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Home My WebLink AboutR39-Economic Development Agency , . v ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco Deputy Director SUBJECT: OR\G\NAL TELACU HOUSING - SAN BERNARDINO III, INC. SENIOR HOUSING HOME GRANT AGREEMENT DATE: November 7, 2003 ------------------.----------------------------------------------------------------------------------------------------------------------- Svnopsis ofPrevions Commission/Council/Committee Action(s): On October 9, 2003, Redevelopment Committee Members Suarez and Estrada voted to recommend that the Community Development Commission consider this action for approval. -------.------------------------------------------------------------------------------------------------------------------------------ Recommended Motion(s): MOTION: (Community Development Commission) A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE HOME GRANT AGREEMENT BY AND BETWEEN THE AGENCY AND TELACU HOUSING - SAN BERNARDINO III, INC., A NONPROFIT CORPORATION ("DEVELOPER") - PROPOSED SENIOR HOUSING DEVELOPMENT AT 365 EAST COMMERCIAL ROAD -------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Gary Van OsdellMaggie Pacheco South Valle Phone: (909) 663-1044 3RD Project Area(s) Ward(s): Supporting Data Attached: 1>'1 Staff Report 1>'1 Resolution(s) 1>'1 Agreement(s)/Contract(s) 0 Map(s) 1>'1 Letters FUNDING REQUIREMENTS Amount: $ 600,000 Source: HOME Grant Budget Authority: 2003-04 EDA Budget SIGNATURE: ~J~~ L/}V?~~, ~ Maggie Pacheco, Deputy Director ----------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ~.,J.l. CfY2.--~ 'Z-CD'S' r y.CJ ------------------------------------------------------.------------------------------------------------.-------------- P:\Agendas\CommDevCommission\C 2003\03.11-17 TELACU SnrHsg III SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/17/2003 Agenda Item Number: R. 3C{ , . . ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ..._.___._____________________d..........n.__.____________________________._____________________________________------------------------------------------------------ TELACU HODsin!!: - San Bernardino III. Inc. Senior HODsin!!: HOME Grant A!!:reement BACKGROUND/CURRENT ISSUE: TELACU is a nonprofit community development corporation founded in the late 1960s to promote community and economic development activity. For the past 15 years, TELACU has participated in the U.S. Department of Housing and Urban Development (HUD) Section 202 Program. TELACU has developed senior housing throughout many communities in California such as Baldwin Park, El Monte, Alhambra and Monterey Park. TELACU presently has two 202 Senior Housing projects under construction in downtown San Bernardino. The Section 202 Program provides grants to qualified nonprofits to finance the construction and management of affordable rental housing for semors. In November 2002, TELACU applied for a HUD Section 202 Grant and received notification that they had been approved for a $10.2 million grant (Exhibit "A" - approximately $8.6 million of these funds can be used for construction costs only) to construct and operate 75 units for seniors on the property located at 365 East Commercial Road within the South Valle Redevelopment Project Area (the "Project"). The Project consists of a 75-unit, three (3) story senior citizen housing complex with a community center. The Project will contain a common multi-purpose, kitchen, library, laundry room, storage space, an attractive lobby/foyer and offices. Seventy-four (74) of the units will be one-bedroom with a living room, kitchen, and bathroom containing approximately 540 square feet. The manager's unit will have two (2) bedrooms. The Site Plan is shown on Exhibit "A" of the HOME Grant Agreement. The construction budget for the Project is estimated at $9.2 million. This budget includes land costs, construction costs, development and architectural fees, ancillary fees, and off-site improvements which are not covered by the 202 Grant. Considering the amount of the 202 Grant ($8.6 million) and the Project budget, TELACU is requesting an Agency subsidy of $600,000. The $600,000 will be used to offset related development, architectural and off-site improvements for the Project. In sununary, it is proposed that the Agency enter into a HOME Grant Agreement with TELACU to provide for the construction and operation of the Project and contribution of $600,000 from the Agency to TELACU towards the Project. The Planning Commission approved the Project on July 8, 2003. Once TELACU receives approval from the Commission, they will commence the preparation of their working drawings, submit for plan check review, submit for a firm HUD commitment and commence construction around September 2004. ________________________d_____________________________.______________________._________________________________----------------------------------------------------- P:\Agendas\Comm Dev Commission\COC 2()())\OJ-II-17 TELACU Snr Hsg III SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/17/2003 Agenda Item Number: f( j 9 ,- Economic Development Agency Staff Report TELACU Senior Housing ill Page 2 ENVIRONMENTAL IMPACT: Prior to the release of any federal funds, the Agency must adhere to the National Environmental Protection Agency (NEPA) environmental guidelines. All mandated notices of release of funds would be noticed prior to the disbursement of HOME funds. FISCAL IMPACT: The $600,000 obligation will be funded from the Economic Development Agency's HOME Grant Program approved 2003-2004 Budget. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. fYJ f,J-< ,h ~ Maggie Pacheco, Deputy Director --.--------------------------------------------------------------------------------------------------------- P:\Agendas\Comm Dev Commission\CDC 2003\03-11-17 TELACU Snr Hsg III SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/17/2003 Agenda Item Nnmber: R.31 _ 2 3 4 5 6 7 8 9 10 (the _13 -14 _25 RESOLUTIO(;OO tPY A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE HOME GRANT AGREEMENT BY AND BETWEEN THE AGENCY AND TELACU HOUSING - SAN BERNARDINO III, INC., A NONPROFIT CORPORATION ("DEVELOPER") - PROPOSED SENIOR HOUSING DEVELOPMENT AT 365 EAST COMMERCIAL ROAD WHEREAS, the Community Development Commission of the City of San Bernardino "Commission") on behalf of the Redevelopment Agency of the City of San Bernardino 11 (the "Agency"), is a redevelopment agency, a public body of the State of California, organized and existing pursuant to the Community Redevelopment Law (Part I of Division 24) 12 commencing with Section 33000 of the Health and Safety Code of the State of California (the "Act"); and WHEREAS, the Agency is authorized by the Act to carry out affordable housing 15 activities within or outside a redevelopment project area for the benefit of low- and moderate- 16 income households; and 17 WHEREAS, in an effort to carry out the Agency's affordable housing obligations and duties under the Act, the City of San Bernardino (the "City") has designated the Agency as the administrator of the federal HOME Grant Program (the "Program") and said Program is 18 19 20 intended to preserve and increase the supply of affordable housing for low- and moderate- 21 income households in the City; and 22 WHEREAS, in an effort to facilitate the Agency's responsibilities under the Act, The East Los Angeles Community Union ("TELACU"), a California nonprofit corporation founded 23 24 in the late 1960s to promote community, economic development and affordable housing activities, desires to develop an affordable senior housing project; and TELACU and the -1- P:\AC,.du\R80lullons\Resolullons\200J\OJ-ll.17 TELACU III CDC RflO.doc e2 13 e14 e25 3 Agency desire to enter into an agreement (the "HOME Grant Agreement") for development of seventy-five senior housing units (the "Project") located at 365 East Commercial Road, City of San Bernardino (the "Site"), in the South Valle Redevelopment Project Area (the "Project 4 Area"); and 5 WHEREAS, TELACU has been successful in obtaining a $8.6 million HUD 202 Grant 6 which will be used to develop the Project; and said $8.6 million is inadequate to cover the Project development costs and the Agency desires to assist TELACU in meeting the financial 7 8 gap of $600,000, which is the subject of the HOME Grant Agreement on file with the Agency 9 Secretary; and WHEREAS, based on the documentation and evidence submitted to the Agency, it is 10 11 reasonable and appropriate for the Agency and TELACU to enter into the HOME Grant 12 Agreement. 15 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: 16 Section 1. The Commission finds and determines that the development of the 17 Project on the Site as described in the HOME Grant Agreement is within the scope, terms and 18 provisions of the Redevelopment Plan for the Project Area, is consistent with the Agency's 19 Housing Implementation Plan and City's Consolidated Plan and will help eliminate blighting 20 conditions in the Project Area by creating affordable rental housing opportunities for low- 21 income seniors. 22 Section 2. The Commission authorizes the Executive Director to appropriate the 23 sum of $600,000 from the federal HOME grant Program, fiscal year 2003-2004 for TELACU to 24 carry out the Project, and authorizes the Executive Director to execute the Agreement on behalf of the Agency together with such technical and conforming changes as recommended by the -2- P:\Acodu\Resolutlonl\ReaolutloDI\100JIO)-II-17 TELACU III CDC ReJO.doc -2 3 4 5 6 7 8 9 Executive Director and approved by the City Attorney, provided such changes do not increase the Agency's financial contribution of $600,000 to the Project. Section 3. A Program Environmental Impact Report was certified in connection with the adoption of the redevelopment plan for the Project Area. Furthermore, on July 8, 2003, the Planning Commission considered and approved TELACU's DPill No. 03-12 (DP) and Conditional Use Permit (CUP), No. 01-15 request and in conjunction with said DP and CUP, made a finding that the Project is exempt from the California Environmental Quality Act (CEQA), pursuant to Section 15332, infill development, and no further environment document is required pursuant to Section 15168 of the CEQA guidelines. The Resolution shall become effective immediately upon its adoption. 10 Section 4. 11 /1/ 12 //1 _ 13 /1/ 14 //1 15 //1 16 //1 17 /1/ 18 /1/ 19 /1/ 20 /1/ 21 /1/ 22 /1/ 23 /1/ 24 /1/ e25 //1 /1/ -3- P:lApndu\Rnoludou\RflOllltle..UOO3\o3-11.17 nucu III CDC ReM.doc: ,--:- e 2 3 4 5 6 A RESOLUTION OF THE COMMUNITY DEVELOPMENT A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE HOME GRANT AGREEMENT BY AND BETWEEN THE AGENCY AND TELACU HOUSING - SAN BERNARDINO III, INC., A NONPROFIT CORPORATION ("DEVELOPER") - PROPOSED SENIOR HOUSING DEVELOPMENT AT 365 EAST COMMERCIAL ROAD 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 meeting e 25 By: ~id. m ~1C\1.j (l.bu,u_ H.",~) m.LI/<<; Agency Counsel /}uI) J/trrt ~. ~ ~ ~~II<. HfY,<v- "N~~ f1t<.. 'i)l6: PVtor 40 'fUu, JfirJJff 4 P:\Apadu\Relolullons\Resolatklnl\100J\03-11-17 TELACU III CDC ReIo.doc I . e HOME GRANT AGREEMENT By and Between The Redevelopment Agency of the City of San Bernardino (Agency) and e TELACU Housing - San Bernardino III, Inc. a California Nonprofit Corporation (Developer) TELACU III PROJECT 365 E. Commercial Road (South Valle Redevelopment Project Area) e e e e TABLE OF CONTENTS I. [~IOO] SUBJECT OF AGREEMENT .............................................................................................................................. I A. [~I 0 I] Recitals ....... ... .... ...... ..... .............. ...... ........... ... ...... ........ ... ......... ...... ..... ..... ... ... ........ ........... ... ................. I B. [~ I 02] The Site ...... ....... ........... .... ...... .... ... ... .... .... ........ .... ........ ... .... ..... ...... ........ ..... .............. ..... ...... ................. 2 C. [~103] Parties to the Agreement........................................................................................................................2 I. [~1 04] The Agency............................................................................................................................ 2 2. [~I 05] The Developer ... ........... .............. ........ ......... ......... ...... ... ........ ....... ... ..... ......................... ........ 2 3. [~I 06] Prohibition Against Change in Ownership, Management and Control of Developer............. 2 II. [~200] ACQUISITION OF THE SITE .............................................................................................................................3 A. [~20 I] Acquisition of the Site ....... .... .... ......... .... ............ ......... ....... ....... ...... ........ ..... ........ .... ....... ... .............. ..... 3 111. [~300} DEVELOPMENT OF THE SITE ......................................................................................................................... 3 A. [~30 I] Development of the Site ...... ....... ............................................... ..... .................. ...... ........................... .... 3 I. [~302] Scope of Development................................................... ........................................................3 2. [~303] (Intentionally Omitted) ..........................................................................................................3 3. [~304] Cost of Work ...................... ..... ............... ......... .............. ........ ............... ....... ..................... ..... 3 4. [~305] Schedule of Performance .............. .................................... .......... ....... ............ ......... ............... 4 5. [~306] Indemnification; Bodily Injury and Property Damage Insurance........................................... 4 6. [~307] Nondiscrimination During Construction; Equal Opportunity................................................ 6 7. [~308] Local, State and Federal Laws............................................................................................... 7 8. [~309] Prohibition Against Transfer..................................................................................................7 9. [~31 0] Security Financing ....... ................. ......... ......... ........... ........ ..... .............. ...... ........ ...... ............. 8 10. [9316] (Intentionally Omitted) ........................................................................................................ 10 11. [~317] Use oflhe Site...................................................................................................................... 10 IV. [9400] FINANCING ............ ....... .... .............. ,...... .................... ... ............ .... ...... ... ...... ....................... ... ... ....... .... ............. 13 A. [9401] Method of Financing Acquisition and Development........................................................................... 13 I. [9402] Sources of Financing ........ ... .......... ... .......... ... ... .... ..... ............. ............ ....... ..... ... ...... ............ 13 2. [9403] Submittal of Financing Documents...................................................................................... 14 B. [9404] Agency Grant.. ...... ....... .... .... ....... ...... .... .... ..... ... .... ..... .......... ... ...... ..... ..... ........ ...... ..... ... .......... ............ 14 I. [9405] (Intentionally Omitted) .......................................................................................................14 2. [~406] Amount of Agency Gran1..................................................................................................... 14 3. [9407] Conditions Precedent to Closing of Agency Grant .............................................................. 14 4. [9408] Defaults Following Closing of Agency Grant...................................................................... 16 5. [~409] Repayment of Agency Grant ...............................................................................................16 V. [9500] DEFAULTS, REMEDIES AND TERMINATION.............................................................................................16 A. [9501] Defaults. General.. ........ ... .... .... ... ...... ..... ............ ... ......... .... ... ........ ......... ........ ...... ..... ........ ..... ............. 16 B. [9502] Legal Actions ..... ..' ....... ... .............. ... ... ........ ... ...... ...... .... ... ... ... ..... .......... ..... ........ ...... .... ......... .......... ... 17 I. [~503} Institution of Legal Actions ................................................................................................. 17 2. [~504] Applicable Law. ... .......... .... .... ....... ... ................ ... ... ........... ....... ........ ..... ..... ..' ..... .... .............. 17 3. [9505] Acceptance of Service of Process ........................................................................................17 C. [9506] Rights and Remedies are Cumulative..................................................................................................17 D. [~507] Damages; Specific Performance........ ........... ... .... ...... ... ... .... ..... ... ....... ..... ... ..... ........ ..... ......... .......... .... 18 E. [~508] Remedies and Rights ofTermination ..................................................................................................18 I. [9509] Termination by the Developer ............................................................................................. 18 2. [9510] Termination by Agency .......................................................................................................18 VI. [~600] GENERAL PROVISIONS.. ...... .... .......... ............................... ........ .... ... ...... ......... ........... ... ..... ..... ... ...... .............. 18 A. [9601] Notices, Demands and Communications Between the Parties............................................................. 18 B. [~602] Conflict of Interests ........... ... ....... ... ... ........... ... .... ...... ... ....... ... ..... ..... ..... ..... ........ ..... ........... ....... .......... 19 C. [9603] Warranty Against Payment of Consideration for Agreement ..............................................................19 D. [9604] Non-liability of Agency Officials and Employees............................................................................... 19 E. [9605] Enforced Delay; Extension of Time of Performance............................................................. ..............19 F. [9606] Inspection of Books and Records .................:...................................................................................... 19 G. [9607J Approvals ....... ....................... ........................ ....... ............................. ............. .................. ...... ............. 19 H. [9608] Minor Modifications to Agreement.....................................................................................................20 e e e VII. VIII. IX. [POOl ENTIRE AGREEMENT, WAIVERS, AMENDMENTS AND HUD PROVISIONS........................................ 20 [~800l TIME OF ACCEPTANCE OF AGREEMENT BY AGENCy........................................................................... 21 [~900l PARTIAL INVALIDITY ....................................................................................................................................21 EXHIBITS Exhibit "A" - Site Maps Exhibit "B" - Legal Description Exhibit "C" - Scope of Development Exhibit "D" - Schedule of Performance Exhibit "E" - Regulatory Agreement and Declaration of Covenants e e e HOME GRANT AGREEMENT TELACU HOUSING-SAN BERNARDINO III, INC. THIS HOME Grant AGREEMENT (the "Agreement") is entered into on November 17, 2003 by and between THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA (the "Agency"), a public body, corporate and politic, and TELACU HOUSING - SAN BERNARDINO III, INC., a California nonprofit corporation (the "Developer"). The Agency and the Developer hereby covenant and agree as follows: I. [~lOOJ SUBJECT OF AGREEMENT A. [gIOI] Recitals This Agreement is made and entered into with the respect to the following facts: I. Developer desires to construct and operate a Senior Housing Complex consisting of seventy-four (74) one (I) bedroom affordable senior housing units and one (I) two bedroom manager's unit (hereafter "Project"); and 2. The Project is entitled, "TELACU HOUSING-SAN BERNARDINO" and is designated as Project No. 143-EE049-WAH-NP; and 3. The Project is proposed to be located on certain real property located within the City of San Bernardino ("City") and within the South Valle Redevelopment Project Area (the "Project Area") referred to herein as the "Site". The Site is depicted on Exhibit "A" and more particularly described on Exhibit "B," attached hereto and incorporated herein by this reference; and 4. Developer has obtained approval from the United States Department of Housing and Urban Development ("HUD") for Section 202 Capital Advance Program Funding for the Project in the amount of $8,582,100.00; and Developer will enter into HUD Capital Advance Documents (as hereinafter defined) with HUD at the time of the initial HUD closing; and 5. Agency is desirous of aiding Developer in the construction of the Project by defraying a portion of the on-site construction cost of the Project; and 6. Agency's participation in the Project is limited to the amounts to be set forth in this Agreement. 7. Developer is responsible for the construction of the said Project at its sole expense, from the funding sources described above, and any other funding source available to it for that purpose; and -1- e e e 8. The Agency has determined that development of the Site pursuant to this Agreement and the fulfillment generally of the Agreement are in the vital and best interest of the City and the Agency. B. [gI02] The Site The Site is located in the City of San Bernardino and the South Valle Redevelopment Project Area (the "Project Area") and is shown on the "Site Map" which is attached to this Agreement as Exhibit "A" and incorporated herein by this reference. The Site is described in the "Legal Description" which is attached hereto as Exhibit "B" and incorporated herein by this reference, and is located at 365 East Commercial Road in the City of San Bernardino, California. C. [gI03] Parties to the Agreement 1. [gl 04] The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the Community Redevelopment Law of the State of California. The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 9240 I. "Agency" as used in this Agreement includes The Redevelopment Agency ofthe City of San Bernardino, California and any assignee or successor to its rights, powers and responsibilities. 2. [gI05] The Developer The Developer is TELACU Housing-San Bernardino III, Inc., a California nonprofit public benefit corporation (the "Developer"). The principal office of the Developer is located at 5400 East Olympic Boulevard, Suite 300, Los Angeles, California 90022. "Developer" as used in this Agreement includes the Developer and any assignee or successor to its rights, powers and responsibilities. 3. [gI06] Prohibition Against Change in Ownership, Management and Control of Developer The qualifications and identity of the Developer are of particular concern to the City and 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 of powers under this Agreement except as expressly set forth herein. -2- e e e The Developer shall not assign all or any part of this Agreement without the prior written approval of the Agency. This Agreement may be terminated by the Agency if there is any significant change (voluntary or involuntary) in management or control of the Developer. Notwithstanding anything in this Section to the contrary, so long as the Project contemplated by this Agreement is encumbered by a Department of Housing and Urban Development ("HUD") Deed of Trust and/or Regulatory Agreement, any proposed transferee or assignee must have the prior written consent of HUD. The Agreement shall not be terminated by the Agency if a transferee or assignee of this Agreement has the approval of HUD or during the period TELACU continues to control not less than fifty-one percent (51 %) of the members and directors of the TELACU. Nothing herein shall prohibit the Developer from transferring the Site to HUD or its transferee without Agency approval. II. [~200] ACQUISITION OF THE SITE A. [9201] Acquisition of the Site The Developer represents that it has entered into a contract to acquire the Site, and the Developer shall acquire title to the Site at or before closing of the Agency Grant. III. [~300] DEVELOPMENT OF THE SITE A. [9301] Development of the Site 1. [9302] Scope of Development The Scope of Development shall be consistent with this Agreement and contain requirements, standards and limitations customary for comparable projects financed by the Agency. The Scope of Development is attached to this Agreement as Exhibit "C." The Developer shall prepare plans for the development of the Site in accordance with the Scope of Development. "Improvements" shall mean the multifamily housing development to be constructed on the Site, consisting of seventy-five (75) dwelling units and amenities as more particularly described in the Scope of Development. 2. [9303] (Intentionally Omitted) 3. [9304] Cost of Work The cost of all work required by this Agreement as set forth in the Scope of Development, Exhibit "C," shall be borne by the Developer, except for work or costs expressly set forth in this Agreement as per Section 400. Notwithstanding the foregoing, in the event that the Agency requires design standards inconsistent with HUD's cost containment guidelines, the Agency shall pay the incremental cost (including but not limited to architects' fees, if any) attributable to the design requirement inconsistent with HUD's cost containment guidelines but not to exceed the amount of the Agency Grant set forth in Section 406. -3- . . . 4. [9305] Schedule of Performance The Developer shall begin and complete all work within the time specified in the Schedule of Performance (Exhibit "D") or within such extensions of such times as may be granted by the Agency Administrator or designee or as provided for in Section 605 of this Agreement. The Schedule of Performance is also subject to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. 5. [9306] Indemnification; Bodily Injury and Property Damage Insurance a. During the period of construction on the Site, and throughout the term of the Agency Grant, the Developer agrees to and shall defend, indemnify and hold the Agency and the City harmless from and against all liability, loss, damage, costs or expenses (including attorney fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss and damage whatsoever caused to any person or to the property or any person which shall occur on or adjacent to such Site and which shall be directly or indirectly caused by any acts done thereon or any errors or omissions of the Developer and its agents, servants, employees and contractors, but excluding any such liability, loss, damage, costs or expenses arising out of the negligence of the Agency or a breach by or misrepresentation of the Agency under this Agreement. b. Prior to the Closing or receiving any other advance under the Agency Grant, Developer shall furnish or cause to be furnished to the Agency duplicate originals of the insurance policy or policies required by this Agreement. Developer shall, until Developer's obligations under this Agreement are paid and discharged in full, maintain and keep in full force and effect any insurance required by Agency, issued by companies approved by Agency including, without limitation: (1) Fire insurance in an amount not less than the full insurable value of the Improvements, with extended coverage, including vandalism, malicious mischief, and a loss payable endorsement naming Agency as loss payee; and during the construction period and until a certificate of occupancy for the completed Improvements has been issued by the City, a course of construction endorsement. (2) Public liability insurance, to protect against loss from liability imposed by law for damages on account of personal injury, including death there from, suffered or alleged to be suffered by any person or persons whomsoever on or about the Site and the Improvements, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Agency or Developer or any person acting for Agency or Developer, or under their respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Site and the Improvements, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Agency or Developer or its tenants or any person acting for Agency or Developer, or under their respective control or direction. Such property damage and personal injury insurance shall also provide for and protect Agency against incurring any legal cost in defending claims for alleged loss. Such personal' injury and property damage -4- e e e insurance shall name the Agency and the City as additional insureds. Initially, such personal injury and property damage insurance shall be in the following amounts: a general aggregate amount of not less than Three Million Dollars ($3,000,000); not less than Two Million Dollars ($2,000,000) of bodily injury and property damage insurance; and not less than Two Million Dollars ($2,000,000) of personal and advertising injury; provided, however, the limitation on the amount of insurance shall not limit the responsibility of the Developer to indemnifY the Agency or pay damages on account of injury to persons or property resulting from Developer's activities or the activities of any other person or persons for which Developer is otherwise responsible. The insurance requirements of this subsection shall be modified if the premium cost for the same is not approved by HUD. (3) Use and occupancy or business interruption or rental income insurance with respect to the Improvements against the perils of fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage fire insurance policies, in an amount that is acceptable to the Agency (except if the premium cost for such insurance is not approved by HUD). (4) Workers' compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all.persons employed by Developer in connection with the Site and the Improvements and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for, or on behalf of any person incurring or suffering injury or death in connection with the Site or the Improvements or the operation thereof by Developer. (5) All required insurance policies shall provide that such insurance policies shall not be subject to change, cancellation, reduction in coverage, or non- renewal except after notice in writing shall have been sent by registered mail addressed to Agency not less than thirty (30) days prior to the effective date thereof. All policies shall name the Agency and the City and their elective and appointive boards, officers, agents and employees as additional insureds and provide that such additional insureds shall not be held liable for any premium or expense of any nature on such policies or any extensions thereof. All such policies also shall provide that such policy and coverage as is afforded to the City and the Agency and their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City or the Agency. (6) The term "full insurable value" as used in paragraph (I) above shall mean the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the Improvements immediately before such casualty or other loss, including the cost of construction of the Improvements, architectural and engineering fees, and inspection and supervision. To ascertain the amount of coverage required, Developer shall cause the full insurable value to be determined from time to time by appraisal by the insurer, by agreement between Agency and Developer or by an appraiser mutually acceptable to Agency and Developer, not less often than once every three years. -5- e e e (7) All insurance provided under this Section 306(b) shall be for the benefit of Developer, HUD, Agency and City, any mortgagee, and any contractor at Developer's discretion. Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. (8) Developer shall submit policies of all insurance required by this Section to Agency prior to disbursement of any portion of the Agency Grant, as set forth in this Section 306(b). At least thirty (30) days prior to expiration of any such policy, copies of renewal policies shall be submitted to Agency. (9) All insurance provided for in this Agreement shall be effected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State of California reasonably approved by Agency. (10) All policies of insurance shall provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days prior written notice to Agency. (11) If Developer fails or refuses to procure or maintain insurance as required by this Agreement, Agency shall have the right, at Agency's election and upon ten (10) days prior notice to Developer and all mortgagees entitled to notice, to procure and maintain such insurance. The premiums paid by Agency shall be added to the amount of the Agency Grant. (12) During the term of the HUD Capital Advance Documents (defined as the HUD Note, Deed of Trust, Regulatory Agreement, Use Agreement, Capital Advance Agreement, and Project Rental Assistance Contract), compliance with the insurance requirements of HUD shall be deemed to satisfy the insurance requirements of this Agreement. The City/Agency and their representatives shall be named as additional insureds on any policies of insurance. In the event ofloss covered by fire and extended coverage insurance, the insurance proceeds, to the extent of the Capital Advance (defined as the amount to be provided in a grant from HUD) then remaining unpaid, shall be paid to the beneficiary of the HUD deed of trust and, at the option of the beneficiary, may be applied to the Capital Advance or released for the repair or rebuilding of the Project. Any balance remaining of insurance proceeds shall be paid to the additional insured and, at the option of such additional insured, may be applied to the indebtedness owed to such insured or be released for repair or rebuilding of the Project. Surplus insurance proceeds thereafter may be dispersed to the Owner of the Project. 6. [9307] Nondiscrimination During Construction; Equal Opportunity The Developer, for itself and its successors and assigns, agrees that in the construction of the Improvements on the Site provided for in this Agreement: a. The Developer will not discriminate against any employee or applicant for employment because ofrace, color, religion, national origin, sex, disability, marital -6- e e e status, sexual preference, creed, ancestry, medical condition, Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived, or retaliation for having filed a discrimination complaint. The Developer will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, national origin, sex, disability, marital status, sexual preference, creed, ancestry, medical condition, Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived, or retaliation for having filed a discrimination complaint. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising, layoff or termination; rates of payor other forms of compensation; and selection for training, including apprenticeship. The Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Agency setting forth the provisions of this nondiscrimination clause. b. The Developer will, in all solicitations or advertisements for employees pl<lced by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, national origin, sex, age, disability, marital status, sexual preference, creed, ancestry, medical condition, Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived, or retaliation for having filed a discrimination complaint. . c. The Developer will cause the foregoing provisions to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor, provided that the foregoing provisions shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. d. Not later than the date established in the Schedule of Performance (Exhibit "e"), the Developer shall meet with the Agency's Equal Opportunity Department staff for a pre-construction briefing on all Agency construction requirements. 7. [9308] Local, State and Federal Laws When and if the Developer undertakes the development work contemplated by this Agreement, the Developer shall carry out the construction of the improvements on the Site in conformity with all applicable laws, including all applicable federal and state labor standards. 8. [9309] Prohibition Against Transfer a. The Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site or the Improvements thereon, without prior written approval of the Agency. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site or to prohibit or restrict the renting for occupancy of residential units to be constructed on the Site, nor shall it prohibit granting any security interests permitted in this Agreement for financing the development of the Site. The provisions of this Section 309 shall remain in effect for the duration of the Agency Grant. -7- e e e b. Any proposed transferee shall have the development experience, qualifications and financial ability necessary to fulfill the obligations undertaken in this Agreement by the Developer. Any proposed transferee shall expressly assume all of the obligations of the Developer under this Agreement and shall agree, in a written agreement with the Agency, to be subject to all of the conditions and restrictions to which the Developer is subject pursuant to this Agreement. The Developer shall submit to the Agency for review all instruments and other legal documents proposed to effect any such transfer. Any proposed transferee shall also meet HUD requirements under the HUD Section 202/811 Capital Advance Documents. c. In the absence of specific written agreement by the Agency, no unauthorized sale, transfer, conveyance or assignment of the Site, the Improvements or any part thereof or interest therein shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. d. Notwithstanding anything in this Section 309 to the contrary, the Developer shall at all times have the right to convey the Site to HUD or its transferee, and so long as any portion of the HUD Section 202/811 Capital Advance Documents remain outstanding and the HUD Regulatory Agreement is in effect, the Agency shall approve any sale, transfer, conveyance or assignment of the Site that first has been approved in writing by HUD; provided, however, that in the event of any such sale, transfer, conveyance or assignment, the Developer shall not be released from any obligation under this Agreement without the prior written consent of the Agency. 9. [9310] Security Financing a. [9311] Encumbrances Permitted Notwithstanding Section 309, mortgages, deeds of trust, or any other form of conveyance required for financing are permitted to be recorded against the Site or the Development (the "Security Instruments") for the purpose of securing funds for the construction of the Improvements. The Developer shall notifY the Agency in advance of any proposed conveyance for financing. The Developer shall promptly notifY the Agency of any Security Instrument or security interest relating thereto that has been created or attached to the Site or the Development, whether by voluntary act of the Developer or otherwise. b. [9312] Holder Not Obligated to Construct Improvements The holder of any Security Instrument authorized by this Agreement ("Holder") shall in no way be obligated by the provisions of this Agreement to construct or complete the Improvements or to guarantee such construction or completion. Nothing in this Agreement shall be deemed to permit or authorize any such Holder to devote the Site to any uses, or to construct any improvements provided for or authorized by this Agreement. -8- e e e c. [~313] Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders: Right to Cure Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of the Improvements on the Site, the Agency shall at the same time deliver to each Holder, of which the Agency has received notice pursuant to Section 311 hereof, a copy of such notice or demand. The Agency will cooperate with any such Holder to the extent reasonably necessary to modify the provisions of this Section 313 to meet the requirements of such lender. Each such Holder shall (insofar as the rights of the Agency are concerned) have the right at its option within ninety (90) days after the receipt of the notice to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. If such default shall be a default which can only be remedied or cured by such Holder upon obtaining possession, such Holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within ninety (90) days after obtaining possession; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced within such 90-day period, such Holder shall have such additional time as reasonable necessary to remedy or cure such default of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such Holder to undertake or continue the construction or completion of the Improvements (beyond the extent necessary to conserve or protect the Improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The Holder in that event must agree to complete, in the manner provided in this Agreement, the Improvements to which the lien or title of such Holder relates, and submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. The foregoing provisions ofthis section shall not apply to HUD during the term the HUD Capital Advance Documents are in effect. d. [~314] Failure of Holder to Complete Improvements In any case where six months after default by the Developer in the completion of the Improvements the Holder has not exercised the option to complete the construction of the Improvements, or if it has exercised the option has not proceeded diligently to complete the Improvements, the Agency may purchase the Security Instrument by payment to the Holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Improvements has vested in the Holder, the Agency, if it so desires, shall be entitled to a conveyance from the Holder to the Agency upon payment to the Holder of an amount equal to the sum of the following: (I) The unpaid balance secured by the Security Instrument at the time such title became vested in the Holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings). (2) All expenses with respect to foreclosure. -9- e e e (3) The net expenses, if any (exclusive of general overhead), incurred by the Holder as a direct result of the subsequent ownership or management of the Improvements, such as insurance premiums and real estate taxes. (4) The costs of any improvements made by such Holder. (5) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. The foregoing provisions of this section shall not apply during the term of the HUD Capital Advance Documents. e. [9315] Right of Agency to Cure Mortgage, Deed ofTrust or Other Security Interest Default In the event of a default or breach by the Developer of any Security Instrument prior to the completion of construction of the Improvements, and the Holder has not exercised its option to complete such construction, the Agency may cure the default prior to completion of any foreclosure. In such event, the 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 entitled to a lien upon the Developer's interest in the Site and ownership of the Improvements (or any portion thereof) to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to Security Instruments recorded against the Site and the Improvements as authorized herein. Any such lien shall also be subject to the prior written approval ofHUD during the term of the HUD Capital Advance Documents. 10. [9316] (Intentionally Omitted) 11. [9317] Use of the Site a. [9318] Uses The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest that during construction and thereafter, the Developer, its successors and assignees shall develop the Site with 74 units, and lon-site manager's unit, in the apartment complex in which each person in residence in each dwelling unit is required to be a Senior Citizen of sixty two (62) years of age or older, or a "Qualifying Permanent Resident" as defined in California Civil Code Section 51.3 and as amended from time to time, and as set forth below (hereinafter collectively referred to as "Senior Citizen"). The use of the project shall be at all times rental units and not be converted to condominiums or other non-rental use. The foregoing covenant shall run with the land. Compliance by Developer with the requirements of the HUD Section 202 program during the term of the HUD Capital Advance Documents shall be deemed to satisfy the requirements of this section, and in the event of a conflict, HUD requirements shall prevail. -10- e e e b. [9319] Obligation to Refrain From Discrimination Except as otherwise required by the HUD Section 202 program rental requirements, the Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through the Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. c. [9320] Form of Nondiscrimination and Nonsegregation Clauses The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases (including rental agreements) or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (I) In deeds: "Except as otherwise required by the HUD Section 202 program rental requirements, the grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "Except as otherwise required by the HUD Section 202 program rental requirements, the lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased." -11- e e e (3) In contracts: "Except as otherwise required by the HUD Section 202 program rental requirements, there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." d. [9321] Effect and Duration of Covenants The covenants contained in this Agreement and the grant deed shall remain in effect for forty (40) years following the initial occupancy of the first dwelling unit to be developed pursuant to this Agreement, except that the covenants against discrimination shall remain in perpetuity. The covenants established in this Agreement and the grant deed shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site or any part thereof. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land for and in its own rights and for the purpose of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. This Agreement and the covenants shall run in favor of the Agency without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site, any parcel or subparcel, or in the Project Area. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. e. [9322] Rights of Access-Public Improvements and Facilities The Agency, for itself and for the City and other public agencies, at their sole risk and expense, reserves the right to enter the Site or any part thereof at all reasonable times and with as little interference as possible for the purposes of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notices to the Developer, and the Agency shall indemnifY and hold the Developer harmless from any claims or liabilities pertaining to any entry. Any damage or injury to the Site resulting from such entry shall be promptly repaired at the sole expense of the public agency responsible for the entry. f. [9323] Affordability Restriction and Tenant Selection All completed and occupied residential dwelling units on the Site shall, for a forty (40) year period, be rented at Affordable rental rates to Very Low income households in accordance with the requirements of 933334.2 et seq. of the California Health & Safety Code and pursuant to this section and 24CFR92. Compliance by Developer with the requirements of -12- e e e the HUD Section 202 program during the term of the HUD Capital Advance Documents shall be deemed to satisfy the requirements of this section and, in the event of a conflict, HUD requirements shall prevail. g. [9324] Definitions For the purposes of this Agreement, the following definitions shall apply: "Very Low income households" means persons and families whose income does not exceed fifty percent (50%) of Area median income, adjusted for family size 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. The determination of a household's status as a Very Low income household shall be made upon the initial occupancy of a unit by the household. "Area median income" means the median family income of a geographic area of the state, as annually estimated by the United States Housing Act of 1937. "Affordable rental rates" (including a utility allowance) may not exceed 30% of 50% of the area median income for the annual rent, adjusted for family size appropriate for the unit. "Qualified Permanent Resident" means a person who meets all of the following requirements: (A) Was residing with the qualifying resident or senior citizen prior to the death, hospitalization, or other prolonged absence of, or the dissolution of marriage with, the qualifying resident or senior citizen; (B) Was 45 years of age or older, or was a spouse, cohabitant, or person providing primary physical or economic support to the qualifying resident or senior citizen; (C) Has an ownership interest in, or is in expectation of an ownership interest in the dwelling unit within the housing development that limits occupancy, residency, or use on the basis of age. "Qualifying Resident or Senior Citizen" means a person who is 62 years of age or older, as defined in Section 51.3 of the California Civil Code, and as amended from time to time. "Utility allowance" means that amount required for utilities which are not paid for by Developer." IV. [~400] FINANCING A. [9401] Method of Financing Acquisition and Development 1. [9402] Sources of Financing The Agency and the Developer anticipate that the acquisition of the Site and development of the Improvements shall be financed with a combination of grants, as follows: -13- e e e Construction and Permanent Financing: Estimated Amount of Section 202 Capital Advance Estimated Amount of Agency Grant Total Estimated Development Cost $8,582,100 $ 600.000 $ 9,182,100 2. [9403] Submittal of Financing Documents Developer shall obtain the Capital Advance from HUD secured by a first priority deed of trust in an amount sufficient, together with the Agency Grant, to pay all costs of the Improvements. Within the time provided therefore in the Schedule of Performance, Developer shall submit for Agency review and approval copies of the Capital Advance Documents required to obtain the Capital Advance. Developer shall provide written certification to the Agency that such Capital Advance Documents are correct copies of the actual documents to be executed by Developer on or before the closing date of the HUD Section 202 Capital Advance. B. [9404] Agency Grant In accordance with and subject to the terms and conditions of this Agreement, the Agency agrees to grant to the Developer, and the Developer agrees to accept from the Agency, funds in an amount set forth in Section 406 for construction and permanent financing of site improvements and design amenities only. In the event the source of funds from the Agency are HOME Funds, the use of such funds shall be subject to all requirements of the HOME Funds program and in the event of a conflict between the HUD requirements and the HOME requirements, the matter shall be submitted to HUD for determination. The parties acknowledge that the HOME Funds are to be utilized to pay costs not included within the HUD Capital Advance Funds proceeds and such funds shall be disbursed to Developer in such escrow as HUD approves to be paid out in the course of construction. The Agency acknowledges that the Agency funds are to pay for costs not included within the HUD Capital Advance and that the Agency funds must be disbursed before the HUD Capital Advance proceeds. 1. [9405] (Intentionally Omitted) 2. [9406] Amount of Agency Grant The Agency Grant shall not exceed the lesser of the difference between the Improvement costs and the HUD Section 202 Capital Advance, or not more than $600,000. 3. [9407] Conditions Precedent to Closing of Agency Grant Disbursement of the Agency Grant shall be conditioned on the Developer meeting all conditions of the HUD Firm Commitment for Section 202 Capital Advance funding acceptable to the Developer in compliance with all requirements of the City including plans and specifications approved by the City, all building permits, execution of all certificates for all insurance policies required as set forth in Section 306 of this Agreement. -14- e e e At the time established in the Schedule of Performance and, in any event, prior to disbursement of any portion of the Agency Grant, the Developer shall deliver to the Agency the following documents or instruments, all of which shall be in full force and effect at the time of disbursement of any portion of the Agency Grant: a. All building permits. b. A proposed construction contract between the Developer and a licensed general contractor approved by HUD covering all construction required by this Agreement. c. A construction budget, current as of the date of disbursement, demonstrating to the satisfaction of the Agency the availability of sufficient funds to construct the Improvements. d. A copy of a completion bond and a payment bond, each in the amount of one hundred percent (100%) of the amount of the construction contract in favor of HUD and the Developer or, alternatively, evidence satisfactory to HUD of a cash deposit of twenty-five percent (25%) of such amount. e. A copy of the Firm Commitment for the HUD Section 202/811 Capital Advance acceptable to Developer. Developer shall also provide the Agency with evidence that equity funds are available to fund the portion of Development Costs, if any, not funded by the HUD Section 202/811 Capital Advance and the Agency Grant. f. A soils report satisfactory to the Agency, including a statement of whether or not the Site is in an earthquake hazard area and an engineering study regarding earthquake design, and the qualifications and experience of the soils engineer preparing such report. g. An environmental assessment prepared by a qualified engineer acceptable to the Agency relating to the presence of Hazardous Substances in, on or around the Site, and confirming that all Hazardous Substances described in such assessment have been removed or mitigated in accordance with law, and that the condition of the Site will not result in liability for cleanup of the Site by the Developer or the Agency under applicable law. h. Duplicate originals of all insurance policies required as set forth in Section 306 of this Agreement. i. Documents relating to the Developer's corporate existence, including: copies of Developer's Articles of Incorporation together with any and all amendments thereto, certified as of a recent date by the Secretary of State of California; a certified copy of the Developer's Bylaws together with any and all amendments thereto; and a certificate of status of the Developer, issued on a recent date by the California Secretary of State. j. Deposit in escrow of the financing documents required to cause the HUD Section 202/811 Capital Advance proceeds to be committed and available, in an amount -15- e e e sufficient, when combined with the Agency Grant, to complete the construction of the Improve- ments. 4. [9408] Defaults Following Closing of Agency Grant In the event that Developer, on or before the date established in the Schedule of performance for such action, fails: a. to complete construction of the Improvements within the time provided in the Schedule of Performance; b. to fulfill its obligations to the Agency under this Agreement, or any agreement or instrument executed in connection herewith; or c. to close the HUD Section 202/811 Capital Advance; The Agency, at its option, may declare the Developer to be in default and require repayment of the Agency Grant; provided, however, that during the period the HUD Capital Advance Documents are in effect, the Agency may not declare acceleration of repayment of the Agency Grant. 5. [9409] Repayment of Agency Grant a. The Agency Grant shall be repaid immediately if the Project, or any portion thereof or interest therein, is sold, transferred, assigned or refinanced without the prior written consent of the Agency; provided, however, that during the term of the HUD Capital Advance Documents the foregoing shall not apply to a transfer to HUD or to a transferee approved by HUD and any such repayment shall be made only from residual receipts and is subject to the approval ofHUD. b. In the event the Project is sold or refinanced during the term of this Agreement, with or without the prior written consent of the Agency, the Net Proceeds of such sale or refinancing shall be paid to the Agency to the extent necessary to repay in full the Agency Grant, provided that during the term of the HUD Capital Advance Documents any such proceeds be first applied to pay any project expenses, repairs and reserves required by HUD. c. The term of this Agreement shall be forty (40) years from the date of issuance of the Certificate of Occupancy but not before the maturity date of the HUD Capital Advance Documents. v. [~500] DEFAULTS, REMEDIES AND TERMINATION A. [9501] Defaults - General Subject to the extensions of time set forth in Section 605, failure or delay by either party to perform any term or provision of this Agreement, or the breach of any representation or warranty, constitutes a default under this Agreement. The party who so fails or delays shall -16- e e e immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence and, during any period of curing, shall not be otherwise in default of this Agreement. The injured party shall given written notice of default to the party in default, specifYing the default complained of by the injured party. Any failures or delays by either party in asserting any of its rights and remedies as to any default under this Agreement shall not operate as a waiver of any default or of any such rights or remedies arising pursuant to such default; nor shall it change the time of default following written notification from the non-defaulting party. Any such delays or failure by either party in asserting any of its rights and remedies shall not deprive any party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. B. [9502] Legal Actions I. [9503] Institution of Legal Actions In addition to any other rights or remedies, either 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 purpose 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 for the Central District of California. 2. [9504] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [9505] Acceptance of Service of Process If 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 Administrator or Chairman of the Agency, or in such other manner as may be provided by law. If any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon a general partner, or in such manner as may be provided by law, and shall be valid whether made within or outside the State of California. C. [9506] Rights and Remedies are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and 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 -17- ~-- e e e different times, of any other rights or remedies for the same default or any other default by the other party. D. [~507] Damages; Specific Performance If either party defaults with regard to any of the provisions of this Agreement, the non- defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within ninety (90) days after service of the notice of default, or if the default is not commenced to be cured within ninety (90) days after service of the notice of default and is not cured diligently within a reasonable period of time after commencement, the defaulting party shall be liable to the other party for damages caused by such default, and the non-defaulting party, at its option, may institute an action for specific performance of the terms of this Agreement. E. [~508] Remedies and Rights of Termination 1. [~509] Termination by the Developer The Developer, at its option, may terminate this Agreement if the Agency is in default of its obligations under this Agreement and such default is not cured within ninety (90) days after written notice by the Developer, or if Developer fails to obtain a Firm Commitment for Capital Advance Financing from HUD on terms satisfactory to Developer. 2. [~51O] Termination by Agency The Agency, at its option, may terminate this Agreement if any of the following occur: (i) the Developer assigns or attempts to assign this Agreement, or any rights therein, or makes any total or partial sale, sublease, transfer or conveyance of the whole or any part of the Site or the Project, except as permitted by this Agreement; and (ii) subject to force maieure, the Developer is in default of any of its obligations under this Agreement, and such default is not cured within ninety (90) days after the date of written demand therefore by the Agency provided, however, that this Agreement shall not be terminated during the term of the HUD Capital Advance Documents without the prior written approval ofHUD. VI. [~600) GENERAL PROVISIONS A. [~60I] Notices, Demands and Communications Between the Parties Formal notices, demands and communications between the Agency and the Developer shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer as designated in Section 104 and 105 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 by mail as provided in this Section 60 I. -18- e e e B. Uj602] Conflict of Interests No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. C. [!j603] 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. D. [!j604] Non-liability of Agency Officials and Employees No member, official or employee of the Agency or of the Developer shall be personally liable to the other party or any successor in interest, in the event of any default or breach by the Agency or the Developer for any amount which may become due to the Developer or the Agency or its successor, or on any obligations under the terms of this Agreement. E. [!j605] Enforced Delay; Extension of Time of Performance Notwithstanding specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation including litigation challenging the validity of this transaction or any element thereof, unusually severe weather, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor, or suppliers, acts of the other party, acts or failure to act of the City, the Agency or any other public or governmental agency or entity (other than that acts or failure to act of the Agency or the City shall not excuse performance by the Agency), or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the Agency and the Developer. F. [!j606] Inspection of Books and Records The Agency or its designee has the right at all reasonable times to inspect the books, records and other documents of the Developer pertaining to the Site and/or the Project pertinent to the purposes of this Agreement. G. [!j607] Approvals -19- e e e Approvals required of 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. H. [~608] Minor Modifications to Agreement The Developer and the Agency presently believe that the terms and provisions of this Agreement are consistent with and accommodate the final form of the HUD Section 202 Capital Advance Documents as may hereafter be required by HUD. However, the Developer and the Agency acknowledge and recognize that certain minor modifications of this Agreement may be necessary to accommodate the final form of one or more of the various HUD Section 202 Capital Advance Documents for the Project as may be reasonably required by HUD. The Agency Executive Director shall be the Agency officer authorized to act for the Agency pursuant to this Section 608. Accordingly, the Agency and the Developer agree on a best efforts basis to consider making reasonable accommodations and if necessary to approve such minor technical and conforming appropriate written modifications of this Agreement (and any exhibit attached hereto) as required to accommodate the final form of the HUD Section 202 Capital Advance Documents for the Project and to close the Escrow; provided however, that the acknowledgment of the parties under this Section 608, shall not be deemed to require or compel the approval of any particular technical or conforming modification of the Agreement by either party based upon a good faith exercise of business judgment of a party and the failure of either party to approve such a technical or conforming modification of this Agreement shall not be deemed to be a default hereunder. VII. [~700) ENTIRE AGREEMENT, WAIVERS, AMENDMENTS AND HUD PROVISIONS This Agreement shall be executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes twenty-two (22) pages and five (5) attachments which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the Agency Grant. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. Notwithstanding anything to the contrary in this Agreement, if any provision of this Agreement tends to contradict, modify or in any way change the terms of the Regulatory Agreement encumbering the Site to be entered into between the Secretary of HUD and the Developer, the terms of the Regulatory Agreement shall prevail and govern; or if any provision of this Agreement in any way tends to limit the Secretary of the United States Department of Housing and Urban Development ("HUD") in his administration of the Housing Act of 1959, as -20- e amended, or the regulations pursuant thereto, this Agreement shall be deemed amended so as to comply with the Act, Regulations and Regulatory Agreement. No other amendment to this Agreement shall be effective without the prior written approval of the Secretary. Notwithstand- ing anything herein to the contrary, if the Secretary ofHUD should take title to the Site through foreclosure, deed in lieu of foreclosure, or otherwise, all covenants, conditions and restrictions set forth in this Agreement shall cease and terminate and be of no further force and effect. VIII. [~800) TIME OF ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within ninety (90) days after the date of signature by the Developer, or this Agreement may be terminated by the Developer on written notice to the Agency. IX. [~900) PARTIAL INVALIDITY If any term or provision of this Agreement or of the Exhibits hereto shall to any extent be determined invalid or unenforceable by a court of competent jurisdiction, the remainder of all such documents and instruments and each term and provision thereof shall be valid and be enforced to the fullest extent permitted by law. /II e /II /II /II /II /II /II /II /II /II /II /II e /II -21- e e e IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates written opposite their signature below. Date: Date: APPROVED AS TO FORM: AGENCY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Gary Van Osdel, Executive Director DEVELOPER TELACU HOUSING-SAN BERNARDINO ill, INC., a California nonprofit corporation By: ~.:n ro {{('IV IftCAqi /f.v.~ H>o.~ Agency Counsel ~ r~ ~,~~ o.LAooo~ )......- , '<.hJ Ir'n~' L... ._.L ~r4o tvon-. f'IIL.'Ti r__t71'<- By: -22- e e e IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates written opposite their signature below. Date: Date: APPROVED AS TO FORM: AGENCY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Gary Van Osdel, Executive Director DEVELOPER TELACU HOUSING-SAN BERNARDINO III, INC., a California nonprofit corporation By: )p(...C~70 Si(;tl; t~i 1+. u. 'j). ~.l./rf.V Agency Counsel /MAl !{~ ~(,~t- ~ J~~T4CYtlrH-'. d7JY~'7l1fz By: -22- e e e IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates written opposite their signature below. AGENCY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Date: By: Gary Van Osdel, Executive Director DEVELOPER TELACU HOUSING-SAN BERNARDINO III, INC., a California nonprofit corporation Date: By: APPROVED AS TO FORM: By: 1I0:....Lt~ 7tl f({:,u (~tZ. 1f.L/.~ ff;.fJ.L,4(p Agency Counsel /tMJ ~ LA-u C#tJr. ~ ~~ Ifrvi'M- ~-"~-' -22- e EXHIBIT "A" SITE MAPS e e :~ ......y OF SAN BERNARDINO "ANNING DIVISION _OCATION MAP _AND USE DISTRICTS PROJECT: DPIII No. 03-12 u HEARING DATE: 7/8/03 NORTH / ...... I , . ~ MOI,.naLl ,. ".lIIIC e C,e , (,U!l... n. ~ I ~ .~. ~ - ~ .~...~ IL I II -~-~<= c...r~ ro . e'.... E ., i6 s: << . on . . . . . I ~' e --u- -... ... _. .. -. . -".'.- l .. ;,:. , . . It;" HI "1,[.,,1 .. I" - 'I 'k.. .. t... I:t~llll d'l' . ", 1<., .. ~.l r"'i_ l ~..; ~. s: f' h.t ; . . . .:. i. , S !~~~t n'~O # ~. ~ fi.;'1 I 'ij ~ ~::I:;io".t$;= I. 1~lkI;l'I! "'. ..~ ~'::i - ! ,. J #.:- :to!!' ".. ~ . ,! ~ j II! -. '" ~ i .( ~~ ~{"!ij !1 ~: 71!ti~. (... ~~ l~ltij :it !; "~i ':'.:;. . ". ~ 1-; ~ . ~ ~~= ~ , I I i ~.. "'~, ': !iif,l ;..:tl! Pt;..,~ 1!IW d'llS . '\ ", -,' f -;';I'=- I ~..~~} ~ ;::'S "~:..J: l"i' ~:i: ", i ;t "I. l:1U ~. ;.;:. i~~i~' ..~!J ;"'''!;;''.." 1It;~~~~~..t t:tln~'~ Ii; Jlf'l t....tE.' to i ~ 1~~f lf~~~;rl <<3 !.I. ~.. ~ ~ . I , , ~ , ( 1'6 ! :~ I:; ! 1; , I ~ -:! ~ _.~ AS-1 ~ :; ---.J Oz ~CIl :~=i ~m ; 'll r )> Z i I '. \.,:,--, ' ~. ~.. 'I t. ~ --,. ! ".. _.._~. ',' -~ 'I '''I 1 " ~ -~ ~-;, .,~ H it - oJ~-'> ;: _.....:~ ...- '-,.-- :::'::-:> ~3~! :::: :::: ~. -J': ~~ ~~:-~ :; -~ ...- .i-:'T:. "- ....... i-o-I"", 'r:" ~;t>"'" " ,- F,v"", "(.',\:";.:, :r'~:....- ...f : .; !!~ ":t < .'. -'v"'", ~\9:; _...~.----.:.:~.:.. TELACU SAN BERNARDINO III SENIOR HOUSING ..,.1 ~ ,. ~~ f j. , . .-" '.-.,. -.....- 1...- :~..; 'it.." . --~...j, .... Hi' ,\ !If',,q dfr~ t '''jJ;:- ~ i'~lcl ...,e"S... ~ i~ P:: -~7!~ . ~pH ~fh:J i;l...iJ ~H{, ihH 1 i I ~! 1111 }if~ !h 'Ii 'I' I" ,. -;r ;~ ~l I . ..;~9 ; ;n~! .;::1'1 ; , f.;' SAN BERNARDINO. CA .... ..wATEIWNI "vEtiUf. . t11 i~t ~ :: ''';:-,l~.~'~: ::-~) . "'. ~" .~" i' -- . , 1. , - , , . : ~ . ~ ~ .~:) ,. I , '." , - r- ~~.;;jj; ; "-'!j'. ~i ' ~:':.r. i --,',ll .. ~ " , " 2 f" :,'1 :~-_:~; -,,;'-'::" .. ,..".j .J . .. . . ~ ~,\:,);:: ,z,'::::~\;;", , ; , , ' ~V,~,!" .;,C/{~~', · , :~.:j~~.? ~, ..'-"-.. , t- 'I j. ~ , . . , m ,...m ;:~ :!i .~< '0 , m s c ~ z . .-.-. ::~:M~~~ , "i. ..-" F-~ :-~;:~ -C' ;.... - - ...... -:: ~ ~i~'..., :; - ~ r: ~ ~~~ <?; "..~:: - J- ;~ -~ '< ~ -.-;: f,-: n t-~ :--::;:: -- -'~ ~ :: ::::::. ~ ~~,E .~:N~ :t~~ .. , .-! - ! -,. l,i .:.. ~" ,~ . .::~ ;;- .b :-; I -..... , ! ; , I I I ~:;.:/~d : !r~.... ~!f'.l:" I - - Iii I ~l1!' ..' ,,';' r:'" j (. ::II .~~~-=::!: i~~"-"l.: ..J.;.: .' "':, '-:':U~; I 3 "",~ "'....... .i'" S , "1'" ~ , 'J.. ~ ~:: i:" "~"~jI A~3 ""'$;'" -." ~'::..:~r-l.: ,.:_ (Ii .' .~k~_i'.:i ?~!" 1 " - ! -"1' ~!). '. ; . - ~ ! \ . t ! , -~ . m " ~ ~ n ~ ' ~ m ~ ~ ~ e o VILLANUEVA ARCHITECTS, INC, w__ , (.~:ll! "i.i.l .. " . ~ 'I ~ i ., ~H .- ?" CD .- s:: - Q; , :J - <C ~ ~ ;p - :J Ql -< -- , (J> - - p!. . - i; ~ :;'lIl.L.:l::.';'"::..~'~i.;::' ;k!I!'" ........ O:T":.""" ... ~::, f': " ~': e e e EXHIBIT "B" LEGAL DESCRIPTION LOTS 38, 39, 40 AND 41 OF TRACT NO. 6548, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 84 OF MAPS, PAGES 39 AND 40, RECORDS OF SAN BERNARDINO COUNTY. e EXHIBIT "C" SCOPE OF DEVELOPMENT e e e e e EXHIBIT "C" SCOPE OF DEVELOPMENT A. General Proiect Description The Site contains approximately 103.237 square feet. The Project shall consist of the construction of seventy four (74) one bedroom units designated as affordable housing for senior citizens of very low income, as defined by federal law and regulations, and one (I) two bedroom managers unit. B. Design Objectives The following is a statement of design objectives for development ofthe Site: I. The creation and achievement of an attractive and pleasant environment reflecting a high level of concern for architectural and urban design principles both in terms of the development itself and its compatibility and suitability with the surrounding community. 2. The provision of a pleasing, safe and well-maintained living environment and vehicle parking in an urban environment. C. Development Standards The Project shall be designed and constructed in accordance with the approved terms and conditions of approval of the land use entitlements approved by the City of San Bernardino for this Project, attached here to and incorporated herein by reference. D. Lot Consolidation The Developer shall be responsible for consolidating the parcels and shall adhere to the City's Public Work requirements when consolidating lots. e EXHIBIT "D" SCHEDULE OF PERFORMANCE e e e e e EXHIBIT "D" SCHEDULE OF PERFORMANCE Execution of Agreement Agreement shall be authorized, executed and delivered by Developer to Agency. On or before December 31, 2003. Evidencing of Financing Developer shall provide Agency with evidence of financing for the Project pursuant to Section 400 of the Agreement. On or before July 31, 2004, unless extended for up to six months by HUD. Design Developer shall prepare all plans and specifications and obtain all required permits. No later than no September 30, 2004. Evidence of Insurance Developer shall furnish to the Agency, a certificate of insurance as set forth in Section 306 of the Agreement. Prior to the Developer or its agents commencing construction of the Site. Ooening of Escrow Agency and Developer shall open escrow to complete HUD Initial Closing Within 30 calendar days of written request from the Agency or Developer. Agencv Funding On or before HUD Initial Closing. HUD Initial Closing On or before September 30, 2004. Commencement of Construction Developer shall commence construction of the improvements of the Site pursuant to Section 305 and Exhibit "D". Within ten calendar days ofHUD Initial Closing. Comoletion of Construction Developer shall complete the construction of all improvements on the Site as well as off-site improvements. Within 365 calendar days after HUD Initial Closing or as extended by HUD. e e e EXHIBIT "D" SCHEDULE OF PERFORMANCE (Continued) It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict of or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. The time periods set forth in this Schedule of Performance may be altered or amended only by written agreement signed by both the Developer and the Agency. The Executive Director of the Agency shall have the authority to approve extensions of time without action of the Council Development Commission of the Agency not to exceed a cumulative total of 180 days. e EXHIBIT "E" REGULA TORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS e e e e e RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino ATTN: Executive Director 201 North uEH Street Suite 301 San Bernardino, California 92401 NO RECORDING FEE PURSUANT TO GOVERNMENT CODE SECTION 27383 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (HOME Program 24 Code of Federal Regulation Part 92; Health and Safety Code Section 33334.2) THIS AGENCY REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (the UAgency Regulatory AgreementH) is made and entered into as of this _ day of , 2003, by and between the Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the "Agency") and TELACU Housing- San Bernardino III, Inc., a California nonprofit corporation (the uDeveloperH). nRECITALSn A. The Agency and the Developer have entered into that certain HOME Grant Agreement, dated as of ,2003 (the UAgreementH). A copy of the Agreement is on file with the Agency Secretary. B. Pursuant to the terms of the Agreement, the Agency will provide resources to the Developer for improvement of the UProjectH subject to the conditions of the UHUD Capital Advance DocumentsH, as these terms are more specifically described in the Agreement, and the Agency has agreed to provide the 1 P:\Clerital Services DepIIMargarel\Agreements.Amendments\Agrmts.Amend 2003\03-11-17 TELACU III Regulatory Agreemcnt.doc e e e Developer with an Agency affordable Housing Grant in support of the Project, subject to certain conditions. C. In consideration for the Agency Affordable Housing Grant, the Developer has agreed to maintain a certain number of the rental dwelling units in the Project as available at "affordable rent" to low income Senior Ci ti zen Households as these terms are defined in the Agreement for the term of this Agency Regulatory Agreement and to further agree to observe all the terms and conditions set forth below. D. The Agency has agreed to provide the Agency Affordable Housing Grant on the condition that the proj ect be maintained and operated in accordance with Health and Safety Code Sections 33334.2 and 33413 and in accordance with certain additional restrictions concerning affordability, operation, and maintenance of the Project, as specified in this Agency Regulatory Agreement. E. In order to ensure that the proj ect will be used and operated in accordance with these conditions and restrictions, the Agency, and the Developer wish to enter into this Agency Regulatory Agreement for themselves and their successors and assigns. THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, ITS SUCCESSORS AND ASSIGNS AND TELACU HOUSING-SAN BERNARDINO, INC., ITS SUCCESSORS AND ASSIGNS HEREBY COVENANT AND AGREE AS FOLLOWS: ARTICLE 1 DEFINITIONS 1.1 Definitions When used in this Agency Regulatory Agreement, certain terms and phrases as denoted by an initially capitalized letter shall have the same meaning as found in the Agreement unless the specific context of the usage of a term or phrase may otherwise require, and certain additional defined terms which appear below in this Section 1.1 shall have the meaning in this Agency Regulatory Agreement as ascribed below: a. "Adjusted IncomeN shall mean the total anticipated annual income of all persons in a household which occupies (or is proposed to occupy) a Unit as calculated in accordance with 25 California Code of Regulations Section 6914 or 2 P:\Clerical Services DepI\~.rgarel\A8reement..AmendmentS\Agrmls.Amend 2003\03.11.17 TELACU III Regulatory Agreemcnl.doc tit tit tit pursuant to a successor state housing program regulation that utilizes a reasonably similar method of calculation of adjusted annual income. In the event that no such program exists, the Agency shall provide the Developer with a reasonably similar method of calculation of adjusted income as provided in 25 California Code of Regulations Section 6914. b. "Agreement" means that certain Agency Regulatory Agreement and Declaration of Restrictive Covenants dated as of 2003, by and between the Developer and the Agency. A copy of the Agreement is on file with the Agency Secretary and is incorporated herein by this reference. c. "Certificate of issuance by the occupancy for the of of Occupancy Date" means City of the initial Project. the date certificate d. "City" shall mean the City of California. San Bernardino, e. "Closing Date" shall mean the date of recordation of this Agency Regulatory Agreement. f. "HOME Assisted Units" shall mean the seventy-four (74) rental Units in the Project. g. "Management Agent" shall mean management agent selected by the management of proj ect as provided this Agency Regulatory Agreement. the experienced Developer for the in Section 5.2 of h. "Developer" shall mean TELACU-San Bernardino, Inc., a California nonprofit public benefit corporation. i. "Site" shall mean the real property described in Exhibit "A" attached hereto and incorporated herein. j . "Agency Regulatory Agreement" shall mean Regulatory Agreement and Declaration of Covenants. this Agency Restrictive k. "Rent" shall mean the total of each monthly payment by the tenants of a Unit to the Developer for the following: use and occupancy of the Unit and land and 3 P:\Clerical Services Dept\Margaret\Agreemenls.Amendmenls\Agrmts-Amend 2003\03-11.17 TEl.ACU III Regulatory Agreement,doc: e e e 1. m. n. associated facilities, including parking (other than parking services acquired by tenants on an optional basis); any separately charged fees or service charges assessed by the Developer which are required of all tenants, other than security deposits; the cost of an adequate level of service for utili ties paid by the tenant, including garbage collection, sewer, common area, water, electricity, gas and other heating, and refrigeration costs, but not telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Developer, and paid by the tenant. "Restricted Units" shall mean the seventy-four (74) Uni ts which are affordable Rent - restricted pursuant to this Agency Regulatory Agreement. "Senior Citizen Households" shall have the meaning as set forth in the Agreement. "Term" shall mean the period of fifty-five (55) years, beginning on the date of recordation of the Agency Regulatory Agreement and ending on the fifty fifth (55th) anniversary following such date. o. "Lower Income" shall mean the annual income for lower income households with an Adjusted Income as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, as amended, and as published by the State of California Department of Housing and Community Development. p. 2.1 years of (74) of "Units" shall mean the Citizen Household rental constructed on the Site. seventy-five (75) dwelling units Senior to be ARTICLE 2 SENIOR CITIZEN HOUSEHOLD RESTRICTED UNITS RENT AND OCCUPANCY AFFORDABILITY COVENANTS Occupancy Requirement. During the first forty (40) the Term of this Agreement not less than seventy-four the Units (the Restricted Units) shall be rented or P:\Clerical Services Depl\Margarcl\Agrecmmls-Amendmenls\Agnnl:o-Amcnd 2003\03-11-17 TELACU III Regulatory Ageemcnt.doc 4 e e e occupied by, or if vacant, available for rental and occupancy by Lower Income Senior Citizen Households. Thereafter for the addi tional fifteen (15) year Term of this Agreement, but not before the term of the HUD Capital Advance Documents, the Restricted Units shall be rented and occupied by, or if vacant, available for rental and occupied by low or moderate income tenants as defined in Health and Safety Code Section 50093. 2.2 Allowable Rent for Restricted Units. a. Subj ect occupants of the percent (30%) of household size. to Section Restricted one-twelfth 2.3 below, the Rent charged the Units shall not exceed thirty of Lower Income, adjusted for b. In calculating the allowable Rent for the Restricted Units, the household size shall be assumed to be one (1) person per Unit. c. At least one hundred eighty (180) calendar days prior to increasing Rent on any Restricted Unit, the Developer shall submit to the Agency for review and approval a written request for such increase. Households occupying Units shall be given at least ninety (90) days written notice prior to any increase in Rent. Rent for a Restricted Unit may only be increased one time per year and the Rent levels following an increase, or upon a new occupancy, shall not exceed the applicable Rent levels set forth in Section 2.2.a., above. 2.3 Increased Income of a Occupancy of a Restricted Unit. Senior Ci t i zen Household a. In the event, upon recertification of an occupant household I s income for a Restricted Unit, the Developer discovers that a Lower Income Household no longer qualifies as a Lower Income household, then such household shall not be required to vacate the Project and the Rent Chargeable to that household shall be increased to an amount of Rent which is the lesser amount of (i) thirty percent (30%) of that household 's actual monthly income; or (ii) the amount payable by the tenant under State or local law. However, when the Restricted Unit is vacated by that household or another unrestricted Unit is vacated, the Unit shall be rented to a Lower Income household at the Rent level allowed in Section 2.2 for a Restricted Unit as 5 P:\Clerieal Services DepI\Marllaret\Ag~menls.AmcndmenI5\Agrmts-Amc:nd 2003\03.11-17 TELACU III Regulatory Agreernenl.doc e e e of the date of commencement of such a new occupancy. Moreover, a Unit occupied by a Lower Income household shall be deemed, upon the termination of such Lower Income household's tenancy to be continuously occupied by a Lower Income household until that Unit is reoccupied. b. If the Project is subj ect to state or federal rules governing low income housing tax credits, the provisions of those rules regarding continued occupancy by, and Rent charged to, households whose incomes exceed the eligible income limi tation shall apply in place of the provisions set forth in Section 2.3.a., above. 2.4 Lease Provisions. a. The Developer shall include in leases or rental agreements for all Restricted Units provisions which authorize owner to immediately terminate the tenancy of any household one or more of whose members misrepresented any fact material to the household's qualification as a Lower Income and/or Senior Citizen household and for all Units (except the on-site manager's unit) any misrepresentation relating to the Senior Ci tizen Household qualification. Each lease or rental agreement for a Restricted Unit shall also provide that the household is subj ect to annual certification in accordance with Section 4.1 below, and that, if the household's income increases above the applicable limits for a Lower Income household such household's Rent may be subj ect to increase to the lesser of (i) thirty percent (30%) of that household's actual adjusted monthly income; or (ii) the amount payable by the Tenant under the State or local law, or the household may be required to vacate the Unit. b. The leases for Restricted Units shall provide that if the Project is subject to State or federal rules governing low income housing tax credits, the provisions of those rules regarding continued occupancy by, and increases in Rent for households whose incomes exceed the eligible income limitation shall apply in place of the provisions set forth in Section 2.4.a, above. 2.5 HUD Compliance. During the period of time when the HUD Capital Advance Documents are in effect with respect to the proj ect, compliance by the Developer with the requirements of the HUD Section 202 program and the HUD Capital Advance Documents shall be deemed compliance by the Developer with 6 P:\Clerical Services DeptlMargaret\Agreement~-Amendments\Allrmts-Amend 2003\03-11.17 TELACU 111 Regulatory Agreement.doc e e e requirements of this ARTICLE 2, and Section 3.1, and ARTICLE 4, and in the event of a conflict between any such provision of this Agreement and the HUD Capital Advance Documents, the requirements of the HUD Capital Advance Documents shall control. ARTICLE 3 OPERATION AND MAINTENANCE OF THE PROJECT 3. I Use as Senior Citizen Rental Housing. The proj ect shall be operated only as rental housing for Senior Citizen Households, except for not more than one (1) of the Units which may be used and occupied by on-site resident manager(s) employed by the Developer and/or the Management Agent. No part of the Project shall be operated as transient housing. 3.2 Compliance with the Agreement. The Developer shall comply with all the terms and provisions of the Agreement. 3.3 [RESERVED--NO TEXT] 3.4 Taxes and Assessments. The Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Site; provided, however, that the Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge against it, the Developer, on final determination of the proceeding or contest, shall immediately payor discharge any decision or judgment rendered against it, together with all costs, charges and interest. 3.5 Nondiscrimination. Except as otherwise required by the rental requirements of the HUD Section 202 program and the HUD Capital Advance Documents, all of the Units shall be available for occupancy on a continuous basis to Senior Citizen Household members of the general public (who are also income eligible with respect to the Restricted Units). The Developer shall not give preference to any particular class or group of persons in renting the Units. There shall be no discrimination against or segregation of any person or group of persons, on 7 P:\C~ric&1 Services DepI\MargaretlAgreemenls.AmmdmenlslAgrmts-Amend 2003\0)-1 J.]7 TELACU III Regulatory Agreement,doc ~-- e e e account of race, color, creed, religion, sex, sexual orientation, age, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit. Neither the Developer nor any person claiming under or through the Developer, shall 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, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the. operation and management of any Unit. All deeds, leases or contracts made or entered into by owner as to the Units or the Site or portion thereof, shall contain covenants prohibiting discrimination as prescribed herein. The Developer shall include a statement in all advertisements, notices and signs for the availability of Units for rent to the effect that owner is an Equal Housing Opportunity Provider. ARTICLE 4 SENIOR CITIZEN HOUSEHOLD AND INCOME CERTIFICATION AND REPORTING 4.1 Age and Income Certification. a. The Developer shall obtain and complete prior to initial occupancy and thereafter maintain on file income certifications from each tenant household renting any of the Restricted Units. The Developer shall make a good faith effort to verify that the income provided by an applicant or occupying Senior Citizen Household in an income certification is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain an income tax return for the most recent tax year; (2) conduct a credit agency or similar search; (3) obtain an income verification form from the applicant's current employer; (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (5) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. On the anniversary of the occupancy of such Restricted Unit the Developer shall recertify the household income of the Senior Citizen Household occupying the Restricted Unit. Copies of tenant income certification shall be available to the Agency upon request. 8 P:\Clerical Services DepIlMargaret\Agl1:Cmenls-Amcndments\Agrmts-Amend 2003\03.] ].]7 TELACU III Regulatory Ag~menl.d()C e e e b. The Developer shall verify, prior to the occupancy of each Unit, that the Senior Citizen Household satisfies the requirements of a senior citizen household as provided in the Agreement. Thereafter, the Developer shall annually verify that the Senior Citizen Household retains its qualification as a Senior Citizen Household. For purposes of this Section 4.l.b, the Developer may conclusively rely upon the evidence of the age of the occupant(s) of the Unit as presented in a valid California Driver's License, other form of identification issued by the State or federal government which includes a date of birth. 4.2 Annual Restricted Unit Rental Affordability Report to Agency. Commencing on the June 30 next following the Certification of the Occupancy Date and on each June 30 thereafter during the Term of the Agency Regulatory Agreement, the Developer shall submit a report to the Agency, in a form approved by the Agency. The annual report shall include for each Restricted Unit covered by this Agency Regulatory Agreement, the Rent and the income and family size of the Senior Citizen Household occupying the Restricted Unit. The report shall also state the date the tenancy commenced for each Restricted Unit and such other information as the Agency may be required by law to obtain; provided, however, that the Agency shall take reasonable steps to maintain the confidential nature of the information contained therein relating to any Restricted Unit. 4.3 Additional Information. The Developer shall provide any additional information reasonably requested by the Agency, including without limitation such Project-related income and expense accounting information. The Agency shall have the right to examine and make copies of all books, records or other documents of Developer which pertain to any Unit; provided, however, that the Agency shall take reasonable steps to maintain the confidential nature of the information contained therein. 4.4 Records. The Developer shall maintain complete, accurate and current records pertaining to the Units, and shall permit any duly authorized representative of the Agency (during business hours and upon not less than seventy-two (72) hours notice) to inspect records, including records pertaining to income and household size of tenant households of Restricted Units; provided, however, that the Agency shall take reasonable 9 P;ICltrical Services Depl\Margarel\Ag~menls-Ammdments\Agnnls-Amcnd 2003\03-11-17 TELACU III Regulatory Agrccmenl.doc e tit e steps to maintain the confidential nature of the information contained therein relating to any household. ARTICLE 5 PROPERTY MANAGEMENT 5.1 Manaqement Responsibilities. The Developer shall be responsible for management of the Project, including, without limitation, the selection of tenants, certification and recertification of household size, and income for the Restricted Units and the age of the head of household of all Units, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Agency shall have no responsibili ty for the management or operation of the Site or the Project. 5.2 Management Agent. The proj ect shall at all times be managed by an experienced management agent (the "Management Agent") reasonably acceptable to the Agency, with demonstrated ability to operate senior citizen residential rental facilities similar to the proj ect in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if the Developer directly performs the functions of the Management Agency by its employees or by means of a service contract with an entity owned or controlled by the Developer, such a Management Agent shall be deemed approved by the Agency. If the Management Agent is an entity or person other than the Developer, its employees or an entity owned or controlled by the Developer, the Developer shall submit for the Agency's approval the identity of any proposed Management Agent, together with additional information relevant to the background, experience and financial condition of any proposed Management Agent as reasonably requested by the Agency. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the Agency shall approve the proposed Management Agent by notifying the Developer in writing. Unless the proposed Management Agent is disapproved by the Agency within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. The Developer is hereby approved by the Agency as the Management Agent for the Project. Any Management Agent approved by HUD during the term of the HUD Capital Advance Documents shall be deemed approved by the Agency. 10 P:\Clerical Services DepllMargarcl\Agreements.Amendrnents\Agmlls-Amend 2003\03-11.17 TELACU III Regulatory Agreement.doc r--:- e e e 5.3. Maintenance of the Site and the Project. a. The Developer shall maintain the Site and the proj ect 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 this Agency Regulatory Agreement, there is an occurrence of an adverse condition on any area of the Site in contravention of the general maintenance standard described above (a -Maintenance Deficiency"), then the Agency shall notify the Developer in writing of the Maintenance Deficiency and give the Developer (60) days from receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Developer fails to cure or commence to cure the Maintenance Deficiency wi thin the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereof to the Developer ten (10) days prior to the scheduled date of such public hearing in order to verity whether a Maintenance Deficiency exists and whether the Developer has failed to comply with the provision of this Section 5.3. a. If, upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, thereafter the Agency shall have the right to enter the Site and perform all acts necessary to cure the Maintenance Deficiency, or take other action at law or equity the Agency may then have 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 5.3.a shall become a lien on the Site. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the City has been presented to the Developer, the Agency shall have the right to enforce the lien in the manner as provided in Section 5.3.c. b. Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Site shall be removed by the Developer from any exterior surface of a structure or improvement on the Site 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 place on the Site and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours 11 P:\Clerical Services DeptlMargarct\Agrcements-Amendments\Agnnts-Amtnd 20031(1).11-17 TELACU III Regulllory Agreemcnl.doc e e e following the time of its application; then in such event and without notice to the Developer, the Agency shall have the right to enter the property and remove the graffiti. Notwithstanding any provision of Section 5.3 to the contrary, any sum expended by the Agency for the removal of graffiti from the Site as authorized by this Section 5.b, shall become a lien on the Site. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Developer, the Agency shall have the right to enforce its lien in the manner as provided in Section 5.3c. c. The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 5.3 expressly include the power to establish and enforce a lien or other encumbrance against the Site, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in the amount reasonably necessary to restore the Site to the maintenance standard required under Section 5.3a, or Section 5.3. b, including 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. The provisions of this Section 5.3 shall be a covenant running with the land for the Term of the Agency Regulatory Agreement and shall be enforceable by the Agency, and its successors and assigns. Nothing in the foregoing provisions of this Section 5.3 shall be deemed to preclude the Developer from making any al ternations, additions, or other changes to any structure or improvement or landscaping on the Site, provided that such changes comply with applicable law. No lien as may arise under this Section 5.3 shall interfere with or be superior to the security interest of any mortgage secured by the Site. d. Notwi thstanding the foregoing provisions of this Section 5.3, during the term of the HUD Capital Advance Documents, the Agency shall not enter the Site, except in an emergency, without the prior written approval of HUD, and any lien of the Agency authorized under this Section 5.3 shall also be subject to the prior written approval of HUD. 5.4 Insurance Coverage. The Developer shall in full force and effect during the term of Regulatory Agreement insurance coverage as follows: cause to have this Agency (i) If any building or improvements erected by the Developer on the Site shall be damaged or destroyed by 12 P;\Clc:ric.l Services DepI\M"Barel\Agreements-Amendments\Agnnls.Amend 2003\03-11-17 TELACU III Regulatory Agreement.doc e an insurable cause, the Developer shall, at its own cost and expense, diligently repair or restore the Site and the Project consistent with the original plans and specifications for the Project. Such work or repair shall be commenced within One Hundred Twenty (120) days after the damage or loss occurs and shall be completed wi thin one year thereafter. All insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, the Developer shall make up the deficiency; e (ii) a policy of comprehensive general liability insurance written on a per occurrence basis in an amount not less than either (i) a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) or (ii) bodily injury limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person, ONE MILLION DOLLARS ($1,000,000.00) per currency, ONE MILLION DOLLARS ($1,000,000.00) products and completed operations and property damage limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence and. FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. (iii) a policy of workers' compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Developer, Agency, and the City against any loss, claim or damage arising from any inj uries or occupational diseases occurring to any worker employed by or any persons retained by the Developer in the course of carrying out the activities in this Agency Regulatory Agreement. e (iv) a policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) per person and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence and property damage liability limits of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) per occurrence and ONE HUNDRED THOUSAND DOLLARS ($100,000.00) in the aggregate or (ii) combined single limit liability of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). Said policy shall 13 P:\Clerical Services DepI\Margarel\Agreements-Amendments\Agmlls-Amend 2003\03-1 ].J7 TELACU III Regulatory Agreemenl.do~ e e e include coverage for owned, hired vehicles. non-owned, leased and All of the above policies of insurance shall be primary insurance and shall name the City and the Agency, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City and the Agency and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) days prior written notice by registered mail to Agency. In the event any of said policies of insurance are canceled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. No operation of the Project shall commence until the Developer has provided Agency with certificates of insurance or appropriate insurance binders evidencing the above insurance coverages, and said certificates of insurance or binders are approved by Agency. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated at least MA(vii)" or better in the most recent edition of Bests Insurance Rating Guide or an equi valent rating in The Key Rating Guide or in the Federal Register unless such requirements are modified or waived by the Executive Director of the Agency due to unique circumstances. Compliance by the Developer with the insurance requirements of HUD under the HUD Capital Advance Documents shall be deemed to meet the foregoing requirements during the period that the HUD Capital Advance Documents are in effect so long as the Agency, City and their officers, employees, and agents as additional insureds on all said policies as evidenced by certificates of insurance issued to the City and the Agency. The Developer agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which the Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 14 P:\Clerical Services Dc:pl\Mug&Il:M.greemc:nts-Amcndmcnls'IAgrmts-Amend 2003\03-] 1.J 7 TELACU III Regulatory Agreemcnl.doc e e e ARTICLE 6 MISCELLANEOUS AND PRIORITY OF HUD CAPITAL ADVANCE DOCUMENTS 6.1 Term. The provisions of this Agency Regulatory Agreement shall apply to the Site for the entire Term. This Agency Regulatory Agreement shall bind any successor, heir or assign of the Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, with or without the approval of the Agency, except as expressly released by the Agency. 6.2 Priority of HUD Capital Advance Documents. This Agency Regulatory Agreement shall be subject to and subordinate to the terms and provisions of the HUD Capital Advance Documents and any other documents entered into by and between the Developer and the Secretary of Housing and Urban Development in connection with the improvement or operation of the Project. Notwi thstanding anything contained herein to the contrary, in the event the Secretary of HUD (Secretary) should take title to the Site through foreclosure, deed in lieu of foreclosure, or otherwise as set forth in the HUD Capital Advance Documents, all covenants, conditions and restrictions set forth this Agency Regulatory Agreement shall cease and terminate and be of no further force or effect. Notwithstanding anything in this Agency Regulatory Agreement to the contrary, in the event any provision in this Agency Regulatory Agreement tends to contradict, modify, or in any way change the terms of the HUD Capi tal Advance Documents, the term of the HUD Capital Advance Documents shall prevail and govern; or if any provision of this Agency Regulatory Agreement in any way tends to limit the Secretary in its administration of the National Housing Act of 1937, as amended, or the Housing Act of 1959, as amended, or the regulations pursuant thereto, this Agency Regulatory Agreement shall be deemed amended so as to comply with such acts, regulations and HUD Capital Advance Documents. 6.3 [RESERVED--NO TEXT] 6.4 Non-Liability of Officials, Employees and Agents. The Agency shall not be personally liable to the Developer for any obligation created under the terms of this Agency Regulatory Agreement except in the case of actual fraud or willful misconduct by such person. 15 P:\Clerical Services Dept\Margaret\Agrecmcnls-Amendmmls\Agmlls-Amcnd 200)\03.1 J.17 TELACU III Regulatory Agreement.doc e e e 6.5 Covenants to Run With the Land. Subject to the provisions of Section 6.2, the Agency and the Developer hereby declare their express intent that the covenants and restrictions set forth in this Agency Regulatory Agreement are affordable redevelopment housing covenants and that each and every provision of this Agency Regulatory Agreement shall run with the land, and shall bind all successors in title to the Site and/or the Project; provided, however, that on the expiration of the Term of this Agency Regulatory Agreement said covenants and restrictions shall expire. 6.6 Enforcement by the Agency. If the Developer fails to perform any obligation under this Agency Regulatory Agreement, and fails to cure the default within thirty (30) days after the Agency has notified the Developer in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure wi thin thirty (30) days and thereafter diligently pursue such cure, the Agency shall have the right to enforce this Agency Regulatory Agreement by any or all of the following actions, or any other remedy provided by law: a. Action to Compel Performance or for Damages. The Agency may bring an action at law or in equity to compel the performance of the obligations of the Developer under this Agency Regulatory Agreement, and/or for damages. b. Enforce Liens. The Agency may enforce and execute upon the lien rights of the Agency as conferred under Section 5.3 of this Agency Regulatory Agreement; provided that during the term of the HUD Capital Advance Documents, HUD has consented in writing to any such lien. 6.7 Attorneys' Fees and Costs. In any action brought to enforce this Agency Regulatory Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute. For the purposes of this Section 6.7, the salary, fringe benefits and overhead expenses of lawyers employed in the Office of City Attorney of the City of San Bernardino shall be deemed to be attorney's fees. 6.8 Recording and Fi ling. The Agency and the Developer shall cause this Agency Regulatory Agreement, and all amendments 16 P:\Clerical Services DepI\MargaretlAgreemenls-Arncndmenls\Agrmts-Amend 200]\03-11-] 7 TELACU III Regulatory Agrecmmt.doc tit e e and supplements to it, to be recorded in the Official Records of the County of San Bernardino, California. 6.9 Governing Law. This Agency Regulatory Agreement shall be governed by the laws of the State of California, except those provisions preempted by federal law. 6.10 Amendments. This Agency Regulatory Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of San Bernardino, California; provided however, that during the period of time when the provisions of the HUD Capital Advance Documents are in effect this Agency Regulatory Agreement may not be amended without the prior written approval of the Secretary of HUD. 6.11 Notice. All notices given or certificates delivered under this Agency Regulatory Agreement shall be deemed received on the delivery or refusal date shown on the delivery receipt, if: (i) personally delivered by a commercial service which furnishes signed receipts of delivery or Iii) mailed by certified mail, return receipt requested, postage prepaid, addressed as shown on the signature page. Any of the parties may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or communications shall be sent. 6.12 Severability. If any provision of this Agency Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agency Regulatory Agreement shall not in any way be affected or impaired thereby. 6.13 [RESERVED--NO TEXT. 6.14 Relationship of Parties. The relationship between the Agency and the Developer during the term of this Agency Regulatory Agreement shall not be construed as a joint venture, equity venture, or partnership. The Agency does not undertake nor assume any responsibility or duty to the Developer or any third party with respect to the ownership of the Site or the operation of the Project or the actions of the Developer. The Developer shall have no authority to act as an agent of the Agency or to bind the Agency to any obligation. 17 P;\Clerical Servites Depl\MarlllfC:lV\greemmls-Amendmenls\Agrmts-Amcnd 2003\0).11.17 TELACU III Regulatory Asreemcnl.dol; e e e 6.15 Waiver. Any waiver by the Agency of any obligation in this Agency Regulatory Agreement must be in writing. No waiver will be implied from any delay or failure by the Agency to take action on any breach or default of the Developer or to pursue any remedy allowed under this Agency Regulatory Agreement or applicable law. Any extension of time granted to the Developer to perform any obligation under this Agency Regulatory Agreement shall not operate as a waiver or release from any of its obligations under this Agency Regulatory Agreement. Consent by the Agency to any act or omission by the Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the Agency's written consent to future waivers. 6.17 Other Agreements. The Developer represents that it has not entered into any agreements that would restrict or compromise its ability to comply with the terms of this Agency Regulatory Agreement. Except for the HUD Capital Advance Documents and any other documents required by HUD under the HUD Section 202 program, the Developer shall not enter into any agreements that are inconsistent with the terms of this Agency Regulatory Agreement without the express approval by the Agency in writing. 18 P:\Clerical Services Depl\Margarcl\Agreemcnls-Amc:ndmenls\Agrmts-Amend 2003\03-11-17 TELACU III Regulatory Agreement.doc e e e IN WITNESS WHEREOF, the Agency and the Developer have for themselves and their successors and assigns executed this Agency Regulatory Agreement by duly authorized representatives in counterpart original copies, all as of the date first written above. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Executive Director APPROVED AS TO FORM: Agency Counsel DEVELOPER TELACU Housing-San Bernardino, Inc., a California non-profit corporation Date: By: By: [ALL OFFICER/PRINCIPAL SIGNATURES TO BE NOTARIZED] 19 P:\Clerical Servius Ikpt\MargUCI\Agrecmcnts-Amcndmcnls\Agmu.s-Amend 2(0)\0).11-] 7 TELACU III Regulatory Agreemem,doc e e e EXHIBIT "Au LEGAL DESCRIPTION OF THE SITE LOTS 38, 39, 40 AND 41 OF TRACT NO. 6548, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 84 OF MAPS, PAGES 39 AND 40, RECORDS OF SAN BERNARDINO COUNTY. 20 P:\Clerical Services Depl\Margarcl\Agreements-AmendmenI5\Agrmls-Amend 2003\03.11.17 TELACU III Regulatory Agreement.doc CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: November 24, 2003 TO: Margaret Parker, Secretary FROM: Michelle Taylor, Senior Secretary RE: Resolution CDC/2003-40 At the Mayor and Common Council meeting of November 17, 2003, the City of San Bernardino adopted Resolution CDC/2003-40 - Resolution approving and authorizing the Executive Director to execute the Home Grant Agreement by and between the Agency and Telacu Housing - San Bernardino IIL Inc. (proposed senior housing development at 365 E. Commercial Road). Please obtain signatures in the appropriate location and return the original agreement to the City Clerk's Office. If you have any questions, please do not hesitate to contact me at ext. 3206. Thank you. Michelle Taylor Senior Secretary I hereby acknowledge receipt of this memorandum. ::00 (.2~Z4Prd,pu Please sign and return ECONONnCDEVELOPMENTAGENCY OF THE CITY OF SAN BERNARDINO J{ECE!Vp"'.-~TY eU?R.K INTER-OFFICE MEMORANDUM '03 DEe 12 P3 :12 TO: Michelle Taylor, Senior Secretary, City Clerk's Office SUBJECT: Margaret Parker, Secretary '1(l P Executed Document FROM: DATE: December 12, 2003 Enclosed is the fully executed Agreement pertaining to the following resolution: CDC/2003-40 HOME Grant Agreement by and between the Agency and TELACU Housing - San Bernardino ill, Inc. Please let me know if you have any questions. Thank you, Margaret Enclosure cc: Barbara Lindseth (with Original Executed Agreement) Barbara Sharp (with Copy of Agreement) Musibau Arogundade (with Copy of Agreement) , c ' , ** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** RESOLUTION AGENDA ITEM TRACKING FORM Meeting Date (Date Adopted): I (- 11 ~CO Item # -12-'3 c; Resolution # Vote: Ayes 1- 'I Nays ~ Abstain ~ Change to motion to amend original documents: C!.- if/?_CX],3. - 'i 0 Absent -?:t Reso. # On Attachments: =- Contract term: Note on Resolution of Attachment stored separately: ~ Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY Date Sent to Mayor: Date of Mayor's Signature: ,\- \ 'i-()3, 1\- L'YO") II-z.o~ Date of Clerk/CDC Signature: NulUVoid After: - By: - Reso. Log Updated: Seal Impressed: ./ ,../ Date Memo/Letter Sent for Signature: 11-7 '-{--o3 60 Day Reminder Letter Sent on 30th day: 90 Day Reminder Letter Sent on 45th day: See Attached: ..--- Date Returned: \'). I ( d \ 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): Copies Distributed to: City Attorney Code Compliance Dev. Services Parks & Rec. Police Public Services Water Notes: Yes ./ No B Yes N07 B Yes No? B\\ Yes No :/ By t-- Yes No B EDA ./ MIS Finance Others: BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.l Ready to File:_ Date: Revised 01112/01