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Home My WebLink AboutR23-Economic Development Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: SUBJECT: NEIGHBORHOOD REVITALIZATION PROGRAMS (OLD TOWNE SAN BERNARDINO, 6TH TO 9TH STREETS, F STREET TO 1215; NEIGHBORHOOD INITIATIVE PROGRAM (NIP) TARGET AREA #1 ____________________________________u~_______________________________________________________________.+~_____________________________________________._._..*_nn.__._.__.___________________________ February 24, 2003 , ~., f , ... Maggie Pacheco Deputy Director DATE: SvnoDsis of Previous Commission/Council/Committee Action(s): On October 10, 2002, Redevelopment Committee Members Anderson, Suarez and Estrada unanimously voted to recommend that the Community Development Commission consider this item for approval. However, since the Committee considered and approved this item, the Community Development Commission has since approved a specific infill housing Grant Program to be implemented in NIP Target Area # I. Under this Grant Program, the County of San Bernardino will provide NIP funds to the Agency and the Agency will provide $10,000 grants to non-profit organizations to help with the development of new infill housing and potentially with the rehabilitation of distressed housing units such as HUD repossessions. Recommended Motion(s): (Communitv Development Commission) MOTION A: THAT THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO ACCEPT AND APPROVE THE CONCEPTUAL BEAUTIFICATION ACTION TEAM (BAT) NEIGHBORHOOD REVITALIZATION STRATEGY FOR THE OLD TOWNE SAN BERNARDINO AREA, GENERALLY LOCATED BETWEEN 6TH AND 9TH STREETS, F STREET TO THE 1215 (CENTRAL CITY NORTH AND UPTOWN REDEVELOPMENT PROJECT AREAS). MOTION B: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORJZING THE AGENCY EXECUTIVE DIRECTOR TO EXECUTE THE OLD TOWNE SINGLE-FAMILY ACQUISITION AND CONSTRUCTION GRANT FUNDING AGREEMENT WITH CREATIVE HOUSING SOLUTIONS, A NON-PROFIT ORGANIZATION (ACQUISITION OF VACANT LOTS, DEVELOPMENT OF ___..______...___...~!':~__!{g.lJ.~~~L~~Q..f'Q~~!B..I:!':.~!o_g.~~!lg~.g':'..l).I~!~<::.:r.!!g.~g.~}~__Q.I:Q}g.\Y_l:'.~).,..........___ Contact Person(s): Maggie Pacheco Old Towne (Central CityfUptown Redevelopment Project Areas) and NIP Target Area # I Phone: (909) 663-1044 Project Area(s) Ward(s): 1&2 Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 LettersIMisc. FUNDING REQUIREMENTS Amount: $ $200,000 Source: LowlMod Funds SIGNATURE: : /] (vV) Gary V n sdel, Executive Director Budget Authority: /fl1?~- aggie Pacheco, Deputy Director 2002/2003 EDA Budget Commission/Council Notes: ~~~~...[JJ;?J?SP:3::..'J....___...______........__.___._..........................---..-.-.....---....---.---...........-.-........---.-.-....---.. P:\CDBG Dept\Maggic\03-03"{)3 CH$ Housing Dcv CDC item.doc COMMISSION MEETING AGENDA Meeting Date: 03/03/2003 Agenda Item Number: W EC 0 NOM I C D EVE LOP MEN TAG E N C Y STAFF REPORT --------~-----------------------------------------------~--------------------------+-------------------------------------------------------------------------------+------------------------------- Neil!hborhood Revitalization Prol!rams Old Towne San Bernardino, 6th to 9th Streets, F Street to 1215: Neil!hborhood Initiative Prol!ram (NIP) Tarl!et Area #1 BACKGROUND AND CURRENT ISSUES: Purchase of HUD Homes in NIP Area #1 and Old Towne In September 1999, the Agency entered into a Cooperative Agreement with the County of San Bernardino ("County") to acquire (amongst other items) all HUD properties made available to the County within six (6) Neighborhood Initiative Program (NIP) areas. Under the Cooperation Agreement, the Agency through its partnerships with the Acquisition, Rehabilitation and Resale Program (ARR) Participants, acquired and substantially rehabbed over 140 HUD foreclosures and caused to sell these homes to first-time homebuyers throughout all NIP areas. In September 2001, the agreement between the County and HUD expired, thus effectively terminating the Agency's exclusive rights to buy HUD properties from the County in the NIP areas under the Cooperative Agreement. During the past seven (7) years, through the ARR Program, the Agency purchased, caused to rehabilitate and sell to homebuyers in excess of 900 HUD foreclosures, hence, having an economic impact on the local community of approximately $60 million and increasing homeownership opportunities to 900 homebuyers. In December 2001, HUD issued new regulations that affected the manner in which the Agency implemented the ARR Program. After several discussions with HUD representatives, it was determined that the new regulations would make it difficult for the Agency to continue the ARR Program with "for-profit developers/participants." Consequently in June 2002, the Community Development Commission authorized Agency Staff to make changes to the ARR Program so that the Agency could continue the program with "for-profit" developers/participants. Essentially, the changes the Commission authorized would allow the Agency to purchase HUD units, hold title to pre-selected HUD units, and concurrently enter into a License Agreement with the developer/participant who will be responsible for providing the financing for acquisition, rehabilitation and also to market and resell the HUD units to income qualified homebuyers. Because of the high demand for housing and the positive economy, the number of HUD homes in the community has decreased, but from time to time HUD homes do become available and Staff would like to continue to have the Agency purchase HUD units to the extent units become available within NIP Target Area #1 and will do so under the approved ARR restructured program. Subsequent to the Redevelopment Committee acting on this item, the Commission approved the NIP Target Area #1 $10,000 Grant Program to assist non-profit organizations in the development of new single-family homes. This Grant Program will be administered as per the County of San Bernardino approved guidelines. P:\CDBG Depl\Maggie\03-03-03 CHS Housing Dcv CDC [tern. doc COMMISSION MEETING AGENDA Meeting Date: 03/03/2003 Agenda Item Number: !<;J..3 Economic Development Agency Staff Report Neighborhood Revitalization Programs Page 2 Creative Housing Solutions has recently acquired the option to purchase the residential lot located at 1465 Mountain View Avenue and they will construct a new single-family home on the lot using the $10,000 NIP Grant Program. Creative Housing Solutions will also buy HUD units if and when they become available via the Agency License Agreement, and the County has authorized the use of the NIP Grant Program funds for the purchase and rehabilitation of HUD units only in NIP Target Area #1 in order to continue to create homeownership opportunities. In addition, under the Agency License Agreement, Creative Housing will, when feasible, purchase HUD units within the Old Towne Pilot Area. Old Towne San Bernardino - Mavor's Neil!hborhood Revitalization The Mayor has embarked upon a plan to improve and rebuild the area located between 6th and 9th Streets, F Street to 1215 (the "Pilot Area"). This will have the effect of complementing the San Bernardino City Unified School District's plan to construct the 10-acre Jones Elementary School located between 6th to 8th Streets, F to G Streets and the two (2) new TELACU senior housin~ projects; one on 6th and F Streets consisting of 75 units and the other 75-unit senior complex on 4 and H Streets. The 6th and F Street senior complex is presently under construction, while the 4th and H Street complex will commence construction in spring of 2003. The Pilot Area is also located within a portion of the Uptown and Central City North Redevelopment Project Areas. Separately, but concurrently Agency Staff, at the direction of the Commission, is presently working on redevelopment plan amendments to reinstate the Agency's powers of eminent domain in Central City North and Uptown Redevelopment Project Areas as a means to eradicate blight and stimulate private investment. As a result of the Mayor's Pilot Program, the Beautification Action Team (BAT), comprised of several department heads, developed the attached conceptual BAT Strategy that encompasses a gamut of programs that are intended to concentrate City/Agency services and programs in the Pilot Area with the intent of rejuvenating and instilling neighborhood pride, economic and social stability in the neighborhood. The strategy provides for the improvement of the existing infrastructure and housing, the development of new housing where appropriate, and if applicable, commercial development. In many respects the conceptual BAT Strategy is similar to the NIP Area #1 neighborhood strategy, but is broader in the sense that the program demands and necessitates the use of City resources (NIP uses primarily County NIP funds), leveraging City/Agency resources with private investment and capitalizing on the development prospects in the area due to the number of vacant parcels. The BAT Strategy also provides for developing new infill single-family housing, as well as creating new open spaces and working with the School District on the possible relocation of homes the District is purchasing. In order to implement the Old Towne Strategy, a commitment of City/ Agency resources will be required and Staff will be exploring some funding options in the foreseeable future and present those options to the Commission (i.e., section 108 CDBG loan). To this end Agency Staff, in concert with Creative Housing Solutions, a newly formed nonprofit corporation (whose members include representatives of ANR Industries and CivicStone) is presently working on two housing development scenarios for the Pilot Area. Scenario # I involves the ______________.~_________________________d_____________________~_______________________________.~.________________-------------..----..--.---------------------------.-------.< P:\Clerical Services Dept\Margaret ParkcrlAgenda\CDC 2003\03-03-03 CHS Housing Dev CDC Itcmdoc COMMISSION MEETING AGENDA Meeting Date: 03/03/2003 Agenda Item Number: Jl.J.3 . Economic Development Agency Staff Report Neighborhood Revitalization Programs Page 3 construction of sixteen (16) new single-family homes on scattered residential lots throughout the Pilot Area that Creative Housing Solutions has obtained an option to purchase (see Exhibit #1, list of properties); the homes would be developed compatible with the existing Victorian architecture treatments that are prevalent throughout the neighborhood. Scenario #2 includes the potential relocation of fourteen (14) School District homes (see Exhibit #2) that may have unique or historic features that the School District has either already acquired or will acquire in conjunction with the Jones Elementary acquisition program and together with the construction of two (2) new single- family homes; under the attached Grant Agreement, Creative Housing Solutions/Agency will work with the School District over the course of the next six (6) months to explore the feasibility and develop a relocation plan for a maximum of fourteen (14) homes. To implement the relocation ofthe District homes, it is anticipated that the District would ask to transfer the homes to the Agency via a future License Agreement with limited restrictions (i.e., structures must be moved within a specific timeframe), with the Agency in turn transferring them to Creative Housing Solutions who will be obligated to relocate the homes to the lots that Creative Housing has purchased for this program or will be purchasing upon consideration and approval of the Grant Agreement. Once agreement is reached between the parties, Staff will return to the Commission to seek various approvals to allow for the implementation of the School District home relocation program. To make this development possible, it is recommended, and the Redevelopment Committee has concurred, that the Agency will provide Creative Housing Solutions with a $200,000 Housing Grant as per the attached Grant Agreement. Under the Grant Agreement, Creative Housing Solutions will buy, or be reimbursed for, the sixteen (16) privately-owned lots using up to $128,000 ($8,000 grant per residential lot) of the proposed $200,000 Agency Grant for the purposes set forth in this report and the Grant Agreement. Again, if the relocation of the District homes proves to be infeasible due to structural or cost factors, Creative Housing Solutions is obligated to develop all sixteen (16) new single-family homes. Under development Scenario #2, Creative Housing Solutions will be required to submit a comprehensive proforma outlining their costs anticipated with the relocation and restoration of the District homes which includes customary and reasonable development costs including a developer return of not more than eight (8) percent; any profits made in excess of the development costs and reasonable return would be shared 50/50 with the Agency. Moreover, should Creative Housing Solutions realize a return greater than the traditional eight (8) percent profit, they will be required to use their additional profits to expand their affordable housing operations within the City of San Bernardino. Creative Housing Solutions is responsible for obtaining their own resources for relocation of the District homes and/or construction of the new infill housing units. The $72,000 remaining Agency Grant Funds will be used by Creative Housing Solutions to off-set their development costs as approved by Staff when the project feasibility and proformas have been completed in either development scenario. ENVIRONMENTAL IMPACT: Any development or rehabilitation will occur on existing infill parcels that are appropriately zoned for the development, and therefore, exempt from California Environmental Quality Act (CEQA), per Section 15332 and therefore, approval ofthe Grant agreement is exempt from CEQA. ______________~*_n_________________________________________*___________________________________._______________________________d____________________________________________---. P:\Clerical Services Depl\Margaret ParkeMgcnda\CDC 2003\OJ-03.o) CHS Housing Dev CDC Item. doc COMMISSION MEETING AGENDA Meeting Date: 03/03/2003 Agenda Item Number: 1?J.3 Economic Development Agency Staff Report Neighborhood Revitalization Programs Page 4 FISCAL IMPACT: Approval of the Grant Agreement will obligate the Agency to commit and set aside $200,000 from the Agency Low/Mod Housing Fund. Funds are available in the 2002-2003 EDA Budget. RECOMMENDATION: That the Community Development Commission adopt the Motion and the attached Resolution. M:m,2~ P:\CDBG Dcpl\Maggie\03-03-03 CHS Housing Dev eDe Item. doc COMMISSION MEETING AGENDA Meeting Date: 03/03/2003 Agenda Item Nnmber: .t>>- Exhibit #1 CREATIVE HOUSING SOLUTIONS Residential, Vacant Parcels Either Closed or In Escrow February 19,2003 APN# Address I. 0134-012-08 835 Victoria 2. 0134-012-09 Victoria & H Street 3. 0134-022-02 Victoria & 7th Street 4. 0134-022-03 Victoria & 7'h Street 5. 0134-022-13 Victoria & 7th Street 6. 0134-022-14 Victoria & 7'h Street 7. 0134-022-15 Victoria & 7th Street 8. 0134-014-24 626 North G Street 9. 0134-014-25 G Street & 6th Street 10. 0134-014-26 G Street & 6th Street II. 0140-263-18 718 West 7ili Street 12. 0134-014-27 740 West 6th Street 13. 0134-013-18 640 North Crescent 14. 0134-011-16 Victoria & H Street 15. 0140-192-27 825 North H Street 16. 0140-261-15 752 North H Street N :j:j: .... .~ :J .~ -= io<i riiil '" u > ::: 'C S <'II :=: :c <'II ..c CIl e::: 'C c:: <'II 'C ~ o == CIl ..c o .. III CIl E o ::I: .~ "0 . 0 ~ ..c · c.J = III ~ "eo ~ . ~ . e ~ . ~ ~ is u 1;; ';: 1;; c nl II II ... Housing Improvement Pilot Program in Old Town San Bernardino Beautification Action Team (BAT) Proposed Strategy Goal: Transform the area (bounded generally by 6th Street, 9th Street, F Street, and the 1- 215) into a quality residential neighborhood focused around the new Jones Elementary School, Senior Housing Project, and a proposed park Short-term action items (first 6 months): . Conduct focused code enforcement through a cooperative approach with owners/tenants that involves City Attorney, Fire, Police, etc. (NIP model) . Repair streets, sidewalks, curb/gutter, street lighting, etc. through the "Rolling Thunder" program . Rehab existing housing through EDA grants, loans, etc. Establish landscape maintenance district membership as a condition of grants/loans. . Involve property owners and tenants; provide education regarding property maintenance and crime prevention . Engage social services agencies as partners to help address community needs (jobs, child care, elder care, etc.) . Improve existing businesses (if any) and offer the Business Incentive Grant Program through EDA to encourage certain development standards, unified theme, and architectural treatments . Begin acquisition of vacant land and properties north ofthe planned Jones Elementary to pave the way for new residential development . Work with the School District to encourage or develop a plan to acquire the remaining parcels south of 8th Street between F and G Streets, including the northeast comer of 6th and G Streets Long-term action items (6 months and beyond): . Develop single-family infill housing on larger vacant parcels - min. 1600 sq/ft and "urban" design . Relocate/rehab selected historic homes to create a "historic row" . Acquire and develop a neighborhood park north of the school property . Establish landscape maintenance districts for all new developments; encourage districts (along H St. first) for existing property owners to ensure long-term maintenance of the neighborhood . Continue community involvement and education programs . Acquire and demolish homes that cannot be rehabed, or are too small for most families; infill with new housing . Develop a landscaping plan . Implement traffic calming measures to help' create a neighborhood atmosphere OFFICE OF THE MAYOR JUDITH VALLES 300 North "D" Stteet. San Bernardino . CA 92418-0001 909.384.5133. Fax: 909.384.5067 www.ci.san-bernardino.ca.us '" -r ,-..... ~.: September 5, 2002 Your neighborhood has been selected to receive enhanced City services under a new pilot program, the "Neighborhood Revitalization Program". The pilot area is from 6th to 9th Streets between the 215 Highway and "F" Street. The purpose of this program is to build and maintain a partnership between individual neighborhoods and the City of San Bernardino. This partnership is designed to encourage cooperative and creative problem solving and improve the quality of life consistent with neighborhood and community values. In addition to the enhanced city services we will be asking property owners and residents to take responsibility for maintaining their properties and working with the City to improve the appearance and quality of life of the neighborhood. The program will allow the City to work with the neighborhood to identify problems. These problems will be addressed by providing targeted improvements, resources and enforcement. Starting September 10, 2002 members of the City of San Bernardino Beautification Action Team (BAT) will start walking the neighborhood assessing conditions on properties. Owners and tenants will be provided with a checklist that will identify any exterior property maintenance violations, along with resources available to correct the violations and a notice to correct. Additionally the public right-of-way will be surveyed to identify any problems with street trees, streets, curbs, gutters and sidewalks. If yoc have questions reg<trding this program, please cali the City of San Bernardino Code Compliance division at 384-5205 and ask for Keith Sartin or Robert Houts. ~/ I thank you for ,you;'understanding and cooperation as we move forward in beautifying our town. . .. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 \5 (: l. ,- .--\ I' L RESOLUTION NO: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE AGENCY EXECUTfVE DIRECTOR TO EXECUTE THE OLD TOWNE SINGLE-FAMILY ACQUISITION AND CONSTRUCTION GRANT FUNDING AGREEMENT WITH CREATfVE HOUSING SOLUTIONS, A NON-PROFIT ORGANIZATION (ACQUISITION OF VACANT LOTS, DEVELOPMENT OF NEW HOUSING AND POSSIBLE RELOCATION OF DISTRICT HOMES IN OLD TOWNE). WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") desires to continue its efforts to revitalize and improve neighborhood housing conditions, and provide affordable housing opportunities, particularly within the Old Towne area bounded by 6th to 9th Streets, F Street to 1215 ("Old Towne") situated within the boundaries of the Central City North and Uptown Redevelopment Project Areas ("Project Area") in accordance with the redevelopment for the Project Area, and also within Neighborhood Initiative Program (NIP) Target Area #1 bounded by 13th and 18th Streets, and D Street and Sierra Way (NIP Area #1); 16 and 17 WHEREAS, in order to facilitate its revitalization efforts, the Agency desires to enter into a Grant Agreement ("Agreement") with Creative Housing Solutions, a non-profit organization, ("Creative Housing") who will engage in the acquisition of vacant residential parcels in Old Towne for the purpose of relocating and restoring the homes to be acquired by the San Bernardino Unified School District ("District") in connection with the development of Jones Elementary School, and or the construction of new single-family homes scattered throughout the Old Towne. Moreover, the Agency and Creative Housing desire to continue the Agency's efforts to buy and rehabilitate, to the extent they are available, HUD repossessions units ("HUD Units") for the purpose of creating homeownership opportunities for first time homeowners in the City of San Bernardino in accordance with the previously approved June 2002 License Agreement; and 18 19 20 21 22 23 24 25 26 27 08 /II I P:\CkricaJ Services Dept\Margarel ParkerIResoJutions\2003\OJ_OJ-QJ CHS CDC Resolution.doc ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 5 16 17 18 19 20 21 22 23 24 25 26 27 WHEREAS, the Agreement with Creative Housing will assist the Agency in meeting its replacement and inciusionary housing needs in accordance with the Redevelopment Plan for the Project Area, and further to assist in the eradication of blighted and underutilization of land uses, and provide new and modern affordable housing opportunities for low- and moderate- income households (the "Project"); and WHEREAS, the Project has been determined to be categorically exempt from the California Environmental Quality Act (CEQA) requirements, per Section 15332, Class 32; and the Project does not require further review under CEQA; and WHEREAS, under Section 33333.4 of the California Community Redevelopment Law, the Agency is authorized to utilize low- and moderate-income housing funds ("Agency Housing Fund") to expand and increase housing opportunities for households whose income do not exceed 120% of the area median income for San Bernardino County; and NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CTIY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section I. The Executive Director of the Agency ("Director") or hislher designee is hereby authorized and directed to execute on behalf of said Commission the Agreement between the Agency and Creative Housing. Section 2. The Director or hislher designee is hereby authorized to appropriate up to Two Hundred Thousand Dollars ($200,000) from the Agency's Housing Fund (2002-2003 Budget) for the purpose of implementing the Agreement. Section 3. The Director or hislher designee is authorized to make changes to the Agreement, provided said changes are not substantive in nature, and as approved by Agency Special Counsel. Section 4. The Community Development Commission has determined that the Project is "categorically exempt" pursuant to CEQA, Section 15332, Class 32, guidelines. Section 5. The Resolution shall become effective immediately upon its adoption. 08 //1 2 P:\Clerical Services DepI\Margarel PanerIRcsolutionsIlOO)\03.{J)_03 CHS CDC Rcsolulion.doc 1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE AGENCY EXECUTIVE DIRECTOR TO EXECUTE THE OLD TOWNE SINGLE-FAMILY ACQUISITION AND CONSTRUCTION GRANT FUNDING AGREEMENT WITH CREATIVE HOUSING SOLUTIONS, A NON-PROFIT ORGANIZATION (ACQUISITION OF VACANT LOTS, DEVELOPMENT OF NEW HOUSING AND POSSIBLE RELOCATION OF DISTRICT HOMES IN OLD TOWNE). 2 3 4 5 6 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 8 Community Development Commission of the City of San Bernardino at a , 2003, by the following vote to wit: meeting 9 thereof, held on the day of 10 Commission Members: Aves 11 ESTRADA 12 LONGVllLE 13 MCGINNIS 14 DERRY 16 SUAREZ 17 ANDERSON 18 MCCAMMACK Navs Abstain Absent 19 20 Rachel G. Clark, City Clerk 21 The foregoing resolution is hereby approved this day of ,2003. 22 23 .0 Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 24 25 26 27 By: 3 P:\Cleric.al Services Dept\Margan:1 Parker\Resolulions\2003\03-03.0J CHS CDC Reso!l,Ition.doc Exhibit #1 CREATIVE HOUSING SOLUTIONS Residential, Vacant Parcels Either Closed or In Escrow February 19, 2003 APN# Address 1. 0134-012-08 835 Victoria 2. 0134-012-09 Victoria & H Street 3. 0134-022-02 Victoria & 7th Street 4. 0134-022-03 Victoria & 7th Street 5. 0134-022-13 Victoria & 7th Street 6. 0134-022-14 Victoria & 7th Street 7. 0134-022-15 Victoria & 7th Street 8. 0134-014-24 626 North G Street 9. 0134-014-25 G Street & 6th Street 10. 0134-014-26 G Street & 6th Street 11. 0140-263-18 718 West 7th Street 12. 0134-014-27 740 West 6th Street 13. 0134-013-18 640 North Crescent 14. 0134-011-16 Victoria & H Street 15. 0140-192-27 825 North H Street 16. 0140-261-15 752 North H Street "'C C1l ... ell .'!:: :c ell .c C1l c:: "'C c::: ell '" U "'C N C1l 'It: ..:: ~ - . == - f-'" .- ..: z .Q C1l .- '" :: .c -= p: ... 0 ~ ~ ~=I ... III C1l E 0 :c ~ ~ ... C,) .;: ... III C . "S 0 ~ . 0 . . .c = Ii C,) e . III ~ ~ . ~ . e . ~ ... '" ~ = is u ,., II II II ... ! e " '" ~ ~ ::l ~ N ~ e " '" .. Z ~ ~ ~ ~ e " '" .. Z I; Housing Improvement Pilot Program in Old Town San Bernardino Beautification Action Team (BAT) Proposed Strategy Goal: Transform the area (bounded generally by 6th Street, 9th Street, F Street, and the 1- 215) into a quality residential neighborhood focused around the new Jones Elementary School, Senior Housing Project, and a proposed park Short-term action items (first 6 months): . Conduct focused code enforcement through a cooperative approach with ownersltenants that involves City Attorney, Fire, Police, etc. (NIP model) . Repair streets, sidewalks, curb/gutter, street lighting, etc. through the "Rolling Thunder" program . Rehab existing housing through EDA grants, loans, etc. Establish landscape maintenance district membership as a condition of grants/loans. . Involve property owners and tenants; provide education regarding property maintenance and crime prevention . Engage social services agencies as partners to help address community needs (jobs, child care, elder care, etc.) . Improve existing businesses (if any) and offer the Business Incentive Grant Program through EDA to encourage certain development standards, unified theme, and architectural treatments . Begin acquisition of vacant land and properties north of the planned Jones Elementary to pave the way for new residential development . Work with the School District to encourage or develop a plan to acquire the remaining parcels south of 8th Street between F and G Streets, including the northeast comer of 6th and G Streets Long-term action items (6 months and beyond): . .Develop single-family infill housing on larger vacant parcels - min. 1600 sq/ft and "urban" design . Relocatelrehab selected historic homes tel create a "historic row" . Acquire and develop a neighborhood park north of the school property . Establish landscape maintenance districts for all new developments; encourage districts (along H S1. first) for existing property owners to ensure long-term maintenance of the neighborhood . Continue community involvement and education programs . Acquire and demolish homes that cannot be rehabed, or are too small for most families; infill with new housing . Develop a landscaping plan . Implement traffic calming measures to help. create a neighborhood atmosphere . , .' OfFicE OF THE MAYOR JUDITH VALLES 300 North "D" Street. San. Bernardino' CA 92418-0001 9t19.384.5133 . Fax: 909.3845067 www.cLsan-bernardino.ClLus ~ ,.. .-..... :~..' , ....' September 5, 2002 ". ~':. .:..' . ."._. n Your neighborhood has been selected to receive enhanced City services under a new pilot program, the "Neighborhood Revitalization Program". The pilot area is from 6th to 9th Streets between the 215 Highway and "F" Street. The purpose of this program is to build and maintain a partnership between individual neighborhoods and the Oty of San Bemardino. This partnership is designed to encourage cooperative and creative problem solving and improve the quality of life consistent with neighborhood and community values. In addition to the enhanced dty services we will be asking properly owners and residents to take responsibility for maintaining their properties and working with the Oty to improve the appearance and quality of life of the neighborhood. The program will allow the City to work with the neighborhood to identify problems. These problems will be addressed by providing targeted improvements, resources and enforcement. Starting September 10, 2002 members of the City of San Bernardino Beautification Action Team (BAT) will start walking the neighborhood assessing conditions on properties. Owners and tenants will be provided with a checklist that will identify any exterior property maintenance violations, along with resources available to corr~ the violations and a notice to correct. Additionally the public right-of-way will be surveyed to identify any problems with street trees, streets, curbs, gutters and sidewalks. If yet: have quescons reg'3rding this program, please call the City of San Bernardino Code Compliance division at 384-5205 and ask for Keith Sartin or Robert Houts. .~. I thank you for ,vou;'understanding and cooperation as we move forward in beautifying our town. OLD TOWNE SINGLE FAMILY RESIDENTIAL ACQUISITION AND CONSTRUCTION GRANT AGREEMENT By and Between The Redevelopment Agency of the City of San Bernardino (Agency) And Creative Housing Solutions, A California Non-Profit Public Benefit Corporation (Developer) ARTICLE I Section 1.01. Section 1.02. Section 1.03. Section 1.04. Section 1.05. ARTICLE II Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14. Section 2.15. Section 2.16. Section 2.17. Section 2.18. TABLE OF CONTENTS Page TERMS AND CONDITIONS............................ 1 Integration of All Agreements Relating to the proj ect and Definition of Terms........... 1 Parties to the Agreement...................... 9 Prohibition Against Change in Ownership, Management and Control of Developer and Assignment of Agreement.............. .........9 Benefit to Project Area..... .................10 List of Exhibits to Agreement................ 10 DISBURSEMENT OF AFFORDABLE HOUSING DEVELOPMENT GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Affordable Housing Development Grant......... 11 Developer Agreement to Undertake the proj ect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Project Development Cost Pro Forma........... 16 School District House Due Diligence Period... 18 Acceptance by Developer of School District Houses and Relocation and Rehabilitation of Restored New Homes........................... 19 Sale of Completed New Homes to Qualified Homebuyers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Final Project Cost Verification.............. 22 Agency Participation Fee in Retained Earnings of Developer in the Project.. '" ....23 Agency as a Party to a School District Agreement or License Relating to any School District House............................... 25 Minimum Conditions for any Agency License Agreement Relating to Disposition of School District Houses.............................. 25 RESERVED - NO TEXT. . . . . . . . . . . . . . . . . . . . . . . . . . . 32 RESERVED - NO TEXT........................... 32 Developer's Conditions Precedent...... .......32 The Agency's Conditions Precedent.... ..... ...33 Satisfaction of Conditions Precedent......... 33 Representations and Warranties............... 33 Damage, Destruction and Condemnation......... 37 Developer Market Reports to the Agency....... 38 ARTICLE III DEVELOPMENT OF THE DEVELOPER LOTS AND THE AGENCY LOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 03-03-03 CHS Old Towne Agreement _ i _ . Section 3.01. Section 3.02. Section 3.03. Section 3.04. ARTICLE IV USE Section 4.01. 49 Section 4.02. Section 4.03. Section 4.04. Section 4.05. Development by Developer..................... 39 Property Taxes and Assessments. . . . . . . . . . . . . . . 46 Prohibition Against Transfer................. 47 Security Financing; Right of Holders......... 47 OF THE DEVELOPER LOTS.. ................... ....49 Uses.......................................... . Maintenance of the Developer Lots..... .... ...50 Obligation to Refrain from Discrimination. ...50 Form of Nondiscrimination and Nonsegregation Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Effect and Duration of Covenants Under Section 4.01 and Section 4.04........................ 52 ARTICLE V DEFAULTS, REMEDIES AND TERMINATION .................. 52 Section 5.01. Section 5.02. Section 5.03. Section 5.04. ARTICLE VI Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Section 6.06. Section 6.07. Section 6.08. Section 6.09. Section 6.10. Section 6.11. Defaults - General........................... 52 Legal Actions................................ 53 Rights and Remedies are Cumulative........... 53 Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 GENERAL PROVISIONS............................. 54 Notices, Demands and Communications Between the Parties.................................. 54 Conflict of Interest......................... 55 Warranty Against Payment of Consideration for Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Nonliability of Agency Officials and Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Enforced Delay: Extension of Time of Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Inspection of Books and Records.............. 56 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Real Estate Commissions.................. ....57 Indemnification.. .... . . . . . . . . . . . . .. . . . . . . . ... 57 Attorneys' Fees.............................. 57 Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT ........... 58 Section 7.01. Entire Agreement............................. 58 EXHIBIT "A" EXHIBIT "B" EXHIBIT "c" EXHIBIT "D" Legal Description of Developer Lots Form of Notice of Agreement Project Description/Scope of Development Schedule of Performance 03.03-03 CHS Old Towne Agreement - ii - . . EXHIBIT "E" EXHIBIT "F" 03-03-03CHSOldToWJ\CAgrtemc:nt - ---~....,...,........,....,. .--- ---_.._._---~-"_._..- ._---_.__._--_.~._...,~..>>..._._~~~-, Form of Section 33334.3 Covenant School District Houses - iii - OLD TOWNE SINGLE FAMILY RESIDENTIAL ACQUISITION AND CONSTRUCTION GRANT FUNDING AGREEMENT THIS OLD TOWNE SINGLE FAMILY RESIDENTIAL ACQUISITION AND CONSTRUCTION GRANT FUNDING AGREEMENT (this "Agreement") is entered into as of March 2003, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency") and CREATIVE HOUSING SOLUTIONS, a California non-profit public benefit corporation (the "Developer") in light of the facts set forth in the following paragraphs of the Recitals: RECITALS [INSERT TEXT OF RECITAL FACTS AS APPROPRIATE] NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE AGENCY AND THE DEVELOPER HEREBY AGREE AS FOLLOWS: ARTICLE I TERMS AND CONDITIONS Section 1.01. Integration of All Agreements Relating to the Project and Definition of Terms. (a) This Agreement integrates all of the terms and conditions mentioned herein and supercedes all negotiations, discussions and understandings between the parties with respect to the Project and all items of assistance which the Agency may hereafter provide to the Developer. (b) In addition to the words which have defined meanings as set forth in the preceding paragraphs of this Agreement, certain other phrases or terms as used in this Agreement shall have the meaning set forth as follows: Adjusted Family Income. The words "Adjusted Family Income" mean the anticipated total annual income (adjusted for family size) of each individual or family residing or treated as residing in the New Home as calculated in accordance with Treasury Regulation 1.167 (k) - 3b) (3) under the Code, as adjusted, based upon family size in accordance wi th the household income adj ustment factors adj usted and 03-03-0J CHS Old Towne Agreement 1 amended from time to time, pursuant to Section 8 of the United States Housing Act of 1937, as amended. Affordable Housinq Cost. The words "Affordable Housing Cost" shall have the meaning as set forth in Health and Safety Code Section 50052.5, as this section may hereafter be amended from time-to-time by the State of California. A Qualified Homebuyer, and/or the Successor-In-Interest of such Qualified Homebuyer, if any, shall pay no more than an Affordable Housing Cost as its purchase price for the New Home as of the applicable Delivery Date. Affordable Housinq Development Grant. The words "Affordable Housing Development Grant" mean and refer to the grant to the Developer of certain low- and moderate- income housing funds of the Agency in the total aggregate amount not to exceed Two Hundred Thousand Dollars ($200,000) which the Developer shall use and apply in connection with the redevelopment of sixteen (16) New Homes on the Developer Lots, which shall be reserved for sale and occupancy by Qualified Homebuyers. The amount of the Affordable Housing Development Grant as disbursed by the Agency to the Developer shall be subj ect to final audit and, if applicable, adjustment, by the Agency as provided in Section 2.05; in the event that Final proj ect Costs as incurred by the Developer are less than the estimated Project development costs of $ shown in the Project development cost pro forma on file with the Agency. Delivery Date. The words "Delivery Date" mean the date of delivery of title and possession of the New Home by the Developer to the Qualified Homebuyer at the close of each New Home Escrow. Developer Lot. The words "Developer Lot" mean and refer to each of the sixteen (16) parcels of land located in the City of San Bernardino and more particularly described in Exhibit "A". Effective Date. The words "Effective Date" mean and refer to the date on which this Agreement has been fully executed by the officers or representatives of the parties following an approving majority vote of the governing board of the Agency authorizing the execution of this Agreement by the Agency. 0)-03-03 CHS Old Towne Agreement 2 Environmental Laws. The words "Environmental Laws" mean all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Site), occupational or environmental conditions on, under, or about the Site or Sales Office, as now or may at any later time be in effect, including without limitation, the Comprehensi ve Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Site, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. 0)-03-03 CHS Old Towne Agreement 3 Final Project Costs. The words "Final proj ect Costs" mean and refer to the actual and reasonable costs incurred by the Developer in the acquisition, development and improvement of the proj ect. Final proj ect Costs include each of the following: (1 ) the purchase price payable by the each Developer Lot, including commissions, escrow fees and insurance and the like; Developer for real estate costs, title (2) the cost of preparing each Developer Lot for improvement, including demolition expenses, if any, and in the case of each Restored New Home, moving costs from the School District Lands to the Developer Lot (s), grading, and all off-site costs incurred in connection with the improvement of each Developer Lot, including utility connection charges and adjacent public right-of- way improvements, if any; (3) architectural, engineering, legal, accounting, consulting and other professional service fees paid in connection with the planning, execution and financing of the Project; (4 ) the cost of points and surety and assessments; insurance, lender financing charges, fees, construction loan interest, completion bonds, property taxes, (5) the cost of construction of the New Homes, (whether New SFD Structures or rehabilitation and improvement work performed on Restored New Homes, as applicable) including all building permits, public school fees, and other regulatory agency charges, landscaping, fencing, on-site construction supervision and management and construction site security patrol expenses; (6) the cost of other extraordinary proj ect-related construction and/or marketing expenses of the Developer approved by the Executive Director in his reasonable discretion which are based upon unusual or unforeseen conditions associated with the completion of the Project; 03-03-03 CHS Old Towne Agreement 4 _ '__. "__ .H._..-_.'-_"._.-C...______--'",. _. ____~._____ -..._-'"--:-----,-..~-_.-., w____~'-- _____._--'-- _.____ , . . . . (7) New Home sales, marketing at the time of sale of percent (6%) of the gross Home; and commissions payable each New Home of six sales price of each New (8) New Home sale escrow closing costs; (9) a Developer overhead fee of the cost items under (2), above; and fi ve percent (5%) (3) , ( 5) and of (6) , (10) a Developer retained earnings allowance for its affordable housing development operations of eight percent (8%) of the gross sales price of each New Home. Although the estimated Project development costs shown on the pro forma on file with the Agency as of the Effective Date (See: Section 2.03) indicate that such cost items (1) through (10), above, of Final Project Costs (based upon the assumptions of the estimated average sales price of each Completed New Home) are anticipated to be $ upon the completion of the proj ect with sixteen (16) New SFD Structures as New Homes, the amount of Final Project Costs may be different from such estimate, and if Final Project Costs are less than the product of $ multiplied by the number of New Homes as completed then the amount of the Affordable Housing Development Grant shall be subject to an adjustment payable by the Developer as provided in Section Hazardous Substances. The words "Hazardous Substances" mean and include without limitation: those substances included within the definiteness of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other environmental law; and those substances listed in Department of Transportation 172 .101], or by the EPA, or any hazardous substances [40 CFR Part the United States (DOT) Table [49 CFR successor agency, as 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic 03-03-03 CHS Old Towne Agreement 5 under federal, state, or local laws or regulations; and any material, waste, or substance that is: (1) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, or (6) a radioactive material. Moderate-Income Household. The words "Moderate-Income Household" mean persons and families whose income does not exceed one hundred and twenty percent (120%) of the area median income of the City adjusted for family size by the State Department of Housing and Community Development in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended, and Health and Safety Code Section 50093, as this section may hereafter be amended from time-to-time by the State of California. New Home. The words "New Home" mean and refer to each of the completed single-family residential dwelling units (including the land and landscape improvements thereon) as shall be constructed and installed by the Developer on each Developer Lot. Depending on a number of factors set forth in this Agreement, a New Home may on the Delivery Date be either a New SFD Structure or a New Restored Home. New Home Escrow. The words "New Home Escrow" mean and refer to the real estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or later, by and between the Qualified Homebuyer and the Successor-In-Interest) for the conveyance and sale of the New Home. The transfer of each New Home from the Developer to a Qualified Homebuyer (or later, by and between the 0)-0)-03 CHS Old Towne Aqreement 6 Qualified Homebuyer and the Successor-In-Interest) shall be accomplished upon the close of the New Home Escrow. New SFD Structure. The words "New SFD Structure" means and refers to the new single family dwelling unit structure which the Developer shall design, finance and construct on at least two (2) of the Developer Lots. In the event that less than fourteen (14) of the School District Houses are made available to the Developer for relocation onto the remaining Developer Lots within the timeframe set forth in this Agreement, the Developer shall design, finance and construct New SFD Structure on each of the remaining Developer Lots on which a School District House has not been relocated. Notice of Agency Concurrence. The words "Notice of Agency Concurrence" mean and refer to the acknowledgment executed by the Executive Director of the Agency and delivered to the holder of the New Home Escrow, in which the Agency confirms that the proposed Qualified Homebuyer, appears to satisfy all of the Adjusted Family Income and other requirements of the Section 33334.3 Covenant for occupancy of the New Home. Project. The word "Project" means and refers to the redevelopment by the Developer of sixteen (16) New Homes on the Developer Lots. At least two (2) of the New Homes shall be New SFD Structures and the remaining fourteen (14) New Homes may be either Restored New Homes (to the extent School District Houses are made available to the Developer) or New SFD Structures all as more particularly described in the Scope of Development attached as Exhibit "C". Each New Home shall be reserved for sale and occupancy by a Qualified Homebuyer. The proj ect shall be undertaken by the Developer in accordance with the dates set forth in the Schedule of Performance attached as Exhibit "D". Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchasers of each of the sixteen (16) New Homes from the Developer (e. g. : all persons identified as having a property ownership interest vested in the New Home as of the close of the New Home Escrow) which the Developer shall reserve for sale and occupancy by Qualified Homebuyers. At the close of the New Home Escrow involving a Qualified Homebuyer, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does not exceed the household income qualification limits of a Moderate-Income 03-03-03 CHS Old Towne Aqreement 7 Household; and (ii) pay no more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees and costs. Qualified Residence Period. The words "Qualified Residence PeriodH mean in the case of each New Home sold to a Qualified Homebuyer, and the Completed New Agency Home, as applicable, the period of time beginning on the Delivery Date and ending on the date which is forty-five (45) years after the Delivery Date. Restored New Home. The words "Restored New HomeH means and refers to a School District House which has been relocated from the School District Lands to a Developer Lot by the Developer and which the Developer has caused to be affixed to a new foundation and rehabilitated and constructed as a New Home ready for occupancy by a Qualified Homebuyer. A description of the general plan of the Developer for the relocation of each School District House and the restoration and improvement of each such School District House on a Developer Lot is attached as Exhibit "GH. School District. The words "School DistrictH mean and refer to the San Bernardino Unified School District. School District Houses. The words "School District HousesH mean and refer to each of the dwelling units identified in Exhibit "FH. One or more of the School District Houses may be made available to the Developer subject to the terms of this Agreement, for relocation and reuse as affordable single family dwelling units by ordinance, resolution or motion of the board of trustees of the School District, in the sole and absolute discretion of such board of trustees. School District House Due Diligence. The words "School District House Due DiligenceH means and refers to such investigations by the Developer of each School District House as the Developer may deem appropriate to determine whether the Developer may accept the transfer of title in one or more such School District Houses for transfer and relocation from the School District Lands to the Developer Lot(s) and for rehabilitation and improvement by the Developer as a Restored New Home on each such Developer Lot. 03-03-03 CHS Old Towne Agreement 8 - -- --~_'_~~-_"--~'__"_-,~--------_._-,-", School District Lands. mean and refer to the House is situated. The words "School District Lands" si te on which each School District Section 33334.3 Covenant. The words "Section 33334.3 Covenant" mean the Redevelopment Agency of the City of San Bernardino Community Redevelopment Housing Affordability Covenants and Restrictions by and among the Qualified Homebuyer, the Developer and the Agency pertaining to the New Home. Section 1.02. Parties to the Agreement. (a) The Agency. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et ~.) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The Developer. The Developer, Creative Housing Solutions, a California non-profit public benefit corporation. The principal office and mailing address of the Developer for purposes of this Agreement is: (c) Neither the City of San Bernardino or the School District are parties to this Agreement. Section 1.03. Prohibition Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. Except as set forth in Section 3.03, prior to the completion of the Project the Developer shall not assign all or any part of this Agreement, or any rights hereunder, without the prior written approval of the Agency Executive Director, which approval shall not be unreasonably conditioned, withheld or delayed. For the purpose of this Agreement, the words "completion of the Project" mean and refer to the date by which 03~03-03 CHS Old Towne Agreement 9 -- .,- .........---.-. .'~-'-~--'--.. ~.__.- ._------_....~.~~. the Developer has caused at least sixteen (16) New Homes to be sold to Qualified Homebuyers; provided however, that the sixteenth (16th) New Home Escrow shall be closed by a date not later than as indicated in the Schedule of Performance. The Developer shall promptly notify the Agency in writing of any material change in the identity of the managing members of its non-profit corporation. This Agreement may be terminated by the Agency prior to the completion of the Project if there is any material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual member or officer) that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the initial disbursement of the Affordable Housing Development Grant prior to the completion of the Project such a material change occurs in the ownership, or control of the Developer, the Developer's interest under the Agreement or the Developer's ownership interest in the Developer Lots or any portion thereof; provided, however, that (A) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or assert any other such remedy, and (B) the Developer shall have thirty (30) calendar days following its receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. Section 1. 04. Benefit to Project Area. The Agency has determined that the redevelopment of the Developer Lots by the Developer in accordance with this Agreement will eliminate blight and provide needed affordable housing to the Redevelopment Project Area as well as to areas in proximity thereto, which housing is needed due to the insufficiency of new affordable housing wi thin the City generally. Section following is a Agreement. Each reference into the 1.05. List of Exhibits to Agreement. listing of the Exhibits attached to such exhibit is incorporated by this by text of this Agreement: The this this EXHIBIT "A" Legal Description of Developer Lots 03-03-03 CHS Old Towne Agreement 10 . _ __ __.____,,~__~~,..._._ '_"'___._.~______~____4_C. _. _......_.._ m__________.__~,___ _--"--.~_.______ _"_______.~__.__._ EXHIBIT "B" Form of Notice of Agreement EXHIBIT "e" Project Description/Scope of Development EXHIBIT "D" Schedule of Performance EXHIBIT "E" Form of Section 33334.3 Covenant EXHIBIT "F" School District Houses ARTICLE II DISBURSEMENT OF AFFORDABLE HOUSING DEVELOPMENT GRANT Section 2.01. Affordable Housinq Development Grant. (a) Subject to the terms and conditions set forth in this Agreement, the Agency hereby allocates and reserves the sum of Two Hundred Thousand Dollars ($200,000) to the Developer for disbursement, in installments (the Affordable Housing Development Grant) as provided in this Section 2.01 in support of the proj ect. (b) The Agency shall disburse the Affordable Housing Development Grant to the Developer in installments as follows: (i) upon the Developer's acquisition of fee title interest in each Developer Lot, the Agency shall disburse the sum of Eight Thousand Dollars ($8,000) as partial payment for the purchase price as provided in Section 2.01 (c); provided however, that the aggregate amount of all such disbursements shall not exceed $128,000; (ii) provided that the Developer has acquired the fee title interest in the sixteen (16) Developer Lots and is not otherwise in default, the Agency shall disburse the sum of $72,000 to the Developer under either subparagraph (A) or (B) below: (A) provided the School District has taken official action within six (6) months following the Effective Date to make the School District Houses available to the Developer and the Developer has elected to accept the School District Houses for 03-03-03 CHS Old Towne Agreement 11 .....,. '.'. '. '-'-'-'- -- ._........;..__..._...,~-_.-'-- ---'-~- ~--_.__.._-_..-- ~..-' .~---~,-,--- .--.-.----...-..------.----...-...-.-.-"-...-. relocation to the Developer Lots for rehabilitation and improvement as Restored New Homes, the Agency shall disburse the sum of $72,000 to the Developer upon completion of the relocation of the School District Houses to the Developer Lots and the attachment of each such School District House to a new foundation on each such Developer Lot; or (B) in the event that the School District Houses are not made available to the Developer wi thin six (6) months following the Effective Date or in the event that the Developer elects not to accept the School District Houses for any reason, the Agency shall disburse the sum of up to $72,000 to the Developer as follows: (1) a sum not to exceed $36,000 for reimbursement of third party professional civil engineering, architecture and structural engineering fees and expenses incurred and paid by the Developer in connection with the design and construction of the New Homes; and/or (2) for building permit fees, public school capi tal facility fees, City water and sewer connection fees and capacity charges and other regulatory fees or charges assessed or payable by the Developer to public agencies with regulatory jurisdiction over the improvement and construction of the New Homes. The total amount of the Affordable Housing Development Grant payable under (A) or (B), above, of this Section 2.01(b) (ii) shall not exceed the sum of $72,000. Affordable Housing Development Grant disbursements under Section 2.01(b) (ii) (A) shall be subject to the provisions of Section 2.01(d) and disbursements under Section 2.01(b) (ii) (B) shall be subject to the provisions of Section 2.01(e). 03-03-03 CHS Old Towne Agreement 12 (c) Within fifteen (15) days following the Effective Date, the Agency shall disburse the sum of Thirty Two Thousand Dollars ($32,000) to reimburse the Developer for a portion of the purchase price previously paid by the Developer for four (4) of the Developer Lots. Concurrently with the disbursement of the sum of $32,000, the Developer shall execute in recordable form and cause to be recorded the Notice of Agreement substantially in the form attached as Exhibit "B" against each of the four (4) Developer Lots. Provided the Developer is not then in default, each subsequent disbursement of the Affordable Housing Development Grant under Section 2.01 (b) (i) (for a total sum of $96,000) shall be payable by the Agency for the account of the Developer through the escrow holder identified by the Developer for the Developer's purchase of each of the remaining twelve (12) Developer Lot within thirty (30) days following receipt by the Agency of notice from the Developer setting forth the total. amount payable by the Developer for the acquisition of each particular Developer Lot and a statement of the Developer that such escrow is reasonably expected to be in a condition to close upon the escrow holder's receipt of the installment of the Affordable Housing Development Grant from the Agency in immediate funds, plus the remaining balance of such Developer Lot purchase price (and all related escrow closing costs) from the Developer. The Agency shall not be deemed a party to any such escrow. The Developer shall deliver its portion of the purchase price for each particular Developer Lot and the escrow shall close and the Developer shall acquire the merchantable fee title interest in each such Developer Lot within five (5) days following the deposit of the Agency's funds into such escrow for the account of the Developer. The escrow holder shall also cause to be recorded concurrently with the close of each escrow for the Developer's purchase of each Developer Lot, a Notice of Agreement executed by the Developer and the Agency substantially in the form attached as Exhibit "B". The Developer and the Agency shall also execute written escrow instructions in favor of such escrow holder as may be reasonably requested by such escrow holder or either of the parties to this Agreement. In the event that any such escrow may fail to close for any reason within five (5) days following the escrow holder's receipt of the Agency's funds, then in such event, the escrow holder shall return the $8,000 in Agency funds to the Agency without further instruction from the Developer or any third party. The Agency may at its sole cost, obtain a policy of title insurance (or an endorsement of a policy of title insurance obtained by the Developer) which insures that the Notice of Agreement in proper form has been recorded at close of each such escrow and that such Notice of Agreement is subject to only those title 03-03-03 CHS Old Towne Agreement 13 . exceptions as previously approved in writing by the Executive Director of the Agency. The Developer hereby agrees to cooperate with the Agency in causing the escrow holder for each such Developer Lot acquisition escrow to deliver a policy of title insurance in favor of the Agency, if requested by the Agency. The Developer shall exercise all reasonable effort to cause each such escrow for the acquisition of the sixteen (16) Developer Lots to be in a condition to close within ninety (90) days of the Effective Date. (d) Provided the board of trustees of the School District has, in its sole and absolute discretion taken official action wi thin six (6) months following the Effective Date to declare the School District Houses available for relocation and restoration, and further provided that the Developer has delivered to the Agency its written acceptance of the transfer of School District Houses by the School District to the Developer in accordance with Section 2.04, and further provided that the Developer is not then in default hereunder, the Agency shall disburse the sum of $72,000 to the Developer within thirty (30) days of receipt by the Agency of satisfactory written evidence from the Developer that each of the School District Houses as accepted by the Developer have been: (i) removed from the School District Lands to the written satisfaction of the School District; and (ii) each such School District House has been attached to a new foundation on a Developer Lot. (e) In the event that the School District may not elect to make the School District Houses available for relocation and restoration, or in the event that the Developer may elect not to accept the transfer of the School District Houses in accordance with Section 2.04, and further provided that the Developer is not then in default hereunder, the Agency shall disburse the sum of $72,000 to the Developer in one or more draws (with no such draw request of the Developer in an amount less than $5,000) for the purposes set forth in Section 2.01 (b) (ii) (B) . Before any such draw request under this Section 2.01(e) shall be paid to the Developer the Developer shall provide satisfactory written evidence to the Executive Director that a reputable construction lender has given the Developer a written construction loan commitment for financing the improvement of at least six (6) New SFD Structures subject only to customary and commercially reasonably terms. The Developer shall submit written draw requests to the Agency accompanied by a suitably detailed description of the New Horne construction- related expenses incurred by the Developer for which the draw request corresponds. The Agency shall pay each such draw wi thin 03-03-03 CHS Old Towne Aqr-eement 14 , , thirty (30) days following receipt of a complete draw request from the Developer. Section 2.02. Developer Agreement to Undertake the Project. (a) Subject to the satisfaction of the applicable condi tions precedent set forth in Section the Developer hereby agrees to undertake the proj ect. The proj ect shall be undertaken in accordance with the schedule of improvement set forth in the Schedule of Performance. (b) The Developer and the Agency each acknowledge and agree that as of the Effective Date, the board of trustees of the School District has made no decision regarding the disposition of the School District Houses and that the Developer may never acquire any such School District Houses for relocation and restoration either from the School District or the Agency as part of the proj ect. In the event that the School District Houses are both: (i) made available to the Developer, and (ii) are accepted by the Developer for relocation and restoration within six (6) months following the Effective Date, the Developer acknowledges and agrees that it shall undertake the construction and improvement of the New Homes on the Developer Lots as follows: Two (2) New SFD Structures shall be constructed and installed on Developer Lots designated by the Developer and shall be ready for occupancy within eighteen (18) months following the Effective Date; and the remaining fourteen (14) Developer Lots shall either be improved with Restored New Homes attached to new foundations thereon or New SFD Structures, all such New Homes shall be ready for occupancy within eighteen (18) months following the Effective Date. In the event that the School District Houses are ei ther: (i) not made available to the Developer, or (ii) not accepted by the Developer for relocated and restoration within six (6) months following the Effective Date of this Agreement, the Developer acknowledges and agrees that it shall undertake the construction and improvement of the New Homes on the Developer Lots as follows: Six (6) New SFD installed on Developer and Structures shall be constructed and Developer Lots designated by the shall be ready for occupancy within 03-03-03 CHS Old Towne Agreement 15 . eighteen (18) months following the Effective Date, and thereafter ten (10) additional New SFD Structures shall be constructed and installed on Developer Lots designated by the Developer, and shall be ready for occupancy within thirty (30) months following the Effective Date. (c) By a date not later than the completion of the project or September 1, 2005, whichever date may first occur, the Developer shall deliver to the Agency a suitably detailed written accounting of the Final Project Costs prepared by the Developer's certified public accountant in accordance with generally accepted accounting principles. Section 2.03. Project Development Cost Pro Forma. (a) The Developer has prepared and submitted to the Agency and the Agency has accepted as of the Effective Date a Project development cost pro forma which is based upon a set of cost assumptions that the final Project will consist of sixteen (16) New SFD Structures being constructed and installed on the Developer Lots (the "Initial Project Pro Forma"). Based upon such Project development cost pro forma, the Agency has made the Affordable Housing Development Grant available to the Developer. (b) The Developer may modify the Initial Proj ect Pro Forma as follows: (i) during the School District House Due Diligence period for the School District Houses as set forth in Section 2.04, the Developer may submit one or more modifications to the Initial proj ect Cost Pro Forma which reflect development costs of the proj ect based upon the Developer's inspections of the School District Houses which may hereafter be made available to the Developer, the plans and specifications prepared by the Developer for the relocation of such structures to the Developer Lots and the cost estimates prepared by the Developer for the completion of the rehabilitation work on such structures as Restored New Homes; (ii) the Developer shall submit any proposed modification of the Initial Project Pro Forma to the Agency within sixty (60) days following the date when the School District may make the School 03-03-03 CHS Old Towne Agreement 16 District Houses available to the Developer for inspection together with a written request that the Agency approve such modification (s) as the "Modified Project Pro Forma"; (iii) provided the Developer has submitted a request for Modified Project Pro Forma, the Executive Director of the Agency shall accept such modification if: (A) the proposed modification indicates that the cost payable by the Developer for the completion of the relocation and rehabilitation of the final number of School District Houses made available to the Developer as Restored New Homes does not exceed by more than ten percent (10%) the Developer's estimates of the cost of the Project under the Initial Project Pro Forma and (B) the Developer provides satisfactory written evidence to the Executive Director that a reputable construction lender has given the Developer a written construction loan commitment for financing the improvement of the proj ect subj ect only to customary and commercially reasonable terms. The Executive Director of the Agency shall not unreasonably withhold, condition or delay his approval of Modified Project Cost Pro Forma if the conditions of this subparagraph (iii) have been satisfied by the Developer; (iv) in the event that the proposed Modified Project Cost Pro Forma may indicate that the total cost of the Proj ect is estimated to be greater than the cost estimate set forth in the Initial Project Pro Forma, the Agency shall have no duty or obligation to increase the amount of the Affordable Housing Development Grant; (v) the Executive Director shall approve or rej ect the proposed Modified Project Cost Pro Forma within fifteen (15) days of the submitted by the Developer of the information under subparagraph (iii), above, and if so accepted, the Modified Project Pro Forma shall be deemed the Project Development Cost Pro Forma for the purpose of determining whether: (A) any portion of the Affordable Housing Development Grant may be refunded to the Agency under Section 2.05; and 03-03-03 CHS Old Towne Agreement 17 -~ -;-~'_.'._--'--.'-~-"-_._'-- (B) whether any Agency Participation Fee may be payable to the Agency under Section 2.06. Section 2.04. School District House Due Diligence Period . (a) The Developer may conduct such due diligence investigation of the structural and environmental condition of the School District Houses as the Developer deems appropriate and as the School District may permit. The Developer shall be solely responsible for obtaining any necessary consents from the School District to conduct such investigations with respect to the School District Houses. All such investigations shall be conducted at the sole cost and expense of the Developer. (b) The Developer's due diligence investigation of the School District Houses shall be completed by the first of the following dates to occur: (i) six (6) months following the Effecti ve Date; or (ii) wi thin sixty (60) days following the date when the School District makes the School District Houses available to the Developer for such inspection. (c) During the School District House Due Diligence period the Developer shall conduct such consultations with interested persons as the City Planning Department and the School District may require relating to the proposed relocation and rehabilitation work for the School District Houses as Restored New Homes. (d) The Agency shall have no duty or obligation under this Agreement to be a party to any inspection agreement or license for entry relating to any School District House pursuant to which the School District may authorize the Developer to conduct any investigation of the condition of any School District House. Notwithstanding the foregoing sentence, the Developer may request the Agency to enter into an inspection or license agreement relating to any School District House as the School District may reasonably request; provided however that the approval of any such inspection or license agreement relating to the School District Houses shall be subject to the prior approval of the governing board of the Agency in its sole and absolute discretion. The Developer shall indemnify and hold the Agency harmless from any cost or expense arising from the Developer's inspection of any School District House under any such inspection or license agreement, and the Developer shall comply with all of the other terms which the Agency may require 03-03-03 CHS Old To.me Agreement 18 .- ....--.-...,,------.-........,. as a condition of its approval of any such inspection or license agreement. (e) Based upon such investigation as the may undertake wi thin the School District House Due Period, the Developer may either accept or reject the of one or more of the School District Houses, in the absolute discretion of the Developer. Developer Diligence condition sole and Section 2.05. Acceptance District Houses and Relocation and New Homes. by Developer Rehabilitation of School of Restored (a) Provided the School District in its sole discretion take official action to make the School District House available to the Developer and further provided that the Developer in its sole discretion has also delivered its written acceptance of the School District Houses to the Agency by no later than the date provided in Section 2.04 (b), together with any indicated modification of the Initial Project Pro Forma as set forth in Section 2.03(b), the Developer shall promptly complete the relocation of the School District Houses to the Developer Lots. (b) The relocation of the School District Houses to the Developer Lots shall be subject to such terms and conditions as the School District may require, to such other terms and condi tions as the City of San Bernardino may impose under the applicable development regulations of the City, and to the extent applicable, the terms and conditions of Section 2.09. (c) The Agency shall not be a party to any contract or agreement by and between the Developer and the School District relating to the relocation of the School District Houses or to the transfer of title in any such School District House to the Developer except on such terms and conditions as the governing board of the Agency may hereafter approve in its sole discretion. (d) In the event that any of the may not be satisfied, the Developer shall complete the proj ect as described in the Section 2.02(b): following conditions promptly proceed to second paragraph of (i) the School District to the Developer or Developer on terms Houses are not made available are not made available to the acceptable to the Developer 03-03-03 CHS Old Towne ....greement 19 within six (6) months following the Effective Date; or (ii) the Developer may elect not to accept the condition of the School District House within six (6) months following the Effective Date; or (iii) if applicable, the modification to the set forth in Section Agency does not approve a Ini tial proj ect Pro Forma as 2.03(b); or (iv) if applicable, the Agency may not approve the terms of any proposed agreement by and between the School District and the Developer relating to the School District Houses in which the Agency is proposed to be a party. Section 2.06. Sale Qualified Homebuyers. of Completed New Homes to (a) Each New Home which the Developer proposes to sell to a Qualified Homebuyer shall be transferred to such Qualified Homebuyer through a New Home Escrow. The Agency shall not be a party to any such New Home Escrow. The Developer shall instruct the holder of the New Home Escrow, that the escrow holder shall comply with the provisions of Section 2.06 (d) of this Agreement and at the close of each New Home Escrow, the escrow holder shall provide the Agency with a copy of both the "seller's" and the "buyer's" closing statement, together with a complete copy of the real estate sales agreement between the Developer and the Qualified Homebuyer for the New Home. (b) The Developer shall deliver to the Agency the information relating to the Qualified Homebuyer described in Section 2 (e) of the Section 33334.3 Covenant, within five (5) days following the Developer's designation of such Qualified Homebuyer as the prospective purchaser of the New Home. Concurrently upon the Developer's delivery to the Agency of the household income and occupancy information described in Section 2 (e) of the Section 33334.3 Covenant, the Developer shall also request that the Agency issue its Notice of Agency Concurrence with respect to the Qualified Homebuyer designated by the Developer. Within ten (10) days following its receipt of such wri tten information and request from the Developer relating to the Qualified Homebuyer, the Agency shall provide the Developer with a preliminary confirmation of the approval or rejection of the income and household occupancy qualifications of the OJ-03-03 CHS Old Towne Agreement 20 proposed Qualified Homebuyer. In the event that the Agency may request additional information relating to the confirmation of the matters described in the preceding sentence with respect to the Qualified Homebuyer, the Developer shall cause such additional information to be provided to the Agency as promptly as feasible. The Executive Director of the Agency shall issue a preliminary determination of his concurrence of the eligibility of the Qualified Homebuyer within ten (10) days following receipt of such completed income and household occupancy information. Provided that the proposed Qualified Homebuyer also qualifies to obtain purchase money mortgage financing for the purchase of the New Home with terms and costs not in excess of an Affordable Housing Cost for such Qualified Homebuyer, as evidenced by a written mortgage lending contract by and between the Qualified Homebuyer and a financial lending institution, which is issued wi thin sixty (60) days following the Executive Director's preliminary concurrence of the eligibility of the Qualified Homebuyer designated by the Developer, the Executive Director of the Agency shall issue a Notice of Agency Concurrence to the Escrow Holder. In the event that the Agency may later determine that the written information provided to it in support of a request for issuance of a Notice of Agency Concurrence is false or incorrect in any material respect, then in such event the Agency may exercise all of its remedies to enforce the provisions of this Agreement and the Section 33334.3 Covenant, if applicable, notwithstanding the fact that a Notice of Agency Concurrence may have been issued in favor of a particular Qualified Homebuyer. (c) The Developer and the Agency mutually covenant and agree to execute all necessary or appropriate written escrow instructions as may be reasonably requested by the escrow holder in connection with the New Home Escrow. (d) Each New Home Escrow shall close upon satisfaction of the applicable escrow conditions by and between the Developer and such Qualified Homebuyer and when the escrow holder confirms that: (i) it is in receipt of the Notice of Agency Concurrence for the Qualified Homebuyer; (ii) the escrow holder shall recorded a fully executed 33334.3 Covenant for the New have received and form of the Section Home; and 0)-03-03 CHS Old Towne AqI"eement 21 (iii) the escrow holder shall provide the Agency with evidence in the form of a policy of title insurance in favor of the Agency which insures that the Section 33334.3 Covenant is subject only to the lien for property taxes and the lien in the New Home of the senior purchase money mortgage lender to the Qualified Homebuyer. (e) In the event that the New Home Escrow may fail to close for any reason, the Developer shall cause such New Home Escrow to be cancelled. The Developer shall pay for all of the costs and expenses of such New Home Escrow and shall indemnify, defend and hold the Agency harmless from any such costs which may otherwise have been assessed or charged to the Agency. Section 2.07. Final Project Cost Verification. (a) Within sixty (60) days following the completion of the proj ect, and in any event by a date not later than September 1, 2005, whichever date first occurs, the Developer shall submit to the Agency its written certification of Final Project Costs as provided in Section 2.02 (c) . If applicable, the Final Project Cost verification shall be based upon the Modified Project Pro Forma. (b) In the event that as of the date of the Developer's certification relating to Final Project Cost under Section 2.07 (a) , such certification and/or the audit or examination by the Agency of the books and records of the Developer relating to the Project, may indicate that a refund of the Affordable Housing Development Grant is payable to the Agency, such refund shall consist of the addition of two (2) separate variables as follows: Refund Variable A = the number (if any) of New Homes less than 16 as actually produced and occupied or ready for occupancy as of the date of the Developer's certificate under Section 2.07 (a) multiplied by the sum of $12,500; and Refund Variable B = % of the difference, if any, between: (i) the product of $ mul tiplied by the number of New Homes produced and occupied or ready for occupancy and (ii) 03-03-0J CHS Old Towne AgI"eement 22 - -.-....--. _._-- ._-~~..__._--~-~~~--_.__. Final Project Costs divided by the actual number of New Homes produced and occupied or ready for occupancy as of the date of the Developer's certificate under Section 2.07(a); (c) The Developer shall maintain accounting books and records of Project development costs and Final Project Costs, in accordance with generally accepted principles of business accounting. The Agency and its accountants and auditors shall have the right to conduct, at its expense, an inspection and review of the accounting books and records of the Developer relating to the Proj ect upon the request of the Agency. The Developer shall cooperate with the Agency in the production of its accounting books and records as reasonably required by the Agency and its auditors to conduct an audit of actual proj ect development costs. (d) In the event that the Agency reasonably determines based upon its review of the Developer's certificate of Final proj ect Costs under Section 2.07 (a) or based upon its audi t of the proj ect related business record of the Developer under Section 2.07(c), or both, that any portion of the Affordable Housing Development Grant is refundable by the Developer to the Agency, then the Developer shall remit the such portion of the Affordable Housing Development Grant to the Agency wi thin thirty (30) days of written demand therefore by the Agency. Section 2.08. Agency Participation Fee in Retained Earnings of Developer in the Project. (a) In addition to and separate from any reimbursement of the Affordable Housing Development Grant payable to the Agency under Section 2.07, the Developer shall also pay to the Agency a Project development participation fee as set forth in this Section 2.08 (the "Agency Participation Fee") . (b) The Agency Participation Fee is a sum payable by the Developer to the Agency from a special source of Developer funds described in this Section 2.08, to the extent that such funds are available therefor, as consideration for the agreement by the Agency to contribute the Affordable Housing Development Grant to the Developer. The Agency Participation Fee is a sum equal to one-half (1/2) of the "Retained Earnings of the 03-03-03 CHS Old Towne Agreement 23 . .--. ---~---"'~ - --,,------.---.-""-.-" Developer", as defined below. Developer" is a some of money as profit or retained earnings Final Project Costs. The "Retained Earnings of the which the Developer has realized from the Project after deducting (c) From and after the time that the sixth (6th) New Home Escrow shall be closed until the Agency Participation Fee is paid in full to the Agency, the Developer shall provide the Agency with the following financial reports relating to the Project: (i) within sixty (60) days of the end of each calendar quarter and upon the request of the Agency, a report on the status of the Project, which shall include, at a minimum, the trial balance, general ledger, cash receipt journal, cash disbursements journal, sales journal, job cost summary compared with the Project pro-forma, bank statement, and quarterly profit and loss statement, and schedule of cash flows and a weekly sales report for New Homes, as applicable; and (ii) within one hundred twenty (120) days after the end of each fiscal year, an annual unaudited financial statement, prepared by the Developer for the proj ect or, if obtained by the Developer, an audited financial statement. (d) At the time indicated in Section 2.07(a) the Developer shall provide the Agency with a suitably detailed written accounting prepared in accordance with generally- accepted accounting principals of the amount of the Agency Participation Fee which the Developer shall certify is due and payable to the Agency. The Agency shall have the right to inspect the business and financial records of the Developer as related to these calculations and verification of the amount of the Agency Participation Fee as may be payable to the Agency, if any. The Developer shall provide the Agency (and its auditors or accountants) with reasonable access to such business records upon reasonable prior notice from the Agency. In the event that the Agency reasonably determines that any Agency Participation Fee is payable from the Retained Earnings of the Developer based upon its review of the Developer's certificate under Section 2.07(a) or based upon its audit of Project related business records of the Developer under Section 2.b7 or this Section 2.08 03-03-03 CHS Old Towne Agreement 24 the Developer shall remit such sum of the Agency Participation Fee within thirty (30) days of written demand thereof by the Agency. Section 2.09. Agency as a Party to a School District Agreement or License Relating to any School District House. (a) Nothing in this Agreement shall be deemed to be a commi tment or undertaking by the Agency to be a party to any agreement or license arrangement by and between or among the School District and the Developer relating to the inspection or the acceptance of title by the Agency in any such School District House as personal property, or the disposition of any School District House to the Developer. The Agency hereby reserves the sole and absolute discretion to enter into one or more inspection or license agreements relating to a School District House as the Developer or the School District may request in order to accommodate the removal of any such School District House from School District Lands either by the Developer or by third persons, or to accommodate the transfer of title and possession of any School District House, as personal property, from the School District to the Developer. Any agreement relating to the inspection or disposition of the School District Houses to the Developer to which the Agency may hereafter be a party shall contain such terms and conditions as may be required by the Agency and shall be subject to the prior approval by the governing board of the Agency. (b) In the event that the School District or the Developer, or either of them, may not accept any term or condition required by the Agency as a condition to be a party to an agreement relating to the inspection or disposition of any School District House, the Developer shall either cause the School District to permit the inspection and/or disposition of each School District House to the Developer to occur under a contract or agreement to which the Agency is not a party, or the Developer shall undertake the development and improvement of each of the Developer Lots with a New SFD Structures as provided in this Agreement. License Houses. Section 2.10. Minimum Agreement Relating to Conditions Disposition for any of School Agency District (a) In the event absolute discretion consent license by and between or that the Agency may in its sole and to be a party to any agreement or among the School District and the 03-03-03 CHS Old Towne Agreement 25 Developer relating to the inspection or disposition of any School District House to the Developer, such agreement or license shall contain the following provisions relating to Hazardous Substances, asbestos containing materials ("ACMs"), lead based paint ("LBP") and lead containing construction materials ("LCCMs"): . prior to commencement of any portion of the inspection or relocation work on the School District Lands the Developer shall retain an environmental consultant reasonably acceptable to the Agency (the "Consultant") to conduct testing on the School District Houses for ACMs, LBPs and other Hazardous Substances (the "Baseline Assessment"). The Agency and the Developer shall agree on the specific sites on the School District Houses for sampling and borings and building materials sampling for the Baseline Assessment. The Baseline Assessment shall be completed wi thin fifteen (15) days of entry onto any School District Lands. Wi thin ten (10) days following the completion of the work of the Baseline Assessment on the School District Lands the Consultant shall deliver a written report addressed to the Developer and the Agency (the "Baseline Report") regarding the results of the Baseline Assessment that presents all of the following. . substanti ve information from any other environmental assessment report for the School District Lands that forms a basis for the Baseline Assessment work conducted by the Consultant. . substanti ve information relating to the selection of the location and methodology of each building material sample collected by the Consultant on the School District Lands. . descriptions of the nature and severity of any Hazardous Substances on the School District Lands (maps should be prepared that present the data collected and illustrate the location of ACMs and LBPs) . . materials testing data, chain of custody records samples, and laboratory results, related to Consultant's investigations. for the 03-03-03 CHS Old Towne Agreement 26 . assessment of the following environmental matters regarding the School District Lands. . nature, location Substances. any Hazardous and of extent . whether additional sampling of Lands for Hazardous Substances description of the scope of such if applicable. the School District is indicated and a additional sampling, . description of special procedures relating to any School District Lands. precautions and handling Hazardous Substances on the . an analysis, based on the sampling whether: (i) demolition or relocation District Houses on the School District a risk to worker health and safety substances; if so, briefly identify the to mitigate them. conducted of of any School Lands may pose from hazardous risks and ways . provide a cost estimate environmental investigation abatement/remediation work, if further and LBP to conduct or ACM indicated. . prior to commencement of any portion of the ACM and/or LBP abatement and relocation work on any School District Lands, the Developer or its Contractor shall deliver to the Agency a H&S Plan, which shall include, at a minimum, each and everyone of the items required by applicable law. . as promptly as feasible following the submission of the Baseline Report, the Developer shall submit to the Executi ve Director of the Agency a suitably detailed written plan setting forth the following details regarding the Relocation Work (the "Relocation Plan"). . the date by which the Developer will install temporary perimeter fencing around the School District Lands to adequately control and secure the School District Lands during the course of the Relocation Work from unauthorized entry and secure all of the windows and entries of each School District House. 03-03-03 CHS Old Towne Agreement 27 . detailed descriptions of the specific measures that will be undertaken by the Developer and its Contractors as part of the Relocation Work to comply with all applicable Environmental Laws and to abate and/or encapsulate any Hazardous Substance, including, wi thout limitation, ACM and LBP, that is present in any of the School District Houses. . the date by which the abatement and/or encapsulation of all Hazardous Substances, including, without limitation, friable and non-friable ACM and LBP, present in each of the School District Houses will be completed. . a detailed description of the methods and procedures by which ACMs and LCCMs will be segregated from other demolition waste, including procedures for assuring that Hazardous Substances are not mixed with demolition wastes. . a description of all licenses, certifications, endorsements and permits required for the Developer or its Contractors to abate and/or encapsulate all Hazardous Substances, including, without limitation, friable and non-friable ACM and LBP, present in each of the School District Houses and documentation evidencing the fact that such licenses, certifications, endorsements and permits were or will be issued, by the various governmental and regulatory agencies with jurisdiction over the Relocation Work to be undertaken by the Developer or its Contractors, including, without limitation, the names and telephone numbers of the persons assigned by each such agency to monitor the Relocation Work. . the name and CAL-EPA waste transport and disposal manifest number assigned to the Developer or its solid waste transport and disposal Contractor, with respect to the Relocation Work and all demolition and other wastes produced by the Relocation Work. . the name, address, telephone number and Contractors State License Board number of the Developer's ACM and LBP abatement or encapsulation contractor (s) and any other contractors that will perform work on the School District Lands on behalf of the Developer, directly or indirectly. OJ-03-03 CHS Old Towne Agreement 28 - _.._._~_._._~--~-----.- . detailed sequence of demolition, relocation, removal and disposal work, including the abatement of Hazardous Substances, with starting and ending dates for each School District Houses. . dates for shutoff, capping and continuation of utility services. . proposed dust-control measures. . proposed noise-control measures. . approximate construction removed from off-site. quantities of Hazardous Substances, materials and all other materials, to be the School District Lands and disposed of . the name, Developer's contractor. address and Hazardous telephone Substance number of the transportation . the name and location of any sites where the will dispose of demolition waste or Substances, including, without limitation ACM Developer Hazardous or LBP. . a telephone contact roster for the Developer and for each of its Contractors. The telephone contact roster shall include 24 hour emergency telephone numbers for each field supervisor principal of the Contractor. the Developer is responsible for promptly providing the Agency with notice of any changes to such emergency contact information. . the Developer shall covenant and agree that in the relocation of the School District Houses, it will comply with all applicable Environmental Laws relating to the presence of ACM or LBP on the School District Lands or in the School District Houses. The Developer shall also acknowledge that the Agency assumes no liability for damages for personal injury, illness, disability, or death to the Developer, or to any other person, including members of the general public, arising from or incident to the purchase, transportation, removal, handling, use, disposition, or other activity causing or leading to contact of any kind whatsoever with ACM or LBP on the School District 03-03-03 CHS Old Towne Agreement 29 Lands or in the School District Houses, whether the Developer properly warned, or failed to properly warn, the persons injured. . Each such agreement or license shall evidence a disclaimer by the Agency of all implied warranties by the Agency regarding the environmental condition of the School District Lands or the School District Houses under any Environmental Law and the regulation of the storage, disposal, release or transport of any Hazardous Substances, hazardous wastes, petroleum product, ACM or LBP on the School District Lands or in or from the School District Houses, at any time and that no statement of fact, promise, representation, affirmation or other indication has been made by the Agency to the Developer with respect to the quality or condition of the School District Houses. . the Developer shall acknowledge and agree that it was given a full opportunity, to inspect and investigate every aspect of the School District Lands and the School District Houses. The Developer shall enter, use or occupy the School District Lands for the relocation of the School District Houses, in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer shall further represent to the Agency that the Developer conducted and completed any and all independent investigation of the condition of the School District Lands and the School District Houses that the Developer believes to be indicated. The Developer hereby acknowledges that it is relying solely upon its own investigation of the School District Lands and the School District Houses and its own review of any available information and documentation, as it deems appropriate, for the purpose of entering, using or occupying the School District Lands. The Developer is not relying on any statement or representation by the Agency, any employee, official or consultant of the Agency relating to the condition of the School District Houses or the School District Lands. . the Developer shall agree, at its sole cost and expense, to indemnify, protect, hold harmless and defend the Agency, with counsel selected by the Agency from and against any and all claims, demands, damages, losses, liabilities, obligations, penal ties, fines, 03-03-03 CHS Old Towne Agreement 30 actions, causes of action, judgments, sui ts, proceedings, costs, disbursements and expenses, including, without limitation, fees, disbursements and costs of attorneys, environmental consultants and experts, and all foreseeable and unforeseeable consequential damages of any kind or of any nature whatsoever (collectively, "Losses") that may, at any time, be imposed upon, incurred or suffered by, or asserted or awarded against, the Agency directly or indirectly relating to or arising from any of the following "Environmental Matters". . any presence of Hazardous Substances on, in, under or affecting all or any portion of the School District Lands or School District Houses or on, in, under or affecting all or any portion of any property adjacent or proximate to the School District Lands, if the presence of such Hazardous Substances results from the Developer's activities upon the Demolition Site. . any storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Substances on, in, under or from the School District Lands or the School District Houses by the Developer, its agents or contractors. . any violation of law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Developer, its agents or contractors, relating to or governing in any way Hazardous Substances, including, without limitation, all Environmental Laws, occurring on or from any portion of the School District Lands or in or from the School District Houses. . the failure of the Developer, its agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the like in connection with the Developer's activities on the School District Lands. . the implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the 03-03-03 eHS Old Towne Agreement 31 .------.---__..,. __'-,r_~_' release, potential release or discharge of Hazardous Substances on, in, under, from or affecting the School District Lands or the School District Houses or in the air, any body of water, any other public domain or any property adjacent or proximate to the School District Lands. . any failure of the Developer , its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Substances stored or generated on the School District Lands or the School District Houses by the Developer, its agents or contractors. . any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Substances or violation of any Environmental Law occurring or allegedly occurring as a result of the acti vi ties of the Developer, its agents or contractors; . all obligations of environmental indemnity from the Agency. the Developer under shall be payable on such demand (b) Any such agreement or license to which the Agency may be requested to be a party, shall be approved in the sole and absolute discretion of the Agency, and shall be fully executed by the parties thereto, before the Developer performs any work of relocation of any School District House. Section 2.11. RESERVED - NO TEXT. Section 2.12. RESERVED - NO TEXT. Section 2.13. Developer's Conditions Precedent. The Developer's obligation to undertake and complete the proj ect, shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.15) prior to the date set forth in Section 2.02(b): (1) The Agency shall not material term of this Agreement Agency hereunder; have to be defaulted on performed by any the 03-03-03 CHS Old Towne Aqreement 32 (2) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.16(a)hereof; (3) the Agency shall have deemed satisfied (or waived satisfaction of) each of the conditions precedent set forth in Section 2.14; Section 2.14. The Agency's Conditions Precedent. The Agency's obligation to provide any installment of the Affordable Housing Development Grant under Section 2.01 shall be conditioned upon the fulfillment of the following conditions precedent (or waived in writing pursuant to Section 2.15) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct. Section 2.15. Satisfaction of Conditions Precedent. Where satisfaction of any of the conditions precedent in this Agreement requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any condition requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in the Agreement, but an~ such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the other party. Section 2.16. Representations and Warranties. (a) Warranties and Representations by the Agency. The Agency hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Developer has been made in material reliance by the Developer on such covenants, representations and warranties: (i) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects as of the Effective Date. (ii) Due redevelopment Organization. The Agency is a community agency, duly formed and operating under the 03-0)-03 CHS Old Towne Agreement 33 . laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. (iii) Requisite Action. The Agency has taken all requisi te action and obtained all requisite consents for agreements or matters to which the Agency is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby. (iv) Enforceability of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewi th will, when executed, shall be valid and enforceable against the Agency in accordance with its terms. (v) Use of Aqency Low-Mod Funds. The sole source of funds which the Agency used to acquire the Agency Lot and which the Agency shall use to make disbursements to the Developer of each installment of the Affordable Housing Development Grant, shall be derived from the low-and moderate-income housing set aside funds of the Agency (as this term is defined at Health and Safety Code Section 33334.2 and 33334.3(b)) and from no other source of funds of the Agency or the City of San Bernardino. (b) Warranties and Representations by the Developer. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Agency has been made in material reliance by the Agency on such covenants, representations and warranties: (I) The Developer is a duly organized and validly existing California non-profit public benefit corporation. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of the Developer hereby 03-03-03 CHS Old Towne Aqreement. 34 . ___.~ ___~_._..__ _...__~___~___..__.___.. ~..___ __ ..~..___ _ . _ ____._~._____..,___._'_____.____.c_. .___.. ..______.__.___.~ ... ~,,~... _._.- . .. represent and warrant that such persons have the power, right and authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for the Developer's authorization to enter into this Agreement. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) The Project development cost pro forma as prepared by the Developer and submitted to the Agency as of the Effective Date is to the best information and belief of the Developer, a fair and reasonable presentation of the costs and expenses which the Developer expects to incur as of the Effective Date with respect to the development of the Project; (5) The books and account records of the Developer with respect to its confirmation and certification as provided in Section 2.05, of Final Project Costs shall conform to generally acceptable principles of accounting; (6) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer; (7) The Developer acknowledges that it has been informed of the provisions of Labor Code Section 1720 by its legal counsel and that the Developer is aware of the legal effect of its acceptance of the Agency 03-03-03 CHS Old To.me Agreement 35 .. Affordable Housing Development Grant. The Developer further represents and warrants to the Agency that the Developer shall not accept any other financial assistance from any other public agency in connection with the Project, including the City of San Bernardino and the School District, unless the Developer also complies with the applicable provisions of Labor Code Section 1720 in connection with its acceptance of such other assistance; (8) If the School District Houses are not made available to the Developer for relocation for any reason, or in the event that the Developer is unable or does not accept the condition of any such School District House for any reason, or in the event that the Developer is unable or does not accept any other term or condition of the disposition of any School District House, including any such condition imposed by the Agency under Section 2.09 or Section 2.10 of this Agreement, then in any of such events, the Developer hereby covenants and warrants to the Agency that the Developer shall exercise its best and diligent efforts to obtain additional funding, if necessary, from non-profit affordable housing development organizations to cause each of the up to ten (10) Developer Lots which may not be improved with Restored New Homes to be improved with a New SFD Structure and made ready for occupancy by a Qualified Homebuyer, within thirty (30) months following the Effective Date; (9) The Developer hereby covenants and warrants that it shall use and apply its retained earnings allowance, and/or any surplus development funds from the Project after all final Project costs are paid, as defined in Section 1.01, to acquire, develop and/or rehabilitate additional housing units at affordable rents or housing costs, in accordance with state or federal law, whichever is applicable, wi thin the City of San Bernardino. The Developer shall provide the Agency with evidence of such covenant. (10) The representations and Developer contained in this Section based upon the actual knowledge of warranties of the 2.16 (b) shall be 03-03-03 CHS Old Towne Aqreelllent 36 ~_.~-_.,,~-~.._.. ...._--.._--.:......._~_... .. All representations and warranties contained in this Section 2.16 (b) are true and correct on the date hereof and on the Effective Date. (c) Change in Facts. If either party becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by such party under this Agreement, whether as of the Effecti ve Date or any time thereafter and whether or not such representation or warranty was based upon such party's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the other party, but such notice shall not release such party of its liabilities or obligations with respect thereto. Section 2.17. Damage, Destruction and Condemnation. (a) If the Project suffers damages as a result of any casualty prior to then the Developer shall give written notice thereof to the Agency within thirty (30) days after the occurrence of the casualty. The Developer elects in such notice to the Agency to either: (i) repair or replace such casualty loss or (ii) the Developer may terminate this Agreement, in which case, the balance of the Affordable Housing Development Grant as disbursed to the Developer shall be promptly refunded to the Agency, and upon the receipt by the Agency of such reimbursement, the parties shall be mutually released from further responsibility under this Agreement. (b) In the event that, prior to the completion of the proj ect, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Project, the Agency shall give prompt written notice thereof to the Agency, and the Developer shall have the option ei ther: (i) to elect not to complete the proj ect and to promptly refund the balance of the Affordable Housing Development Grant as disbursed to the Developer and terminate the Agreement; or (ii) the Developer may complete such portion of the proj ect as not affected by such condemnation proceedings, in which case Developer shall be entitled to retain the proceeds of such taking; provided however, that the Developer shall reimburse the Agency a portion of the balance of the Affordable Housing Development Grant as previously disbursed to the Developer in a pro rated amount for each Developer Lot as so acquired by a third party public agency in eminent domain. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of 03-03-03 CHS Old Towne Agreement 37 . , its receipt of notice of the initiation of any such condemnation proceedings affecting the Project. Section 2.18. Developer Market Reports to the Agency. (a) From and after the date of the initial disbursement of the Affordable Housing Development Grant by the Agency to the Developer until the completion of the Proj ect as provided in Section 1.03, the Developer shall provide the Agency with the following financial reports relating to the Project: (i) wi thin sixty (60) days of the end of each calendar quarter and upon the request of the Agency, a report on the status of the Project, which shall include, at a minimum, the trial balance, general ledger, cash receipt journal, cash disbursements journal, sales journal, job cost summary compared with the Project pro-forma, bank statement, and quarterly profit and loss statement, and schedule of cash flows and a weekly sales report for New Homes, as applicable; and (ii) within one hundred twenty (120) days after the end of each fiscal year of the Developer, an annual unaudited financial statement, prepared by the Developer for the Project, or, if obtained by the Developer, an audited financial for the proj ect. (b) The Agency shall have the right to inspect the business and financial records of the Developer as relate to the proj ect and the presentation of the information described in subsection (a), above and in Section 2.05 with respect to the verification by the Agency of final proj ect development costs. The Developer shall provide the Agency (and its auditors or accountants) with reasonable access to such business records upon reasonable prior notice from the Agency. The Agency shall pay for its copying and accounting costs associated with inspection of the business records provided by the Developer to the Agency for inspection. 03-03-03 CHS Old Towne Agreement 38 . J ARTICLE III DEVELOPMENT OF THE DEVELOPER LOTS AND THE AGENCY LOT Section 3.01. Development by Developer. (a) Scope of Development. It is the intent of the parties that the Developer Lots shall be developed as follows: . if the School District Homes are made available to the Developer and the Developer elects to accept such School District Houses by the date authorized in this Agreement, the Project shall consist of the improvement and financing by the Developer of at least two (2) Developer Lots with a New SFD Structure as the New Homes on each such lot, and up to fourteen (14) Restored New Homes or New SFD Structures as the New Homes on 14 of the other Developer Lots -- OR -- . if either the School District Houses are not made available to the Developer or if the Developer may elect not to accept any such School District Houses by the date authorized in this Agreement, the proj ect shall consist of the improvement and financing by the Developer of sixteen (16) New SFD Structures as the New Homes on the Developer Lots. Each of the sixteen (16) New Homes shall be reserved for sale and occupancy by Qualified Homebuyers whose Adjusted Family Income at the time of initial occupancy of each New Home (e.g., close of the applicable New Home Escrow) does not exceed the household income qualification limits of a Moderate-Income Household. (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the New Homes on each Developer Lot. The Developer acknowledges that the plans for development of the New Homes on the Developer Lots as set forth in the Scope of Development (both the New SFD Structures as well as Restored New Homes) shall be subject to the City's zoning ordinance and building requirements. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed 03-03-03 CHS Old Towne Agreement 39 to constitute a waiver of any lawful City requirements which are applicable to the Developer Lots or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Developer Lots except by modification or development variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit "cn is hereby approved by the Agency upon its execution of this Agreement. The New Homes (e.g., the New SFD Structures and/or the Restored New Homes, as applicable) shall be constructed and improved on the Developer Lots in conformance with the Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency and the mutual approval of any such change shall not be unreasonably conditioned, withheld or delayed. The approval by the City of any element of the Project, which may be subject to the discretionary or ministerial regulatory review of the City, shall be deemed to be approved by the Agency. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the Common Council of the City or the Planning Commission of the City with respect to any regulatory approvals relating to the improvement of the New Homes and/or the public improvements necessary for the development of the Developer Lots as may be required by such other bodies. If any material change of the Scope of Development as previously approved by the Agency shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Developer Lots. The Agency shall not unreasonably withhold or delay approval of such revisions to the Scope of Development; provided however, that the Agency reserves the sole and absolute discretion to approve or disapprove any agreement relating to the inspection, relocation and disposition of School District Houses as set forth in Section 2.09 and Section 2.10. (e) The Developer agrees to accept and comply fully wi th any and all lawful and reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Project. (f) If required by the City, the Developer shall cause landscaping plans in connection with development of the Project to be prepared by a licensed landscape contractor. 03-03-03 CHS Old Towne Agreement 40 --_.,.._-_._-,.."~.._-"+~.._-'"--~.. -- (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Project consistent with the Scope of Development to the City. The development plans, construction drawings and related documents submitted by the Developer to the City shall be in the form of final drawings, plans and specifications. Such final drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to obtain a building permit from the City. (h) During the preparation of all drawings and plans in connection with the development of the New Homes and the public improvements necessary for the development of the Project, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right to review all plans, drawings and related documents pertinent to the development of the proj ect in order to ensure that they are consistent with this Agreement and with the Scope of Development. (j) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Project, as required by the City. The Agency shall cooperate with and shall assist the Developer in order for the Developer to obtain the approval of any and all development plans, construction drawings and related documents submitted by the Developer to the City consistent with this Agreement as promptly as feasible following the City's receipt of such plans. Any failure by the City to approve any of such plans or to issue necessary permits for the construction of a New SFD Structure or for the relocation and rehabilitation of a Restored New Home, as applicable, within sixty (60) calendar day following submission by the Developer to the City of complete and correct plans for such construction shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond a sixty (60) calendar day period in which the City approves said plans; provided, however, that in the event that the City 03-03-03 CHS Old Towne Agreement 41 disapproves of any of such plans, the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit such plans in accordance with the City's requirements and in such form and substance so as to obtain the City's approval thereof. (k) In the case of each Restored New Home, the Developer is responsible for undertaking and completing such consultations with the State Office of Historic Preservation or other interested persons relating to the relocation and rehabilitation of the School District Homes/Restored New Homes as the City Planning Department may direct, at the sole cost and expense of the Developer. If applicable, such consultations shall be completed wi thin sixty (60) days following the date that the School District Homes may be made available to the Developer or within such shorter period of time as required by the San Bernardino Unified School District. Notwithstanding any other provision of this Agreement to the contrary, the Developer shall obtain the written permission of the School District before any such consultations may be initiated by the Developer with respect to any School District House. (1) The Agency shall approve any modified or revised plans, drawings and related documents to which reference is made in this Agreement as long as such modified or revised plans, drawings and related documents are generally consistent with the Scope of Development and any other plans which have been approved by the Agency. Upon any disapproval of such modified or revised plans, drawings or related documents, the Agency shall state in writing the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency, and if no specific time for approval if specified then the Agency shall so approve or disapprove the proposed modifications or revisions promptly upon the written request of the Developer. 03-03-03 CHS Old Towne Agreement 42 (m) If the Developer desires to make any material change in the final construction drawings, plans and specifications and related documents after their approval by the Agency and/or the City (either with respect to a New SFD Structure or with respect to any Restored New Home), the Developer shall submit the proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the Agency to the Developer, setting forth in detail the reasons therefor, and such rej ection shall be made within said thirty (30) calendar day period unless extended as permi tted herein. The Agency shall use its best efforts to cause the City to review and approve or disapprove any such change as provided in Section 3.0l(j) hereof. (n) The Developer, upon receipt of written notice of disapproval of a proposed change in construction drawings, plans and specifications by the Agency and/or the City for a New SFD Structure or for a Restored New Home, as applicable, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the manner provided in Section 3.0l(j) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction concerning the interior design of the New Homes and "minor field changes" with respect to the New Homes, and to make "minor field changes" to the public improvements necessary for the development of the proj ect without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a New Home or the ability of the City to accept the completion of the public improvements necessary for the development of the proj ect; and further provided that the City has approved any such minor field change to either a New Home or the public improvements necessary for the development of the proj ect in accordance with the standards and practices of the City Building Department and/or City Public Works Department, as applicable. Said "minor field changes" shall be defined as those changes from the approved final construction drawings, plans and 03-03-03 CHS Old Towne Agreement 43 - -,......-. _......_._....~... ~ -...-- ._~. ... specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this subsection shall be deemed to constitute a waiver of or change in the City's Building Code or Public Works Department requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes." (p) Except as otherwise specified in this Agreement, the cost of constructing the New Homes and all other improvements on the Project shall be paid for by the Developer; provided however, that the Agency shall be obligated to the Developer to pay the Agency Affordable Housing Development Grant in the installments as provided in Section 2.01. (q) Developer shall pay the school capital facility development improvement fees as required and at the time specified by the San Bernardino Unified School District. All other development fees imposed by the City as a condition of issuance of any permit for the development of the Project shall be paid by the Developer to the City at the time of issuance of each such permit or, subject to the approval of the City in its discretion, at the close of each New Home Escrow, pursuant to the terms of the City of San Bernardino's Development Fee Deferral program as may then be in effect. (r) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval thereof by the City, all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Project hereunder including, but not limited to the public improvements necessary for the development of each New Home and to the specifications, drawings, plans, maps, permi t applications, land use applications, zoning applications and design review documents for the New Homes. (s) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation and securing of permits for utility improvements and connections, which may be required in developing each New Horne. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and habitability of surrounding properties during said construction. 03-03-03 CHS Old Towne Agreement 44 (t) The Developer shall begin and complete all construction and development and undertake all obligations and responsibilities of the Developer within the times specified in the Schedule of Performance, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Schedule of Performance shall be subj ect to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. Any and all deadlines for performance by the parties shall be extended for any times attributable to delays which are not the fault of the performing party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (u) Prior to and during the period of construction of the New Homes the Developer (including the period of time in which any School District House is being relocated from School District Lands to a Developer Lot) shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every twelve (12) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (v) Prior to any distribution of the Affordable Housing Development Grant, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of Two Million Dollars ($2,000,000.00) combined single limit, naming the Agency, the City and the elected officers, officials, employees, attorneys and agents of both of them, as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises- operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000.00) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from 03-03-03 eHS Old Towne Aqreement 45 insurance companies admitted in the State of California and rated at least B+: XII in Best's Insurance Guide, or in special circumstances, be preapproved by both the Executive Director of the Agency and the Agency General Counsel. All said insurance policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Project as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force until the Agency has issued the final Certificate of Completion in connection with the development of the Project. (w) The Developer for itself and its successors and assigns agrees that in the construction of the New Homes and the undertaking of the Project, the Developer will not discriminate against any employee or applicant for employment because of sex, mari tal status, race, color, religion, creed, national origin, or ancestry. (x) The Developer shall carry out its construction of the improvements of the New Homes and the undertaking of the Project in conformity with all applicable laws, including all applicable State labor standards and requirements and with respect to the development of the Project. (y) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits which may be required for the construction, development or work of the proj ect by the City or any other governmental agency having jurisdiction thereof. (z) Officers, employees, agents or representatives of the Agency and the City shall have the right of reasonable access to the Developer Lots, during normal business hours during the period of construction for the purposes of monitoring the Developer's performance under this Agreement. Section 3.02. Property Taxes and Assessments. The Developer shall pay prior to the delinquency all real property 03-03-03 CHS Old Towne Agreement 46 .-'---_.--..:....,.~.;;.'....::;;,:-.~~ taxes and assessments assessed and levied on or against the Developer Lots prior to the close of each New Home Escrow. Nothing herein shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. Section 3.03. Prohibition Against Transfer. (a) Prior to the completion of the Project as. set forth in Section 1. 03, the Developer shall not, without prior written approval of the Agency or except as permitted by this Agreement, (i) assign or attempt to assign this Agreement or any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of any Developer Lot or permit to be placed on any Developer Lot any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien. This prohibi tion shall not apply to any of the following: (l) the reasonable grant by the Developer of utility easements or permits to facilitate the development of any Developer Lot; (2) the assignment of all of the Developer's interest in this Agreement to a limited liability company of which the Developer is the managing member (and the assumption of such interest by such limited liability company); (3) any permitted construction financing interest under Section 3.04; and (4) sales by the Developer of individual New Homes. (b) In the absence of specific written agreement or approval by the Agency, no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of a Developer Lot shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. (c) Developer shall not lease or rent any of the New Homes, or any structure or any Developer Lot for commercial or residential occupancy by any person, pending final sale to a Qualified Homebuyer. Section 3.04. Security Financing; Right of Holders. la) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. Notwi thstanding any provision of Section 3.03 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the construction and improvement of the Project are permitted on any 03-03-03 CHS Old Towne Agreement 47 Developer Lot before the completion of the Project. The Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for financing of the Project which the Developer proposes to be secured by any Developer Lot before the recordation of any such Project-related construction financing security interests. The Developer shall not enter into any such conveyance for construction financing without the prior written approval of the Agency, which approval the Agency shall grant if: (i) any such conveyance is given to a responsible financial or lending institution including, wi thout limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and the like, or other acceptable persons or entities for the purpose of financing the construction of the New Homes on the Developer Lots, and (ii) such loan contains customary construction lender disbursement controls. (b) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the New Homes whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. (c) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the proj ect or to guarantee such construction or completion; provided however, that each surety under any completion and payment surety bond delivered by the Developer to the City of San Bernardino, if any, under the terms of any off-site improvement permit issued by the City to the Developer, shall not, by the virtue of any term of this Agreement, be deemed to be discharged from its obligation to the City as arises under such surety. (d) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Project or any Developer Lot prior to the completion of the Project and the holder of such security interest has not exercised its option to complete the Project, the Agency may cure the default of the Developer with respect to one or more of the Developer Lots, but is under no obligation to do so prior to completion of any foreclosure. In the event that the Agency may cure any such default by the Developer, the 03-03-03 CHS Old Towne Agreement 48 -., -- -. -"--"'~'--'_.,--,~" ~""~-'~~"'.._..~- ..- - -----..-.-.-.....--. Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.04(d) upon the Project (or any Developer Lot) to the extent of such costs and disbursements. Any such lien shall be subordinate and subj ect to mortgage, deed of trust or other security instrument executed by the Developer encumbering the applicable Developer Lots. ARTICLE IV USE OF THE DEVELOPER LOTS Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors, and assigns that each of the sixteen (16) New Homes to be developed, constructed and improved on Developer Lots, shall be reserved for sale and occupancy by Qualified Homebuyers whose Adjusted Family Income at the time of initial occupancy of each New Home does not exceed the household income qualification limits of a Moderate-Income Household. The Developer shall cause to be recorded at the time of close of each New Home Escrow for each of the fully executed form of the Section 33334.3 Covenant. The final form of the Section 33334.3 Covenant shall be delivered to the escrow holder for execution by the Developer and the Qualified Homebuyer at the time of close of each New Home Escrow. If the Qualified Homebuyer may use Agency MAP funds for the purchase of the New Home from the Developer, the Qualified Homebuyer and the Agency shall execute a separate set of redevelopment affordability covenants in favor of the Agency to evidence the obligation of the Qualified Homebuyer to the Agency which arise by virtue of the Qualified Homebuyer's acceptance of Agency MAP Funds under the Agency MAP program. (b) The Developer further covenants and agrees for itself, its successors and assigns that each of the Developer Lots shall be improved, developed and used in accordance with the Scope of Development. Developer covenants to develop and use the Developer Lots in conformity with all applicable laws. (c) Developer shall not lease or Developer Lots, or any New Home constructed final sale to a Qualified Homebuyer. rent any thereon, of the pending 03-03-03 CHS Old Towne A.qreement 49 Section 4.02. Maintenance of the Developer Lots. The Developer covenants and agrees for itself, its successors, and assigns to maintain each of the Developer Lots in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping on each Developer Lot required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter any Developer Lot and undertake, such maintenance acti vi ties. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance acti vi ties. The obligation of the Developer under this Section 4.02 with respect to the Developer Lots shall be discharged for each Developer Lot on the applicable Delivery Date to the Qualified Homebuyer. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to each of the Developer Lots, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Si te; 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, sublessee or vendees of the Developer Lots. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Developer Lots, and each of them, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of each of the Developer Lots and each of the New Homes, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 03-03-03 CHS Old Towne Agreement 50 la) In deeds: "The grantee herein covenants by ar,d :or itself, i-cs successors and assigns, and all persc:l.s claiming under or through them, that there shall be r.o discrimina~ion against or segregation of, 2~Y person Or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or arocestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall t",e grantee or any person claiming under or throu::;h it, establish or permit any such practice or prac-:ices of discrimination Ol:' segregation v..'ith reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." Ib) In leases: "The Lessee herein covenants by and for itsel:, irs successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination againsr or segregar~on of any person or group of persor.s, on aCCOU'1t of race, coler, creed, religion, sex, mari.tal status, national origin, or ancestry, in the leasing, sub2.easin9, transferrir'lg, use, occupancy, tenure, or enjcY:-:'Lent of ::;-18 premises ~~erein leased nor shall the lessee ':":'3e1f, or ar.y person ci.aiming under or through it, establis~ or permi:. any such practice or practices of discri~~naL~on or segregatic~ wlth reference to the selecLic~, location, n;J.mber, :..:.se, or occupancy, of tenarILS lessees, sublessee, subte~2~ts, or verdees in the premises herein leased." (c) =~ contracts: "There shall be no d~scrimination aga~nst or segregation of any perso'1 or group cf persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises here~n conveyed or leased, ncr shall the transferee or any person claiming under or ~hrough i~, establish or permit any such pract~ce or practices of disc:-imir.a-:.ion or segregation witr. reference to the select ion, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of ':.he premises herein tra'1sferred." The foregoing provision shall be bind.:r~g upon and shall obligate the contract2-.:-.g party or parties ar.d any subcontracting party or parties, or other transferees under the instrument. ~':'.C> .-. ~ : ",,,::-. " . C'1 Section 4.05. Effect and Duration of Ccvena:cts CJ~.de~ Section 4.01 and Section 4.04. The covenants established u~de~ Section 4.04 against discrimination shall remain in e:fec: _. perpetuity. The covenant respecting uses and occupancy 0: each New Eome which shall be initially occupied by a Qualifiec Homebuyer as set forth in Section 4.0lla), shall remain in effect for the Qualified Residence Period of each such New Eame le.C)., forty five (45) years follovling the Dellvery Dace to :h:e Qua~i:ied ~omebuyer), and shall run with the ~a~c ana s~211 constitute equitable servitudes thereon, and s:--,211, ',,]it~,C1J.'=- regard to technical classification and designatio:;, be binc'::l; for the benefit ana lil favor of the P.gency, its s'.Jccessors 2:";:: assigns and the City. 'Ch,e Agency is deemed the beneficiary of t:he terrcs ~.. pro~Jisio~s of this ..A.greement and of t~e covenants run::.i:H; '.p ~.~. the land :8!' and in its own rights and for tl:e pur80ses ,,~ procecti~,g t:he interests of the communicy. The .Z\ger,cy sr.a11 have the ri9ht, if such covenants are breacb.ed, to exercise '-__ righ~s and remedies and to maintain any actions or seits a: _a~ or In e:.:r..:i:.y or such other proper proceedings to er'.:e~ce -'"''=' cJring or s~ch breaches to which it or any otter be~ef~ci2ry =f such cove~.2:;.ts may be entitled, i:1cluding, ';lit.he1"':: ~2-~.=--:c:=-::-" to specif.:.c perfo~:Tla:';ce, damages and ir:junc<:ive :::e1::"2:. Age~lcy 5.'12::"2. have :he ~ight to assign 212. of i:s ~i::r.':-::s ber.efits ~e~eu~der ~c the City. ~, .~, P..RTICLS ''] DEFA~LTS, REM2DIES AND TERM~NAT=ON 5e::::tion ':.01. Defau~ts - Ge~er2::". ,=,~ Subject :'0 the exte:--:sions of ti:T:'2 se: :fcrt~: ,.... Section 6.GS hereof, failure or delay by either par~y -:0 perfc~~ any term C~ provision of this Agreement shall cor.s:itJte 2 defal.:lt '....:r'.:ier this .~greement; provicied, hO\-Jever, t:--.at if 2 p2r::~.' otherwise i:--, defa:..:lt commences to c'Jre, correct or re:neciy suc:-: default h'i:::'1in thirty (30) cale:--;dar days after re,::eipt '0_ written ~c:ice specifying such de:ault and shall dilige~~ly ans continuous~~' prosecute such cure, correction or re~edy ~o completio~ (and where any tlme llmi~s for the completic~ of s~=~ cure, co:c:-ection cr remedy are specifically set tortf'. lr~ -:-,,~ c: Agreer..ent, then within said time 2.ir:-lits), s'c.lch parti' shall !""'i::;t be deemed :: be in cefault hereunder. ~ : ~ C"",o~.," r,: -0 :)..:. .,.- -~ -~-_.- ----~-~---...-- --~-_.- ----- --~ (b) The injured party shall give written notice of default to the party in default, specifying the default complained of by the non-defaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to insti tute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 5.02. Legal Actions. (a) In addition to any other rights or remedies, ei ther party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chairman of the Agency, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on (or such other agent for service of process and at such address ..as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Rights Except with respect to any declared to be exclusive in and Remedies are Cumulative. rights and remedies expressly this Agreement, the rights and 03-03-03 CHS Old Towne Aqreement 53 ---.---- -,_._--_._..~-~--------- --._- remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damages If either party defaults with regard to any provision of this Agreement following the Effective Date, the non-defaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such defaul t wi thin thirty (30) calendar days after service of the notice of default and promptly complete the cure of such default wi thin a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for any specific default), after the service of written notice of such default, the defaulting party shall be liable to the other party for damages caused by such default. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices, Between the Parties. Demands and Communications (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal deli very, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable, as designated in Section 1.02(a) and Section 1.02(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is recei ved by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail as heretofore provided. (b) In or communications all notices shall addition to the submission of notices, demands to the parties as set forth above, copies of also be delivered by facsimile as follows: 03-03-03 CHS Old Towne Agreement 54 to the Developer: Creative Housing Solutions 3233 Grand Avenue No. 76 Chino Hills, California 91709 to the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, CA 92401 FAX: (909) 888-9413 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement, or in the development of the Site, shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. Section 6.04. Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, 03-03-03 CHS Old Towne Agreement 55 insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Project or to satisfy any other condition of this Agreement relating to the redevelopment of the Developer Lots shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force maj eure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Inspection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the Proj ect, as necessary for the 03-03-03 CHS Old 'Towne Agreement 56 Agency, in its reasonable discretion, to enforce its rights under this Agreement. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Site and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Approvals. (a) Except as otherwise provided in this Agreement, approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise or be purported to arise from or related to this Agreement. Section 6.09. Indemnification. The Developer agrees to indemnify and hold the City, the Agency, and the elected officers, officials, employees, attorneys and agents of both of them, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Developer in performing its obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. Section 6.10. Attorneys' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow Holder or a third party, then as between the Developer and the Agency, 03-03-03 CHS Old Towne Agreement 57 ~~-~~".,. .. .--- ._~. ---.".-- - -- the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include in the case of the Agency to salaries and expenses of the lawyers employed by the Office of City Attorney (allocated on an hourly basis) who may provide legal services to the Agency in connection with the representation of the Agency in any such matter. Section 6.11. Effect. This binding upon and inure to the benefit of their respective heirs, executors, representatives, successors and assigns. Agreement shall be the parties hereto and administrators, legal ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT Section 7.01. Entire Agreement. (a) This Agreement shall originals each of which is deemed Agreement includes pages and list of attachments at Section entire understanding and Agreement 1. 05) , of the be executed in two to be an original. ( ) attachments which constitute parties. (2) This (See the (b) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate representations of the Agency and the Developer. 03-03-03 CHS Old Towne Agreement 58 _.._"---'-'._~_._.o.__ IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Agency Chair By: Agency Executive Director APPROVED AS TO FORM: Agency Special Counsel DEVELOPER Creative Housing Solutions, a California non-profit corporation Date: By: By: 03-03-03 CHS Old Towne Aqreement 59 .-,-"-.....-- ...... ~'" EXHIBIT "An Legal Description of Developer Lots 03-03-03 CHS Old Towne Aqreement Exh. "A" - 1 ...~...........'- -~.._.---_.._-'-~ ~~.'" ..........-;;.-~ EXIllBIT "A" Creative Housing Solutions "Old Town Project Area" Properties either Closed or In Escrow February 21,2003 APN# Address 1. 0134-012-08 2. 0134-012-09 3. 0134-022-02 4. 0134-022-03 5. 0134-022-13 6. 0134-022-14 7. 0134-022-15 8. 0134-014-24 9. 0134-014-25 10.0134-014-26 11. 0140-263-18 12.0134-014-27 13.0134-013-18 14.0134-011-16 15.0140-261-15 16.0140-192-27 0140-192-26 0140-192-25 835 Victoria Victoria & H St Victoria & 7th St Victoria & 7th 8t Victoria & 7th 8t Victoria & 7th St Victoria & 7th 8t 626 N G St G St & 6th St G 8t & 6th St 718 W 7th 8t 740 W 6th 8t 640 N Crescent Victoria & H 8t 752 N. H 8t 825 N. H St ;." . ,.~ 03-03-03 CHS Old Towne Agreement .-..---------...---.-.--.-...-.-..-.--.-.--..-"---- ~._.._------.. EXHIBIT "B" Form of Notice of Agreement Exh. "B" - 1 , -..-..0_-',-... '_.. _ .~_.._ _______~ ___ " RECORDING REQUESTED BY WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Executive Director (SPACE ABOVE LINE FOR USE BY RECORDER) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO NOTICE OF AGREEMENT RELATING TO REAL PROPERTY (Creative Housing Solutions) TO ALL INTERESTED PERSONS: PLEASE TAKE NOTICE that as of the date of recordation of this Notice of Agreement Relating to Real Property, Creative Housing Solutions, a California non-profit public benefit corporation (the "Developer") and the Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the "Agency") have entered into an agreement entitled: "Old Towne Single Family Residential Acquisition and Construction Grant Funding Agreement". This Notice of Agreement Relating to Real Property affects the property descried as follows: [INSERT TEXT OF LEGAL DESCRIPTION FOR EACH DEVELOPER LOT] Interested persons may contact the Agency (Attention Executive Director) by telephone at (909) 663-1044, during regular business hours for additional information relating to the Old Towne Single Family Residential Acquisition and Construction Grant Funding Agreement. 03-03-03 CHS Old Towne Aqreement Exh. "B" - 2 .-----.. ....-- _.~..~-.~--_._.._-....................._--- "c. . . L This Notice of Agreement Relating to Real Property has been executed by the parties as set forth below. DEVELOPER Creative Housing Solutions, a California non-profit public benefit corporation Date: By: By: AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Executive Director APPROVED AS TO FORM: Agency Special Counsel [NOTARY JURATS ATTACHED] 03-03-03 eMS Old Towne Aqreelllent Exh. "B" - 3 EXHIBIT "en Project Description/Scope of Development 03-03-03 CHS Old Towne Aqreement Exh. "c" - 1 ..., ~ ., -~-,~,-.' -----....-....."_._~-".;...~..,-', ',' EXHIBIT "C" Project Description/Scope of Development Creative Housing Solutions Old Town Project Area Creative Housing Solutions (CHS), a non-profit housing corporation, will acquire or has acquired sixteen (16) vacant parcels in the Old Town Project Area of the City of San Bernardino (see attached map). Scenario 1: If the "School District Houses" are made available to CHS and if CHS has accepted the. condition of such "School District Houses" as provided in the agreement then CHS will cause the "School District Houses" to be relocated, rehabilitated and sold to qualified homebuyers. CHS will be responsible for all related street improvements in accordance with City development standards, relocation of the School District homes; utility reconnections, and required approvals from the City. In addition, CHS will have at least six (6) "New SFD Homes" ready for occupancy within eighteen (18) months of the Effective Date as defined in the contract. Scenario 2: If the "School District Houses" are not available or CHS chooses for whatever reason to not accept the "School District Houses", CHS will have at least six (6) "New SFD Homes" ready for occupancy within eighteen (18) months of the Effective Date as defined in the contract. The remaining ten (10) "New SFD Homes" will be ready for occupancy within 30 months of the Effective Date as defined in the contract. CHS will be responsible for all related street improvements in accordance with City development standards, utility reconnections, and required approvals from the City. 03-03-03 eHS Old Towne Aqreement EXHIBIT "D" Schedule of Performance Exh. "0" -1 , . t--~ - .'~-.~":'::"';'-.>..:.;-- ~.------....~........- '.)--" " . ... ._._-.. "--'--~._-~-.~-. -'--.-"-. ...- ..- ..---'-.' .----- EXHIBIT "0" SCHEDULE OF PERFORMANCE Creative Housing Solutions Old Town Project Area 1 Within 10 days following Agency Deliver fully executed Agreement governing board approval of Agreement including all exhibits and evidence of (Effective Date) insurance to the Agency I 2 Within 90 days following the Effective Date Close remaining twelve (12) lots in escrow 3 Within 6 months following the Effective Inspect and submit final list of School Date District Houses and new SFD houses Scenario 1: "School District Homes" with attached project pro-forma. Available 4 Within 18 months following effective date "New SFD Structures" and "Restored Scenario 1: "School District Homes" Homes" ready for occupancy Available , i , , i 5 Within 18 months following effective date i A minimum of six (6) "New SFD I Scenario 2: "School District Homes" Not I Structures" must be ready for occupancy. Available I ! , , , 6 Within 30 months following effective date Remaining balance often (10) "New SFD Scenario 2: "School District Homes" Not Structures" must be ready for occupancy Available i 7 I Within 60 days of the completion ofthe Developer shall submit to the Agency its Project (not later than September 1, 2005) I written verification of Final Project Costs ! I I 03-03-03 CHS Old Towne A.glu:mc:nl. ~~"--'----~._.-.----._--~._,,-_.;....._..- . EXHIBIT "E" Form of Section 33334.3 Covenant Exh. "En - 1 ~ ~._~~. ."--~--~----'__~..'-'.. c.._..~ I." RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North ME" Street, Suite 301 San Bernardino, CA 92401 Attn: Executive Director (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS Dated as of , 200 Old Towne Single Family Residential Acquisition and Construction Grant Funding Agreement 03-O3..()) CHS Old ToWTlll AgrcemmI. Exh. ME" - 2 REDEVELOPMENT AGENCY OF THE CITY OF SAN BElUQRDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS (Old Towne Single Family Acquisition and Construction Grant Funding Agreement) THIS REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS (the "Section 33334.3 Covenant") is made and entered into as of 200_, by and among Creative Housing Solutions, a California non-profit public benefit corporation (the Developer"), the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a body corporate and politic (the "Agency"), and (the "Qualified Homebuyer"), and this Section 33334.3 Covenant relates to the following facts set forth in Recitals. -- RECITALS -- A. The Qualified Homebuyer proposes to acquire a single family residence (the "New Home"), located within the City of San Bernardino (the "City"), from the Developer, to be owned and occupied by the Qualified Homebuyer as their principal residence. The legal description of the New Home is attached hereto as Exhibit "A" and incorporated herein by this reference. B. The Agency has used and applied certain affordable housing development funds from the Low-and Moderate-Income Housing Funds of several different redevelopment project areas, to make the New Home available for acquisition by the Qualified Homebuyer from the Developer subject to the terms and conditions of the Community Redevelopment Law found at Health and Safety Code Section 33000, et seq. (the "Act") and this Section 33334.3 Covenant; and C. The Act mandates that the acquisition, use and occupancy of the New Home shall be regulated in certain respects for the term as provided herein (the "Qualified Residence Period") in order to ensure that the New Home will be used and occupied in accordance with the Act and the affordable single family residential dwelling unit development goals and objectives of the Agency. O)..(I)..()3 CH.S Old Towne Agreemenl Exh. "E" - 3 NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF walCH IS HEREBY ACKNOWLEDGED, THE QUALIFIED HOMEBUYER, THE DEVELOPER AND THE AGENCY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS: Section 1. Definitions of Certain Terms. As used in this Section 33334.3 Covenant, the following words and terms shall have the meaning as provided in the Recitals or in this Section 1 unless the specific context of usage of a particular word or term may otherwise require: Adjusted Family Income. The words "Adjusted Family Income" mean the anticipated total annual income (adjusted for family size) of each individual or family residing or treated as residing in the New Home as calculated in accordance with Treasury Regulation 1.167(k) - 3b) (3) under the Code, as adjusted, based upon family size in accordance with the household income adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States Housing Act of 1937, as amended. Affordable Housing Cost. The words "Affordable Housing Cost" shall have the meaning as set forth in Health. and Safety Code Section 50052.5, as this section may hereafter be amended from time-to-time by the State of California. A Qualified Homebuyer and/or the Successor-In-Interest of such Qualified Homebuyer, if any, shall pay no more than an Affordable Housing Cost for the New Home as of the applicable Delivery Date. Agency Investment Reimbursement. The words "Agency Investment Reimbursement" mean and refer to the sum of money which may be payable to the Agency by the Qualified Homebuyer if, during the Qualified Residence Period, the Qualified Homebuyer sells, assigns, transfer or otherwise hypothecates the New Home to any person who does not satisfy the requirement of a permitted successor-in- interest (in other words the Successor-In-Interest designated by the Qualified Homebuyer is a person or household whose Adj usted Family Income exceeds the income level for a Moderate Income Household). The Agency Investment Reimbursement, and the method or formula for determining the amount, if any, as may be payable by the Qualified Homebuyer to the Agency upon the resale of the New Home, is more particularly described in Section 5 of 03.03-<13 CHS Old Towne Agnlemen1 Exh. "E" - 4 this Section 33334.3 Covenant. As of the Delivery Date, the Agency has provided the Developer with the sum of $12,500 as an affordable housing development assistance contribution for the improvement of the New Home, and the provisions of Section 5 of this Section 33334.3 Covenant are included in satisfaction of the requirements of Health and Safety Code Section 33334.3 (f) (B) . Code. The word "Code" means the Internal Revenue Code of 1986, as amended, and any regulation, rulings or procedures with respect thereto. Delivery Date. The words "Deli very Date" mean the date of delivery of title and possession of the New Home from the Developer to the Qualified Homebuyer at the close of the New Home Escrow. In the case of a Successor- In- Interest, the words "Delivery Date" refers to the date on which such Successor-In-Interest acquires the New Home from the Qualified Homebuyer; provided however, that for the purpose of establishing the termination date of the Qualified Residence Period, the Delivery Date shall refer to the date on which this Section 33334.3 Covenant is recorded. Moderate-Income Household. The words "Moderate-Income Household" mean persons and families whose income does not exceed one hundred and twenty percent (120%) of the area median income of the City adjusted for family size by the State Department of Housing and Community Development in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, as amended, and Health and Safety Code Section 50093, as this section may hereafter be amended from time-to-time by the State of California. New Home. The words "New Home" mean and refer to the completed affordable single-family residential dwelling uni t (including the land and landscape improvements thereon) as constructed and installed by the Developer and sold to the Qualified Homebuyer. New Home Escrow. The words "New Home Escrow" mean and refer to the real estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or later, by and between the Qualified Homebuyer and the Successor-In-Interest) . The transfer of the New Home from the Developer to the Qualified Homebuyer (or later, by and O).{)3-oJ 0iS Old Towne Agr=ment Exh. "E" - 5 between the Qualified Homebuyer and the Successor-In- Interest) shall be accomplished upon the close of the New Home Escrow. Notice of Agency Concurrence. The words "Notice of Agency Concurrence" mean and refer to the acknowledgment in recordable form in which the Agency confirms that the proposed Successor-In-Interest of the Qualified Homebuyer satisfies all of the Adjusted Family Income and other requirements of this Section 33334.3 Covenant for occupancy of the New Home by the Successor-In-Interest at any time during the Qualified Residence Period. Qualified Homebuyer. The words "Qualified Homebuyer" mean the purchaser of the New Home from the Developer (e.g.: all persons identified as having a property ownership interest vested in the New Home as of the close of the New Home Escrow). At the close of the New Home Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does not exceed the household income qualification limits of a Moderate-Income Household: (ii) shall be a first-time homebuyer, as this term is defined in Health and Safety Code Section 50068.5 as this section may hereafter be amended from time-to-time by the State of California; and (iii)pay no more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase money mortgage financing, insurance, escrow and other fees and costs. Qualified Residence Period. Period" mean the period of Date and ending on the date after the Delivery Date. The words "Qualified Residence time beginning on the Delivery which is forty-five (45) years Section 33334.3 Covenant. The words "Section 33334.3 Covenant" mean these Redevelopment Agency of the City of San Bernardino Community Redevelopment Housing Affordability Covenants and Restrictions by and among the Qualified Homebuyer, the Developer and the Agency pertaining to the New Home. Successor-In-Interest. The words "Successor- In- Interest" mean and refer to the person, family or household which may acquire the New Home from the Qualified Homebuyer at any time during the Qualified Residence Period by purchase, assignment, transfer or otherwise and whose payments for 03-OJ.,{}) CHS Old To\IrTIC AgJ:eemcnt Exh. "E" - 6 "__..__._.__._._~____" ...w ...._.......,-"~_._._~...._.____..._ the acquisition of the New Home from the Qualified Homebuyer do not exceed an amount which is an Affordable Housing Cost for such Successor-In-Interest household. The Successor-In-Interest does not need to be a ~First-Time Homebuyer" but, such Successor-In-Interest shall have an income level for the twelve (12) months prior to the date on which the Successor-In-Interest acquires the New Home which does not exceed the maximum Adjusted Family Income level for a Moderate-Income Household. Upon acquisition of the New Home the Successor-In-Interest shall be bound by each of the covenants, conditions and restrictions of this Section 33334.3 Covenant. The titles and headings of the sections of this Section 33334.3 Covenant have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the meaning any of the terms or provisions hereof. Section 2. Acknowledgments and Representations Qualified Homebuyer. The Qualified Homebuyer acknowledges and represents to the Agency that, as Delivery Date: of the hereby of the (a) the total household income for the Qualified Homebuyer does not exceed the maximum amount permitted as Adjusted Family Income for a Moderate-Income Household, adjusted for family size; (b) the Qualified Homebuyer intends to promptly occupy the New Home after the Delivery Date as the principal place of residence for a term of at least two (2) years following the Delivery Date and the Qualified Homebuyer has not entered into any arrangement and has no present intention to rent, sell, transfer or assign the New Home to any third party during the Qualified Residence Period so as to frustrate the purpose of this Section 33334.3 Covenant; (cl the Qualified Homebuyer has no present intention to lease or rent any room or sublet or rent a portion of the New Home to any relative of the Qualified Homebuyer or to any third person at any time during the Qualified Residence Period; (d) following interest, the sum payable each month by the Qualified Homebuyer the close of the New Home Escrow as principal and property taxes and, property casualty insurance for OJ-QJ.(lJ CHS Old Towne Agr=ncoI. Exh. "Ell - 7 '-~"---"--'- the acquisition of the New Home does not exceed the Affordable Housing Cost for the household; (e) the Qualified Homebuyer agrees to provide the Agency with the following items of information for inspection by the Agency promptly upon written request of the Agency: (i) State and federal income tax returns filed by all persons who reside in the New Home for the most three (3) recent tax years preceding the close of the New Home Escrow for inspection of such State and federal income tax returns; (ii) current wage, income all person residing close of the New Home and salary statements in the New Home at Escrow; for the (f) The Qualified Homebuyer has been informed by the Developer that this Section 33334.3 Covenant imposes certain restrictions on the use and occupancy of the New Home during the term of this Section 33334.3 Covenant and that this Section 33334.3 Covenant imposes certain restrictions on the resale of the New Home during the Qualified Residence Period. The Qualified Homebuyer acknowledges and understands that these restrictions shall be applicable to the New Home and to. any resale of the New Home from the Delivery Date to the end of the forty-fi ve (45) year Qualified Residence Period which is , 204 . (g) Each of the foregoing acknowledgements and representations of the Qualified Homebuyer are true and correct. Dated: Initials of Qualified Homebuyer Section 3. Covenant of the Qualified Homebuyer to Maintain Affordability of the New Home During the Qualified Residence Period and Covenant Relating to Sale or Transfer of the New Home During the Qualified Residence Period to a Successor-In- Interest. (a) The Qualified Homebuyer for itself, its heirs, successors and assigns, hereby covenants and agrees that during the term of the Qualified Residence Period the New Home shall be used and, occupied by the Qualified Homebuyer as its principal residence, and that the New Home shall be reserved for sale, use -" O]..{)]..{)] 0lS Old To_ Agn:cmcnt Exh. "E" - 8 -.' .--.- ---------. _..............._,--,-'-'-.......~~--'<--~. ~~ and occupancy by the Qualified Homebuyer and/or for another Moderate-Income Household as a Successor-In-Interest at an Affordable Housing Cost. The Qualified Homebuyer, for itself, its heirs, successors and assigns, further covenants and agrees that, during the Qualified Residence Period, the Agency shall have the right and duty as provided in this Section 3 to verify that each proposed Successor-In-Interest of the Qualified Homebuyer in the New Home satisfies the income requirements and Affordable Housing Cost limitations of a Moderate-Income Household (based upon the Adjusted Family Income of each household), and that the completion of any resale or transfer of the New Home to a Successor-In-Interest shall be subject to the recordation of the "Notice of Agency Concurrence" as provided in Section 3 (d) . (b) The Qualified Homebuyer, for itself, its successors and assigns, hereby covenants and agrees that during the term of the Qualified Residence Period the Qualified Homebuyer shall not sell, transfer or otherwise dispose of the New Home (or any interest therein) to a Successor-In-Interest without first giving written notice to the Agency and without first obtaining the written concurrence of the Agency as provided herein. At least forty-five (45) days prior to the date on which the Qualified Homebuyer proposes to transfer title in the New Home to a Successor-In-Interest, the Qualified Homebuyer shall send a written notice to the Agency as provided in Section 17 of the intention of the Qualified Homebuyer to sell the New Home to a Successor-In-Interest which includes the following true and correct information: (i) name of the proposed Successor-In-Interest (including the identity of all persons in the household of the Successor-In-Interest, proposing to reside in the New Home); (ii) copies of State and federal income tax returns for the Successor-In-Interest for the calendar year preceding the year in which the notice of intention to sell the New Home is given to the Agency; (iii) resale price of the New Home payable by the Successor-In-Interest, including the terms of all purchase money mortgage financing to be assumed, provided or obtained by the Successor-In- Interest, escrow costs and charges, realtor broker fees and all other resale costs or charges 03.03-03 CHS Old Towne Agrccmcnl Exh. "E" - 9 '----- -----.-. ,-.-.-,., payable by either the Qualified Homebuyer or the Successor-In-Interest; (iv) name address, and telephone number of the escrow company which shall coordinate the transfer of the New Home from the Qualified Homebuyer to the Successor-In-Interest; (v) appropriate mortgage credit references for the Successor-In-Interest together with a written authorization signed by the Successor-In-Interest authorizing the Agency to contact each such reference (for the purposes of this subparagraph (v), appropriate mortgage credit reference may include a true and correct and complete copy of the mortgage loan application submitted by the Successor-In-Interest to its proposed purchase money mortgage lender); and (vi) such other relevant information as the Agency may reasonably request, as provided in Section 3(c). (c) Within twenty (20) days following receipt of the notice of intention and accompanying written information described in Section 3(b), the Agency shall provide the Qualified Homebuyer with either a preliminary confirmation of approval or a preliminary rej ection of approval in writing of the income and household occupancy qualifications of the Successor-In-Interest. The Agency shall not unreasonably withhold, condition or delay approval or rejection of the qualifications of the proposed Successor-In-Interest in connection with any proposed sale of the New Home. In the event that the Agency may request additional information relating to the confirmation of the matters described in Section 3(b) with respect to a proposed Successor-In-Interest, the Qualified Homebuyer shall provide such information to the Agency as promptly as feasible. (d) Upon its final confirmation of approval of the Adjusted Family Income and Affordable Housing Cost eligibility of the Successor-In-Interest to acquire the New Home, the Agency shall deliver a written acknowledgment and approval of the resale of the New Home to the Successor-In-Interest (e.g., the Notice of Agency Concurrence) in recordable form to the escrow holder referenced in Section 3(b) (iv) above, and thereafter the Successor-In-Interest may acquire the New Home subject to the satisfaction of the following conditions: 03-03-03 CHS Old Towne ~ Exh. "E" - 10 -_.>._",~_. ~ -,.~_..__.._._.,....- .,......-".~,._-..~_..._~ -.. -,.. ~__..__....___~..;.......; ":. ~_c..........;..;._~ ~~--.~" (i) the income and household occupancy information provided to the Agency shall be true and correct, and the Notice of Agency Concurrence executed by the Successor-In-Interest and the Agency shall be recorded at the close of the resale escrow; (ii) the escrow holder shall have provided the Agency with a copy of the customary form of the final escrow closing statement of the Qualified Homebuyer and the final escrow closing statement for the Successor-In-Interest; and (iii) the other conditions of the resale escrow as established by the Qualified Homebuyer and Successor-In-Interest shall have been satisfied. (e) The Qualified Homebuyer for itself, its successors and assigns hereby covenants and agrees that during the Qualified Residence Period the New Home shall not be leased, subleased, or rented to any third person, except for a temporary period (not to exceed 12 months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in writing by the Agency subject to compliance during the temporary rental period with the reasonable temporary rental occupancy conditions required by the Agency. The Qualified Homebuyer shall submit a written request to the Agency prior to the commencement of the temporary occupancy, as practicable, but in any event within not more than (60) days following the commencement of a temporary rental occupancy of the New Home by a third party, which notice to the Agency shall set forth the grounds on which the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that a temporary rental occupancy in necessary. Section 4. Main tenance Condition Qualified Homebuyer, for itself, its hereby covenants and agrees that: of the New Home. The successors and assigns, (a) The exterior areas of the New Home which are subject to public view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the term of the Qualified Residence Period, there is an occurrence of an adverse condition on any area of the New Home which is 03-03-03 CHS Old Towne Ag=:mmt Exh. "E" - 11 -. ~...- .--_.".~--- .~ subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notify the Qualified Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30) days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words ~Maintenance Deficiency" include without limitation the following inadequate or non-confirming property maintenance conditions and/or breaches of single family dwelling residential property use restrictions: failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling unit in a clean and presentable manner; failure to keep the front and side yard areas of the property free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the property; failure to regularly mow lawn areas or permit grasses planted in lawn areas to exceed six inches (6") in height, or failure to otherwise maintain the landscaping in a reasonable condition free of weeds and debris; parking of any commercial motor vehicle in excess of 7,000 pounds gross weight anywhere on the property, or the parking of motor vehicles, boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of the property which are not covered by a paved and impermeable surface; the use of the garage area of the dwelling unit for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the New Home. In the event the Qualified Homebuyer fails to cure or commence and to diligently proceed to complete the cure of the Maintenance Deficiency within thirty (30) days from the date of notice to cure, the Agency may thereafter conduct a public hearing following transmittal of written notice thereof to the Qualified Homebuyer ten (10) days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Qualified Homebuyer has failed 03-03-03 CHS Old Towne AgreemenI Exh. ~E" - 12 to comply with the provision of this Section 4(a). If, upon the conclusion of a public hearing, the Agency makes a written finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, and that the Qualified Homebuyer has failed to cure such Maintenance Deficiency, then in such event the Agency shall have the right (in addition to any other rights or powers then available to the Agency or the City of San Bernardino) to enter the New Home (exterior areas only) upon ten (10) days written notice to the Qualified Homebuyer and perform all acts necessary to cure the Maintenance Deficiency, or the Agency may take other action at law or equity the Agency may then deem appropriate to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency as authorized by this Section 4(a) shall become a lien on the New Home. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce the lien in the manner as provided in Section 4(c). (b) Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the New Home shall be removed by the Qualified Homebuyer from any exterior surface of a structure or improvement on the New Home by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the New Home (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the Qualified Homebuyer, the Agency shall have the right to enter the New Home and remove the graffiti. Notwithstanding any provision of Section 4(a) to the contrary, any sum expended by the Agency for the removal of graffiti from the New Home as authorized by this Section 4(b) shall become a lien on the New Home. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce its lien in the manner as provided in Section 4(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 4 expressly include the power to establish and enforce a lien or other encumbrance against the New Home in the manner 03-03.03 CiS Ok! Towne ~ Exh. "En - 13 provided under Civil Code Sections 2924, 2924b and 2924c in the amount as reasonably necessary to restore the New Home to the maintenance standard required under Section 4(a) or Section 4(b), including the reasonable attorneys fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the Agency in connection with such action. In any legal proceeding for enforcing such a lien against the New Home, the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. For the purposes of this Section 4, the words "reasonable attorneys' fees and costs of the Agency" mean and include the salaries and benefits payable to lawyers employed by the Office of the City Attorney, allocated on an hourly basis, who provide legal services to the Agency in connection with the enforcement of this Section. The provisions of this Section 4, shall be a covenant running with the land for the Qualified Residence Period and shall be enforceable by the Agency in its discretion, cumulative with any other rights or powers granted by the Agency under applicable law. Nothing in the foregoing provisions of this Section 4 shall be deemed to preclude the Qualified Homebuyer from making any alterations, addi tions, or other changes to any structure or improvement or landscaping on the New Home, provided that such changes comply with the zoning and development regulations of the City and other applicable law. Section Derived From Home - Agency 5. Protection of Agency the Low-and Moderate-Income Investment Reimbursement. Investment of Moneys Housing Fund in the New (a) For the purpose of this Section 5, the following terms shall have the meaning as provided below: "Purchase Money Mortgage" means the original balance on the Delivery Date of the New Home mortgage provided to the Qualified Homebuyer by the conventional mortgage lender, plus the original outstanding balance of the Agency MAP Loan, if any. "Qualified Homebuyer Equity" means the downpayment amount in cash paid by the Qualified Homebuyer for the New Home on the Delivery Date (e.g.: the equity or "basis" as defined under the Code, net of the Purchase Money Mortgage of the Qualified Homebuyer in the New Home), plus the reduction, if any, of the outstanding principal balance of the Purchase Money Mortgage secured by the New Home through the date of the resale of the New Home. 03-03-03 CHS Ok! Towne ~ Exh. "E" - 14 . "-~"."'--_. - .. '._"_"'_.~""+'_'_n._..__.._.___.,....._~______...._._.~_..:",... _.. ........__v_' "Resale Price" means the total consideration paid by the Successor-In-Interest, including real estate broker fees and commissions for the purchase of the New Home, but excluding escrow fees and mortgage financing costs payable or otherwise allocated to the Successor-In-Interest in connection with the transfer of the New Home from the Qualified Homebuyer to the Successor-In-Interest. "Resale Profit" means the balance of the following calculation: (Resale Homebuyer Profit. Price)-(Purchase Equity + Resale Money Mortgage)-(Qualified Cost Adjustment Factor)=Resale A portion of the Resale Profit shall be payable to the Agency by the Qualified Homebuyer in accordance with Section S(b). "Resale Cost Adjustment Factor" means one of the following sums determined by reference to the number of years which have elapsed between the Delivery Date and the date on which the resale and transfer of the New Home to the Successor-In-Interest occurs: Date of Resale of New Home after the Delivery Date: From the Delivery Date to the S~ anniversary after Delivery Date From and including the 5th anniversary to the loth anniversary after Delivery Date From and including the anniversary to the end of Qualified Residence Period loth the Resale Factor: Cost Adjustment $0 $5,000.00 $10,000.00 (b) The Agency has used and applied certain moneys from the Low-and Moderate-Income Housing Funds of the Agency to assist with the development of the New Home. In the event that the New Home may be sold, assigned, conveyed or otherwise transferred by the Qualified Homebuyer during the term of the Qualified Residence Period to a person or household whose Adjusted Family Income exceeds the income level for a Moderate- 03.03-03 CHS Old Towne Agn:emen1 Exh. "E" - 15 .-_ .._.___.M_..._. __. __.,--..~___~..._ ~:"~C:.i"",-,-",-~,:",_,__ Income Household, a portion of the Resale Price of the New Home in excess of an adjusted sale price amount which the Qualified Homebuyer paid on such resale date (e.g.: the "Resale Profit" amount) shall be payable to the Agency as the Agency Investment Reimbursement in accordance with Health and Safety Code Section 33334.3(f), and as provided herein. In the event that, at any time during the Qualified Residence Period, the Qualified Homebuyer (or any Successor-In-Interest) may sell, assign, conveyor otherwise transfer the New Home to a person or household whose Adjusted Family Income exceeds the income level for a Moderate-Income Household, a portion of the Resale Profit realized by the Qualified Homebuyer shall be payable to the Agency as the "Agency Investment Reimbursement" in the amounts as follows: Date of Resale of New Home After Delivery Date From the Delivery 2nd anniversary Delivery Date Date to the after the From the 2nd anniversary to the loth anniversary after the Delivery Date From the loth anniversary to end the 20th anniversary after the Delivery Date From the 20th anniversary to the 30~ anniversary after the Delivery Date From the 30th anni versary after the Delivery Date to the end of the Qualified Residence Period 03-03-03 eHS Old Towne Aqreement Portion of Resale Profit Payable to Agency from Resale of New Home 100% of Resale Profit is payable to Agency as Agency Investment Reimbursement 75% of Resale Profit is payable to Agency as Agency Investment Reimbursement 50% of Resale Profit is payable to Agency as Agency Investment Reimbursement 25% of the payable to Agency Reimbursement Resale Profit is the Agency as Investment 10% of the payable to Agency Reimbursement Resale Profit is the Agency as Investment Exh. "E" - 16 ._0_.__'_. --.----..-'-.....-.---_.__._,.~.......,_._~~._,__.~_~".M. (c) Three (3) examples of the application of the formula described above as "Resale Profit" to determine the amount of the Agency Investment Reimbursement payable on the date of a hypothetical resale of the New Home are presented as follows: EXAMPLE A: Resale to a purchaser whose Adjusted Family Income exceeds the income level of a Moderate Income Household or to a purchaser who will not live in the New Home as a principal residence: Assume that on the Delivery Date the sales price of the New Home payable by the Qualified Homebuyer was $156,000 and that the resale occurs on the 7ili anniversary following the Delivery Date; Assume the Resale Price of the New Home is $185,000; and Assume that Qualified Homebuyer Equity as of the date of the resale is $24,000: EXAMPLE A CALCULATION OF RESALE PROFIT: $185,0001-$137,0002- ($19,0003+$5,0004)=$24,0005:Resale Profit (SEE ALSO FOOTNOTES, BELOW) . The Agency Investment Reimbursement amount under Example A payable at close of the resale escrow in this hypothetical example is $12,500 (e.g., 75% of $24,000 is more than the $12,500 Agency Investment Reimbursement - so in this case the lower figure of $12,500 is payable to the Agency). EXAMPLE B: Resale to a purchaser whose Adj usted Family Income DOES NOT exceed the income level of a Moderate Income Household 1 The Resale Price of the New Home to the Successor-In-Interest in Example A. 2 The Purchase Money Mortgage amount ($130,000 conventional mortgage plus $7,000 Agency MAP) of the New Home as of the Delivery Date. 3 The Qualified Homebuyer Equity in the New Home ($19,000 cash down payment plus a $5,000 reduction of outstanding principal balance on the Purchase Money Mortgage loans through the time of resale) . · The Resale Cost Adjustment Factor in the 7th year. 5 The Resale Profit of $24,000 is subject to a 75% allocation to pay the Agency Investment Reimbursement, or $12,500 payable to the Agency (as provided in Section 5 (b)) . The seller of this New Home could retain only $11,500 of the "Resale Profit" in this example. 03-03-03 CHS Old Towne Aqreement Exh. "E" - 17 . ~,--~~.""'.- -' ,- -- - '-'-~,"-----~. ~'-'-~n_'__'--_~___,J_~ '. . and who will reside in the New Horne as their principal residence: Assume same facts as in Example A and that the Successor- In-Interest also pays no more than an Affordable Housing Cost for the New Horne at a resale price of $185,000 on the 7th anniversary date following the Delivery Date; EXHIBIT B CALCULATION OF RESALE PROFIT: No Agency Reimbursement is payable to Agency as the Successor- In-Interest is a Moderate Income Household in this hypothetical sale and pays to the Qualified Homebuyer no more than Affordable Housing Cost for its purchase of the New Horne. In this example, the seller of the New Horne could retail the full amount of the Resale Profit or $24,000. Such Successor-In-Interest's "Qualified Homebuyer Equity" will be adjusted to reflect that buyer's new mortgage and equity basis in the New Horne for purposes of determining whether an Agency Reimbursement amount may be payable by such Successor-In-Interest in any future resale transaction during the remaining term of the Qualified Residence Period. (d) The sole source of funds of the Qualified Homebuyer to pay the Agency the Agency Reimbursement Agreement, shall be from the Resale Profit amount realized at the time of resale to a purchaser whose Adjusted Family Income exceeds the income level of a Moderate Income Household. In the event that the applicable amount of the Agency Investment Reimbursement is paid to the Agency at the time of resale of the New Horne to a person or household which does not qualify as a Successor-In-Interest, the Agency shall cause to be recorded concurrently with the resale of the New Horne to such person, a notice of release of the following provisions of this Section 33334.3 Covenant: Section 2, Section 3, Section 5 Section 7 Section 6. Acknowledgment of Subordination of the Provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant to the Mortgage Security Interest of the First Mortgage Lender. Concurrently upon the execution and recordation of this Section 33334.3 Covenant the Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition of the New Horne from (the "First Mortgage 03-03-03 CHS Old Towne Agreement Exh. "E" - 18 , Lender"). As of the Delivery Date, the Qualified Homebuyer has provided the Agency with a true and correct copy of the loan agreement by and between the First Mortgage Lender and the Qualified Homebuyer. As a condition to providing its mortgage loan to the Qualified Homebuyer, the First Mortgage Lender requires the Agency to agree that the provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant shall be junior and subordinate to the security interest of the First Mortgage Lender of even date herewith, in the New Home. The Agency hereby acknowledges and agrees that the provisions of Section 3, Section 5 and Section 7 (b) of this Section 33334.3 Covenant are subordinate and junior to the security interest of the First Mortgage Lender of even date herewith in the New Home. No breach or default by the Qualified Homebuyer of any provision of Section 3 and/or Section 7 (b) of this Section 33334.3 Covenant, nor the exercise by the Agency of any remedy it may have against the Qualified Homebuyer in the event of such a breach or default shall affect or render invalid the lien of the First Mortgage Lender in the New Home. In the event that the First Mortgage Lender (or its assignee) may foreclose the lien of the First Mortgage Lender in the New Home through trustee sale, judicial foreclosure or by acceptance of deed in lieu of foreclosure, the First Mortgage Lender, and its good faith purchasers for value, shall receive title in the New Home free and clear of the provisions of Section 3, Section 5 and Section 7(b) of this Section 33334.3 Covenant. Section 7. Foreclosure of Purchase Money Mortgage Loan and Agency Right of First Refusal. (a) During the Qualified Residence Period the Agency shall have the right (but not the obligation) to bid on the purchase of any mortgage loan lien secured by the New Home at the time of any trustee foreclosure sale or any judicial foreclosure sale. (b) During the Qualified Residence Period the Agency shall have the right of first refusal to purchase the New Home from the Qualified Homebuyer on the same terms which the Qualified Homebuyer may propose to sell the New Home to a third party who does not qualify as a Successor-In-Interest. The Agency must exercise such a right of first refusal within thirty (30) days following written notification of the intention of the Qualified Homebuyer to resell the New Home to such a third party, and such notice shall be accompanied with a true and complete copy of the 03-03-03 CHS Old Towne Agreement Exh. "E" - 19 , . written sale agreement between the Qualified Homebuyer and such third party. If the Agency accepts the offer in writing within such time period the Agency shall be bound to complete the purchase of the New Home in accordance with the written sale agreement of such third party. Thereafter the Agency shall pay the "resale price" to the Qualified Homebuyer and close an escrow for the transfer of the New Home to the Agency within sixty (60) days following written notification of the intention of the Qualified Homebuyer to resell the New House. Section 8. Covenants to Run With the Land. The Developer, the Agency and the Qualified Homebuyer hereby declare their specific intent that the covenants, reservations and restrictions set forth herein are part of a common plan for the development of affordable single family housing improvements in the Northwest Redevelopment Project and that each shall be deemed covenants running with the land and shall pass to and be binding upon the New Home and each Successor-In-Interest of the Qualified Homebuyer in the New Home for the term provided in Section 10. The Qualified Homebuyer hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Section 33334.3 Covenant. Each and every contract, deed or other instrument hereafter executed covering or conveying the New Home or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. Section 9. Burden and Benefit. The Developer, the Agency and the Qualified Homebuyer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Qualified Homebuyer' s legal interest in the New Home is affected by the affordable single family dwelling use and occupancy covenants hereunder. The Agency and the Qualified Homebuyer hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the New Home by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the public purposes for which moneys from the Low-and Moderate Income Housing Fund of the Northwest Redevelopment Project were used and applied by the Agency in order to make the New Home available for acquisition and occupancy by the Qualified Homebuyer. 03-0)-03 cas Old Towne Aqreement Exh. "E" - 20 , " Section 10. Term. This Section 33334.3 Covenant shall appLy to the New Home and the Qualified Homebuyer and to each Successor-In-Interest as of the Delivery Date for the Qualified Residence Period -- e. g.: this Section 33334.3 Covenant shall remain in full force and effect for forty five (4S) years after the Delivery Date, except as to certain sections hereof as provided in Section SId). Any provision or section hereof, may be terminated after the Delivery Date upon agreement by the Agency and the Qualified Homebuyer (or the Successor-In-Interest in the New Home), if there shall have been provided to the Agency an opinion of special legal counsel that such a termination under the terms and conditions approved by the Agency in its reasonable discretion will not adversely affect the Agency or the investment of Low-and Moderate-Income Housing Funds of the Agency in the New Home. Section 11. Breach and Default and Enforcement. (a) Failure or delay by the Qualified Homebuyer to honor or perform any material term or provision of this Section 33334.3 Covenant shall constitute a breach under this Agreement; provided however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged breach within thirty (30) calendar days after the date of written notice specifying such breach and shall diligently complete such cure, correction or remedy, the Qualified Homebuyer shall not be deemed to be in default hereunder. The Agency shall give the Qualified Homebuyer written notice of breach specifying the alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar days, shall be deemed to be an event of default. Delay in giving such notice shall not constitute a waiver of any breach or event of default nor shall it change the time of breach or event of default; provided, however, the Agency shall not exercise any remedy for an event of default hereunder without first delivering the written notice of breach as specified in this Section 11. Except with respect to rights and remedies expressly declared to be exclusive in this Section 33334.3 Covenant, the rights and remedies of the Agency are cumulative with any other right or power of the Agency or the City or other applicable law, and the exercise of one or more of such rights or remedies shall not preclude the exercise by the Agency at the same or different times, of any other right or remedy for the same breach or event of default. OJ-03-03 eHS Old Towne Agreement Exh. "En - 21 .....-......---,~.__..~,-.... .. ,_._~._- -_.~;.-..,,_..._----.~ -., '---~'''~- - ,',! In the event that a breach of the Qualified Homebuyer may remain incurred for more than thirty (30) calendar days following written notice, as provided above, an event of default shall be deemed to have Occurred. In addition to the remedial provisions of Section 4 as related to a Maintenance Deficiency at the New Home, upon the occurrence of any event of default the Agency shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the Qualified Homebuyer to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the Agency; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the Qualified Homebuyer to the Agency. (b) No third party shall have any right or enforce any provision of this Section 33334.3 Covenant of the Agency or to compel the Agency to enforce any of this Section 33334.3 Covenant against the Qualified on the New Home. power to on behalf provision Homebuyer Section 12. Governinq Law. This Section 33334.3 Covenant shall be governed by the laws of the State of California. Section 13. Amendment. This Section 33334.3 Covenant may be amended after the Delivery Date only by a written instrument executed by the Qualified Homebuyer (or the Successor-In- Interest, as applicable) and by the Agency. The Developer shall have not any right or power to approve any such amendment to this Section 33334.3 Covenant, and the execution by the Developer of any such amendment after the delivery date shall not be required. Section 14. Attorney's Fees. In the event that the Agency brings an action to enforce any condition or covenant, representation or warranty in this Section 33334.3 Covenant or otherwise arising out of this Section 33334.3 Covenant, the prevailing party in such action shall be entitled to recover from the other party its reasonable attorneys' fees to be fixed by the court" in which a judgment is entered, as well as the 03-03-03 eMS Old Towne Agreement Exh. "E" - 22 .. . .-.-. -..--. '-- ---~-~_._'"., ,~-".~ - -',.-_..,,----_. ._---_._.~-....~~-------- ,----'-.'- , . costs of such suit. For the purposes of this Section, the words "reasonable attorneys' fees" in the case of the Agency shall mean and include the salaries and benefits payable to lawyers employed by the Office of City Attorney, allocated on an hourly basis, who provide legal services to the Agency in connection with the enforcement of this Agreement. Section 15. Severability. If any provision of this Section 33334.3 Covenant shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of this Section 33334.3 Covenant which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable. Section 16. Time of this Section 33334.3 of time within which satisfied, time shall be is of the Essence. For each provision Covenant which states a specific the requirements thereof are deemed to be of the essence. amount to be Section 17. Notice. Any notice required to be given under this Section 33334.3 Covenant shall be given by the Agency or by the Qualified Homebuyer, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the parties hereto: If to the Agency: Executive Director Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Ste 301 San Bernardino, CA 92401 Phone: (909) 384-5081 If to the Qualified Homebuyer: Attn: Phone: Notice shall be deemed given five (5) calendar date of mailing to the party, or, if personally received by the Executive Director of the Qualified Homebuyer, as applicable. days after the delivered, when Agency or the OJ-03-03 CHS Old Towne Aqreement Exh. "E" - 23 . -. ..._-.,,--.._~ _.~_.__.- ,.-......"'-'---;...'. ---~._._--- .-- ". . IN WITNESS WHEREOF I the Developer I the Qualified Homebuyer and the Agency have caused this Section 33334.3 Covenant to be signed, acknowledged and attested on their behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document. The recordation of this Section 33334.3 Covenant is authorized under Health and Safety Code Section 33334.3(g) . QUALIFIED HOMEBUYER Dated: By: By: DEVELOPER Creative Housing Solutions, a California non-profit public benefit corporation Dated: By: By: AGENCY Redevelopment Agency of the City of San Bernardino Dated: By: Executive Director [ALL SIGNATURES MUST BE NOTARIZED] Approved as to Form: By: Agency Special Counsel 03-0)-OJ CHS Old Towne Aqreement Exh. "E" - 24 . OJ-03-03 CHS Old Towne Agreement __._. __.,.u._...______..._._~.~__ .....__a.~......_.~.____" ......_.__.:.......... EXHIBIT "Au Legal Description of the New Horne Exh. 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WU .CI ~ CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: March 6, 2003 TO: Margaret Parker, Secretary FROM: Michelle Taylor, Senior Secretary RE: Resolution CDC/2003-7 At the Mayor and Common Council meeting of March 3, 2003, the City of San Bernardino adopted Resolution CDC!2003-7 - Resolution approving and authorizing the Agency Executive Director to execute the Old Towne Single-Family Acquisition and Construction Grant Funding Agreement with Creative Housing Solutions, a non-profit organization (acquisition of vacant lots, development of new housing and possible relocation of district homes in Old Towne). Please obtain all signatures and return the original agreement to the City Clerk's Office. If you have any questions, please do not hesitate to contact me at ex!. 3206. Thank you. Michelle Taylor Senior Secretary I hereby acknowledge receipt of this memorandum. Signed: '7}J2711Lrf ?1h1i.iL Date: c-3J.;;/c 3 / I Please sign and return - ** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** RESOLUTION AGENDA ITEM TRACKING FORM Abstain 'I dCX:) zoo,'} I) , Absent ,R- Meeting Date (Date Adopted): 3-'3-CC Item # Vote: Ayes 1- (., Nays .h- , r -,-;;> IL. L- ,) Resolution # Change to motion to amend original documents: Reso. # On Attachments: / Contract term: - Note on Resolution of Attachment stored separately: ---== Direct City Clerk to (circle 1): PUBLISH, POST, RECORD W/COUNTY Null/Void After: - By: - Date Sent to Mayor: 3-+(;:>:, Reso. Log Updated: ;/ Seal Impressed: Date of Mayor's Signature: ~ -5. 03 Date ofC1erk/CDC Signature::'.>' (,,- <--::.3 Date Memo/Letter Sent for Signature: 60 Day Reminder Letter Sent on 30th day: 90 Day Reminder Letter Sent on 45th day: 3- <c 0') See Attached:'/ Date Returned: }--j -I \-03 See Attached: See Attached: Request for Council Action & Staff Report Attached: Updated Prior Resolutions (Other Than Below): Updated CITY Personnel Folders (6413,6429,6433, 10584, 10585, 12634): Updated CDC Personnel Folders (5557): Updated Traffic Folders (3985, 8234, 655, 92-389): Yes ./ No By Yes No-L By Yes No --L By Yes NO~ By Yes No B Copies Distributed to: City Attorney Parks & Rec. Code Compliance Dev. Services EDA / Finance Police Public Services Water Others: MIS Notes: BEFORE FILING, REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE IContract Term, etc.) Ready to File: ~ Date: Pr- \ \- C;~ Revised 01/12/01