the Note.
4. Security and Source of Payment.
Borrower's obligations under this Note shall, at all times during which any amount remains
outstanding, be secured by the deed of trust ("Deed of Trust") of even date herewith, and of which
City is the beneficiary, recorded against Borrower's fee interest in the Site and the Development
(collectively, the "Property"). Except to the extent any Event of Default hereunder results directly
or indirectly from any fraud or intentional and material misrepresentation by Borrower in connection
56526.3 001205-0006 12/4/00-2:42pm -3-
0 0
with this Note or the Loan, in the event of the occurrence of an Event of Default, City's only recourse
under the Deed of Trust shall be against the Property, the proceeds thereof, and the rents and other
income arising from its use and occupancy as provided in the Deed of Trust.
Purpose of Loan.
The Loan proceeds shall be used by Borrower only to pay eligible development costs of the
Development and such other uses previously approved in writing by City. In no event shall
Borrower use or otherwise invest the proceeds of the Loan except as expressly provided in this Note.
6. Covenants of Borrower.
As additional consideration for the making of the Loan by City, Borrower covenants as
follows:
6.1 Compliance with Deed of Trust. Borrower shall comply with all of its obligations
under the Deed of Trust. Any amounts payable by Borrower under the Deed of Trust (other than
amounts also payable hereunder) shall be deemed added to the principal amount of the Loan payable
hereunder.
6.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants
associated with any loan secured by an interest in the Site or the Development. Borrower shall
provide to City a copy of any notice of default within (3) three business days after receiving any
notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly
cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects
to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing
or assisting in such a cure shall be deemed added to the outstanding principal amount of the Loan.
Assiemmnt of this Note.
This Note shall be assignable by Borrower only to a successor owner of the Site.
Events of Default and Remedies.
A. Borrower Events of Default. The occurrence of any of the following shall, after the
giving of any notice described therein, constitute an event of default by Borrower hereunder ("Event
of Default"):
(1) The failure of Borrower to pay or perform any monetary covenant or
obligation hereunder or under the terms of the Deed of Trust without curing such failure within
ten (10) days after receipt of written notice of such default from City (or from any party authorized
by City to deliver such notice as identified by City in writing to Borrower); or
56526.3 001205-0006 12/4/00 - 2:42 pm -4-
(2) The failure of Borrower to perform any non -monetary covenant or obligation
hereunder or under or the Deed of Trust without curing such failure within thirty (30) days after
receipt of written notice of such default from City (or from any party authorized by City to deliver
such notice as identified by City in writing to Borrower) specifying the nature of the event or
deficiency giving rise to the default and the action required to cure such deficiency. Provided,
however, that if any default with respect to a non -monetary obligation is such that it cannot be cured
within a 30 -day period, it shall be deemed cured if Borrower commences the cure within said 30 -day
period and diligently prosecutes such cure to completion thereafter.
B. City Remedies. Upon the occurrence of an Event of Default hereunder, City may, in
its sole discretion, take any one or more of the following actions:
(1) By notice to Borrower, declare the entire then unpaid principal balance of the
Loan immediately due and payable, and the same shall become due and payable without further
demand, protest or further notice of any kind, all of which are expressly waived. Upon such
declaration, outstanding principal and (to the extent permitted by law) interest and any other sums
outstanding in connection with the Loan shall thereafter bear interest at the Default Rate, payable
from the date of such declaration until paid in full;
(2) Subject to the nonrecourse provisions of Section 4 above, take any and all
actions and do any and all things which are allowed, permitted or provided by law, in equity or by
statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due
hereunder, to exercise its rights under the Deed of Trust, and to enforce performance and observance
of any obligation, agreement or covenant of the Borrower under this Note or under any other
document executed in connection herewith; and/or
(3) Subject to the nonrecourse provisions of Section 4 above, upon the occurrence
of an Event of Default which is occasioned by Borrower's failure to pay money, whether under this
Note, City may, but shall not be obligated to, make such payment. If such payment is made by City,
Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default
Rate. In either case, the Event of Default with respect to which any such payment has been made
by City shall not be deemed cured until such repayment (as the case may be) has been made by
Borrower.
C. No Remedy Exclusive. No remedy herein conferred upon or reserved to City is
intended to be exclusive of any other available remedy or remedies, but each such remedy shall be
cumulative and shall be in addition to every other remedy given under this Note or now existing at
law or in equity or by statute.
9. Agreement to Pay Attorneys' Fees and Expenses.
In the event that either party hereto brings any action or files any proceeding in connection
with the enforcement of its respective rights under this Note, the prevailing party in such action or
565263 W1205-0006 12/4/00-2'42pm -5-
0 0
proceeding shall be entitled to have its reasonable attomeys' fees and out-of-pocket expenditures paid
by the losing party.
10. Conflict of Interest: No Individual Liability.
No official or employee of City shall have any personal interest, direct or indirect, in this
Note, nor shall any official or employee of City participate in any decision relating to this Note
which affects such official's or employee's pecuniary interest in any corporation, partnership or
association in which such official or employee is directly or indirectly interested. No official or
employee of City shall be personally liable in the event of a breach of this Note by City.
11, Amendments. Changes and Modifications.
This Note may not be amended, changed, modified, altered or terminated without the prior
written consent of the parties hereto.
12. Notices.
All notices, demands, requests, elections, approvals, disapprovals, consents or other
communications given under this Note shall be in writing and shall be given by personal delivery,
certified mail, return receipt requested, or overnight guaranteed delivery service and addressed as
follows:
If to City:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 93675
Attn.: City Manager and Planning Director
If to Borrower:
c/o Willow Partners, LLC
310 N. Westlake Blvd #250
Westlake Village, CA 91362
Attn.: Mr. Davis Slajchert
With a copy to:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 93675
Attn: City Attorney
With a copy to:
Brown, Winfield & Canzoneri, Inc.
300 South Grand Avenue, Ste. 1500
Los Angeles, California 90071
Attn.: Joshua C. Gottheim
Notices shall be effective upon receipt, if given by personal delivery, the earlier of (i) three (3)
business days after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by
the return receipt, if delivered by certified mail, and one (1) day after deposit with the delivery
service, if delivered by overnight guaranteed delivery service. Each party shall promptly notify the
other party of any change(s) of address to which notice shall be sent pursuant to this Note.
56526.3 001205-0006 12/4/00 - 2:42 pm -6-
13. Severability.
The invalidity or unenforceability of any one or more provisions of this Note will in no way
affect any other provision.
14. Interpretation.
Whenever the context requires, all words used in the singular will be construed to have been
used in the plural, and vice versa, and each gender will include any other gender. The captions of
the paragraphs of this Note are for convenience only and do not define or limit any terms or
provisions. Time is of the essence in the performance of this Note by Borrower. Each party has
been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor
of or against any Party on account of relative responsibilities in drafting. Notwithstanding any other
provision of this Note, nothing herein shall be deemed to require Borrower to pay interest in the
amount of any applicable usury law or other legal limitation on interest, and the terms hereof shall
be interpreted to require in each instance the lesser of (i) the amount stated in this Note; and (ii) the
maximum applicable legal limit.
15. No Waiver: Consents.
Any waiver by City must be in writing and will not be construed as a continuing waiver. No
waiver will be implied from any delay or failure by City to take action on account of any default of
Borrower. Consent by City to any actor omission by Borrower will not be construed to be a consent
to any other or subsequent act or omission or to waive the requirement for City's consent to be
obtained in any future or other instance.
16. Governing Law.
This Note shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first
above written.
BORROWER:
NHPAHP VILLA PALOMA LIMITED PARTNERSHIP,
a California limited partnership
By: W.P. Villa Paloma, LLC, aCalifornialimited liability
company .ts General Partner
By: V
Manager
56526.3 001205-0006 12/4/00 - 2:42 pm -7-
0 6
CITY OF SAN JUAN CAPISTRANO
INTER -DEPARTMENT MEMORANDUM
TO: John Shaw
DEPT: City Attorney
SUBJECT: Document Review
FROM: Bill Ramsey, Principal Planner
DEPT: Planning
DATE: December 15, 2000
PHONE EXT.: 6334
NOTE: IF THIS A "RUSH" ITEM. PLEASE COMPLETE IN RED INK
ATTACHED ARE THE FOLLOWING (please describe document, i.e. draft ordinance,
consultant agreement, contract, etc.): The following signed original documents which
you've previously reviewed and approved as -to -form: "Promissory Note, "Density Bonus
Agreement and Restrictive Covenants," and the "Subordinate Deed of Trust" for Villa
Paloma
PLEASE:
(1) For your approval as -to -form and signature [X]
(2) For your review and comment [ ]
(3) For your information [ ]
(4) As you requested [ ]
(5) Other: [ j
(A) Keep for your files [ ]
(B) When completed, forward to the City Manager
for signature by Mayor (requires notary): [X]
When completed, forward to the City Clerk
for signature and recordation: [X]
(C) Date/Time Needed: n.a.
CITY ATTORNEY'S COMMENTS
P:PlanningwrchiwV c9909VAc9909ria3.wpd
Recording Requested by and
When Recorded Mail To:
CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Ann.: City Clerk
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
11111111111111111111111111111111111111111111111111111111134.00
20010049842 01:21 pm 01129101
107 23 D11 A36 12
0.00 0.00 0.00 0.00 22.00 0.00 0.00 0.00
Above Space For Recorders Use Only
SUBORDINATE DEED OF TRUST AND ASSIGNMENT OF RENTS
NOTICE: This deed of trust contains a subordination clause which may result
in your security interest in the property becoming subject to and of lower
priority than the lien of some other or later security instrument. This deed of
trust contains a subordination clause which allows the person obligated on your
real property security instrument to obtain a loan a portion of which may be
expended for other purposes than improvement of the land.
THIS SUBORDINATE DEED OF TRUST AND ASSIGNMENT OF RENTS ('Deed of
Trust") is made as of December 14, 2000, by and between NHPAHP Villa Paloma Limited
Partnership, a California limited partnership ("Trustor"), whose address is c/o Willow Partners, 310
N. Westlake Blvd., Suite 250, Westlake Village, CA 91362, Attn.: Mr. Davis Slajchert; First
American Title Insurance Company ("Trustee"); and the City of San Juan Capistrano, a municipal
corporation ('Beneficiary"). This Deed of Trust is subordinate to the deed of trust made
September 28, 2000 by Turstor to Lehman Housing Corp. as beneficiary, recorded
September 29, 2000 as RECITALS
Instrument No. 20000521760.
A. Beneficiary is making a loan to Trustor in the original principal amount of Five
Hundred Thousand and No/100 Dollars ($500,000.00) (the "Loan") pursuant to that certain
56494.3 001205-0006 5/2/00-8:43PM -I-
• 0
promissory note of even date herewith executed by Trustor (the "Note") in the principal amount of
the Loan.
B. Trustor intends to use the Loan proceeds for the purpose of financing the 84 -unit
affordable senior housing development (the "Project') to be developed on a site legally described
on Attachment "I" to this Deed of Trust (the "Property").
NOW THEREFORE, in consideration of the Loan, Trustor hereby irrevocably grants,
conveys, transfers and assigns to Trustee, its successors and assigns, in trust, with power of sale and
right of entry and possession as provided below, all of its present and future estate, right, title and
interest in and to the Property, together with all, right, title and interest of Trustor therein and in and
to, and grants to Beneficiary a security interest in, the following:
(A) All development rights, air rights, water, water rights, and water stock relating to the
Property.
(B) All present and future structures, buildings, improvements, appurtenances and fixtures
of any kind on the Property, including but not limited to all apparatus, attached equipment and appli-
ances used in connection with the operation or occupancy of the Property, such as heating and air-
conditioning systems and facilities used to provide any utility services, ventilation, vehicular
cleaning, storage or other services on the Property, and all signage, carpeting and floor coverings,
partitions, generators, screens, awnings, boilers, furnaces, pipes, plumbing, vacuum systems,
brushes, blowers, cleaning, call and sprinkler systems, fire extinguishing apparatus and equipment,
water tanks, heating, ventilating, air conditioning and air cooling equipment, and gas and electric
machinery and equipment, it being intended and agreed that all such items will be conclusively
considered to be a part of the Property conveyed by this Deed of Trust, whether or not attached or
affixed to the Property.
(C) All appurtenances of the Property and all rights of Trustor in and to any streets, roads
or public places, easements or rights of way, relating to the Property.
(D) All of the rents, royalties, profits and income related to the Property, to the extent not
prohibited by any applicable law.
(E) All proceeds and claims arising on account of any damage to or taking of the Property
and all causes of action and recoveries for any loss or diminution in value of the Property.
(F) All of the right, title and interest of Trustor in and to any construction contracts, plans
and specifications, building permits, and all other documents necessary for completion of the
improvements to the construction of the Property.
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
56494.3 001205-0006 5/2/00 - 8:43 PM -2-
(1) performance of each agreement of Trustor herein contained or incorporated herein
by reference, including, without limitation, the covenants, conditions and restrictions contained in
the Density Bonus Agreement and Restrictive Covenants ("CC&Rs") recorded against the Property
in favor of the City of San Juan Capistrano; and
(2) payment of the indebtedness (including, without limitation, interest thereon)
evidenced by the Note, and any extension or renewal or modification thereof.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
1. Payment of Secured Obligation. To pay when due the principal of, and the
interest on, the indebtedness evidenced by the Note.
2. Maintenance, Repair, Alterations. To keep the Property in good condition and
repair; to complete promptly and in a good and workmanlike manner all buildings and other
improvements to be constructed on the Property, and promptly restore in like manner any structure
that may be damaged or destroyed thereon; to pay when due all claims for labor performed and
materials furnished therefor, to complywith all laws, ordinances, regulations, covenants, conditions
and restrictions now or hereafter affecting the Property or any part thereof or requiring any
alterations or improvements thereon; not to commit or permit any waste or deterioration of the
Property; to keep and maintain abutting grounds, sidewalks, roads, parking and landscape areas in
good and neat order and repair; not to commit, suffer or permit, to the extent Trustor is able by the
exercise of commercially reasonable best efforts, any act to be done in or upon the Property in
violation of any law, ordinance or regulation.
3. Insurance. To provide, maintain at its expense property and liability insurance
covering the Property and the improvements to be constructed thereon. Any and all unexpired
insurance shall inure to the benefit of and pass to the purchaser of the Property at any foreclosure
sale, or any Trustee's sale held pursuant hereto.
4. Lawsuits. To appear in and defend, or otherwise take such action therein as
the Beneficiary and Trustee or either of them may deem advisable with respect to, any action or
proceeding affecting the security for the Loan in which Beneficiary or Trustee may appear.
5. Beneficiary Statement. To pay all charges for all court costs and expenses
which Beneficiary may elect to advance in order to keep unimpaired, protect, and preserve the title
thereto; and to pay for any statement provided for by law in effect at the date hereof regarding the
obligations secured hereby, any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.
6. Condemnation. That all judgments, awards of damages and settlements,
hereafter made as a result of or in lieu of any condemnation or other proceedings for public use of,
56494.3 001205-0006 5/2/00 - 8:43 PM -3-
0 0
or for any damage to, the Property or the improvements thereon, are hereby assigned to Beneficiary.
7. Permitted Acts of Beneficiary. That without affecting the liability of any
person, Beneficiary may at any time, and from time to time, either before or after the maturity of the
obligations secured hereby, and without notice (a) release any person liable for the payment of any
of the indebtedness, (b) make any agreement extending the time or otherwise altering the terms of
payment of any of the indebtedness, (c) accept additional security therefor of any kind, or (d) release
any property, real or personal, securing the indebtedness.
8. Reconveyance of Property. That upon written request of Beneficiary stating
that all sums secured hereby have been paid or forgiven, and upon surrender of this Deed of Trust
and the Note to Trustee for cancellation and retention, 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."
9. Default and Trustee's Sale. That upon the occurrence ofan"Event of Default"
under this Deed of Trust (as defined in Section 17 below) Beneficiary may declare all principal
remaining unpaid, all interest then earned and remaining unpaid, and all sums other than principal
or interest secured hereby, immediately due and payable (and thenceforth at the option of the
Beneficiary and except as otherwise prohibited by law, the entire balance of the unpaid principal
shall bear interest at a rate of three percent (3%) per annum (simple interest) as set forth in the Note
until paid) and may proceed to exercise the power of sale granted by this Deed of Trust by delivery
to Trustee of written declaration of default and demand for sale and of written notice of default and
of election to cause to be sold said Property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed of Trust, the Note and all documents
evidencing expenditures secured hereby.
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 the 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 the Property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by public announcement at
the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the Property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including Trustor, Trustee or Beneficiary, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee, including cost of evidence of title in
connection with sale, Trustee shall apply the proceeds of sale to payment of first, all sums expended
by the Beneficiary under the terms hereof or under the Note, not then repaid, with accrued interest
56494.3 001205-0006 5/2/00 - 8:43 PM -4-
at the rate of three percent (3%) per annum (simple interest); second, all other sums then secured
hereby; and the remainder, if any, to the person or persons legally entitled thereto.
10. Substitute Trustees. That Beneficiary, or any successor in ownership of any
indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor
or successors to any Trustee named herein or acting hereunder, which instrument, executed by the
Beneficiary and duly acknowledged and recorded in the Office of the Recorder of the County of
Orange, and by otherwise complying with the provisions of California Civil Code Section 2934a,
or any successor section, shall be conclusive proof of proper substitution of such successor Trustee
or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, right, powers and duties. Said instrument must contain the name of the original Trustor,
Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the
name and address of the new Trustee.
11. Successors Bound. That this Deed of Trust applies to, inures to the benefit
of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors,
assigns, trustees and receivers. 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.
12. Evidence of Title. That if, because of any default hereunder, or because of
the filing or contemplated filing of any legal proceedings affecting the Property, Beneficiary deems
it necessary to obtain an additional evidence of title or to cure any defect in title, Beneficiary may
procure such evidence or cure such defect, pay the cost thereof, and shall have an immediate claim
against Trustor therefor, together with a lien upon the Property for the amount so paid, with interest
at the rate of three percent (3%) per annum (simple interest). Beneficiary is further authorized to
require an appraisal of the Property at any time that Beneficiary may reasonably request.
13. Default in Other histruments: BagkWtcv. That default in the terms of any
other instrument securing the debt secured hereby, and/or the filing or other commencement of any
bankruptcy or insolvency proceedings including any assignment for the benefit of creditors or other
proceedings intended to liquidate or rehabilitate, by, for or against Trustor shall after any applicable
cure period constitute default under this Deed of Trust.
14. Statute of Limitations. That the pleading of any statute of limitations as a
defense to any and all obligations secured by this Deed of Trust is hereby waived by the Trustor, to
the full extent permissible by law.
15. Severability. That the invalidity of any one or more covenants, phrases,
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be constructed as if
such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted
herein.
56494.3 001205-0006 5/2/00-8:43PM -5-
0
16. Order of Application. That if the indebtedness secured hereby is now or
hereafter becomes further secured by a security agreement, deed of trust, pledge, contract of guaranty
or other additional securities, Beneficiary may to the full extent allowed bylaw, at its option, exhaust
any one or more of said securities as well as the security hereunder, either concurrently or inde-
pendently and in such order as it may determine, and may apply the proceeds received upon the
indebtedness secured hereby without affecting the status of, or waiving any right to exhaust all or
any other security including the security thereunder and without waiving anybreach or default in any
right or power, whether exercised hereunder or contained herein, or in any such other security.
17. Default. That the Trustor will be in default under this Deed of Trust upon any
of the following events which, if not cured within the applicable cure period provided, if any, shall
constitute an event of default hereunder ("Event of Default"):
a. The failure of Trustor to pay or perform any monetary covenant or
obligation hereunder or under the terms of the Note, without curing such failure within ten (10) days
after receipt of written notice of such default from Beneficiary (or from any party authorized by
Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor).
b. The failure of Trustor to perform any non -monetary covenant or
obligation hereunder or under the terms of the Note, without curing such failure within thirty (30)
days after receipt of written notice of such default from Beneficiary (or from any party authorized
by Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying
the nature of the event or deficiency giving rise to the default and the action required to cure such
deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such
that it cannot be cured within a 30 -day period, it shall be deemed cured if Trustor commences the
cure within said 30 -day period and diligently prosecutes such cure to completion thereafter.
18. Acceleration. That the entire principal and all accrued and unpaid interest on
the Note shall be due and payable as therein set forth; provided, however, that the entire balance of
the outstanding principal and all accrued and unpaid interest on the Note, together with any
outstanding interest and other amounts payable thereunder, shall, at the election of Beneficiary and
upon notice to Trustor thereof, become immediately due and payable upon any Event of Default,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by
Trustor.
19. Breach by Trustor, Cure by Beneficiary or Trustee. That, in the event of
Trustor's failure to comply with any or all of the promises and agreements set forth in this Deed of
Trust or to make any payment or to do any act as provided in this Deed of Trust, 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 such
extent as either in its sole judgment may reasonably deem necessary to protect the security hereof
(including, without limitation, to procure insurance and pay the premiums therefor). Trustor agrees
to pay immediately and without demand all sums so expended by Beneficiary or Trustee, with
56494.3 001205-0006 5/2/00 - 8:43 PM -6-
•
interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and
that Beneficiary shall have a lien upon the Property for the sums so expended and such interest
thereon.
20. Assumption of Liabilitv. That the assumption of liability for the payment of
the indebtedness hereby secured, by any successor in interest to Trustor in the Property (in the event
Beneficiary elects not to accelerate the repayment of the Loan pursuant to any transfer or disposition
of the Property by operation of law or otherwise) shall not release Trustor from liability for the
payment of such indebtedness or any sums advanced under and secured by this Deed of Trust. Any
forbearance or indulgence of Beneficiary, or extensions of time for the payment of all or any part of
the indebtedness secured hereby, or the release of a part of the Property from the lien of this Deed
of Trust, for, or without, payment of a consideration, shall not in any manner diminish or reduce the
liability of Trustor for the payment of the indebtedness now or hereafter secured hereby; and that any
payments made upon the said indebtedness shall be deemed to have been made on behalf and for the
benefit of all parties obligated to pay the same. The acceptance of payments in excess of the install-
ments provided to be paid upon the Note or the consideration paid for any such release shall not alter
or diminish the obligation of Trustor to thereafter make payments in the amounts and on the dates
provided therein, until the same are fully paid.
21. CWtions. That the captions of the sections of this Deed of Trust are for
convenience only and shall not be considered in resolving questions of interpretation or construction.
22. Estoppel Certificates. That Trustor and Beneficiary both agree, from time to
time, at request of the other party, to furnish to the requesting party or any person designated by the
requesting party a certified statement in a form satisfactory to the requesting party showing as of the
date of the certificate the unpaid principal balance and accrued interest on the Note and stating that
Trustor is not in default hereunder (or describing any default), and stating that Trustor has no
defense, right of set off or counterclaim in the payment of the indebtedness, or any part thereof, or
the observance or performance of any obligation (or describing any such defense, set off or
counterclaim). Any purchaser or assignee of the Note or this Deed of Trust or any interest therein
may rely on such certificate.
23. Books and Records. That Trustor and all subsequent owners of the Property,
if any, shall keep and maintain full and correct books and records showing in detail the earnings and
expenses of the Property and shall permit Beneficiary or its representatives to examine such books
and records and all supporting data and vouchers, from time to time at reasonable times, on request,
at Trustor's offices or at another mutually agreed upon location.
24. Obligation Non -Recourse. Except to the extent any Event of Default
hereunder results directly or indirectly from any fraud or intentional and material misrepresentation
by Borrower in connection with the Loan, in the event of the occurrence of an Event of Default,
Beneficiary's only recourse under this Deed of Trust shall be against the Property, the proceeds
56494.3 001205-0006 52/00 - 8:43 PM -7-
0 0
thereof, the rents and other income arising from its use and occupancy as provided in the Deed of
Trust, and any other collateral given to Beneficiary as security for repayment of the Loan.
25. Assignment of Rents. That all of the existing and future rents, royalties,
income, and profits of the Property that arise from its use or occupancy are hereby absolutely and
presently assigned to Beneficiary. However, until Trustor is in default under this Deed of Trust,
Trustor will have a license to collect and receive those rents, royalties, income and profits. Upon
any Event of Default by Trustor, Beneficiary may terminate Trustor's license in its discretion, at any
time, without notice to Trustor, and may thereafter collect the rents, royalties, income and profits
itself or by an agent or receiver. No action taken by Beneficiary to collect any rents, royalties,
income or profits will make Beneficiary a "mortgagee -in -possession" of the Property, unless
Beneficiary personally or by agent enters into actual possession of the Property. Possession by a
court-appointed receiver will not be considered possession by Beneficiary. All rents, royalties,
income and profits collected by Beneficiary or a receiver will be applied first to pay all expenses of
collection, and then to the payment of all costs of operation and management of the Property, and
then to the payment of the indebtedness and obligations secured by the Deed of Trust in whatever
order Beneficiary directs and without regard to the adequacy of its security. If required by
Beneficiary, each lease or occupancy agreement affecting any of the Property must provide, in a
manner approved by Beneficiary, that the tenant will recognize as its lessor any person succeeding
to the interest of Trustor upon any foreclosure of this Deed of Trust. The expenses (including
receivers' fees, if any, compensation to any agent appointed by Beneficiary, counsel fees, costs and
compensation to any agent appointed by Beneficiary, and disbursements) incurred in taking
possession and making such collection, shall be deemed a portion of the expense of this trust. The
entering upon and taking possession of the Property, and/or the collection of such rents, issues and
profits and the application thereof as aforesaid, shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any
one or more of the remedies in this section without waiving its right to exercise any such remedies
again or for the first time in the future. The foregoing shall be subject to the provisions of applicable
law.
26. Applicable Law. That this Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State of California.
27. Good Faith and Fair Dealing. That the Beneficiary and Trustor agree to
perform all of their obligations and the actions required of each hereunder in good faith and in
accordance with fair dealing.
28. Subordination. The lien of this deed of trust shall be junior and subordinate
to the lien of any other deed of trust or other real property security instrument recorded against the
Property heretofore or hereafter in favor of Trustor, Ocwen Federal Bank FSB ("Ocwen"), Lehman
Housing Lending Corp, a Delaware corporation ("Lehman"), Midland Mortgage Corp. ("Midland"),
or any affiliate of Trustor, Lehman, Midland or Ocwen, as such deed of trust or other security
instrument may be modified, refinanced, or replaced with permanent financing from time to time.
56494.3 001205-0006 5/2/00 - 8:43 PM -8-
Without limiting the generality of the foregoing, the lien of this deed of trust shall be junior and
subordinate to the liens of the following: (i) Long Form Deed of Trust and Assignment of Rents
dated September 28, 2000 between Trustor as trustor, First American Title Company as trustee, and
Lehman as Beneficiary; (ii) Deed of Trust, Security Agreement and Financing Statement dated
September 28, 2000 between Trustor as trustor, First American Title Company as trustee, and NHP
Affordable Housing Limited Partnership - Villa Paloma, a Florida limited partnership as beneficiary;
and (iii) any other lien created in connection with development or permanent financing for the
Project. Beneficiary shall, upon the written request of Trustor from time to time, execute
subordination agreements, estoppels and other certificates reasonably requested by senior
lienholders.
IN WITNESS WHEREOF, the undersigned have executed this Subordinate Deed of
Trust as of the date first above written.
TRUSTOR:
NHPAHP VILLA PALOMA LIMITED PARTNERSHIP,
a California limited partnership
By: W.P. Vill aloma, LLC, a California limited liability
comp , i General Partner
By:
Manager
BENEFICIARY:
CITY OF SAN JUAN CAPISTRANO, a municipal
corporation
By:
Ma��� r
ATTEST:
/INN ✓= 44F
APPROVED AS TO FORM:
By: J
56494.3 001205-0006 5/2/00-8:43PM -9-
City Attorney
STATE OF CALIFORNIA )
ss.
COUNTY OF ve% )
On j)��- 1y ,2000beforeme,{ ( ( iCJG �• Notary
Public, personally appeared Lau. ,r& (, 2�nti L c EST
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(e)
whose nameH is/aye subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in Lia/her/their authorized capacity(ies), and that by his/her/their signatureH on
the instrument the person(4, or the entity upon behalf of which the person(s) acted, executed the
instrument.
WISS my hand and official s
nature
STATE OF CALIFORNIA
COUNTY OF
ss.
2000 before me,
Public, personally appeared
personally known to me (or proved to me on the
whose name(s) is/are subscribed to the within in
executed the same in his/her/their authorized c
the instrument the person(s), or the entity on
instrument.
WITNESS my hand and
Signature
SwF .
Notary
ba f satisfactory evidence) to be the person(s)
st ent and acknowledged to me that he/she/they
acity(ies), and that by his/her/their signature(s) on
behalf of which the person(s) acted, executed the
56494.3 001205-0006 52/00 - 8:43 PM -10-
•
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
State of California )
County of Orange ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 1181)
On December 18, 2000 , before me, Cheryl Johnson , City Clerk,
personally appeared - - - Wyatt Hart - - - , personally known to me to
be the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
V City Clerk
Capacity Claimed by Signer
Municipal Corporate Officer
Mayor
Title
Signer is Representing
City of San Juan Capistrano
Description of Attached
Document
Subordinate Deed of Trust and
Assignment of Rents (Viilla Paloma)
Title or Type of Document
Twelve
Number of Pages
December 14, 2000
Date of Document
Laura Slujchert
Signer(s) Other Than Named Above
ATTACHMENT "I"
Legal Description of Property
All that certain land situated in the State of California, County of Orange, City of
San Juan Capistrano, described as follows:
That portion of the southwest quarter of Section 6, township 8 south, range 7
west, San Bernardino base and meridian, described as follows:
Beginning at a point in the east line of the west half of the southwest quarter of
said section 6, said point being the northeast corner of that certain 1.247 -acre
parcel of land conveyed to Ada B. Forster, a widow, by deed recorded July 28,
1945 in book 1327, page 138 of official records; thence north 74 degrees 29'00"
east 120.97 feet; thence south 3 degrees 20'10" west 309.28 feet; thence south 44
degrees 01'50" west 38.77 feet; thence north 82 degrees 55'00" west 242.37 feet;
thence north 23 degrees 00'30" west 221.12 feet; thence north 74 degrees 29'00"
east 264.97 feet to the point of beginning.
Excepting therefrom, one-half of all oil, gas and other hydrocarbon substances and
minerals in and under said land, as reserved in the deed from Arley H. Leck and
others, to Paul Y. Goya, a single man, recorded May 7, 1956 in book 3499, page
346 of official records.
A.P. # 666-241-06
56494.3 001205-0006 52/00 - 8:43 PM
i
•
PROMISSORY NOTE (MODIFIED)
(Residual Receipts)
$950,000.00 December 14, 2000
(modified March 6, 200 1)
For value received, the undersigned, NHPAHP VILLA PALOMA LIMITED PARTNERSHIP, a
California limited partnership ('Borrower") whose principal address is set forth hereinbelow,
promises to pay to the order of the CITY OF SAN JUAN CAPISTRANO, a public body corporate
and politic ("City") at 32400 Paseo Adelanto, San Juan Capistrano, California, 93675 (or to such
designee and/or at such other address as City may from time to time designate in writing), the
principal sum of NINE HUNDRED FIFTY THOUSAND DOLLARS ($950,000.00) (the "Loan"),
or such greater amount which may from time to time be owing as a result of accrued and unpaid
interest being added to principal as provided hereinbelow. The purpose of the Loan is to provide
Borrower with funds for use in connection with development of an 84 -unit affordable senior housing
development ("Development") on a site ("Site") more particularly described in the Deed of Trust and
the Density Bonus Agreement and Restricted Covenants executed concurrently herewith.
Interest.
1.1 Basic Interest. The disbursed and unpaid principal balance of the Loan shall bear
interest commencing on the date on which the Loan proceeds are first disbursed for the account of
Borrower, and ending on the date paid, at the rate of three percent (3%) per annum, simple interest.
Interest shall be computed on the basis of actual number of days elapsed and a 360 -day year.
1.2 Payment Dates and Amounts. Except as otherwise provided in this Note, Borrower
shall repay the Loan with interest in arrears in annual installments on March 15th of each calendar
year for the previous calendar year, commencing March 15, 2003. Absent prepayment or
acceleration, each of the annual payments due March 15, 2003 through and including March 15,
2033 ("Maturity Date") shall be in an amount equal to fifty percent (50%) of "Residual Receipts"
for the prior calendar year, as defined herein. Residual Receipts shall be calculated by Borrower
(and certified by an authorized officer of Borrower) and reported by Borrower to City annually for
each calendar year no later than March 15th of the following calendar year on forms required by the
California Tax Credit Allocation Commission ("TCAC") in connection with Borrower's award of
tax credits for the Development. All calculations and records are subject to audit by City.
Notwithstanding any other provision of this Note, unless due sooner, any outstanding principal
balance of the Loan remaining at the Maturity Date, together with any outstanding interest and any
other sums payable under this Note, shall be forgiven on the Maturity Date.
1.3 Default Rate. Any amounts (including but not limited to amounts of principal and
interest on the Loan) which Borrower does not pay when otherwise due under the terms of this Note,
shall bear interest at the rate of seven percent (7%) per annum ("Default Rate"), simple interest, from
the date otherwise due until the date paid.
56526.5 001205-0006 03/12/2001 - 11 12 am -I-
0 0
1.4 Definition of Residual Receipts.
1.4.1 "Residual Receipts" shall mean, with respect to each calendar year, the amount
by which "Gross Rents," as defined herein, for such calendar year exceed the "Operating Expenses",
as defined herein, for that calendar year.
1.4.2 With the exception of the "Excluded Items" (as defined below), "Gross Rents"
shall mean, with respect to each calendar year or portion thereof, all gross income, rentals, revenues,
payments and consideration, of whatever form or nature, whether direct or indirect, received by or
paid to or for the account or benefit of Borrower or any "Affiliate" (as defined below) of Borrower
or any of their agents or employees, from any and all sources, resulting from or attributable to the
ownership, operation, leasing and occupancy of the Development, determined on the basis of
generally accepted accounting principles applied on a consistent basis, and shall include, but not be
limited to: (i) gross rentals paid by occupancy tenants of the Development under occupancy leases
and payments and subsidies of whatever nature, including without limitation any payments, vouchers
or subsidies from the United States Department of Housing and Urban Development ("HUD") or
any other person or organization, received on behalf of tenants under occupancy leases, (ii) amounts
paid to Borrower or any Affiliate of Borrower on account of "Operating Expenses" (as defined
herein), for further disbursement by Borrower or such Affiliate to a third party or parties, (iii) late
charges and interest paid on rentals, (iv) rents and receipts from licenses, concessions, vending
machines, coin laundry and similar sources; (v) other fees, charges or payments not denominated as
rental but payable to Borrower in connection with the rental of office, retail, storage, or other space
in the Development; and (vi) consideration received in whole or in part for the cancellation,
modification, extension or renewal of occupancy leases. The term "Affiliate" shall mean any person
or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with Borrower which, if Borrower is a partnership or limited liability
company, shall include each of the constituent members or partners, respectively, thereof. The term
"control" as used in this immediately preceding sentence, means, with respect to a person that is a
corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights
attributable to the shares of the controlled corporation, and, with respect to a person that is not a
corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled person. Notwithstanding the foregoing, Gross Rents shall
not include the following items ("Excluded Items"): (aa) security deposits from tenants (except when
applied by Borrower to rent or other amounts owing by tenants); (bb) capital contributions to
Borrower by its members, partners or shareholders; (cc) condemnation or insurance proceeds, to the
extent used for reconstruction; or (dd) funds received from any source actually and directly used for
acquisition and/or initial development of the Development.
1.4.3 "Operating Expenses" shall mean, with respect to each calendar year or
portion thereof, the sum of the following expenses to the extent reasonably paid by Borrower during
such period: (i) amounts paid with respect to costs of initial development of the Project or with
respect to Project Financing to which the City's Deed of Trust is subordinated; (ii) all taxes and
assessments imposed upon the Development and required to be paid by Borrower but only to the
extent such taxes and assessments are paid or set aside as a reserve by Borrower during such calendar
56526.5 001205-0006 03/12/2001 - 11:12 am -2-
a
0 0
year; (iii) all amounts paid or set aside as a reserve by Borrower on account of insurance premiums
for insurance carried in connection with the Development, provided that if insurance on the
Development is maintained as part of a blanket policy covering the Development and other
properties, the insurance premium included in this definition shall be the portion of the premium
fairly allocable to the Development for the period; (iv) ownership and operating costs incurred by
Borrower for the management, operation, cleaning, leasing, marketing, maintenance and repair of
the Development (including without limitation, property management fees, administrative fees,
incentive management fees, developer fees and other fees and expenses required to be paid pursuant
to Borrower's limited partnership agreement), properly chargeable against income according to
generally accepted accounting principles, including without limitation wages, payroll and accounting
costs, utility and heating charges, material costs, maintenance costs, costs of services, water and
sewer charges, travel expenses allocable to the Development, and license fees and business taxes,
all or a portion of each of which may be paid to Borrower and/or an Affiliate of Borrower;
(v) reasonable and ordinary reserves actually set aside for replacement of roofing, furniture, fixtures,
equipment, and other capital expenditures; and (vi) to the extent not otherwise included in Operating
Expenses, amounts paid from any account as a reserve account for the purpose for which such
reserve was created so long as such purpose would constitute an Operating Expense.
2. Acceleration.
Notwithstanding the payment terms set forth in Section 1 above, upon the occurrence of any
"Event of Default" as set forth in Section 8 below, the entire outstanding principal balance of the
Note, together with any outstanding interest and other amounts payable thereunder, shall, at the
election of City and upon notice to Borrower thereof, become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by
Borrower.
3. Prepayment; A plication of Payments.
At any time after the disbursement of the Loan proceeds, Borrower may prepay all or a
portion of the unpaid principal amount of the Loan and accrued interest and any other sums
outstanding without penalty. All payments, including any prepayments or funds received upon
acceleration pursuant to Section 2 above, shall be applied first toward any outstanding costs of
collection or other amounts (excluding Loan principal or interest thereon) due under this Note, then
toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest
accrued at the basic interest rate of three percent (3%) per annum (simple interest), if any, then
toward any deferred principal, and finally toward the remaining principal balance under the Note.
4. Security and Source of Payment.
Borrower's obligations under this Note shall, at all times during which any amount remains
outstanding, be secured by that certain Subordinate Deed of Trust and Assignment of Rents ("Deed
of Trust") of even date herewith, and of which City is the beneficiary, recorded January 29, 2001 as
histrument No. 20010049842 against Borrower's fee interest in the Site and the Development
56526.5 001205-0006 03/12/2001 - 11712 am -3-
0 0
(collectively, the "Property"). Except to the extent any Event of Default hereunder results directly
or indirectly from any fraud or intentional and material misrepresentation byBorrower in connection
with this Note or the Loan, in the event of the occurrence of an Event of Default, City's only recourse
under the Deed of Trust shall be against the Property, the proceeds thereof, and the rents and other
income arising from its use and occupancy as provided in the Deed of Trust.
Purpose of Loan.
The Loan proceeds shall be used by Borrower only to pay eligible development costs of the
Development and such other uses previously approved in writing by City. In no event shall
Borrower use or otherwise invest the proceeds of the Loan except as expressly provided in this Note.
6. Covenants of Borrower.
As additional consideration for the making of the Loan by City, Borrower covenants as
follows:
6.1 Compliance with Deed of Trust. Borrower shall comply with all of its obligations
under the Deed of Trust. Any amounts payable by Borrower under the Deed of Trust (other than
amounts also payable hereunder) shall be deemed added to the principal amount of the Loan payable
hereunder.
6.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants
associated with any loan secured by an interest in the Site or the Development. Borrower shall
provide to City a copy of any notice of default within (3) three business days after receiving any
notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly
cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects
to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing
or assisting in such a cure shall be deemed added to the outstanding principal amount of the Loan.
7. Assignment of this Note.
This Note shall be assignable by Borrower only to a successor owner of the Site.
Events of Default and Remedies.
A. Borrower Events of Default. The occurrence of any of the following shall, after the
giving of any notice described therein, constitute an event of default by Borrower hereunder ("Event
of Default"):
(1) The failure of Borrower to pay or perform any monetary covenant or
obligation hereunder or under the terms of the Deed of Trust without curing such failure within
56526.5 001205-0006 0342/2001 - 11:12 am -4-
0 9
ten (10) days after receipt of written notice of such default from City (or from any party authorized
by City to deliver such notice as identified by City in writing to Borrower); or
(2) The failure of Borrower to perforin any non -monetary covenant or obligation
hereunder or under or the Deed of Trust without curing such failure within thirty (30) days after
receipt of written notice of such default from City (or from any party authorized by City to deliver
such notice as identified by City in writing to Borrower) specifying the nature of the event or
deficiency giving rise to the default and the action required to cure such deficiency. Provided,
however, that if any default with respect to a non -monetary obligation is such that it cannot be cured
within a 30 -day period, it shall be deemed cured if Borrower commences the cure within said 30 -day
period and diligently prosecutes such cure to completion thereafter.
B. City Remedies. Upon the occurrence of an Event of Default hereunder, City may, in
its sole discretion, take any one or more of the following actions:
(1) By notice to Borrower, declare the entire then unpaid principal balance of the
Loan immediately due and payable, and the same shall become due and payable without further
demand, protest or further notice of any kind, all of which are expressly waived. Upon such
declaration, outstanding principal and (to the extent permitted by law) interest and any other sums
outstanding in connection with the Loan shall thereafter bear interest at the Default Rate, payable
from the date of such declaration until paid in full;
(2) Subject to the nonrecourse provisions of Section 4 above, take any and all
actions and do any and all things which are allowed, permitted or provided by law, in equity or by
statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due
hereunder, to exercise its rights under the Deed of Trust, and to enforce performance and observance
of any obligation, agreement or covenant of the Borrower under this Note or under any other
document executed in connection herewith; and/or
(3) Subject to the nonrecourse provisions ofSection 4above, upon the occurrence
of an Event of Default which is occasioned by Borrower's failure to pay money, whether under this
Note, City may, but shall not be obligated to, make such payment. If such payment is made by City,
Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default
Rate. In either case, the Event of Default with respect to which any such payment has been made
by City shall not be deemed cured until such repayment (as the case may be) has been made by
Borrower.
C. No Remedy Exclusive. No remedy herein conferred upon or reserved to City is
intended to be exclusive of any other available remedy or remedies, but each such remedy shall be
cumulative and shall be in addition to every other remedy given under this Note or now existing at
law or in equity or by statute.
56526.5 001205-0006 03/12/2001 - 11:12.m -5-
0 0
9. Agreement to Pay Attorneys' Fees and Expenses.
In the event that either party hereto brings any action or files any proceeding in connection
with the enforcement of its respective rights under this Note, the prevailing party in such action or
proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid
by the losing party.
10. Conflict of Interest: No Individual Liability.
No official or employee of City shall have any personal interest, direct or indirect, in this
Note, nor shall any official or employee of City participate in any decision relating to this Note
which affects such official's or employee's pecuniary interest in any corporation, partnership or
association in which such official or employee is directly or indirectly interested. No official or
employee of City shall be personally liable in the event of a breach of this Note by City.
11. Amendments, Changes and Modifications.
This Note may not be amended, changed, modified, altered or terminated without the prior
written consent of the parties hereto.
12. Notices.
All notices, demands, requests, elections, approvals, disapprovals, consents or other
communications given under this Note shall be in writing and shall be given by personal delivery,
certified mail, return receipt requested, or overnight guaranteed delivery service and addressed as
follows:
If to City:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 93675
Atm.: City Manager and Planning Director
If to Borrower:
c/o Willow Partners, LLC
310 N. Westlake Blvd 4250
Westlake Village, CA 91362
Attn.: Mr. Davis Slajchert
With a copy to:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 93675
Attn: City Attorney
With a copy to:
Brown, Winfield & Canzoneri, Inc.
300 South Grand Avenue, Ste. 1500
Los Angeles, California 90071
Attn.: Joshua C. Gottheim
Notices shall be effective upon receipt, if given by personal delivery, the earlier of (i) three (3)
business days after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by
56526.5 001205-0006 03/12/2001 - 11:12 am -6-
0 0
the return receipt, if delivered by certified mail, and one (1) day after deposit with the delivery
service, if delivered by overnight guaranteed delivery service. Each party shall promptly notify the
other party of any change(s) of address to which notice shall be sent pursuant to this Note.
13. Severability.
The invalidity or unenforceability of any one or more provisions of this Note will in no way
affect any other provision.
14. Interpretation.
Whenever the context requires, all words used in the singular will be construed to have been
used in the plural, and vice versa, and each gender will include any other gender. The captions of
the paragraphs of this Note are for convenience only and do not define or limit any terms or
provisions. Time is of the essence in the performance of this Note by Borrower. Each party has
been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor
of or against any Party on account of relative responsibilities in drafting. Notwithstanding any other
provision of this Note, nothing herein shall be deemed to require Borrower to pay interest in the
amount of any applicable usury law or other legal limitation on interest, and the terms hereof shall
be interpreted to require in each instance the lesser of (i) the amount stated in this Note; and (ii) the
maximum applicable legal limit.
15. No Waiver: Consents.
Any waiver by City must be in writing and will not be construed as a continuing waiver. No
waiver will be implied from any delay or failure by City to take action on account of any default of
Borrower. Consent by City to any act or omission by Borrower will not be construed to be a consent
to any other or subsequent act or omission or to waive the requirement for City's consent to be
obtained in any future or other instance.
16. Governing Law.
This Note shall be governed by the laws of the State of California.
17. Disbursement Schedule.
City shall disburse portions of the $950,000 Loan proceeds to Borrower as the Development
progresses according to the following schedule:
Development Milestone Percent of City Loan Disbursed
Building Permit Issuance 15%
56526.5 001205-0006 03/12/2001 - 11:12. -7-
0
E
Grading Inspection and Completion 15%
Foundation Inspection Completion 10%
Roof Sheathing Inspection 15%
Final Framing Inspection / Rough 20%
Mechanical, Electrical & Plumbing
Final Drywall Inspection 15%
Final Certificate of Occupancy 10%
Total: 100%
18. Prior Note Superseded. This Promissory Note (Modified) supersedes and replaces the
original $500,000 Promissory Note dated December 14, 2000, which shall be returned to Borrower
and destroyed upon the execution hereof.
19. REPLACEMENT OF ORIGINAL NOTE. This Promissory Note (Modified) is a
replacement of the original Promissory Note (Modified) provided to the City by the Borrower,
on the assumption that the original Promissory Note (Modified) previously provided by the
Borrower has been permanently misplaced. Notwithstanding any other provision herein,
Borrower shall only be liable under one Promissory Note (Modified), even if the first original
Promissory Note (Modified) is subsequently located.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first
above written.
BORROWER:
NHPAHP VILLA PALOMA LIMITED PARTNERSHIP,
a California limited partnership
By: W.P. Villa Paloma, LLC, a California limited liability
company, its General Partner
l I G.
.��.
56526.5 001205-0006 03/12@001 - 1112. -8-
Agreed and Accepted by:
CITY OF SAN JUAN CAPISTRANO,
a municipal corporation
Attested by: %% �j
By: / 2 / �' k"
Mayor6f. Wyatt Hart ity Jerk: Margaret R. Monahan
56526.5 001205-0006 03/12/2001 - 11:12 am -9-
Cory
f tilt-p^r:4r!' COPY
RECORDING REQUESTED BY AND
AFTER RECORDATION, MAIL TO:
CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Arm.: City -Clerk
E
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
111111111111111111111111111111111111111111111 NO FEE
20010049844 01:21 pm 01129101
107 23 Al2 C38 9
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
This Agreement is recorded at the request and for the benefit of the City of San Juan Capistrano and is exempt from the
payment of a recording fee pursuant to Government Code Section 6103.
DENSITY BONUS AGREEMENT
AND RESTRICTIVE COVENANTS
THIS DENSITY BONUS AGREEMENT AND RESTRICTIVE COVENANTS
("Agreement") is executed as of the 14" day of December, 2000 by and between the CITY OF SAN
JUAN CAPISTRANO, a municipal corporation ("City"), and NHPAHP VILLA PALOMA
LIMITED PARTNERSHIP, a California limited partnership ("Owner"), with reference to the
following:
A. City on February 22, 2000 approved a Planning Commission resolution ("Project
Approval") authorizing, subject to the issuance of building permits and other conditions, a new
multifamily rental housing development containing 84 studio, one- and two-bedroom senior citizen
apartment units ("Project") on a 1.92 acre site at 27191 Paseo Espada in the City of San Juan
Capistrano ("Site") legally described on Exhibit "A" to this Agreement.
B. The Project requires a density bonus as authorized by Section 9-3.511 of the San Juan
Capistrano Municipal Code.
C. As a condition to the Project Approval and pursuant to Government Code Section
65915 and San Juan Capistrano Municipal Code Section 9-3.511, this Agreement and the terms and
covenants herein are required as a condition to Owner's utilization of the density bonus.
NOW THEREFORE, in consideration of the representations, covenants, and
obligations of Owner contained in this Agreement, Owner, on behalf of itself and its successors and
assigns, hereby covenants and agrees as follows:
556273 001205-0006 12/4/00-2:47pm
CO^'FC.?R EO COPT
N ,t coi t ur d wii;,i Epi; lr.al
Recording Requested by and
When Recorded Mail To:
CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.: City Clerk _-
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
11111111111111111111111111111111111111111111111111111111134.00
20010049842 01:21 pm 0V29/01
107 23 D11 A36 12
0.00 0.00 0.00 0.00 22.00 0.00 0.00 0.00
Above space For Recorder's Use Only
SUBORDINATE DEED OF TRUST AND ASSIGNMENT OF RENTS
NOTICE: This deed of trust contains a subordination clause which may result
in your security interest in the property becoming subject to and of lower
priority than the lien of some other or later security instrument. This deed of
trust contains a subordination clause which allows the person obligated on your
real property security instrument to obtain a loan a portion of which may be
expended for other purposes than improvement of the land.
THIS SUBORDINATE DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of
Trust") is made as of December 14, 2000, by and between NHPAHP Villa Paloma Limited
Partnership, a California limited partnership ("Trustor"), whose address is c/o Willow Partners, 310
N. Westlake Blvd., Suite 250, Westlake Village, CA 91362, Attn.: Mr. Davis Slajchert; First
American Title Insurance Company ("Trustee"); and the City of San Juan Capistrano, a municipal
corporation ("Beneficiary"). This Deed of Trust is subordinate to the deed of trust made
September 28, 2000 by Turstor to Lehman Housing Corp. as beneficiary, recorded
September 29, 2000 as RECITALS
Instrument No. 20000521760. -------
A. Beneficiary is making a loan to Trustor in the original principal amount of Five
Hundred Thousand and No/100 Dollars ($500,000.00) (the "Loan") pursuant to that certain
56494.3 001205-0006 5/2/00 - 8:43 PM
2.
n
AYES:
NOES:
ABSTAIN:
ABSENT:
0
Council Members Greiner, Hart, Swerdlin and Mayor Campbell
None
Council Member Bathgate
None
Approval of Residential Allocation Schedule:
It was moved by Council Member Hart, seconded by Council Member Greiner_ that the
following Resolution be adopted:
2003 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
JUAN CAPISTRANO, CALIFORNIA, APPROVING THE RESIDENTIAL
ALLOCATION SCHEDULE FOR CALENDAR YEARS 2000 THROUGH
2003 PURSUANT TO TITLE 9, CHAPTER 7, RESIDENTIAL GROWTH
MANAGEMENT PROGRAM
The motion carried by the following vote:
AYES: Council Members Greiner, Hart, Swerdlin and Mayor Campbell
NOES: None
ABSTAIN: Council Member Bathgate
ABSENT: None
FAMILY/SENIOR HOUSING (VILLA PALOMA) (440.251600.30)
n
Proposal:
Consideration of a General Plan Amendment to redesignate an existing 1.897 -acre
parcel located at 27191 Paseo Espada from 5.3 Assisted Care Facility to 2.6 Affordable
Family/Senior Housing and to consider approval of a Density Bonus Agreement which
would allow a maximum density of 44 dwelling units per acre. The project involves an
application to the Federal Department of Housing and Urban Development's Affordable
Housing Tax Credit Program. The current zoning of 5.3 Assisted Care Facility does not
provide for senior affordable housing. The site is situated within Sector B-2 of the
Ortega Planned Community and is subject to Comprehensive Development Plan 78-1;
the proposed use is consistent with the zoning. The site would be developed with a
three-story structure, including subterranean parking on the basement level and
apartments on the first and second levels.
City Council Minutes
7-
3/7/00
Applicant:
Friess Company Builders, Attention Kenneth Friess, 31658 Rancho Viejo Road, San
Juan Capistrano.
Proiect Representative:
Willow Partners, LLC, Attention G. David Slajchert, 310 North Westlake Boulevard,
#250, Westlake Village, California 91362.
Written Communications:
Report dated March 7, 2000, from the Planning Director, forwarding background
information and a recommendation of approval.
Preliminary landscape and grading plans and site plans were on display and William
Ramsey, Principal Planner, made an oral presentation, noting that the updated General
Plan had designated the property Assisted Care Facility in recognition of an approved
project for the site. He advised that the current designation was fairly narrow and would
not accommodate the revised project proposal. He discussed the density bonus
application and noted that the only other project in town with a density bonus was the
adjacent Seasons apartment complex. He also advised that due to the density bonus
allocation and federal tax credits, all units in this project would be designated as
affordable housing available to low-income and very low-income households. He
discussed the Planning Commission concerns with massing of the project and the
three-story building facade on the south eleyation, noting that landscape elements had
been incorporated to address those concerns.
Council Comments:
Discussion ensued regarding the mix and size of units. Mayor Campbell expressed her
concerns that there be sufficient landscaping; that there be sufficient walking areas
appropriate for the age of the residents; and, that all future residents be aware of the
St. Margaret's Episcopal School ballfields and lights. Mr. Ramsey described the
proposed landscaping, pedestrian walkways and courtyards, and advised that those
issues would be addressed in detail in the follow-up Planning Commission review. He
further advised that the existence of the St. Margaret's ballfields could be addressed in
the lease disclosure. Council Member Hart expressed concern that the units, and
particularly the bathroom areas, were ADA accessible.
Applicant's Comments:
Davis Slajchert, representing Willow Partners, advised that there were minimum safety
standards and Building Code requirements with regard to ADA accessibility that would
be met. Dr. Friess, applicant, advised that the installation of handrails in the bathroom
areas was a standard requirement.
Public Hearing:
Notice having been given as required by law, Mayor Campbell opened the Public
Hearing and there being no response, closed the Hearing with the right to re -open at
any time.
Approval of General Plan Amendment:
It was moved by Council Member Swerdlin
following Resolution be adopted:
City Council Minutes
Q3
seconded by Council Member Hart that the
3/7/00
San Juan Capistrano
Community
RedeNbW far 5, 2001
Agency
NHPAHP Villa Paloma Limited Parnership
c/o Willow Partner
310 N. Westlake Blvd, Suite 250
Westlake Village, CA 91362
Attention: Davis Slajchert
Please find enclosed a copy of an executed Notice of Additional Advance related to
APN 66-241-06 promissory note. The original Notice of Additional Advance has been
sent to the Orange County Recorder. The recording process takes approximately two
to three weeks. You may request a copy at that time by calling (949) 443-6309.
If you have any questions regarding the Notice of Additional Advance, please contact
Deborah Dirnu, Housing Consultant to the City of San Juan Capistrano (949) 443-6330.
Thank you,
Megonah n, CMC
City lerk
enclosure: Copy: Notice of Additional Advance
cc: Deborah Dirnu, Housing Consultant
Thomas Tomlinson, Planning Director
32400 Paseo Adelanto
San .Tuan Capistrano
California 92675
9:49-$93-1171
32400 PASEO ADELANTO
SAN .JUAN CAPISTRANO, CA 92675
(949) 493-1171
(949) 493-1053 (FAX)
January 8, 2001
610114
mm�um
Bunnrn 1961
1776
Mr. G. Davis Slajchert
Willow Partners LLC
310 North Westlake Boulevard, Su 250
Westlake Village, California 93162
Dear Mr. Slajchert:
MEMBERS OF THE CRY COUNCIL
DIANE L. BATHGATE
COLLENE CAMPBELL
JOHN GREINER
WYATT HART
DAVID M. SWERDLIN
CITY MANAGER
GEORGE SCARBOROUGH
The following documents have been executed by City officials and forwarded to the
Orange County Recorder's Office:
1. Deferral of Development Fees Agreement (Villas Paloma Project)
2. Subordinate Deed of Trust and Assignment of Rents
3. Density Bonus Agreement and Restrictive Covenants
Copies of the documents are enclosed for your files.
Very truly yours,
Cheryl Joh o
City Clerk
Enclosure
DRUG USE
IS
San Juan Capistrano: Preserving the Past to Enhance the Future
Ll
32400 PASEO ADELANTO
SAN JUAN CAPISTRANO, CA 92675
(949) 493-1171
(949) 493-1053 (FAX)
, yl i llyy��
ErNntlk' . 11
Clerk -Recorder's Office
County of Orange
P. O. Box 238
Santa Ana, California 92701
✓r� I,(I„H,B,
If1A111„I, 1961
1776
Re: Three Doc ments for Recording - Villa Paloma
Gentlemen:
The following documents are enclosed for recordation:
MEMBERS OF THE CITY COUNCIL
DIANE L. BATHGATE
COLLENE CAMPBELL
JOHN GREINER
WYATT HART
DAVID M. SWERGLIN
CITY MANAGER
GEORGE SCARBOROUGH
Deferral of Development Fees Agreement (Villa Paloma Project)
Subordinate Deed of Trust and Assignment of Rents
Density Bonus Agreement and Restrictive Covenants
A check in the amount of $63 is enclosed to cover recording and conformed copy fees.
When placed of record, please return the original documents to this office.
Please stamp Document Number and date of recording on the enclosed copy of the first
page of each document and return it, as the conformed copy, to this office in the enclosed,
stamped, self-addressed envelope at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
Cheryl Johnson
City Clerk
Enclosure
Document Number
Date
D= USE
Is
San Juan Capistrano: Preserving the Past to Enhance the Future
VENDOR NUMBER
VENDOR NAME G�s7iu o/ clan 9mm @gpl._.^
99999 CLERK EC
VENDOR:
INVOICE e'
,CODE
DATE
REFERENCE
INVOICE AMOUNT
DISCOUNT
AMOUNT PAID
INVOI
12190
E
CR
DTE
12—
REFERENCE
9-00 RECORDATION OF DEFERRAL
P.O
N
AMOUNT
63.00
letach and Retail ThE Stela nerrL The attached check ...
s in payment of Menne DeacriEed aaa+e.
B=Debit memo, C=CrOM memo} ,- .. .
_ UNION BANK OF CALIFORNIA No. 099148
/%1i�u�LYe' d(IIL ��J`�s cw`%��'`�'••LQfui 31971 Juan
Capisno trrano
San Juan Capistrano, CA 92675
32400 PASEO AOELANTO
SAN JUAN CAPISTRANO, CALIFORNIA 92675 16-49/1220
Pay
nn►.1 Awc ANT nn rFNTa
CHECK DATE PAY EXACTLY
12 PR -00 L AA QQ
11111099I48110 I: 1 2 20004961:04 5 200039 ill•
4
Cheryl Johnson
From:
Joshua C. Gottheim [GOTTHEIM@bwclaw.com]
Sent:
Wednesday, January 17, 2001 11:12 AM
To:
'cjohnson@sanjuancapistrano.org'
Cc:
Davis Slajchert (E-mail)
Subject:
Deed of Trust for Villa Paloma Loan
Cheryl -- I suggest you type the following new sentence on the first
page of
the Deed of Trust prior to the RECITALS heading:
"This Deed of Trust is subordinate to the deed of trust made 9/28/00 by
Trustor to Lehman Housing Corp. as beneficiary, recorded 9/29/00 as
Instrument No. 20000521760."
Give me a call if I can be of further assistance.
Joshua C. Gottheim
BROWN, WINFIELD & CANZONERI, INC.
300 S. Grand Avenue, Suite 1500 Los Angeles CA 90071
Phone: (213) 687-2100 Fax: (213) 687-2149
//l/�/ci
I�
�"1 gh o
os
Ai -3
RETURN ADDRESS: '
Regretfully your unrecorded �� (� ! T ( � � mi Ce
together with your remittance oft/ --, �k. No.
is being returned as your document isaeficient in the area(s) indicated below:
(1) The recorder can find no provision in the law authorizing the recording of the enclosed
(14) To properly perfect a security interest, this UCC -1 must be filed with the Secretary of State,
Uniform Commercial Code Division, P.O. Box 1738, Sacramento, CA 95808, unless it is a
"fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must
include a statement that it is a fixture filing to be recorded in the real estate records, a
description of real property in Orange County and, if the debtor does not own the real property,
the name of the owner.
(15) We have received your check without a document or letter of instruction. We are unable to
determine the intent of the fees.
(16) The correct fee is $ If an attachment is added to the
document, the fee will increase as stated on the attached fee schedule.
(17) OTHER:
THANK YOU FOR YOUR COOPERATION
GAMY L GLANVLE, COU ITY CLERK -RECORDER Please return to:
Clerk -Recorder
P.O. Box 238
Deputy Recorder Santa Ana, CA 92702-0238
-e F0662-105 (R10/96j (714) 834-2887
document(s).
(2)
Recording cannot be performed in this county. Please forward your document to
County Recorder.
(3)
For proper indexing:
a. "Et al" is not acceptable; all parties must be named.
b. The name of the company, corporation or partnership must be at the signature
point.
"
gd.
c. The trustee of a trust must be identified as such.
The names in the caption, execution and notary acknowledgment must match.
e. The caption of the document and signature point need to identify who the
.—
custodian/agent represents
(4)
The Documentary Transfer Tax declaration must be completed to show either the amount of tax
due or an acceptable reason for exemption. (See enclosed bulletin.) If there is "No
consideration," document must so state.
(5)
The city where the property is located or "unincorporated area," is required on the deed and the
tax declaration must indicate how the tax was computed.
(6)
The preliminary change of ownership report is required. Please complete or correct the areas
marked in red.
(7)
The notary acknowledgment is incomplete (please see red mark) or is on an outdated form. A
"General Acknowledgment" form is required. (See enclosed sample.)
(8)
The notary seal is illegible. You may have the notary restamp the document clearly or you may
complete the enclosed certification under the penalty of perjury. Adding the `Penalty of Perjury"
statement will increase the fee by $
(9)
Portion(s) of the document are illegible (please see red mark). You may execute and submit a
new original, or complete the enclosed certification under penalty of perjury. Adding the
"Penalty of Perjury" statement will increase the fee by $
The legal description/exhibit has been omitted. All exhibits must be referenced in the body of
i-_�
the document and appropriately labeled.
(11)
Recording reference (date and document number or booI� and page) of t��h``e� prior �recorded ,
omrtted..._ }�� J,) I T(1
document is incorrect or wag ` f /)CwL' 2)et-Cl C. )
(12)
Abstracts of judgment must contain the address of the judgment creditor(s), the address of the
judgment debtor(s) and the address at which the summons was served or mailed.
(13)
Pursuant to Government Code sections 27288.1 and 27201, all parties whose interest is
affected must be named and identified (i.e. owner etc.).
(14) To properly perfect a security interest, this UCC -1 must be filed with the Secretary of State,
Uniform Commercial Code Division, P.O. Box 1738, Sacramento, CA 95808, unless it is a
"fixture filing" pursuant to UCC section 9313. Any Financing Statement covering fixtures must
include a statement that it is a fixture filing to be recorded in the real estate records, a
description of real property in Orange County and, if the debtor does not own the real property,
the name of the owner.
(15) We have received your check without a document or letter of instruction. We are unable to
determine the intent of the fees.
(16) The correct fee is $ If an attachment is added to the
document, the fee will increase as stated on the attached fee schedule.
(17) OTHER:
THANK YOU FOR YOUR COOPERATION
GAMY L GLANVLE, COU ITY CLERK -RECORDER Please return to:
Clerk -Recorder
P.O. Box 238
Deputy Recorder Santa Ana, CA 92702-0238
-e F0662-105 (R10/96j (714) 834-2887