HomeMy WebLinkAboutR06-Economic Development Agency
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DE.LOPMEIIT DEPARTMAT
OF THE CIn OF SAIl BERlWIDIIIO
REOUEST FOR COMMISSIOII/comrCIL ACTIOII
From:
KENNETH J. HENDERSON
Executive Director
Subject:
PORTUGAL AND NEAL
FIRST AMENDMENT TO
OWIIER PARTICIPATIOII
AGREEMENT
Date:
February 10, 1992
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SvnoDsis of Previous Commission/Council/Committee Aetionls):
On May 10, 1990, the Redevelopment Committee recommended the item
regarding approval of an Owner's Participation Agreement with Portugal
and Neal be continued to the next Redevelopment Committee meeting,
On May 24, 1990, the Redevelopment Committee recommended approval of
an Owner's Participation Agreement with Portugal and Neal.
On June 4, 1990, the Community Development Commission approved a
motion to execute an Owner's Participation Agreement with Portugal and
Neal.
On January 6, 1991, the Redevelopment Committee recommended approval
of a first amendment to the Owner Participation Agreement with
Portugal and Neal.
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Recommended Motionls):
lCommunitv Develonment Commission)
That the Community Development Commission authorize the execution of
a first amendment, and related'required documents, to the Owner
Participation Agreement between the Redevelopment Agency and Portugal
and Neal
A~~'.< ~~:..
Executive Diree or
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Contact Person(s): Ken Henderson/John Wood
Phone:
5081
Project Area(s): South Valle
Ward(s) :
ThreeO)
Supporting Data Attached: Staff ReDort: First Amendment to OPAl Site MaD
FUNDING REQUIREMENTS:
Amount: $ N/ A
Source:
N/A
Budget Authority:
N/A
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Commission/Council Notes:
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KJH:EMW:lag:0635T
COMMISSION MEETIIIG AGENDA
Meeting Date: 2/17/199~
Agenda Item Number: ~
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DBVBLOPMBNT DBPARTMBNT
OF TBB CITY OF SAN BBRlWlDINO
STAFF REPORT
PortuRal & Neal First JmPndment to Owner's Particiuation ARreement
Rich Neal developer & owner of Portugal and Neal has requested financial
assistance in the form of a twelve (12) month debt service moratorium on an
existing loan between Dwight Portugal/Richard Neal and the Agency.
BACKGROUND
In June of 1990, the Agency executed an Owner Participation Agreement (OPA)
with Portugal and Neal (PN) to construct approximately 51,372 s.f. of retail
buildings located at the intersection of Redlands Boulevard and 1-10 Waterman
south. In conjunction with this OPA, a loan was made to PN which has an
existing balance of approximately $3,298,033.93 as of March 1, 1992. Existing
deal points include a term of twenty years with an interest rate of 11% fixed
for the first four years, prime plus three points for years five through
seven, and prime plus six points for years eight through twenty.
Due largely to the economic climate over the past year, PN is currently at
43.4% occupancy, and is, therefore, suffering from a large negative cash
flow. However, Portugal & Neal is and has been current on all their debt
service payments. Portugal & Neal have made it clear that without further
assistance at this time, they would be unable to continue meeting their debt
service Obligations, while at the same time adequately providing tenant
improvements needed to assist in leasing up their building. The organization
finds itself in an economic dilemma that is somewhat familiar in today's
recession - i.e. if it makes on-time debt service payments, the money for
necessary tenant improvements is inadequate and without tenant improvements,
the vacancy rate cannot be reduced to increase cash flow for operational
needs. The need for debt service relief is clear.
At the inception of this project, the market indicated a strong demand for
retail/warehouse space, sO PN budgeted for tenant improvements of this type.
Since then, the market appears to have changed, resulting in interest and
inquiries from businesses with a need for office space. This has increased
the cost of providing tenant improvements considerably. The proposed
moratorium would allow PN to accumulate funds for office tenant improvements
and would hopefully increase their occupancy factor significantly. This could
accelerate their ability to refinance the project and pay the Department loan
off early.
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KJH:EMW:lag:0635T
COMMISSION MEETING AGENDA
Meeting Date: 2/17/1992
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Agenda Item Number:
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DEVELOPMENT DEPARnmNT STAFF REPORT
Portugal & Neal First Amendment to OPA
February 10, 1992
Page Number -2-
STAFF RECOMMENDATION
Staff recommends approval of a first amendment to the Owner Participation
Agreement in order to provide a twelve month debt service moratorium,
effective March 1, 1992, as outlined below. The moratorium date has been
changed from February 1, 1992 as originally discussed and moved to March 1,
1992 for accounting purposes as agreeded to by the developer.
Existing loan
$3,298,033.93
$ 362,783.73
$3,660,817.66
$ 34,413.12
$ 34,863.06
11% interest for twelve months
New principal balance
Current monthly debt service amortized over 20 years
New monthly debt service amortized over 30 years
The total interest which would have accumulated over twelve months will be
added to the existing loan amount. The new balance of $3,660,817.66 will be
amortized over thirty (30), as opposed to twenty (20), years to keep the
monthly debt service approximately equal to existing payments. Interest will
remain at 11% for years two (2) through four (4) and years five (5) through
seven (7) will remain at prime plus three (3) points with one (1) annual
adjustment on the anniversary date of the note. However, the note shall be
due and payable in full at the end of seven (7) years as opposed to the
originally stipulated twenty (20) year term. In addition, the amendment to
the OPA will include language requiring that the deferred interest amount of
$362,783.73 will be used for tenant improvements only. This will help ensure
that every effort is made to increase the occupancy rate and to accelerate
refinancing qualification and early payoff of the Department loan.
It should be noted that the Agency has enjoyed a mutually cooperative
relationship with PN. Portugal and Neal has been able to complete early the
construction of an attractive complex of three commercial structures with the
capability to expand to two stories totalling over 100,000 s.f. in the
future. The development has also successfully eliminated a number of
previously blighting conditions. A debt service moratorium would provide PN
with sufficient cash flow for the more office-oriented tenant improvements not
originally anticipated.
On February 6, 1992, the Redevelopment Committee considered this matter and
recommended to the Community Development Commission approval of same.
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KJH:EMW:lag:0635T
COMMISSION MEETING AGENDA
Meeting Date: 2/17/1992/
Agenda Item Number: ----i.P..---
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DEVELOPMENT DEPARTMENT STAFF REPORT
Portugal & Neal First Amendment to OPA
February 10, 1992
Page Number -3-
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Attached for your reference is a copy of a site map and the first amendment to
the Portugal and Neal Owner Participation, Agreement.
Staff recommends adoption of the form motion.
RSON, Executive Director
rtment
KJH:EMW:lag:0635T
COMMISSION MEETING AGENDA
Meeting Date: 2/17/1992
Agenda Item Number: --.Ia-
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1 FIRST AMENDMENT TO
2 OWNER PARTICIPATION AGREEMENT
3 This First Amendment to Agreement is entered into this
4 day of , 1992, by and between the REDEVELOPMENT
5 AGENCY OF THE CITY OF SAN BERNARDINO (the "Agency"), and DWIGHT H.
6 PORTUGAL and JEANNE L. PORTUGAL. trustees of the Dwight and Jeanne
7 Portugal trust under Trust Agreement dated September 8, 1986, as
8 amended by Amendment dated December 31, 1987, as to 50\ interest,
9 and RICHARD R. NEAL and NORA J. NEAL, trustees of the Richard and
10 Nora Neal trust under Trust Agreement dated October 1, 1986, as to
11 50\ interest, (collectively the "participant").
12 WITNESSETH
13 WHEREAS, the parties entered into that certain Owner
14 Participation Agreement dated June 4, 1990 and recorded with the
15 County Recorder of the County of San Bernardino as Document 90-
16 414042, and
17 WHEREAS, the parties desire to amend said Agreement by
18 eliminating the need for debt service payments from March 1, 1992
19 to and including February 1993, by increasing the amount of the
20 loan from $3,298,033.93 to 3,660,817.66, by changing the monthly
21 payments from $34,413.12 to $34,863.06, and by making the loan all
22 due and payable at the end of seven (7) years. In addition the
23 parties desire to restrict the use of the $362,783.73, realized by
24 deferring the debt service payments, to tenant improvements only.
25 NOW, THEREFORE, the parties hereto agree as follows:
26 1. Section 315 of the Agreement is hereby amended to read
27 as follows:
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DAB/ses/OPA.agre
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February 10, 1992
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"1. [315]
Loan Agreement
Agency and Participant shall enter into a Loan
Agreement in the form of Attachment No. 6 by which Agency shall
loan Participant an amount not to exceed $3, 660, 817 ~ 66. Six
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hundred eighteen thousand dollart;l ($618,000.00), shall be placed in
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escrow to be payoff the existing First Deed of Trust on the site
("Existing Deed of Trust"). The remainder shall be used for the
construction of Participant Improvements. Said loan shall be at
an interest rate of 11\ for the first four years, and prime plus
three points for years five through seven. Said loan shall be all
due and payable at the end of seven years. The floating interest
rate shall be automatically adjusted once per year on the
anniversary date of this Agreement.
For the purposes of this'
Agreement prime means the prime interest rate of the commercial
bank from which Agency obtains its loan to fund the loan provided
for in this paragraph 315. Interest only payments shall be paid
monthly beginning on March 1, 1993, on the amount of the loan
drawn to date, then principal and interest payments to be paid
monthly to fully amortize the loan over 30 years. Amortization
shall be recalculated upon each change in the interest rate.
Participant shall be entitled to draw on the loan proceeds less
'~the amount of the Existing Deed of Trust, as follows: 40\ of the
-'loan upon the issuance of building permits, 25\ of the loan upon
recommendation by the Executive Director that approximately 40\ of
"the project has been completed and 25\ upon recommendation by the
'Executive Director that approximately 80\ of the project has been
'"completed. The remaining 10\ shall be disbursed to Participant
,upon evidence of the payment or satisfaction of all indebtedness
DAB/SeS/OPA.agre
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February 10, 1992
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relating to the project, including payrolls and bills for
materials and equipment (or that with the remaining funds such
payment or satisfaction will be achieved), that might subject the
Site or Agency to liability. At the option of the Agency it may
pay the retained proceeds directly to the holders of any such
indebtedness.
"Participant agrees that $362,783.73 of the loan provided
for herein shall be used only for tenant improvements and for no
other purpose.
"Agency agrees to loan Participant the reasonable cost of
off site improvements as described in Part IV of Attachment 4
(Scope of Development) in excess of the $120,000 cost described in
Section 305. Said loan proceeds shall be paid to Participant when
a Certificate of Completion is issued. Said loan proceeds are
included in the loan described in the previous paragraph of this
Section 315."
2. Attachment No. 6 to said Agreement is amended as shown
on Exhibit "A" attached hereto and incorporated herein.
3. Attachment No. 7 to said Agreement is amended as shown
on Exhibit "8" attached hereto and incorporated herein.
4. Participant agrees to execute a new note and deed of
trust reflecting the changes as provided in this First Amendment
and as shown on Exhibits "A" and "B." Participant understands and
agrees that the implementation of this First Amendment is
contingent on Agency obtaining a security interest in the property
described in Attachments 1 and 2 in essentially the same position
as previously held by Agency. Such determination shall be made by
Agency in its sole unfettered discretion. Such agreement by
DAB/ses/OPA.agre 3 February 10, 1992
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Agency shall be reflected in Agency recording this First Amendment
with the County Recorder of the County of San Bernardino. Failure
or refusal of Participant to provide clear title acceptable to
Agency or the failure or refusal of Agency to record this First
Amendment indicating an acceptance of the security offered by
Participant shall result in the terms and conditions of the OPA
remaining unamended.
5. Except as amended herein the OPA shall remain in full
force and effect.
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DAB/ses/OPA.agre
February 10, 1992
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IN WITNESS WHEREOF. Agency and Participant have execute(
this First Amendment on the day and date first above shown.
"Agency"
Redevelopment Agency of the
Ci ty of San Bernardino
By
Executive Director
"Participant"
The Dwight and Jeanne
Portugal Trust
Approved as to Progr8lll
Trust
By ~.~~UcJc
Dwight H. Portugal
By 94_~.;~Q~yt
Jeanne Portugal
The Richard and Nora NeaJ
By
By1~ RM
Richard R. Neal
By (!d --' Q:\./J, ~ /.
Nora J. Neal
APPROVED AS TO FORM
AND LEGAL CONTENT:
-ffV~
BY~~
~ncy COun 1
Richard R. Neal
In his individual capacity
h.~~. ~
Dwight H. Portugal
In his individual capacity
DAB/seS/OPA.agre
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February 10, 1992
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..-- --- ---...--- ---..............
. <:':;..:Hateof California ___ }
:. ::";~ounty of San bernardino
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. On FebruaIy II, 1992
DATE
before me. Lisa T. Ash ford
NAME. TITlE OF OFFICEA -I.G.. ".lANE DDE. NOTARY PU8l1C"
Dwight H. Portugal and Jeanne Portugal
NAMElSlOF IIIClNER(S)
o personally known to me . OR . m proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) l8Iare
subscribed to the within Instrument and ac-
knowledged to me that IfMlIIelthey executed
the same in IOIl1CIlKr/their authorized
capacity(les). and that by JbtdIerltheir
signature(s) on the instrument the person(s).
orthe entity upon behalf of which the person(s)
acted. executed the instrument.
Witness my hand and official seal.
personally appeared
. __ lUll
,. LISA T. ASHFORD
. IIOTAR'I PUBlIC - CALlRlINIA
SAIl IIUNAllDINO COUNTY
My Commission Expl_ ~ 28. 1995
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SIGNATUIlE OF NOT_
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CAPACITY CLAIMED BY SIGNI
o INDIVIDUAL(S)
o CORPORATE
OFFICER(S)
J TITtEIS)
)21. PARTNER(S)
o ATTORNEY.IN.FACT
o TRUSTEE(S)
o SUBSCRIBING WITNESS
o GUARDIANiCONSERVATOR
o OTHER:
SIGNER IS REPRESENTING:
....E OF PE_5) OR EJmTYIIE5)
.
ATTINTlON NOrMY: AIIhough tlle ............ roquooted _. OPTIONAL,. _ _ oI1hio _.. _ documont.
'. THIS CERTIFICATE Title or Type of Document Owner ParticiDation Aueement
MlJST BE ATTACHED
TO THE DOCUMENT Number of Pages ~ Date of Document Il'Ah.....y II. tOO?
DESCRIBED AT RIGHT: Signer(s) Other Than Named Above Richard and Nora Neal
ALL. PURPOSE ACKNOWLEDGMENT
o t'" NATJClNALNOTAAY ASSOCJATlON._ AIrmlMAt1e.. P.o. lox 7114.CInogI,.. CAlfS
State of California
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Cou~of ~An RpTnATd;nn
On Il'..hn~ II, IllCl? before me.
1 ; Ill.. T. A.hfn1"d
_ TlTUEOfOfFlCEA. EG..'''''' _ NOr.... PIJILlC"
personallyappeared R;t'hard R. N....l and Nora J. N..al
NAME($) OF SlGHEIl(SI
o personally known to me . OR . Ci proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are
subscribed to the within instrument and ac-
knowledged to me that helshelthey executed
the same in his/her/their authorized
capacity(ies). and that by hls/herltheir
signature(s) on the instrument the person(s),
orthe entity upon behalf of which the person(s)
acted. executed the instrument.
Witness my hand and official seal.
. comelA. ....,
LISA T. ASHFORD
, IIOrAl'l PUBlIC. CAUfOIIMIA
SAN HRNAIDINO COUNTY
Commllllon Expl_ Man:It 28. 1195
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CAPACITY CLAIMED BY SIGNI
o INDIVlDUAL(S)
o CORPORATE
OFFICER(S)
il PARTNER(S)
o ATTORNEY-iN-FACT
o TRUSTEE(S)
o SUBSCRIBING WITNESS
o GUARDIANICONSERVATOR
o OTHER:
TlTtE(S)
SIGNER IS REPRESENTING:
NAME OF PEASON(S) OR ENTITY(IES)
ATTINTlON NOrMY: A-.gtltlle - roquooted _. OPTIONAL,. _ _ _ t oI1hio.._" unouthoIIzod documont.
THIS CERTIFICATE Title or Type of Document Owner Part iciDat ion Allreement
MUST BE ATTACHED
TO THE DOCUMENT Number of Pages ~ Date of Document
DESCRIBED AT RIGHT: Signer(s) Other Than Named Above i ht and Jeanne Portu al
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c '81' NATIONAL NOTARY ASSOC~TION.1238 AemrnltAve.. P.O. Box 7114. Canoga Park. CA113C
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EXHIBIT "A"
ATTACHMENT NO. 6
PROMISSORY NOTE SECURED BY DEED OF TRUST
$3,660,817.66
Place:
Redevelopment Agency
201 North "E" Street
San Bernardino, CA 92418
Date:
FOR VALUE RECEIVED, the undersigned jointly and severally
promises to pay to the Redevelopment Agency of the City of San
Bernardino (the "Agency") or its successors, the sum of Three
Million Six Hundred Sixty Thousand Eight Hundred Seventeen Dollars
and Sixty-Six Cents ($3,660,817.66), and to pay interest on the
unpaid principal amount drawn of this Note from March 1, 1993, at
the rate of eleven percent (llt) per annum, for the first four
years from June 4, 1990, and prime plus three points for years
five through seven. Prime means the prime interest rate of the
commercial bank from which the Agency obtains its loan to fund
this loan. The floating interest rate shall be adjusted and set
annually on the anniversary of the Owners Participation Agreement
dated June 4, 1990. Beginning on March 1, 1993, and the first day
of each month thereafter, monthly payments shall fully amortize
the principal and interest over 30 years.
Amortization and
payments shall be recalculated upon each change in the interest
rate. All principal and interest shall be due and payable on June
4, 1997. All payments shall be made in lawful money of the United
States at the principal office of the Agency, 201 North "E"
Street, San Bernardino, CA 92418, or at such other place as may
from time to time be designated by the Agency in writing. This
DAB/ses/OPA.agre
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February 10, 1992
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1 Note shall become immediately due and payable in the amount of
2 unpaid principal, with interest, upon transfer of title of the
3 property described in the Deed of Trust securing this Note to any
4 person, firm or corporation other than the undersigned and except
5 as provided in said Deed of Trust, whether such transfer of title
6 be voluntary, involuntary, or by operation of law.
7 The undersigned reserves the right to prepay at any time all
8 or any part of the principal amount of this Note without the
9 payment of penal ties or premiums. All payments on this Note shall
10 be applied first to the interest due on the Note and then to the
11 principal due on the Note, and the remaining balance shall be
12 applied to late charges, if any. Except as provided below, all
13 monthly payments on this Note shall be credited as of the due date
14 thereof without adjustment of interest because paid either before
15 or after such due date.
16 IN THE EVENT the undersigned shall fail to pay any payment
17 when due, and if such failure be subsisting Thirty (30) days
18 thereafter, the unpaid principal amount of this Note, together
19 with accrued interest and late charges, shall become due and
20 payable, at the option of the Agency, without notice to the
21 undersigned. Failure of the Agency to exercise such option shall
22 not constitute a waiver of such default. No default shall exist
23 by reason of nonpayment of any required payment so long as the
24 amount of optional prepayments already made pursuant hereto
25 equals or exceeds the amount of the required payments. If the
26 payments on this Note are not paid wi thin Fifteen (15) days of the
27 due date, the undersigned shall pay to the Agency a late charge of
28 4% per calendar month, or fraction thereof, on the amount past due
DAB/ses/OPA.agre 2 February 10, 1992
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1 and remaining unpaid. If this Note be reduced to judgment, such
2 judgment shall bear the statutory interest rate on judgments.
3 In no event shall the total interest and late charge payable
4 hereunder exceed the maximum amount of interest permitted under
5 the usury laws of the state of California.
6 If suit is instituted by the Agency to recover on this Note,
7 the undersigned agrees to pay all costs of such collection
8 including reasonable attorney's fees and court costs.
9 THIS NOTE is secured by a Deed of Trust of even date, duly
10 filed for record in the office of the County Recorder of the
11 County of San Bernardino, State of California.
12 DEMAND, protest and notice of demand and protest are hereby
13 waived and the undersigned hereby waives, to the extent authorized
14 by law, any and all homestead and other exemption rights which
15 otherwise would apply to the debt evidenced by this Note.
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28 IN WITNESS WHEREOF, THIS NOTE has been duly executed by the
DAB/ses/OPA.agre 3 February 10, 1992
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1 undersigned, as of its date.
. 2 The Dwight and Jeanne Portugal
Trust
3
4 By: j,)~ 1i · ~d~
Dwight . Portugal
5 By: Q.....-,/~Qrt?//
6
J nne L. Portugal
7
8 The Richard and Nora Neal Trust
9 By: filJIJd
10 Rib ardR. a1
11 By: f2..~ 7],/
12 Nora J. Nea
13 --.LeL't/ I!ltw
14
. Richard R. ~eal,
15 In His Individual Capacity
16 ~~ ~L..O~
.1.' 17 Dwight . Portugal,
In His Individual Capacity
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DAB/ses/OPA.agre 4 February 10, 1992
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..___r...-.r.... ....ft............ ...,........... N
. . State of California e-} . CAPACITY CLAIMED BY SIGNI
~
County of ~.n R~,..n.aTtf;nn [J INDIVIDUAL(S)
[J CORPORATE
On February II. 1992 before me, Lisa T. Ashford OFFICER(S)
DATE , TITlE(S)
NAME. 11TI.i OF OFFICER. La.. -JANE DOE. NOTARY PUBUC"
IIll PARTNER(S)
personally appeared Richard R. Neal and Nora J. Neal [J ATTORNEY.IN-FACT
.
NAME(S) OF SlGNEACS) [J TRUSTEE(S)
o personally known to me . OR . Dproved to me on the basis of satisfactory evidence [J SUBSCRIBING WITNESS
to be the person(s) whose name(s) is/are [J GUARDIANlCONSERV A TOR
subscribed to the within instrument and ac-
knowledged to me that he/shelthey executed [J OTHER:
the same in his/her/their authorized
e capacity(ies), and that by his/her/their
_IAL 11M! signature(s) on the instrument the person(s),
LISA T. ASHFORD orthe entity upon behalf of which the person{s) SIGNER IS REPRESENTING:
NOTARY ,",.BlIe. CAUFORIlIA acted, executed the instrument. NAME OF PE_S) OR ENTITY(IES)
SAN ccn~AnDIHO COUNTY
My CommlnlOn Expires Marcil 28. 1995 Wnness my hand and offICial seal.
N~ _)_~~
., A1TEHTION NOTARY: AIIhaugII'" ."""".....'/WqUOItad _ II~::: =- _~ oIlhi1_1DunoutI1orIHd__
f THIS CERTIFICATE TItle or Type of Document Promissary Note secured by Deed of Trust
MUST BE ATTACHED
10 THE DOCUMENT Number of Pages 4 Date of Document Februarv I J. 1992
DESCRIBED AT RIGHT: Signer(s) Other Than Named Above Dwight and Jeanne Portugal
01.1 NA11)NAL NOTARY ASSOCIATION. lIS RemtnIl: Ave.. P.O.... 7114.c.,... FWk. CA'131
-- .~.. --. _~ _&._ ... A_ - "'-'""--...- ~ . _...a;._ . .,,-,-a
ALL-PURPOSE ACKNOWLEDGMENT N
,.
. ~Ieof California } CAPACITY CLAIMED BY SIGNI
~nty of Sill" R,.,.nJlT'tf; nt'll [J INDIVIDUAL(S)
[J CORPORATE
On February II. 1992 before me, Lisa T. Ashford OFFICER(S)
DATE -. TITI.I OF 0FFICEIl. La.. ''- _ NOT_ PU8UC" , TTTLE(S)
n: PARTNER(S)
personally appeared Dwight B. Portugal and Jeanne L. PortuRal . [J ATTORNEY.IN-FACT
NAMECS) OF SlClNEIl(S) C TRUSTEE(S)
o personally known 10 me . OR . III proved to me on the basi!! of satisfactory evidence [J SUBSCRIBING WITNESS
to be the person(s) whose name(s) islare [J GUARDIANICONSERVATOR
subscribed to the wnhln instrument and ac-
knowledged to me that helshelthey executed [J OTHER:
(OFFICIAL SEALI the same in his/her/their aulhorized
e LISA T. ASHFORD capacity(ies), and that by his/her/their
, . NOT~.RY PUBLIC. CALIFORNIA signature(s) on the inslNment the person{s), SIGNER IS REPRESENTING:
SAN BERNARDINO COUNTY orthe entity upon behalf of which the person(s)
My Commission Expir.s March 2B, 1995 acted, executed the inslNment. NAME OF PE_.) OR EHT1TY('ES)
Wnness my hand and official seal.
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A1TEHTION NOTARY:AIIhaugII...In...."......, ~ _ II~~::= _4011hi1_1D _documont.
,THIS CERTIFICATE Title or Type of Document Pranissorv Not~ ~ Ily na..:wI nf TnI-C:I"
KolUST BE ATTACHED
TO THE DOCUMENT Number of Pages " Date of Document FIlbNm:y J I IllPJ
DESCRIBED AT RIGHT: Signer(s) Other Than Named Above lH, an" Vnra Va.' . J
C ,., NATIONALNOTAAY ASSOCIATION o 8231 R*1l1l'llt Ave. . P.O. Box 7114 oeanoo- p~
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EXHIBIT "B"
ATTACHMENT NO. 7
Deed of trust with assignment of rent
Deed of trust made on , 1992, by Dwight H.
Portugal and Jeanne L. Portugal, Trustees of the Dwight and Jeanne
Portugal Trust under Trust Agreement dated September 8, 1986, as
amended by Amendment dated December 31, 1987, as to 50% interest,
and Richard R. Neal and Nora J. Neal, Trustees of the Richard and
Nora Neal Trust under Trust Agreement dated October 1, 1986, as to
50% interest, hereinafter called trustor, whose address is P.O.
Box 279, BrYn Mawr, CA 92318 to World Title Insurance Company, a
California Corporation, hereinafter referred to as trustee, whose
business address is 320 North "E" Street, Suite 100, San
Bernardino, CA 92401 in favor of the Redevelopment Agency of the
City of San Bernardino, hereinafter referred to as beneficiary,
whose business address is 201 North "E" Street, San Bernardino, CA
92418.
Trustor irrevocably grants, transfers, and assigns to
trustee in trust, with power of sale, all that property, including
all easements and rights of way used in connection therewith or as
a means of access thereto, in the City of San Bernardino, County
of San Bernardino, State of California, described as follows: See
Exhibit "1" attached hereto and incorporated herein;
Together with the rents, issues, and profits thereof,
subject however to the right reserved by trustor in Paragraph B-16
hereof to collect and apply such rents, issues, and profits, prior
to any default hereunder;
DAB/ses/OPA.agre
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February 10,
1992
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1 For the purpose of securing payment of the indebtedness
2 evidenced by a promissory note executed by trustor, dated
3 , 1992, in the principal sum of Three Million, Six
4 Hundred Sixty Thousand Eight Hundred Seventeen Dollars and Sixty
5 Six Cents ($3,660,817.66), payable to beneficiary or order, and
6 each extension thereof; and performance of each agreement of
7 trustor incorporated herein by reference or contained herein.
8 A. To protect the security of this deed of trust, trustor
9 agrees:
10 1. To maintain the property in good condition and repair;
11 not to remove or demolish any building or improvement thereon
12 except as provided in that certain owners Participation Agreement
13 entered into between Trustor and Beneficiary and dated June 4,
14 1990; to complete promptly in workmanlike manner any improvement
15 hereafter constructed thereon and to restore promptly in
16 workmanlike manner any improvement thereon that is damaged or
17 destroyed, and to pay when due all costs incurred therefor or in
18 connection therewith; to comply with all laws, ordinances,
19 regulations, covenants, conditions, and restrictions affecting the
20 property; not to commit or permit any waste thereof or any act
21 upon the property in violation of law or of covenants, conditions,
22 or restrictions affecting the property.
23 2. To provide, maintain, and deliver to beneficiary fire
24 and earthquake insurance, in the amount of $2,155,000, and if
25 required by beneficiary, other insurance satisfactory to and with
26 loss payable to beneficiary such insurance shall name the
27 Beneficiary as an additional insured and Trustor shall provide
28 Beneficiary a Certificate of said insurance so stating from an
DAB/ses/OPA. agre 2 February 10, 1992
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insurance company authorized to do business in the state of
California. Said certificate shall also provide that said
insurance shall not be canceled or reduced in coverage without
Thirty (30) days prior written notice to Beneficiary. The amount
collected under any fire, earthquake or other insurance policy and
all return premiums may be applied by beneficiary upon any
indebtedness secured hereby in such order as beneficiary
determines, or at the option of beneficiary the entire amount so
collected or any part thereof may be released to trustor. Such
application or release shall not cure or waive any default or
notice of default hereunder or invalidate any act done pursuant to
such notice. Any unexpired insurance shall inure to the benefit
of, and pass to, the purchaser of the property covered thereby at
any trustee's sale held hereunder, or at any foreclosure sale of
such property.
3. To appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers
of beneficiary or trustee; and also, if at any time beneficiary or
trustee is a party to or appears in any such action or
proceeding, or in any action or proceeding to enforce any
obligation hereby secured, to pay all cost and expenses paid or
incurred by them or either of them in connection therewith,
including, but not limited to, cost of evidence of title and
attorneys' fees in a reasonable sum.
4. To pay (a) at least 10 days before delinquency, all
taxes and assessments affecting the property, all assessment upon
water company stock, and all rents, assessments, and charges for
water appurtenant to or used in connection with the property; (b)
DAB/ses/OPA.agre 3 February 10, 1992
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1 when due, all encumbrances, charges, and liens, with interest, on
2 the property or any part thereof, which appear to be prior or
3 superior hereto; and (c) all costs, fees, and expenses of this
4 trust.
5 5. If trustor fails to make any payment or to do any act
6 as herein provided, then beneficiary or trustee (but without
7 obligation so to do, and with or without notice to or demand upon
8 trustor, and without releasing trustor from any obligation hereof)
9 may (a) make or do the same in such manner and to such extent as
10 either deems necessary to protect the security hereof, beneficiary
11 or trustee being authorized to enter upon the property for such
12 purpose; ( b ) appear in or commence any action or proceeding
13 purporting to affect the security hereof or the rights or powers
14 of beneficiary or trustee; (c) pay, purchase, contest, or
15 compromise any encumbrance, charge, or lien that, in the judgment
16 of either, appears to be superior hereto; and in exercising any
17 such power, beneficiary or trustee may incur
18 necessary expenses, including reasonable attorneys' fees.
19 6. To pay immediately and without demand all sums expended
20 hereunder by beneficiary or trustee, with interest from date of
21 expenditure at eleven per cent (llt) per annum.
22 B. It is mutually agreed that:
23 1. Any award of damages made in connection with the
24 condemnation for public use of or injury to the property or any
25 part thereof is hereby assigned and shall be paid to beneficiary,
26 who may apply or release such moneya received therefor upon any
27 indebtedness secured hereby in such order as beneficiary
28 determines, or at the option of beneficiary the entire amount so
DAB/ses/OPA.agre 4 February 10, r;:
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1 received or any part thereof may be released to trustor. Such
2 application or release shall not cure or waive any default or
3 notice of default hereunder or invalidate any act done pursuant to
4 such notice.
5 2. The acceptance by beneficiary of any payment less than
6 the amount then due shall be deemed an acceptance on account only
7 and shall not constitute a waiver of the obligation of trustor to
8 pay the entire sum then due or of beneficiary's right either to
9 require prompt payment of all sums then due or to declare default.
10 The acceptance of payment of any sum secured hereby after its due
11 date will not waive the right of beneficiary either to require
12 prompt payment when due of all other sums so secured or to declare
13 default for failure so to pay. No waiver of any default shall be
14 a waiver of any preceding or succeeding default of any kind.
15 3. At any time or from time to time, without liability
16 therefor and with or without notice, upon written request of
17 beneficiary and presentation of this deed and the secured note for
18 endorsement, and without affecting the personal liability of any
19 person for payment of the indebtedness secured hereby or the
20 effect of this deed upon the remainder of the property, trustee
21 may reconvey any part of the property, consent to the making of
22 any map or plat thereof, join in granting any easement, or join in
23 any extension agreement or any agreement subordinating the
24 in lien or charge thereof.
25 4. Upon written request of beneficiary stating that all
26 sums secured hereby have been paid, surrender of this deed and the
27 note to trustee for cancellation and retention, and payment of its
28 fees, trustee shall reconvey, without warranty, the property then
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1 held hereunder. The recitals in such reconveyance shall bE
2 conclusive proof of the truthfulness thereof. The grantee may bE
3 designated in such reconveyances as "the person or persons legall~
4 entitled thereto."
5 5. If trustor or any subsequent owner of the propert~
6 covered hereby shall occupy the proper1:y, or any part thereof,
7 after any default in payment of any amount secured by this deed of
8 trust, trustor or such owner shall pay to beneficiary in advancE
9 on the first day of each month a reasonable rental for thE
10 premises so occupied. On failure to pay such reasonable rental,
11 trustor or such owner may be removed from the premises by summa~
12 dispossession proceedings or by any other appropriate
13 action or proceeding.
14 6. If default is made in payment of any indebtedness or ir.
15 performance of any agreement hereby secured, then beneficiary,
16 with or without notice to trustor, may declare all sums secured
17 hereby immediately due and payable by instituting suit for the
18 recovery thereof or for the foreclosure of this deed, or by
19 delivering to trustee a written declaration of default and demand
20 for sale, as well as a written notice of default and of election
21 to cause the property to be sold, which notice trustee shall cause
22 to be filed for record. If such declaration is delivered to
23 trustee, beneficiary also shall deposit with trustee this deed,
24 the secured note, and all documents evidencing expenditures
25 secured hereby.
26 7. Should trustor, without the consent in writing of
27 beneficiary, voluntarily sell, transfer, or convey his interest in
28 the property or any part thereof, or if by operation of law, it be
DAB/ses/OPA.agre 6 February 10, 1992
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1 sold, transferred, or conveyed, then beneficiary may, at its
2 option, declare all sums secured hereby immediately due and
3 payable. Consent to one such transaction shall not be deemed to
4 be a waiver of the right to require such consent to future or
5 successive transactions. Nothing in this paragraph shall be
6 construed to prohibit or restrict the lease of all or part of any
7 of the buildings on the property by Trustor in the ordinary course
8 of business.
9 8. After the time then required by law has elapsed after
10 recordation of such notice of default, and notice of sale having
11 been given as then required by law, trustee, with or without
12 demand on trustor, shall sell the property at the time and place
13 fixed in the notice of sale, either as a whole or in separate
14 parcels and in such order as trustee determines, at public
15 auction, to the highest bidder, for cash in lawful money of the
16 United states, payable at time of sale. Trustee may postpone from
17 time to time sale of all or any portion of the property by
18 public announcement at the time and place of sale originally fixed
19 or at the last preceding postponed time. Trustee shall deliver to
20 the purchaser its deed conveying the property sold, but without
21 any covenant or warranty, express or implied. The recitals in
22 such deed of any matters or facts shall be conclusive proof of the
23 truthfulness thereof. Trustor, trustee, beneficiary, or any other
24 person may purchase at the sale.
25 9. After deducting all costs, fees, and expenses of
26 trustee and of this trust, including cost of evidence of title and
27 reasonable attorney fees in connection with sale, trustee shall
28 apply the proceeds of sale to payment of (a) all sums expended
DAB/ses/OPA.agre 7 February 10, 1992
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under the terms hereof and not theretofore repaid, with accrued
interest at eleven per cent (11\) per annum, and (b) all other
sums then secured hereby in such order as beneficiary, in the
exercise of its sole discretion, directs. The remainder, if any,
shall be paid to the person or persons legally entitled thereto.
10. Before trustee's sale, beneficiary may rescind such
notices of default and of election to cause the property to be
sold by delivering to trustee a written notice of rescission,
which notice, when recorded, shall cancel any prior declaration of
default, demand for sale, and acceleration of maturity. The
exercise of such a right of rescission shall not constitute a
waiver of any default then existing or subsequently occurring, or
impair the right of beneficiary to deliver to trustee other
declarations of default and demands for sale or notices of
default and of election to cause the property to be sold, or
otherwise affect any provision of the secured note or of this deed
or any of the rights, obligations, or remedies of beneficiary or
trustee hereunder.
11. Beneficiary may from time to time, as provided by
statute, or by a writing signed and acknowledged by him and
recorded in the office of the county recorder of the county in
which the land or such part thereof as is then affected by this
deed of trust is situated, appoint another trustee in place and
stead of trustee herein named; and thereupon, the trustee herein
named shall be discharged, and the trustee so appointed shall be
substituted as trustee hereunder with the same effect as if
originally named trustee herein.
III
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February 10, 1992
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12. If two or more persons are designated as trustee
herein, any or all powers granted herein to trustee may be
exercised by any of such persons if the other person or persons is
unable, for. any reason, to act. Any recital of such inability in
any instrument executed by any of such persons shall be conclusive
against trustor, his heirs and assigns.
13. All leases now or hereafter affecting the property are
hereby assigned and transferred to beneficiary by trustor.
Trustor hereby covenants that none of such leases will be .
modified or terminated without the written consent of beneficiary,
which consent shall not be unreasonably withheld.
14. When requested so to do, trustor shall give such
further written assignments of rents, royal ties, issues, and
profits; of all security for the performance of leases; and of all
money payable under any option to purchase, and shall give
executed originals of all leases, now or hereafter on or affecting
the property.
15. Trustor reserves the right, prior to any default in
payment of any indebtedness or performance of any obligation
secured hereby, to collect all such rents, royalties, issues, and
profits, as but not before they become due. Upon any such
default, trustor's right to collect such moneys shall cease, not
only as to amounts accruing thereafter, but also as to amounts
then accrued and unpaid. In the event of default, beneficiary,
with or without notice and without regard to the adequacy of
security for the indebtedness hereby secured, either in person or
by agent, or by a receiver to be appointed by the court, (a) may
enter upon and take POssession of the property at any time and
DAB/ses/OPA. agre 9 February 10, 1992
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manage and control it in beneficiary's discretion and, (b) with or
without taking possession, may sue for or otherwise collect the
rents, issues, and profits thereof, whether past due or coming due
thereafter, and apply the same, less costs and expenses of
operation and cOllection, including reasonable attorney's fees,
upon any obligation secured hereby and in such order as
beneficiary determines. None of the aforesaid acts
shall cure or waive any default hereunder or invalidate any act
done pursuant to such notice. Beneficiary shall not be required
to act diligently in the care or management of the property or in
collecting any rents, royalties, or other profits that it is
hereby authorized to collect, and shall be accountable only for
sums actually received.
16. Without affecting the liability of trustor or of any
other party now or hereafter bound by the terms hereof for any
obligation secured hereby, beneficiary, from time to time and with
or without notice, may release any person now or hereafter liable
for performance of such obligation, and may extend the
time for payment or performance, accept additional security, and
alter, substitute, or release any security.
17. In any action brought to foreClose this deed or to
enforce any right of beneficiary or of trustee hereunder, trustor
shall pay to beneficiary and to trustee attorneys I fees in a
reasonable sum, to be fixed by the court.
18. No remedy hereby given to beneficiary or trustee is
exclusive of any other remedy hereunder or under any present or
future law.
III
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19. The pleading of any statute of limitations as a defense
to any and all obligations secured by this deed is hereby waived,
to the full extent permissible by law.
20. In the event of default in the payment of any
indebtedness secured hereby, and if such indebtedness is secured
at any time by any other instrument, beneficiary shall not be
obligated to resort to any security in any particular order: and
the exercise by beneficiary of any right or remedy with respect to
any security shall not be a waiver of or limitation on the right
of beneficiary to exercise, at any time or from time to time
thereafter, any right or remedy with respect to this deed.
21. Trustor shall, upon request made by beneficiary,
furnish the beneficiary with annual statements covering the
operations of the property.
22. Beneficiary may collect a "late charge" not to exceed
an amount equal to four per cent (4%) per calendar month, or
fraction thereof, on the amount past due and remaining unpaid on
any instalment that is not paid within fifteen (15) days from the
due date thereof, to cover the extra expense involved in handling
delinquent payments.
23. This deed applies to, inures to the benefit of, and
binds, all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors, successors in interest, and
assigns. The term "beneficiary" means the owner and hOlder,
including pledgees, of the note secured hereby, whether or not
named as beneficiary herein. In this deed, whenever the context
so requires, the masculine gender includes the feminine and
neuter, and the singular number includes the plural, and all
DAB/ses/OPA.agre 11 February 10, 1992
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obligations of each trustor hereunder are joint and several.
24. Trustee accepts this trust when this deed, duly
executed and acknowledged, is made a public record as provided by
law. Trustee is not obligated to notify any party hereto of
pending sale under any other deed of trust or of any action or
proceeding in which trustor, beneficiary, or trustee is a party
unless brought by trustee.
Trustor requests that a copy of notice of default and
of any notice of sale hereunder shall be mailed to him at the
address set out opposite his name, immediately below.
MAILING ADDRESS FOR NOTICES
Portugal and Neal
P.O. Box 279
Bryn Mawr, CA 92318
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Executed at San Bernardino, California on the date first above
written.
[Signature]
j)'D.~f!t'~Lt:~
TrustoIi
DAB/ses/OPA.agre
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February 10,
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EXHIBIT "1"
Parcels 1 through 4, inclusive, of Parcel Map No. 3441, in the
City of San Bernardino, COunty of San Bernardino, State of
California, as per plat recorded in Book 35, Pages 46 and 47 of
Parcel Maps in the Office of the County Recorder of said County.
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