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HomeMy WebLinkAbout30A - DEED - CAMBODIAN FAMILY PROPERTY REFINANCEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JANUARY 7, 2013 TITLE: CAMBODIAN FAMILY PROPERTY LOAN REFINANCING CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1St Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Direct Counsel to review and authorize the City Manager to sign an Assignment of Deed of Trust, a Subordination of Deed of Trust, and a Substitution of Beneficiary for action taken by Cambodian Family, a California non-profit organization, to refinance its building loan that was funded through the Federal Empowerment Zone grant. DISCUSSION On May 18, 1999, the City of Santa Ana signed a Memorandum of Agreement with the Department of Housing and Urban development (HUD) by which the City received the designation of a Round II Empowerment Zone effective January 1, 1999 through December 31, 2009. The Santa Ana Empowerment Corporation (SAEC) was created by Resolution No. 1999-043 and adopted by the City Council on July 19, 1999, to undertake the implementation of the Santa Ana Empowerment Zone program. The SAEC was subsequently incorporated under as a 501(c)(3) non-profit organization. During its ten year designation, the SAEC dutifully carried out the implementation of the Empowerment Zone Strategic Plan. As one of its final grant awards, the SAEC awarded $1,730,939 to Cambodian Family for the purchase of a building located at 1626 E. 4t" Street. This award was in response to a Request for Proposal process and allowed Cambodian Family to purchase the building and relocate to a more visible and accessible location while continuing to serve the community and enhance services in the eastern portion of the City. The Loan Agreement ("Agreement") was structured as a forgivable loan with the condition that Cambodian Family continues operating programs from the new facility for the next five years. Each year 20 percent of the total debt owed to the SAEC would be reduced. The organization has been in compliance with the terms of the Agreement and annually submits a summary of their activities and services to the City. There are 20 months remaining on the term of the Agreement. 30A-1 Cambodian Family Refinance January 7, 2013 Page 2 The Empowerment Zone designation ended September 30, 2010. The SAEC adopted a resolution to dissolve the corporation and City Council authorized the City Manager to proceed with formal dissolution through the California Secretary of State, with the City assuming responsibility for any agreements or obligations still in place. Recently, Cambodian Family gave 30-day notice of their intent to refinance the existing first trust deed loan to take advantage of the historically low interest rates. They have opened escrow and are working with Union Bank to refinance from a 6.5 to a 4.25% 10-year fixed, 25-year amortization. The refinancing necessitates the City to sign an Assignment of Deed of Trust, a Subordination of Deed of Trust, and a Substitution of Beneficiary removing the SAEC from these documents and inserting the City's name in its place. The City's position in chain of title will not change. No cash will be taken from equity and Cambodian Family intends to pay the fees associated with the refinance separate from the loan itself. FISCAL IMPACT There is no fiscal impact associated with this action. Nancy T. E ards Interim Exe tive Director Community Development Agency NTE/LAO/DS/kg Exhibit: 1. Assignment of Deed 2. Subordination Deed of Trust 3. Substitution of Beneficiary 30A-2 RECORDING REQUESTED BY: PACIFIC COAST TITLE COMPANY Escrow No,,, 54003798-DD Title No.: 97510365 AND WHEN RECORDED MAIL TO: APN; 3913-911-23 THIS LINE FOR RECORDER'S USE ASSIGNMENT OF DEED OF TRUST FOR VALUE RECEIVED, the undersigned hereby grants, assigns and transfers to all beneficial Interest under that certain Deed of Trust dated August 20, 2009 executed by The Cambodian Family, a California non-profit Public Benefit Corporation Trustor, to The First American Title Insurance Company Trustee, and recorded as Instrument No.200900449118, on August 20, 2009 , In Book `, Page of Official Records in the County Recorder's office of Orange County, Callfornia, describing land therein as; TOGETHER with the note or notes therein described or referred to, the money due and to become due thereon with Interest, and all rights accrued or to accrue under said Deed of Trust, Dated: December 7, 2012 Paul Waiters, City Manager EXHIBIT 9 ASSTGNDT 30A-3 STATE OF CALIFORNIA COUNTY OF ORANGE }SS: On before me, (This area for offlclal notarial seal) a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(les) and that by his/her/their signature(s)on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true and correct. WITNESS my hand and official seal, Signature 30A-4 30A-5 RECORDING REQUESTED BY: UNION BANK, N.A. AND WHEN RECORDED MAIL TO: UNION BANK, N.A. Attn: Collateral Management Commercial Real Estate Loan Admin. (V01-492) P. O. Box 30115 Los Angeles, CA 90030-0115 Space Above This Line For Recorder's Use SUBORDINATION OF DEED OF TRUST (To Deed of Trust) NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION OF DEED OF TRUST ("Subordination Agreement") is made this 4th day of December. 2012 by The Cambodian Family a California non-profit public benefit corporation, owner of the land hereinafter described ("Owner") and The City of Santa Ana present owner and holder of the deed of trust and note first hereinafter described ("Beneficiary"). RECITALS A. The Cambodian Family a California non-profit public benefit corporation has executed, or is about to execute, a deed of trust dated August 20, 2009, to First American Title Insurance Company as trustee, covering that certain real property legally described in Exhibit "A" attached hereto (the "Property"), to secure a debt instrument in the sum of One Million Seven Hundred Thirty Thousand Nine Hundred Thirty Nine and 001100ths Dollars ($ 1,730,939.00 ) dated August 20, 2009 , in favor of The City of Santa Ana ("Beneficiary's Deed of Trust"), which deed of trust was recorded on August 20. 2009 as Instrument/Serial No. 2009000449118 in Book/Reel N/A, Page/Image(s) N/A of Official Records, in the County of Orange , State of California ; and B. Owner has executed, or is about to execute, a deed of trust dated December 4. 2012 to UnionBanCal Mortgacie Corporation as trustee, covering said land and securing an indebtedness (the "Loan") in the amount of One Million One Hundred Fifty Thousand and 00/100ths Dollars ($ 1,150,000.00 ) evidenced by a debt instrument ("Lender's Note") in favor of Union Bank N.A. ("Lender"), payable with interest and upon the terms and conditions described therein, which deed of trust ("Lender's Deed of Trust") is to be recorded concurrently herewith, and provides, among other things, that it shall also secure additional advances and loans thereafter made upon the terms and conditions therein set forth; and EXHIBIT 2 JUtSKLUU 1 .UA (06/09) Page 1 46866-12-UB19986 30A-6 C. It is a condition precedent to obtaining the Loan from Lender that Lender's Deed of Trust, as amended from time to time, shall unconditionally be and remain at all times a lien or charge upon the Property prior and superior to the lien or charge of Beneficiary's Deed of Trust; and D. It is to the mutual benefit of the parties hereto that Lender make the Loan to Owner and Beneficiary is willing that Lender's Deed of Trust, as amended from time to time, shall constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of Beneficiary's Deed of Trust. AGREEMENT 1. In consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the Loan, it is hereby declared, understood and agreed as follows: 1.1 That Lender would not make the Loan without this Subordination Agreement. 1.2 That Lender's Deed of Trust, as amended from time to time, securing Lender's Note and any amendments, renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the Property prior and superior to the lien or charge of Beneficiary's Deed of Trust. 1.3 That this Subordination Agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of Beneficiary's Deed of Trust to the lien or charge of Lender's Deed of Trust, as amended from time to time, and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreements as to such subordination including, but not limited to, those provisions, if any, contained in Beneficiary's Deed of Trust which provide for the subordination of the lien or charge thereof to a deed or deeds of trust or to a mortgage or mortgages. 2. Beneficiary declares, agrees and acknowledges that: 2.1 Beneficiary consents to and approves (a) all provisions of Lender's Note and Lender's Deed of Trust, and (b) all agreements including, but not limited to, any loan or escrow agreements between Owner and Lender, for the disbursement of the proceeds of the Loan; 2.2 Lender, in making disbursements pursuant to any such agreement, is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; 2.3 Beneficiary intentionally and unconditionally subordinates the lien or charge of Beneficiary's Deed of Trust in favor of the lien or charge upon the Property of Lender's Deed of Trust, as amended from time to time, and understands that in reliance upon and in consideration of this subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this subordination; and 2.4 An endorsement has been placed upon the note secured by Beneficiary's Deed of Trust that Beneficiary's Deed of Trust has by this instrument been subordinated to the lien or charge of Lender's Deed of Trust, as amended from time to time. SUBREDOT.CA (06/09) Page 2 46866-12-UB19986 30A-7 (ALL SIGNATURES MUST BE ACKNOWLEDGED) OWNER: The Cambodian Family,a California non-profit, public benefit corporation By: Title: BENEFICIARY: The City of Santa Ana By: Name: Title: IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. JUBRUUU'1'.C'.A (06/09) Page 3 46866-12-UB19986 30A-8 Jut3xhuU1.CA (06/09) Page 4 46866-12-UB19986 30A-9 EXHIBIT 'W' LEGAL DESCRIPTION OF PROPERTY Assessor's Tax Parcel No(s): 398-411-23 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: ALL OF LOT 10, EXCEPT THE WEST 37.50 FEET THEREOF AND THE WEST 43.72 FEET OF LOT 12, BLOCK "B" OF GARDNER VILLA TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 13, PAGE 97 OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. PARCEL 2: LOTS 12 AND 14 IN BLOCK "B" OF THE GARDNER VILLA TRACT, AS PER MAP THEREOF RECORDED IN BOOK 13, PAGE 97 OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. SUBREDOT.CA (06/09) Page 5 46866-12-UB19986 30A-10 30A-11 NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF On before me, Notary Public personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the forgoing paragraph is true and correct. WITNESS my hand and official seal. Signature (SEAL) 30A-12 30A-13 NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF On before me, Notary Public personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the forgoing paragraph is true and correct. WITNESS my hand and official seal. Signature (SEAL) 30A-14