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09-1215_HABITAT FOR HUMANITY_Affordable Housing Funding and Loan Agreement II
0 AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT It THIS AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT (this "Aareement") .is entered into as of December 15, 2009, by and between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation ("Habitat"), with reference to the following: RECITALS A. Agency transferred to Habitat the real property on Assessor's Parcel Nos. 668-421-03 & 04 at the terminus of Calle Rolando located in the City of San Juan Capistrano ("City"), County of Orange, State of California, which is legally described in Exhibit "A" attached hereto and incorporated herein (the "Property"). B. On August 22, 2006, the City's Planning Commission approved a resolution authorizing, subject to approval of a rezone by the City Council and issuance of building permits and other conditions, a new multifamily ownership condominium housing development containing 27 units (thirteen duplexes and one single-family unit) located on the Property (the "Project"). C. On September 19, 2006, Agency and Habitat entered into the Disposition and Development Agreement ("DDA") for the transfer of the Property and for the development of a residential project on the site, and in connection therewith recorded Affordability Covenants for Calle Rolando Villas Condominiums, Tract Number 17027. D. Thereafter, Habitat began construction of the Project and encountered cash flow difficulties which included less than anticipated financial assistance from third parties, the City permit fees were substantially higher than origirlally anticipated, the City development and infrastructure fees were payable upfront for the total Project development, and the increased cost from the original budget to widen and Improve Calle Rolando. E. On October 8, 2008, the Agency loaned Habitat $631,174.49 payable upon construction of each of 19 units then left to be constructed. $581,945 is currently due on this initial loan. F. Habitat for Humanity has completed nine of the total 27 units within the Project, the remaining 18 units are anticipated to be completed by September 30, 2010. G. This Affordable Housing Funding and Loan Agreement II is necessary for Habitat for Humanity to complete the project by September 30, 2010. 670387.2 Page 1 of 19 0 0 H. Agency desires to assist Habitat with the cash flow difficulties by providing an additional interest free loan for the construction of the development subject to this Agreement and the Promissory Note attached hereto as Exhibit B. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration,. the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows: ARTICLE i KOY117 1.1 Amoun . Agency hereby agrees to loan and Habitat hereby agrees to borrow and repay, an amount not to exceed Two Million Four Hundred Seventy Two Thousand One Hundred Sixty Five Dollars ($2,472,165), subject to the terms, covenants, conditions, representations, and warranties set forth in this Agreement, and the other Loan Documents ("Agency Loan"). 1.2 Repayment of Agency Loan. The Promissory Note, the disbursed and unpaid principal balance of the Agency Loan shall not bear interest. Habitat shall repay the Agency Loan on a per unit basis per the following schedule: (a) Payment of Ninety One Thousand Five Hundred Sixty One and 67/100 Dollars ($91,561.67) at the close of escrow for each of the Twenty Seven (27) units. (b) Subject to Section 1.11 below, any residuals in excess of all indebtedness including overhead fees of $342,000 from the sale of units will be split evenly between Habitat and the Agency at the completion of the Project. For purposes of this Agreement, `overhead" includes the portion of Habitat¢ indirect costs or fixed operating expenses (which include rent, administrative costs, and marketing costs) attributable to the Project development. 1.3 Maturity Date. Notwithstanding any other provision of this Agreement or the Promissory Note, unless due sooner, the entire outstanding principal balance of the Agency Loan shall be due and payable in full on January 1, 2011 ("Maturity Date"). The Maturity Date may only be extended by a mutual agreement of the parties in writing and fully executed. 1.4 Prepayment. Habitat may pay the principal due the Agency under the Promissory Note prior to or in advance of the time for payment thereof as provided in the Promissory Note, without penalty. 1,701973 Page 2 of 19 1.5 Assumption. The Promissory Note shall not be assumable by successors and assigns of Habitat, either voluntarily or by operation of law, without the prior written consent of the Agency, and any such assignment or assumption shall be void. 1.6 Loan Disbursement. Upon satisfaction of the conditions to disbursement set forth in Section 3.1 below and pursuant to the disbursement procedures set forth in Section 3.3 below, the Agency, through the approved Escrow Holder will cause the disbursement of the Agency Loan as provided for in Section 3.3. The Agency may authorize disbursement of funds of up to 50% of the loan funds authorized herein as the Agency deems necessary in its sole discretion to keep the Project on track for completion prior to satisfaction of all of the conditions herein. 1.7 Security for Agency Loan. The Agency Loan and Promissory Note shall be secured by the Deed of Trust, which Habitat shall execute and which shall be recorded as a lien against the Project along with the recording of a Request for Notice of Default. The parties shall use the short form Deed of Trust with Assignment of Rents and Request for Special Notice provided by Escrow Holder. 1.8 Approval of Additional Financina. Habitat shall not place or permit (either voluntarily or involuntarily) to be placed any encumbrances not otherwise provided for and approved by the Agency, including, but not limited to any additional liens or financing of any kind on the Project without the prior written consent of the Agency. 1.9 Subordination of Deed of Trust. in accordance with the DDA, the Agency agrees that the Deed of Trust shall be subordinate to the liens of record prior to the date of this Agreement. Any other financing, refinancing or encumbrance of the Project is prohlbited without the Agency's prior written consent, which consent the Agency may arbitrarily withhold In the exercise of its discretion. 1.10 Riaht of Reinstatement/Right of Redemption. Habitat acknowledges that the Agency has the right of reinstatement and redemption of any senior mortgage obligation pursuant to Section 4.16 of the DDA, Habitat acknowledges its obligation under the DDA to notify the Agency and provide copies of any notice of default pursuant thereto. 1.11 Forfeit of Overhead Fee. Habitat shall forfeit $342,000 identified for overhead fees, from the home sale proceeds should the project not be completed by the Maturity Date. 670187.2 Page 3 of 19 0 0 ARTICLE II USE RESTRICTIONS 2.1 Use Restrictions. In accordance with the provisions of the DDA, the Affordability Covenants and this Agreement as incorporated herein, the Habitat has agreed to provide housing in the Project to families in need on the basis of housing need, ability to repay the loan, family size, character, willingness to volunteer time on Habitat's projects and certain other input as set forth in the aforesaid agreements and covenants. Additionally, Habitat will market and aim to house veterans within fourteen of the 27 units. 2.2 Records. Habitat will maintain complete and accurate records pertaining to the Affordable Housing requirements, and will permit any duly authorized representative of the Agency to inspect and copy the books and records of the Habitat pertaining to the Project, including those books and records pertaining to the occupancy of the units. ARTICLE III DISBURSEMENT OF AGENCY LOAN 3.1 Conditions Precedent to Disbursement of Agency Loan Proceeds, The Agency shall cause Agency Loan proceeds to be disbursed through escrow to the Habitat as set forth in this Article III. No disbursement shall be made until all of the following conditions precedent are satisfied. (a) Execution and Delivery of Documents. Habitat shall have executed and delivered to the Agency (i) this Agreement, the Promissory Note and the Deed of Trust, (ii) all resolutions and certificates necessary or appropriate in the opinion of the Agency to evidence the Habitat's authority to enter into the Agency Loan and be bound by the Loan Documents, and (iii) all other documents and instruments required by the Agency to be executed and delivered, all in form and substance satisfactory to the Agency. (b) Insurance. Habitat shall have furnished the Agency with evidence of the insurance coverage described under Section 6.10 hereof and Section 4.5 of the DDA. (c) Title to Prooertv. The Agency has determined to its satisfaction that upon the Close of Escrow Habitat will have good and marketable fee title to the Property and there will exist thereon or with respect thereto no mortgage, lien, pledge, easement, covenant, condition, restriction, or other encumbrance of any character whatsoever other than liens for current real property taxes and assessments not yet due and payable, the liens of the deeds of trust described in Section 1.7 hereof, the lien of the recorded DDA and Affordability Covenants, the woaszz Pape 4 of 19 0 lien of Sunwest Bank pursuant to that Deed of Trust dated December 2008 to secure a note in the amount of $1,200,000, and any other matters approved in writing by the Agency. (d) Recordation. The Escrow Holder is prepared, to concurrently record the Deed of Trust against the Property at the Close of Escrow and issue or cause the issuance to the Agency by a title insurance company approved by the Agency, such endorsements to the existing title insurance policy as the Agency may require, which shall insure the Deed of Trust as a lien upon the Property subject only to the exceptions approved by the Agency in Section 3.1(c) above. (e) No Default. There shall exist no condition, event or act which would constitute an Event of Default (as hereinafter defined) hereunder or which, upon the giving of notice or the passage of time, or both, would constitute an Event of Default. (f) Representations and Warranties. All representations and warranties of Habitat herein contained shall be true and correct. (g) Construction Releases. The Agency (if it so elects) shall have received and approved copies of all labor and material releases pertaining to the construction contract or contracts with a responsible contractor or contractors providing for the construction of the Project in conformance with the terms of this Agreement. 3.2 Disbursement Milestones. The loan will be disbursed to Habitat in four equal payments of $618,041.25 at construction milestones. The first milestone will be upon foundation approval from the building inspector for all remaining 18 units. The second milestone will be upon sign off from the building inspector for the roof sheathing and sheering on all remaining 18 units. The third milestone will be the sign off of rough framing by the building inspector, including approval of mechanical, electrical, plumbing, and structural for all remaining 18 units. The final milestone will be upon the sign off of the drywaiUnaiiing building inspection on all remaining 18 units. 3.3 Procedure for Disbursement of Aaencv Loan Proceeds. When all the conditions to disbursement have been satisfied and the Agency is satisfied that any conditions to the Close of Escrow have been satisfied, the Agency shall deposit the Agency Loan with the Escrow Holder for disbursement upon the Close of Escrow in accordance with the terms of the DDA. 670337.: Page 5 of 19 0 0 ARTICLE IV DEVELOPMENT OF THE IMPROVEMENTS The Project is being constructed substantially in accordance with plans approved by the City and Agency (and to the extent of any material change from such plans, then in accordance with the City and Agency approval of the proposed change) and the terms and conditions of the permits and approvals (including building permits) for the Project. ARTICLE V REPRESENTATIONS AND WARRANTIES OF HABITAT Habitat hereby makes the following representations and warranties to the Agency, each of which shall also be deemed a covenant for which Habitat agrees, shall continue to be true and accurate in all material respects so long as the Agency Loan or any portion thereof remains outstanding: 5.1 Organization. Habitat is duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. The copies of the documents evidencing the organization of Habitat delivered to the Agency are true and correct copies of the originals, as amended to the date of this Agreement. 5.2 Authority of Habitat. Habitat has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. 5.3 Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Habitat, and all actions required under Habitat's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. 5.4 Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed WWI Faye 6 of 19 0 011 and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Habitat enforceable against the Habitat in accordance with their respective terms. 5.5 No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement or the other Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Habitat, or any provision of the organizational documents of Habitat or, if applicable, of its constituent partners, or will conflict with or constitute a breach of or a default under any agreement to which Habitat, or, if applicable, its constituent partners, is a party, or will result In the creation or imposition of any lien upon any assets or property of Habitat, other than liens established pursuant hereto. 5.6 Pending Proceedinas. Habitat is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Habitat, threatened against or affecting Habitat or the Property or Project, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Habitat, materially affect Habitat's ability to repay the Agency Loan or impair the security to be given to the Agency pursuant hereto. 5.7 Compliance with Laws: Consents and Approvals. The Project shall comply at all times with all applicable laws, ordinances, rules and regulations of federal, state, and local governments and agencies, including but not limited to all applicable federal and state labor requirements, and with all applicable directions, rules and regulations of the fire marshal,:. health officer, building inspector, and other officers of any such government or agency. All consents, permissions and licenses required by any federal, state, or local government or agency to which the Habitat or the Project is subject, which may be necessary in relation to this Agreement or the ownership or operation of the Project, have been or will be obtained, and none of such consents, permissions, and licenses is subject to appeal or to conditions which have not been met. 5.8 Financial Statements. The financial statements of the Habitat and its general partners and other financial data and Information furnished by the Habitat for review by the Agency fairly present the information contained therein. As of the date of Agency Loan disbursement, there will not have been any adverse material change in the financial condition of the Habitat from that shown by such financial statements and other data and information. e703S71 Page 7 of 19 0 0 5.9 Adeauacv of Agency Loan. Barring any unforeseen circumstances beyond Habitat's control, without any fault of Habitat, the amount of the Agency Loan, together with any funds to be provided by the Habitat or to the Habitat from any other sources, is adequate to pay all costs incurred in connection with the Project and to enable the Habitat to satisfy the covenants contained in this Agreement. 5.10 Payment of Taxes. All federal, state, county, and municipal taxes required to be paid by the Habitat or on account of the Project have been paid in full as of the date of this Agreement or will be paid in full by the Close of Escrow. ARTICLE VI CONTINUING OBLIGATIONS 6.1 Applicability. For the longer of the entire Term, or so long as the Promissory Note remains outstanding, the Habitat shall comply with the provisions of this Article VI. 6.2 Compliance with Loan Documents. Habitat shall promptly comply with all the terms and provisions of the Loan Documents. 6.3 Taxes and Assessments. So long as Habitat owns the Project, Habitat shall pay all real and personal property taxes, assessments and charges, and all franchise, income, unemployment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Project; provided, however, that Habitat shall have the right to contest in good faith any such taxes, assessments, or charges, In the event Habitat exercises its right to contest any tax, assessment, or charge against it, Habitat, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges, and interest. 6.4 Indemnity. Habitat shall, at Habitat's expense, defend, indemnify, save and hold the Agency and its respective elected and appointed officials, officers, agents, employees, and members harmless from any and all losses, damages, liabilities, claims, causes of action, judgments, settlements, court costs, attorneys' fees, and other legal expenses, cost of evidence of title, cost of evidence of value, and other expenses which they may suffer or incur due to, arising from, or relating to Habitats performance or non-performance of its obligations under this Agreement, the DDA or the Loan Documents, or Habitat's ownership or operation of the Property or the Project. 6.5 Entry by the Agency. Habitat shall permit the Agency, through its officers, agents, or employees, at all reasonable times to enter the Property or 470197.1 Page 8 of 19 0 0 the Project and inspect for conformity with the requirements hereof. Habitat acknowledges that the Agency is under no obligation to inspect. Any inspection by the Agency is entirely for its purposes in determining whether Habitat is in default under this Agreement or the Loan Documents. 6.6 Hazardous Materials. Habitat shall indemnify, defend and hold harmless the Agency, and its respective elected and appointed officials, members, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal of hazardous materials on, under, or about the Project occurring during such time as Habitat held title to the property, including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Project and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by the Agency or Agency in connection with clauses (a) and (b), including but not limited to reasonable attorneys'fees. 6.7 Transfers. During the Term, Habitat shall not sell or otherwise transfer the Project or any portion thereof to a Developer, speculator or investor. The Agency shall not approve any such transfer request if the Habitat is in default under any of the DDA or the Loan Documents 6.8 Maintenance of Project. During Habitat's ownership or control thereof, Habitat agrees to maintain all interior and exterior improvements, Including landscaping, on the Project in first-class condition, repair and sanitary condition, in compliance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, Agency, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Habitat acknowledges the great emphasis the Agency places on quality maintenance to protect Its investment and to provide quality low income housing for its constituents and to ensure that all Agency subsidized affordable housing projects within the Agency are not allowed to deteriorate due to deficient maintenance. In addition, Habitat shall keep the Project free from all graffiti and any accumulation of debris or waste material. Habitat shall promptly make all repairs and replacements necessary to keep the Project in first class condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Habitat breaches any of the covenants contained in this Section 6.8 and such default continues for a period of five (5) days after written notice from Agency (with respect to graffiti, debris, waste material, and general maintenance) or thirty (30) days after written notice from Agency (with respect to landscaping and building improvements), then Agency, in addition to whatever 670.797.7 Page 9 of 7g other remedy it may have under this Agreement, at law or in equity, shall have the right to enter upon the Project and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the Agency shall be permitted (but not required) to enter upon the Project and perform all acts and work necessary to protect, maintain and preserve the improvements and landscaped areas on the Project, in the amount of the expenditure arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Habitat to Agency upon demand. 6.9 Status of Habitat. Habitat shall at all times maintain its legal status in good standing and comply with all laws, rules and regulations of California and the United States and of any political subdivision thereof applicable to ft or its business. 6.10 Insurance. While any obligation of Habitat under any Loan Document remains outstanding, Habitat shall maintain at Habitat's sole expense, with Insurers of recognized responsibility, the following policies of insurance in form and substance satisfactory to the Agency. Insurers shall be admitted and in good standing in the State of California and shall be rated at least A VIII. (a) Workers' compensation insurance and any other insurance required by law in connection with the Project; (b) Fire and hazard "all risk" insurance covering one hundred percent (100%) of the replacement cost of the Project in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the locality where the Project is situated (including insurance against loss by flood if the Project is located in an area now or hereafter designated as subject to the danger of flood, but excluding insurance against loss by earthquake); (c) Umbrella coverage in an amount not less than $2,000,000; and (d) All such insurance shall be endorsed to provide that said insurance may not be canceled or materially modified without 30 days' prior written notice to the Agency. The policies required pursuant to subparagraphs (b) and (c), above, shall include a "lender's loss payable endorsement" (Form 438BFU) in form and substance satisfactory to the Agency assuring Agency that all proceeds shall be paid to Agency as provided in the Deed of Trust subject to the interests of the senior lenders on the Project. The City and Agency shall be an additional named insured as to the policies required pursuant to subparagraph (b), (c), and (d), above. No such insurance shall include deductible amounts to which the Agency has not previously consented in writing. Certificates of insurance for all of the above policies (and/or original policies, if required by the Agency from time to 670397.2 Page 10 of 19 0 41 time), showing the same to be in full force and effect, shall be delivered to the Agency. All policies insuring against damage to the Project shall contain an agreed value clause sufficient to eliminate any risk of coinsurance. ARTICLE VII DEFAULT AND REMEDIES 7.1 Events of Default. Each of the following shall constitute an "Event of Default" by Habitat under this Agreement: (a) Failure to Make Note Payments. Failure to make prompt payments under the Promissory Note as and when provided for in the Promissory Note and this Agreement. (b) Mismanagement. Failure by Habitat to manage the Project in a prudent, first class manner in accordance with the terms, covenants, conditions, representations and warranties of this Agreement, the DDA or other Loan Documents. For purposes of this Agreement, an act or omission constituting "mismanagement" by the Habitat shall include, but not be limited to each of the following: (1) Failure to maintain and repair the Project and make replacements thereto, or the committing or permitting of any waste or deterioration of the Project; (2) Breach or failure by Habitat to duly perform, comply with or observe any of the terms, covenants, or conditions of this Agreement, the DDA or any other Loan Document, and such failure continues uncured or without Habitat commencing to diligently cure for thirty (30) days after notice thereof in writing is mailed by the Agency to Habitat; (3) A sale or other transfer of the Project in violation of Section 6.7 above. (c) Fraud or Material Misstatement or Omissions. Any fraudulent act or omission of Habitat's, or misrepresentation of Habitat's, pertaining to or made in connection with the Agency Loan, the Loan Documents or the Project. (d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Habitat to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Habitat or seeking any arrangement for Habitat under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or ether jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Habitat in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or 6701871 Page 11 of 19 0 0 liquidation of Habitat, if any such decree or order described in clauses (1) to (iv), inclusive, shall have continued unstayed or undischarged for a period of sixty (60) days unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period will apply under this subsection 7.1(d) as well; or Habitat shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (1) to (iv), inclusive. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the Agency, the indebtedness evidenced by the Promissory Note. (e) Project Monies. Misapplication or embezzlement of Project monies. 7.2 Remedies. The occurrence of any Event of Default shall, either at the option of the Agency or automatically where so specified, relieve the Agency of any obligation to make or continue the Agency Loan and shall give the Agency the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents or otherwise available at law or in equity or by statute (and all of the Agency's rights and remedies shall be cumulative), including but not limited to the following: (a) Acceleration of Note. Upon the occurrence of an Event of Default hereunder, the Agency shall have the right to cause all indebtedness of the Habitat to the Agency under this Agreement and the Promissory Note, to become immediately due and payable. The Habitat waives all right to presentment, demand, protest or notice of protest, or dishonor. The Agency may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the Agency as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Habitat shall be liable to pay the Agency on demand all expenses, costs and fees (including, without limitation, attorneys' fees and expenses) paid or incurred by the Agency in connection with the collection of the Agency Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Agency Loan. (b) Specific Performance. The Agency shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Habitat to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at Habitat's Expense. The Agency shall have the right to cure any monetary default by Habitat under a loan other than the Agency Loan. The Habitat agrees to reimburse the Agency for any funds advanced by the Agency to cure a monetary default by Habitat upon demand therefore, 900137.2 Page 12 of 19 0 0 together with interest thereon at the rate of twelve percent (12%) per annum or the maximum rate permitted by law, whichever rate is lesser, from the date of expenditure until the date of reimbursement. 7.3 Right of Contest. Habitat shall have the right to contest in good faith any third party claim, demand, levy, or assessment the assertion of which would constitute an Event of Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the Agency or the rights of the Agency hereunder. Upon demand by the Agency the Habitat shall make provision by deposit of funds with the Agency or, if permitted by the Agency in the exercise of the Agency's sole discretion, by bond in an amount, on forms, and with a bonding company all satisfactory to the Agency in the exercise of Its discretion. Such assurance shall be given thirty (30) days after demand therefor, and, if made by deposit of funds with the Agency, the amount so deposited shall be disbursed in accordance with the resolution of the contest either to the Habitat or the adverse claimant. 7.4 Remedies Cumulative. No right, power, or remedy given to the Agency by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the Agency by the terms of any such instrument, or by any statute or otherwise against Habitat and any other person. Neither the failure nor any delay on the part of the Agency to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the Agency of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. 7.5 Waiver of Terms and Conditions. No waiver of any default or breach by Habitat hereunder shall be implied from any omission by the Agency to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the. default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the Agency to or of any act by Habitat requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Agreement or the Loan Documents, nor shall it invalidate any act done pursuant to notice of default, or prejudice the Agency in the exercise of any right, power, or remedy hereunder or under the Loan Documents unless in the exercise of any such right, power, or remedy all obligations of Habitat to Agency are paid and discharged in full. 670.387.2 Page 13 of 19 • ARTICLE VIII MISCELLANEOUS 0 8.1 Approvals Under Aoreement. Where this Agreement requires an approval or consent of the Agency, such approval or consent may be given on behalf of the Agency by the Executive Director or his or her designee. 8.2 Time. Time is of the essence in this Agreement. 8.3 Notices. Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first -Gass United States certified mail, postage prepaid, addressed to the appropriate party as follows: If to Developer: Habitat for Humanity of Orange County, Inc. 2200 South Ritchey Santa Ana, CA 92705 If to Agency: San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: Executive Director If to Escrow Holder First American Title Company 5 First American Way Santa Ana, CA 92707 Attn: Jeanne Gould, Senior Escrow Officer Such addresses may be changed by notice to the other party given in the same manner as provided above. 8.4 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and benefit of the Agency, its successors and assigns, and Habitat, its permitted successors and assigns, and no other person or persons shall have any right of action hereon. 8.5 Aaencv to File Notices. Habitat irrevocably appoints, designates, and authorizes the Agency as its agent (said agency being coupled with an Interest) to file for record any notices of completion, cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest hereunder and under the Loan Documents 8.6 Actions. The Agency shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or 67.197.2 Page 14 of 19 0 0 liabilities of the parties hereunder, or the disbursement of any proceeds of the Agency Loan. 8.7 Successors and Assions. The terms hereof shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that no assignment of Habitat's rights hereunder shall be made, voluntarily or by operation of law, without the prior written consent of the Agency, and that any such assignment without said consent shall be void. 8.8 Construction of Words. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender. 8.9 Partial Invalidity. If any provision of this Agreement shall be declared invalid, Illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 8.10 Governing Law and Venue. This Agreement and the Loan Documents and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement or any of the Loan Documents, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court. 8.11 Amendment. This Agreement may not be changed orally, but only by an agreement in writing signed by Habitat and the Agency. 8.12 Entire Agreement. This Agreement, the DDA, the Affordability Covenants and the other Loan Documents constitute the,entire agreement of the parties with respect to the subject matter hereof. 8.13. AApprovais. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. 8.14 Captions and Headings. Captions and headings in this Agreement are for convenience of reference only, and are not to be considered in construing the Agreement. 8.15 Counterparts: Facsimile Sionatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument and any M387-2 Pape 16 of 19 E 0 executed counterpart may be delivered by facsimile transmission with the same effect as if an originally executed counterpart had been delivered. IN WITNESS WHEREOF, Agency and Habitat have signed this Agreement as of the date first set forth above. HABITAT: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: airpe�q 13R.�t'T M,fC(-tA/ELME/�NS�(ELf� By: ecE�C urector 5IWARON ELLIS AGENCY: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic By: A�(_ E ecutive irector ATTEST: APPROVED AS .FORM:�y 690,187.2 Page 16 of 19 EXHIBIT A Property Leaal Description THE LAND REFaSEO TO THIS REFSS IS SITUATED IN THE CITY OF SAN JUAN CAPIS1RANO, IN THE MM OF C wla;, STATE OF CALIFORILD, AND IS D gM= AS FOLLOWS: PARCEL 1: THAT PORTION OF LOT 1 OF THE DANERI TRACT, IN THE CITY OF SAN JUAN CPPSSIRAND, AS SON ON A NAP F]TED IN Bo i< 2, P A G E 2 2 OF R@= OF S.RANS, RECORDS OF SAID ORANGE COUNTY DESCRIBED AS FOLLOWS: CQ:T'ENGING AT THE NORTHERLY CORNER OF SAID I.OT 1, BEING THE WESTERLY CIN'R OF IAT 62 OF TRbCr NO. 103, AS SEM .CN A MNP R IMPEED IN DOCK 11, PAGES 29 TO 33 INCLUSIVE OF MISCELLANEOUS MAPS, PDC;RDS OF SAID ORANGE QR.I=; THEIS,E SaIM 44' 06' 00" EAST 723.47 FEET AICNG THE N,7MEASI'EMY LINE OF SAID IAT I TO THE TRUE POINT OF BEGINNING, THFST.E SUJM 49' 34' 29" DM 141.05 =, Mi NE B3111H 3' 11' 12" EAST 204.26 HM f0 TIE S)1M L1% OF SAID IAT 1; TARU NaM 89 ' 46' Ol" EAST 193.01 FELT AwG SAID S.IHH LINE TO A LINE THAT BEARS SaM 0' 11' 13" EPSP FR',IS AN PNME POINT ON ME NaUHERLY LINE OF SAID TTA' 1; THEME N30 0' 11' 13" W9 203.83 fm' TO SNID num ROINIT; THENCE N CRIH 440, 06' 00" REST 131.85 FEET TO TIE TIE POINT OF BEGINNING. PARCEL 2: AN EAMM FOR ROAD AND RELIC UTILITY PUREOSE5 OVER THAT PCRTICN OF IAT 1 OF THE DkNM TWEC.T, IN THE CITY OF SAN 1AN CAPIS7PPDD, AS WNN CN A PAP FILER IN BOOK 2, PPL£ 22 OF RECORD OF SURVEYS, RECORDS OF SAID ORANGE COUNTY DESCRIBED AS FOLLOWS: EFGINNING AT A POINT CN THE NI3MW-S1II2LY LINE OF SAID IAT 1, DISTANT SJM 36' 56' 30" 4' M 115.69 FEET FRCM THE NOFQ}iERLY 4344M OF SAID IAT 1, SAID NCRrBERLY C MER BEING THE WESTERLY CXIPNER OF IAT 62 OF TRACT NO. 103, AS SHOWN ON A MAP RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MISCELLANEOUS MAPS RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MIS1Y3 REC17S NAPS, REMW OF SAID CRANE CCUNIY; THENCE SWIH 42' 40' 30" EAST 638.31 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 55.21 FEET; THENCE SOUTHEASTERLY ALONG SAID CURE TIECM4 A C &ORAL ANAL CF 42' 29' 17 AS DISIAN E OF 40.94 FEET TO A REVERSE CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 40.00 FEET; THENCE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY ALONG SAID QRWE TWO" A CENTRAL ANGLE OF 26 ' 58' 34" A DISH-rE OF 184.29 FEET 10 A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A PADIUS OF 55.21 FEET; THENCE NO2'INtOrERLY ALONG SAID CURVE THPC,GH A CENTRAL ANGLE OF 42' 29' 17" A DISTANCE OF 40.94 FEET; THDCE N13m 42' 40' 38" WEST 632.81 FEET TO SAID NORTHWESTERLY LINE; THENCE NORTH 36' 56' 36" EAST 30.50 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF LYING WITHIN TETE PUBLIC STREET (ALIPAZ STREET) DESCRIBED IN THE EASEMENT DEED TO THE CITY OF SAN JUAN CAPISTRANO, RECORDED SEPTEMBER 24, 1976 W BOOK 11900, PAGE 831 OF OFFICIAL RECORDS. ALSO EXCEPTING THE PORTION INCLUDED WITHIN PARCEL 1. PARCEL 3: THAT PORTION OF LOT 1 OF THE DANERI TRACT IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 2 PAGE 22 OF RECORD OF SURVEYS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF A LINE WHICH BEARS SOUTH 0' 1.1' 13" EAST PROM AN ANGLE POINT ON THE NORTHERLY LINE OF SAID LOT, SAID ANGLE POINT BEING SOUTH. 44' 06' 00' EAST 861.32 FEET FORM THE MOST NORTHERLY CORNER THEREOF. AcsYsaor's Parcel No: 668421-03, 04 670187.2 Page 17 Of 19 670387.2 0 EXHIBIT B Form of Promissory Note PROMISSORY NOTE 0 [SECURED BY DEED OF TRUST/NO INTEREST] $2,472,165 San Juan Capistrano, California 3.1-)- 2010 FOR VALUE RECEIVED, the undersigned, HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation ("Maker"), unconditionally promises to pay to the order of SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder"), at City of San Juan Capistrano, 32400 Paseo Adelanto, San Juan Capistrano, CA 92675, or at such other place as may be designated in writing by the Holder the principal sum of TWO MILLION FOUR HUNDRED SEVENTY TWO THOUSAND ONE HUNDRED SIXTY FIVE DOLLARS ($2,472,165) on or before January 1, 2011 ("Maturity Date"). All payments under this Note shall be in lawful money of the United States. No interest shall be charged or accrue on the principal amount of this Note prior to the Maturity Date. After the maturity of this Note, this Note shall bear interest at the rate of Zero (0%) percent per annum. The Maker agrees to pay to the Holder all costs, expenses and reasonable attorney's fees incurred in the collection of sums due hereunder, whether through legal proceedings or otherwise, to the extent permitted by law. This Note may be prepaid at any time, in whole or in part, without penalty or premium. The Note shall be repaid as described in Section 1.2 of the Affordable Housing Funding and Loan Agreement II, executed of even date herewith. Upon payment of this Note in full, Holder shall surrender the Note to Maker. This Note shall be governed by the laws of the State of California. IN WITNESS WHEREOF, this Promissory Note is executed under seal on the day and year first above written. MAKER: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: By: hairperson Executive Director F,PE7T WCI-tA�L. MANSRI FLD SHARON Et.-t_iS Page 18 of 19 0 ACKNOWLEDGMENT STATE OF CALIFORNIA ss. COUNTY OF ORANGE 0 On March j_L, 2010, before me, Rita A. Ross, a Notary Public, personally appeared Sharon Ellis, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foreg.9ing paragraph is true a� gitrrect. my hand and of' d. -LrRITA A. ROSS Commlulon N 1732162 Public y Notary Public - California orange County MirCorm.e"nApr10.2011 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On March 2010, before me, Rita A. Ross, a Notary Public, personally appeared Brett Michael Mansfield, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the - within instrument and acknowledged to me that he/she/they executed the same in` his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I declare under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 670367.2 Page 19 of 19 @l%VCRITA A. ROSS Commission M 1732162- Notary Public - California crnnr.Exi3kwAprI5.20I1 Orange CountyOrange County 0 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 4931171 (949) 4931053 PAK www.sanjuancapistrano. org TRANSMITTAL April 8, 2010 TO Habitat for Humanity OC Inc. 2200 South Ritchey Santa Ana, CA 92705 use /�(/^,✓J{�� INIAl1AA1l1 ` Ff1Al1�fIH 1 1961 Ins FROM: Christy Jakl, Deputy City Clerk (949) 443-6310 RE: Affordable Housing Funding and Loan Agreement II Enclosed: (1) Original, Affordable Housing Funding and Loan Agreement II MEMBERS OF THE CITY COUNCIL SAM ALLEVATO LAURA FREESE THOMAS W. HRIBAR MARK NIELSEN DR. LONDRES USO Please contact Laura Stokes, Housing/Redevelopment Coordinator at (949) 443-6313, with questions regarding the agreement. CC: Laura Stokes, Housing/Redevelopment Coordinator; Jeanne Gould, First American Title Co.; Robert Sayer, First American Title Co. San Juan Capistrano: Preserving the Past to Enhance the Future Co.3, Printed on 100% recycletl paper Today's pate: March 16. 2010 • CIP No. (if any): • Transmittal Routing (Check All That Apply) ® City Attorney ® City Manager ® City Clerk CONTRACT TRANSMITTAL Project Manager's Last Name: STOKES Phone Extension:6313 Council or CRA Meeting Date (if applicable): December 15, 2009 APPROVING AUTHORITY: (Check One) ❑ Mayor ❑ CRA Chair ® City Manager /Exec1%�I'- 7 +� Provide (1) executed original contract for each signing party, including the City. If the agreement is to be recorded — only (1) original will be recorded with certified copies going to other parties. Please provide the mailing address of any party to receive an agreement — unless the mailing address is included within the body of the agreement: Names Street city St I Zi Habitat For Humanity OC Inc. 2200 South Ritchey Santa Ana CA92705 �nYYLC'�A)� �i'S i[c 't� � Fr r$i tygvCzn �d %rs r� 2 OTHER INSTRUCTIONS: Form Date: 01-2004 D-7 11 Christy JAI E From: Laura Stokes Sent: Wednesday, February 24, 2010 4:20 PM To: Christy Jakl Subject: Habitat for Humanity Affordable Housing loan agreement II Hallo Christy, The loan agreement with Habitat for Humanity approved to be executed by the Executive Director (after the Agreement included Board of Directors Comments and approved by Agency Council and Ex Direct) has been drafted, and reviewed and then redrafted and is currently being re -reviewed by Habitat. We are hoping the final document will be executed and delivered to us within the next week. Thanks, Laura Stokes Housing/Redevelopment Coordinator City Manager's Office City of San Juan Capistrano Istokes2sanivancaoistrano.org 949-443-6313 32400 Paseo Adelanto San Juan Capistrano, CA 92675 In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by HABITAT FOR HUMANITY OF ORANGE COUNTY, INC. as Trustor, and recorded October 27, 2008, as Instrument No. 2008000493808 in the Official Records of Orange County, California, in which Sunwest Bank is named as Beneficiary, and Sunwest Bank as Trustee, be mailed to: San Juan Capistrano Community Redevelopment Agency Attn.: Executive Director 32400 Paseo Adelanto San Juan Capistrano, CA 92675 NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. Dated: February —a--, 2010 670389.1 r~> Jo ait Ex utive irector Recorded in Official Records, Orange County RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Tom o pmppp ppDyyapqllyryry, ryryClpem�rryryk-Re„„cpporppder ���II���YY�AII �IIII�4��tl����III�Y��������II��Y����ll���� NO FEE San Juan Capistrano Community 2010000091987 8:10 am 02/26/10 Redevelopment Agency 62 413 R23 2 32400 Paseo Adelanto 0.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 San Juan Capistrano, California 92675 I Attention: Executive Director (Above Space for Recorder's Use) This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383. �i REQUEST FOR NOTICE OF DEFAULT AND SALE In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by HABITAT FOR HUMANITY OF ORANGE COUNTY, INC. as Trustor, and recorded October 27, 2008, as Instrument No. 2008000493808 in the Official Records of Orange County, California, in which Sunwest Bank is named as Beneficiary, and Sunwest Bank as Trustee, be mailed to: San Juan Capistrano Community Redevelopment Agency Attn.: Executive Director 32400 Paseo Adelanto San Juan Capistrano, CA 92675 NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. Dated: February —a--, 2010 670389.1 r~> Jo ait Ex utive irector 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) r On February 17, 2010, before me, Maria Morris, Agency Secretary, personally appeared Joe Tait, Executive Director, who proved to me on the basis of satisfactory evidence to the be person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/there signature on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument . I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. (SEAL) Capacity Claimed by Signers Officer title Executive Director Signers are Representing OPTIONAL San Juan Capistrano Community Redevelopment Agency Description of Attached Document Title or Type of Document Request for Notice of Default and Sale Date of Document: February 17, 2010 3. VERDUGO STREET BEAUTIFICATION PROJECT SHELVED UNTIL THE DOWNTOWN MASTER PLAN IS COMPLETED ( 600.40) Douglas Dumhart, Economic Development Manager, provided a staff, a slide presentation and responded to questions. Board Comment: • Preference in Concept C, and rework the cul-de-sac. • Preference in Option B, and to have a study to determine the best option for the ingress/egress. • Preference in shelving the project until having a clear direction on the Master Plan Circulation. ■ Preference in not expending additional funding on traffic studies. ■ Preference in including the project as part of the Downtown Master Plan. ■ Would like to see the $21,860 to be used for painting the interior of the parking garage in a bright white color. Board Action: Moved by Director Uso, seconded by Director Nielsen and carried 3-2 with Director Hribar and Vice Chair Allevato opposed to shelve the Verdugo Street Beautification project until the Downtown Master Plan is completed. ROLL CALL: AYES: BOARD MEMBER: Uso, Nielsen, and Vice Chair Freese NOES: BOARD MEMBER: Allevato and Hribar ABSENT: BOARD MEMBER: None 4. AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT WITH HABITAT FOR HUMANITY, APPROVED; AND THE EXECUTIVE DIRECTOR AUTHORIZED TO EXECUTE THE AGREEMENT (600.40) Chair Freese recused herself due to the proximity of the project to her residence; she turned the meeting over to Vice Chair Allevato and left the City Council Chamber. Douglas Dumhart, Economic Development Manager, provided a staff report and responded to questions. Public Comment: ■ Tony Brown, City resident, concerned with the project location; being able to find disabled veterans to occupy units; and spending additional funds for the project. Board Comment: • The project needs to be completed. • It will not be simple to find veterans to occupy 14 units. 0 0 Board Action: Moved by Director Nielsen, seconded by Director Hribar and carried 4-0-1 with Chair Freese recused, to approve an Amendment to the First Affordable Housing Funding Loan agreement, allowing the remaining encumbrance from the Agency Loan, to be payable upon close of escrow with mortgage proceeds; and Executive Director authorized to execute a 0% interest Affordable Housing Funding and Loan Agreement with Habitat for Humanity in the amount of $2,472,165.00 subject to the following: 1) Loan to be structured in such way that the Agency will be in the position to pay off the $800,000 existing mortgage if it was necessary in a foreclosure situation. 2) The project and property is collateral, for the Agency to take back. 3) Provision stating that if project is not completed in a timely manner, the Agency does not retain the Grant or if the Agency is penalized on the Grant, then Habitat for Humanity will forfeit the $342,000 for overhead. 4) The money for the Loan is to be paid out based on milestone achievements. 5) Agreement to state the Agency is in the second position if the buyback reserve is not sufficient and Habitat for Humanity does not exercise its first right on the properties. 6) Preference (not required) to have 14 units for veterans. 7) The previous Loan Agreement issued by the Agency to Habitat for $581,954 may be amended to allow for repayment by Habitat at the time of close of escrow and mortgage proceeds. ROLL CALL: AYES: BOARD MEMBER: Uso, Nielsen, Hribar and Vice Chair Allevato NOES: BOARD MEMBER: None RECUSED: BOARD MEMBER: Freese ADJOURNMENT: There being no further business, Vice Chair Allevato adjourned the meeting at 10:16 p.m. to Thursday, January 5, 2010 at 5:30 p.m. for Closed Session, and 6:30 p.m., for the public Business Session, in the City Council Chamber. Respectfully submitted, MARIA MORRIS, AGENCY SECRETARY Approved: JANUARY 19, 2010 ATTEST: LAURA FREESE, CHAIR AGENDA REPORT TO: Joe Tait, Executive Director FROM: Douglas Dumhart, Economic Development Manager CRA 12/15/2009 JF SUBJECT: Consideration of Habitat for Humanity's Request for Additional Funding to Complete Calle Rolando Affordable Housing Development RECOMMENDATION: By motion, approve a 0% interest loan of $3,272,165 to be repaid by Habitat for Humanity on a per unit basis at the close of escrow; and direct the Executive Director to execute an Affordable Housing Funding and Loan Agreement memorializing the additional assistance. SUMMARY: On September 19, 2006 the Redevelopment Agency entered into a Disposition and Development Agreement (the "DDA") with Habitat for Humanity ("Habitat"). As part of the agreed development, the Agency would provide Habitat with a 2.7 acre vacant parcel of land valued at $2.05 million and a $1 million Community Development Block Grant (CDBG). In return for the grant funds and land, Habitat agreed to provide 27 affordable ownership units, for very -low and lower income limit households, within 24 months from the commencement of construction. So far nine units have received their Certificates of Occupancy and an additional four building permits have been issued for the next units to be built since the project inception. It became apparent Habitat would not meet the DDA or the CDBG deadlines without financial assistance; therefore staff prepared alternative actions for the Agency's review November 17, 2009. The Agency requested staff to investigate the management costs of ownership projects verses rental projects, and requested Habitat provided cost estimates without buyback reserves. Cost estimates for different projects and Habitat's most recent loan proposal reveals that the most effective solution is to loan Habitat $3,272,165, and accept mortgage proceeds for the reimbursement of the loan. This loan would be memorialized through an Affordable Housing Funding Agreement II (Attachment 1); additionally, staff recommends the previous Affordable Housing Funding and Loan Agreement from October, 2008, be amended to enable Habitat to reimbursement the loan with mortgage proceeds (Attachment 2). Agenda Report • 0 December 15, 2009 Page 2 BACKGROUND: Management Costs for Ownership Project: The Agency requested a cost assessment of managing an ownership project on a per unit basis. Staff looked to the City of Huntington Beach which is known for having a successful inclusionary housing and down payment assistance program. Discussion with Huntington Beach staff revealed that the programs are similar but not exactly what the Agency had indicated wanting for the Calle Rolando project. Huntington Beach has separate developers house all the inclusionary housing units, and a full time employee will verify the ownership remains the same and provides direction upon sale. This differs from the level of impact the Calle Rolando project would have on staff due to the need to house all the units with income qualified households initially and in the future. Huntington Beach staff offered the amount they spend to verify income qualifications for their down payment assistance program ($50,000) which has similar requirements to what will be necessary for the Calle Rolando project. Staffs discussion of necessary work, costs for continuous monitoring, qualifying households, and maintenance of the common areas resulted in an approximate budget of $60,000 to $80,000 annually. Including the support services offered through the Little Hollywood/Rental Subsidy Programs, as indicated by the Agency, would result in a $8,700 to $9,400 cost per unit. Management Costs for Rental Project: The Agency requested a cost assessment of managing a rental project on a per unit basis. The Agency currently manages the Little Hollywood Rental Program. Staff analyzed the program costs from fiscal years 2007-2008 and 2008-2009 to determine an average cost per unit for the management of the program. The management of the Little Hollywood program includes counseling services, collecting rents, executing leases, certifying household incomes, handling tenant complaints, and overseeing maintenance. Property maintenance includes all trash services, plumbing, pest control, select appliance repairs, grounds maintenance (tree trimming and weeding) and occasional street repairs. The average cost to manage a rental program is $8,300 per unit. The average rent revenue for a single unit results in $7,104 annually, creating an approximate $1,196 deficit per unit. Habitat for Humanity Updated Loan Request: Habitat has responded to the Agency's request for an updated proposal by minimizing the cost to the Agency and establishing a completion date to satisfy the CDBG deadline (Attachment 3). Habitat requests the Agency loan $3,272,165, to cover the encumbrance on the land ($800,000 to SunWest Bank) and the construction costs, excluding buyback reserve. The Agency will be reimbursed at the close of escrow on a per unit basis from third party mortgage proceeds from all 27 units. The first nine units are currently occupied and are being leased to the residents until close of escrow, which Agenda Report • Page 3 • December 15, 2009 is expected to be completed within the next two months. Additionally, any residuals from the sale of units will be split evenly between Habitat and the Agency at the completion of the development. The success of this proposal requires the renegotiation of the DDA's Construction Completion deadline to September 30, 2010 or 33 months from Construction Commencement (requires a Public Hearing). Additionally; the Affordability Covenants will be amended to allow 18 units to be sold to low income households, and the remaining be sold to very -low income households. Habitat's requests for changes to the DDA and Covenants are reasonable and the loan terms are acceptable to staff. The approval of an Affordable Housing Funding and Loan Agreement with Habitat for $3, 272,165 is staffs recommendation for a successful conclusion to the Calle Rolando Affordable Housing Project. Affordable Housing Funding Agreement II: The Affordable Housing Funding Agreement II will include the approved terms of funding, and the conditions of the funding. The basic terms of the agreement are that the 0% interest loan will be reimbursed to the Agency at the close of escrow of all 27 units for $121,191.29 per unit. The conditions will be attributed all the units within the development and all units will continue to be held to the DDA requirements. The Affordable Housing Funding Agreement it should be effectuated post haste so that Habitat can maintain their September, 2010, deadline. It is acceptable for the Agreement to be approved prior to the DDA and Affordability Covenants being update. The additional time will provide time for loan documents to be finalized and noticing requirements to be complete for the DDA amendment, without postponing Habitat's construction timeline. Amendment to the Affordable Housing Funding and Loan Agreement: Habitat for Humanity originally requested the Agency loan funds to cover both the encumbrance from SunWest Bank for $800,000, as well as the remaining Agency loan of $581,954.78. Agency staff recommends the first Affordable Housing Funding and Loan Agreement be Amended to allow the remaining encumbrance from the Agency loan, be payable upon close of escrow with mortgage proceeds. This action reduces the loan amount within the Affordable Housing Funding and Loan Agreement Il. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: N/A NOTIFICATION: • Mark Korando, Habitat for Humanity . Ken Friess, Friess Property Services • David Wilson, American General Corp. Agenda Report • • December 15, 2009 Page 4 FINANCIAL CONSIDERATION: The Agency has approximately $9 million in 2008 Series B Tax Allocation Bond Proceeds, and $5 million in other Agency set aside funds. Staff requests the Agency loan Habitat for Humanity $3,272,165, from the 2008 Series B Tax Allocation Bond Proceeds, for the completion of the Calle Rolando Affordable Housing Project. RECOMMENDATION: By motion, approve a 0% interest loan of $3,272,165 to be repaid by Habitat for Humanity on a per unit basis at the close of escrow; and direct the Executive Director to execute an Affordable Housing Funding and Loan Agreement memorializing the additional assistance. Resl2ectfullv submitted, Douglas Dumhart Economic Development Manager Pr pared by: aura Stokes Housing/Redevelopment Coordinator Attachments 1. Affordable Housing Funding and Loan Agreement II 2. First Amendment to the Affordable Housing Funding and Loan Agreement 3. Habitat for Humanity Proposal 0 0 AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT II THIS AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT (this "Agreement") is entered into as of December 15, 2009, by and between the SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation ("Habitat"), with reference to the following: RECITALS A. Agency transferred to Habitat the real property on Assessor's Parcel Nos. 668-421-03 & 04 at the terminus of Calle Rolando located in the City of San Juan Capistrano ("City'), County of Orange, State of California, which is legally described in Exhibit "A" attached hereto and incorporated herein (the "Property"). B. On August 22, 2006, the City's Planning Commission approved a resolution authorizing, subject to approval of a rezone by the City Council and issuance of building permits and other conditions, a new multifamily ownership condominium housing development containing 27 units (thirteen duplexes and one single-family unit) located on the Property (the "Project"). C. On September 19, 2006, Agency and Habitat entered into the Disposition and Development Agreement ("DDA") for the transfer of the Property and for the development of a residential project on the site, and in connection therewith recorded Affordability Covenants for Calle Rolando Villas Condominiums, Tract Number 17027. D. Thereafter, Habitat began construction of the Project and encountered cash flow difficulties which included less than anticipated financial assistance from third parties, the City permit fees were substantially higher than originally anticipated, the City development and infrastructure fees were payable upfront for the total Project development, and the increased cost from the original budget to widen and improve Calle Rolando. E. Habitat for Humanity has completed nine of the total 27 units within the Project, the remaining 18 units are anticipated to be completed by September 30, 2010. F. Affordable Housing Funding and Loan Agreement II is necessary for Habitat for Humanity to complete the project by the Community Development Block Grant deadline. G. Agency desires to assist Habitat with the cash flow difficulties by providing an interest free loan for the construction of the development. Page 1 of 19 ATTACHMENT 0 0 NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows: ARTICLE I LOAN 2.1 Amount. Agency hereby agrees to loan and Habitat hereby agrees to borrow and repay, an amount not to exceed Three Million Two Hundred Seventy Two thousand One Hundred Sixty Five Dollars ($3,272,165), subject to the terms, covenants, conditions, representations, and warranties set forth in this Agreement, and the other Loan Documents ("Agency Loan"). 2.2 Repayment of Agency Loan. The Promissory Note, the disbursed and unpaid principal balance of the Agency Loan shall not bear interest. Habitat shall repay the Agency Loan on a per unit basis per the following schedule: (a) The balance of One Hundred Twenty One Thousand One Hundred Ninety One and 29/100 Dollars ($121,191.29) at the close of escrow for each of the Twenty Seven (27) units. 2.3 Maturity Date. Notwithstanding any other provision of this Agreement or the Promissory Note, unless due sooner, the entire outstanding principal balance of the Agency Loan shall be due and payable in full on January 1, 2011 ("Maturity Date'). The Maturity Date may only be extended by a mutual agreement of the parties in writing and fully executed. 2.4 Prepayment. Habitat may pay the principal due the Agency under the Promissory Note prior to or in advance of the time for payment thereof as provided in the Promissory Note, without penalty. 2.5 Assumption. The Promissory Note shall not be assumable by successors and assigns of Habitat, either voluntarily or by operation of law, without the prior written consent of the Agency, and any such assignment or assumption shall be void. 2.6 Loan Disbursement. Upon satisfaction of the conditions to disbursement set forth in the DDA and Section 4.1 below and pursuant to the disbursement procedures set forth in Section 4.2 below, the Agency, through the approved Escrow Holder will cause the disbursement of the Agency Loan as provided for in Section 4.2. 2.7 Security for Agency Loan. The Agency Loan shall be secured by the Deed of Trust, which Habitat shall execute and which shall be recorded as a Page 2 of 19 0 0 lien against the Project along with the recording of a Request for Notice of Default. The parties shall use the short form Deed of Trust with Assignment of Rents and Request for Special Notice provided by Escrow Holder. 2.8 Approval of Additional Financing. Habitat shall not place or permit (either voluntarily or involuntarily) to be placed any encumbrances not otherwise provided for and approved by the Agency, including, but not limited to any additional liens or financing of any kind on the Project without the prior written consent of the Agency. 2.9 Subordination of Deed of Trust. In accordance with the DDA, the Agency agrees that the Deed of Trust shall be subordinate to the liens of record prior to the date of this Agreement. Any other financing, refinancing or encumbrance of the Project is prohibited without the Agency's prior written consent, which consent the Agency may arbitrarily withhold in the exercise of its discretion. ARTICLE 11 USE RESTRICTIONS 3.1 Use Restrictions. In accordance with the provisions of the DDA, the Affordability Covenants and this Agreement as incorporated herein, the Habitat has agreed to provide housing in the Project to families in need on the basis of housing need, ability to repay the loan, family size, character, willingness to volunteer time on Habitat's projects and certain other input as set forth in the aforesaid agreements and covenants. 3.2 Records. Habitat will maintain complete and accurate records pertaining to the Affordable Housing requirements, and will permit any duly authorized representative of the Agency to inspect and copy the books and records of the Habitat pertaining to the Project, including those books and records pertaining to the occupancy of the units. ARTICLE III DISBURSEMENT OF AGENCY LOAN 4.1 Conditions Precedent to Disbursement .of Agencv Loan Proceeds. The Agency shall cause Agency Loan proceeds to be disbursed through escrow to the Habitat as set forth in this Article IV. No disbursement shall be made until all of the following conditions precedent are satisfied. (a) Execution and Delivery of Documents. Habitat shall have executed and delivered to the Agency (i) this Agreement, the Promissory Note and the Deed of Trust, (ii) all resolutions and certificates necessary or appropriate in the Page 3 of 19 0 0 opinion of the Agency to evidence the Habitat's authority to enter into the Agency Loan and be bound by the Loan Documents, and (iii) all other documents and instruments required by the Agency to be executed and delivered, all in form and substance satisfactory to the Agency. (b) Insurance. Habitat shall have furnished the Agency with evidence of the insurance coverage described under Section 7.10 hereof and Section 4.5 of the DDA. (c) Title to Property. The Agency has determined to its satisfaction that upon the Close of Escrow Habitat will have good and marketable fee title to the Property and there will exist thereon or with respect thereto no mortgage, lien, pledge, easement, covenant, condition, restriction, or other encumbrance of any character whatsoever other than liens for current real property taxes and assessments not yet due and payable, the liens of the deeds of trust described in Section 2.7 hereof, and the lien of the recorded DDA and Affordability Covenants and any other matters approved in writing by the Agency. (d) Recordation. The Escrow Holder is prepared, to concurrently record the Deed of Trust against the Property at the Close of Escrow and issue or cause the issuance to the Agency by a title insurance company approved by the Agency, such endorsements to the existing title insurance policy as the Agency may require, which shall insure the Deed of Trust as a lien upon the Property subject only to the exceptions approved by the Agency in Section 4.1(c) above. (e) No Default. There shall exist no condition, event or act which would constitute an Event of Default (as hereinafter defined) hereunder or which, upon the giving of notice or the passage of time, or both, would constitute an Event of Default. (f) Representations and Warranties. All representations and warranties of Habitat herein contained shall be true and correct. (g) Construction Releases. The Agency (if it so elects) shall have received and approved copies of all labor and material releases pertaining to the construction contract or contracts with a responsible contractor or contractors providing for the construction of the Project in conformance with the terms of this Agreement. 4.2 Procedure for Disbursement of Agency Loan Proceeds. When all the conditions to disbursement have been satisfied and the Agency is satisfied that any conditions to the Close of Escrow have been satisfied, the Agency shall deposit the Agency Loan with the Escrow Holder for disbursement upon the Close of Escrow in accordance with the terms of the DDA. Page 4 of 19 ARTICLE IV DEVELOPMENT OF THE IMPROVEMENTS The Project is being constructed substantially in accordance with plans approved by the City and Agency (and to the extent of any material change from such plans, then in accordance with the City and Agency approval of the proposed change) and the terms and conditions of the permits and approvals (including building permits) for the Project. ARTICLE V REPRESENTATIONS AND WARRANTIES OF HABITAT 6.1 Representations and Warranties. Habitat hereby makes the following representations and warranties to the Agency, each of which shall also be deemed a covenant for which Habitat agrees, shall continue to be true and accurate in all material respects so long as the Agency Loan or any portion thereof remains outstanding: (a) Organization. Habitat is duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. The copies of the documents evidencing the organization of Habitat delivered to the Agency are true and correct copies of the originals, as amended to the date of this Agreement. (b) Authority of Habitat. Habitat has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Habitat, and all actions required under Habitat's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. Page 5 of 19 0 0 (d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Habitat enforceable against the Habitat in accordance with their respective terms. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement or the other Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Habitat, or any provision of the organizational documents of Habitat or, if applicable, of its constituent partners, or will conflict with or constitute a breach of or a default under any agreement to which Habitat, or, if applicable, its constituent partners, is a party, or will result in the creation or imposition of any lien upon any assets or property of Habitat, other than liens established pursuant hereto. (f) Pending Proceedings. Habitat is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Habitat, threatened against or affecting Habitat or the Property or Project, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Habitat, materially affect Habitat's ability to repay the Agency Loan or impair the security to be given to the Agency pursuant hereto. (g) Compliance with Laws: Consents and Approvals. The Project shall comply at all times with all applicable laws, ordinances, rules and regulations of federal, state, and local governments and agencies, including but not limited to all applicable federal and state labor requirements, and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector, and other officers of any such government or agency. All consents, permissions and licenses required by any federal, state, or local government or agency to which the Habitat or the Project is subject, which may be necessary in relation to this Agreement or the ownership or operation of the Project, have been or will be obtained, and none of such consents, permissions, and licenses is subject to appeal or to conditions which have not been met. (h) Financial Statements. The financial statements of the Habitat and its general partners and other financial data and information furnished by the Habitat for review by the Agency fairly present the information contained therein. As of the date of Agency Loan disbursement, there will not have been any Page 6 of 19 0 0 adverse material change in the financial condition of the Habitat from that shown by such financial statements and other data and information. (i) Adequacy of Agency Loan. The amount of the Agency Loan, together with any funds to be provided by the Habitat or to the Habitat from any other sources, is adequate to pay all costs incurred in connection with the Project and to enable the Habitat to satisfy the covenants contained in this Agreement. Q) Payment of Taxes. All federal, state, county, and municipal taxes required to be paid by the Habitat or on account of the Project have been paid in full as of the date of this Agreement or will be paid in full by the Close of Escrow. ARTICLE VI CONTINUING OBLIGATIONS 7.1 Applicability. For the longer of the entire Term, or so long as the Promissory Note remains outstanding, the Habitat shall comply with the provisions of this Article VII. 7.2 Compliance with Loan Documents. Habitat shall promptly comply with all the terms and provisions of the Loan Documents. 7.3 Taxes and Assessments. So long as Habitat owns the Project, Habitat shall pay all real and personal property taxes, assessments and charges, and all franchise, income, unemployment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Project; provided, however, that Habitat shall have the right to contest in good faith any such taxes, assessments, or charges, in the event Habitat exercises its right to contest any tax, assessment, or charge against it, Habitat, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges, and interest. 7.4 Indemnity. Habitat shall, at Habitat's expense, defend, indemnify, save and hold the Agency and its respective elected and appointed officials, officers, agents, employees, and members harmless from any and all losses, damages, liabilities, claims, causes of action, judgments, settlements, court costs, attorneys' fees, and other legal expenses, cost of evidence of title, cost of evidence of value, and other expenses which they may suffer or incur due to, arising from, or relating to Habitats performance or non-performance of its obligations under this Agreement, the DDA or the Loan Documents, or Habitat's ownership or operation of the Property or the Project. Page 7 of 19 0 0 7.5 Entry by the Agency. Habitat shall permit the Agency, through its officers, agents, or employees, at all reasonable times to enter the Property or the Project and inspect for conformity with the requirements hereof. Habitat acknowledges that the Agency is under no obligation to inspect. Any inspection by the Agency is entirely for its purposes in determining whether Habitat is in default under this Agreement or the Loan Documents. 7.6 Hazardous Materials. Habitat shall indemnify, defend and hold harmless the Agency, and its respective elected and appointed officials, members, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of hazardous materials on, under, or about the Project, including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Project and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by the Agency or Agency in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees. 7.7 Transfers. During the Term, Habitat shall not sell or otherwise transfer the Project or any portion thereof to a Developer, speculator or investor. The Agency shall not approve any such transfer request if the Habitat is in default under any of the DDA or the Loan Documents 7.8 Maintenance of Project. Habitat agrees to maintain all interior and exterior improvements, including landscaping, on the Project in first-class condition, repair and sanitary condition, in compliance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, Agency, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Habitat acknowledges the great emphasis the Agency places on quality maintenance to protect its investment and to provide quality low income housing for its constituents and to ensure that all Agency subsidized affordable housing projects within the Agency are not allowed to deteriorate due to deficient maintenance. In addition, Habitat shall keep the Project free from all graffiti and any accumulation of debris or waste material. Habitat shall promptly make all repairs and replacements necessary to keep the Project in first class condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Habitat breaches any of the covenants contained in this Section 7.8 and such default continues for a period of five (5) days after written notice from Agency (with respect to graffiti, debris, waste material, and general maintenance) or thirty (30) days after written notice from Agency (with respect to landscaping and building improvements), then Agency, in addition to whatever Page 8 of 19 other remedy it may have under this Agreement, at law or in equity, shall have the right to enter upon the Project and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the Agency shall be permitted (but not required) to enter upon the Project and perform all acts and work necessary to protect, maintain and preserve the improvements and landscaped areas on the Project, in the amount of the expenditure arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Habitat to Agency upon demand. 7.9 Status of Habitat. Habitat shall at all times maintain its legal status in good standing and comply with all laws, rules and regulations of California and the United States and of any political subdivision thereof applicable to ft or its business. 7.10 Insurance. While any obligation of Habitat under any Loan Document remains outstanding, Habitat shall maintain at Habitat's sole expense, with insurers of recognized responsibility, the following policies of insurance in form and substance satisfactory to the Agency. Insurers shall be admitted and in good standing in the State of California and shall be rated at least A VIII. (a) Workers' compensation insurance and any other insurance required by law in connection with the Project; (b) Fire and hazard "all risk" insurance covering one hundred percent (100%) of the replacement cost of the Project in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the locality where the Project is situated (including insurance against loss by flood if the Project is located in an area now or hereafter designated as subject to the danger of flood, but excluding insurance against loss by earthquake); (c) Rent loss insurance for a period of repair or restoration for a period of at least one year; (d) Umbrella coverage in an amount not less than $2,000,000; and (e) All such insurance shall be endorsed to provide that said insurance may not be canceled or materially modified without 30 days' prior written notice to the Agency. The policies required pursuant to subparagraphs (b) and (c), above, shall include a "lender's loss payable endorsement" (Form 438BFU) in form and substance satisfactory to the Agency assuring Agency that all proceeds shall be paid to Agency as provided in the Deed of Trust subject to the interests of the senior lenders on the Project. The City and Agency shall be an additional named insured as to the policies required pursuant to subparagraph (b), (c), and Page 9 of 19 (d), above. No such insurance shall include deductible amounts to which the Agency has not previously consented in writing. Certificates of insurance for all of the above policies (and/or original policies, if required by the Agency from time to time), showing the same to be in full force and effect, shall be delivered to the Agency. All policies insuring against damage to the Project shall contain an agreed value clause sufficient to eliminate any risk of coinsurance. ARTICLE VII DEFAULT AND REMEDIES 8.1 Events of Default. Each of the following shall constitute an "Event of Default" by Habitat under this Agreement: (a) Failure to Make Note Payments. Failure to make prompt payments under the Promissory Note as and when provided for in the Promissory Note and this Agreement. (b) Mismanagement. Failure by Habitat to manage the Project in a prudent, first class manner in accordance with the terms, covenants, conditions, representations and warranties of this Agreement, the DDA or other Loan Documents. For purposes of this Agreement, an act or omission constituting "mismanagement" by the Habitat shall include, but not be limited to each of the following: (1) Failure to maintain and repair the Project and make replacements thereto, or the committing or permitting of any waste or deterioration of the Project; (2) Breach or failure by Habitat to duly perform, comply with or observe any of the terms, covenants, or conditions of this Agreement, the DDA or any other Loan Document, and such failure continues uncured or without Habitat commencing to diligently cure for thirty (30) days after notice thereof in writing is mailed by the Agency to Habitat; (3) A sale or other transfer of the Project in violation of Section 7.7 above. (c) Fraud or Material Misstatement or Omissions. Any fraudulent act or omission of Habitat's, or misrepresentation of Habitat's, pertaining to or made in connection with the Agency Loan, the Loan Documents or the Project. (d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Habitat to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Habitat or seeking any arrangement for Habitat under the bankruptcy law or any other applicable Page 10 of 19 0 0 debtor's relief law or statute of the United States or any state or ether jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Habitat in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of Habitat, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of sixty (60) days unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period will apply under this subsection 8.1(d) as well; or Habitat shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the Agency, the indebtedness evidenced by the Promissory Note. (e) Project Monies. Misapplication or embezzlement of Project monies. 8.2 Remedies. The occurrence of any Event of Default shall, either at the option of the Agency or automatically where so specified, relieve the Agency of any obligation to make or continue the Agency Loan and shall give the Agency the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents or otherwise available at law or in equity or by statute (and all of the Agency's rights and remedies shall be cumulative), including but not limited to the following: (a) Acceleration of Note. The Agency shall have the right to cause all indebtedness of the Habitat to the Agency under this Agreement and the Promissory Note, to become immediately due and payable. The Habitat waives all right to presentment, demand, protest or notice of protest, or dishonor. The Agency may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the Agency as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Habitat shall be liable to pay the Agency on demand all expenses, costs and fees (including, without limitation, attorneys' fees and expenses) paid or incurred by the Agency in connection with the collection of the Agency Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Agency Loan. (b) Specific Performance. The Agency shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Habitat to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at Habitat's Expense. The Agency shall have the right to cure any monetary default by Habitat under a loan other than the Agency Page 11 of 19 0 0 Loan. The Habitat agrees to reimburse the Agency for any funds advanced by the Agency to cure a monetary default by Habitat upon demand therefore, together with interest thereon at the rate of twelve percent (12%) per annum or the maximum rate permitted by law, whichever rate is greater, from the date of expenditure until the date of reimbursement. 8.3 Right of Contest. Habitat shall have the right to contest in good faith any third party claim, demand, levy, or assessment the assertion of which would constitute an Event of Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the Agency or the rights of the Agency hereunder. Upon demand by the Agency the Habitat shall make provision by deposit of funds with the Agency or, if permitted by the Agency in the exercise of the Agency's sole discretion, by bond in an amount, on forms, and with a bonding company all satisfactory to the Agency in the exercise of its discretion. Such assurance shall be given thirty (30) days after demand therefor, and, if made by deposit of funds with the Agency, the amount so deposited shall be disbursed in accordance with the resolution of the contest either to the Habitat or the adverse claimant. 8.4 Remedies Cumulative. No right, power, or remedy given to the Agency by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the Agency by the terms of any such instrument, or by any statute or otherwise against Habitat and any other person. Neither the failure nor any delay on the part of the Agency to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the Agency of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. 8.5 Waiver of Terms and Conditions. No waiver of any default or breach by Habitat hereunder shall be implied from any omission by the Agency to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the Agency to or of any act .by Habitat requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Agreement or the Loan Documents, nor shall it invalidate any act done pursuant to notice of default, or prejudice the Agency in the exercise of any right, power, or remedy hereunder or under the Loan Documents unless in the exercise of any such right, power, or remedy all obligations of Habitat to Agency are paid and discharged in full. Page 12 of 19 0 ARTICLE VII MISCELLANEOUS 9.1 Approvals Under Agreement. Where this Agreement requires an approval or consent of the Agency, such approval or consent may be given on behalf of the Agency by the Executive Director or his or her designee. 9.2 Time. Time is of the essence in this Agreement. 9.3 Notices. Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows: If to Developer: Habitat for Humanity of Orange County, Inc. 2200 South Ritchey Santa Ana, CA 92705 If to Agency: San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: Executive Director If to Escrow Holder First American Title Company 5 First American Way Santa Ana, CA 92707 Attn: Jeanne Gould, Senior Escrow Officer Such addresses may be changed by notice to the other party given in the same manner as provided above. 9.4 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and benefit of the Agency, its successors and assigns, and Habitat, its permitted successors and assigns, and no other person or persons shall have any right of action hereon. 9.5 Agency to File Notices. Habitat irrevocably appoints, designates, and authorizes the Agency as its agent (said agency being coupled with an interest) to file for record any notices of completion, cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest hereunder and under the Loan Documents 9.6 Actions. The Agency shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or Page 13 of 19 0 0 liabilities of the parties hereunder, or the disbursement of any proceeds of the Agency Loan. 9.7 Successors and Assiqns. The terms hereof shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that no assignment of Habitat's rights hereunder shall be made, voluntarily or by operation of law, without the prior written consent of the Agency, and that any such assignment without said consent shall be void. 9.8 Construction of Words. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender. 9.9 Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 9.10 Governing Law and Venue. This Agreement and the Loan Documents and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement or any of the Loan Documents, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court. 9.11 Amendment. This Agreement may not be changed orally, but only by an agreement in writing signed by Habitat and the Agency. 9.12 Entire Agreement. This Agreement, the DDA, the Affordability Covenants and the other Loan Documents constitute the entire agreement of the parties with respect to the subject matter hereof. 9.13. Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. 9.14 Captions and Headings. Captions and headings in this Agreement are for convenience of reference only, and are not to be considered in construing the Agreement. 9.15 Counterparts: Facsimile Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument and any Page 14 of 19 0 0 executed counterpart may be delivered by facsimile transmission with the same effect as if an originally executed counterpart had been delivered. [SIGNATURE PAGE FOLLOWS] Page 15 of 19 0 IN WITNESS WHEREOF, Agency and Habitat have signed this Agreement as of the date first set forth above. HABITAT: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: Chairperson By: Executive Director AGENCY: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director ATTEST: By: Secretary APPROVED•FORM: 111.4IRoom IRTIMIRWN�/y,il.�i':tL Page 16 of 19 0 0 EXHIBIT A Property Lesaal Description THE LAND REb' UZ D TO THIS REPORT IS STILP= IN THE CITY OF SAN JUAN CAPIS RPM, IN THE CCN1Y OF QRANE, STATE OF CALSFCRUA, AND IS IEcAZIEED AS FOLLOWS: PARCEL 1: THAT PORTION OF LOT 1 OF THE DANERI TRACT, IN THE CITY OF SAN JUAN CAFISTOW, AS %EW QI A MAP F= IN SOCK 2, P A G E 2 2 OF RE= OF SLRVFYS, RECORDS OF SAID ORANGE COUNTY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHERLY CC0M OF SAID LOP 1, BEING THE WESTERLY 03ZNF OF IOC 62 OF TRACT NO. 103, AS G -ON .CN A MAP RE� IN = 11, PAGES 29 TO 33 II7=IVE OF MIISCE.LADID:A15 MAPS, REOMDS OF SAID ORANCE 0JNTIY; THENCE SOUTH 440 06' 00" EAST 723.47 FEET ALCM THE UlZTHZ%SPFI27Y LINE OF SAID LOP I TO THE TRUE POINT OF BEGUMG; UE CE SUTH 490 34' 29" VEST 147.05 FEC; MENE 93ICH 30 11' 12" FAST 204.26 FEED TO THE = LDE OF SAID LOP 1; TFE•NNIE brM 89 ° 46' 01" EAST 193.01 FEED ALQM SAID 9JIIH LINE TO ALINE THAT BEARS SOUTH 0° 11' 13" EAST FROM AN ANGLE POINT IN THE NQRIHERLY LUE CF SAID LOP 1; THR,tE N2;Mi 0° 11' 13" VEST 203.83 = TO SAID RUE R=; THENCE NUZIH 440, 06' 00" 1*= 131.85 FE;FT TO THE TRUE POINT OF EBIDIIQG. PARCEL 2 AN EASE VENT ETR ROAD AND PUBLIC UTILITY PURPOSES CIM THAT P RTTClN OF LOT 1 OF THE 11'NFRI TRACT, IN THE CITY OF SAN JUAN CAPT.SIFAND, AS S[ -UN IN A MAP FILER IN BOOK 2, PAGE 22 OF REOCRD OF SUl=, REO» OF SAID ORANGE COUNTY DESCRIBED AS FOLLOWS: BE3t,lMU AT A POINT IN THE NCTMWESTERLY LINE OF SAID LOT 1, DISTANT SJM 360 56' 30" WEST 115.69 FEET FRCM THE NORTHERLY ald�ER OF SAID LOT 1, SAID MNk21I-TQ2LY OM'ER BEING THE WESTERLY awm OF LOT 62 OF 'TRACT NO. 103, AS SHOWN ON A MAP RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MIISCEUANEOUS MAPS RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MIS ELLS MAPS, IUK= OF SAID C32ANT.£ 07CNIY; THENCE SCUIH 42° 40' 30" EAST 638.31 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 55.21 FEET; THENCE SOUTHEASTERLY ALONG SAID QRVE THRJT M A CENiIPAL ANME OF 42° 29' 17 AS EMSTPDCE OF 40.94 FEET TO A REVERSE CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 40.00 FEET; THENCE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY ALONG SAID QRVE THRa M A Camm AN3E OF 26 ° 58' 34" A DISDYsrE OF 184.29 FEET TO A REVERSE CURVE CONCAVE SOU IDW-S1'ERLY HAVING A RADIUS OF 55.21 FEET; THENCE NXYIHWESTERLY ALONG SAID CURVE TIMM A CENTRAL ANMZ OF 420 29' 17" A DISTANCE OF 40.94 FEET; THENCE NCRTH 420 40' 38" WEST 632.81 FEET TO SAID NORTHWESTERLY LINE; THENCE NORTH 36° 56' 38" EAST 30.50 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFIREM THAT PORTION THERDOF LYING WITHIN THE PUBT C STREET (ALIPAZ STREET) DESCRIBED IN THE EASEMENT DEED TO THE CITY OF SAN JUAN CAPISTRANO, RECORDED SEPTEMBER 24, 1976 W BOOK 11900, PAGE 831 OF OFFICIAL RECORDS. ALSO EXCEPTING THE PORTION INCLUDED WITHIN PARCEL 1. PARCEL 3: THAT PORTION OF LOT 1 OF THE DANERI TRACT IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 2 PAGE 22 OF RECORD OF SURVEYS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF A LINE WHICH BEARS SOUTH 00 1.1' 13" EAST PROM AN ANGLE POINT ON THE NORTHERLY LINE OF SAID LOT, SAID ANGLE POINT BEING SOUTH. 44° 06' 00' EAST 861.32 FEET FORM THE MOST NORTHERLY CORNER THEREOF. Assessor's Parcel No: 668'421-03, 04 Page 17 of 19 EXHIBIT B Form of Promissory Note PROMISSORY NOTE [SECURED BY DEED OF TRUST/NO INTEREST] $3,272,165 San Juan Capistrano, California OR FOR VALUE RECEIVED, the undersigned, HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation ("Maker"), unconditionally promises to pay to the order of SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder"), at City of San Juan Capistrano, 32400 Paseo Adelanto, San Juan Capistrano, CA 92675, or at such other place as may be designated in writing by the Holder the principal sum of THREE MILLION TWO HUNDRED SEVENTY TWO THOUSAND ONE HUNDRED SIXTY FIVE DOLLARS ($3,272,165) on or before January 1, 2011 ("Maturity Date"). All payments under this Note shall be in lawful money of the United States. No interest shall be charged or accrue on the principal amount of this Note prior to the Maturity Date. After the maturity of this Note, this Note shall bear interest at the rate of Zero (0%) percent per annum. The Maker agrees to pay to the Holder all costs, expenses and reasonable attorney's fees incurred in the collection of sums due hereunder, whether through legal proceedings or otherwise, to the extent permitted by law. This Note may be prepaid at any time, in whole or in part, without penalty or premium. This Note is unsecured. The Note shall be repaid as described in Section 2.2 of the Affordable Housing Funding and Loan Agreement, executed of even date herewith. Upon payment of this Note in full, Holder shall surrender the Note to Maker. This Note shall be governed by the laws of the State of California. IN WITNESS WHEREOF, this Promissory Note is executed under seal on the day and year first above written. MAKER: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: By: Chairperson Page 18 of 19 Executive Director 0 ACKNOWLEDGEMENT STATE OF CALIFORNIA ) ) ss COUNTY OF RIVERSIDE ) On , before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature My Commission Expires: seal Page 19 of 19 This area for official notarial 0 FIRST AMENDMENT TO THE AFFORDABLE HOUSING FUNDING AND LOAN AGREEMENT THIS FIRST AMENDMENT TO THE AFFORDABEL HOUSING FUNDING AND LOAN AGREEMENT (this "Amendment') is entered into as of December 15, 2009, by and between SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation ("Habitat'), with reference to the following: RECITALS A. Agency approved an Affordable Housing Funding and Loan Agreement on October 8, 2008, to grant $335,342 and loan at 0% interest $631,174.49 to Habitat for Humanity for reimbursement of extraordinary development expenses and development fees paid up front. B. The $631,174.49 0% interest loan was to be repaid on a per unit basis for the remaining 19 units, with $4,000 paid at Building Permit issuance, and $29,219.71 paid at issuance of Certificate of Occupancy. C. On November 30, 2009, Habitat for Humanity requested the remaining funds due from the Affordable Housing Funding and Loan Agreement ($581,954.78) be repaid with mortgage proceeds at the close of escrow of all 27 units. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained within this Amendment, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree to the following amendments: Article 11 2.2 shall hereby read: Repayment of Agency Loan. The Promissory Note, the disbursed and unpaid principal balance of the Agency Loan shall not bear interest. Habitat shall repay the Agency Loan on a per unit basis per the following schedule: (a) $21,553.88 at close of escrow with mortgage proceeds. Article 11 2.3 shall hereby read: Maturity Date. Notwithstanding any other provision of this Agreement or the Promissory Note, unless due sooner, the entire outstanding principal balance of the Agency Loan shall be due and payable in full on January 1, 2011 ("Maturity Date"). The Maturity Date may only be extended by a mutual agreement of the parties in writing and fully executed. ATTACHMENT 0 0 [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, Agency and Habitat have signed this Agreement as of the date first set forth above. HABITAT: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: Chairperson By: Executive Director AGENCY: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic ZAII Executive Director ATTEST: By: Secretary APPROVED AS TO FORM: Laura Stokes To: Subject: Laura Stokes RE: New deal points From: Mark Korando [mailto: Sent: Monday, November 30, 2009 9:43 AM To: Douglas Dumhart; Laura Stokes Cc: Sharon Ellis Subject: New deal points Douglas, Laura: To keep it simple I would propose the following: • DDA be renegotiated to have an end date of September 30, 2010. This allows time for rain delay as an EI Nino is predicted and time to complete should there be a default. So there would be enough revenue to cover loan, allow remaining 18 homes to be up to 80% AMI. • Agency loan HfHOC 800K for street construction lien, 611 K and change for existing permit loan, 2.473K for construction. (see chart below) • Habitat overhead (342K) to be paid first from mortgage proceeds. We currently have 3.3 mil into the development. • Agency loan to be paid back from 3rd parry mortgage proceeds • Residual income to be split 50/50 Agency/ HfHOC, this provides incentive to be under budget. Every effort will be made to bring the development in under costs. Historical data shows savings of 5%-8%. Sunwest Loan $800,000 Construction Cost (less buyback reserve) $2,472,165 Consolidated Loan (Mortgage proceed payback) F$3,272,165 Agency Loan (Amended: mortgage proceed $581,954 payback) HfHOC Construction Overhead $342,000 Total Costs $4,196,119 Third Party Mortgage Income 160K X 27 $4,320,000 Residual split 50/50 $123,881 ATTACHMENT 0 Is NOTIFICATION OF MEETING OF POTENTIAL INTEREST SAN JUAN CAPISTRANO REDEVELOPMENT AGENCY The Board of Directors of San Juan Capistrano Community Redevelopment Agency will meet at 6:30 p.m. on Tuesday, December 15, 2009, in the City Council Chamber in City Hall, to consider: "Consideration of Habitat for Humanity's Request for Additional Funding to Complete Calle rolando Affordable Housing Development" — Item No. D4 If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the Board of Directors through correspondence addressed to the Board and/or by attending the meeting and speaking to the Board during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, December 14, 2009 to allow time for the Board to consider its content. If you would like to speak at the meeting, please complete a yellow "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Chairman when the item is considered. You have received this notice at the request of the City staff member Laura Stokes, Housing/Redevelopment Coordinator. You may contact that staff member at (949) 443-6313 with any questions. The agenda, including agenda reports, is available to you on our web site: www.sanivancaaistrano.org. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: cityclerkasanivancapistrano.org. Maria Morris, CMC City Clerk cc: Mark Korando, Habitat for Humanity; Ken Friess, Friess Property Services; David Wilson, American General Corp. 32dOO Pasco Adelanto • San Juan Capistrano • California 92675 (949) 493.1171 . • CRA 1111712009 D2 AGENDA REPORT TO: Joe Tait, Interim Executive DirectoO< FROM: Douglas Dumhart, Economic Development Manager SUBJECT: Consideration of Status of the Habitat for Humanity Project and Compliance with Terms of the Disposition and Development Agreement and Community Development Block Grant. RECOMMENDATION: By motion, identify the preferred course of action from the options listed in the Alternative Action section of the Agenda Report (p. 4), and direct staff to pursue and effectuate the preferred action. SUMMARY: On September 19, 2006 the Redevelopment Agency entered into a Disposition and Development Agreement (the "DDA") (Attachment 1) with Habitat for Humanity ("Habitat'). As part of the agreed development, the Agency would provide Habitat with a 2.7 acre vacant parcel of land valued at $2.05 million and a $1 million Community Development Block Grant (CDBG). In return for the grant funds and land, Habitat agreed to provide 27 affordable ownership units, for very -low and lower income limit households, within 24 months from the commencement of construction. Without financial assistance Habitat will not complete the project before the CDBG grant and DDA deadlines expire. This Agenda Report outlines the options available to the Agency for addressing the CDBG grant and DDA deadlines and securing completion of the project. BACKGROUND: Disposition and Development Agreement: On March 15, 2005 the Agency considered a conceptual plan from Habitat to develop 27 affordable owner occupied units on the 2.7 acre site, acquired January 26, 2004 by the Agency. Habitat and staff completed the Architectural Control application and received entitlement for the project August 22, 2006. The conditions of entitlement included the widening Calle Rolando, completing an Affordability Covenant, and establishing a Disposition and Development Agreement. The DDA included a "Schedule of Performance" (as Attachment 5 of the DDA) including the commencement of construction by June 30, 2007, and the completion of Agenda Report Page 2 • November 17, 2009 construction within 24 months of the commencement of construction (p. 7 of the DDA). Staff discussed the discrepancy in completion time between Attachment 5 and p. 7 of the DDA with the City attorney. Staff concluded that the DDA discussions likely resulted in the completion timeline being extended to 24 months; however it seems the change was not reflected in the DDA's "Schedule of Performance". Habitat did not meet the commencement of construction date of June 30, 2007, for two reasons. First, Calle Rolando, which Habitat was conditioned to widen, had not been properly recorded and it became necessary to resurvey and rerecord the street right-of- way. Second, the design process and meeting the City's improvement requirements to the street added substantial and unanticipated time and cost anticipated to be spent on building homes. Therefore, the commencement of construction, issuance of grading permit for the residential development, occurred on January 3, 2008. This commencement of construction date establishes the completion of construction date as January 3, 2010, pursuant to the DDA. To -date Habitat has pulled thirteen building permits, secured four Certificates of Occupancy, and anticipates completion and Certificates of Occupancy for five additional units prior to the DDA deadline. CDBG Grant: In February 2004 the City applied for $1 million in affordable housing new construction funds through the State's CDBG program. The City's original grant application included a proposed affordable multi -family rental project by Mercy Housing California ("Mercy') to be located on the same site at the terminus of Calle Rolando. The State notified staff of the successful award of the grant to the City on April 29, 2004. However, the City Council opted not to proceed with the Mercy project due to concerns related to the project scope and design, and proposed financing. This delay resulted in the CDBG Standard Agreement to receive grant funds, being approved on January 20, 2005. The original CDBG Agreement stipulated three salient conditions. First, the $1 million grant funds were to be used for infrastructure in new residential development for a targeted income group. Second, the expenditure of funds were tied to calendar milestones (25% by December 31, 2005; 75% by June 30, 2005; and 100% by December 31, 2006). Lastly, the grant required the entire project to be complete by date certain. December 31, 2006. Project completion occurs at occupancy of the units, due to the state requirement to report each unit's household income as verification of the affordability component of the grant. The State has approved two amendments to the CDBG agreement, both of which have extended the completion time. The first extension was to December 31, 2007 and included both the expenditure and the performance completion. The second extension was to December 31, 2010 and was solely for the work completion. Due to the State's obligation to close out the 2004 CDBG grant with the federal Housing and Urban Development Department, the City is not eligible for an additional extension. Defaulting on the grant agreement will result in the City being ineligible for funds in 2011 Agenda Report • Page 3 • November 17, 2009 and 2012; additionally, the State can require the City reimburse the $1 million loan. Staff was notified that the State may review the project at the time of default and determine if the completed work would have received the full $1 million grant. Staff is not confident the partially completed project would satisfy the $1 million grant completion requirement. Habitat for Humanity Loan Request: Staff has worked doggedly with Habitat since construction commencement and pursued the Redevelopment Agency's approval of loans and grants in efforts to keep Habitat's construction moving forward. On September 24, 2009 Staff met with Habitat to discuss the project status and the CDBG and DDA deadlines. Habitat requested an additional construction loan of $5,292,339 for the remaining construction, overhead, and encumbrances of the project, and identified a new completion date of April, 2011 (five months past the December 2010 grant deadline). A detailed breakdown of the costs is provided as Attachment 2 for review. Acceptance of Habitat's proposed completion date would require the Agency to extend the conditions of the DDA and would make the City in default of the State CDBG grant agreement. Extending the DDA would require a public hearing and notification to over 300 residents (Alipaz Community residents and San Juan Mobile Estates). Additionally, defaulting on the State CDBG agreement may trigger the City's reimbursement to the State of the $1 million grant and prohibit the City from receiving CDBG funds for the following two years. Staff related the concerns with defaulting on the CDBG agreement and requested Habitat prepare a cost estimate to complete the project by May 31, 2010. The May deadline was identified to give Habitat seven months to select households and occupy the units satisfying the CDBG requirement of reporting all assisted household incomes. Habitat prepared a new estimate and on October 26, 2009, staff met with Habitat to discuss the estimate and potential future solutions. The new estimate from Habitat for the loan to complete the project by May, 2010 was $5,548,339. Additionally, Habitat related that if the Agency loaned the full amount requested, there would be an approximate $2 million shortfall for reimbursement of the loan, which would require Habitat to request the amount be forgiven as a grant. Habitat's preferred option would be for the State grant to be repaid by the Agency, and the DDA be renegotiated, extending the timeline and allowing 18 units be sold to moderate income households. These changes would enable all development funds and some CDBG funds to be repaid through conventional lending, the sale of units, and funding raising. Resulting in the minimized cost to the Agency of only a portion of the $1 million grant, opposed to a $2 million cost. Habitat believes this option would enable the organization to complete the project within 18 months of approval. Agenda Report • • November 17, 2009 Page 4 Staff Action: Staffs due diligence led to two local construction firms being contacted and requested to prepare estimates for the construction of the remainder of the project, by May 31, 2010. The estimates do not include the permitting costs, or the additional staff time which will be required to coordinate and manage the construction of the project. The first estimate, included as Attachment 3, from American General Corporation, the successful bidder of the Season's project, sets the cost at approximately $2,291,927.52. The second estimate, provided as Attachment 4, received by the Agency from Friess Property Services, sets a ballpark cost at $3.26 million. ALTERNATE ACTIONS: Staff has investigated several options for the Agency and for Habitat regarding the imminent agreement default and need to complete the project no later than December, 2010. Staff has identified four alternative actions for the Board to consider for the solution to the dilemma with Habitat and the project completion schedule. 1. The Agency may consider Habitat's preferred option. Including renegotiating the DDA completion timeline to April, 2011, allowing remaining units to be sold to moderate income households, and reimbursing the $1 million grant to the state. This option would result in the City repaying the grant and being reimbursed for a portion of the reimbursement by Habitat through the higher profit in home sales, conventional loans and fund raising. The total cost to the Agency under this action would be less than $1 million. 2. The Agency can opt to extend the DDA and loan Habitat $5.55 million to complete the project by May 31, 2010. This action would establish a timeline for the completion of the project which would keep the City from defaulting on its CDBG grant. Habitat will not be able to raise the full loan amount in order to reimburse the Agency within the timeline; therefore, the Agency would likely need to forgive approximately $2 million of Habitat's loan. 3. The Agency can find Habitat in default of their DDA and contract with a construction team to complete the project by May, 2010 for a cost between $2.3 and $3.26 million. Additionally, the Agency would be required to take responsibility for the SunWest Bank loan, totaling $800,000, Habitat required in to complete the project's roadway. The Agency would strive to preserve a partnership with Habitat to maintaining and managing household selection and re -sales. Habitat has related that long term management would not be conducive to their program, but they may be contracted with to make the initial household selections for a minimum of $76,000. This option would result in a Agency cost of approximately $3.18 to $4.14 million. 4. The Agency can decide to find Habitat in default of their DDA, and contract with a construction team to complete the project by May, 2010 for a cost between $2.3 Agenda Report • • November 17, 2009 Page 5 and $3.26 million. Additio nally, the Agency would be required to take responsibility for the SunWest Bank loan, totaling $800,000, Habitat required in to complete the project's roadway. The Agency would choose to maintain and manage household selection and re -sales with current housing staff or with a contracted party. The cost for this action will include the $3.1 to $4.06 million construction costs and the unknown management and selection costs. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: N/A NOTIFICATION: • Mark Korando, Habitat for Humanity • David Wilson, American General Corporation • Ken Friess, Friess Property Services RECOMMENDATION: By motion, identify the preferred course of action from the options listed in the Alternative Action section of the Agenda Report (p. 4), and direct staff to pursue and effectuate the preferred action. Respectfully submitted, W,. 0-,47 Douglas Dumhart Economic Development Manager Prepared by: IR 04 Laura Stokes Housing/Redevelopment Coordinator Attachments 1. Habitat for Humanity Disposition and Development Agreement 2. Habitat for Humanity Detailed Construction Cost Estimate 3. Construction Cost Estimate from American General Corporation 4. Construction Cost Estimate from Friess Property Services R4x ORDIN43 REQUESTED BY AND WHEN RECORDED MAILTO. Recorded in Oficial Records, Orange County Tom Day, Clerk -Recorder San Juan Capistrano Community 111MINIIN1111501IIV1011111NO FEE Redevelopment Agency 2006 OWN602 09:05am wom 32400 Paseo Adelanto We2286 1t Al2 27 San Juan Capistrano, California 92675 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Attention: Executive Director (Above Space for Recorder's Use) This document is exempt from the payment Of a recording fee parsuaot to Government Code Section 27383. Yom/ DISPOSITION AND DEVELOPMENT AGREEMENT �1 for AFFORDABLE HOUSING by and between SAN .YUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., Calle Rolando Villas SD Prot Location APN 668-421-03 & 04 Tract No. 17027 San Juan Capistrano, California 1 DDA -Affordable Housing ATTACHMENT 1 TABLE OF CONTENTS RECITALS ..............._. I 1. DEFINITIONS......................................................................................................................2 10 2 DISPOSITION OF THE STI E ........... 4 2.1 Conveyance of the Site .................................................... .................... 4 2.2 Closing Procedure ........ ................................................ 4 2.3 Homeowners Association ................. 4 3. CONDMONS TO CLOSING................. 4 3.1 Agency Conditions Precedent....................................................................... 4 4 SCOPE OF DEVELOPMENT INSURANCE AND INDEMNITY ........................... 6 4.1 Scope of Development .... ................ 6 4.2 Design Review.. .............................................. 6 4.3 Time of Performance: Progress Reports 6 4.4 Cost of Construction ........................................ ..................... 7 4.5 Insurance Requirements ........ 7 4.6. Waiver of Subrogation.......................................................................................... 8 4.7 Obligation to Repair and Restore Damage Due to Casualty 8 48lndemnify........................................................................................................8 ........... 16 4.9 Rights of Access ............ 1. 9 4.12 Taxes and Assessments ........... 10 4.13 Liens and Stop Notices......................................................................................... 10 4.14 Certificate of Completion......................................................................................... 10 4.15 Further Assurances........................................................................................................... 10 4.16 Financing of the Improvements.................................................................................... 11 5. COVENANTS AND RESTRICTIONS............................................................................... 13 5.1 Use Covenants... .... 13 5.2 Affordable Housing Requirements.................................................................................... 13 5.3 Verifications...................................................................................................................... 13 5.4 Maintenance of S ite...................................................:........................................................ 14 5.5 Nondistximination Covenants.................................................................................. I.......... 14 5.6 Effect of Violation After Completion of Construction....................................................... 15 6. DEVELOPER'S GENERAL REPRESENTATIONS AND WARRANTIES.. ................ 15 6.1 Execution and Performance of Proiect Documents ....................................................1.16 6.2 Covenant Not to Transfer Except in Confbrmity..................................................... 16 7. DEFAULTS, REMEDIES, AND TERMINATION ............... ........... .............. 16 7.1 Default Remedies..........................................................................................16 7.2 Institution of Legal Actions ..................................................... ............... ........... 16 7.3 Termination by the Developer..........................:................................................. 17 7.4 Tennination by Agency........................................................................................ ..... 17 7.5 Acceptance of Service of Process.........................:......................................... 17 7.6 Rights and Remedies Are Cumulative .............. ................................................. 17 Calle Rolando Villas i DDA -Affordable Housing 7 7 Inaction Not a Waiver of Default .............. 17 7.8 Applicable Law ..... I ........... . 17 7.9 Forced Delay. Extension of Times of Performance .............. 18 8. TRANSFERS OR ASSIGNMENTS ........................................ 18, 8.1 Prohibition on Transfers or Assignments ....... 18 8.2 Permitted Transfers ..... .. ........................... 18 8.3 Assignment by Agency .................................................................................................. 18 9. MISCELLANEOUS .......................................................................................................... 20 9.1 Obligations Unconditional and Inde_pendent........................................................... ...... ..... 19 9.4 Counterparts........................................................................................................................ 19 9.5 Prior Agreements: Amendments: Consents....................................................................... 19 9.6 Governing Law............................................................................. ..................................... 20 9.7 Sev rag bilitvofProvisions..................................................................................................20 9.8 Headings............................................................................................................................ 20 9.9 Conflicts.... ...............20 9.10 Time of the Essence.........................................................................................................20 9.11 Conflict of Interest............................................................................................................ 20 9.12 Warranty Against Payment of Consideration.................................I............................ 20 9.13 Successors and Assigns................................................................................................. 20 9.14 Non -Liability of Officials and Employees of Agency ............................................... 21 9.15 Relationship Between Agency and Developer .................................................. 21 9.16 Agency and City Approvals and Actions........................................................ 21 9.17 Real Estate Brokers ............................................... ......................1„-21 9.18 Attorneys' Fees ......................... .........................:............................. ................ . 21 Calla Rolando Villas ii DDA -Affordable Housing DISPOSITION AND DEVELOPMENT AGREEMENT FOR AFFORDABLE HOUSING This Disposition and Development Agreement for Affordable Housing is entered into this 191b day of September, 2006, by and between the San Juan Capistrano Community Redevelopment Agency, a public body, corporate and politic ("Agency'), and Habitat for Humanity of Orange County, Inc., a California non-profit, public benefit corporation ("Developer'). RECITALS A. Agency is a California redevelopment agency acting under the California Community Redevelopment Law, Part l of Division 24 of the Health and Safety Code (the "Redevelopment Law'). B. Agency owns property on Assessor's Parcel Nos. 668-421-03 & 04 at the temrinus of Calle Rolando located in the City of San Juan Capistrano, County of Orange, State of California, which is legally described in Attachment 2. C. The Agency is authorized and empowered under the Community Redevelopment Law, California Health and Safety Code Sections 33000, et seq. (the "Community Redevelopment Law'), to enter into agreements for the production, improvement, or preservation of affordable housing to households of limited income, with such housing to be available at Affordable Housing Cost (as defined below). D. The Developer is experienced in the development and operation of affordable single and multi -family housing in southern California. E. The Developer has proposed to enter into this Agreement with the Agency under which the Developer shall develop a new multifamily ownership condominium housing development consisting of: (i) 13 duplexes (26 units), and (ii) 1 single family unit, all of which shall be sold to "Qualified Households" at prices that do not exceed "Affordable Housing Cost" throughout the "Covenant Period" (as defined below). Those undertakings of the Developer are material to this Agreement and but for those undertakings by the Developer, the Agency would not have entered into this Agreement. F. This Agreement is in the vital and best interest of the Agency and the City of San Juan Capistrano, California, and the health, safety and welfare of its residents. AGREEMENT NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, the parties hereto agree as follows: Calle Rolando Villas 1 DDA -Affordable Housing C� 1. DEFPTMONS As used in this Agreement, the following capitalized terms shall have the following meanings: L "Affordability Covenants" means Attachment 3 to this Agreement. "Affordable Housing Cost" means a monthly payment which, including a reasonable utility allowance, does not exceed: a) For a Very Low Income Household, one -twelfth (1/12) of thirty percent (30%) of fifty percent (50516) of Area Median Income; and b) For a Low Income Household, one -twelfth (1/12) of thirty percent (30"/0) of eighty percent (80%) of Area Median Income. "Agency" means the San Juan Capistrano Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers and organized under the Community Redevelopment Law of the State of California, and any assignee of or successor to its rights, powers and responsibilities. "Agency Conditions Precedent" is set forth in Section 3. "Agency Deed" means a deed in the form of Attachment No. 4 to this Agreement. "Area" means the Orange County Primary Metropolitan Statistical Area, as periodically defined by HUD. "Certificate of Completion" means Attachment No. 6 to this Agreement. "City" means the City of San Juan Capistrano, California, a California municipal corporation. "Closing Date" means the date the Agency Deed is recorded. "Conveyance' means the conveyance of the Site by recordation of the Agency Deed. "County" means the County of Orange, California. "Covenant Period" means a period of 'sixty (60) years, as more particularly set forth in the Affordability Covenants. "Date of Agreement" means September 19, 2006. "Default" is defined in Section 7.1 hereof. Calle Rolando Villas 2 DDA -Affordable Housing 0 CA "Developer" means Habitat for Humanity of Orange County, Inc., a California non- profit, public benefit corporation. "Development" means the new duplexes (26 units) and single family unit, and associated improvements as required by this Agreement to be: (i) constructed by the Developer upon the Site, with related offsite improvements, and (ii) operated in conformity with the Agency Deed and the Affordability Covenants. "Event of Default" has the meaning set forth in Section 7.1. "Executive Director" means the Executive Director of the Agency or iris or her designee or delegate. "Improvements" means all of the improvements required by the Development. "Legal Description of the Site" moans Attachment No. 2 to this Agreement. `Low Income Household" means households earning not greater than eighty percent (80%) of Median Income for the Area. "Notice" shall mean a notice in the form prescribed by Section 9.2 hereof. "Project Documents" means, collectively, this Agreement, the Affordability Covenants, the Agency Deed, all other Attachments to this Agreement, and any other agreement, document, or instrument that Agency requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. "Qualified Household" is a person or a household whom Developer determines is qualified to participate in the ownership of a Unit in the Development in accordance with the Affordability Covenants. "Required Affordable Units" means all twenty-seven (27) of the dwelling units required to be developed on the Site under this Agreement and as more fully set forth in the Affordability Covenants. "Schedule of Performance" means Attachment No. 5 to this Agreement. "Site" means that real property depicted on the Site Map and described with greater particularity by the Legal Description of the Site. "Site Map" means Attachment No. 1 to this Agreement. "Unit" means each of the twenty-seven (27) dwelling units required to be developed by the Developer under this Agreement. Calle Rolando Villas DDA -Affordable Housing "Very Low Income Households" means households earning not greater than fifty percent (50019) of Median Income for the Area. "Year" means the period commencing as of the Closing Date and ending as of December 31 of that calendar year, then each succeeding calendar year thereafter during the Covenant Period. 2. DISPOSITION OF THE SITE 2.1 Conveyance of the Site. Subject to the satisfaction of those conditions set forth in Section 3 hereof, the Agency is prepared to convey the Site to the Developer free of charge in consideration of the performance,by Developer under all terms and conditions of this Agreement. In consideration of the Agency entering into this Agreement and conveying the Site, the Developer shall develop the Improvements and comply with and cause the use of the Site to conform to the Affordability Covenants throughout the Covenant Period. Subject to the covenants and conditions hereon, Agency shall convey to Developer title to the Site free and clear of any and all encumbrances, liens, leases, easements, and other exceptions to or defects in title, excepting only the following: (i) the lien of any non -delinquent property taxes and assessments (to be prorated at the close of Escrow); (ii) the covenants and conditions set forth in the Grant Deed for the Site; (iii) property interests held by a public body or public bodies including without limitation easements, franchises, licenses, or other property interests of said public body or public bodies; and (iv) the approved title exceptions an such other exceptions to title as may hereafter be mutually approved by the Agency and Developer. 2.2 Closing Procedure. After Developer obtains all land use approvals for the Improvements, Agency shall record the following documents in this order: (i) the Agency Deed; (ii) the Affordability Covenants; and (iii) such other instruments, if any, as shall be approved by Executive Director (upon consultation with Agency's legal counsel) as necessary or convenient to effectuate and implement the Improvements. The order of recordation shall be subject to revision upon approval of the Executive Director. 2.3 Homeowners Association. Developer shall establish a homeowner's association to provide for ongoing exterior property maintenance and maintenance of common areas on the Site. Approval of covenants, conditions and restrictions as to the Site (or portions thereof) shall be subject to the approval of the Executive Director. 3. CONDITIONS TO CLOSING 3.1 Ag@rtcy Conditions Precedent. The Agency shall not execute the Agency Deed or proceed with the Closing as provided pursuant to this Agreement, unless all of the following conditions precedent (the "agency conditions precedenn have been fully satisfied, as determined in good faith by the Executive Director (which condition, if it requires action by Developer, shall also be a covenant of Developer): Calle Rolando Villas 4 DDA -Affordable Housing 0 (a) Execution of Certain Documents. Each of the Affordability Covenants and the Agency Deed has been executed by the Developer (where such documents so provide) and is ready to be recorded. (b) Evidence of Financing. Developer shall have provided written proof acceptable to Agency that the Developer has sufficient internal funds and/or has obtained a loan or financing, subject to customary conditions and Agency has approved such evidence of financing, in accordance with Section 4.16 hereof. In the event Developer obtains a loan or financing for the construction of the Improvements, such construction loan or financing for the Improvements shall be ready to close, and shall close and shall be immediately available for use in constructing the Improvements. (c) Construction Contract. Agency acknowledges that Developer is a California licensed contractor and may perform the construction of the Development. Developer shall have confirmed to the Agency in writing of its intention to act as the general contractor for the construction of the Development. Alternatively, Developer shall have provided to the Agency a signed copy of a fixed-price contract between the Developer and a general contractor for the construction of the Development, certified by the Developer to be a true and correct copy thereof, and Executive Director shall have approved such contractor or contractors, and the construction contract or contracts. However, nothing contained in this subsection (c) shall be deemed to create any responsibility or liability for selection of the contractor(s) of for construction of the Improvements, the Developer being solely responsible for such activities. (d) Payment, Performance and Completion Bonds. In the event that Developer hires a third -party contractor to perform the construction of the Development, Developer shall have obtained payment bonds and performance and completion bonds for off-site improvements as may be customarily required by City in connection with its subdivision process, in an amount and from a surety company reasonably acceptable to the Executive Director. All bonds shall be issued by good and solvent sureties qualified to do business in California and shall have a rating of A or better in the most recent edition of Best's Key Rating Guide. (e) Insurance. Agency shall have received evidence, satisfactory to Executive Director, that all of the insurance policies required by Section 4.5, below, are in full force and effect. All conditions set forth in Section 3.1, or to Agency's obligations hereunder, are for Agency's benefit only and Executive Director may waive all or any part of such rights by written notice to Developer. If Executive Director shall, within the applicable periods set forth herein, disapprove of any of the items which are subject to Agency's approval, or if any of the conditions set forth in this Agreement are not met within the times called for, Agency may thereafter terminate this Agreement without any further liability on the part of Agency by giving written notice of termination to the Developer. (f) Land Use Approvals. Before commencement of construction of the Development or other works of improvement upon the Site, the Developer shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits, and approvals which may be required for the Improvements by the City or any other governmental agency affected by Calle Rolando Villas 5 DDA -Affordable Housing 0 0 or baying jurisdiction over such construction or work. The Developer shall, without limitation, apply for and secure, and pay all costs, charges and fees associated therewith, all permits and fees required by the City, County of Orange, and other governmental agencies with jurisdiction over the Improvements. 4. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY 4.1 Scope of Develomnent. The Developer shall develop the Improvements in accordance with the approved plans, drawings and documents for the Improvements. 4,2 Design Review, (a) Developer Submissions. Prior to the Date of Agreement, in connection with its application for land use approvals by the City, the Developer has submitted "Basic Concept Drawings" for the Improvements. Before commencement of construction of the Improvements or other works of improvement upon the Site, the Developer shall submit to the City any plans and drawings (collectively, the "Design Development Drawings") which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop the Improvements. Developer, on or prior to the date set forth in the Schedule of Performance, shall submit to the City such plans for the Improvements as required by the City in order for Developer to obtain building permits for the Improvements. (b) City Review and Approval. The City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Municipal Code, and nothing set forth in this Agreement shall be construed to constitute the City's approval of any or all of the Design Development Drawings or to limit or affect the City's review and right to approve, approve subject to conditions, or disapprove Design Development Drawings, plans, drawings, applications, or submittals. (c) Revisions. Any and all revisions required by the City and its inspectors under the Municipal Code and all other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical; etc.) and under other applicable laws and regulations shall be included by the Developer in its Design Development Drawings and other required submittals and shall be completed during the construction of the Improvements. (d) Defects in Plans. The Agency and the City shall not be responsible either to the Developer or to third parties in any way for any defects in the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 4.2. 4.3 Time of Performance: Progress Reports. The Developer shall submit all Design Development Drawings, commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in this Agreement. Construction of the Improvements shall be commenced on or before Calle Rolando Villas 6 DDA -Affordable Housing 11 • the time established therefor in the Schedule of Performance. Once construction is commenced, it shall continuously and diligently be pursued to completion and shall not be abandoned for more than fifteen (15) days except when due to causes beyond the control and without the fault of Developer. During the course of construction and prior to issuance of the Certificate of Completion, Developer shall provide timely reports of the progress of construction when requested by the Executive Director. Developer shall complete construction of all of the Improvements on the Site within twenty-four (24) months after the first to occur of (i) commencement of construction or (ii) the time established by this Agreement for commencement of construction. 4.4 Cost of Construction. The cost of planning, designing, developing, and constructing the Improvements shall be borne solely by the Developer. All fees imposed by any governmental entity in connection with the subdivision of the Site or the development of the Improvements shall be home by Developer and shall be paid when due by Developer. 4.5 insurance Reeuirements. Commencing as of the Closing Date and continuing throughout the Covenant Period, Developer shall maintain at Developer's sole expense, with insurers reasonably approved by Agency, the following policies of insurance in forst and substance reasonably satisfactory to Agency: (a) workers' compensation insurance and any other insurance required by law in connection with the Improvements or other work performed on the Site (to be in effect while work is being performed on the Site); (b) upon commencement of construction of the Improvements and at all times prior to completion of the Improvements, builder's risk -all risk insurance covering 1001/6 of the replacement cost of all Improvements (including offsite and the materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Site is located (including loss by flood if the Site is in an area designated as subject to the danger of flood); (c) following completion of the Improvements, fire and hazard "all risk" insurance covering 100% of the replacement cost of the hnprovements in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Site is located (including loss by flood if the Site is in an area designated as subject to the danger of flood); (d) public liability insurance in amounts reasonably required by the Executive Director from time to time, and in no event less than $2,000,000 for "single occurrence;" (e) property damage insurance in amounts reasonably required by the Executive Director from time to time, and in no event less than $2,000,000; and (f) all other insurance reasonably required by the Executive Director from time to time. Calle Rolando Villas 7 DDA -Affordable Housing E 0 4.6. Waiver of Subro ag tion. Developer hereby waives all rights to recover against Agency (or any officer, employee, agent or representative of Agency) for any loss incurred by Developer from any cause insured against or required by any Project Document to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation. 4.7 Obligation to Repair and Restore Damage Due to Casualty. If during the period of construction the Improvements shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Improvements to substantially the same condition as the Improvements are required to be constructed pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Improvements can be occupied as an affordable housing project in accordance with this Agreement. In no event shall the repair, replacement, or restoration period exceed eighteen (18) months from the date Developer obtains insurance proceeds unless the Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Developer, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Improvements by giving notice to Agency (in which event Developer will be entitled to all insurance proceeds but Developer shall be required to remove all debris from the Site) or Developer may reconstruct such other improvements on the Site as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction, and the Agency may pursue remedies of its choosing under this Agreement, including without limitation termination. 4.8 Indemnity. (a) Developer shall defend (by counsel satisfactory to Agency), indemnify and save and hold harmless Agency and City and their officers, contractors, agents and employees (collectively, the "Indemnitees') from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, attorneys' fees and court costs) arising from or relating to: (i) this Agreement (including without limitation Section 4.10 hereof); (ii) a claim, demand or cause of action that any person has or asserts against Developer; (iii) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Site; or (iv) the ownership, occupancy or use of the Site. Notwithstanding the foregoing, Developer shall not be obligated to indemnify the Agency with respect to the consequences of any act of gross negligence or willful misconduct of the Agency. Developer's obligations under this Section 4.8 shall survive the issuance of the Certificate of Completion and termination of this Agreement; the requirements under this Calle Rolando Villas 8 DDA -Affordable Housing Section 4.8 are in addition to and do not limit the obligations of the Developer under the Agency Deed. (b) The Developer shall reimburse the Agency immediately upon written demand for all costs reasonably incurred by the Agency (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of Agency) in connection with the enforcement of the Project Documents and all related matters including the following: (i) the Agency's commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any Project Document, and (ii) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which the Agency is indemnified under the Project Documents. Such reimbursement obligations shall survive the issuance of the Certificate of Completion and termination of this Agreement. (c) The Developer shall indemnify the Agency from any real estate commissions or brokerage fees which may arise from this Agreement or the Site, including without limitation the the sale of dwelling units on the Site. The Developer represents that it has engaged no broker, agent, or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless from any claim by any broker, agent or finder in connection with this Agreement, the activities by the Developer, or the Site. 4.9 Rights of Access. Prior to the issuance of the Certificate of Completion, for purposes of assuring compliance with this Agreement, representatives of Agency shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as Agency representatives comply with all safety rules. Agency representatives shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 4.9. 4.10 Compliance With Laws. Developer shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards (including payment of prevailing wages if not exempted), the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and the Fair Housing Act, 42 U.S.C. Section 3601 et seq. (and 24 C.F.R. Part 100), the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, at seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq. The Developer does hereby and shall indemnify and hold each of Agency and City harmless from and against any and all claims, demands, causes of action, obligations, damages, liabilities, costs and expenses, including reasonable attorneys' fees, that may be asserted against or incurred by Agency and/or City with respect to or in any way arising from Developer's and Developer's compliance with or failure to comply with applicable laws, including all applicable federal and state labor standards including without limitation the requirements of Labor Code Section 1720, if applicable. Calle Rolando Villas 9 DDA -Affordable Housing 4.11 Nondiscrimination in Emoloymcm Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition or physical or mental disability. 4.12 Taxes and Assessments. Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site. Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof which is owned or leased by Developer, or assure the satisfaction thereof within a reasonable time, but in no event to exceed sixty (60) days. The Developer's duties to make payments of taxes and assessments under this Section 4.12 shall cease with respect to properties sold to homebuyers in accordance with this Agreement as of the time of each such sale, The Developer shall additionally defend, indemnify, and hold harmless the Agency and the City from and against any taxes, assessments, mechanic's liens, claims of materialmen and suppliers, or other claims by private parties in connection with (a) activities undertaken by the Developer or (b) the Site. 4.13 Liens and Ston Notices. Developer shall not allow to be placed on the Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Improvements the Developer shall within thirty (30) days of such recording or service or within five (5) days of Agency's demand whichever last occurs: (i) pay and discharge the same; or (ii) affect the release thereof by recording and delivering to Agency a surety bond in sufficient form and amount, or otherwise; or (iii) provide Agency with indemnification from the Title Company against such lien or other assurance which Agency deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of such lien or bonded stop notice. 4.14 Certificate of Comoletion. Promptly after completion of the improvements in conformity with this Agreement, Agency shall furnish the Developer with a "Certificate of Completion," substantially in the form attached hereto as Attachment 6 hereof. Agency shall not unreasonably withhold such Certificate of Completion. The Certificate of Completion shall be a conclusive determination of satisfactory completion of the Improvements and the Certificate of Completion shall so state. If Agency refuses or fails to famish a Certificate of Completion after written request from Developer, Agency shall, within fifteen (15) days of receipt of written request therefor, provide Developer with a written statement of the reasons Agency refused or Med to furnish the Certificate of Completion. The statement shall also contain Agency's opinion of the actions Developer must take to obtain the Certificate of Completion. The Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code. 4.15 Further Assurances. Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Agency all documents, and take all actions, reasonably required by Agency from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents or otherwise to carry out the purposes of the Project Documents. Calle Rolando Villas 10 DDA -Affordable Housing 4.16 Financing of the Improvements. (a) Evidence of Financial Capability. Within the time set forth in the Schedule of . Performance, Developer shall submit to the Executive Director, evidence reasonably satisfactory, to the Executive Director that Developer has the financial capability necessary for the construction of the Development pursuant to this Agreement. Such evidence of financial capability shall include a copy of the commitment or commitments obtained by Developer for each source of funds to assist in financing the construction of the Development. All copies of commitments submitted by Developer to Agency shall be certified by Developer to be true and correct copies thereof. Each commitment for financing shall be in such form and content acceptable to Agency as reasonably evidences a firm and enforceable commitment, with only those conditions which are standard or typical for the lender involved for similar projects. (b) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer as to the Site as provided herein, whenever the Agency may deliver any notice or demand to Developer with respect to any breach or default by the Developer under this Agreement, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand; provided that the failure to notify any holder of record shall not vitiate or affect the effectiveness of notice to the Developer. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage or deed of trust. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Improvements, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement reasonably satisfactory to the Agency. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates, but on a schedule which takes into account the time reasonably required for the holder to obtain title to and possession of the Site, analyze and negotiate amendments to plans, specifications, construction contracts and operating contracts or to negotiate new construction contracts and operating contracts. Any such holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 4.14 of this Agreement, to a Certificate of Completion. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy tz Developer default which requires title and/or possession of the Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (c) Failure of Holder to Complete Improvements. In any case where, sixty (60) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from Agency of a default by the Developer in completion of construction of any of the Improvements under this Agreement, and such holder is not vested Calle Rolando Villas 11 DDA -Affordable Housing with ownership of the Site and has not exercised the option to construct as set forth in Section 4.16, or if it has exercised the option but has defaulted herenader and failed to timely cure such default, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (1) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (2) All expenses with respect to foreclosure including reasonable attorneys' fees; (3) The net expense, if any, incurred by the holder as a direct result of the subsequent management of the Site or part thereof; (4) The costs of any improvements made by such holder; (5) An amount equivalent to the interest that would have accrued at the rate(s) specified in the holder's loan documents on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency; and (6) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. The foregoing rights shall be in addition to those measures set forth in an Inter -Creditor Agreement, and in addition shall supplement and not limit the Agency's rights as landlord under the Agency Deed or by operation of law. (d) Right of the Agency to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer whether prior to or after the completion of the construction of any of the Improvements or any part thereof (continuing until the expiration of the term of the Agency Deed), Developer shall immediately deliver to Agency a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, the Agency shall have the right but no obligation to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all proper costs and expenses incurred by the Agency in curing such default. ' (a) Failure to Obtain Financing. In the event this Agreement is terminated, upon such termination, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other Calle Rolando Villas 12 DDA -Affordable Housing materials relating to the construction of the Improvements on the Site (the "Plans'j, together with copies of all of the Plans. Such assignment shall not affect the Developer's obligations or duties concerning any of the Plans, including without limitation any obligation to pay for any work done on the Plans. Upon such assignment and payment therefor, the parties agree that neither shall have any further obligations or liability to the other pursuant to this Agreement. 5. COVENANTS AND RESTRICTIONS 5.1 Use Covenants. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that the Developer shall devote the Site to the uses specified in and shall operate in conformity with: (i) this Agreement; (ii) the Affordability Covenants; and (iii) the Agency Deed, whichever is the more restrictive in each case unless expressly provided to contrary effect herein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable provisions of the City Municipal Code. 5.2 Affordable Housing Reeuirements. (a) Number of Required Affordable Units. Developer agrees to make available and restrict occupancy to all of the Units at Affordable Housing Cost to Low and Very Low Income Households as more particularly set forth in the Affordability Covenants. (b) Duration of Affordability Requirements. The Required Affordable Units shall be maintained as owner -occupied units available at and owned by Low and Very Low Income Households throughout the Covenant Period, as more particularly set forth in the Affordability Covenants. (c) Selection of Buyers. Developer shall be responsible for the selection of homebuyers for the Required Affordable Units in compliance with the criteria set forth in Section 5.3 of this Agreement. (d) Income of Owners. Each homebuyer shall be a Low or Very Low Income Household which meets the eligibility requirements established for the corresponding Required Affordable Unit, and Developer shall obtain a certification from each prospective purchaser which substantiates such fact. Developer shall verify the income certification of each homebuyer as set forth in Section 5.3 hereof. Prior to entering into an agreement for sale of a unit on the Site to a homebuyer. The Developer shall cooperate in obtaining substantiation of income, including tax returns. 5.3 Verifications. (a) Income Verification. Developer shall verify the income of each proposed and existing homebuyer of the Required Affordable Units and all other units developed on the Site. Calle Rolando Villas 13 DDA -Affordable Housing 9 0 (b) The Developer shall maintain on file sale agreements, income verifications, development costs and records for all of the units developed on the Site. The Developer shall maintain complete and accurate records pertaining to the Required Affordable Units and will permit any duly authorized representative of the Agency to inspect the books and records of the Developer pertaining to this Agreement and the Required Affordable Units. 5.4 Maintenance of Site. Developer agrees for itself and its successors in interest to the Site, to maintain the improvements on the Site in conformity with the City Municipal Code, and shall keep the Site free from any accumulation of debris or waste materials. During such period, the Developer shall also maintain the landscaping planted on the Site in a healthy condition. The Developer's duties shall cease as to each unit sold in conformity with this Agreement as of the time of each such sale. 5.5 Nondiscrimination Covenants. (a) Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, sexual preference, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of homebuyers, lessees, subtenants, sublessees or vendees of the Site or any portion thereof. The foregoing covenants shall run with the land. (b) Developer shall refrain from restricting the sale or lease of the Site on the basis of race, color, religion, sex, marital status, sexual preference, handicap, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: In deeds: "The grantee herein covenants by and for himself or herselty his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, sexual preference, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of homebuyers, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." Calle Rolando Villas 14 DDA -Affordable Housing 0 In leases: 0 "The lessee herein covenants by and for himself or herself; his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: `That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, sexual preference, handicap, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of homebuyers, lessees, sublessees, subtenants, or vendees in the premises herein leased.'" In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion sex, marital status, sexual preference, handicap, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of homebuyers, lessees, subtenants, sublessees or vendees of the premises." 5.6 Effect of Violation After Completion of Construction. Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in.whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area of the Redevelopment Plan. Agency shall have the right, if the Agreement or any covenants in any agreement pursuant to this Agreement, including without limitation the Affordability Covenants and the Agency Deed, are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and such covenants may be entitled. 6. DEVELOPER'S GENERAL REPRESENTATIONS AND WARRANTIES. Calle Rolando Villas 15 DDA -Affordable Housing 0 As a material inducement to Agency to enter into this Agreement, Developer represents and warrants to Agency that: 6.1 Execution and Performance of Project Documents. Developer has all requisite authority to execute and perform its obligations under the Project Documents. The execution and delivery by Developer of, and the performance by Developer of its obligations under, each Project Document has been authorized by all necessary action and do not and will not violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by-laws or other governing document applicable to Developer. 6.2 Covenant Not to Transfer Except in Confotmitv. Except for the sale of individual dwelling units in conformity with this Agreement, the Developer shall not sell, lease, or otherwise transfer or convey all or any part of the Site, of any interest therein, unless the Developer has first obtained the prior written consent of the Executive Director, which consent shall not be unreasonably withheld. Any sale, lease, transfer or conveyance without such consent shall, at Agency's option, be void. In connection with the foregoing consent requirement, Developer acknowledges that Agency relied upon Developer's particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of all of the Improvements, and the marketing and sale of the Required Affordable Units to Low and Very Low Income Households to afford the community a long -tern, quality affordable housing resource. DEFAULTS, REMEDIES, AND TERMINATION. 7.1 Default Remedies. Subject to the extensions of time set forth in Section 7.9 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default. Except as otherwise expressly provided in this Agreement, and without limiting or affecting rights of parties hereto to terminate this Agreement, the claimant shall not institute any proceedings against any other party, and the other party shall not be in Default if such party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy the specified Default and shall complete such cure, correction or remedy with diligence. 7.2 �titution of Legal Actions. In addition to any other tights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement; provided, that the Agency shall have no right, in any event, to impose a lien for monetary damages against the Site or on any improvements erected from time - to -time on the Site. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California. Calle Rolando Villas 16 DDA -Affordable Housing 0 0 7.3 Termination by the Developer. In the event that: (i) the Developer is not in default under this Agreement and Agency does not execute the Agency Deed.and attempt to convey the Site to the Developer in the manner and condition and by the date provided in this Agreement; or (ii) in the event of any default of Agency prior to the Conveyance which is not cured within the time set forth in Section 7.1 hereof, and any such failure is not cured within the applicable time period after written demand by the Developer, then this Agreement may, at the option of the Developer, be terminated by Notice thereof to Agency. From the date of the notice of termination of this Agreement by the Developer to Agency and thereafter, this Agreement shall be deemed terminated and there shall be no further rights or obligations among the parties. 7.4 Termination by A¢ancv. If prior to the time established in the Schedule of Performance for the satisfaction of the Agency's Conditions Precedent: (i) Developer (or any successor in interest) assigns this Agreement or any rights therein or in the Site in violation of this Agreement; or (ii) Developer does not fulfill the Agency Conditions Precedent and such failure is not caused by Agency; or (iii) Developer fails to execute (as covenantee or maker) the Affordability Covenants or the Agency Deed; or (iv) Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 7.1 hereof; then this Agreement and any rights of the Developer or any assignee or transferee with respect to or arising out of the Agreement or the Site, shall, at the option of Agency, be terminated by Agency by Notice thereof to the Developer. From the date of the Notice of termination of this Agreement by Agency to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations among the parties, except that Agency may pursue any remedies it has hereunder. 7.5 Acceptance of Service of Process, In the event that any legal action is commenced against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director, Agency's secretary, or in such other manner as may be provided by law. In the event that any legal action is commenced against the Developer, service of process on the Developer shall be made in such manner as may be provided by law and shall be effective whether served inside or outside of California. 7.6 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. . 7.7 Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such parry of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 7.8 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Calle Rolando Villas 17 DDA -Affordable Housing L 7.9 Forced Delav: Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts or omissions of another party, or acts or failures to act of the City or any other public or governmental agency or entity (excepting that acts or failures to act of Agency or City shall not excuse performance by Agency or City). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the forced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within fifteen (15) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. The Agency Executive Director shall have the authority to approve extensions on behalf of Agency to approve extensions of time not to exceed a cumulative total of one hundred eighty (180) days. 8. TRANSFERS OR ASSIGNMENTS 8.1 Prohibition on Transfers or Assignmrcnts. The qualifications and identity of the Developer are of particular concern to Agency. It is because of those qualifications and identity that Agency has entered into this Agreement with the Developer. Until the completion of the Improvements and the sale of all units to be developed on the Site under this Agreement, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreemcnt, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Development thereon (excepting the sale of units to homebuyers in conformity with this Agreement) without prior written approval of Agency, except as expressly set forth herein. 8.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the Agency shall not unreasonably withhold its approval of an assignment of this Agreement or conveyance of the Site, or any part thereof, in connection with any of the following: (a) Any transfers to an entity or entities in which the Developer retains a minimum of fifty-one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Development. In the event of a proposed assignment by Developer under this Section, Developer agrees that at least thirty (30) days prior to such assignment it shall give written notice to Agency including a request for approval of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the Obligations of this Agreement. 8.3 &;Ag lment by Agency. Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be Calle Rolando Villas 18 DDA -Affordable Housing unreasonably withheld; provided, however, that Agency may assign or transfer any of its interests hereunder to the City at any time without the consent of the Developer. 9. MISCELLANEOUS 9.1 Obligations Unconditional and Indeoendent. Notwithstanding the existence at any time of any obligation or liability of Agency to Developer, or any other claim by Developer against Agency, in connection with the Site or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer's obligations under this Agreement (including without limitation the attachments hereto), or (b) to claim that the existence of any such outstanding obligation, liability or claim"excuses the nonperformance by Developer of any of its obligations under the Project Documents. 9.2 Notices. All notices, demands, approvals and other communications provided for in the Project Documents shall be in writing and be delivered to the appropriate party at its address as follows: If to Developer: Habitat for Humanity of change County, Inc. 2200 South Ritchey Santa Ana, CA 92705 If to Agency: San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: Executive Director Addresses for notice may be changed from time to time by written notice to all other parties. All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication 9.3 No Third Parties Benefited Exceot for City. This Agreement is made for the purpose of setting forth rights and obligations of Developer and Agency, and no other person (except for the City) shall have any rights hereunder or by reason hereof, Except.for the City, which shall be deemed to be a third party beneficiary of this Agreement (including without limitation the Attachments hereto), there shall be no third party beneficiaries of this Agreement. 9.4 CORM arts. Any Project Document may be executed in counterparts, all of which, taken together, shall be deemed to be one and the same document. 9.5 Prior Aweements. Amendments: Consents. (a) This Agreement (together with the other Project Documents) contains the entire agreement between Agency and Developer with respect to the Site, and all prior negotiations, understandings and agreements with respect to such matters are superseded by this Agreement Calle Rolando Villas 19 DDA -Affordable Housing and such other Project Documents. No modification of any Project Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. (c) All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. 9.5 Venue. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange or the United States District Court of the Central District of California, as Agency may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Agreement or the other Project Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue. 9.7 Severability of Provisions. No provision of any Project Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Project Documents are hereby declared to be severable. 9.8 Headings. Article and section headings are included in the Project Documents for convenience of reference only and shall not be used in construing the Project Documents. 9.9 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Project Document, this Agreement shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 9.10 Time of the Essence. Time is of the essence of all of the Project Documents. 9.11 Conflict of Interest No member, official or employee of Agency shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law. 9.12 Warranty Against Payment of Consideration. Developer wan -ants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. 9.13 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Calle Rolando Villas 20 DDA -Affordable Housing Whenever the term "Developer" is used in this Agreement, such terra shall include any other permitted successors and assigns as herein provided. 9.14 Non -Liability of Officials and Emnlpyees of Agenev. No member, official, officer or employee of Agency or the City shall be personally liable to the Developer, of any successor in interest, in the event of any Default or breach by Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 9.15 Relationft Between Agency and Developer. It is hereby acknowledged that the relationship among the Agency and Developer is not that of a partnership or joint venture and that Agency and Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided in this Agreement, including the Attachments hereto, neither the Agency nor the City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Development. 9.16 Agency and City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by the Agency, the Executive Director is authorized to act on behalf of the Agency unless specifically provided otherwise or the law otherwise requires. When a reference is made herein to an action or approval to be undertaken by the City the City Manager is authorized to act on behalf of the City unless specifically provided otherwise or the law otherwise requires. 9.17 &m! Estate Brokers. Agency and Developer each represent and warrant to each other that no broker or finder is entitled to any commission or finder's fee in connection with this transaction, and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part. 9.18 me s' Fees. In any action among the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. [SIGNATURE PAGE AND NOTARY ACKNOWLEDGEMENTS FOLLOW] Calle Rolando Villas 21 DDA -Affordable Housing IN WITNESS WIJEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth. DEVELOPER: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit, public benefit corporation By: ` sirperson �P�!/_�� AGENCY: SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director ATTP.ST: APPRO ED S TO FORM: John Sht,Agency Counsel Calle Rolando Villas 22 DDA -Affordable Housing PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT State of California ) County of Orange ) ss. City of San Juan Capistrano ) (Gov't Code 40814 & Civil Code 118 1) On October 9. 2006 before me, Margaret R. Monahan. City Clerk, personally appeared David F. Adams 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 ofwhich the person acted, executed the instrument. (SEAL) WITNESS my hand and official seal. Monahan, Agency Secretary OPTIONAL Capacity Claimed by Signers David F. Adams — Executive Director Tide Signers are Representing San Juan Capistrano Community Redevelopment Agency Description of Attached Document Disposition & Development AVeement Title or Type of Document • STATE OF CALIFORNIA ) COUNTY OF ORANGE ) A .. , a.,4 d-007 C] On a� / before me, WICU a notary Public, pers6nalty appeared persona 4 kir WR4o .ma (or proved to me on the basis of satisfactory evidence) to be the persoFifs)"whose namg(a) ®are subscribed to the within instrument and acknowledged to me th�he/they executed the same in�her/their authorized capacity, and that by er/their signature(aYon the instrument the person1yj or the entity ttpott behalf of whicli the perso�W acted, executed the instrument. WITNESS my hand and official seal. STATE OF CALIFORNIA COUNTY OF ORANGE On v(rnf 7 r4,?DeG , before me, a Notary Public, pe6on lily appeared ,C4bh. A,96ganef aHrknowtrto steer proved to me on the basis of satisfactory evidence) to be the person(h) whose name(p) is/are subscribed to the within instrument and acknowledged to me that 4Wshe/dwrexecuted the same in hisfher/ttwir authorized capacity("&), and that by hWherhkair signatm*4 on the instrument the person, or the entity upon behalf of which the personfg) acted, executed the instrument. WITNESS my hand and official seal. �OMiy LE C0Mffln ron: = Not Public Notcly tLblc • ColtarYo Notary oronpa County . MVCarm.E_i a•�' OOtNY L F.QM Cardrdi10n # 13MM Nolay Rb1e • Caltarso a" Oso G1oalr0 Calle Rolando Villas 23 DDA -Affordable Housing 0 0 Total project costs to Habitat = $7,175,400 Costs to Complete the Calle Rolando Develooment Sunwest Bank Loan (street) $ 800,000 Redevelopment Loan (permits) $ 611,174 Construction Costs - 18 homes $ 2,472,165 Cost to complete current 5 homes $ 509,t100 includes S tent to the developnmt internal to W40C Habitat Overhead @ 50k per $ 900,000 Total $ 5,292,339 Less Construction Loan $ 256,000 new total $ 5,548,339 Loan reauired $ 12,500 Redevelopment Loan $ 5,292,339 Plus Loan Costs @4% simple $ 2,472,165 Interest for 40 years $ 211,694 total loan Payback $ 5,504,033 Mortgage Proceeds Average Sales Price $ 210,000 Times 27 Homes $ 5,670,000 Less Construction Loan $ 5,504,033 excess of loan to offset vacancies $ 165,967 Potential Proceeds from Thrid Party Motaages Discount to Affordable Sales Price of $135,000 each with Market Rate Loan @ 6% $ 2,025,000 Habitat Sales Price - 27 homes $ 5,670,000 Sales Proceeds Utilizing $ (3,645,000) Market Rate Lender Construction Costs Breakdown Der unit Private Street $ 5,425 Lot Improvements $ 9,150 Building Construction $ 76,568 Site Management $ 33,700 Contingency $ 12,500 _ Subtotal $ 137,343 18 times $ 2,472,165 Add-on to complete by May 2010 = additional admin costs $ 18,000 additional marketing costs $ 58,000 construction costs services $ 180,000 $ 256,000 4.50% 4.75% 5% $ 238,155 $ 251,386 $ 264,617 $ 5,530,494 $5,543,725 $ 5,556,956 $ 139,506 $ 126,275 $ 113,044 ATTACHMENT 2 Ll Major Catagories Cost Breakdown Grading and Foundations $ 132,600 4000 Common Area Improvements $ 107,650 5000 Lot Improvements $ 164,700 6000 Structures $ 1,260,615 7000 Direct costs $ 606,600 9000 Contingency $ 200,000 Total $ 2,472,165 is walks, fences, utililies,park driveways, landscape, fences, utilities supervision, temp utilities, volunteers rentals, site office, etc, 0 9 October 28, 2009 Mr. Douglas Dumhart City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 RE: CONSTRUCTION PROPOSAL FOR 18 UNITS /9 BUILDINGS CALLE ROLANDO, SAN JUAN CAPISTRANO Dear Mr. Dumhart, Thank you for the opportunity, on having American General Corporation provide the City of San Juan Capistrano, a construction proposal for 18 units / 9 buildings for the Calle Rolando Project. As per the plans, specifications, that was provided to us, and American General Corporation's experience and understanding of the Owner's construction requirements, please find attached the 'Schedule of Values' for your review and coordination use for the construction of the remaining buildings, site flat work and landscaping. We trust that these numbers are acceptable and reasonable in moving forward. On the other hand, our proposal shall exclude: permits, fees, engineering/plan preparations, structural observation, special inspection, soils inspections and testing, other testing, and site wet/dry utilities. With mutual interest in steering the project ahead, American General Corporation is confident that working with the City of San Juan Capistrano will contribute to the success of the "Calle Rolando Project". Once again, thank you for your interest in considering American General Corporation as your lead project construction team. Please do not hesitate to contact me should you have any items of concern regarding the "Calle Rolando Project" and/or your other development needs. In the mean time, I shall look forward to hearing back from your good office. Sincerely, David Wilson President 34921 Calle Del Sol, Capistrano Beach, CA 92624 • (949) 489-4141 • (949) 489-4144 fax - -- - -- ATTACHMENT 3 0 0 October 28, 2009 Project Name : CALLE ROLANDO — SAN JUAN CAPISTRANO, CA Address : Calle Rolando, San Juan Capistrano, CA Description : 18 Unit Affordable Housing Development Total Square Footage: 59,184 Sq. Ft ESTIMATED VALUE Cost Per DESCRIPTION OF WORK PER UNIT Foot Divie%n 7 general RetlplreAnents . $21$,0$00(3:,, , Temporary Electricity $3,600.00 $0.06 Reprographics $800.00 $0.01 Temporary Sanitary Facilities $5,400.00 $0.09 Temporary Water $4,800.00 $0.08 Waste Dumpsters $21,000.00 $0.35 Final Clean $9,000.00 $0.15 Security $30,000.00 $0.51 Project Identification and Signs $1,250.00 $0.02 Field Offices and Sheds $4,200.00 $0.07 Rough Clean $4,500.00 $0.08 Project Site Manger $72,500.00 $1.22 Project Management $35,000.00 $0.59 Project General Labor $21,000.00 $0.35 d�visop Z T Site GgnsE.niekicSn . ;;- . °< $319 8,5A;Q0 $5.90'> Surveying $26,500.00 $0.45 Grading /Trenching $96,800.00 $1.64 Export of Soils $35,000.00 $0.59 Termite Control $6,800.00 $0.11 Wet Utilities/ Curb to Building $11,250.00 $0.19 Dry Utilities / Curb to building $8,500.00 $0.14 Landscaping & Irrigation $135,000.00 $2.28 DhrlsipD3 C©rlcrete ., $,31ti, $524 On Site Concrete $21,450.00 $0.36 Structural Concrete $288,000.00 $4.87 Wash out bins $650.00 $0.01 THE INFORMATION CONTAINED HEREaN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE F OR COPY THIS DOCUMENT. 34921 Calle Dal Sol, Capistrano Beach, CA 92624 TEL: (949) 469-4141 FAX: (949) 469-4144 0 0 'Ni k,: Dir$io , . , S' poo Handrails and Railings $22,500.00 $0.38 Dlyial,ont iddeopcl F ..Wo I ' *cIs' "950. 3 0,0 V P 6.63 Rough Carpentry $255,006.00 $4.31 Finish Carpentry $18,200.00 Countertops $11,250.00 $0.19 Cabinets $48,600.00 $0.82 th 010011 . 0,00 Molsure PtsCpptlin12$2.Q3_ Deck Coating $3,500.00 $0.06 Building Insulation $21,420.00 $0.36 Roofing $71,900.00 $1.21 Flashing and Sheet Metal $9,800.00 $0.17 Rain Gutters $13,500.00 $0.23 61VOon $ RoorB anp,WMdows;; $1.1.9,908 Q0 Interior I Exterior Doors $72,108.00 $1.22 Garage Overhead Door $21,600.00 $0.36 Mirrors $2,700.00 $0.05 Windows $23,500.00 $0.40 Portland Cement Plaster $108,000.00 $1.82 Gypsum Board $98,500.00 $1.66 Carpet / Vinyl $81,000.00 $1.37 Exterior & Interior Paints $48,500.00 $0.82 010 09, 7 11_ Postal Specialties $4,500.00 $0.08 Residential Bath Accessories $5,600.00 $0.09 Residential Appliances- Stove/ Dishwasher $21,600.00 $0.36 CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE, THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE CUMENT. 34921 Calls Del Sol, Capistrano Beach, CA F'EL: (949) 489-4141 FAX: (949) 489-41" [)iviston 1Y FiA�6hings $7;480,00' $0:13 Window Coverings $7,480.00 $0.13 pivision1l' '-Sp9clal-CpnsEractiort' N/A Mispn 14 � A Division 15 Ilachatalci-- $249,15950 $422 Plumbing $162,000.00 $2.74 Fiberglass Tubs/Shower $18,000.00 $0.30 Heating, Ventilating, and Air Conditioning $69,605.00 $1.18 Diylsion l6 ?' 1 gc4neal„;' ,, ' ' ' $1-a 'Q0.00 Electrical $120,000.00 $2.03 Telephone CATV Pre -Wire $8,500.00 $0.14 Fire Life/ Fire Alarm $2,800.00 $0.05 SUBTOTAL 5llhts�lt*anb"tru¢liatt:Cost $?ir981,$19QQ $33:?18 Total General Requirements $213,050.00 $3.60 Contractor's Fee and Overhead $79,264.52 $1.34 Insurance $18,000.00 $0.30 T(tTAL Fptal AlnodntsContrae;. M4 ;927.4 ' $38.T3;: THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY, IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE IT OR COPY THIS DOCUMENT. 34921 Calle Del Sol, Capistrano Beach, G 92624 TEL: (949) 469.4141 FAX: (949) 499-4144 0 0 October 28, 2009 Project Name : CALLE ROLANDO — SAN JUAN CAPISTRANO, CA Address : Calls Rolando, San Juan Capistrano, CA Description : 18 Unit Affordable Housing Development Total Square Footage: 59,184 Sq. Ft. I -&I I I LTA I ;[ 0 kvl;,l I k1l 4 1 Eft --711 1-M DESCRIPTION OF WORK PER UNIT Foot IV ,I P talon t RADIO 0;14 %#pnM $21:q,0 woo -A0 Temporary Electricity $3,600.00 $0.06 Reprographics $800.00 $0.01 Temporary Sanitary Facilities $5,400.00 $0.09 Temporary Water $4,800.00 $0.08 Waste Dumpsters $21,000.00 $0.35 Final Clean $9,000.00 $0.15 Security $30,000.00 $0.51 Project Identification and Signs $1,250.00 $0.02 Field Offices and Sheds $4,200.00 $0.07 Rough Clean $4,500.00 $0.08 Project Site Manger $72,500.00 $1.22 Project Management $35,000.00 $0.59 Project General Labor $21,000.00 $0.35 'Division $4-o"I; -nB( 10 $6.40 Surveying $26,600.00 $0.45 Grading /Trenching $96,800.00 $1.64 Export of Soils $35,000.00 $0.59 Termite Control $6,800.00 $0.11 Wet Utilities/ Curb to Building $11,250.00 $0.19 Dry Utilities / Curb to building $8,500.00 $0.14 Landscaping & Irrigation $135,000.00 $2.28 Division 1 C ''OoPre On Site Concrete $21,450.00 $0.36 Structural Concrete $288,000.00 $4.87 Wash out bins $650.00 $0.01 S BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE 34921 Calls Del Sol, Capistrano Beach, CA 92624 IifJAwPzP)X!*z 5 IN Aivison 4CJA Division 5 ' ;Matala =$22,500. )Q $0.3B Handrails and Railings $22,500.00 $0.38 Division 6 WoNq0,an4 PI.. 50-b0 $5.63. Rough Carpentry $255,000.00 $4.31 Finish Carpentry $18,200.00 Countertops $11,250.00 $0.19 Cabinets $48,600.00 $0.82 AiVislon 7 7fl17L1at ana Malstitre Protection , ' $10 92Q,;4,Q , $2;03 Deck Coating $3,500.00 $0.06 Building Insulation $21,420.00 $0.36 Roofing $71,900.00 $1.21 Flashing and Sheet Metal $9,800.00 $0.17 Rain Gutters $13,500.00 $0.23 Division $Qpoks Bnd 11111ndovTa;.. $14POOP ;9Q $2.03 Interior/ Exterior Doors $72,108.00 $1.22 Garage Overhead Door $21,600.00 $0.36 Mirrors $2,700.00 $0.05 Windows $23,500.00 $0.40 Division 8 Finishes . $$3tr QOQ 00 - r $5:68 Portland Cement Plaster $108,000.00 $1.82 Gypsum Board $98,500.00 $1.66 Carpet / Vinyl $81,000.00 $1.37 Exterior & Interior Paints $48,500.00 $0.82 givisiont0 ielties .; $1fi,14Qfi0 $Q,1;7- Postal Specialties $4,500.00 $0.08 Residential Bath Accessories $5,600.00 $0.09 Division 11' EqU{pm9nf;, .' $21,6QQ00 $0;36' Residential Appliances- Stove/ Dishwasher $21,600.00 $0.36 THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE R TO OTHERS, USE IT OR COPY THIS DOCUMENT. 34921 Calle Del Sol, Capistrano Beach, CA 92624 TEL: (949) 489-4141 FAX: (949) 4694144 Division 12 fur hill 6hings $7,480,:00 $,0..�3 Window Coverings $7,480.00 $0.13 Divisien,0 $pedal Construction N/A VM$11on 14 . ';SIA DN 'ion 15 . ;Meg *01001; _ $249,fQ5 pD $4:22 Plumbing $162,000.00 $2.74 Fiberglass Tubs/Shower $18,000.00 $0.30 Heating, Ventilating, and Air Conditioning $69,605.00 $1.18 01416en 16z _ $131 3Q0 (ID -2' $2.22 Electrical $120,000.00 $2.03 Telephone CAN Pre -Wire $8,500.00 $0.14 Fire Life/ Fire Alarm $2,800.00 $0.05 SUBTOTAL SuMotalsitstruFffetn Cost . ' -` $11581,61&QQ $33.48 Total General Requirements $213,050.00 $3.60 Contractors Fee and Overhead $79,264.52 $1.34 Insurance $18,000.00 $0.30 TOTAL Total Amount Contract $2;251;927:52 $3$,73 HEREIN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE 34921 Calle Del Sol, Capistrano Beach, CA 92624 3 0 0 October 28, 2009 Project Name : CALLE ROLANDO — SAN JUAN CAPISTRANO, CA Address : Calls Rolando, San Juan Capistrano, CA Description : 18 Unit Affordable Housing Development Total Square Footage: 59,184 Sq. Ft. THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, 00 NOT READ, DISCLOSE IT TO OTHERS, USE Calle Del Sol, Capistrano 5"ch, CA 92624 TEL: (949) 489-4141 FAX: ESTIMATED VALUE Cost Per DESCRIPTION OF WORK PER UNIT Foot w, e§01region its $3,.60 Temporary Electricity $3,600.00 $0.06 Reprographics $800.00 $0.01 Temporary Sanitary Facilities $5,400.00 $0.09 Temporary Water $4,800.00 $0.08 Waste Dumpsters $21,000.00 $0.35 Final Clean $9,000.00 $0.15 Security $30,000.00 $0.51 Project Identification and Signs $1,250.00 $0.02 Field Offices and Sheds $4,200.00 $0.07 Rough Clean $4,500.00 $0.08 Project Site Manger $72,500.00 $1.22 Project Management $35,000.00 $0.59 Project General Labor $21,000.00 $0.35 DIVI glio n2 ,risoVN#10", '$319;650.00 $5'40- 0:40Surveying Surveying $26,500.00 $0.45 Grading /Trenching $96,800.00 $1.64 Export of Soils $35,000.00 $0.59 Termite Control $6,800.00 $0.11 Wet Utilifiest Curb to Building $11,250.00 $0.19 Dry Utilities / Curb to building $8,500.00 $0.14 Landscaping & Irrigation $135,000.00 $2.28 ,Dlyllillon4,100-00 ... Mel $5,240� On Site Concrete $21,450.00 $0.36 Structural Concrete $288,000.00 $4.87 Wash out bins $660.00 $0.01 THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, 00 NOT READ, DISCLOSE IT TO OTHERS, USE Calle Del Sol, Capistrano 5"ch, CA 92624 TEL: (949) 489-4141 FAX: THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRMLEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE .IT OR COPY THIS DOCUMENT. 34921 Calle Del Sol, Capistrano Beach, CA 92624 TEL: (949) 489-4141 FAX- (949) 4893144 Handrails and Railings $22,500.00 $0.38 :WPOO and' 1100ttew, . , '$33% i� .00 $5.63 Rough Carpentry $255,000.00 $4.31 Finish Carpentry $18,200.00 Countertops $11,250.00 $0.19 Cabinets $48,600.00 $0.82 P ;$120120 sx'oti Deck Coating $3,500.00 $0.66 Building Insulation $21,420.00 $0.36 Roofing $71,900.00 $1.21 Flashing and Sheet Metal $9,800.00 $0.17 Rain Gutters $13,500.00 $0.23 Interior / Exterior Doors $72,108.00 $1.22 Garage Overhead Door $21,600.00 $0.36 Mirrors $2,700.00 $0.05 Windows $23,500.00 $0.40 PWfBicilnr'J' F" h JIAISIQP� `;'NA -P 0; 40 Portland Cement Plaster $108,000.00 $1.82 Gypsum Board $98,500.00 $1.66 Carpet / Vinyl $81,000.00 $1.37 Exterior& Interior Paints $48,500.00 $0.82 "Sp'eo.1A'!01ew, Postal Specialties $4,500.00 $0.08 Residential Bath Accessories $5,600.00 $0.09 D Ntsitcin -11 qulpma"_: I , , ' '' �: *'000-.00 $av, Residential Appliances- Stove/ Dishwasher $21,600.00 $0.36 THE INFORMATION CONTAINED HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRMLEGED AND CONFIDENTIAL AND IS FOR THE USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE .IT OR COPY THIS DOCUMENT. 34921 Calle Del Sol, Capistrano Beach, CA 92624 TEL: (949) 489-4141 FAX- (949) 4893144 0 0 Division 12 ;;Famishings $7,480:00 $0.13 Window Coverings $7,480.00 $0.13 flivlslon 13 Sp$cisloTstrpction N/A fllvislan 1A ":yNA fllvlsion 13 • Ipla9h9t?leal' ' 240,fi05190 $4,22 Plumbing $162,000.00 $2.74 Fiberglass Tubs/Shower $18,000.00 $0.30 Heating, Ventilating, and Air Conditioning $69,605.00 $1.18 Dlvislori 16 �lecfriFal � "' $1�3t,30000 ' $2;22 `. Electrical $120,000.00 $2.03 Telephone CAN Pre -Wire $8,500.00 $0.14 Fire Life/ Fire Alarm $2,800.00 $0.05 SUBTOTAL S�rbta#�IGogstrD`cUen Cog# $1!;981,6'13;0[1 $33.48 Total General Requirements $213,050.00 $3.60 Contractors Fee and Overhead $79,284.52 $1.34 Insurance $18,000.00 $0.30 TOTAL, Total Amours#Contract. $ZP1k93752 34921 Calle Del HERE -IN HAS BEEN SECURED FROM SOURCES TO BE RELIABLE. THE INFORMATION CONTAINED HEREIN IS PRIVILEGED AND USE OF THE INTENDED RECIPIENT ONLY. IF YOU ARE NOT THE INTENDED RECIPIENT, DO NOT READ, DISCLOSE IT TO OTHERS, USE 3 469-4141 FAX: (949) 489-4144 W RIESS PROPERTY SERV/CES November 2, 2009 Douglas Dumhart Economic Development Manager City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Via email: ddumhart&a sanivancapistrano.ore RE: Habitat of Humanity Construction Costs Dear Douglas, We have had the opportunity to review the plans and the site conditions to allow us to develop a reasonable estimate to complete the construction of the remaining Habitat for Humanity homes. Our attached cost estimate is not a final bid, rather a preliminary estimate to complete the work in a professional manner using private contractors and new construction materials for all work components. We have assumed a unit mix of five "A" buildings and four `B" buildings, as the site plan did not designate which unit went on which lot. The cost difference between the buildings types is relatively small. To move forward with this project, the trades would be need to be bid, but we are comfortable that the provided total project budget is attainable. When you are reviewing the attached budget please note that we made the following assumptions. o All utilities are provided to each pad o All civil engineering, mapping, and title issues are completed o All city, agency, and jurisdictional permits are paid o Qualified trade contractors would be contracted to complete their specified scopes o Utility fees are excluded o Only the items listed in the attached breakdown are included o The attached budget is provided for planning purposes only We would be happy to meet to review our budgets, and can be reached at 949-533-0812 or dfriessgffriessproperty.com Respectfully, Ken Friess and Dan Friess ATTACHMENT F12IE55 PROPERTY INVESJMENTS Unt Description Beanoms Gerald. Coat First Floor 6acond Floor Total SF Gnty Total LivebM Total Gen BuildingA Ground floor eaoe.sible, wfl- stel unit above 2and3 wo 1055 1288 2,353 5 11]65 4,300 BuildingB Thne and four bedroom lownhome 3and4 551 862 1,45] 2,438 4 9,756 3,404 BuildingC Sln Ie 3betlroom home 3 Q5 /81 685 Shall Foundation 21,521 ],]04 Cost To Comptata Esisting UnRe (s5)1Ron9nvailing we Trade Coat Sam Grading $ 1.000 See conmets S 3,000 Landscaping $ 4,500 Fanon $ 3000 Final utility connections Trash Gates S 150 Shall Foundation Framing Ge a Goon Roofing $ 4,500 Watil Diain S 3.000 Insulation $ Weatherair in $ Alum Wild.. $ Drnewl Labor $ 2,000 Edlror Planter $ 3,000 Painting 3 5'aco 6hoeimetal S 200 Gullers 6 Doane S 1,000 6 Hams Plumbing, $ 5,000 Ellidno $ 4.000 Teta hone Pnvnre NS .tem S 150 HVAC $ 4,000 Tub S showerr, $ 1,000 Interior Floor Und.M. ant S 1,500 We. Shelven S 250 Toilet Accaaeonea $ 200 Slidin DoonsAlVarvir S 1.000 Fireah Ca,,al $ 3,500 Cabinet. 3 5,500 Finish Hardware S 350 Fen Eslin ulsheo $ 150 Formic To $ 400 Cultured Marble To $ 200 Light FiHures $ 300 Resilient Roaring $ 400 Carbon $ 2.100 Mirrors S 200 Shower Door. $ 2,500 A lien.. $ 2200, Address Tiles $ 200 General Clean Up 3 1000 6 ectal Conetnmeo $ 1,500 Conlin en $ 3,000 General Conations $ 4,600 ProFNOverbaad $ 11000 Total $ 4M,250 Total SF 1 29,225 0 32400 PASEO AD£L.ANTO SAN JUAN CAPISTRANO, CA 9.2675 (949) 493-1171 (949) 493.1053 FAX ww=w.xuwjaaa�a�Istranr.ar;.� n U WJABERS OF THE CITY COUNCIL NOTIFICATION OF MEETING OF POTENTIAL INTEREST OF THE SAN JUAN CAPISTRANO CITY COUNCIL SAMALLEVATO LAtA7AfREESE THOMAS W. HR6AR MARK NELSEN DR LONDRES USO The City Council of San Juan Capistrano will meet at 6:30 p.m. on Tuesday, November 17, 2009 in the City Council Chamber in City Hall, to consider: "Consideration of Status of the Habitat for Humanity Project and Compliance with Terms of the Disposition and Development Agreement and Community Development Block Grant" — Item No. G2a. If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the City Council through correspondence addressed to the Council and/or by attending the meeting and speaking to the Council during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, November 16, 2009 to allow time for the Council to consider its content. If you would like to speak at the meeting, please complete a yellow "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Mayor when the item is considered. You have received this notice at the request of the City staff member Laura Stokes, Housing Redevelopment Coordinator. You may contact that staff member at (949) 443- 6313 with any questions. The agenda, including agenda reports, is available to you on our web site: www.sanivancapistrano.oro. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: cityclerk aasanivancapistrano.org. Maria Morris Acting City Clerk cc: Mark Korado, Habitat for Humanity; David Wilson, American General Corporation; Ken Friess; Friess Property Services S'an.bran t:apatsuar+a: Preserving the Past to Enha+ace the ("rrtarry