HomeMy WebLinkAboutJAMBOREE HOUSING CORPORATIONINSURANCE NOT REQUIRED
WORK MAY PROCEED
CLERK OF COUNCIL.
(1dTo
SEP 9 c 1,M?,DING REQUESTED BY
AND WHEN RECORDED RETURN TO:
C City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 6103]
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(3312 W. First Street, Santa Ana, California)
THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF
PROPERTY (the "Restrictions") are entered into as of August 21, 2018, by and among
and Santa Ana Village LP, (referred to herein as the "Developer") a California limited
partnership, and the City of Santa Ana, a charter city and municipal corporation (the
"City").
RECITALS:
A. Developer is the owner of that certain real property located at 3312 W. First
Street, (the "Property") located in the City of Santa Ana more particularly described in
Exhibit A, which is attached hereto and incorporated herein by this reference.
B. For the purpose of providing seventy-six (76) units of housing that will be
affordable to Extremely -Low, Very -Low and Low Income households ("Assisted Units"),
the Developer and the City have entered into that certain Loan Agreement, dated on or
about the date hereof (the "Loan Agreement") to which these Restrictions are attached as
Exhibit G, which, along with all of its attachments, is incorporated herein by this reference
(any capitalized term that is not otherwise defined in these Restrictions shall have the
meaning ascribed to such term in the Loan Agreement).
C. The Loan Agreement provides, among other things, for the use of the Property
for affordable housing with all Assisted Units being restricted to Extremely -Low, Very -
Low and Low Income households, at Affordable Rent(s).
D. The Loan Agreement contains certain provisions relating to the use of the
Property.
A-2018-198
NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS
FOLLOWS:
1. Developer covenants and agrees (for itself, its successors, its assigns, and
every successor in interest to the Property or any part thereof) that Developer, such
successors, and such assigns shall use the Property exclusively to provide affordable
housing of Extremely -Low, Very -Low and Low Income households, as provided in these
Restrictions and in the Loan Agreement.
2. Developer, for itself and its successors and assigns, hereby covenants and
agrees that all of the apartments in the Property (less one manager's unit) (the "Units")
shall be rented exclusively, at Affordable Rent, to Extremely -Low, Very -Low and Low
Income households to the extent provided for herein. Area median income levels and
Affordable Rents are subject to adjustment from time to time as provided in Section 3
below.
3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF
THE PROPERTY
3.1 Use Covenants and Restrictions.
A. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assigns and every successor in interest to the Property that
Developer will make all rental units on the Property available to low- or very low-income
households at rents affordable to such households for fifty-five (55) years from the issuance of
the Certificate of Completion. The HOME restrictions for the two (2) HOME assisted units
shall be enforced until the date that is twenty (20) years after the date on which the Certificate
of Completion is issued or until payment of principal and all accrued interest on the HOME
Loan, whichever comes last. The City permits the Developer to limit the eligibility and/or give
preference to a particular segment of the population in accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventy-six (76) units, including one (1) on-site
manager's unit(s). There shall be two (2) HOME assisted units. The HOME assisted units
shall be one 1 -bedroom unit and one 2 -bedroom unit, floating, and shall be distributed
throughout the complex with comparable amenities to the other units.
C. At initial lease up, households in the HOME assisted units cannot earn more than
30% of AMI. Rental increases shall be in conformance with federal and state law. After
the twenty (20) year HOME compliance period, the City shall require that the units remain
affordable, with rents calculated based on assumed household size at the same income
levels
D. All of the HOME units will be restricted to occupancy by families earning no more than
thirty (30%) of the Area Median Income (AMI).
E. Maximum Occupancy will be two (2) people per room plus one (1). Example for a two-
bedroom unit, five (5) people would be maximum occupancy.
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G. Developer must have a written lease between tenant and owner for a period of at least
one year, unless a shorter period is mutually agreed upon. Leases must be consistent with the
HOME Program regulations at 24 CFR section 92.209(g).
3.2 Affordability Levels/Unit Mix:
The affordability levels/unit mix for the Project is as follows:
Unit Size
30% AMI
Total
No.
Units
Current
Tient
1 Bedroom
71
$1,025
71
2 Bedroom
4
$1,230
4
Total
75
71
75
The remaining unit will be a 1 -bedroom unit reserved for the onsite manager.
HOME Assisted Units
Total # of
Level of
# of HOME
°
/o Share of
Units
Unit Type
Affordability
Assisted
Unit Type
Units
71
1 Bed
30% AMI
1
1.4%
4
2 Bed
1
25%
(1) In no event shall the rent charged to the HOME assisted units be more than that
amount of the low HOME rent as published by HUD, as amended from time to time.
(2) At the time of project completion, the Developer shall provide to the City the address
and/or unit number of each of the HOME floating units.
(3) Annually with the financial statements, the Developer shall provide an annual report
of rents and occupancy of all assisted units, including the HOME assisted units, to
verify compliance with affordability requirements. For the HOME assisted units,
information on unit substitution and filling vacancies shall be provided to ensure that
the project maintains the required unit mix.
The affordable rents charged at the Project must comply with the standards set forth by HUD
and California Tax Credit Allocation Committee (TCAC). Notwithstanding anything to the
contrary contained in these Restrictions or in the HOME Loan Agreement between the City
and Developer, in the event of a foreclosure, or delivery of a deed in lieu of foreclosure, of
any Senior Loan, then, other than for the two (2) HOME Assisted -Units, (1) the maximum
qualifying tenant household income shall be increased to 60% of Area Median Income
adjusted for family size appropriate to the unit, and (2) the maximum annual affordable rent
shall be increased to comply with the rent limits set forth by California Tax Credit Allocation
Committee (TCAC) for households at 60% Area Median Income.
Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing
Authority of the City of Santa Ana publishes the Utility Allowance Schedule.
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Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up
following completion of construction in accordance with any changes in allowable rent and
income tables as published by HUD.
3.3 Rent Increases: On an annual basis, the City shall provide Developer with the
maximum allowable schedule of rents for the Property in accordance with changes in
allowable rent and income tables published by HUD and the California Tax Credit Allocation
Committee, provided however that the rent for the HOME units shall in no event be higher
than the rent for the equivalent non -HOME assisted unit within the Project. In no event can
Developer charge any tenant more than such amount. The City will make all best efforts to
provide Developer with the maximum allowable schedule of rents within no more than 30
calendar days after the date TCAC publishes the allowable rent and income tables.
3.4 Increase in Rent and Occupancy Restrictions upon Termination of Rental
Subsidies. The parties acknowledge that Developer is only able to rent units to Extremely
Low Income Households because the City is providing 75 Housing and Urban
Development Veterans Affairs Supportive Housing (HUD VASH) Project -Based
Vouchers for Permanent Supportive Housing ("VASH Vouchers"). In the event the
VASH Vouchers expire, terminate, are not renewed or are reduced for any reason other
than a default by Developer under the VASH Vouchers, then the occupancy requirements
for all of the units, other than the 2 HOME Assisted Units shall automatically increase to
60% of the Area Median Income and the Affordable Rent shall increase to Affordable
Rents for households earning 60% of the Area Median Income in accordance with the rent
limits set forth by the California Tax Credit Allocation Committee (TCAC for households
earning 60% of the Area Median Income.
3.5 CHDO Provisions. Developer shall maintain CHDO (Community Housing
Development Organization) status for the term of this Agreement and the HOME Regulatory
Agreement in accordance with 24 CFR 92. Developer agrees to provided information as may
be requested by the City to document its continued compliance, including but not limited to
an annual board roster and certification of continued compliance.
Any funds advanced as CHDO pre -development funds must be in compliance with 24 CFR
92.301, and are forgivable only under the terms in 24 CFR 92.301. Any funds advanced to
Developer as CHDO Operating Expenses must be expended in compliance with 24 CFR
92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this Project
shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement.
The provisions of this Section 3.5 shall not apply in the event of a foreclosure of the Property
or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a deed in lieu
of foreclosure, Senior Lender will use commercially reasonable efforts to accept bids for the
Property from a qualified CHDO; provided, however, that in no event shall Senior Lender be
obligated to select a qualified CHDO to be the purchaser of the Property unless, among other
criteria used in Senior Lender's reasonable discretion, such qualified CHDO has offered the
highest purchase price among the bidders.
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4. Developer, its successors and assigns shall not charge rents for the Units in excess
of the amounts set forth herein, as adjusted on the basis of the revised schedules of area
median incomes issued from time -to -time by HUD. The City shall notify Developer in
writing of the adjusted allowable maximum incomes and rents.
5. Developer shall adopt and include as part of its Management Plan
(described in Section 11 below), written tenant selection policies and criteria for the Units,
that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely
Low and Very Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(e) Give reasonable consideration to the housing needs of households
that would have a preference under 42 CFR §906.211 (Federal selection preferences for
admission to Public Housing);
(d) Provide for:
(i) The selection of tenants from a written waiting fist in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection;
(e) Subject to compliance with the HOME Regulations, the HUD -
Veterans Affairs Supportive Housing referral program requirements, the County of Orange
coordinated entry system and applicable California and federal fair housing laws, local
preference for Santa Ana residents and workers in tenant selection shall be a requirement
of the Project. Subject to applicable laws and regulations governing nondiscrimination
and preferences in housing occupancy required by HUD or the State of California, as well
as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the
Developer shall give preference in leasing units in the following order of priority:
1. First priority shall be given to persons who have been
permanently displaced or face permanent displacement from
housing in Santa Ana as a result of any of the following:
a. A redevelopment project undertaken pursuant to
California's Community Redevelopment Law (Health &
Safety Code Sections 33000, et seq.) -- applicable only
to projects funded by the Low and Moderate Income
Housing Asset Fund.
b. Ellis Act, owner -occupancy, or removal permit eviction;
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c. Earthquake, fire, flood, or other natural disaster;
d. Cancellation of a Housing Choice Voucher HAP
Contract by property owner; or
e. Governmental Action, such as Code Enforcement.
2. Second priority shall be given to persons who are either:
a. Residents of Santa Ana and/or
b. Working in Santa Ana at least 32 hours per week for at
least the last 6 months.
; and
(f) Carry out the Affirmative Marketing procedures of the City of Santa
Ana, which are designed to provide information and otherwise attract eligible persons
from all racial, ethnic and gender groups in the housing market area to the units.
Developer shall cooperate with the City to effectuate this provision prior to the initial
renting, or upon occurrence of a vacancy, and the re -renting of any Restricted Units (�4
CFR 92.351).
6. Developer, its successors and assigns, shall not refuse to lease a unit to a
holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or
to a holder of a comparable document evidencing participation in a HOME tenant -based
assistance program because of the status of the prospective tenant as a holder of such
certificate of family participation, rental voucher, or comparable HOME tenant -based
assistance document. Total rents charged to the tenant for the tenant's share of rent shall
not exceed the allowable rents as described above.
7. Any lease of any of the units must be for not less than one year, unless by
mutual agreement between the tenant and the Developer. Should the tenant and Developer
agree to a term of less than one year, said agreement shall be expressed in some type of
written form, signed by the tenant, and maintained in the tenant's rental file held by the
Developer. The lease may not contain any of the following provisions (in which
references to "owner" shall mean the Developer, its successors or assigns):
(a) Agreement by the tenant to be sued, to admit guilt, or to a judgment
in favor of the owner in a lawsuit brought in connection with the lease;
(b) Agreement by the tenant that the owner may take, hold, or sell
personal property of household members without notice to the tenant and a court decision
on the rights of the parties. This prohibition, however, does not apply to an agreement by
the tenant concerning disposition of personal property remaining in the housing Unit after
the tenant has moved out of the Unit. The owner may dispose of this personal property in
accordance with state law;
(c) Agreement by the tenant not to hold the owner or the owner's agent
legally responsible for any action or failure to act, whether intentional or negligent;
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(d) Agreement of the tenant that the owner may institute a lawsuit
without notice to the tenant;
(e) Agreement by the tenant that the owner may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties;
(f) Agreement by the tenant to waive any right to a trial by jury;
(g) Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
(h) Agreement by the tenant to pay attorney's fees or other legal costs
even if the tenant wins in a court proceeding by the owner against the tenant. The tenant,
however, may be obligated to pay costs if the tenant loses.
8. Developer, its successors or assigns, must adhere to state law requirements
with regard to termination of tenancy.
9. Developer shall maintain the improvements on the Property in compliance
with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local
code requirements (California Health and Safety Code section 33418), and shall keep the
Property free from any unreasonable accumulation of debris or waste materials.
Developer shall also maintain in a healthy condition any landscaping planted on the
Property.
10. Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to the Property or any part thereof, there shall be no
discrimination against or segregation of any person, or group of persons, on account of
race, color, creed, religion, sex, mental or physical disability, marital status, national origin
or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property
nor shall the Developer itself or any person claiming under or through it establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the
Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age
Discrimination Act of 1975, and all implementing regulations.
11. Not later than five (5) business days prior to the execution of the
documents, Developer shall submit to the Executive Director a Management Plan in a
form that is acceptable to the Executive Director, including, but not limited to, the
components listed below. Approval of the Management Plan must be obtained from the
Executive Director not later than the time for the Closing. Developer shall manage the
Assisted Units in accordance with the approved Management Plan, including such
amendments as may be approved in writing from time to time by the Executive Director,
for the term of the income and rent restrictions contained in these Restrictions. The
components of the Management Plan shall include:
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(a) Management Agent. Developer shall submit the name and
qualifications of the proposed Management Agent. The Executive Director shall approve
or disapprove the proposed Management Agent in writing based on the experience and
qualifications of the Management Agent.
(b) Management Agreement. Developer shall submit a copy of the
proposed management agreement specifying the amount of the management fee, and the
relationship and division of responsibilities between Developer and Management Agent.
(c) Annual Budget and Projected Cash Flows. Prior to the Closing,
and annually thereafter not later than ninety (90) days after the close of each calendar year
thereafter until the Loan is repaid in full, Developer shall submit a projected operating
budget and cash flow to the Executive Director. The budget and cash flow shall be in a
form that is acceptable to the Executive Director.
(d) Tenant Selection Policies. Developer shall include in the
Management Plan the tenant selection policies in accordance with Section 5, above.
12. If at any time the City determines that the units are not being managed or
maintained in accordance with the approved Management Plan, the City shall send the
Developer a detailed description of the management deficiencies (a "Deficiency Notice").
If the deficiencies set forth in the Deficiency Notice are not cured within thirty (30) days
(or such longer period as may be reasonably required to cure the deficiency), with the
exception of HOME regulations that require a shorter period, the Executive Director may
require Developer to change management practices or to terminate the management
contract and designate and retain a different management agent. The management
agreement shall provide that it is subject to termination by Developer without penalty,
upon thirty (30) days prior written notice, at the direction of the Executive Director upon
failure to cure a Deficiency Notice within the time period specified above. Within ten (10)
days following a direction of the Executive Director to replace the management agent in
accordance with the terms hereof, the Developer shall select another management agent or
make other arrangements satisfactory to the Executive Director or designee for continuing
management of the units.
13. The covenants established in these Restrictions and any amendments hereto
approved by the City and Developer shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the City and their respective
successors and assigns. These Restrictions shall remain in effect for fifty-five (55) years.
In its discretion, the City may defer repayment of the HOME Loan or the City may agree
to such reasonable modifications to the requirements of these Restrictions, as they may
determine are necessary for the continued maintenance and operation of the Assisted
Units. The covenants against discrimination shall remain in effect for the period of these
Restrictions.
14. Developer shall not request disbursement of HOME funds until the funds
are needed to pay eligible costs. The City shall have the right to disapprove any request if
the City determines the request is for an ineligible item or is otherwise not in compliance
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with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504
(c)(10)]•
15. Developer shall prepare, maintain and submit to the City, as appropriate,
the following records and reports in compliance with 24 CFR 92.504 (c) (12):
a. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") within one hundred twenty (120) days
following the end of each calendar year, commencing with the end of the calendar year (or
portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain
a certification by Developer as to such information as the City Executive Director may
then require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 10 (c) of the Affordable Housing
Restrictions which shall include a financial statement for the previous calendar year that
includes a balance sheet and a profit and loss statement indicating any surplus or deficit in
operating accounts; a detailed itemized listing of income and expenses; and the amounts of
any fiscal reserves. Such Annual Budget and financial statement shall be prepared in
accordance with generally accepted accounting practices. The City Executive Director
may require that the financial statement be audited at Developer's expense by an
independent certified public accountant acceptable to the Executive Director.
(2) Any substantial physical defects in the Project, including a
description of any major repair or maintenance work undertaken or needed in the previous
and current years. Such statement shall describe what steps Developer has taken in order
to maintain the Project in a safe and sanitary condition in accordance with applicable
housing and building codes and the property standards set forth in 24 CFR 92.251.
(3) The occupancy of the units indicating the income of each current
resident and the current rents charged each resident and whether those rents include
utilities, including records that demonstrate that the Project meets the requirements of 24
CFR 92.253 for tenant and participant protection under the HOME Program.
(4) General management performance, including tenant relations and
other relevant information.
(5) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and
Safety Code, for the required period of affordability according to section 33334.3 of the
California Health and Safety Code.
(6) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 6 of the City/HOME Deed of Trust, with a loss payable
endorsement naming the City as a loss payee(s) together with other approved lenders (as
their interests may appear), with a "Replacement Cost Endorsement" in amount sufficient
to prevent Developer or City from becoming a co-insurer under the terms of the policy, but
in any event in an amount not less than 100% of the then full replacement cost, to be
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determined at least once annually and subject to reasonable approval by the Executive
Director.
(7) Evidence of a currently paid liability insurance policy, naming the
City as additional insured and in a form approved by the City Attorney with coverage as
described in the Loan Agreement.
(8) Termite reports pertaining to the Property every fifth (5a') year.
(9) Such other information as may be reasonably required by the
Executive Director or his/her designee.
b. Records and Audits. During the HOME Compliance Period, Developer
shall maintain the following general program records, and make them available for
inspection by the City, the State or HUD:
(1) records which demonstrate that the project meets the property
standard specified in 24 CFR 92.251;
(2) records, for each HOME Assisted Unit, which demonstrates that the
project meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253;
(4) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and
single head of household (by gender of head of household) have applied for, participated
in, or benefited from, any program or activity funded in whole or in part with HOME
funds;
(B) documentation of actions undertaken to meet the equal
opportunity requirements of 24 CFR 92.350, which implements Section 3 of the Housing
Development Act of 1968, as amended (12 U.S.C. 1701u);
(C) documentation and data on the steps taken to implement
Developer's outreach programs to minority-owned and women -owned businesses to meet
the minority outreach requirements of 24 CFR 92.350;
(5) doc urnemation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(6) if applicable, records which demonstrate compliance with the
requirements relating to relocation of displaced persons, as described in 24 CFR 92.353.
At a minimum, these shall include project occupancy lists identifying the name and
address of all persons occupying the project property up until the date of the Real Estate
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Closing (i.e., the date on which Developer obtained site control);
(7) records concerning lead-based paint in accordance with 24 CFR
92.355;
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) records of certifications of contractor qualifications as they relate to
the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part
24; and
(10) any other reports issued by other monitoring agencies.
c. All records pertaining to each calendar year of HOME funds
must be retained for the most recent five year period, except that for rental housing
projects, records may be retained for five years after the project completion date; except
that records of individual tenant income verifications, project rents and project inspections
must be retained for the most recent five year period, until five years after the affordability
period terminates (24 CFR 92.508). Developer shall cooperate with the City to retain all
books and records relevant to the Loan Agreement for a minimum of five years after the
expiration of the Loan Agreement and any and all amendments hereto, or for five years
after the conclusion or resolution of any and all audits or litigation relevant to the Loan
Agreement, whichever is later. The City, the State, the Office of the Auditor General of
HUD, and/or their representatives shall have unrestricted reasonable access to all
locations, books, and records for the purpose of monitoring, auditing, or otherwise
examining said locations, books, and records with or without prior notice.
d. If so directed by the City, the State or HUD upon termination of the Loan
Agreement, Developer shall cause all records, accounts, documentation and all other
materials relevant to the work to be delivered to the City, the State or HUD, as depository.
e. All records, accounts, documentation and other materials relevant to the
Project shall be accessible at any time to the authorized representatives of the City, the
State or HUD, on reasonable prior notice, for the purpose of examination or audit.
f. Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the
close of each calendar year in which these Restrictions are in effect. Developer shall
reasonably cooperate with City in performing such audit.
16. If an event of default occurs under the terms of these Restrictions, prior to
exercising any remedies hereunder, City shall give Developer written notice of such
default. If the default is reasonably capable of being cured within thirty (30) days,
Developer shall have such period to effect a cure prior to exercise of remedies by the City
under these Restrictions. If the default is such that it is not reasonably capable of being
cured within thirty (30) days, and Developer (i) initiates corrective action within said
period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as
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possible, then Developer shall have such additional time as is reasonably necessary to cure
the default prior to exercise of any remedies by City.
The City is a beneficiary of the terms and provisions of these Restrictions
and the covenants herein, both for and in their own right and for the purposes of protecting
the interests of the community and other parties, public or private, for whose benefit these
Restrictions and the covenants running with the land have been provided. Upon the
occurrence of an event of default and the expiration of the notice and cure period specified
above, the City shall have the right 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 they or any other beneficiaries of these Restrictions and covenants
are entitled.
17. The covenants and agreements contained herein shall ran with the land and
not be personal obligations of Developer. Upon the sale, conveyance or other transfer of
the Property (a "Transfer") and the assumption of the obligations hereunder by a
transferee, Developer's liability for performance shall be terminated as to any obligation to
be performed hereunder after the date of such Transfer.
18. The Loan Agreement and all of its attachments shall be enforceable by
City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME
Deed of Trust provide a means of enforcement by the City if Developer is in breach of its
obligations hereunder and thereunder, including liens on the Property, use and deed
restrictions and covenants running with the land [24 CFR 92.504 (c) (13)].
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IN WITNESS WHEREOF, the parties hereto have caused these Affordability
Restrictions on Transfer of Property to be executed on the date set forth hereinabove.
ATTEST: CITY OF SANTA ANA
06 r
Maria D. Huizar Ra odinez II
Clerk of the Council City Manager
Dated: I L1hog Dated:
APPROVED AS TO FORM:
SONIA R.,Ct ALHO, City Attorney
LN
Dated: -cl1H 10
Steven A. Mendoza
Executive Director
Community Development Agency
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ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document, to which this certificate
is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange )
On September 13, 2018 before me, Rosa A. Flores, Notary Public
(insert name and title of the officer)
personally appeared Raul Godinez II, who proved tome on the basis of satisfactory evidence to
be the personal whose nameKis /ere- subscribed to the within instrument and acknowledged tome
that he/el relth€y executed the same in hWherkhtsir authorized capacity( t, and that by hWheritlaeir
signature(4on the instrument the personal, or the entity upon behalf of which the person(o 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.
Signaturea• A�w (Seal)
ROSA A, FLORES
4" Notary Public - California z
-`<
V:4 ,. � Orange County £
Commission M 2228450
My Comm. Expires Feb 7, 2022
DEVELOPER
SANTA ANA VILLAGE LP,
a California limited partnership
By: JHC Santa Ana Village LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit publenefit corporation,
icb
Manager / / I i?
By:
Name:
A[
Title:
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INSURANCE NOT REQUIRED
WORK MAY PROCEED
CLERK OF COUNCIL
�ATn
SEP 's 2F RECORDING REQUESTED PURSUANT
OVERNMENT CODE SECTION 6103 & 27383
When Recorded Mail to:
City of Santa Ana
Cleric of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
A-2018-198
SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 6103]
HOME LOAN AGREEMENT
by and between the
CITY OF SANTA ANA
Im
SANTA ANA VILLAGE LP
a California limited partnershin
(3312 W. First Street, Santa Ana, California)
Dated: August 21, 2018
1
LOAN AGREEMENT
HOME PROGRAM
THIS LOAN AGREEMENT (the "Agreement") dated, for identification purposes only,
as of August 21, 2018, is made and entered into by and between the City of Santa Ana, a
charter city and municipal corporation (referred to herein as "City") and Santa Ana Village
LP, a California limited partnership, with reference to the following:
RECITALS:
A. City has received an allocation of funds from the United States Department of
Housing and Urban Development ("HUD") under the HOME Investment Partnerships
Program (the "HOME Program") (42 U.S.C. §12701, et seq.,) to be used in accordance
with applicable statutory requirements and regulations (the "HOME Regulations") (24
CFR Part 92);
B. At least 15% of the City's annual allocation of HOME Program funds is
reserved for Community Housing Development Organizations (the "HOME Program
CHDO funds"), and Jamboree Housing Corporation has been certified by the City on
February 7, 2017 and is in good standing as a Community Housing Development
Organization (CHDO);
C. Among the purposes of the HOME Program are (1) to expand the supply
of decent, safe, sanitary, and affordable housing, with primary attention to rental housing,
for very low-income and low-income Americans; and (2) to provide participating
jurisdictions, on a coordinated basis, with the various forms of federal housing assistance,
including capital investment, mortgage insurance, rental assistance, and other federal
assistance, needed (a) to promote the development of partnerships among the federal
government, states and units of general local government, private industry, and nonprofit
organizations able to utilize all available resources to provide more of such housing, and
(b) to expand the capacity of nonprofit Community Housing Development Organizations
to develop and manage decent, safe, sanitary and affordable housing;
D. Developer is the owner of that certain property commonly known as 3312
W. First Street, within the City of Santa Ana, California, and legally described in Exhibit
A attached hereto (the "Property"). The loans referenced herein shall assist in the
acquisition and new construction of said Property for a multifamily residential housing
development.
E. Developer is on the City's Approved List of Community Housing
Development Organizations and has been certified and approved to utilize HOME
Program CHDO funds.
F. In furtherance of the HOME Program, Developer has applied to City for a
loan with which to:
1. provide deeper affordability for a longer term, as well as acquire and
construct the Property, and
2. thereafter to maintain, operate and professionally manage the Property
as decent, safe, sanitary and affordable rental housing.
G. City, on certain terms and conditions, desire to make such loan
to Developer in order to make possible the acquisition and construction of the Property, to
expand the supply of decent, safe, sanitary and affordable housing.
H. If there is any discrepancy between Federal and State guidelines with regard
to any of the terms and conditions contained herein, the more stringent shall apply.
I. The Loan Agreement and all of its attachments shall be enforceable by
City in accordance with the terms thereof. Each of the Loan Agreement, the
Affordability Restrictions on Transfer of Property, the City/HOME Loan Note and the
City/HOME Deed of Trust provide a means of enforcement by the City if Developer is in
breach of its obligations hereunder and thereunder, including liens on the Property, use
and deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)].
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, City and Developer agree as follows:
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. All capitalized terms used herein, including, without
limitation, in the Recitals above and in all other Project Documents, unless otherwise
expressly defined, are defined where first used in this Agreement and/or as set forth in
this Article 1.
"Affordable Housing" means housing operated in accordance with the
requirements of 24 CFR 92.252 and the rents governed by HUD.
"Affordability Restrictions on Transfer of Property" means that
certain document affecting real property benefiting the City, attached hereto as Exhibit F.
"Affordable Rent" means the monthly rents that are set forth in more detail
in Section 7 of this Agreement.
"Building Permit" means the building permit(s) issued by City and
required for the construction, if any.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs.
"Calendar Year" means each consecutive twelve (12) month period from
January 1 to December 31.
"Certificate of Completion" has the meaning set forth in Article 17.
"CHDO" means Community Housing Development Organization under
the HOME Program.
"City" means the City of Santa Ana, California, a charter city and
municipal corporation.
"City/HOME Loan" means the loan to be made to Developer by City
from HOME funds pursuant to Article 5 of this Agreement.
"City/HOME Loan Deed of Trust" means the deed of trust encumbering
the Property, in the form attached hereto as Exhibit D, to be executed by Developer
pursuant to Section 5.13.2 in order to secure the Loan Note.
"City/HOME Loan Note" means that certain promissory note in the
original principal amount of $352,962.90, in the form attached hereto as Exhibit E, and to
be executed by Developer in favor of City to evidence the obligation of Developer to repay
the City/HOME Loan.
"Close of Escrow" shall mean the date upon which the City/HOME Loan
Deed of Trust is recorded in the Official Records of the County.
"Closing Statement" means the final statement of Developer's
Escrow account for the purchase and sale of the Property pursuant to the Purchase Contract.
"County" means the County of Orange, California.
"Developer" means Santa Ana Village LP, a California limited partnership,
its successors and assigns.
"Developer's Representative" shall mean the President of
the Managing General Partner of Developer or his/her designee.
"Escrow Holder" means First American Title Insurance Company,
18500 Von Karman Avenue, Suite 600, Irvine, CA 92612.
"Event of Default" has the meaning set forth in Section 20.1.
"Executive Director" means the Executive Director of the Community
Development Agency, or his/her designee.
"Extremely Low Income" an adjusted income which does not exceed
thirty percent (30%) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
"General Partner(s)" means the General Partners of Developer, JHC-
Santa Ana Village LLC, and their respective successors and assigns.
"Governmental Authority" means any governmental or quasi
governmental agency, board, bureau, commission, department, court, administrative
tribunal or other instrumentality or authority, and any public utility.
"Hazardous Materials" means flammable materials, explosives,
radioactive materials, hazardous wastes, toxic substances and similar substances and
materials, including all substances and materials defined as hazardous or toxic wastes,
substances or materials under any applicable law, including without limitation the
Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §§ 9601, et seq., as amended.
"HOME Compliance Period" is for a period of twenty (20) years.
"HOME Program" has the meaning set forth in Recital "A" above.
"HOME Regulations" has the meaning set forth in Recital "A" above.
"I3IJD" means the United States Department of Housing and Urban
Development and any successors or assigns thereof.
"Improvements11 means all improvements and fixtures now and hereafter
comprising any portion of the Property, including, without limitation, landscaping, trees
and plant materials; and offsite improvements (including, without limitation, streets,
curbs, storm drains, and adjacent street lighting).
"Indebtedness" of a person means (a) all indebtedness for borrowed
money, (b) notes payable and drafts accepted representing extensions of credit, whether
or not representing obligations for borrowed money, (c) any obligation for the purchase
of property or services in excess of $10,000 in the aggregate that is (i) deferred for more
than six (6) months, or (ii) evidenced by a note or similar instrument, and ( d) all recourse
and all non-recourse indebtedness secured by any Lien on any property or asset of such
person (whether or not assumed by such person).
"Indemnitees" has the meaning set forth in Section 14.5.
"Laws" means all statutes, laws, ordinances, regulations, orders, writs,
judgments, injunctions, decrees or awards of the United States or any state, county,
municipality or other Governmental Authority.
"Lien/1 means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any lien or security
interest).
"Limited Partner" means the Limited Partners of Developer, and their
successors and assigns.
"Loan Documents" means, collectively, this Agreement, the City/HOME
Loan Note, the City/HOME Deed of Trust, the Affordability Restrictions on Transfer of
Property, and any other agreement, document, or instrument that the City requires in
connection with the execution of this Agreement or from time to time to effectuate the
purposes of this Agreement.
"Low Income" means an adjusted income which does not exceed eighty
percent (80%) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
"Median Income for the Area" means the median income for the Orange
County, California PMSA as most recently determined by HUD. Also may be referred to
interchangeably in the Loan Documents as "Area Median Income" or "AMP'.
"Partnership Agreement" means the Agreement of
dated as said Partnership Agreement may be amended from time to
time.
"Permitted Encumbrances for the Affordable Housing Restrictions"
means, collectively, the Senior Loan Deed of Trust and all other title exceptions and
limitations with respect to the Property hereafter approved by the Executive Director in
writing.
"Permitted Encumbrances for the City Loan Deed of Trust"
means, collectively, the Senior Loan Deed of Trust and all other title exceptions and
limitations with respect to the Property hereafter approved by the Executive Director in
writing.
"Project" means the acquisition and new construction of the Property by
Developer pursuant to this Agreement.
"Project Budget" means the line -item budget for the Project
attached hereto as Exhibit C, as modified from time to time in accordance with this
Agreement.
"Project Costs" means all costs of any nature incurred in connection with
the Project in accordance with generally accepted accounting principles.
"Property" means the Property that is located at 3312 W. First Street,
within the City of Santa Ana, and is more fully described in the "Legal Description"
of the Property attached hereto as Exhibit A and incorporated herein by reference.
"Senior Lender" means MUFO Union Bank, N.A. or any other holder of
the Senior Loan Note(s) or any refinancing of the Senior Loan Note(s).
"Senior Loan" shall mean the senior loan being made by Senior Lender
concurrent to the City Loan for payment of a portion of the acquisition and new
construction costs, and shall include any subsequent loan that refinances the initial Senior
Loan.
"Senior Loan Deed of Trust" means the deed of trust securing the
Senior Loan by encumbering the Property.
"Senior Loan Documents" means, collectively, the loan agreement
governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and
any other agreement, document or instrument that the Senior Lender requires in
connection with the Senior Loan.
"Senior Loan Note" means the promissory note evidencing the
Senior Loan from Senior Lender.
"Term" the terms and conditions contained herein shall remain in effect
for fifty-five (55) years. The Affordability Restrictions on Transfer of Property shall
also remain in effect for fifty-five (55) years.
"Very Low Income" means an adjusted income which does not exceed
fifty percent (50%) of the area median income for the Orange County, California PMSA,
adjusted for household size, as published by HUD.
1.2 Singular and Plural Terms. Any defined term used in the plural in this
Agreement or any other City Loan Document shall refer to all members of the relevant
class and any defined term used in the singular shall refer to any number of the members
of the relevant class.
1.3 References and Other Terms. Any reference to this Agreement or any
Loan Document shall include such document both as originally executed and as it may
from time to time be modified. References herein to Articles, Sections and Exhibits shall
be construed as references to this Agreement unless a different document is named.
References to subparagraphs shall be construed as references to the same Section in
which the reference appears. The term "document' is used in its broadest sense and
encompasses agreements, certificates, opinions, consents, instruments and other written
material of every kind. The terms "including" and "include" mean "including (include)
without limitation."
1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement,
as now existing and as the same may from time to time be modified, are incorporated
herein by this reference.
2. [RESERVED]
SCOPE OF WORKI PROJECT BUDGET
Developer shall comply with this Section until the Certificate of Compliance is
issued.
A "Scope of Work" for the Property is attached hereto as Exhibit B. Any change
to the Scope of Work requested by the Developer, which would result in a change
to the Project Budget in excess of ten percent (10%) of any individual line item or in
excess of five percent (5%) of the aggregate budget, shall be subject to the prior written
approval of the Executive Director.
A line -item budget for the Project, including a summary statement of sources and
uses of funds, is incorporated into Exhibit C (the "Project Budget"). Any material change
to the Project Budget in excess of ten percent (10%) of any individual line item or in
excess of five percent (5%) of the aggregate budget shall be subject to the prior written
approval of the Executive Director which if not granted or denied within five (5)
Business Days, shall be deemed approved; provided, however, that in all events,
Developer shall at all times obtain and maintain all required permits and approvals from
the City's Planning and Building Agency. Notwithstanding the foregoing, the City's
approval of a change order shall not be required unless the approval of the Senior Lender
is required with respect to such change order.
4. [RESERVED]
5. LOANS
A. CITY LOAN:
1. Amount and Purpose. Subject to the terms and conditions of this Agreement,
City agrees to make a loan of HOME funds to Developer in the principal amount of up to
$352,962.90 (the "City/HOME Loan") for the acquisition and new construction of the
Property.
2. City/HOME Note and Deed of Trust. The City/HOME Loan shall be
evidenced by the City/HOME Loan Note in the form attached hereto as Exhibit E. The
City Loan shall be secured by the City/HOME Loan Deed of Trust in the form attached
hereto as Exhibit D. The City/HOME Deed of Trust shall be a deed of trust encumbering
the Property, subordinate to the Senior Loan(s) made to Developer and the Senior Loan
Documents.
3. City/HOME Loan Terms. The terms and conditions of the City/HOME
Loan are as set forth in the City/HOME Loan Note which is a residual receipts note. The
HOME compliance period is twenty (20) years, commencing on the date that all work is
complete and the Property is fully occupied.
6. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS
Developer shall comply with this Section until the Certificate of Compliance is issued.
6.1 Conditions Precedent. City's obligation to disburse the Loan Amount is subject
to the satisfaction, or waiver by the Executive Director, of the following conditions
precedent:
(a) Loan Documents. Developer shall have delivered to the
Escrow Holder, signed by the authorized officer or officers of Developer, with such
signature(s) aclmowledged where necessary, each of the following documents:
(i) the Loan Agreement;
(ii) The City/HOME Loan Note;
(iii) The City/HOME Deed of Trust, and
(iv) The Affordability Restrictions on Transfer of Property.
(b) Title Insurance. City shall have received an LP -10 ALTA Lender's
loan policy of title insurance (2006 edition), or evidence of a commitment therefore
satisfactory to City, issued by First American Title Insurance Company and in form and
substance satisfactory to City, together with all endorsements and binders required,
naming City as the insured, in a policy amount of not less than the City/HOME Loan
Amount, showing Developer as the fee owner of the Property and insuring the
City/HOME Deed of Trust to be a valid lien on the Property. This Agreement, the
City/HOME Loan Note, and City/HOME Deed of Trust shall be subordinate to the Senior
Loan Note and Senior Loan Deed of Trust.
(c) Affordability Restrictions on Transfer of Property. Developer
shall have delivered to the Escrow Holder, in the form attached hereto as Exhibit F, the
Affordability Restrictions on Transfer of Title pursuant to which, among other things,
Developer agrees that the Property shall be used only for decent, safe, sanitary and
affordable rental housing pursuant to the affordability requirements of Code of Federal
Regulations ("CFR") section 92.252 or 92.254 and California Health and Safety Code
("H&S") sections 50052.5, as applicable.
(d) Documents Recorded, This Agreement, the City/HOME Loan Deed
of Trust and the Affordability Restrictions on Transfer of Property shall have been
recorded in the Official Records of the County. This Agreement, and the City/HOME
Loan Deed of Trust shall be subordinate to the Senior Loan Note and the Senior Loan
Deed of Trust.
(e) Request for Notice. For the benefit of City, Escrow Holder shall
have recorded a request for notice of default of the Senior Loan (the "Request for Notice
of Default").
(t) Insurance. City shall have received evidence satisfactory to the City
Attorney that all of the policies of insurance required by Section 19 of this Agreement are
in full force and effect.
(g) Representations and Warranties. The representations and
warranties of Developer contained in this Agreement and the other Loan Documents shall
be correct in all material respects as of the Close of Escrow as though made on and as of
that date, and if requested by the Executive Director, City shall have received a certificate
to that effect signed by Developer's Representative.
(h) No Default. No Event of Default by Developer shall have occurred,
and no event shall have occurred which, with the giving of notice or the passage of time
or both, would constitute an Event of Default by Developer under this Agreement, and if
requested by the Executive Director, City shall have received a certificate to that effect
signed by Developer's Representative.
6.2 Disbursement Procedures for Loan.
The Loan proceeds shall be disbursed through Escrow to finance the acquisition of the
Property, with other proceeds being used for the construction (as evidenced in Exhibit Q.
The Loan proceeds shall not be used for any purpose other than for acquisition costs of the
Property and/or construction costs, including a Developer fee and soft costs related to
development of the Project (costs all subject to City's prior review). The City allows for
eligible costs to be paid by HOME loan funds that were incurred not more than 24 months
prior to the HOME funds commitment date of this loan agreement in accordance with
HOME regulations.
6.3 First Disbursement. The City's obligation to make the first disbursement of the
Construction Portion is subject to satisfaction of the following conditions precedent:
(a) General Contractor. If the Executive Director has not yet approved
the General Contractor, the Executive Director shall have approved the identity and
qualifications of the General Contractor.
(b) Construction Contract. If the Executive Director has not yet
approved the Construction Contract, the Executive Director shall have approved the
Construction Contract.
(c) Relocation Plan. If the relocation of any existing tenants is
contemplated by the parties, the Executive Director shall have approved a plan for the
relocation of such tenants of the Property determined by the Executive Director to be
eligible for relocation assistance.
6.4 Termination for Failure of Condition. If (a) any of the conditions set forth
herein are not timely satisfied or waived by the Executive Director, and (b) City is not in
default under this Agreement, City may terminate this Agreement without any further
liability on its part by giving written notice of termination to Developer. Upon the giving
of such notice, all principal, interest and other amounts owing under the City Loan Note
shall be immediately due and payable, regardless of any other specified due date.
6.5 [Reserved.]
6.7 Waiver of Conditions. The conditions set forth pertaining to City's
obligation to make disbursements of the rehabilitation or construction portion are for
City's benefit only and the Executive Director may waive all or any part of such rights by
written notice to Developer.
6.8 Waiver of Disbursement Conditions. Unless City otherwise agrees in
writing, the making by City of any disbursement with knowledge that any condition to
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such disbursement is not fulfilled shall constitute a waiver of such condition only with
respect to the particular disbursement made.
6.9 Modification of Disbursement Conditions and Procedures. The
Executive Director shall have the authority to modify the disbursement conditions and
procedures set forth herein in order to conform them to the payment provisions of the
Construction Contract,
6.10 Other Terms and Conditions of Loan.
A. The Note shall become immediately due and payable, in the event of any
of the following:
(1) failure to complete the Project within four (4) years of the
recording date;
(2) HOME rental units must achieve initial occupancy within 18
months of project completion.
(3) violation of any of the use covenants and restrictions contained in
this Agreement after the expiration of any applicable notice and cure
periods;
(4) an Event of Default by Developer which is not timely cured after
expiration of any applicable notice and cure periods pursuant to the
terms of this Agreement.
6.11 Closing Costs and Fees. Developer shall pay (a) all escrow fees and charges,
(b) all recording fees and charges on any document recorded pursuant to this Agreement,
and (c) the premium for the title insurance required hereunder.
7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE
PROPERTY
7.1 Use Covenants and Restrictions.
A. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assigns and every successor in interest to the Property that
Developer will make all rental units on the Property available to low- or very low-income
households at rents affordable to such households for fifty-five (55) years from the issuance of
the Certificate of Completion. The HOME restrictions for the two (2) HOME assisted units
shall be enforced until the date that is twenty (20) years after the date on which the Certificate
of Completion is issued or until repayment of principal and all accrued interest on the HOME
Loan, whichever comes last. The City permits the Developer to limit the eligibility and/or
give preference to a particular segment of the population in accordance with 24 CFR
92.253(d).
B. The Project shall consist of seventy-six (76) units, including one (1) on-site
manager's unit(s). There shall be two (2) HOME assisted units. The HOME assisted units
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shall be one 1 -bedroom unit and one 2 -bedroom unit, floating, and shall be distributed
throughout the complex with comparable amenities to the other units.
C. At initial lease up, households in the HOME assisted units cannot earn more than
30% of AMI. Rental increases shall be in conformance with federal and state law. After
the twenty (20) year HOME compliance period, the City shall require that the units
remain affordable, with rents calculated based on assumed household size at the same
income levels
D. All of the HOME units will be restricted to occupancy by families earning no more than
thirty (30%) of the Area Median Income (AMI).
E. Maximum Occupancy will be two (2) people per room plus one (1). Example for a two-
bedroom unit, five (5) people would be maximum occupancy.
F. Affordable rents shall be governed by the HOME Program regulations at 24 CFR
section 92.2.
G. Developer must have a written lease between tenant and owner for a period of at least
one year, unless a shorter period is mutually agreed upon. Leases must be consistent with
the HOME Program regulations at 24 CFR section 92.209(g).
7.2 Affordabilitv Levels/Unit Mix:
The affordability levels/unit mix for the Project is as follows:
Unit Size
30%AMI
Total
No.
Units
Current
Rent
1 Bedroom
71
$1,025
71
2Bedroom
4
$1,230
4
Total
75
71
75
The remaining unit will be a 1 -bedroom unit reserved for the onsite manager.
HOME Assisted Units
Total # of
Level of
# of HOME
/o Slrare of
Units
Unit Type
Affordability
Assisted
Unit Type
Units
71
1 Bed
30% AMI
1
1.4%
4
2 Bed
1
25%
(1) In no event shall the rent charged to the HOME assisted units be more than that
amount of the low HOME rent as published by HUD, as amended from time to
time.
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(2) At the time of project completion, the Developer shall provide to the City the
address and/or unit number of each of the HOME floating units.
(3) Annually with the financial statements, the Developer shall provide an annual report
of rents and occupancy of all assisted units, including the HOME assisted units, to
verify compliance with affordability requirements. For the HOME assisted units,
information on unit substitution and filling vacancies shall be provided to ensure
that the project maintains the required unit mix.
The affordable rents charged at the Project must comply with the standards set forth by
HUD and California Tax Credit Allocation Committee (TCAC). Notwithstanding anything
to the contrary contained in this Agreement or the Affordability Restrictions on Transfer of
Property, in the event of a foreclosure, or delivery of a deed in lieu of foreclosure, of any
Senior Loan, then for all units other than the HOME Assisted Units, (1) the maximum
qualifying tenant household income shall be increased to 60% of Area Median Income
adjusted for family size appropriate to the unit, and (2) the maximum annual affordable rent
shall be increased to comply with the rent limits set forth by California Tax Credit
Allocation Committee (TCAC) for households at 60% Area Median Income.
Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing
Authority of the City of Santa Ana publishes the Utility Allowance Schedule.
Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up
following completion of construction in accordance with any changes in allowable rent and
income tables as published by HUD.
7.3 Rent Increases: On an annual basis, the City shall provide Developer with the
maximum allowable schedule of rents for the Property in accordance with changes in
allowable rent and income tables published by HUD and the California Tax Credit
Allocation Committee (TCAC), provided however that the rent for the HOME units shall in
no event be higher than the rent for the equivalent non -HOME assisted unit within the
Project. In no event can Developer charge any tenant more than such amount. The City will
make all best efforts to provide Developer with the maximum allowable schedule of rents
within no more than 30 calendar days after the date TCAC publishes the allowable rent and
income tables.
7.4 Prohibited Fees. The Developer and subsequent owner is prohibited from charging
fees that are not customary, consistent with HOME Regulations 24 CFR section
92.504(c)(3)(xi). The Developer and subsequent owner can charge reasonable application
fees to prospective tenants; other fees only to the extent that they are reasonable and
customary for the project area; and fees for services provided to tenants, provided that these
services are not mandatory.
7.5 Maintenance of the Property. Solely at Developer's expense, Developer agrees to
maintain the Property in a clean and orderly condition and in good condition and repair and
keep the Property free from any accumulation of debris and waste materials. If at any time
Developer fails to maintain, or cause to be maintained, the Property as required by this
section, and said condition is not corrected after the expiration of a reasonable period of time
not to exceed thirty (30) days from the date of written notice from the City, unless such
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condition cannot reasonably be cured within thirty (30) days, in which case Developer shall
have such additional time as reasonably necessary to complete such cure, the City may
perform the necessary maintenance and Developer shall pay all reasonable costs incurred for
such maintenance. The City shall inspect the Property annually after the date of issuance of
the Certificate of Completion as described in Article 17 of this Agreement. During the
affordability period, the Property must meet all applicable State and local codes. The
Property must be free of all health and safety defects during the affordability period.
7.6 Obligation to Refrain from Discrimination. Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part
thereof, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, mental or physical disability, marital
status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the Property nor shall Developer itself or any person claiming under or
through him establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall
run with the land and shall remain in effect for the term of the Agreernent.
7.7 Increase in Rent and Occupancy Restrictions anon Termination of Rental
Subsidies. The parties acknowledge that Developer is only able to rent units to
Extremely Low Income Households because the City is providing 75 Housing and Urban
Development Veterans Affairs Supportive Housing (HUD-VASH) Project -Based
Vouchers for Permanent Supportive Housing ("VASH Vouchers"). In the event the
VASH Vouchers expire, terminate, are not renewed or are reduced for any reason other
than a default by Developer under the VASH Vouchers, then the occupancy requirements
for all of the units, other than the 2 HOME Assisted Units shall automatically increase to
60% of the Area Median Income and the Affordable Rent shall increase to Affordable
Rents for households earning 60% of the Area Median Income in accordance with the rent
limits set forth by the California Tax Credit Allocation Committee (TCAC for households
earning 60% of the Area Median Income..
7.8 CHDO Provisions. Developer shall maintain CHDO (Community Housing
Development Organization) status for the term of this Agreement and the HOME
Regulatory Agreement in accordance with 24 CFR 92. Developer agrees to provide
information as may be requested by the City to document its continued compliance,
including but not limited to an annual board roster and certification of continued
compliance.
Any funds advanced as CHDO pre -development funds must be in compliance with 24 CFR
92.301, and are forgivable only under the terms in 24 CFR 92.301. Any funds advanced to
Developer as CHDO Operating Expenses must be expended in compliance with 24 CFR
92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this
Project shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this
Agreement.
Developer will create and follow a tenant participation plan, as required in 24 CFR 92.303.
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The provisions of this Section 7.8 shall not apply in the event of a foreclosure of the
Property or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a
deed in lieu of foreclosure, Senior Lender will use commercially reasonable efforts to accept
bids for the Property from a qualified CHDO; provided, however, that in no event shall
Senior Lender be obligated to select a qualified CHDO to be the purchaser of the Property
unless, among other criteria used in Senior Lender's reasonable discretion, such qualified
CHDO has offered the highest purchase price among the bidders.
8. RESERVED.
GENERAL PROVISIONS AND WARRANTIES
As a material inducement to City to enter into this Agreement, Developer
represents and warrants as follows:
9.1 Formation, Oualification and Compliance. JHC-Santa Ana Village LLC, the
managing general partner of Developer (a) is a limited liability company, validly existing
and in good standing under the laws of the State of California, (b) has all requisite
authority to conduct its business and own and lease its properties, and (c) is qualified and
in good standing in every jurisdiction in which the nature of its business makes
qualification necessary or where failure to qualify could have a material adverse effect on
its financial condition or the performance of its obligations under the Loan Documents.
Developer is in compliance with all laws applicable to its business and has obtained all
approvals, licenses, exemptions and other authorizations from, and has accomplished all
filings, registrations and qualifications with, any Governmental Authority that are
necessary for the transaction of its business.
9.2 Execution and Performance of Loan Documents.
9.2.1 Developer has all requisite authority to execute and
perform its obligations under the Loan Documents.
9.2.2 The execution and delivery of Developer of, and the
performance by Developer of its obligations under, each Loan Document has been
authorized by all necessary action and does not and will not:
(a) require any consent or approval not heretofore
obtained of any person having any interest in Developer;
(b) 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;
(c) result in or require the creation of any lien, claim,
charge or other right of others of any kind (other than under the City Loan Documents)
on or with respect to any property now or hereafter owned or leased by Developer;
(d) violate any provision of any law presently in effect;
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or
(e) constitute a breach or default under, or permit the
acceleration of obligations owed under, any contract, loan agreement, lease or other
agreement or document to which Developer is a party or by which Developer or any of its
property is bound.
9.2.3 Developer is not in default, in any respect that is materially adverse
to the interests of City under the Loan Documents or that would have any material
adverse effect on the financial condition of Developer or the conduct of its business,
under any law, contract, lease or other agreement or document described in sub-
paragraph (d) or (e) of the previous subsection.
9.2.4 No approval, license, exemption or other authorization from, or
filing, registration or qualification with, any Governmental Authority is required which
has not been previously obtained in connection with:
(a) the execution of Developer of, and the
performance by Developer of its obligations under, the Loan Documents; and
(b) the creation of the liens described in the Loan
Documents.
9.3 Financial and Other Information. To the best of Developer's knowledge,
all financial information furnished to City with respect to Developer in connection with
the Loan (a) is complete and correct in all material respects as of the date of preparation
thereof, (b) accurately presents the financial condition of Developer, and (c) has been
prepared in accordance with generally accepted accounting principles consistently
applied or in accordance with such other principles or methods as are reasonably
acceptable to City. To the best of Developer's knowledge, all other documents and
information furnished to City with respect to Developer, in connection with the Loans,
are correct and complete in all material respects insofar as completeness is necessary to
give the City accurate knowledge of the subject matter. To the best of Developer's
knowledge Developer has no material liability or contingent liability not disclosed to City
in writing and there is no material lien, claim, charge or other right of others of any kinds
(including liens or retained security titles of conditional vendors) on any property of
Developer not disclosed in such financial statements or otherwise disclosed to City in
writing.
9.4 No Material Adverse Change. There has been no material adverse change in
the condition, financial or otherwise, of Developer since the dates of the latest financial
statements furnished to City. Since those dates, Developer has not entered into any
material transaction not disclosed in such financial statements or otherwise disclosed to
City in writing.
9.5 Tax Liability. Developer has filed all required federal, state and local tax returns
and has paid all taxes (including interest and penalties, but subject to lawful extensions
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disclosed to City in writing) other than taxes being promptly and actively contested in
good faith and by appropriate proceedings. Developer is maintaining adequate reserves
for tax liabilities (including contested liabilities) in accordance with generally accepted
accounting principles or in accordance with such other principles or methods as are
reasonably acceptable to City.
9.6 Governmental Requirements. To the best of Developer's knowledge, Developer
is in compliance with all laws relating to the Property and all Governmental Authority
approvals, including zoning, land use, planning requirements, and requirements arising
from or relating to the adoption or amendment of, any applicable general plan,
subdivision and parcel map requirement; environmental requirements, including the
requirements of the California Environmental Quality Act and the National
Environmental Policy Act and the preparation and approval of all required environmental
impact statements and reports; use, occupancy and building permit requirements; and
public utilities requirements.
9.7 Rights of Others. Developer is in compliance with all covenants, conditions,
restrictions, easements, rights of way and other rights of third parties relating to the
Property.
9.8 Litigation. There are no material actions or proceedings pending or, to the best of
the Developer's knowledge, threatened against or affecting Developer or any property of
Developer before any Governmental Authority, except as disclosed to City in writing
prior to the execution of this Agreement.
9.9 Bankruptcy. To the best of Developer's knowledge, no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or threatened against Developer, nor are
any of such proceedings contemplated by Developer.
9.10 Information Accurate. To the best of Developer's knowledge, all information,
regardless of its form, conveyed by Developer to City, by whatever means, is accurate,
correct and sufficiently complete to give City true and accurate knowledge of its subject
matter, and does not contain any material misrepresentation or omission.
9.11 Conflicts of Interest. No member, official or employee of the City shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his/her
personal interests or the interests of any corporation, partnership or association in which
he/she has a direct or indirect financial interest. The Developer warrants that it neither has
paid nor given, nor will pay or give, any third party any money or other consideration for
obtaining this Agreement.
9.12 Nonliability of ON Officials and Employees. No member, official or employee of
the City shall be personally liable to the Developer in the event of any default or breach by
the City or for any amount which may become due to Developer or on any obligations under
the terms of this Agreement.
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9.13 No Assignment. Developer expressly acknowledges and agrees that the City has
only agreed to assist the Developer as a means by which to induce the
acquisition/rehabihtation/development of the Property. Accordingly, Developer further
expressly acknowledges and agrees that this Agreement is a personal right of Developer that
is neither negotiable, transferable, nor assignable except as set forth herein. Developer may
assign some or all of its rights under the Agreement only with the prior written consent of
the Executive Director (such consent not to be unreasonably withheld), except that no prior
consent is necessary for an assignment by a limited partner of Developer to an affiliate, or as
otherwise provided in the Deed of Trust.
9.14 Applicable Law. This Agreement shall be interpreted, governed and enforced under
federal and state laws.
9.15 Third Parties. This Agreement is made for the sole benefit of Developer and the
City and their successors and assigns, and no other person or persons shall have any rights
or remedies under or by reason of this Agreement or any right to the exercise of any right or
power of the City hereunder or arising from any default by Developer, nor shall the City
owe any duty whatsoever to any claimant for labor performed or materials famished in
connection with the construction of the Property.
9.16 Control of Property. The parties acknowledge that the City has not at any time
participated in any manner in the management or operation of the Property, and will not so
participate at any time hereafter.
10. CONDITIONS FOR CONSTRUCTION
Developer shall comply with this Section until the Certificate of Compliance is issued.
10.1 Permits and Approvals. Developer shall diligently obtain all
permits, including all building permits, licenses, approvals, exemptions and other
authorizations of Governmental Agencies required in connection with the construction of
the Property.
10.2 Commencement and Completion of Construction.
The construction shall be considered complete for purposes of this Agreement
only when (a) all work described has been completed and fully paid for, and (b) all work
requiring inspection or certification by Governmental Authority has been completed and
all requisite certificates, approvals and other necessary authorizations (including required
final certificates of occupancy) have been obtained.
10.3. RESERVED.
10.4 Entry and Inspection. At all times prior to completion of the
construction, upon reasonable notice, City and their agents shall have (a) the right of free
access to the Property and all sites away from the Property where materials for the
construction are stored, (b) the right to inspect all labor performed and materials
IV
furnished for the construction, and (c) the right to inspect and copy all documents
pertaining to the construction.
10.5 Compliance with Section 3 Clause. Section 3 of the Housing and
Urban Development Act of 1968, 12 U.S.C. 1701u, as amended by Section 915 of the
Housing and Community Development Act of 1992 requires that economic opportunities
generated by HUD financial assistance for housing and community development
programs be targeted toward low- and very low- income persons. Whenever HUD
assistance generates opportunities for employment or contracting, state and local
grantees, as well as other recipients of HUD housing assistance funds must, to the
greatest extent feasible, provide these opportunities to low- and very low- income persons
and to businesses owned by or employing low- and very low- income persons. Section 3
applies to projects for which HUD's share of project costs exceeds $200,000 and
contracts and subcontracts awarded on projects for which HUD's share or project costs
exceeds $200,000 and the contract or subcontract exceeds $100,000.
For purposes of this Section 3 Clause and compliance thereto, whenever
the word "contractor" is used it shall mean and include, as applicable, the Developer, and
its contractor and subcontractor(s), if any. The particular text to be utilized in any and all
contracts of any contractor doing work covered by Section 3 shall be in substantially the
form of the following, as reasonably determined by the City, or as directed by HUD or its
representative, and shall be executed by the applicable contractor under penalty of
perjury:
"(a) The work to be performed under this contract is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968, as
amended, 12 U.S.C. 1701u ("Section 3"). The purpose of Section 3 is to ensure
that employment and other economic opportunities generated by HUD assistance
or HUD -assisted projects covered by Section 3, shall, to the greatest extent
feasible, be directed to low- and very low-income persons [inclusive of Very Low
Income Persons, Very Low Income Households, and Very Low Income Tenants
served by the Project], particularly persons who are recipients of HUD assistance
for housing.
(b) The parties to this contract agree to comply with HUD's
regulations in 24 CFR part 135, which implement Section 3. As evidenced by
their execution of this contract, the parties to this contract certify that they are
under no contractual or other impediment that would prevent them from
complying with the part 135 regulations.
(c) The contractor agrees to send to each labor organization or
representative of workers with which the contractor has a collective bargaining
agreement or other understanding, if any, a notice advising the labor organization
or workers' representative of the contractor's commitments under this Section 3
clause, and will post copies of notices in conspicuous places at the work site
where both employees and applicants for training and employment positions can
see the notice. The notice shall describe the Section 3 preference, shall set forth
minimum number of job titles subject to hire, availability of apprenticeship and
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training positions, the qualifications for each; and the name and location of
person(s) taking applications for each of the position; and the anticipated date the
work shall begin.
(d) The contractor agrees to include this Section 3 clause in every
subcontract subject to compliance with regulations in 24 CFR part 135, and
agrees to take appropriate action, as provided in an applicable provision of the
subcontract or in this Section 3 clause, upon a finding that the subcontractor is in
violation of the regulations in 24 CFR part 135. The contractor will not
subcontract with any subcontractor where the contractor has notice or knowledge
that the subcontractor has been found in violation of the regulations in 24 CFR
part 135.
(e) The contractor will certify that any vacant employment positions,
including training positions, that are filled (a) after the contractor is selected but
before the contract is executed, and (b) with persons other than those to whom the
regulations of 24 CFR part 135 require employment opportunities to be directed,
were not filled to circumvent the contractor's obligations under 24 CFR part 135.
(0 Noncompliance with HUD's regulations in 24 CFR part 135 may
result in sanctions, termination of this contract for default, and debarment or
suspension from future HUD assisted contracts."
After the foregoing Section 3 Clause, there shall be a signature block for
the contractor, as applicable, the following text shall be included immediately above the
signature block: "The contractor/provider by his/her signature affixed hereto declares
under penalty of perjury that contractor has read the requirements of the Section 3 Clause
and accepts all its requirements contained therein for all of his/her operations related to
this contract"
To the extent applicable, the Developer shall comply and/or cause
compliance with Section 3 Clause requirements for the Project. For example, when and
if Developer or its contractor(s)/subcontractor(s) hire(s) full time employees, rather than
volunteer labor or materials, Section 3 is applicable and all disclosure and reporting
requirements apply.
10.6 Construction Information. From time to time during the course of the
construction, within ten (10) Business Days following City's written demand therefore,
Developer shall furnish requested reports of project costs, progress schedules and
contractors' costs breakdowns for the construction, itemized as to trade description and
item, showing the name of the contractor(s) and/or subcontractor(s), and including such
indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and
engineers' fees, loan fees, interest during construction and contractors' overhead.
10.7 Protection Against Liens. Developer shall diligently file a valid
Notice of Completion upon completion of the construction, diligently file a notice of
cessation in the event of a cessation of labor on the construction for a period of thirty (30)
days or more, and take all actions reasonably required to prevent the assertion of claims
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of lien against the Property. In the event that any claim of lien is asserted against the
property or any stop notice or claim is asserted against the City by any person furnishing
labor or materials to the Property, Developer shall immediately give written notice of the
same to City and shall, promptly and in any event within ten (10) Business Days after
written demand therefor, (a) pay and discharge the same, (b) effect the release thereof by
delivering to City a surety bond complying with the requirement of applicable laws for
such release, or (c) take such other action as City may reasonably require to release City
from any obligation or liability with respect to such stop notice or claim.
10.8 General Contractors who are Related Parties to the Developer. If the
Project is developed with general contractors who are Related Parties to the Developer,
the Developer must be audited to the subcontractor level by an outside auditing firm
approved by the City. The Developer shall pay for the audit to the subcontractor level by
an outside auditing firm.
11. FEDERAL (HOME PROGRAM) COVENANTS
Developer shall comply with this Section during the HOME Compliance Period.
11.1 CHDO. Jamboree Housing Corporation, the sole member and manager of
the managing general partner of Developer, represents and warrants that it qualifies and is
in good standing as a Community Housing Development Organization under the HOME
Program. Developer hereby covenants and agrees to maintain such status throughout the
term of this Agreement, and to provide the Agency and City with written documentation
necessary to demonstrate maintenance of said status on an annual basis.
11.2 Qualification as Affordable Housing. As more particularly provided in
the Affordability Restrictions on Transfer of Property, Developer shall use, manage and
operate the Property in accordance with the requirements of 24 CFR 92.252 so as to
qualify the housing on the Property as Affordable Housing with affordable rents.
11.3 Tenant and Participant Protection. Developer shall comply with the
requirements of 24 CFR 92.253.
11.4 Local Preference. Subject to compliance with the HOME Regulations, the
HUD -Veterans Affairs Supportive Housing referral program requirements, the County of
Orange coordinated entry system and applicable California and federal fair housing laws,
local preference for Santa Ana residents and workers in tenant selection shall be a
requirement of the Project. Subject to applicable laws and regulations governing
nondiscrimination and preferences in housing occupancy required by HUD or the State of
California, as well as the City of Santa Ana Affordable Housing Funds Policies and
Procedures, the Developer shall give preference in leasing units in the following order of
priority:
1. First priority shall be given to persons who have been permanently displaced or
face permanent displacement from housing in Santa Ana as a result of any of the
following:
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a. A redevelopment project undertaken pursuant to California's Community
Redevelopment Law (Health & Safety Code Sections 33000, et seq.) --
applicable only to projects funded by the Low and Moderate Income
Housing Asset Fund.
b. Ellis Act, owner -occupancy, or removal permit eviction;
c. Earthquake, fire, flood, or other natural disaster;
d. Cancellation of a Housing Choice Voucher HAP Contract by property
owner; or
e. Governmental Action, such as Code Enforcement.
2. Second priority shall be given to persons who are either:
a. Residents of Santa Ana and/or
b. Working in Santa Ana at least 32 hours per week for at least the last 6
months.
11.5 Handicapped Accessibility. Developer shall comply with (a) Section
504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C
governing accessibility of projects assisted under the HOME Program; and (b) the
Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35-36
in order to provide handicapped accessibility to the extent readily achievable.
11.6 Use of Debarred. Suspended, or Ineligible Participants. Developer shall
comply with the provisions of 24 CFR 24 relating to the employment, engagement of
services, awarding of contracts, or funding of any contractor or subcontractor during any
period of debarment, suspension, or placement in ineligibility status.
11.7 Maintenance of Drug -Free Workplace. Developer shall certify that
Developer will provide a drug-free workplace in accordance with 24 CFR 84.13.
11.8 Lead -Based Paint. Developer shall comply with the requirements of the
Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and implementing
regulations at 24 CFR 35, as applicable.
11.9 Affirmative Marketing. Developer shall implement and perform such
affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in
compliance with the City's adopted Program.
11.10 Equal Opportunity and Fair Housing. Developer shall carry out the
construction and perform its obligations under this Agreement in compliance with all of
the state and federal laws and regulations regarding equal opportunity and fair housing
described in 24 CFR 92.350.
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11. 11 Property Standards. Developer shall cause the Property to meet the
housing quality standards set forth in 24 CFR 882.109, as well as all applicable local,
state and federal codes and ordinances, including zoning ordinances. Developer shall also
cause the Property to meet the current edition of the Model Energy Code published by the
Council of American Building Officials.
11.12 Displacement and Relocation. Developer acknowledges and agrees
that, pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this
part, City must ensure that it has taken all reasonable steps to minimize the displacement
of persons as a result of the Project. Furthermore, to the extent feasible, residential
tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent,
safe, sanitary and affordable dwelling unit on the Property upon completion of the
construction. Developer agrees to cooperate fully and completely with City in meeting
the requirements of 24 CFR 92.253 and shall take all actions and measures reasonably
required by the Executive Director in connection therewith. All applicable state
guidelines must also be followed.
(a) Developer acknowledges and agrees to hire a Relocation
Consultant to provide relocation services, pursuant to the Uniform
Relocation Act and Real Property Acquisition Policies Act of 1970
("URA") and 24 CFR 92.253.
(b) The City, Developer, and Relocation Consultant will meet
periodically during the relocation to provide updates and review
tenant files, including at Project approval and prior to final benefit
calculations. The Developer and Relocation Consultant shall carry
out activity in compliance with URA and the City's Acquisition
and Relocation Policy and Procedures Manual ("Manual").
(c) The Developer and Relocation Consultant shall maintain accurate
records and files pertaining to the temporary and permanent
relocation of tenants, in accordance with URA and the City's
Manual.
(d) The Developer and Relocation Consultant shall provide all
relocation and tenant files to the City once relocation is complete
at the Project.
11.13 Other Program Requirements. Developer shall carry out each activity
in compliance with all federal laws and regulations described in subpart H of 24 CFR 92,
except that Developer does not assume City's responsibilities for environmental review in
24 CFR 92.352 or the intergovernmental review process in 24 CFR 92.359,
11.14 Rea nest for Disbursements of Funds. Notwithstanding anything
contained in this Agreement to the contrary, Developer may not request disbursements of
funds under this Agreement until the funds are needed for payment of eligible costs (such
funds shall be used solely towards the acquisition and construction of the Property). The
amount of each request shall be limited to the amount needed.
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11.15 Eligible Costs. Developer shall use HOME Funds to pay costs defined as
"eligible costs" pursuant to 24 CFR 92.206,
11.16 Records and Reports. Developer shall maintain and from time to time
submit to City such records, reports and information as the Executive Director may
reasonably require in order to permit City to meet the record keeping and reporting
requirements required of it pursuant to 24 CFR 92.508,
11.17 Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Developer shall comply with the requirements and
standards of 2 CFR 200.
11.18 Conflict of Interest. Developer shall comply with and be bound by the
conflict of interest provisions set forth at 24 CFR 570.611, as well as state regulations
pertaining to conflict of interest.
11.19 Monitoring. Developer shall allow the City to conduct periodic
inspections of the HOME assisted units on the Property as required by the Program after
the date of construction completion, with reasonable advance written notice. Developer
shall cure any defects or deficiencies found by the City while conducting such
inspections within two weeks of written notice thereof, or such longer period as is
reasonable within the sole discretion of the City.
11.20 Recertification of Tenant Income.
(A) Developer shall take all necessary steps to review the income of all tenants
prior to renting to them, as well as reviewing current tenants on an annual basis,
in accordance with HOME regulations and guidelines. Every fifth (5th) year,
Developer shall require new original income documents to be submitted by
tenants. Tenants in HOME assisted units whose incomes no longer comply with
federal income guidelines shall have their rents adjusted in accordance with
federal HOME guidelines (24 CFR 92.252-92.253).
(B) HOME assisted units continue to qualify as affordable housing despite a
temporary non-compliance caused by increases in the incomes of existing tenants
if actions satisfactory to HUD are being taken to ensure that all vacancies are
filled in accordance with this section until the non-compliance is corrected.
11.21 Other HOME Program Requirements. Developer shall comply with all
other applicable requirements of the HOME Program.
11.22 Controlling Covenants. If there is a discrepancy between State and
Federal law with regard to any of the aforementioned covenants, the more stringent shall
apply.
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11.23 Faith Based Activities. To the extent applicable to the Project, in
accordance with 24 CFR 92.257, Developer will comply with the restrictions on the use
of HOME funds for faith based activities as set forth in Section 92.257.
12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION
AND REPAIR OF PROPERTY
12.1 Maintenance. Developer shall maintain the Property (and all abutting
grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise
required to maintain) in good condition and repair; shall operate the Property in a
businesslike manner; shall prudently preserve and protect its own as well as the City's
interests in connection with the Property; shall not commit or permit any waste or
deterioration of the Property (except for normal wear and tear); shall not abandon any
portion of the Property or leave the Property unguarded or unprotected; and shall not
otherwise act, or fail to act, in such a way as to unreasonably increase the risk of any
damage to the Property or of any other impairment of City's interests under the Loan
Documents. Without limiting the generality of the foregoing, and except as otherwise
agreed by City in writing from time to time, Developer shall promptly and faithfully
perform and observe each of the following provisions:
12.1.1 Alterations and Repair. Developer shall not remove, demolish or
materially alter any Improvement without City's prior consent, except to make non-
structural repairs which preserve or increase the Property's value, and shall promptly
restore, in a good and professional manner, any Improvement (or other aspect or portion
of the Property) that is damaged or destroyed from any cause.
12.2 Compliance. Developer shall comply with all laws and requirements of
Governmental Authority (including, without limitation, all requirements relating to the
obtaining of Governmental Authority approvals), all Governmental Authority approvals
and all rights of third parties, relating to Developer, the Property or Developer's business
thereon.
12.3 Taxes and Impositions. Developer shall pay, prior to delinquency,
all of the following (collectively, the "Impositions"): (a) all general and special real
property taxes and assessments imposed on the Property; (b) all other taxes and
assessments and charges of every kind that are assessed upon the Property (or upon the
owner and/or operator of the Property) and that create or may create a lien upon the
Property (or upon any personal property or fixtures used in connection with the Property),
including, without limitation, non-governmental levies and assessments pursuant to
applicable covenants, conditions or restrictions; and (c) all license fees, taxes and
assessments imposed on City (other than City's income or franchise taxes) which are
measured by or based upon (in whole or in part) the amount of the obligations secured by
the Property. If permitted by law, Developer may pay any Imposition in installments
(together with any accrued interest).
12.1.3.1 Right to Contest. Developer shall not be required to pay any
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Imposition so long as (a) its validity is being actively contested in good faith and by
appropriate proceedings, (b) Developer has demonstrated to City's reasonable satisfaction
that leaving such Imposition unpaid pending the outcome of such proceedings could not
result in conveyance of the Property in satisfaction of such Imposition or otherwise
impair City's interests under the Loan Documents, and (c) Developer has furnished City
with a bond or other security satisfactory in an amount not less than 100% of the
applicable claim (including interest and penalties).
12.1.3.2 Evidence of Payment. Upon demand by City from
time to time, Developer shall deliver to City, within thirty (30) days following the due
date of any Imposition, evidence of payment reasonably satisfactory to City.
12.1.3.3 Books and Records. Developer shall maintain complete books of
account and other records reflecting its operations (in connection with any other
businesses as well as with respect to the Property), in accordance with generally accepted
accounting principles applied on a consistent basis or in accordance with such other
principles or methods as are reasonably acceptable to City, in accordance with 24 CFR
92.508.
12.4 Project Operating Account. Subject to the requirements of the Senior
Lender, Developer must promptly deposit all project income directly into a segregated
depository account established exclusively for the Project ("Project Operating Account").
Withdrawals from this account may be made only in accordance with the provisions of
this Agreement and the approved Project Budget, as it may be revised from time to time
with City approval. Prior to the repayment of the City/HOME Loan in full, Developer
may make withdrawals from this account solely for the payment of project expenses
(including, without limitation, funding reserves and the making of debt service
payments), project fees and permitted distributions to the partners of the Developer.
Withdrawals from this account for other purposes may be made only with the prior
written approval of the City.
12.5 Replacement Reserve Account. Developer must establish or cause to be
established a segregated interest-bearing replacement reserve depository account
("Replacement Reserve Account") no later than the date of the Senior Loan converts
from a construction loan to a permanent loan. Developer must make monthly deposits
from project income into the Replacement Reserve in the amount of $500 per unit per
year. Developer may withdraw funds from the Replacement Reserve Account solely to
fund capital improvements for the Project, such as replacing or repairing structural
elements, furniture, fixtures or equipment of the Project that are reasonably required to
preserve the Project. Developer may not withdraw funds from the Replacement Reserve
Account for any other purpose without the prior written approval of the City.
13. NONDISCRIMINATION COVENANTS
13.1 Obligation to Refrain from Discrimination. Developer covenants and
agrees that:
A. In Use of Property. There shall be no discrimination
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against or segregation of any person, or group of persons, on account of race, color,
creed, religion, sex, mental or physical disability, marital status, national origin, or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Property, nor shall Developer or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendors of the Property.
B. In Affordable Housing Restrictions. The
foregoing covenant shall (a) be included in the Affordability Restrictions on Transfer of
Property, (b) run with the land, and (c) remain effective for the term of the contract (for
55 years).
C. In Employment. In construction of the
Property, Developer shall not discriminate against any employee or applicant because of
race, color, creed, religion, sex, marital status, mental or physical disability, national
origin, or ancestry. Developer shall take affirmative action to ensure that applicants are
employed, and that employees are treated during employment, without regard to their
race, color, creed, religion, sex, marital status, national origin, or ancestry.
D. In all Contracts. Developer shall cause the foregoing
covenants to be inserted in all contracts for any work covered by this Agreement so that
such provisions will be binding upon each contractor and subcontractor for the benefit of
City, provided that the foregoing covenant shall not apply to contracts or subcontracts for
standard commercial supplies or raw materials.
14. ENVIRONMENTAL MATTERS
14.1 Representation and Warranty. Except as disclosed in writing to the
City including the environmental site assessments prepared on behalf of Developer and
delivered to the City, Developer has no knowledge (a) of the presence on, under or about
the Property, now or in the past, of any Hazardous Materials in violation of applicable
law, or of the transportation to or from the Property of any Hazardous Materials, (b) that
asbestos or polychlorinated biphenyls (PCBs) are contained in or stored on the Property,
or (c) that there are any underground storage tanks located in, on or under the Property.
14.2 Compliance with Environmental Laws. Developer shall (a) comply with
all environmental laws and environmental permits applicable to the Construction of the
Property, (b) immediately pay or cause to be paid all costs and expenses incurred by
reason of such compliance, (c) keep the Property free and clear of any environmental
claims or liens imposed pursuant to any environmental law, and (d) obtain and renew all
environmental permits required for ownership or use of the Property.
14.3 Presence of Hazardous Materials. Developer shall not, and shall not
permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous
Materials on the Property, or transport or permit the transportation of Hazardous
Materials to or from the Property except for de minimis quantities used at the Property in
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compliance with all applicable environmental laws and required in connection with the
routine construction, operation and maintenance of the Property.
14.4 Notice of Environmental Matters. Developer shall immediately advise
City in writing of any of the following: (a) any pending or threatened environmental
claim against Developer or the Property, (b) any condition or occurrence that (i) results in
noncompliance with any applicable environmental law, (ii) could reasonably be
anticipated to cause the Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of the Property under any environmental law, or (iii)
could reasonably be anticipated to form the basis of an environmental claim against the
Property or Developer.
14.5 Environmental Indemnification by the Developer. Developer agrees to
defend, indemnify and hold harmless the City and their respective officers, directors,
employees and agents (collectively the "Indemnitees ") from and against any and all
obligations (including removal and remediation), losses, claims (including third party
claims), suits, judgments, liabilities, penalties, damages (including consequential and
punitive damages), costs and expenses (including consultants, and attorneys' fees) of
whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or
asserted against the Indemnitees directly or indirectly based on, or arising or resulting
from the actual or alleged presence of Hazardous Materials on the Property other than
arising from the gross negligence, willful misconduct and/or illegal actions of any
Indemnitee.
15. OTHER AFFIRMATIVE COVENANTS
While any obligation of Developer under the City Loan Note or Deed of Trust
remain outstanding, the following provisions shall apply, except to the extent that
Executive Director otherwise consents in writing:
15.1 Existence, Developer's Managing General Partner shall maintain its
existence in good standing under the laws of the State of California, and
Developer shall provide documentation of such status annually to the City.
15.2 Protection of hien. Developer shall maintain the lien of the City
Deed of Trust as a valid second priority deed of trust on the Property and take all
actions, and execute and deliver to City all documents, reasonably required by
City from time to time in connection therewith.
15.3 Notice of Certain Matters. Developer shall give notice to City, within ten
(10) days of Developer's learning thereof, of each of the following:
(a) any filed litigation or claim affecting or relating to the
Property and involving an amount in excess of $5,000; and any litigation or claim that
might subject Developer or any general partner to liability in excess of $5,000, whether
covered by insurance or not;
M
(b) any material dispute between Developer and a
Governmental Authority relating to the Property, the
adverse determination of which might materially affect the
Property;
(c) any change in Developer's principal place of business;
(d) any aspect of the Improvements that is not in
substantial conformity with the plans or code;
(e) any Event of Default or event which, with the giving of
notice or the passage of time or both, would constitute an Event of Default;
(f) any material default by Developer or any other party under
any Senior Loan document, or the receipt by Developer of any notice of default under
any Senior Loan document;
(g) the creation or imposition of any mechanics' or
materialmans' lien or other lien against the Property which might materially affect the
Property; and/or
(h) any material adverse change in the financial condition of
Developer.
15.4 Further Assurances. Developer shall execute and acknowledge (or cause
to be executed and acknowledged) and deliver to City all documents, and take all actions,
reasonably required by City from time to time to confirm the rights created or now or
hereafter intended to be created under the Loan Documents; to protect and further the
validity, priority and enforceability of the City Deed of Trust; to subject to the Deed of
Trust any property intended by the terms of any Loan Document(s) to be covered by the
City Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the
transactions contemplated thereunder. Notwithstanding anything to the contrary set forth
herein, the Developer shall have no obligation to execute any document, or take any
action, which would (i) change a material term of any Loan Document, (ii) change or
impair any material right of Developer and/or (iii) increase the liability of Developer or
any partner thereof.
15.5 Annual Financial Statements. Developer shall deliver to City, within
one hundred twenty (120) days after the end of each Calendar Year following issuance of
a Certificate of Completion, (a) a certified public accountant reviewed balance sheet for
Developer as of the end of such Calendar Year and a certified public accountant reviewed
statement of profit and loss for Developer and for Developer's operations in connection
with the Property for such Calendar Year, together with all supporting schedules, (b) a
certificate of such certified public accountant that such documents were reviewed by such
certified public accountant in accordance with generally accepted accounting principles
and otherwise comply with generally accepted accounting principles review
requirements, and (c) a certificate of Developer's Managing General Partner that such
documents: (i) were prepared in accordance with generally accepted accounting
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principles applied on a consistent basis or in accordance with such other principles or
methods as are reasonably acceptable to City, (ii) fairly present Developer's financial
condition, (iii) show all material liabilities, direct and contingent, and (iv) fairly present
the results of Developer's operations. Developer shall also provide the City with any
other annual audit reports issued by other monitoring agencies upon written request.
15.6 Audits and Access to Records. Developer agrees that City, the U.S.
Department of Housing and Urban Development, the Comptroller General of the United
States or any of their authorized representatives shall have the right of access, upon
reasonable notice, to any books, documents, papers, or other records of Developer which
are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts
or transcripts. Developer will maintain all books and records pertaining to this Agreement
for a period of not less than five (5) years after all matters pertaining to this Agreement
(i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or
state laws, regulations or policies, and when a period of affordability or recapture applies
to Developer's activities, for a period of not less than five (5) years after the affordability
period ends.
16. OTHER NEGATIVE COVENANTS
While any obligation of Developer under the City Note or City Deed of Trust
remain outstanding, the following provisions shall apply, except to the extent that
Executive Director otherwise consents in writing:
16.1 Default on Senior Loan. Developer shall not default on any of the
Senior Loan documents, provided however, that Developer shall have such period as is
provided in the Senior Loan Documents during which to effectuate a cure.
16.2 Sale or Lease of Property. Unless and until Developer has received a
Certificate of Completion for the construction from City, Developer shall not sell, lease,
sublease or otherwise transfer all or any part of the Property or any interest therein
without the prior written consent of the Executive Director, which consent may be
withheld in the Executive Director's reasonable discretion. In connection with the
foregoing consent requirements, Developer acknowledges that City relied upon
Developer's particular expertise in entering into this Agreement and continues to rely on
such expertise to ensure the satisfactory completion of the construction.
Notwithstanding anything to the contrary contained herein, a "transfer" shall not
include (i) a transfer of any general partner's interest in Developer when made in
connection with the exercise by the Developer's limited partner (the "Limited Partner")
of its rights upon a default by a general partner under the Developer's Partnership
Agreement or upon a general partner's withdrawal in violation of the Partnership
Agreement, so long as the removal and substitution of the defaulting general partner is
made within thirty (30) days of such default or, if such removal and substitution cannot
reasonably be completed within thirty (30) days, so long as the Limited Partner
commences to take action to remove and substitute the general partner with a reasonable
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period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of
the Property to the managing general partner of Developer pursuant to the right of first
refusal or to the general partners of Developer pursuant to the purchase option, as
provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's
interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other
disposition of an interest in a limited partner of the Developer.
17, CERTIFICATE OF COMPLETION
Upon satisfactory completion of the construction and upon the request of
Developer, or at its own election, the City of Santa Ana shall issue a Certificate of
Completion. Such Certificate of Completion shall be, and shall so state, conclusive
determination of satisfactory completion of the construction.
If City declines to furnish a Certificate of Completion after written request from
Developer, the Executive Director shall, within thirty (30) days after receipt of the
request, provide Developer with a written statement of the reasons therefore. The
statement shall contain a description of the action Developer must take to obtain a
Certificate of Completion. If the reason therefore is that the Developer has not completed
a minor portion of the Construction, City may, in its sole and absolute discretion, issue
the Certificate of Completion upon the posting with City of a bond or other form of
security acceptable to the Executive Director in the amount of the fair value of the
uncompleted work.
A Certificate of Completion is not evidence of compliance with or satisfaction of
the Loan Documents or any obligation of Developer to any other party whatsoever,
including any holder of a mortgage or deed of trust. A Certificate of Completion is not
"notice of completion" referred to in Section 3093 of the California Civil Code.
18. INDEMNIFICATION
18.1 Nonliability of City. Developer acknowledges and agrees that:
(a) The relationship between Developer and City is and
shall remain solely that of borrower and lender, City neither undertakes nor assumes any
responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform
Developer of any matter in connection with the construction, including matters relating
to: (i) the performance of the construction work, (ii) architects, contractors,
subcontractors and materialmen, or the workmanship of or materials used by any of them,
or (iii) the progress of the construction; and Developer shall rely entirely on its own
judgment with respect to such matters and acknowledges that any review, inspection,
supervision, approval or information supplied to Developer by City in connection with
such matters is solely for the protection of City and that neither Developer nor any third
party is entitled to rely on it;
(b) Notwithstanding any other provision of any Loan Document: (i)
the City is not a partner, joint venture, alter -ego, manager, controlling person or other
business associate or participant of any kind of Developer and City does not intend to
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ever assume any such status; (ii) City's activities in connection with the Loan(s) shall not
be "outside the scope of the activities of a lender of money" within the meaning of
California Civil Code Section 3434, as modified or recodifred from time to time, and City
does not intend to ever assume any responsibility to any person for the quality or safety
of the Property; and (iii) City shall not be deemed responsible for or a participant in any
acts, omissions or decisions of Developer;
(c) City shall not be directly or indirectly liable or responsible for any
loss or injury of any kind to any person or property resulting from any construction on, or
occupancy or use of, the Property, whether arising from: (i) any defect in any building,
grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of
Developer or any of Developer's agents, employees, independent contractors, licensees
or invitees; or (iii) any accident on the Property or any fire or other casualty or hazard
thereon; and
(d) By accepting or approving anything required to be performed or
given to City under the Loan Documents, including any certificate, financial statement,
survey, appraisal or insurance policy, City shall not be deemed to have warranted or
represented the sufficiency or legal effect of the sante, and no such acceptance or
approval shall constitute a warranty or representation by City to anyone.
18.2 Indemnitv. Developer shall defend (by counsel reasonably satisfactory
to City), indemnify and save and hold harmless the Indemnitees from and against all
claims, damages, demands, actions, losses, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees and court costs) arising from or relating to
(i) a breach of this Agreement by Developer; (ii) the making of the Loan(s); (iii) a claim,
demand or cause of action that any person has or asserts against Developer; (iv) any act
or omission of Developer, any contractor, subcontractor or material supplier, engineer,
architect or other person with respect to the Property; or (vi) the ownership, occupancy or
use of the Property. Notwithstanding the foregoing, Developer shall not be obligated to
indemnify City with respect to the consequences of any act of illegal conduct, gross
negligence or willful misconduct of City. Developer's obligations under this Section shall
survive the cancellation of the City Loan Note, release and reconveyance of the City
Deed of Trust, issuance of the Certificate of Completion, and termination of this
Agreement.
18.2.1 Nothwithstanding the foregoing, neither Developer, nor any of its partners,
shall be personally liable for any indemnification obligation hereunder
which would result as the repayment of principal and/or interest under the
Loan.
18.3 Reimbursement of City. Developer shall reimburse City immediately
upon written demand for all costs reasonably incurred by City (including the reasonable
fees and expenses of attorneys, accountants, appraisers and other consultants, whether the
same are independent contractors or employees of City) in connection with the
enforcement of the Loan Documents and all related matters including all claims,
demands, causes of action, liabilities, losses, commissions and other costs against which
City is indemnified under the Loan Documents. Such reimbursement obligations shall
32
bear interest from the date occurring twenty (20) days after City gives written demand to
Developer and shall be secured by the City Deed of Trust. Such reimbursement
obligations shall survive the cancellation of the Loan Note, release and reconveyance of
the City Deed of Trust, issuance of a Certificate of Completion, and termination of this
Agreement
19. INSURANCE, CASUALTY AND CONDEMNATION
19.1 Policies Required. While any obligation of Developer under the Loan
Documents remains outstanding, Developer shall maintain at Developer's sole expense,
with insurers either (i) admitted in California or (ii) are not admitted to California but
have an A.M. Best Rating of "A" or above and reasonably approved by the City, the
following policies of insurance in form and substance reasonably satisfactory to the City
Attorney:
(a) worker's compensation insurance and any other insurance
required by law in connection with the construction;
(b) prior to commencement and following completion of the
construction, fire and hazard "all risk" insurance covering 100% of the replacement cost
of the Improvements 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 Property is located (including loss by flood if the Property is in an area
designated as subject to the danger of flood);
(c) upon commencement of the construction and at all
times prior to completion of the construction, builder's risk -all risk insurance covering
100% of the replacement cost of all Improvements (including offsite 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 Property is located (including loss by flood if the Property is in an area
designated as subject to the danger of flood);
(d) public liability insurance in the amount of $1,000,000 for "single
occurrence";
(e) property damage insurance in amounts reasonably
required by City from time to time, and in no event less than $1,000,000; and
(1) any other insurance reasonably required by City.
All such insurance shall provide that it may not be canceled or materially modified
without thirty (30) days (ten (10) days for nonpayment of premium) prior written notice
to City. The policies required under subparagraphs (b) and (c) shall include a "lender's
loss payable endorsement" in form and substance satisfactory to City, showing the City
as encumbrance. The City shall be named as an additional insured(s) in the policies
required under subparagraphs (d) and (e) with primary coverage. Certificates of insurance
for the above policies (and/or original policies, if required by City) shall be delivered
33
within ten (10) days after demand therefore, and prior to start of any construction work.
All policies insuring against damage to the Improvements shall contain an agreed value
clause sufficient to eliminate any risk of co-insurance. No less than ten (10) days prior to
the expiration of each policy, Developer shall deliver to City evidence of renewal or
replacement of such policy reasonably satisfactory to City Attorney.
19.2 RESERVED.
19.3 Claims and Proceedings. Developer shall give City
immediate notice of any material casualty to any portion of the Property, whether or not
covered by insurance, and of the initiation or threatened initiation of any proceeding for
the condemnation or other taking for public or quasi -public use of any portion of the
Property (collectively, "Condemnation"), and shall provide City with copies of all
documents which pertain to any such casualty or Condemnation. Developer shall take all
action reasonably required by City in connection therewith to protect the interests of
Developer and/or City, and City shall be entitled (without regard to the adequacy of its
security) to participate in any action, claim, adjustment or proceeding and to be
represented therein by counsel of its choice. Developer shall not settle, adjust, or
compromise any claim, action, adjustment or proceeding without prior written approval,
which approval shall not be unreasonably withheld or delayed.
19.4 Delivery of Proceeds to City. In the event that,
notwithstanding the "lender's loss payable endorsement" requirement set forth above, if
the proceeds from any casualty insurance is in excess of $500,000, Developer shall,
subject to any superior rights of the Senior Lender, deliver such proceeds to the City
immediately upon receipt.
19.5 Application of Casualty Insurance Proceeds. Subject to the
rights of the Senior Lender, any proceeds collected (the "Proceeds") under any casualty
insurance policy described in this Agreement shall be disbursed to Developer as provided
below, but only upon fulfillment of each of the following conditions (the "Restoration
Conditions") within ninety (90) days (unless extended by mutual agreement of Developer
and City) following the occurrence of the damage for which the Proceeds are collected:
(a) Developer shall demonstrate to City's reasonable
satisfaction that the Proceeds (together with amounts deposited by Developer pursuant to
subparagraph (b)) will be adequate to repair the Improvements and to restore the fair
market value of the Property, within two years (or such longer time period reasonably
determined by City), to at least the value it had immediately prior to sustaining the
damage. Such demonstration shall include delivery to City of (i) plans and specifications
reasonably satisfactory to City, and (ii) a construction contract in form and content, and
with a contractor, reasonably satisfactory to City.
(b) To the extent that the Proceeds are insufficient to
accomplish the restoration required above, Developer shall deliver to City (the "Shortfall
Funds") in the amount of such shortfall, which funds shall be assigned to City as security
for Developer's obligation hereunder and held and disbursed in the same manner as the
Proceeds.
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(c) Developer shall execute such documents as City reasonably
requires to evidence and secure Developer's obligation to use all amounts disbursed for
the diligent restoration of the Property.
(d) No Event of Default shall remain uncured.
19.6 Method of Disbursement and Undisbursed Funds.
Any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by City and
disbursed in accordance with then customary disbursement procedures and related
provisions. Any amounts remaining undisbursed following completion of such restoration
shall be returned to Developer up to the amount of any Shortfall Funds deposited by
Developer, and any other amounts remaining shall either be paid to Developer or applied
by City against any obligations to City that are secured by a lien on the Property, as they
elect in their sole and absolute discretion.
19.7 Failure to Satisfy Conditions. In the event that Developer
fails to fulfill the Restoration Conditions within ninety (90) days (unless extended
pursuant to Section 19.5) following the date on which the damage occurs, the Proceeds
shall be applied by City against any obligations to City that are secured by a lien on the
Property, and the selection of which such obligations to apply the Proceeds against shall
be made by City in their sole and absolute discretion, subject to the rights of the Senior
Lender.
19.8 Reserved.
19.9 Condemnation; Treatment of Compensation. Subject to any
superior rights of Senior Lender, Developer hereby assigns to the City, as security for all
obligations to City secured by a lien on the Property, all amounts payable to Developer in
connection with any Condemnation, and any proceeds of any related settlement
(collectively, "Compensation"). Subject to any superior rights of Senior Lender,
Developer shall deliver such remaining Compensation to City immediately upon receipt.
If the taking results in a loss of the Property to an extent that, in the reasonable opinion of
City, renders or is likely to render the Property not economically viable or if, in City's
reasonable judgment Developer's security is otherwise impaired, City may apply the
Compensation received due to judgment or settlement in connection with any
condemnation or other taking to reduce the unpaid obligations secured in such order as
City may determine, and without any adjustment in the amount or due dates of payments
due under the Note. If so applied, any award in excess of the unpaid balance of the Note
and other sums due to City shall be paid to Developer or Developer's assignee. City shall
have no obligation to take any action in connection with any actual or threatened
condemnation or other proceeding.
19.9.1 Notwithstanding the foregoing, as long as the value of
City's liens are not impaired, any condemnation proceeds may be used by the Borrower
for repair and/or restoration of the Project.
19.10 Waiver of Subrogation. Developer hereby waives all rights to
35
recover against the City (or any officer, employee, agent or representative of the City) for
any loss incurred by Developer from any cause insured against or required by any Loan
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.
20. DEFAULTS AND REMEDIES
20.1 Events of Default. The occurrence of any of the following, whatever the
reason therefore, shall constitute an Event of Default by Developer:
(a) Developer fails to make any payment of principal or
interest under the City Loan Note when due, and such failure is not cured within fifteen
(15) Business Days after Developer's receipt of written notice that such payment was not
received when due;
(b) Developer fails to perform any other obligation for the
payment of money under any Loan Document, and such failure is not cured within fifteen
(15) Business Days after Developer's receipt of written notice that such obligation was
not performed when due;
(c) Developer fails to perform any obligation (other than the
obligations described in subparagraphs (a) and (b) above) under any Loan Document, and
such failure is not cured within thirty (30) days after Developer's receipt of written notice
that such obligation was not performed; provided that, if cure cannot reasonably be
effected within such thirty (30) -day period, such failure shall not be an Event of Default
so long as Developer (in any event, within ten (10) days after receipt of such notice)
commences to cure, and thereafter diligently (in any event within ninety (90) days after
receipt of such notice) prosecutes such cure to completion;
(d) Any representation or warranty in any Loan Document proves to
have been incorrect in any material respect when made;
(e) Reserved;
(f) Work on the construction ceases for ninety (90) consecutive days
for any reason (other than governmental orders, decrees or regulations,
acts of God or any other deity, strikes or other causes beyond Developer's
reasonable control), provided that the same do not, in the aggregate and in
the City's reasonable judgment, threaten to delay the completion of the
construction beyond the required completion date set forth in this
Agreement;
(g) Developer is enjoined or otherwise prohibited by any
Governmental Authority from constructing and/or occupying the improvements and such
injunction or prohibition continues unstayed for ninety (90) days or more for any reason;
36
(h) Developer is dissolved, liquidated or terminated, or all or
substantially all of the assets of Developer are sold or otherwise transferred without the
Executive Director's prior written consent; or
(i) Developer is the subject of an order for relief by a bankruptcy
court, or is unable or admits its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors; or Developer applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or any part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of Developer and the appointment continues undischarged or
unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part
of its property; or any similar proceeding is instituted without the consent of Developer
and continues undismissed or unstayed for ninety (90) days; or any judgment, writ,
warrant of attachment or execution, or similar process is issued or levied against any
property of Developer and is not released, vacated or fully bonded within ninety (90)
days after its issue or levy.
(j) Any of the Senior Loan documents is amended, supplemented or
otherwise modified without City's prior written consent, which
consent shall not be unreasonably withheld, to the extent the City's
consent is required pursuant to any subordination agreement
between the City and the Senior Lender.
20.2 Remedies Upon Default. Upon the occurrence and during the
continuance of any Event of Default, City may, at its option and in its absolute discretion,
do any or all of the following:
(a) By written notice to Developer, declare the principal of all
amounts owing under the Loan Documents, together with all accrued interest and other
amounts owing in connection therewith, to be immediately due and payable, regardless of
any other specified due date; provided that any Event of Default described in Section
20.1 shall automatically, without notice or other action on City's part, cause all such
amounts to be immediately due and payable;
(b) In its own right or by a court-appointed receiver, take
possession of the Property, enter into contracts for and otherwise proceed with the
completion of the construction by expenditure of its own funds;
(c) Exercise any of its rights under the Loan Documents and any rights
provided by law, including, without limitation, the right to seek specific performance and
the right to foreclose on any security and exercise any other rights with respect to any
security, all in such order and manner as City elects in its sole and absolute discretion;
and,
(d) Suspend or terminate the award of HOME funds if Developer fails
37
to comply with any term of that award.
20.3 Cumulative Remedies: No Waiver. City's rights and remedies under the
Loan Documents are cumulative and in addition to all rights and remedies provided by
law. The exercise by City of any right or remedy shall not constitute a cure or waiver of
any default, nor invalidate any notice of default or any act done pursuant to any such
notice, nor prejudice the City in the exercise of any other right or remedy. No waiver of
any default shall be implied from any omission by City to take action on account of such
default if such default persists or is repeated. No waiver of any default shall affect any
default other than the default expressly waived, and any such waiver shall be operative
only for the time and to the extent stated. No waiver of any provision of any Loan
Document shall be construed as a waiver of any subsequent breach of the same provision.
City's consent to or approval of any act by Developer requiring further consent or
approval shall not be deemed to waive or render unnecessary City's consent to or
approval of any subsequent act. The City's acceptance of the late performance of any
obligation shall not constitute a waiver by City of the right to require prompt performance
of all further obligations; City's acceptance of any performance following the sending or
filing of any notice of default shall not constitute a waiver of either party's right to
proceed with the exercise of its remedies for any unfulfilled obligations; and City's
acceptance of any partial performance shall not constitute a waiver by City of any rights.
20.4 Nonrecourse Liability. Neither Developer, nor any partner of Developer,
shall have any personal liability under this Agreement, or the attached Note and Deed of
Trust, and any judgment, decree or order for the payment of money obtained in any action to
enforce the obligation of Developer to repay the loan evidenced by such documents shall be
enforceable against Developer only to the extent of Developer's interest in the Property.
21. MISCELLANEOUS
21.1 Obligations Unconditional and Independent. Notwithstanding the
existence at any time of any obligation or liability of City to Developer, or any other
claim by developer against City, in connection with the Loan 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 the Loan Documents, 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 Loan Documents.
21.2 Notices. All notices, demands, approvals and other communications
provided for in the Loan Documents shall be in writing and be delivered to the
appropriate party by personal service or U.S. mail at its address as follows:
If to Developer: Santa Ana Village LP
c/o Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Attn: President
If to City: City of Santa Ana
IN
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P.O. Box 1988
Santa Ana, California 92702
With a copy to: City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
Addresses for notice may be changed as required by written notice to all other parties.
All notices personally served shall be effective when actually received. All notices
mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid.
The foregoing notwithstanding, the non -receipt of any notice 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 notice.
21.3 Survival of Renresentations and Warranties. All representations and
warranties in the Loan Documents shall survive the making of the Loan described herein
and have been or will be relied on by City notwithstanding any investigation made by
either party.
21.4 No Third Parties Benefited. This Agreement is made for the purpose of
setting forth rights and obligations of Developer and the City, and no other person shall
have any rights hereunder or by reason hereof.
21.5 Binding Effect; Assignment of Obligations. This Agreement shall bind,
and shall inure to the benefit of, Developer and City and their respective successors and
assigns. [Redundant of Section 16.21
21.6 Prior Agreements; Amendments; Consents. This Agreement (together
with the other Loan Documents) contains the entire agreement between the City and
Developer with respect to the Loan and the Property, and all prior negotiations,
understandings and agreements are superseded by this Agreement and such other Loan
Documents. No modification of any Loan 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.
21.7 Governing Law. All of the Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of California and
Federal law, whichever is more stringent. 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 City
may deem appropriate, in connection with any legal action or proceeding arising out of or
relating to this Agreement or the Loan Documents. Assuming proper service of process,
Developer also waives any objection regarding personal or in rem jurisdiction or venue.
39
21.8 Severability of Provisions. No provision of any Loan Document that is
held to be unenforceable or invalid shall affect the remaining provisions, and to this end
all provisions of the Loan Documents are hereby declared to be severable.
21.9 Headings. Article and section headings are included in the Loan
Documents for convenience of reference only and shall not be used in construing the
Loan Documents.
21.10 Conflicts. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, this Agreement, unless otherwise
expressly provided, 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.
21.11 Time of the Essence. Time is of the essence under this Agreement and in
the performance of every term, covenant, and obligation contained herein.
21.12 Conflict of Interest. No member, official or employee of the City shall
have any direct or indirect interest in this Agreement, nor participate in any decision
relating to the Agreement which is prohibited by law.
21.13 Warranty Against Payment of Consideration. Developer warrants 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.
21.14 Nonliability of City Officials and Employees. No member, official or
employee of City shall be personally liable to Developer, or any successor in interest, in
the event of any default or breach by City or for any amount which may become due to
Developer or successor, or on any obligation under the terms of this Agreement.
21.15 Plans and Data. As additional collateral for the Loan, Developer hereby
grants to the City a security interest in all plans and data concerning the Property,
subject to the rights of any Senior Lender. Such right of City shall be subject to
any right of the preparer of the plans to their use.
21.16 Authority to Enter Agreement. Each undersigned represents and warrants
that its signature hereinbelow has the power, authority and right to bind their respective
parties to each of the terms of this Agreement, and shall indemnify the City fully, including
reasonable costs and attorney's fees, for any injuries or damages to City in the event that
such authority or power is not, in fact, held by the signatory or is withdrawn.
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the date set forth at the beginning of this Agreement.
DEVELOPER
SANTA ANA VILLAGE LP,
a California limited partnership
By: JHC-Santa Ana Village LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public ben fit corporation,
Manager 1
By: /ri/I✓ p
Name: 41 L 0 d tL.4SC5 / U
Title: 3 L '/l D /L V 1 C f LS Tri 6 W
41
ATTEST:
CITY OF SANTA ANA
Maria D. Huizar Raul Godinez II
Clerk of the Council City Manager
Dated: ��y�' 'lei Dated: 17 rj-�?.�bjt
APPROVED AS TO FORM:
SONIA R. C,,kIYVALIJO, City Attorney
52
Assist��jt City Attorney
Dated: v 1,11l9i
RECOMMENDED FOR APPROVAL:
Steven A. Mendoza
Executive Director
Community Development Agency
42
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document, to which this certificate
is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange )
On September 13. 2018 before me, Rosa A. Flores Notary Public
(insert name and title of the officer)
personally appeared Raul Godinez II, who proved tome on the basis of satisfactory evidence to
be the personal whose name.s`S is -fare subscribed to the within instrument and acknowledged tome
that he/s� executed the same in his/tTarfth2ir authorized capacity(iiasr, and that by his/treT/th-etr
signature(s-) on the instrument the person( , or the entity upon behalf of which the personW 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.
ROSA A. FLORES
s; �`, Notary Public — California
w�.: Orange County
Commission * 2228450
My Comm. Expires Feb 7, 2022
Signature (Seal)
EXHIBITS
A. Legal Description
B. Scope of Work
C. Project Budget
D. City/HOME Loan Deed of Trust
E. City/HOME Loan Note
F. Affordability Restrictions on Transfer of Property
43
Exhibit Ae. Legal
Description
Form No. 1068-2
ALTA Plain Language Commitment
1.
2.
3.
0
SCHEDULEA
Commitment Date: January 30, 2018 at 7:30 A.M.
Policy or Policies to be issued:
(A) ALTA Owner's Policy
To Be Determined
Proposed Insured:
To Be Determined
(B) ALTA Loan Policy
ALTA Extended Loan Policy
Proposed Insured:
To Be Determined
Commitment No.: NCS -824396 -A -SAI
Page Number:4
(A) The estate or interest in the land described in this Commitment is:
Fee
(B) Title to said estate or interest at the date hereof is vested in:
Santa Ana Village LP, a California Limited Partnership
FIT, 1707l'i i
$To Be Determined
$To Be Determined
The land referred to In this Commitment is situated in the City of Santa Ana, County of
Orange, State of California, and is described as follows:
PARCEL "B" AS SHOWN ON LOT LINE OF ADJUSTMENT NO. 91-01, AS EVIDENCED BY
DOCUMENT RECORDED JUNE 17, 1991 AS INSTRUMENT NO. 91-306696 OF OFFICIAL
RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEING ALL OF PARCEL 1 OF PARCEL MAP FILED IN BOOK 80, PAGES 32 AND 33 OF PARCEL
MAPS, RECORDS OF SAID ORANGE COUNTY, IN THE CITY OF SANTA ANA, COUNTY OF
ORANGE, STATE OF CALIFORNIA, TOGETHER WITH A PORTION OF SAID LOT "I" OF TRACT NO,
13804, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHERLY TERMINUS OF THAT CERTAIN COURSE IN THE WESTERLY
LINE OF SAID LOT "I" SHOWN AS "N 0038'52" W 102.24"' ON SAID MAP; THENCE NORTH 890
21' 08" EAST 8.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 890 21' 08" EAST
6.00 FEET; THENCE SOUTH 00 38' 52" EAST 25.42 FEET TO THE BEGINNING OF A TANGENT
CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 61.00 FEET; THENCE
SOUTHEASTERLY ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 21° 02'22'- AN ARC
LENGTH OF 22.40 FEETTO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY
AND HAVING A RADIUS OF 59.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE, FROM AN
INITIAL RADIAL LINE WHICH BEARS NORTH 68° 18'46" EAST, THROUGH A CENTRAL ANGLE
OF 210 02' 22" AN ARC LENGTH OF 21.67 FEET; THENCE SOUTH 0° 38' 52" EAST 40.58 FEET TO
THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF
110.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF
Form No, 1468-2
ALTA Plain Language Commitment
Commitment No.: NCS -824396 -A -SAI
Page Number: 5
190 14'30" AN ARC LENGTH OF 36.94 FEET TO THE BEGINNING OF A COMPOUND CURVE
CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 50.00 FEET; THENCE SOUTHEASTERLY
ALONG SAID CURVE, FROM AN INITIAL RADIAL LINE WHICH BEARS SOUTH 70° 06 38"' WEST,
THROUGH A CENTRAL ANGLE OF 240 54'33" AN ARC LENGTH OF 21.74 FEET TO THE
BEGINNING OF A COMPOUND CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF
110.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE, FROM AN INITIAL RADIAL LINE
WHICH BEARS SOUTH 450 12'05" WEST, THROUGH A CENTRAL ANGLE OF 220 02'0911 AN ARC
LENGTH OF 42.31 FEET TO A POINT IN THAT CERTAIN COURSE IN THE EASTERLY LINE OF
SAID LOT "I" SHOWN AS "NORTH 00 40' 13" WEST 132.34"' ON SAID MAP; SAID POINT LYING
7.00 FEET NORTHERLY ALONG SAID COURSE, FROM ITS SOUTHERLY TERMINUS; THENCE
SOUTH 00 40' 13" EAST 7.00 FEET TO SAID SOUTHERLY TERMINUS, THENCE ALONG THE
SOUTHERLY, EASTERLY AND NORTHERLY LINES OF SAID PARCEL 1 THE FOLLOWING
COURSES: NORTH 890 32' 17" EAST 268.75 FEET; NORTH 00 3548" WEST 211.42 FEET;
SOUTH 890 33'30" WEST 317.87 FEET; AND WESTERLY AND SOUTHWESTERLY ALONG A
CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 17,00 FEET, THROUGH A
CENTRAL ANGLE OF 900 12' 22" AN ARC LENGTH OF 26.76 FEET TO THE TRUE POINT OF
BEGINNING.
EXCEPT ALL OIL, GAS AND OTHER HYDROCARBONS AND MINERALS NOW AND HEREAFTER IN,
ON AND UNDER THAT PART OF SAID LAND BUT WITHOUT ANY RIGHT OF ENTRY UPON SAID
LAND OR WITHIN SAID TOP 500 FEET THEREOF FOR ANY PURPOSES WHATSOEVER, AS
RESERVED BY THE ROMAN CATHOLIC ARCHBISHOP OF LOS ANGELES, A CORPORATION SOLE,
IN THE DEED RECORDED MAY 28, 1976 IN BOOK 11753, PAGE 849 OF OFFICIAL RECORDS.
EXCEPTING THEREFROM ALL OIL, GAS AND OTHER HYDROCARBONS AND MINERALS NOW AND
HEREAFTER IN, ON AND UNDER THAT PART OF SAID LAND BUT WITHOUT ANY RIGHT OF
ENTRY UPON SAID LAND OR WITHIN SAID TOP 500 FEET THEREOF FOR ANY PURPOSES
WHATSOEVER, AS RESERVED IN A DEED RECORDED MAY 28, 1975 IN BOOK 11754, PAGE 935
OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ALL OIL, MINERAL, GAS AND OTHER HYDROCARBON
SUBSTANCES BELOW A DEPTH OF 500 FEET UNDER SAID LAND, WITHOUT RIGHT OF SURFACE
ENTRY, AS RESERVED BY D&D DEVELOPMENT COMPANY, A CALIFORNIA CORPORATION, IN
DEED RECORDED JULY 10, 1991 AS INSTRUMENT NO. 91-356825 OF OFFICIAL RECORDS.
APN: 144-341-07 (Affects: Portion of said land) and 144-551-51 (Affects: Portion of said land)
Exhibit Be.
SCOPE OF WORK & SCHEDULE OF PERFORMANCE
I. SCOPE OF DEVELOPMENT:
The property address of the site subject to this agreement is 3312 W. First Street, at the intersection
of Jackson Street and 1st Street, in the Harbor Mixed Use Transit Corridor Specific Plan. The
development site consists of two parcels held as one, of 66,994 square feet total (or 1.5 acres). The
development site is currently vacant.
The development is a seventy-six (76) unit affordable housing development. A mix of seventy-one
(71) 1 -bedroom, and five (5) 2 -bedroom will be spread throughout the new construction building.
The building height is (3) stories. Surface parking will be striped for 30 parking spaces. Parking will
be accessed via the North-east side of the property off First Street.
The overall height, set -back and parking restrictions for the project is consistent with the fabric of
the surrounding neighborhood. The design of Santa Ana Veterans Village will reflect a contemporary
interpretation of Spanish revival architecture. The project will have characteristic stucco walls,
colorful tile accents, arches, and ornamental metalwork. The red s- tile mansard roof will provide a
flat surface to hide HVAC equipment and racks for the solar hot water and PV energy generation.
Santa Ana Veterans Village is designed to serve the needs of homeless veterans. The project will
have approximately 6,717 square feet of service/amenity space. Residents will have the unique
opportunity to receive on-site services and programing that are designed to be responsive to the
specific needs of each individual resident. Individual counseling offices, group counseling room, and
a multipurpose conference rooms will be used to provide residents with counseling and medical
services that address mental health and substance abuse issues as well as therapeutic services. The
four individual offices and four individual counseling offices are all approximately 135 square feet.
Additionally, veterans will receive counseling/courses on daily living skills that includes budgeting,
cooking, grocery shopping, paying rent on time and how to be a good neighbor/tenant. Other
dedicated service/amenity space for residents includes the following: a computer lab, lounge space,
fitness room, exterior recreational space that includes BBQ area with picnic tables, sport court,
reflection area, fire pit / lounge seating area, and bike storage area. The building will have a common
laundry facility with 8 washer/dryers.
II. SCHEDULE OF PERFORMANCE:
I_RN1101"IMAI
1. Insurance. Developer shall furnish or cause to be furnished As a Condition Precedent to disbursement of
appropriate certificates of insurance and/or endorsements to any portion of the loan, but no later than ten
City which meet all requirements of the Agreement days after close of escrow.
B. PROJECT FINANCING
Receipt of All Funding Commitments Necessary to Complete Not later than thirty (30) days
Construction of the Improvements. Developer shall use its best before Construction Close.
and good faith efforts to secure irrevocable funding
commitments from TCAC, Senior Lender, and other available
funding sources which when combined with the Loans shall
equal no less than the total cost to construct the Improvements,
as set forth in the approved Project Budget. Developer shall
submit such commitments to City for review.
2. Approval of Developer's Evidence of Financing. City must Not later than twenty (20)
approve Developer' s evidence of financing as required by business days after receipt of a
the Agreement, complete submittal from
Developer
C. CONSTRUCTION OF IMPROVEMENTS
1. Management Plan. Developer shall submit its proposed No later than (30) business days
Management Plan to City for review and approval. before construction close,
2. Approval of Management Plan. City shall review and approve, Within fourteen (14) days of
approve with conditions, or disapprove the Management Plan. receipt of submittal from
Developer.
3. Revision to Management Plan. Developer shall revise Within fourteen (14) days of
Management Plan if conditionally approved or disapproved by receipt of disapproved
City. Management Plan from City.
4. Approval of Revised Management Plan. City shall review and Within fourteen (14) days of
approve, approve with conditions, or disapprove revised receipt of a complete submittal
Management Plan. of revised Management Plan
from Developer, but not later
than 120 days prior to project
completion.
5. Commencement of Construction of the Improvements. No later than January 1, 2019
Developer shall cause the Construction of the Improvements to
be commenced by Contractor.
6. Completion of Construction of the Improvements. Developer On or before November 1, 2020 (subject to
shall complete all work of the Construction of the extension by City based upon substantial
Improvements. progress toward completion of construction by
Developer).
7. Release of Construction Covenants. City to furnish Developer Within thirty (30) days of
with a Release of Construction Covenants. receipt of Developer request
and only after Developer's
satisfactory completion of the
Construction of the
Improvements.
The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing
between Developer and the City Manager or his/her designee ("City Manager"), and City Manager is
authorized on behalf of City to agree to make such revisions as he deems reasonably necessary. The
City Manager, in his/her sole discretion, may elect to bring to the City Council for consideration and
action any modifications to this Schedule of Performance. It is understood that the Schedule of
Performance is subject to all of the telms and conditions set forth in the text of the Agreement. The
summary of the items of perfolmance in the Schedule of Performance is not intended to supersede or
modify the more complete description in the text of the Agreement; in the event of any inconsistency
between the Schedule of Performance and the text of the Agreement, the text shall govern. In the event
the City Manager deems it necessary to bring to City Council for consideration one or more
modifications to this Schedule of Performance, the discretion to do so is expressly reserved to the City
Manager. The time periods set follh herein for City approval of plans and drawings and other
submittals that are submitted to City by Developer shall only apply and commence upon Developer' s
complete submittal of all the required information. In no event shall an incomplete submittal by
Developer trigger any City obligations of review and/or approval hereunder; provided, however, that
City shall notify Developer of an incomplete submittal as soon as is practicable and in no event later
than the applicable time set forth for City action on the particular item in question. If any of the
foregoing performance measurements are not met then it will be deemed a default as defined in Section
20 and any remedies shall be cured according to said Section of the Agreement.
Exhibit Co.
Santa Ana Arts CollectiVe PEDlect BNtlpet
CONSTRUCTION
Imo'' 1
mvmms=
Im�iO®""®'
�,RGHItELiVRA�
�
®®
®■®®®®®®®®®®®®
'SURVEYS ENGINEERING
C41NiINf+ENCY COSTS
CONSTRUCTION PERIOU
EXPENSES
PERMANENT PRANCING E%PENSES
��-
��II�II���I�S9�®'
1£GPE[EE9
ONO=�������
CPPIPMZED RESERVES
pEPORi585rVOIES
OTHEROTHER
DEVELOPER
Santa Ana Veterans Village ("SAW")
Sources & Uses City of Santa Ana
Initial Preforms
02/15/1 7
NEW OR
ELIGIBLE
ELIGIBLE
NOTTOTAL
USES OF
eTAL
ACQUISITION
REHAB COSTHISTORIC
Land at $2,404,372 Per Acre or $55.20 Per SF
4,400,000
0
0
0
0
4,400,000
57,895
Existing Structure
0
0
0
0
0
0
0
Other Acquisition Costs
0
0
0
0
0
0
0
Hard Cost Residential 14,888,155 195,897
12,975,000
0
12,975,000
0
12,975,000
0
170,724
Site Improvements
971,749
0
971,749
0
971,749
0
12,786
General Conditions, Profit & Overhead 5.00%
697,337
0
697,337
0
697,337
0
9,175
GC Bond/Insurance/ Letter of Credit 1.75%
244,068
0
244,068
0
244,068
0
3,211
Hard Cost Contingency 11.00%
1,637,730
0
1,637,730
0
1,637,730
0
21,549
Construction Interest (3.62%) at Perm. Rate+ -2( 3.62%
974,315
0
423,996
0
423,996
550,319
12,820
Bridge Interest al 10.00%
5,753
0
0
0
0
5,753
76
Construction Loan Fees
149,500
0
149,500
0
149,500
0
1,967
Permanent Loan Fees
118,425
0
0
0
0
118,425
1,558
Bridge Loan Fees
37
0
37
0
37
0
0
4% Related Costs / Cost of Issuance
0
0
0
0
0
0
0
Accounting & Audit
35,000
0
35,000
0
35,000
0
461
Appraisal/Market Study
15,000
0
15,000
0
15,000
0
197
Architecture (Architect, Landscape Architect)
750,000
0
750,000
0
750,000
0
9,868
Civil Engineering
150,000
0
150,000
0
150,000
0
1,974
Construction Manager
0
0
0
0
0
0
0
Consultants (CM, Geo, LEEO, Utilities, exc.)
340,000
0
340,000
0
340,000
0
4,474
Environmental (EIR, Phase I, Asbestos, exc.)
50,000
0
50,000
0
50,000
0
658
Financial Adviser/Syndication Consultant
0
0
0
0
0
0
0
Furnishings
439,400
0
439,400
0
439,400
0
5,782
Impact Fees
911,633
0
911.633
0
911,633
0
11,995
Lease -up& Marketing Expenses
110,000
0
0
0
0
110,000
1,447
Legal
190,000
0
145,000
0
145,000
45,000
2,500
MHSA Construction Period Fees
0
0
0
0
0
0
0
Operating & Debt Service Reserve (-ma's I debt)
303,074
0
0
0
0
303,074
3,988
Other (Admin, Repro. & Relmb.)
15,000
0
15,000
0
15,000
0
197
Other (Bank Inspections)
25,000
0
25,000
0
25,000
0
329
SNHP Local Application Fee
29,120
0
29,120
0
29,120
0
383
Bridge Loan Costs
314,000
0
0
0
0
314,000
4,132
Permit Fees
281,200
0
281,200
0
281,200
0
3,700
Property Taxes and Insurance
217,500
0
187,500
0
187,500
30,000
2,862
PV - solar hot water + rooftop solar
300,000
0
300,000
0
300,000
0
3,947
Replacement Reserve
0
0
0
0
0
0
0
Soft Cost Contingency 7.50%
325,645
0
325,645
0
325,645
0
4,285
Tax Credit Fees (App., Man., & Res.)
135,000
0
2,000
0
2,000
133,000
1,776
Title & Recording
45,000
0
32,250
0
32,250
12,750
592
Developer Overhead
0
0
0
0
0
0
0
Devel0 er Fee
TOTAL
2,200,0001
0
1400000
Ll
1 400 MLI
800,000
28,947
Lanae,
Eon(Vuellon Loan
Prindpal Amount
Esusel
Cone4ucllon Loan Into ..t Rale
.6103%
Bridge Loan Nlereal Rate
10.00%
Interest on Surplus Funds - GIC Ran, Tax£xampl Bonds
O,W%
Format, Format (Up Front Aa Needed, or Forced)
AS Needed
Avg. Retelnagc%
10..%
Construction I Ridge Loan Odglnelbn Fe"
,Ill.
Lender
perm mnl4ogM1._
RTin YES 1NO
".
Loan Cash, Load(NINTR)Aug-YO
To Gaining Lend (MMPYN))_
Jando
Subsidy Income After vacancy
Prlwlpol Amount (Recopied)
I>„ 0Ol
Pmsenl Debt Sarvlw
514363
Final Amount Fill
.."I
Max Pent Bervke
clea34
Amornaatlon(Monnis)
000
DELTA
362
Inlereal Role
6.63%
Inclutle in Mlnlmum Gain
YES
DGR
1.15'
Term (McnNs)
880.
Loan OAglnaOon Fee %n
'u.Ts%
OCR
6.15
SaMdnq Fee Raw
0
Loan Grlelnauan Fee %:„,
Senldng Fee (Fred or OO)
FIXED
round In Minimum Gain
YES
Accrm Indent (YES or Pint
YES
Lenmr
Owrllanayomill:
RTin YES 1NO
".
YEP
To Gaining Lend (MMPYN))_
Jando
Subsidy Income After vacancy
Loan Clodng Oaw(oll
LO61.418
Princlpal Amoum(RequesW)
,. -. -P-
Mex Oabt 9ervko
a'.
.401361
Prlaalpel Amount EllAlbw
9,748.173
DELTA
Amortize P,lnclpal(YES or NO)
iN.064
Amomists,(Mcivirl
-. iep'.
Inclutle in Mlnlmum Gain
YES
Amom.scm(Mca1M1e)
Imareel Rele
Term (McnNs)
880.
Loan Close B Ind Ended?
YES
OCR
6.15
Lentler
County MRSA
Loan Grlelnauan Fee %:„,
0115%
§:
Su Fee Rate
log
P..%
Accrm Indent (YES or Pint
YES
PrincipalRate
Servlcln0 Fee(FlXed or OB)
FIXED
SIMPLE
Inbmsl Raw
_
Include In Minimum Gain
YES
Pmcentof Available GaeM1 Flcw
al
50.00%1
Include 1, Mlnlmum Gain
Lender
flied psisalor(ggge (SI
0
Term (MonNn)
0601
Loan Gloeng far (NMI)
Jim off
Present Oabl serums
D
Prlrclpal Ano—l(Requeskd)
0
Mex Cebl9arvlm
Oistmbason Leval
252
PNwipal Amount E1101ble
2,.
DELTA
Ayr -A)
252
Amortlaatlon(Mantllal
120”
Interest Ran,
T"I
DCft
Y,15
Leen Or191ne0cn Fee yr:
1.W%
Servlcing Fee Raw
O.Oc%
Servlcing Fee (Plead or RE)
FIXED
Inclutle In MlMmum Can
YES
Leader
Acamel Mortgage
ELI or Compounded
COMPOUNDED
Loan Cin MA Rod n.MM'I
Jan -0c
All Princlpal(YES or NO)
NO
Principal Amounl(Remested)
0
Include In Minimum Gain
YES
Interest Raw
de.%
Pay Rate
0.00%
Loan Ori9ina0an Fee %',
400%
Laid.,
vmlabla Musical Mort0a0e
Aral Princlpal(YES or NO)
NO
Laen Rican, Door PMMI
Jan00
Include In Mlnlmum Onto
YES
Prindpal Amount
0
Amanlaallon(McnlM1e)
InitJal Incest Rale
0.00%
Servlcing Fee Rate
DAO%
ServldnA FeaPlead ar OB)
FIXED
IndIda In Minimum Gain
YES
Lentler
CASfIF4GW NQRiGAGE (1
Olstrlbutlan Leval
4
Loan Clodng Oaw(oll
JarrO3
Accrue lnwraet(YES or NOI
YES
Principal Amount
a'.
Simple or Compounded
SIMPLE
InlarasI Rate
3.0ry.6
Amortize P,lnclpal(YES or NO)
YES
Par cell of Availada Cash Flaw
"I
Inclutle in Mlnlmum Gain
YES
Amom.scm(Mca1M1e)
D
Term (McnNs)
880.
Loan Close B Ind Ended?
YES
Lender
Do dommalag p>snaanan
Distribution Levd
_ §.
Loan Closing Mans PANI
Arm Cm
Accmelntered(YEN or NO)
YES
Pdnclpel Amount
1,YW,WO
Slmplear Compcundea
SIMPLE
lentil Rola
J.W%
Amord. or LYES or NO)
NO
Percent of Avalleble Geon Flow
"I
Include In Minimum Gain
YES
Amonlm6on(M.4o)
0
Term (Monte)
880.
Loan CloaW B Into Enwred9
YES
Lentler
County MRSA
Dwmbnbcn Level
§:
Loan Cil Data (MINI
Apr -.b
Accrm Indent (YES or Pint
YES
PrincipalRate
_
Y.51Q
Compounded
SIMPLE
Inbmsl Raw
_
Formula, Principal
Amortize Prindpal (YES or NO)
l(YES
NO
Pmcentof Available GaeM1 Flcw
al
50.00%1
Include 1, Mlnlmum Gain
YES
F)
Amn.1...
0
Term (MonNn)
0601
In.
Loan CloaW Blnlo Formed?
YES
Lentler
Glf'f 08.114 An., CR00 Loan
Oistmbason Leval
}".
Loan Closing Cars MIN )
Ayr -A)
Accrve Interco((YES ar NO)
YES
.13
2010
.is
.to
.is
.to
on.
2020
cm.
tam
zO20
Principal Al l Blmple cr FmM.Nnrletl SIMPLE
Inlereel Ra. 1.0% Amortlae PflncIPal(YES or NO) NO
Percent of Avellebla ..or Flow 60.00$Include In Mlnlmum Coln YES
A nada.don(Com e) 0 Term(Momb.) Oao
Login Clceetl Rink Entered? YES
DEVELOPER FEE PAYMENT SCHEDULE
ILE
III
Lander
oapo:d O:velopufF ..
1,549,901 Caah ProOt
1,264,874
Olelrloutlon L ... I
1
650,099 -. 850099 650099 Deferred PmOt
0
Loan C1.1np Oab(MM(Y)
D—.
Accrue rental (YES or NO)
YES
Inlereel Rale
0.00%
Simple or Compounded
COMPOUNDED
Percent or Availabb Qch Flow
1WW%
Amcrdze Prindpel(YES or NO)
YR.
Anam.don(.,Tp)
p
Include In Mlnlmum Coln
NO
Loon Cloned A Into Eirbsu R
YES
Roundlrq Fecbr
0,00%
ICAC DEVELOPER FEE CALCULATION
Max Pobnllel TCAC Fee (Pon Un i6) M 2$oO,WO
Max Potential TCAC Feel (Par Badal 3, I NOFS
Md.0—Icpar Pa. For 3% 2,2.1000
Mi. lnal101Me Developer Pa. 5.,.0
Point r,..A,. and or Yr lS-Current Assume at'. 2.5%12 0
Remaining Balance and of Yr 16 Laing 3%I3% 0
Dr1dg. Lcen Aller Ccnver.lcn 220,50]
Total Current Uses 29, 355,4O7
Amount to Add Subtract to Total Use* 0
TOTAL OESI RED USES 2$355:48' 1 2,355487.
Mex Available Annual Federal Credits
2,630,300
1,549,901 Caah ProOt
1,264,874
DEFERRED FEE PRINCIPAL AMOUNT
6,759,950
R
650,099 -. 850099 650099 Deferred PmOt
0
LIHTC Tlming Adlualar
0
2,200,000 TOTAL PROFIT
0
Stole Credit Adluabr
0
Leas Atlu.ler
0
For.""
12,900,425
stele
Cretllt Price
I'm
Cretllt Price
0]0-
Rounding Factor
R00%
Roundlrq Fecbr
0,00%
LP&CITY Inlereel
go.%
LP S SLP Interact'.
99.00%
Ep UITYAMOUNI OF I PENNY
"o',t'5
EOUIIYAMOUNT OF I PENNY
0
Mex Available Annual Federal Credits
2,630,300
REQUESTED CREDIT RESERVATIONS
1,264,874
Max Avallable Annual State Crumb
6,759,950
R
REQUESTED CREDIT RESERVATIONS
Investor
N.1 Uprooter Faulty
Llmlletl PaMertLIHTC)
12,son ,42E
LUmlled Pa.ar (HC)
0
Llmlletl Pe Mar t BCl
0
LIHTC Tlming Adlualar
0
LIHTC Bass Adjuster
0
Stole Credit Adluabr
0
Leas Atlu.ler
0
TOTAL LIMITED PARTNER
12,900,425
General Padnor Pointy _.. 0
1bm. Capt FoMd.tbn SOOA00
ARE _. Modern
Imerasl.n SuTmN Funds IN
NOL Dwtng Conelruam -. o,W%' 0
Dlacoum Ram FLAG%
.Non Cloeing 0
compl.Ron 0
Complmmn b
commmmn a
Yarm Convenor- I
ApFFI.WoPomontoge l Credit Red
AC0uis14on i
N.wor MhY1 Coale
..I.ai
�1 a
fi Aug4O Io.�w I 0
24 1 Dec -20 ]..Mb 33],013
Santa Ana Veterans Village ("SAW")
Unit Mix & Targeting City of Santa Ana
Initial Proforma
0211511]
MONTHLY GROSS
VLH LI NO.OF NO.OF SET- SF CONTRACT UTILITY PER UNIT MONTHLY ANNUAL. RENTISF
SLI, MKT UNIT DESCRIPTION PERCENT UNITS BEDROOMS ASIDE PER UNIT RENT ALLOWANCE NET RENT INCOME INCOME PER YEAR
1'. 1 • 1', it •Lt
TOTALOR AVERAGE 76 30% 39,960 534 534 20,025 240,300 520
AMI
NO. UNITS
PERCENT
UNIT
MIX
TOTALNET
GROSS.
1'.
BEDROOMS.
UNITS
MGR
PERCENT
UTILITY
MONTHLY
ANNUAL
ALLOWANCE
RENT
INCOME
EN
1.1'.
TOTAL
]6
100%
TOTAL
]5.
4
100%
20,025
240,300
MONTHLY GROSS
VLH LI NO.OF NO.OF SET- SF CONTRACT UTILITY PER UNIT MONTHLY ANNUAL. RENTISF
SLI, MKT UNIT DESCRIPTION PERCENT UNITS BEDROOMS ASIDE PER UNIT RENT ALLOWANCE NET RENT INCOME INCOME PER YEAR
1'. 1 • 1', it •Lt
TOTALOR AVERAGE 76 30% 39,960 534 534 20,025 240,300 520
Santa Ana Veterans Village ("SAW")
Overhang Tranche Unit Mix 6 Targeting
NO. OF
NO. OF
SET-
Version:
Revised:
TCAC
Clly & Santa Ana
Initlal Proforma
02115117
AVERAGE AFFORDABILITY 30%
PUBLIC
SUBSIDY
NET
MONTHLY
GROSS'
ANNUAL
RENT/SF
UNIT DESCRIPTION.
71 JNITS@ 1% VASH1111111111
PERCENT
UNITS
ASIDE
UNIT
M IX
ALLOWANCE
RENT
NET
GROSS
30% 5 100%
SIR
UNITS
NOR
PERCENT
UTILITY
MONTHLY
ANNUAL
35% 0 0%
534
3,040
ALLOWANCE
RENT
INCOME
40% 0 0%
0
0
0
0%
0
C
0
45% 0 0%
1
71
0
95%
0
0
1,116,678
50% 0 0%
2
4
0
5%
0
0
82,896
55% 0 0%
3
0
0
0%
0
0
0
60% a 0%
a
0
0
0%
0
0
0
NO. OF
NO. OF
SET-
SF
TCAC
UTILITY
NET
ICAC
PUBLIC
SUBSIDY
NET
MONTHLY
GROSS'
ANNUAL
RENT/SF
UNIT DESCRIPTION.
71 JNITS@ 1% VASH1111111111
PERCENT
UNITS
BEDROOMS
ASIDE
PER UNIT
RENT
ALLOWANCE
RENT
RENT(FMR)
RENT
INCOME
PER YEAR
1 �•
TOTAL
OR AVERAGE
75
30%
39,330
534
534
3,040
1,201.,592
28.]3
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Exhibit D:
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
CITY HOME DEED OF TRUST
AND ASSIGNMENT OF RENTS
(3312 W. First Street, Santa Ana, California)
THIS CITY DEED OF TRUST AND ASSIGNMENT OF RENTS (the "City Deed
of Trust") made this 21 day of August, 2018 by Santa Ana Village LP, a California limited
partnership (the "Trustor"), AmeriNat, a Minnesota corporation (the "Trustee"), and the
City of Santa Ana, a charter city and municipal corporation (the 'Beneficiary").
Trustor, in consideration of the promises herein recited and the trust herein created,
irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the
property located in the City of Santa Ana, County of Orange, State of California, described
in the attached Exhibit A and more commonly known as 3312 W. First Street (the
'Property");
TOGETHER with all the improvements now or hereafter erected on the Property,
and all easements, rights, appurtenances and all fixtures now or hereafter attached to the
Property, all of which, including replacements and additions thereto, shall be deemed to be
and remain a part of the Property covered by this City Deed of Trust;
TOGETHER with the right, power and authority during the continuance of these
Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the
right, prior to any default by Trustor in payment of the indebtedness secured by this City
Deed of Trust or in the performance of any agreement under this City Deed of Trust, to
collect and retain these rents, issues and profits as they become due and payable; and,
TOGETHER with all articles of personal property or fixtures now or hereafter
attached to or used in and about the building or buildings now erected, or hereafter to be
erected, on the Property which are necessary to the complete and comfortable use and
occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one
herein described and referred to, and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are, or shall be attached to said building or
buildings in any manner; and all of the foregoing, together with the Property, is herein
referred to as the "Security';
To have and to hold the Security together with acquittances to the Trustee, its
successors and assigns forever;
TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by a
promissory note to the Beneficiary executed by Trustor of even date herewith in the
principal amount of THREE HUNDRED AND FIFTY-TWO THOUSAND, NINE
HUNDRED, SIXTY-TWO DOLLARS AND NINETY CENTS ($352,962.90) (the "City
HOME Loan Note"); (b) the performance of the covenants and agreements of Borrower
contained in a certain Loan Agreement as hereinafter defined; and (c) the payment of all
other sums, with interest thereon, advanced in accordance herewith to protect the security of
this City Deed of Trust; and the performance of the covenants and agreements of Trustor
contained herein.
TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS:
1. The Loan Agreement. This City Deed of Trust is executed and delivered,
along with the City Loan Note and the Loan Agreement, to benefit the Property. A copy of
said Loan Agreement is on file as a public record with the Beneficiary and is incorporated
herein by reference (the "Agreement"). Trustor acknowledges that but for the execution of
this City Deed of Trust, the Beneficiary would not enter into the Agreement or City Loan
Note secured by this City Deed of Trust.
2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and
has the right to grant and convey the Security; that except as disclosed on the Title Policy
insuring the City Deed of Trust, the Security is not encumbered except for obligations
secured by deeds of trust, or any other security agreement, to secure financing or refinancing
for the purchase and rehabilitation of the Property.
3. Repayment of the Loan. Trustor will promptly repay, when due, the
principal and interest, as required by the City Loan Note secured by this City Deed of Trust.
4. Subordination. This obligation secured by this City Deed of Trust shall be
subordinated to the Senior Loan.
5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform
all of Trustor's obligations under any mortgage, deed of trust or other security agreement
with a lien which has priority over this Instrument, including Trustor's covenants to make
payments when due (subject to an applicable notice and cure provisions). Trustor will pay
all taxes, assessments and other charges, fines and impositions attributable to the Security
which may attain a priority over this Deed of Trust, by Trustor making any payment, when
due, directly to the payee thereof Trustor will promptly furnish to the Beneficiary all
notices of amounts due under this paragraph, and in the event Trustor makes payment
directly, Trustor will promptly discharge any lien which has priority over this Deed of Trust;
provided that Trustor will not be required to discharge the lien of the Deed of Trust securing
any senior lender or any other lien described in this paragraph so long as Trustor will agree
in writing to the payment of the obligation secured by such lien in a manner acceptable to
the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such
lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture
of the Security or any part thereof.
6. Hazard Insurance. Trustor will keep the Security insured by such insurance
policies in such amounts and for such periods as called for in the Agreement. All insurance
policies and renewals thereof will include a standard mortgagee clause with standard
lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their
interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall
have the right to hold, or cause its designated agent to hold, the policies and renewals
thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the
original insurance policies or certificates of insurance, all renewal notices and all receipts of
paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier
and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may
make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days
(10 days for nonpayment of premium) advance notice of cancellation of any insurance
policies required under this Section.
Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds,
subject to the rights of any senior lender, will be applied to restoration or repair of the
Security damaged, provided such restoration or repair is economically feasible and the
security of this City Deed of Trust is not thereby impaired. If such restoration or repair is
not economically feasible or if the security of this City Deed of Trust would be impaired,
again, subject to the rights of any senior lender, the insurance proceeds will be used to repay
the loan secured by this Deed of Trust, with the excess, if any, paid to Trustor. If the
Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its
designated agent within 30 days from the date notice is mailed by either of them to Trustor
that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its
designated agent, is authorized to collect and apply the insurance proceeds at the
Beneficiary's option either to restoration or repair of the Security or to repay the loan.
If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in
and to any insurance policy and in and to the proceeds thereof resulting from damage to the
Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums
secured by this City Deed of Trust immediately prior to such sale or acquisition subject to
the rights of any senior lender.
7. Preservation and Maintenance of Security. Trustor will keep the Security in
good repair and will not commit waste or permit impairment or deterioration of the Security.
S. Protection of the Beneficiary's Security. If Trustor fails to perform the
covenants and agreements contained in this City Deed of Trust or if any action or
proceeding is commenced which materially affects the Beneficiary's interest in the Security,
including, but not limited to, default under the City Deed of Trust securing any senior
lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon
notice to Trustor, may make such appearances, disburse such sums and take such action as it
determines necessary to protect the Beneficiary's interest, including, but not limited to,
disbursement of reasonable attorneys' fees and entry upon the Security to make repairs.
Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest
thereon, will become an indebtedness of Trustor secured by this City Deed of Trust. Unless
Trustor and the Beneficiary agree to other terms of payment, such amount will be payable
upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear
interest from the date of disbursement at the rate payable from time to time on outstanding
principal under the City Loan Note unless payment of interest at such rate would be contrary
to applicable law, in which event such amounts will bear interest at the highest rate
permissible under applicable law. Nothing contained in this paragraph will require the
Beneficiary to insure any expense or take any action hereunder.
9. Inspection. The Beneficiary may make, or cause to be made, reasonable
entries upon and inspections of the Security during normal business hours; provided that the
Beneficiary will give Trustor reasonable prior written notice of inspection.
10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the
Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any
such right or remedy. The procurement of insurance or the payment of taxes or other liens
or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the
maturity of the indebtedness secured by this City Deed of Trust.
11. Remedies Cumulative. All remedies provided in this City Deed of Trust are
distinct and cumulative to any other right or remedy under this City Deed of Trust or any
other document, or afforded by law or equity, and may be exercised concurrently,
independently or successively.
12. Successors and Assigns Bound. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective successors and
assigns of the Beneficiary and Trustor subject to the provisions of this City Deed of Trust.
13. Joint and Several Liability. All covenants and agreements of Trustor shall be
joint and several.
14. Notice. Except for any notice required under applicable law to be given in
another manner, (a) any notice to Trustor provided for in this City Deed of Trust will be
given by certified mail, return receipt requested, addressed to Trustor at 17701 Cowan
G
Avenue, Suite 200, Irvine, CA 92614, Attn: President, with a copy to Union Bank, (b)
any notice to the Beneficiay will be given by certified mail, return receipt requested, to the
Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702,
Attention: Housing Division Manager, or at such other address as the Beneficiary may
designate by notice to Trustor as provided above, and (c) to Trustee at 8121 E. Florence
Avenue, Downey, California 90240. Notice shall be effective as of the date received as
shown on the return receipt.
15. Governing Law. This City Deed of Trust shall be governed by the laws of
the State of California.
16. Severability. In the event that any provision or clause of this City Deed of
Trust or the City Loan Note conflicts with applicable law, such conflict will not affect other
provisions of this City Deed of Trust or the City Loan Note which can be given effect
without the conflicting provision, and to this end the provisions of the City Deed of Trust
and the City Loan Note are declared to be severable.
17. Ca»tions. The captions and headings in this City Deed of Trust are for
convenience only and are not to be used to interpret or define the provisions hereof.
18. Default in Foreclosure; Remedies. Upon Trustor's breach of any covenant or
agreement of Trustor in this City Deed of Trust or the City Loan Note secured by this City
Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums
secured by this City Deed of Trust, the Beneficiary may declare all sums secured by this
City Deed of Trust immediately due and payable by delivering to Trustor notice thereof
specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less
than 30 days from the date the notice is received by Trustor as shown on the return receipt,
by which such breach is to be cured provided, however, that if such default is not reasonable
susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the
defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure
to cure such breach on or before the date specified in the notice may result in acceleration of
the sums secured by this City Deed of Trust and sale of the Security. The notice will also
inform Trustor of Trustor's right to reinstate after acceleration and the right to bring a court
action to assert the non-existence of default or any other defense of Trustor to acceleration
and sale.
The City Note contains additional cure periods granted to Trustor's limited
partner and no event of default shall have occurred until and unless the Trustor's limited
partner fails to cure such breach during such cure period.
If the breach is not cured on or before the date specified in the notice or such longer
period as provided above or in the City Loan Note or the Agreement, the Beneficiary, at the
Beneficiary's option, may: (a) declare all of the sums secured by this City Deed of Trust to
be immediately due and payable without further demand and may invoke the power of sale
and any other remedies permitted by California law; (b) either in person or by agent, with or
without bringing any action or proceeding, or by a receiver appointed by a court, and
G
without regard to the adequacy of its security, enter upon the Security and take possession
thereof (or any part thereof) and of any of the Security, in its own name or in the name of the
Trustee, and do any acts which it deems necessary or desirable to preserve the value or
marketability of the Property, or part thereof or interest therein, increase the income
therefrom or protect the security thereof. The entering upon and taking possession of the
Security shall not cure or waive any breach hereunder or invalidate any act done in response
to such breach and, notwithstanding the continuance in possession of the Security, the
Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by
law upon occurrence of any uncured breach, including the right to exercise the power of
sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a
written declaration of default and demand for sale, pursuant to the provisions for notice of
sale found at California Civil Code Sections 2924, et sM., as amended from time to time; or
(e) exercise all other rights and remedies provided herein, in the instruments by which
Trustor acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the obligations secured
hereby, or provided by law.
Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any
cure of any default made or tendered by Trustor's limited partner shall be deemed to be a
cure by Trustor and shall be accepted or rejected on the same basis as if made or tendered by
Trustor.
The Beneficiary shall be entitled to collect all reasonable costs and expenses
incurred in pursuing the remedies provided in this paragraph, including, but not limited to,
reasonable attorneys' fees.
19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration
of the sums secured by this City Deed of Trust, Trustor will have the right to have any
proceedings begun by the Beneficiary to enforce this City Deed of Trust discontinued at any
time prior to 5 days before sale of the Security pursuant to the power of sale contained in
this City Deed of Trust or at any time prior to entry of a judgment enforcing this City Deed
of Trust if: (a) Trustor pays the Beneficiary all sums which would be then due under this
City Deed of Trust and no acceleration under the City Loan Note has occurred; (b) Trustor
cures all breaches of any other covenants or agreements of Trustor contained in this Deed of
Trust and the Affordability Restrictions on Transfer of Property; (c) Trustor pays all
reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants
and agreements of Trustor contained in this City Deed of Trust and the Affordability
Restrictions, and in enforcing the Beneficiary's and the Trustee's remedies, including, but
not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the
Beneficiary may reasonably require to assure that the lien of this City Deed of Trust, the
Beneficiary's interest in the Security and Trustor's obligation to pay the sums secured by this
City Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this
City Deed of Trust and the obligations secured hereby will remain in full force and effect as
if no acceleration had occurred.
m
20. Acceptance by Trustee. Trustee accepts this Trust when this City Deed of
Trust, duly executed and acknowledged, is made a public record as provided by law.
Trustee is not obligated to notify any party to this City Deed of Trust of pending sale under
any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee
shall be a party unless brought by Trustee.
21, Reconveyance. Upon payment or forgiveness of all sums secured by this
City Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and
will surrender this City Deed of Trust and the City Loan Note to the Trustee. The Trustee
will reconvey the Security without warranty and without charge to the person or persons
legally entitled thereto. Such person or persons will pay all costs of recordation, if any.
22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from
time to time remove the Trustee and appoint a successor trustee to any Trustee appointed
hereunder. The successor trustee will succeed to all the title, power and duties conferred
upon the Trustee herein and by applicable law.
23. Request for Notice. Trustor requests that copies of the notice of default and
notice of sale be sent to Trustee at the address set forth in Section 14 above.
24. Nonrecourse Liability. Neither Trustor nor any partner of Trustor shall
have any personal liability under the Loan Agreement, City Loan Note, and this City Deed
of Trust and any judgment, decree or order for payment of money obtained in any action to
enforce the obligation of Trustor to repay the loan evidenced by such documents shall be
enforceable against Trustor only to the extent of Truster's interest in the Property.
25. Extended Use Agreement. Beneficiary acknowledges that Trustor and
the California Tax Credit Allocation Committee have or intend to enter into an extended
use agreement. Beneficiary acknowledges and agrees that, in the event of a foreclosure
of its interest under this Deed of Trust or delivery by Trustor of a deed in lieu thereof
(collectively, a "Foreclosure"), the following rule contained in Section 42(h)(6)(E)(ii) of
the Code shall apply:
For a period of three (3) years from the date of Foreclosure, with
respect to any unit that had been regulated by the extended use agreement,
(i) none of the eligible tenants occupying those units at the time of
Foreclosure may be evicted or their tenancy terminated (other than for
good cause, including but not limited to, the tenants' ineligibility pursuant
to Section 42 of the Code), (ii) nor may any rent be increased except as
otherwise permitted under Section 42 of the Code.
VA
IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first
written above.
DEVELOPER
SANTA ANA VILLAGE LP,
a California limited partnership
By: JHC Santa Ana Village LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
Manager
By:
Name:
Title:
Exhibit Eo.
City/HOME Loan
CITY HOME LOAN NOTE
SECURED BY SUBORDINATED DEED OF TRUST
TO THE CITY OF SANTA ANA, CALIFORNIA
(3312 W. First Street, Santa Ana, California)
$352,962.90 August 21, 2018
Santa Ana, California
1. Principal Amount of Loan
For value received, SANTA ANA VILLAGE LP, a California limited partnership
("Borrower") promises to pay to the order of THE CITY OF SANTA ANA ("City"), at 20 Civic
Center Plaza, 6' Floor, Santa Ana, California 92701, or at such other place as the City may from
time to time designate in writing, or to the assignee of the City, the principal sum of THREE
HUNDRED AND FIFTY-TWO THOUSAND, NINE HUNDRED, SIXTY-TWO DOLLARS
AND NINETY CENTS ($352,962.90) or so much thereof as shall be disbursed hereunder, with
three percent simple interest (3%) commencing upon filing of Notice of Completion.
City and Borrower have heretofore entered into that certain Loan Agreement dated
concurrently herewith (the "Loan Agreement"), pertaining to the acquisition and rehabilitation of
certain real property described in the Loan Agreement as the "Property," commonly known as
3312 W. First Street, Santa Ana, California, and the operation of the Property as affordable
housing for Extremely -Low, Very -Low and Low Income households. This City HOME Loan
Note (the "Note") is made pursuant to, entitled to the benefits of and referred to as the City Loan
Note in the Loan Agreement; that certain "Affordability Restrictions on Transfer of Property"
between Borrower and City, dated on or about the date hereof; and that certain Subordinated City
Deed of Trust and Assignment of Rents between Borrower and City, dated on or about the date
hereof (the "City Deed of Trust"). This Note, the Loan Agreement, the Affordability Restrictions
on Transfer of Title, and the Deed of Trust are sometimes collectively referred to herein as the
"Loan Documents." The Loan Documents and the rights and responsibilities inure to the benefit
of the City of Santa Ana. Any capitalized term which is not otherwise defined herein shall have
the meaning ascribed to such term in the Loan Agreement.
2. Definitions.
For the purpose of calculating the payments to be made by Borrower to City pursuant to
this Note, the following terms shall have the following respective meanings:
"Acquisition Costs" shall mean the costs and expenses of Borrower to acquire the
Property, as set forth in the Project Budget attached to the Loan Agreement.
"City Loan" shall mean the loan evidenced by this Note.
"City's Percentage" with reference to the Residual Receipts, shall mean 50% or the
prorated percentage of the total amount of funds contributed after Santa Ana Village, LP, retains
fifty percent of the Residual Receipts, whichever is less, of the City's share of the total Residual
Receipts from the Property as further described in Section 5 hereof. If other lenders to the
Property are also repaid from Residual Receipts, City's Percentage shall be reduced
proportionally to the ratio that the original principal amount of the Loan bears to the original
principal amount of all loans being repaid from Residual Receipts multiplied by 50%.
"Calendar Year" means each consecutive twelve (12) month period from January 1 to
December 31.
"Closing Costs" shall mean:
(i) In the case of a Sale, reasonable brokerage commissions payable to a broker as a
result of the Sale, which shall not in any event exceed the customary amount charged -for similar
transactions in the immediate market place, costs of title insurance premiums, documentary
stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably
incurred with respect to the Property, in each case actually paid by Borrower as a condition of
the Sale.
(ii) In the case of a Refinancing, the reasonable and necessary costs of
consummating such Refinancing, including, without limitation, loan fees, loan repayment
charges, costs of title insurance premiums, escrow fees, recording fees, attorneys' fees and costs
of Lender required repairs or reserves.
"Gross Revenues" shall mean all revenues and receipts of every kind actually received
by Borrower from operating the Property, and all parts thereof, including, but not limited to,
income from both cash and credit transactions, rental from leased and/or subleased spaces and
parking fees and charges (but not including security deposits and other tenant deposits, except to
the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues
does not include any insurance proceeds other than any rental interruption insurance proceeds.
Any credit consideration shall be included in Gross Revenues at the time cash proceeds
(principal, interest and/or other) are received. Borrower shall establish and maintain accounts for
the Gross Revenues (the "'Project Accounts") that are segregated from revenues and income
received by Borrower from all other projects. Gross Revenues shall also include all interest
earned on the Project Accounts to the extent interest is released from the Project Accounts.
Gross Revenues do not include the proceeds of any loans or capital contributions made to
Borrower, Refinancing Proceeds or Sale Proceeds.
"Operating Expenses" shall mean the sum of the following:
(i) payments of principal and interest and all other charges relating to the Senior
F1
Loan(s), exclusively including required payments under the MUFG Union Bank, N.A. loan, the
Orange County Community Foundation Loan and the County of Orange Loan (any additional
loans to the project must be approved by the City);
(ii) a property management fee no greater than 8% of gross rents;
(iii) Owner Partnership Management and Asset Management Fees not to exceed 5%
of gross rents;
(iv) Deposits into required reserves required by any lender or Borrower's
Partnership Agreement;
(v) all other actual, reasonable cash operating costs and expenses, calculated on an
annual basis, that are directly attributable to managing and operating the Property and the
Borrower, including, without limiting the generality of the foregoing, the following: costs and
expenses for real and personal property taxes, special assessments or similar charges; water, fuel,
electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies;
tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage
commissions and other leasing expenses; reasonable reserves for all anticipated expenses as
approved by the City; and other such items constituting operation, maintenance and repair costs
actually paid by the Borrower, subject to the following conditions:
(a) Depreciation and amortization expenses shall not be considered
Operating Expenses, except as otherwise provided herein.
(b) Reserved.
(c) Any expenses, compensation or fees paid to any affiliate of Borrower
shall only be included as Operating Expenses to the extent they are not in excess of the
reasonable expenses, compensation or fees which would be payable to unrelated third parties in
arms -length transactions for similar services in the Santa Ana, California area.
(vi) Any other expenses necessary to meet senior lender requirements and requirements
of Borrower's limited partner, or its assignee, as set forth in Borrower's Agreement of Limited
Partnership (the "Partnership Agreement"), including, without limitation, repayment of any loans
to the Borrower by a partner or tax credit recapture or deficiency payments.
(vii) Deferred Developer Fees.
(viii) A social services administrative fee.
"Project" shall mean the acquisition and rehabilitation of the Property by Borrower
pursuant to the Loan Agreement.
"Property" shall mean the real property located at 3312 W. First Street, Santa Ana,
California described in the City Deed of Trust.
"Refinancing" shall mean changing the then existing financing on the Property by,
without limitation, modifying final maturity date of the existing Senior Loan, increasing the
stated maximum principal amount of the existing Senior Loan, paying off the existing Senior
Loan in full and obtaining new Senior Loan.
"Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof.
"Residual Receipts" shall mean the Gross Revenues from the Property, for each year,
less deductions for Operating Expenses from the Property, applicable to each such year to the
extent not already deducted as an Operating Expense.
"Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant
for occupancy or a transaction set forth in Section 15(c) hereof) of the Property or any portion
thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of
any partnership interest in the Borrower by an individual or entity which is a general partner in
the Borrower, or any interest by any individual or entity which holds an interest in any such
general partner in the Borrower, which brings the cumulative total of all such direct and indirect
transfers, assignments and sales during the term of this Note to more than forty-nine percent
(49%) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a
direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under
threat thereof. Sale does not include dedications and grants of easements to public and private
utility companies of the kind customary in real estate development, nor transfers of Limited
Partnership interests or transfers of General Partner interests caused by the removal of the
General Partner pursuant to the terms of the Partnership Agreement.
"Sale Proceeds" shall be disbursed as set forth in Section 8 hereof.
"Senior Loan" shall mean the senior loan being made by MUFG Union Bank, N.A.,
concurrent to the City Loan for payment of a portion of the Acquisition and Rehabilitation Costs,
and shall include any subsequent loan that refinances the initial Senior Loan.
"Term" the term for repayment of this Note shall mean fifty-five (55) years from the
date of recording.
3. Loan Repayment.
Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts),
7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment).
4. Operating Capital Improvement Loan.
91
If the replacement reserve account ("reserves") is depleted due to unforeseen repairs and
the General Partner makes a loan to the Partnership, the reserves must be fully funded to their
original level prior to repayment of said loan. Such loan shall be repaid with net cash flow prior
to the residual receipt split. The outstanding loan balance will be reflected in the annual report.
5. Annual Loan Repayment.
a. After any deferred Developer Fee has been paid, as set forth hereinabove, the
Borrower shall thereafter make a loan payment to the City annually, in the amount of the lesser
of the outstanding balance due under this Note or the City's Percentage of the Residual Receipts,
as provided in this Section 5.
b. Within one hundred twenty (120) days after the year in which the rehabilitation of
the Project is completed, and on or before the 120th day of each Calendar Year thereafter, the
Borrower shall submit to the City a detailed statement of Gross Revenues and Operating
Expenses attributable to the Property for the applicable Calendar Year, along with a computation
of the amount of the Residual Receipts applicable to such Calendar Year with which to make a
City Loan payment then due.
c. Except as otherwise provided in Section 4, the Borrower shall pay to the City fifty
percent (50%) of the Residual Receipts as payment of principal and interest under its loan. The
remaining amount of the Residual Receipts shall remain with the Borrower to be used by
Borrower as determined by the General Partners of Borrower, including, without limitation, for
distribution to the partners of the Borrower.
d. The Residual Receipts payment shall be made not later than one hundred fifty (150)
days after the close of the Calendar Year. Such payment shall be applied first to any accrued but
unpaid interest, if any, then to reduce the principal balance of the loans.
6. Reserved.
7. Loan Repayment from Refinancing Proceeds.
The Borrower shall make a loan payment to the City from every Refinancing that occurs
during the term of this Note not to exceed the outstanding balance of principal and interest on
this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows:
the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the
amount necessary to pay in full all amounts owing on the Senior Loan; next, the Borrower shall
pay to the City fifty percent (50%) of the then remaining unapplied Refinancing Proceeds not to
exceed the outstanding balance on this Note. The remaining Refinancing proceeds shall remain
with Borrower to be used by Borrower as determined by the General Partners of Borrower,
including, without limitation, for distribution to the partners of the Borrower. Such payment shall
be due within 30 days of the date of such Refinancing, and shall be applied first to any accrued
but unpaid interest, then to reduce the principal balance of the Loans. The City shall not be
5
required to reconvey the lien of the Deed of Trust if Sale Proceeds are insufficient to repay the
City Loan in full.
8. Loan Repayment from Sale Proceeds.
The Borrower shall make a loan payment, not to exceed the outstanding balance of
principal and interest on this Note, to the City from any Sale that occurs during the term of the
City Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale
proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing on the
Senior Loan; next the Borrower shall pay to the City fifty percent (50%) of the then remaining
unapplied Sale Proceeds, not to exceed the outstanding amount of principal and interest due on
this Note. This fifty percent (50%) represents the total payment due under the City Note. The
remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of
such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the
principal balance of the Loans. The City shall not be required to reconvey the lien of the Deed of
Trust if Sale Proceeds are insufficient to repay the City Loan in full.
9. Buy Out Option.
Prior to the initial disbursement under this Note, the Borrower shall grant to the City a Right of
First Refusal (subject to any purchase option and/or right for first refusal granted to one or more
of the general partners of the Borrower) (the "City Right of First Refusal") to acquire the
Property if Borrower desires to transfer the Property to an entity which is not affiliated with one
or more of Borrower's general partners. The City Right of First Refusal shall be in form and
substance acceptable to the City and shall comply with all applicable Tax Credit requirements.
10. Accelerated Loan Payment.
The full principal amount outstanding plus accrued but unpaid interest thereon, shall be
due and payable on the earlier to occur of the following:
a. Sale or Refinancing of the Property as provided further in Section 15 hereof,
unless: (i) in the case of a Sale in which the City's Percentage of the Sale Proceeds are
insufficient to repay in fall the City Loan, the City approves such sale -and the purchaser assumes
the balance of the City Loan in accordance with the terms of this Note; or (ii) in the case of a
Refinancing in which the City's Percentage of the Refinancing Proceeds are insufficient to repay
in full the City Loan, the City approves such Refinancing and the Borrower remains obligated
pursuant to the terms of this Note.
or
b. if an Event of Default occurs pursuant to Section 16 hereof.
c. The date that is fifty five (55) years after the date of execution of this Note. On
that date, the City agrees to review the performance of the Property and consider in good faith
any reasonable request by Borrower to modify the terms or extend the Term of this Note.
11. Prepayment
Borrower may prepay the outstanding principal balance under this Note, in whole or in
part, together with any accrued but unpaid interest, if any, and other sums owed to the City under
this Note, if any, at any time without penalty.
12. Lawful Money.
Principal and interest are payable in lawful money of the United States of America.
13. Application of Payments, Late Charges.
a. Any payments received by the City pursuant to the terms hereof shall be
applied first to sums, other than principal and interest, due the City pursuant to this Note, next to
the payment of all interest accrued to the date of such payment, and the balance, if any, to the
payment of principal.
b. If any payment is not received by the City within ten (10) days following the
due date thereof, then in addition to the remedies conferred upon the City pursuant to this Note
and the other Loan Documents, (i) a late charge of four percent (4%) of the amount due and
unpaid will be added to the delinquent amount to compensate the City for the expense of
handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall
bear interest at ten percent (10%) per annum, computed from the date on which the amount was
due and payable until paid. Without prejudice to the rights of the City hereunder or under any of
the other Loan Documents, Borrower shall indemnify the City against, and shall pay the City on
demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower
to pay when due any installment of interest and/or principal, fees, or other amounts payable to
the City under this Note or any other Loan Document, to the extent that any such expense or loss
is not recovered pursuant to such foregoing provisions. A certificate of the City setting forth the
basis for the determination of the amounts necessary to indemnify the City in respect of such
expenses or direct loss, submitted to Borrower by the City, shall be conclusive and binding for
all purposes except as immediately corrected by Borrower notice to City.
14. Securi
This Note is secured by the City Deed of Trust.
15. Acceleration by Reason of Transfer or Financing.
a. In order to induce City to make the loan evidenced hereby, Borrower agrees that
in the event of any transfer of the Property without the prior written consent of City
(other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of
foreclosure, by the holder of the Senior Loan Deed of Trust), City shall have the
absolute right at its option, upon at least 30 days' prior written notice to Borrower, to
declare all sums secured hereby immediately due and payable. Such consent will not
be unreasonably withheld. Consent to one such transaction shall not be deemed to be
a waiver of the right to require consent to future or successive transactions. City may
grant or deny such consent in its reasonable discretion and, if consent should be
given, any such transfer shall be subject to this Section 12, and any such transferee
shall assume all obligations hereunder and agree to be bound by all provisions
contained herein. Such assumption shall release Borrower from all liability
thereunder from and after the date of such assumption.
b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or
conveyance of the Property, or any portion thereof or interest therein, whether voluntary,
involuntary, by operation of law or otherwise, the execution of any installment land sale contract
or similar instrument affecting all or a portion of the Property, or the lease of all or substantially
all of the Property. 'Transfer' shall not include the leasing of individual residential units on the
Property, so long as Borrower complies with the provisions of the Loan Agreement and the
Affordable Housing Restrictions relating to such leasing activity, nor shall it include a
conveyance of the Property to a limited partnership in which the general partner of Borrower or
an affiliate is a general partner, or to a corporation that is wholly owned by the Borrower and that
is formed for the sole purpose of owning and operating the Property, or the sale back to the
Borrower. In the event of any Refinancing or partial Refinancing in an amount in excess of the
balance of the Senior Loan, without the prior written consent of City (which consent City may
grant or deny in its sole discretion), then the entire outstanding balance of the City Loan together
with all accrued and unpaid interest, shall be repaid to the City at the time of each Refinancing or
partial Refinancing.
c. For the avoidance of doubt, a "transfer" shall not include (i) a transfer of any
general partner's interest in Borrower when made in connection with the exercise by the
Borrower's limited partner (the "Limited Partner") of its rights upon a default by a general
partner under the Borrower's Partnership Agreement or upon a general partner's withdrawal in
violation of the Partnership Agreement, so long as the removal and substitution of the defaulting
general partner is made within thirty (30) days of such default or, if such removal and
substitution cannot reasonably be completed within thirty (30) days, so long as the Limited
Partner commences to take action to remove and substitute the general partner with a reasonable
period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the
Property to the managing general partner of Borrower pursuant to the right of first refusal or to
the general partners of Borrower pursuant to the purchase option, as provided for in the
Partnership Agreement; (iii) any transfer of the Limited Partner's interest in accordance with the
Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited
partner of the Borrower.
F:3
16. Event of Default.
Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the
following shall be deemed to be an event of default ("Event of Default") hereunder: (a) failure by
Borrower to make any payments provided for herein, and if such default is not made good within
fifteen (15) days of written notice to Borrower of such default; or (b) failure by Borrower to
perform any covenant or agreement in the Deed of Trust, the Loan Agreement, or the
Affordability Restrictions on Transfer of Property within thirty (30) days after written demand
therefor by City (or, in the event that more than thirty (30) days is reasonably required to cure
such default, should Borrower fail to promptly commence such cure, and diligently and
continuously prosecute same to completion). Notwithstanding the foregoing, if Borrower fails to
cure such breach during the time set forth herein for such cure, City shall provide written notice
of such failure to Limited Partner and no Event of Default shall be deemed to occur unless
Limited Partner fails to cure such breach within 30 days following delivery of such notice;
provided, however, if in order to cure such breach Limited Partner determines that it must
remove the General Partner pursuant to the terms of the Partnership Agreement, then no Event of
Default shall occur until 30 days following the effective date of such removal.
17. Remedies.
Upon the occurrence and during the continuance of an Event of Default, after any
applicable notice has been provided and the expiration of any applicable cure period therefore,
City may declare all sums evidenced hereby immediately due and payable by delivery to the
Trustee named in the City Deed of Trust securing this Note, and to Borrower, written declaration
of default and demand for sale, and written notice of default and of election to cause the Property
to be sold, which notice Trustee shall cause to be duly filed for record and City may foreclose on
the City Deed of Trust. City shall also deposit with Trustee the Deed of Trust, this Note and all
documents evidencing expenditures secured thereby and evidenced hereby. No delay or
omission on the part of the City in exercising any right under this Note or under any of the other
Loan Documents shall operate as a waiver of such right.
18. Attorneys' Fees.
If this City Loan Note is not paid when due or if any Event of Default occurs, Borrower
promises to pay all costs of enforcement and collection, including but not limited to, reasonable
attorneys' fees, whether or not any action or proceeding is brought to enforce the provisions
hereof.
19. Severability.
Every provision of this Note is intended to be severable. In the event any term or
provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and enforceable.
.01
20. Number and Gender.
In this Note the singular shall include the plural and the masculine shall include the
feminine and neuter gender, and vice versa, if the context so requires.
21. Non-recourse.
The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any
other party, including Borrower's partners, shall have any personal liability for repayment of the
City Loan or for any other amounts under any of the documentation evidencing, securing or
describing the City Loan. The sole recourse of City under this Note and the Deed of Trust for
repayment of the City Loan and for such other amounts arising therefrom shall be the exercise of
its rights against the Property and related security thereunder.
22. Subordination.
It is hereby expressly agreed and acknowledged by Borrower and City that the City Deed
of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior
Loan Deed of Trust held by MUFG Union Bank, N.A..
23. Reserved.
24. Reserved.
25. Force Majeure.
Notwithstanding specific provisions of this Note, performance hereunder shall not be
deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs;
riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor,
materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to
act of the City or any other public or governmental City or entity (except that any act or failure to
act of City shall not excuse performance by City); or any other causes beyond the reasonable
control or without the fault of the party claiming an extension of time to perform. An extension
of time for any such cause shall be for the period of the enforced delay and shall commence to
run from the time the party claiming such extension gives notice to the other party, provided
notice by the party claiming such extension is given within thirty (30) days after the
commencement of the cause. Times of performance under this Note may also be extended in
writing by the City and the Borrower.
10
26. Assignments.
The City, and the assignee of the City, shall have the right to assign this Note and the
City Deed of Trust securing this Note, without any further act of Borrower. The assignee shall
give notice to Borrower as soon as practicable after such assignment.
11
This Note is hereby agreed to and executed on the date first set forth above.
ii 17 FT.ZIlt 00
SANTA ANA VILLAGE LP,
a California limited partnership
By: JHC-Santa Ana Village LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
Manager
By:
Name:
Title:
12
Exhibit Fee
Affordability
Restrictions on
Transfer of Property
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
SPACE ABOVE THIS LINE FOR RECORDING USE
FREE RECORDING REQUESTED
[Government Code Section 6103]
AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
(3312 W. First Street, Santa Ana, California)
THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF
PROPERTY (the "Restrictions") are entered into as of August 21, 2018, by and among
and Santa Ana Village LP, (referred to herein as the "Developer") a California limited
partnership, and the City of Santa Ana, a charter city and municipal corporation (the
"City").
RECITALS:
A. Developer is the owner of that certain real property located at 3312 W. First
Street, (the "Property") located in the City of Santa Ana more particularly described in
Exhibit A, which is attached hereto and incorporated herein by this reference.
B. For the purpose of providing seventy-six (76) units of housing that will be
affordable to Extremely -Low, Very -Low and Low Income households ("Assisted Units"),
the Developer and the City have entered into that certain Loan Agreement, dated on or
about the date hereof (the "Loan Agreement") to which these Restrictions are attached as
Exhibit G, which, along with all of its attachments, is incorporated herein by this reference
(any capitalized term that is not otherwise defined in these Restrictions shall have the
meaning ascribed to such term in the Loan Agreement).
C. The Loan Agreement provides, among other things, for the use of the Property
for affordable housing with all Assisted Units being restricted to Extremely -Low, Very -
Low and Low Income households, at Affordable Rent(s).
D. The Loan Agreement contains certain provisions relating to the use of the
Property.
NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS
FOLLOWS:
1. Developer covenants and agrees (for itself, its successors, its assigns, and
every successor in interest to the Property or any part thereof) that Developer, such
successors, and such assigns shall use the Property exclusively to provide affordable
housing of Extremely -Low, Very -Low and Low Income households, as provided in these
Restrictions and in the Loan Agreement.
2. Developer, for itself and its successors and assigns, hereby covenants and
agrees that all of the apartments in the Property (less one manager's unit) (the "Units")
shall be rented exclusively, at Affordable Rent, to Extremely -Low, Very -Low and Low
Income households to the extent provided for herein. Area median income levels and
Affordable Rents are subject to adjustment from time to time as provided in Section 3
below.
3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF
THE PROPERTY
3.1 Use Covenants and Restrictions.
A. Developer agrees and covenants, which covenants shall run with the land and bind
Developer, its successors, its assigns and every successor in interest to the Property that
Developer will make all rental units on the Property available to low- or very low-income
households at rents affordable to such households for fifty-five (55) years from the issuance of
the Certificate of Completion. The HOME restrictions for the two (2) HOME assisted units
shall be enforced until the date that is twenty (20) years after the date on which the Certificate
of Completion is issued or until payment of principal and all accrued interest on the HOME
Loan, whichever comes last. The City permits the Developer to limit the eligibility and/or give
preference to a particular segment of the population in accordance with 24 CFR 92.253(d).
B. The Project shall consist of seventy-six (76) units, including one (1) on-site
manager's unit(s). There shall be two (2) HOME assisted units. The HOME assisted units
shall be one 1 -bedroom unit and one 2 -bedroom unit, floating, and shall be distributed
throughout the complex with comparable amenities to the other units.
C. At initial lease up, households in the HOME assisted units cannot earn more than
30% of AMI. Rental increases shall be in conformance with federal and state law. After
the twenty (20) year HOME compliance period, the City shall require that the units remain
affordable, with rents calculated based on assumed household size at the same income
levels
D. All of the HOME units will be restricted to occupancy by families earning no more than
thirty (30%) of the Area Median Income (AMI).
E. Maximum Occupancy will be two (2) people per room plus one (1). Example for a two-
bedroom unit, five (5) people would be maximum occupancy.
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G. Developer must have a written lease between tenant and owner for a period of at least
one year, unless a shorter period is mutually agreed upon. Leases must be consistent with the
HOME Program regulations at 24 CFR section 92.209(8).
3.2 Affordability Levels/Unit Mix:
The affordability levels/unit mix for the Project is as follows:
Unit Size
30% AMI
Total
No.
Units
Current
Rent
1 Bedroom
71
$1,025
71
2 Bedroom
4
$1,230
4
Total
75
75
The remaining unit will be a 1 -bedroom unit reserved for the onsite manager.
HOME Assisted Units
(1) In no event shall the rent charged to the HOME assisted units be more than that
amount of the low HOME rent as published by HUD, as amended from time to time.
(2) At the time of project completion, the Developer shall provide to the City the address
and/or unit number of each of the HOME floating units.
(3) Annually with the financial statements, the Developer shall provide an annual report
of rents and occupancy of all assisted units, including the HOME assisted units, to
verify compliance with affordability requirements. For the HOME assisted units,
information on unit substitution and filling vacancies shall be provided to ensure that
the project maintains the required unit mix.
The affordable rents charged at the Project must comply with the standards set forth by HUD
and California Tax Credit Allocation Committee (TCAC). Notwithstanding anything to the
contrary contained in these Restrictions or in the HOME Loan Agreement between the City
and Developer, in the event of a foreclosure, or delivery of a deed in lieu of foreclosure, of
any Senior Loan, then, other than for the two (2) HOME Assisted -Units, (1) the maximum
qualifying tenant household income shall be increased to 60% of Area Median Income
adjusted for family size appropriate to the unit, and (2) the maximum annual affordable rent
shall be increased to comply with the rent limits set forth by California Tax Credit Allocation
Committee (TCAC) for households at 60% Area Median Income.
Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing
Authority of the City of Santa Ana publishes the Utility Allowance Schedule.
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#of HOME
Total # of
Level of
/o Share of
Units
Unit Type
Affordability
Assisted
Unit Type
Units
71
1 Bed
30% AMI
1
1.4%
4
2 Bed
1
25%
(1) In no event shall the rent charged to the HOME assisted units be more than that
amount of the low HOME rent as published by HUD, as amended from time to time.
(2) At the time of project completion, the Developer shall provide to the City the address
and/or unit number of each of the HOME floating units.
(3) Annually with the financial statements, the Developer shall provide an annual report
of rents and occupancy of all assisted units, including the HOME assisted units, to
verify compliance with affordability requirements. For the HOME assisted units,
information on unit substitution and filling vacancies shall be provided to ensure that
the project maintains the required unit mix.
The affordable rents charged at the Project must comply with the standards set forth by HUD
and California Tax Credit Allocation Committee (TCAC). Notwithstanding anything to the
contrary contained in these Restrictions or in the HOME Loan Agreement between the City
and Developer, in the event of a foreclosure, or delivery of a deed in lieu of foreclosure, of
any Senior Loan, then, other than for the two (2) HOME Assisted -Units, (1) the maximum
qualifying tenant household income shall be increased to 60% of Area Median Income
adjusted for family size appropriate to the unit, and (2) the maximum annual affordable rent
shall be increased to comply with the rent limits set forth by California Tax Credit Allocation
Committee (TCAC) for households at 60% Area Median Income.
Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing
Authority of the City of Santa Ana publishes the Utility Allowance Schedule.
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Initial rents may be recalculated to allowable rental amounts at the time of initial lease -up
following completion of construction in accordance with any changes in allowable rent and
income tables as published by HUD.
3.3 Rent Increases: On an annual basis, the City shall provide Developer with the
maximum allowable schedule of rents for the Property in accordance with changes in
allowable rent and income tables published by HUD and the California Tax Credit Allocation
Committee, provided however that the rent for the HOME units shall in no event be higher
than the rent for the equivalent non -HOME assisted unit within the Project. In no event can
Developer charge any tenant more than such amount. The City will make all best efforts to
provide Developer with the maximum allowable schedule of rents within no more than 30
calendar days after the date TCAC publishes the allowable rent and income tables.
3.4 Increase in Rent and Occupancy Restrictions upon Termination of Rental
Subsidies. The parties acknowledge that Developer is only able to rent units to Extremely
Low Income Households because the City is providing 75 Housing and Urban
Development Veterans Affairs Supportive Housing (HUD VASH) Project -Based
Vouchers for Permanent Supportive Housing ("VASH Vouchers"). In the event the
VASH Vouchers expire, terminate, are not renewed or are reduced for any reason other
than a default by Developer under the VASH Vouchers, then the occupancy requirements
for all of the units, other than the 2 HOME Assisted Units shall automatically increase to
60% of the Area Median Income and the Affordable Rent shall increase to Affordable
Rents for households earning 60% of the Area Median Income in accordance with the rent
limits set forth by the California Tax Credit Allocation Committee (TCAC for households
earning 60% of the Area Median Income.
3.5 CHDO Provisions. Developer shall maintain CHDO (Community Housing
Development Organization) status for the term of this Agreement and the HOME Regulatory
Agreement in accordance with 24 CFR 92. Developer agrees to provided information as may
be requested by the City to document its continued compliance, including but not limited to
an annual board roster and certification of continued compliance.
Any funds advanced as CHDO pre -development funds must be in compliance with 24 CFR
92.301, and are forgivable only under the terms in 24 CFR 92.301. Any funds advanced to
Developer as CHDO Operating Expenses must be expended in compliance with 24 CFR
92.208. Any funds that Developer is permitted to retain as CHDO proceeds from this Project
shall be used in compliance with 24 CFR 92.300(a)(2) or as specified in this Agreement.
The provisions of this Section 3.5 shall not apply in the event of a foreclosure of the Property
or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a deed in lieu
of foreclosure, Senior Lender will use commercially reasonable efforts to accept bids for the
Property from a qualified CHDO; provided, however, that in no event shall Senior Lender be
obligated to select a qualified CHDO to be the purchaser of the Property unless, among other
criteria used in Senior Lender's reasonable discretion, such qualified CHDO has offered the
highest purchase price among the bidders.
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4. Developer, its successors and assigns shall not charge rents for the Units in excess
of the amounts set forth herein, as adjusted on the basis of the revised schedules of area
median incomes issued from time -to -time by HUD. The City shall notify Developer in
writing of the adjusted allowable maximum incomes and rents.
5. Developer shall adopt and include as part of its Management Plan
(described in Section 11 below), written tenant selection policies and criteria for the Units,
that meet the following requirements:
(a) Are consistent with the purpose of providing housing for Extremely
Low and Very Low Income households;
(b) Are reasonably related to program eligibility and the applicants'
ability to perform the obligations of the lease;
(c) Give reasonable consideration to the housing needs of households
that would have a preference under 42 CFR §906.211 (Federal selection preferences for
admission to Public Housing);
(d) Provide for:
(i) The selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable; and
(ii) The prompt written notification to any rejected applicant of
the grounds for any rejection;
(e) Subject to compliance with the HOME Regulations, the HUD -
Veterans Affairs Supportive Housing referral program requirements, the County of Orange
coordinated entry system and applicable California and federal fair housing laws, local
preference for Santa Ana residents and workers in tenant selection shall be a requirement
of the Project. Subject to applicable laws and regulations governing nondiscrimination
and preferences in housing occupancy required by HUD or the State of California, as well
as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the
Developer shall give preference in leasing units in the following order of priority:
1. First priority shall be given to persons who have been
permanently displaced or face permanent displacement from
housing in Santa Ana as a result of any of the following:
a. A redevelopment project undertaken pursuant to
California's Community Redevelopment Law (Health &
Safety Code Sections 33000, et seq.) -- applicable only
to projects funded by the Low and Moderate Income
Housing Asset Fund.
b. Ellis Act, owner -occupancy, or removal permit eviction;
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c. Earthquake, fire, flood, or other natural disaster;
d. Cancellation of a Housing Choice Voucher HAP
Contract by property owner; or
e. Governmental Action, such as Code Enforcement.
2. Second priority shall be given to persons who are either:
a. Residents of Santa Ana and/or
b. Working in Santa Ana at least 32 hours per week for at
least the last 6 months.
(f) Carry out the Affirmative Marketing procedures of the City of Santa
Ana, which are designed to provide information and otherwise attract eligible persons
from all racial, ethnic and gender groups in the housing market area to the units.
Developer shall cooperate with the City to effectuate this provision prior to the initial
renting, or upon occurrence of a vacancy, and the re -renting of any Restricted Units (24
CFR 92.351).
6. Developer, its successors and assigns, shall not refuse to lease a unit to a
holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or
to a holder of a comparable document evidencing participation in a HOME tenant -based
assistance program because of the status of the prospective tenant as a holder of such
certificate of family participation, rental voucher, or comparable HOME tenant -based
assistance document. Total rents charged to the tenant for the tenant's share of rent shall
not exceed the allowable rents as described above.
7. Any lease of any of the units must be for not less than one year, unless by
mutual agreement between the tenant and the Developer. Should the tenant and Developer
agree to a term of less than one year, said agreement shall be expressed in some type of
written form, signed by the tenant, and maintained in the tenant's rental file held by the
Developer. The lease may not contain any of the following provisions (in which
references to "owner" shall mean the Developer, its successors or assigns):
(a) Agreement by the tenant to be sued, to admit guilt, or to a judgment
in favor of the owner in a lawsuit brought in connection with the lease;
(b) Agreement by the tenant that the owner may take, hold, or sell
personal property of household members without notice to the tenant and a court decision
on the rights of the parties. This prohibition, however, does not apply to an agreement by
the tenant concerning disposition of personal property remaining in the housing Unit after
the tenant has moved out of the Unit. The owner may dispose of this personal property in
accordance with state law;
(c) Agreement by the tenant not to hold the owner or the owner's agent
legally responsible for any action or failure to act, whether intentional or negligent;
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(d) Agreement of the tenant that the owner may institute a lawsuit
without notice to the tenant;
(e) Agreement by the tenant that the owner may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties;
(1) Agreement by the tenant to waive any right to a trial by jury;
(g) Agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease; and
(h) Agreement by the tenant to pay attorney's fees or other legal costs
even if the tenant wins in a court proceeding by the owner against the tenant. The tenant,
however, may be obligated to pay costs if the tenant loses.
8. Developer, its successors or assigns, must adhere to state law requirements
with regard to termination of tenancy.
9. Developer shall maintain the improvements on the Property in compliance
with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local
code requirements (California Health and Safety Code section 33418), and shall keep the
Property free from any unreasonable accumulation of debris or waste materials.
Developer shall also maintain in a healthy condition any landscaping planted on the
Property.
10. Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to the Property or any part thereof, there shall be no
discrimination against or segregation of any person, or group of persons, on account of
race, color, creed, religion, sex, mental or physical disability, marital status, national origin
or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property
nor shall the Developer itself or any person claiming under or through it establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the
Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age
Discrimination Act of 1975, and all implementing regulations.
11. Not later than five (5) business days prior to the execution of the
documents, Developer shall submit to the Executive Director a Management Plan in a
form that is acceptable to the Executive Director, including, but not limited to, the
components listed below. Approval of the Management Plan must be obtained from the
Executive Director not later than the time for the Closing. Developer shall manage the
Assisted Units in accordance with the approved Management Plan, including such
amendments as may be approved in writing from time to time by the Executive Director,
for the term of the income and rent restrictions contained in these Restrictions. The
components of the Management Plan shall include:
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(a) Management Agent. Developer shall submit the name and
qualifications of the proposed Management Agent. The Executive Director shall approve
or disapprove the proposed Management Agent in writing based on the experience and
qualifications of the Management Agent.
(b) Management Agreement. Developer shall submit a copy of the
proposed management agreement specifying the amount of the management fee, and the
relationship and division of responsibilities between Developer and Management Agent.
(c) Annual Budget and Projected Cash Flows. Prior to the Closing,
and annually thereafter not later than ninety (90) days after the close of each calendar year
thereafter until the Loan is repaid in full, Developer shall submit a projected operating
budget and cash flow to the Executive Director. The budget and cash flow shall be in a
form that is acceptable to the Executive Director.
(d) Tenant Selection Policies. Developer shall include in the
Management Plan the tenant selection policies in accordance with Section 5, above.
12. If at any time the City determines that the units are not being managed or
maintained in accordance with the approved Management Plan, the City shall send the
Developer a detailed description of the management deficiencies (a "Deficiency Notice").
If the deficiencies set forth in the Deficiency Notice are not cured within thirty (30) days
(or such longer period as may be reasonably required to cure the deficiency), with the
exception of HOME regulations that require a shorter period, the Executive Director may
require Developer to change management practices or to terminate the management
contract and designate and retain a different management agent. The management
agreement shall provide that it is subject to termination by Developer without penalty,
upon thirty (30) days prior written notice, at the direction of the Executive Director upon
failure to cure a Deficiency Notice within the time period specified above. Within ten (10)
days following a direction of the Executive Director to replace the management agent in
accordance with the terms hereof, the Developer shall select another management agent or
make other arrangements satisfactory to the Executive Director or designee for continuing
management of the units.
13. The covenants established in these Restrictions and any amendments hereto
approved by the City and Developer shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the City and their respective
successors and assigns. These Restrictions shall remain in effect for fifty-five (55) years.
In its discretion, the City may defer repayment of the HOME Loan or the City may agree
to such reasonable modifications to the requirements of these Restrictions, as they may
determine are necessary for the continued maintenance and operation of the Assisted
Units. The covenants against discrimination shall remain in effect for the period of these
Restrictions.
14. Developer shall not request disbursement of HOME funds until the funds
are needed to pay eligible costs. The City shall have the right to disapprove any request if
the City determines the request is for an ineligible item or is otherwise not in compliance
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with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504
(c)(10A.
15. Developer shall prepare, maintain and submit to the City, as appropriate,
the following records and reports in compliance with 24 CFR 92.504 (c) (12):
a. Annual Reports. Developer shall file with the City an Annual Report
(herein referred to as the "Annual Report") within one hundred twenty (120) days
following the end of each calendar year, commencing with the end of the calendar year (or
portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain
a certification by Developer as to such information as the City Executive Director may
then require, including, but not limited to, the following:
(1) The fiscal condition of the Project, including the Annual Budget and
Project Cash Flow report required by Section 10 (c) of the Affordable Housing
Restrictions which shall include a financial statement for the previous calendar year that
includes a balance sheet and a profit and loss statement indicating any surplus or deficit in
operating accounts; a detailed itemized listing of income and expenses; and the amounts of
any fiscal reserves. Such Annual Budget and financial statement shall be prepared in
accordance with generally accepted accounting practices. The City Executive Director
may require that the financial statement be audited at Developer's expense by an
independent certified public accountant acceptable to the Executive Director.
(2) Any substantial physical defects in the Project, including a
description of any major repair or maintenance work undertaken or needed in the previous
and current years. Such statement shall describe what steps Developer has taken in order
to maintain the Project in a safe and sanitary condition in accordance with applicable
housing and building codes and the property standards set forth in 24 CFR 92.251.
(3) The occupancy of the units indicating the income of each current
resident and the current rents charged each resident and whether those rents include
utilities, including records that demonstrate that the Project meets the requirements of 24
CFR 92.253 for tenant and participant protection under the HOME Program.
(4) General management performance, including tenant relations and
other relevant information.
(5) Records that demonstrate that the units meet the affordability
requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and
Safety Code, for the required period of affordability according to section 33334.3 of the
California Health and Safety Code.
(6) Evidence of a currently paid hazard insurance policy in accordance
with the requirements of Section 6 of the City/HOME Deed of Trust, with a loss payable
endorsement naming the City as a loss payee(s) together with other approved lenders (as
their interests may appear), with a "Replacement Cost Endorsement" in amount sufficient
to prevent Developer or City from becoming a co-insurer under the terms of the policy, but
in any event in an amount not less than 100% of the then full replacement cost, to be
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determined at least once annually and subject to reasonable approval by the Executive
Director.
(7) Evidence of a currently paid liability insurance policy, naming the
City as additional insured and in a form approved by the City Attorney with coverage as
described in the Loan Agreement.
(8) Termite reports pertaining to the Property every fifth (5a') year.
(9) Such other information as may be reasonably required by the
Executive Director or his/her designee.
b. Records and Audits. During the HOME Compliance Period, Developer
shall maintain the following general program records, and make them available for
inspection by the City, the State or HUD:
(1) records which demonstrate that the project meets the property
standard specified in 24 CFR 92.251;
(2) records, for each HOME Assisted Unit, which demonstrates that the
project meets the requirements of 24 CFR 92.252.
(3) records which demonstrate compliance with the tenant and
participant protections, as specified in 24 Section 29.253;
(4) records which demonstrate compliance with the Equal Opportunity
and Fair Housing requirements outlined in these Restrictions, including:
(A) data on the extent to which each racial and ethnic group and
single head of household (by gender of head of household) have applied for, participated
in, or benefited from, any program or activity funded in whole or in part with HOME
funds;
(B) documentation of actions undertaken to meet the equal
opportunity requirements of 24 CFR 92.350, which implements Section 3 of the Housing
Development Act of 1968, as amended (12 U.S.C. 1701u);
(C) documentation and data on the steps taken to implement
Developer's outreach programs to minority-owned and women -owned businesses to meet
the minority outreach requirements of 24 CFR 92.350;
(5) documentation of the steps taken to carry out an affirmative
marketing program in accordance with 24 CFR 92.351, if applicable;
(6) if applicable, records which demonstrate compliance with the
requirements relating to relocation of displaced persons, as described in 24 CFR 92.353.
At a minimum, these shall include project occupancy lists identifying the name and
address of all persons occupying the project property up until the date of the Real Estate
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Closing (i.e., the date on which Developer obtained site control);
(7) records concerning lead-based paint in accordance with 24 CFR
92.355;
(8) if applicable, records which support any requests for waivers of the
conflict of interest prohibition as stated in 24 CFR 92.356;
(9) records of certifications of contractor qualifications as they relate to
the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part
24; and
(10) any other reports issued by other monitoring agencies.
c. All records pertaining to each calendar year of HOME funds
must be retained for the most recent five year period, except that for rental housing
projects, records may be retained for five years after the project completion date; except
that records of individual tenant income verifications, project rents and project inspections
must be retained for the most recent five year period, until five years after the affordability
period terminates (24 CFR 92.508). Developer shall cooperate with the City to retain all
books and records relevant to the Loan Agreement for a minimum of five years after the
expiration of the Loan Agreement and any and all amendments hereto, or for five years
after the conclusion or resolution of any and all audits or litigation relevant to the Loan
Agreement, whichever is later. The City, the State, the Office of the Auditor General of
HUD, and/or their representatives shall have unrestricted reasonable access to all
locations, books, and records for the purpose of monitoring, auditing, or otherwise
examining said locations, books, and records with or without prior notice.
d. If so directed by the City, the State or HUD upon termination of the Loan
Agreement, Developer shall cause all records; accounts, documentation and all other
materials relevant to the work to be delivered to the City, the State or HUD, as depository.
e. All records, accounts, documentation and other materials relevant to the
Project shall be accessible at any time to the authorized representatives of the City, the
State or HUD, on reasonable prior notice, for the purpose of examination or audit.
f Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the
close of each calendar year in which these Restrictions are in effect. Developer shall
reasonably cooperate with City in performing such audit.
16. If an event of default occurs under the terms of these Restrictions, prior to
exercising any remedies hereunder, City shall give Developer written notice of such
default. If the default is reasonably capable of being cured within thirty (30) days,
Developer shall have such period to effect a cure prior to exercise of remedies by the City
under these Restrictions. If the default is such that it is not reasonably capable of being
cured within thirty (30) days, and Developer (i) initiates corrective action within said
period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as
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possible, then Developer shall have such additional time as is reasonably necessary to cure
the default prior to exercise of any remedies by City.
The City is a beneficiary of the terms and provisions of these Restrictions
and the covenants herein, both for and in their own right and for the purposes of protecting
the interests of the community and other parties, public or private, for whose benefit these
Restrictions and the covenants running with the land have been provided. Upon the
occurrence of an event of default and the expiration of the notice and cure period specified
above, the City shall have the right 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 they or any other beneficiaries of these Restrictions and covenants
are entitled.
17. The covenants and agreements contained herein shall run with the land and
not be personal obligations of Developer. Upon the sale, conveyance or other transfer of
the Property (a "Transfer") and the assumption of the obligations hereunder by a
transferee, Developer's liability for performance shall be terminated as to any obligation to
be performed hereunder after the date of such Transfer.
18. The Loan Agreement and all of its attachments shall be enforceable by
City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability
Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME
Deed of Trust provide a means of enforcement by the City if Developer is in breach of its
obligations hereunder and thereunder, including liens on the Property, use and deed
restrictions and covenants running with the land [24 CFR 92.504 (c) (13)].
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IN WITNESS WHEREOF, the parties hereto have caused these Affordability
Restrictions on Transfer of Property to be executed on the date set forth hereinabove.
ATTEST:
CITY OF SANTA ANA
Maria D. Huizar Raul Godinez II
Clerk of the Council City Manager
Dated:
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
R
Ryan O. Hodge
Assistant City Attorney
Dated:
RECOMMENDED FOR APPROVAL:
Steven A. Mendoza
Executive Director
Community Development Agency
Dated:
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DEVELOPER
SANTA ANA VILLAGE LP,
a California limited partnership
By: JHC Santa Ana Village LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
Manager
By:
Name:
Title:
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