00-1219_WILLOW PARTNERS LLC_Defferal Development Fees Agra 6
MEMORANDUM
TO: Memo to File
FROM: Dawn Schanderl, Deputy City Clerk
DATE: February 12, 2001
SUBJECT: Villa Paloma Limited Partnership
This file contains:
Deferral of Development Fees (Willow Partners LLC)
See additional files for information:
440.25 - Villa Paloma GPA 00-1
600.30 - Density Bonus Agreement & Restrictive Covenants
Subordinate Deed of Trust and Assignment of Rents
Original Promissory Note
Recording Requested by and
When Recorded Return to:
City Clerk
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, Ca. 92675
Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
11111111111111111111111111111111111111111111111111111111114.00
20010049843 01:21 pm 01129101
107 23 Al2 5
0.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00
DEFERRAL OF DEVELOPMENT FEES AGREEMENT
(VILLA PALOMA PROJECT)
[Assessor's Parcel #666-241-06, County of Orange]
This Agreement is made by and between the City of San Juan Capistrano
(hereinafter "City"), and Willow Partners LLC (hereinafter "Developer").
RECITALS:
Whereas, Developer has received a General plan amendment and Architectural
Plan approvals authorizing the construction of an affordable senior apartment housing
project consisting of approximately 84 units at the location of 27221 Paseo Espada, San
Juan Capistrano, and
Whereas, City has also agreed to provide a $500,000 affordable senior housing loan
to assist the Developer constructing the project, and
Whereas, City development fee requirements for the project mandate the posting
of sewer and water fees with City at or prior to the time for the commencement of
construction of the project, and
Whereas, Developer has requested that payment of sewer and water fees be
deferred until such time that Developer requests the issuance of a certificate of occupancy
for the housing units, and
Whereas, City finds that the deferral of payment of fees will make the project more
financially feasible and in the public interest,
NOW THEREFORE BE IT MUTUALLY RESOLVED BETWEEN CITY AND
1 of 3
l�
DEVELOPER AS FOLLOWS:
Section 1. Deferral of Payment of Fees
Developer shall pay the following development fees and taxes for the Project by not
later than the date Developer has requested a City Certificate of Occupancy for any of the
units proposed to be constructed by the Developer, but in any event not later than two
years from the date of this Agreement. The estimated development fees in questions are:
A. Sewer Capacity Fees ......................... $143,902.00
B. Water Fees:
(i) Water Capital Imp. Charge $166,488.00
(ii) Water Capacity Charge $ 21,743.00
(iii) Water Storage Fee $116,088.00
Total Water Fees ....................... $304,319.00
These fees are estimates and may change based upon final configuration and
buildout of the projector subsequent administrative recalculation of the specific dimensions
of the project.
Section 2. Developer's Interest Payment Obligation.
Developer agrees and understands that City will forego the benefit of the use of the
development fees described above for the period of time running from the date of issuance
of development permits to construct the project to the date issuance of certificates of
occupancy for the apartment units. Accordingly, Developer shall have the obligation to pay
to City an interest charge on the total amount of the development fees described in Section
1 of the Agreement for this period of time as follows: the interest charge shall be computed
by the City's Controller in the amount of the average rate of interest earned by the City's
investments; the interest charge shall be paid to City at or before the time of City's
issuance of certificate(s) of occupancy for the project.
Section 3. Term of Agreement.
This Agreement shall remain in full force and effect until mutually rescinded by the
Parties.
Section 4. Attorney's Fees.
Developer agrees to pay City such sum as the court may adjudge as reasonable
attorney's fees for the legal services of an attorney representing City in an action brought
to enforce this Agreement, and such sum shall be made a part of any judgment in such
action against Developer if such action is determined in favor of City.
2 of 3
Section 5. Successors and Assigns
The burdens of this Agreement shall be binding upon, and the benefits of the
Agreement inure to, all successors -in -interest and assigns of the Parties.
Section 6. Time of Essence.
Time is of the essence with respect to all obligations under this Agreement.
Section 7. Notices.
All notices between the parties pursuant to this Agreement shall be in writing and
shall be given by personal delivery or first class mail to the parties as follows:
A) To City: George Scarborough, City Manager
City of San Juan Capistrano
32400 Paaeo Adelanto
San Juan Capistrano, Ca. 92675
B) To Developer: Willow Partners LLC
Attn: G. Davis Slajchert
310 N. Westlake Blvd., #250
Westlake Village, Ca. 93162
In Witness Whereof, the parties have executed this Agreement on the date first
above written.
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Willow Partners LLC
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
ss.
County ofyL
On If Zk,L`.Emto(+ ���'� before me, ,/L21IZe J
Date �i Name and Ttle of Officer (e.g.. "Jane Doe, Nolan"y Public')
personally appeared ` 7e2 z, L � ✓lS -5�k iG(i, -
Name(s) of Signers)
JAMES S. ROE
Commission # 1232572
Notoit Public - California
Los Angeles County
W Comm.6WccsAug 19.2003
❑ personally known to me
proved to me on the basis of satisfactory
evidence
to be the person(s) whose name(sr(is/are
subscribed to the within i strument and
acknowledged to me thath sy/p%y executed
the same/. in his/h�f6ir authorized
capacity(i2s�, and that by his/�/tWir
signature( on the instrument the person(s�or
the entity upon behalf of which the person(s�
acted, executed the instrument.
hand andnffi6al seal.
Place Notary Seal Above V Signature of "ary Public
OPTTA
Though the information below is not required by law, it may prove va o persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Roc9ment
Title or Type of Document: d /✓4 /pl
Document Date: Number of Pages:
Signer(s) Other Than Named Above: A -11A"
Capacity(ies) Claimed by Signer
Signer's Name:
❑ Individual
❑ Corporate Officer — Title(s): _
❑ Partner —❑ Limited ❑ General
i
Attorney in Fact
Trustee
Guardian or Conservator
Other:
Signer Is Representing:
RIGHT THUMBPRINT
OF SIGNER
01999 Nabo al Notary Aaeooiallon • 9350 a Solo Ave.. P0. Boa 2402 • ClutawoM, CA 91313.2402 • w- w.nutooaingbqor, Prod. W. 6907 Ra r Call Toll -Free 1-BOpe]Sbe27
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 19. 2000 , before me, Cheryl Johnson City Clerk,
personally appeared - - - George Scarborough - - - 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.
Capacity Claimed by Signer
Municipal Corporate Officer
City Manager
Title
Signer is Representing
City of San Juan Capistrano
OPTIONAL
Description of Attached
Document
Deferral of Develooment Fees
Agreement (Villa Paloma Project)
Title or Type of Document
Number of Pages
December 19, 2000
Date of Document
George Sluichert
Signer(s) Other Than Named Above
I CERTIFY THAT, IF THIS SEAL IS AFFIXED 4p� `s0�, COUNTY CLERK-Rcy,u„v...lt
IN PURPLE INK, THIS IS A TRUE AND
CORRECT COPY OF THE PERMANENT RECORD
FILED OR RECORDED IN THIS OFFICE. Iwo
JAN 2 9 2001
DATE fEE�:�L� ORANGi COUNTY ST+/t'fEOFCALIFORNIA
0
Recording Requested by and
When Recorded Return to:
City Clerk Recorded in Official Records, County of Orange
Gary Granville, Clerk -Recorder
324000 Paseo Adelanto
City San Juan Capistrano 1m11111111111IN11111M111111011111114.00
San Juan Capistrano, Ca. 92675 20010049843 01:21 pm 01129101
107 23 Al2 5
OM OM 0.00 0.00 8.00 0.00 0.00 0.00
DEFERRAL OF DEVELOPMENT FEES AGREEMENT
(VILLA PALOMA PROJECT)
[Assessor's Parcel #666-241-06, County of Orange]
This Agreement is made by and between the City of San Juan Capistrano
(hereinafter "City"), and Willow Partners LLC (hereinafter "Developer"). �(
RECITALS:
Whereas, Developer has received a General plan amendment and Architectural
Plan approvals authorizing the construction of an affordable senior apartment housing
project consisting of approximately 84 units at the location of 27221 Paseo Espada, San
Juan Capistrano, and
Whereas, City has also agreed to provide a $500,000 affordable senior housing loan
to assist the Developer constructing the project, and
Whereas, City development fee requirements for the project mandate the posting
of sewer and water fees with City at or prior to the time for the commencement of
construction of the project, and
Whereas, Developer has requested that payment of sewer and water fees be
deferred until such time that Developer requests the issuance of a certificate of occupancy
for the housing units, and
Whereas, City finds that the deferral of payment of fees will make the project more
financially feasible and in the public interest,
NOW THEREFORE BE IT MUTUALLY RESOLVED BETWEEN CITY AND
1 of 3
0 0
DEVELOPER AS FOLLOWS:
Section 1. Deferral of Payment of Fees.
Developer shall pay the following development fees and taxes for the Project by not
later than the date Developer has requested a City Certificate of Occupancy for any of the
units proposed to be constructed by the Developer, but in any event not later than two
years from the date of this Agreement. The estimated development fees in questions are:
A. Sewer Capacity Fees ......................... $143,902.00
B. Water Fees:
(i) Water Capital Imp. Charge $166,488.00
(ii) Water Capacity Charge $ 21,743.00
(iii) Water Storage Fee $116.088.00
Total Water Fees ....................... $304,319.00
These fees are estimates and may change based upon final configuration and
buildout ofthe projector subsequent administrative recalculation of the specific dimensions
of the project.
Section 2. Developer's Interest Payment Obligation.
Developer agrees and understands that City will forego the benefit of the use of the
development fees described above for the period of time running from the date of issuance
of development permits to construct the project to the date issuance of certificates of
occupancy for the apartment units. Accordingly, Developer shall have the obligation to pay
to City an interest charge on the total amount of the development fees described in Section
1 of the Agreement for this period of time as follows: the interest charge shall be computed
by the City's Controller in the amount of the average rate of interest earned by the City's
investments; the interest charge shall be paid to City at or before the time of City's
issuance of certificate(s) of occupancy for the project.
Section 3. Term of Agreement.
This Agreement shall remain in full force and effect until mutually rescinded by the
Parties.
Section 4. Attorney's Fees.
Developer agrees to pay City such sum as the court may adjudge as reasonable
attorney's fees for the legal services of an attorney representing City in an action brought
to enforce this Agreement, and such sum shall be made a part of any judgment in such
action against Developer if such action is determined in favor of City.
2of3
Section 5. Successors and Assigns
The burdens of this Agreement shall be binding upon, and the beneftts of the
Agreement inure to, all successors -in -interest and assigns of the Parties.
Section 6. Time of Essence
Time is of the essence with respect to all obligations under this Agreement.
Section 7. Notices.
All notices between the parties pursuant to this Agreement shall be in writing and
shall be given by personal delivery or first class mail to the parties as follows:
A) To City: George Scarborough, City Manager
City of San Juan Capistrano
32400 Paaeo Adelanto
San Juan Capistrano, Ca. 92675
B) To Developer: Willow Partners LLC
Attn: G. Davis Slajchert
310 N. Westlake Blvd., #250
Westlake Village, Ca. 93162
In Witness Whereof, the parties have executed this Agreement on the date first
above written.
Willow Partners LLC
1
Title: t�zye
12/18/000AAGREEM MPALOMA.," 3 of 3
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
���i�
ss.
r
County of
o persons relying on the document
ec`l9/lLty' G6 .6ttcJ
On before me,
�
SzCr
Date
Name and Title of Officer (e.g., "Jane Doe, Notary Public")
S/,
personally appeared ` %�' C Y�/PS
i,e4,c.
V
Name(6) of Signer(s)
❑ personally known to me
Signer(s) Other Than Named Above:
proved to me on the basis of satisfactory
Capacity(les) Claimed by Signer
evidence
Signer's Name:
to be the person(s)/ whose name(O'/is/are
JAMES S. ROE
Commission # 1232572
subscribed to the within i strument and
acknowledged to me that h sO� *ey executed
Notary Public - Calfomio _
Los Angeles County
the same/. in his/h;/t it autho'zed
capacity(ias), and that by his/ r/tr
My Comm. [�'vesAug 19,2003
signature(,$f on the instrument the person(§ or
the entity upon behalf of which the personW
❑ Corporate Officer — Title(s):
acted, executed the instrument.
--UICUNESS my hand pafLQVial seal.
Place Notary Seal Above / ill Signature of NUlary Public
yr 1 wrvrs
Though the information below is not required by law, it may prove va
o persons relying on the document
and could prevent fraudulent removal and reattachment of
this form to another document.
Description of Attached ocument
Title or Type of Document: y
Document Date: IZ ' rd' 0-0
Number of Pages:
Signer(s) Other Than Named Above:
Capacity(les) Claimed by Signer
Signer's Name:
❑ Individual
Top of thumb here
❑ Corporate Officer — Title(s):
❑ Partner —❑ Limited ❑ General
❑ Attorney in Fact
❑ Trustee
❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
01999 National Notary Aaeoviation • 9350 be Soto Ave., PO. Box 2002 • Ctiatav , CA 91313 2402 • w .nationalwt arg PmE. No, 5907 Reorder. Call Toll -Free 1-600 -Vii
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 19. 2000 , before me, Cheryl Johnson City Clerk,
personally appeared - - - George Scarborough - - - 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.
Capacity Claimed by Signer
Municipal Corporate Officer
City Manager
Title
Signer is Representing
City of San Juan Capistrano
OPTIONAL
Description of Attached
Document
Deferral of Development Fees
Agreement (Villa Paloma Project)
Title or Type of Document
Number of Pages
December 19, 2000
Date of Document
George Sluichert
Signer(s) Other Than Named Above
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
nProposal:
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
410
Applicant:
Friess Company Builders, Attention Kenneth Friess, 31658 Rancho Viejo Road, San
Juan Capistrano.
Project 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, seconded by Council Member Hart that the
following Resolution be adopted:
City Council Minutes -8- 3/7/00
Recording Requested by and
When Recorded Return to:
City Clerk
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, Ca. 92675
Recorded in official Records, County of orange
Gary Granville, Clerk -Recorder
111111111 INTI 1111 IL IIII ILI 111111111@I I11ll 15.00
2001004799104:30pm 01126101
118 16 Al2 S
0.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00
DEFERRAL OF DEVELOPMENT FEES AGREEMENT
(VILLA PALOMA PROJECT)
[Assessor's Parcel #666-241-06, County of Orange]
This Agreement is made by and between the City of San Juan Capistrano
(hereinafter "City"), and Willow Partners LLC (hereinafter "Developer").
RECITALS:
Whereas, Developer has received a General plan amendment and Architectural
Plan approvals authorizing the construction of an affordable senior apartment housing
project consisting of approximately 84 units at the location of 27221 Paseo Espada, San
Juan Capistrano, and
Whereas, City has also agreed to provide a $500,000 affordable senior housing loan
to assist the Developer constructing the project, and
Whereas, City development fee requirements for the project mandate the posting
of sewer and water fees with City at or prior to the time for the commencement of
construction of the project, and
Whereas, Developer has requested that payment of sewer and water fees be
deferred until such time that Developer requests the issuance of a certificate of occupancy
for the housing units, and
Whereas, City finds that the deferral of payment of fees will make the project more
financially feasible and in the public interest,
NOW THEREFORE BE IT MUTUALLY RESOLVED BETWEEN CITY AND
1 of 3
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 ofan 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.
1. 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.
hiterest 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 ofthe "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
56526.5 001205-0006 03/12/2001 - 11:12 am -2-
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; Application 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
Instrument No. 20010049842 against Borrower's fee interest in the Site and the Development
56526.5 001205-0006 03/12/2001 - 11:12 am -3-
(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
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.
5. 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. Assimment of this Note.
This Note shall be assignable by Borrower only to a successor owner of the Site.
8. 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 03/12/2001 - 11:12 am -4-
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 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.
56526.5 001205-0006 07/12/2001 - 11:12 am -5-
0 0
9. Agreement to Pay Attorneys' Fees and Expenses.
hi 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
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
565265 001205-0006 03/12/2001 - 11:12 am -6-
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. Severabilitv.
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.
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 03/122001 - 11:12 am -7-
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
56526.5 001205-0006 03/12/2001 - 11:12 am -8-
Agreed and Accepted by:
CITY OF SAN JUAN CAPISTRANO,
a municipal corporation
Attested by: By:f994" - V._ 112 P�
Mayor6f. Wyatt Hart 2ty Jerk : Margaret R. Monahan
56526.5 001205-0006 03/122001 - 11:12 am -9-
L,
32400 PASEO ADELANTO
SAN JUAN CAPISTRANO, CA 92675
(949) 493-1171
(949) 493-1053 (FAX)
www.sanjuancapistrano.org
November 8, 2001
Willow Partners, LLC
310 N. Westlake Blve #250
Westlake Village, CA 91362
Attention: Mr. Davis Slajchert
Dear Mr. Davis:
Jew' •
j:/ IA[IAIIAAIN
fs,uuan 1961
1776
MEMBERS OF THE CITY COUNCIL
DIANE L. BATHGATE
JOHNS GELFF
COLLENE CAMPBELL
MATT HART
DAVID M. SWERDLIN
CITY MANAGER
GEORGE SCARBOROUGH
Please find enclosed a certified copy of a Promissory Note (Modified) dated December
14, 2000 (modified March 6, 2001) related to NHPAHP VILLA PALOMA LIMITED
PARTNERSHIP, referencing a principal sum of $950,000.
This certified copy is for your records.
If you have any questions regarding this document, please contact Deborah Dirnu,
Housing Consultant (949) 443-6330.
Sincerely,
Me ona an, CMC
Cit
(949) 443-6308
enclosure: Promissory Note (Modified)
cc: Joshua C. Gotteim, Brown, Winfield & Canzoneri, Inc; Deborah Dirnu, Housing
Consultant; Tom Tomlinson, Planning Director
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San Juan Capistrano: Preserving the Past to Enhance the Future
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