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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
APPROVAL TO ENTER INTO A HOME
CHDO AGREEMENT WITH
NEIGHBORHOOD HOUSING
DATE: August 28,2001 SERVICES OF THE INLAND EMPIRE,
_____________._..._______________________________________________________________..._...._.________________________.!~<;:_,i~~2_______...______________________________________
Svnopsis of Previons Commission/Council/Committee Action(s):
FROM:
Maggie Pacheco, Director
Housing and Community Development
SUBJECT:
On August 9, 2001, the Redevelopment Committee recommended that this item be sent to the Community Development
Commission for approval.
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Recommended Motion(s):
(Community Development Commission)
MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING AND AUTHORIZING (I) THE EXECUTIVE DIRECTOR OF THE
AGENCY TO EXECUTE A HOME PROGRAM COMMUNITY HOUSING DEVELOPMENT
ORGANIZATION (CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC., (NHS) AND
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (II UNITS MULTI-FAMILY
HOUSING ACQUISITION AND REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
Contact Person(s): Gary Van Osdel/Maggie Pacheco
Project Area(s) N/A
Phone:
663-1044
Ward(s):
Second
Supporting Data Attached: Ii! Staff Report Ii! Resolution(s) Ii! Agreement(s)/Contract(s) Ii! Map(s) 0 Letter/Memo
SIGNATURE:
Source: HOME-CHDO #804604099 and 804600899
FUNDING REQUIREMENTS
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Maggie P ceca, Director
Housing and Community Development
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________________________________________________.________________________________________n._______________________________________________________________________________________
Commission/Council Notes:
Agenda He
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GVO:MA:ssj:
COMMISSIOl'
ME
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
Approval To Enter Into A Home CHDO Al!reement With
Neil!hborhood H011Sinl! Services Of The Inland Empire. Inc,. (NHSIE)
BACKGROUND
Neighborhood Housing Services of the Inland Empire, Inc., (NHS) is a non-profit 501c(3)
housing and community development corporation established in 1981 and is located in the City
of San Bernardino. The mission of NHS is to revitalize neighborhoods through housing
development, down payment assistance, homebuyer education, Y outhBuild and neighborhood
revitalization. Through these various programs, NHS has assisted over 1000 prospective
homebuyers through its education program, over 25 youth through its YouthBuild Program and
200 households through the Agency's Mobile Home Repair Grant Program and other housing
rehabilitation programs.
NHS is also a City/Agency approved and certified Community Housing Development
Organization (CHDO) and is eligible to receive federal HOME funds to improve, construct and
preserve affordable housing for low/moderate-income households.
In fiscal year 2000/01, the Community Development Commission approved a grant for $80,000
("Grant Agreement") to NHS to expand their housing capacity in the area of multi-family.
Specifically, the grant was provided for NHS to increase its staffing and technical skills in the
area of acquisition and property management of multi-family units with the goal of eventually
grooming NHS to become an owner of multi-family units within the City or selected NIP areas.
NHS had previous limited property management experience in that they owned and managed
more than 200 units at the Royal Palm Apartments in San Bernardino.
CURRENT ISSUE
As per the Agency/County of San Bernardino Cooperative Agreement, Neighborhood Initiative
Program (NIP), the Agency is obligated to purchase all properties within the NIP Areas. The
properties, when available, have been bought from the County by the Agency and sold in back-
to-back escrows to approved ARR Partners. The Partners then rehabilitate the properties and sell
them to qualified first-time homebuyers.
Similarly, more and more multi-family units are becoming available for mandatory acquisition
under the Cooperative Agreement, which the Agency has to buy and resell. Based on the goals
established in the Grant Agreement and to effectuate a comprehensive block-by-block
revitalization NIP approach, Staff and NHS have identified possible multi family units for their
acquisition, rehabilitation and management.
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Number:
Economic Development Agency Staff Report
NHS-CHDO
August 28,2001
Page Number -2-
The first multi-family property that the Agency can make available to NHS is the property
located at 1379 Arrowhead (4 units), which is a donation from the County to the Agency
pursuant to the Cooperative Agreement. Staff proposes to donate this property to NHS, and sell
other available multifamily units at: 1441-1443 Mt. View (2 units), 1495 Mt. View and 195-197
West Magnolia (3 units) and 1501-1503 Pershing (2 units) (the "Properties"). All properties are
located within NIP areas. Under the Cooperative Agreement, the Agency is required to buy
these three properties at the cost of$129,000. Along with the Arrowhead donation, the Agency
would sell these 3 Properties to NHS in a back -to-back escrow. NHS' s estimated total costs to
buy, rehabilitate and manage these 11 units, is approximately $490,000. This includes acquisition
costs, over $286,000 for rehabilitation costs and the difference is for construction management,
marketing, reserves, etc.
In order to make this Project financially feasible and leverage resources, NHS will obtain a
senior first mortgage in the approximate amount of $328,000, provide a down payment of
$15,000 and obtain an Agency Loan for the difference in an amount not to exceed $147,000.
The Agency Loan will be structured as a second subordinate, 15- year forgivable loan at one
fifteenth (1/15) of the original principal balance annually and conditioned upon adequate
property management and maintaining affordability. The Agency Loan would be used by NHS to
buy the three properties at the costs of$129,000 and $18,000 will be used for other costs such as
rehabilitation, reserves, marketing, etc.
The Agency's Loan will be funded from the 15% Set Aside HOME/CHDO funds which the
Agency, by federal regulation, must make available to approved CHDO's.
After the units have been fully rehabilitated, NHS will lease the units to low-income renters. The
proposed rents will range from $230 per month for a I-bedroom unit and $530 per month for a 2-
bedroom unit. The rents are annually capped per federal regulations. The rents collected by NHS
will go to pay the first mortgage loan, property maintenance, reserves, landscaping, management,
administration, and insurance cost. Furthermore, NHS will be conditioned to use any and all
Project surplus cash flow (not anticipated until year 3) and any equity in the Project to acquire
subsequent multi family units or invest in other affordable housing opportunities. Although,
NHS's property management experience is limited, staff believes the interim management plan
for the project will work until such time that NHS has developed a sufficient multi-family
portfolio to hire a professional property management company (see attached Management Plan).
Moreover, NHS Multi-family Management Staff will be required to participate and be certified
in the Police Department's Crime Free Multi-Family Housing Program as a condition of the
Agency Loan.
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Number:
Economic Development Agency Staff Report
NHS - CHDO
August 28,2001
Page Number -3-
FISCAL IMPACT
Funds in the amount of $147,000 are available in the Agency 2000 HOME/CHDO account #'s
804601099 and 804600899.
ENVIRONMENTAL
Prior to the release of any federal resources, the Agency must adhere to the National
Environmental Protection Agency (NEPA) environmental guidelines and requirements. All
mandated notices of the public hearing and NEPA have been adhered to.
RECOMMENDATION
That the Co
. Development Commission adopt the attached Resolution.
aggie Pacheco, Director
Housing and Comm11nity Development
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Nnmber:
RESOLUTION NO.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING (I)
THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE A HOME
PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
(CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC.,
(NHS) AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO (11 UNITS MULTI-FAMILY HOUSING ACQUISITION
AND REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
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WHEREAS, Neighborhood Housing Services of the Inland Empire, Inc. (NHS), a
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California non-profit corporation (the "Participant") known locally and internationally for
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building affordable homes for low and moderate income households, has requested financial
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assistance in the amount of one hundred forty-seven thousand dollars ($147,000) from the
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Agency to purchase and rehabilitate seven (7) multi-family housing units (the "Properties") in
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the City; and
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WHEREAS, the Properties are identified as: APN 0146-163-43000, APN 146-163-0200,
and APN 0146-132-18000 (the "HOME Project"); and
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WHEREAS, the County of San Bernardino has donated the property located at 1379
Arrowhead Avenue (APN #0146-162-22) (4 units) (the "Property") to the Agency, of which the
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Agency is required to make the Property available to a qualified non-profit organization for the
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purpose of rehabilitating and providing affordable housing to moderate income households
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pursuant to the 1999 Cooperative Agreement between the Agency and the County of San
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Bernardino; and
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WHEREAS, Participant shall use the Properties and the Property for the purpose of
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providing affordable housing to low and moderate income households in accordance with the
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federal HOME Program and HUD regulations; and
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WHEREAS, it is proposed that the Agency shall provide certain City HOME Program
2 Funds to Participant and the HOME Project, as set forth under the terms ofthe Agreement.
3 NOW THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE
4 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO,
5 AS THE GOVERNING BOARD OF THE REDEVELOPMENT AGENCY OF THE CITY OF
6 SAN BERNARDINO, AS FOLLOWS:
7 Section 1. A detailed description of the HOME Project is set forth in the HOME
8 Agreement.
9 Section 2. Subject to the terms and conditions of the HOME Agreement, the
10 Community Development Commission ("Conunission") hereby reserves the sum of not-to-
Il exceed one hundred forty-seven thousand dollars ($147,000) in fiscal year 2000 and 2001 City
12 HOME CHDO Funds as approved and budgeted in the Agency budget by the Commission for
13 such purposes, for the use and application by the Participant for the HOME Project.
14 Section 3. The Conunission hereby finds and determines that the approval of the
15 HOME Agreement, and the disbursement of the City HOME/CHDO Fiscal Year 2000 and 2001
16 Program funds administered by the Agency for the HOME Project as reserved for the
17 Participant under Section 2 of this Resolution, requires no further environmental assessment
18 under the provisions of the National Environmental Protection Act in view of the categorized
19 exemption applicable to the HOME Project as set forth at 24 CFR Part 58.35(c)(2). The
20 Commission further finds and determines that the approval of the HOME Agreement, and the
21 disbursement of the City HOME/CHDO Program fiscal year 2000 and 2001 funds by the
22 Agency as reserved for the HOME Project under Section 2 of this Resolution requires no further
23 environmental assessment by the Commission under the provisions of the California
24 Environmental Quality Act in the view of the exemption found at Public Resources Code
25 Section 21080.14 (affordable housing for low income persons in urbanized areas). The
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Executive Director of the Agency is hereby authorized and directed to prepare the appropriate
2 forms of written notice of the determinations of categorical exemption for the HOME Project as
3 provided for in this Section 3.
4 Section 4. The Commission hereby approves the form of the HOME Agreement as
5 presented at the meeting at which this Resolution is adopted. The Executive Director of the
6 Agency is hereby authorized and directed to execute the. HOME Agreement on behalf of the
7 Agency, together with such technical and conforming changes as may be recommended by the
8 Agency Counsel. The Executive Director of the Agency is further authorized and directed to
9 execute all ancillary and related documents and agreements subject to the terms and conditions
10 as set forth therein.
11 Section 5.
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This Resolution shall become effective immediately upon its adoption.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING (1)
THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE A HOME
PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
(CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC.,
(NHS) AND REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO (11 UNITS MULTI-FAMILY HOUSING ACQUISITION AND
REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
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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 thereof, held on the day of ,2001, by the following vote to wit:
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Commission Members: Aves Navs
10
ESTRADA
11
LIEN
12 MCGINNIS
13 SCHNETZ
14 SUAREZ
ANDERSON
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MC CAMMACK
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Abstain
Absent
Rachel G. Clark, City Clerk
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The foregoing resolution is hereby approved this
day of
,2001.
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22 Approved as to form and Legal Content:
Judith Valles, Chairperson
Community Development Commission
City of San Bernardino
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24 By:
Agency Counsel
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REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
HOME LOAN AGREEMENT FOR
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
MUL TI-F AMIL Y HOUSING ACQUISITION AND REHABILITATION
2001 HOME/CHDO AGREEMENT
THIS AGREEMENT is dated as of October I, 2001, by and between the Redevelopment
Agency of the City of San Bernardino, a body corporate and politic (the "Agency"), and
Neighborhood Housing Services of the Inland Empire, Inc., a California non-profit corporation
(the "Participant") and is entered into in light ofthe facts set forth in the following Recitals:
RECITALS
I. The City of San Bernardino (the "City") has been designated to receive and is
eligible to receive certain Federal funds under the Home Investment Partnership Act ("HOME
Program") allocation for Fiscal Year 2000 and Federal funds under the HOME Community
Housing Development Organization ("CHDO") allocation for Fiscal Year 2000, from the United
States Department of Housing and Urban Development ("HUD") in order to carry out eligible
activities of the City and the Agency in accordance with Federal program regulations set forth at
Title 24 Code of Federal Regulations Part 92; and
2. The City has designated and authorized the Redevelopment Agency to administer
and implement the HOME Program; and
3. In accordance with the HUD guidelines under the HOME Program, at least fifteen
percent (15%) of HOME funds must be set aside for locally based non-profit ..ntities known as
community housing development organizations ("CHDO's");
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4. The Participant is a CHDO, as this term is defined at 24 CFR Part 92.300, and the
Participant desires to participate with the Agency in activities eligible under the HOME Program,
and the Participant further agrees that the beneficiaries of its activities under the HOME Program
and this Agreement, are or will be families and persons who meet the income eligibility
guidelines of24 CFR Part 92.216 and Part 92.217; and
5. The Agency deems that the activities and HOME Program funded services to be
provided by Participant are consistent with and supportive of the HOME Program description for
the Agency in Fiscal Years 2000, and that the financial assistance of the Agency is necessary and
appropriate to initiate the activities of the Participant as set forth herein; and
6. The Participant shall certify to the Agency that it qualifies as a CHDO under the
requirements as set forth in the HOME Program; and
7. The Agency deems it desirable to enter into this Agreement with Participant in
order to provide for the acquisition and rehabilitation of eleven (II) residential dwelling units by
the Participant (hereinafter referred to as the "Project"). The Project shall be situated on four (4)
separate non-contiguous parcels ofland situated in the City (each such parcel hereinafter referred
to as a "Parcel"):
Parcel No.1 consists of2 rental dwelling units: 1441-1493 Mt. View APN-0146-
163-43000;
Parcel No.2 consists of 3 rental dwelling units 1495 Mt. View and 1915-1917
Magnolia (corner parcel): APN 0146-163-0200;eParcel No.3 consists of 2 rental dwelling units 1501-1503 Pershing: APN 0146-
132-18000; and
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Parcel No.4 consists of 4 rental dwelling units (rehabilitation only - Property was
donated by the County) 1379 Arrowhead: APN 0146-162-22000.
Parcel No.1, Parcel No.2, Parcel No.3, and Parcel No.4, are more particularly
described in the legal description attached hereto as Exhibit "A" and incorporated herein by this
reference; and
8. Each Parcel shall be subject to the affordable housing HOME Program covenants,
conditions and restrictions, as noted in Exhibit "8" and incorporated herein by this reference;
and
9. The Participant shows a history of serving the residents of the City for at least one
year, Agency deems it desirable to assist the Participant to acquire and rehabilitate each of the
Parcels and undertake the Project as more fully described in the Scope of Work attached hereto
as Exhibit "c" and incorporated herein by this reference, in order to facilitate use and operation
of each Parcel for uses consistent with the HOME Program; and
1 O. With respect to the use of the Project by the Participant after the completion of
rehabilitation work on each Parcel, it is deemed desirable that each of the dwelling units on each
Parcel be reserved for use by eligible households qualifying as low-income households ill
accordance with the HOME Program provisions as more fully set forth herein.
NOW THEREFORE, THE PARTIES TO THIS AGREEMENT COVENANT AND
AGREE AS FOLLOWS:
Section 1. Qualifications
The terms and provisions of the Recitals of this Agreement are material to its
consideration and formation and are hereby incorporated into this Agreement. Participant has
fully reviewed all of the requirements of a CHDO under the HOME Program and hereby certifies
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and warrants to the Agency that it is a CHDO and that the Participant has satisfied the
qualifications and rights of a CHDO as set forth in 24 CFR Part 92.2. Participant hereby further
warrants and covenants to the Agency that it has met the following requirements:
1.1 Legal Status. Participant is organized under State law, as evidenced by its articles
of incorporation. No part of its net earnings inure to the benefit of any member, founder,
contributor, or individual. Participant has a tax exemption ruling from the Internal Revenue
Service (hereinafter referred to as the "IRS") under Section 501 (c) of the Internal Revenue Code
of 1986, as evidenced by a certificate from the IRS. Also, Participant has among its purposes the
provision of safe, decent and affordable housing that is affordable to low and moderate-income
people.
1.2 Capacitv. Participant conforms to the financial accountability standards of
Attachment F of Office of Management and Budget Circular A-II 0, as evidenced by a notarized
statement by the organization's Certified Public Accountant. Participant is qualified to carry out
activities assisted with HOME Program funds through the experience of key staff members.
1.3 Organizational Structure. The governing board of directors of Participant contains at
least 33 percent low-income representation. Participant provides a formal process for low-
income program beneficiaries to advise the organization in all of its decisions regarding the
design, siting, development, and management of all affordable housing projects through its by-
laws and operating procedures approved by the governing board of directors.
1.4 Relationship with For-Profit Entities. Participant is not controlled nor receives
directions from individuals or entities seeking profit from the organization. Participant is free to
contract for goods and services from vendor(s) of its own choosing.
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1.5 Maintenance of Warranties During Term of Loan. During the term of the Loan as
described in Section 2 of this Agreement, the Participant shall maintain each of the foregoing
covenants set forth in this Section 1.
SCOPE OF SERVICES
Section 2.
Loan and Scope of Services
Subject to the terms and conditions of this Agreement, the Agency shall make available
to the Participant for the implementation of the Project, a total amount not to exceed one hundred
forty-seven thousand dollars ($147,000) in HOME Program funds as a deferred loan (the
"Loan"). No other source of Agency funds or the City are pledged or otherwise made available
to the Participant for the Project. The proceeds of the Loan shall be used and applied by the
Participant (together with other funds to be provided by the Participant) for the acquisition and
rehabilitation of the Project. The proceeds of the Loan shall be used for the following purposes:
(i) up to one hundred twenty-nine thousand Dollars ($129,000) shall be used and applied by
Participant, together with other funds, to acquire the Parcels; and (ii) up to eighteen thousand
Dollars ($18,000) shall be used and applied by Participant to cause the substantial rehabilitation
of the ll-units located upon the Parcels. The Loan shall be evidenced by three (3) separate
promissory notes which shall each be in an initial principal amount of Forty Nine Thousand
Dollars ($49,000) and each such Promissory Note shall be secured by a separate Parcel. The
proceeds of the Loan shall be disbursed by the Agency to the Participant upon receipt from
Participants of appropriate documentation requesting each of the two (2) draws of the Loan funds
as set forth herein. During the term of the Loan, Participant shall own and shall have effective
management control of the Project and the Participant shall comply with the provisions of 24
CFR 92.504.
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The Agency will set aside HOME Program Funds for FY 2000 for Participant. The
Agency will submit the "Designation of Community Housing Development Organization", Form
HUD-40098, to reserve funds for use by Participant promptly following the approval of this
Agreement by the governing board of the Agency. The HOME Program funds for FY 2000,
which are set aside for use by Participant and which are not committed by or for Participant
within 12 months following the approval of this Agreement, will be automatically returned to the
HOME Line of Credit and shall not be available for disbursement to Participant thereafter.
Section 3. Payment ofProiect Costs
The total estimated cost of the Project (acquisition of the Parcels and rehabilitation of
each of the 11 rental dwelling units) is presently estimated by the Participant to be approximately
$489,290. The Loan shall cover a portion of these Project costs; and the Participant anticipates
receipt of not less than $327,503 in senior lender funds from a commercial lending institution
(the "Senior Lender") and the Participant shall also contribute approximately $15,000 as equity
down payment on the Project. Participant shall pay any and all fees and costs incurred as a result
of acquisition and development of the Project using the loan and funds provided by the Senior
Lender and equity contributed by Participant. Funds representing the Loan proceeds shall only
be used by Participant to pay for acquisition of the Parcels and the rehabilitation of the 11
dwelling units thereon (each referred to as a "Rental Unit") unless otherwise first approved in
writing by the Agency. The Agency shall have the right, upon reasonable notice, to inspect and
audit all books and records of Participant pertaining to the payment of Project fees and costs.
Section 4. The Proiect and Initial Disbursement of Loan to ParticiDant.
(a) Subject to the terms and conditions of this Agreement, the Participant hereby
agrees to undertake the Project.
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(b) The Participant shall acquire each of the Parcels from the Agency as provided
below. Concurrently with the approval of this Agreement by the governing board of the Agency,
the Participant shall also execute one or more real property transfer and escrow agreements with
the Agency for the transfer of the fee title interest of each of the Parcels subject to the
satisfaction of the terms and conditions of that certain asset transfer agreement by and between
the Agency and the County of San Bernardino (the "County/FHA Transfer Agreement"). The
transfer of the marketable fee title interest in each of the Parcels by the Agency to Participant
shall be subject to the terms and conditions of the County/FHA Transfer Agreement and
compliance by the Participant with terms of each related escrow agreement with the Agency.
(c) Concurrently with the close of each of the escrows for the transfer of the Parcels
referenced in Section 4(b), the Agency shall disburse a portion of the proceeds of the Loan to
Participant as follows:
(i) at close of the escrow for Parcel No.1, $49,000; closing costs and
expenses;
(ii) at close of the escrow for Parcel No.2, $49,000; and
(iii) at close of the escrow for Parcel No.3, $49,000.
(d) The Agency shall disburse the proceeds of the Loan to fund the acquisition of the
Parcels when the Participant has satisfied the following conditions:
(i) the Participant has provided the Agency with a written fmancing
commitment of the Senior Lender in form satisfactory to the Executive Director of the
Agency to provide at least $327,503 in funds to the Participant for the rehabilitation of
the Rental Units;
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(ii) the Participant has provided the Agency with evidence of insurance
coverage as required under this Agreement and each deed of trust;
(iii) each of the escrows referenced in Section 4(b) is otherwise in a condition
to close;
(iv) the Participant has executed each of the Promissory Notes and Deeds of
Trust and HOME Regulatory Agreements in favor of the Agency as provided in Section 5
and has executed appropriate escrow instructions in favor of the Agency relating to the
recordation of each deed of trust and HOME Regulatory Agreement against each of the
Parcels (HOME Regulatory Agreement against Parcel No.4., as there will be no Deed of
Trust in favor of the Agency on Parcel No.4); and
(v) the Participant has complied with each of the other provisions of this
Agreement and is not in default hereunder.
(e) Provided no default has occurred, the remaining balance of the Loan shall be
disbursed to Participant by the Agency after each of the three (3) escrows described in Section
4(b) has closed (and the escrow for Parcel No.4., has also closed and the HOME Regulatory
Agreement for Parcel No.4 has been recorded) when:
(i) the Participant has certified in writing to the Agency either: (A) the work
of rehabilitation of at least four (4) Rental Units has been completed and each such
Rental Unit is ready for occupancy or (B) at least 20% of the work of improvement and
rehabilitation of all of the Rental Units has been completed by Participant; and
(ii) no default has occurred under this Agreement.
Section 5. Loan Documents and Grant Deed Covenants
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(a) The Loan shall be evidenced by three (3) promissory notes (each a "Promissory
Note") which shall each be secured by a deed of trust on a parcel as follows:
(i) Promissory Note secured by Deed of Trust on Parcel No. I, $49,000;
(ii) Promissory Note secured by Deed of Trust on Parcel No.2, $49,000;
(iii) Promissory Note secured by Deed of Trust on Parcel No.3, $49,000;
(b) The form of the Promissory Note is attached hereto as Exhibit "E". The date of
each of the Promissory Notes shall be the date on which the close of each of the escrows
referenced in Section 4(b) occurs.
The term of each Promissory Note shall be fifteen (15) years from its date which shall be
the close of each such escrow and each Promissory Note shall bear no interest prior to maturity
provided no default exists. Provided that Participant is in full compliance with all of the terms
and conditions of this Agreement, the principal amount of each Promissory Note shall be
forgiven as follows: annually from the date of the Promissory Note, one fifteenth (l/15th) of the
original principal balance shall be forgiven. If the outstanding principal balance of a Promissory
Note is paid prior to maturity, Participant and the Parcel which secures such Promissory Note
under a Deed of Trust, shall be released from those terms and conditions imposed by the Agency
under the HOME Regulatory Agreement on such Parcel as they relate to the HOME Program
and those terms shall be deemed satisfied (the HOME Regulatory Agreement for Parcel No.4.,
shall contain comparable HOME Program release provisions upon payment to the Agency of the
appraised value of Parcel No.4, less certain authorized capital improvement costs as set forth at
24 CFR, Part 570.209).
(c) Each of the Promissory Notes shall be secured by a deed of trust on the applicable
Parcel substantially in the form as attached as Exhibit "F".
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(d) Provided no default has occurred, upon the written request of the Participant, the
Executive Director of the Agency shall execute and deliver on behalf of the Agency a loan
subordinate agreement in favor of the Senior Lender substantially in the form as attached as
Exhibit "G".
(e) Concurrently with the close of each escrow referenced in Section 4(b) and the
escrow for the transfer of Parcel No.4 to the Participant and the disbursement of the proceeds of
the Loan to Participant, the Participant shall execute and cause to be recorded in favor of the
Agency a HOME Covenants, Conditions and Restrictions substantially in the form attached as
Exhibit "B" for each such Parcel.
Section 6. Schedule for Completion of Tasks
The Participant shall acquire fee title interest in the Parcels by a date not later than
December 31, 2001, or this Agreement shall have no further force of effect. The Participant
shall commence the rehabilitation work on the Parcels promptly following the close of the
escrows as set forth in Section 4 and thereafter complete such rehabilitation work within 180
days following the close of such escrows. The Executive Director of the Agency may for good
cause grant the Participant up to sixty (60) days additional time in which to complete such
rehabilitation work. For the purposes of this Section 6, the words "complete such rehabilitation
work" refer to a condition of completed work of improvement and rehabilitation on each of the
Rental Units such that the city of San Bernardino may issue a Certificate of Residential
Occupancy for each such Rental Unit.
Section 7. Occupancv of Units
7.1 Participant shall ensure that the eleven (11) units (hereinafter referred to as the
"Rental Units") of which 7 units are designated "HOME Assisted Units" and 4 units designated
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"Market Rate Rental Units" in the Project shall be reserved for occupancy by eligible households
as follows:
(i) 20% (2 Rental Units) of the "HOME Assisted Units" shall be rented or
reserved for occupancy by very low-income households. For the purposes of this
Agreement, very low-income shall be defined as those households earning fifty percent
(50%) of median income, or below;
(ii) the remaining balance (5 Rental Units) of the "HOME Assisted Units"
shall be rented or reserved for occupancy by households earning (80%) eighty percent of
the area median income or below;
(iii) the remaining balance (4 "Market Rate Rental Units") shall be rented or
reserved for occupancy by households earning one hundred and fifteen percent (115%) of
the area median income or below; and
(iv) at the time of initial occupancy (1 year period) of the HOME Assisted
Units in the Project, not less than ninety percent (90%) of the designated HOME Assisted
Units, (6 Rental Units) shall be rented or reserved for occupancy by households earning
sixty percent (60%) of the area median income or below. The eligible household
occupancy test of this subparagraph (iv) shall be applied only at the time of initial
occupancy of the HOME Assisted Unit. The eligible household occupancy tests of
subparagraph (i) and (ii), above, shall be applied annually for the remaining term of this
Agreement.
7.2 Participant shall ensure that each of the Rental Units shall be available and
remained to be available for occupancy by individuals or families who are income-eligible in
accordance with the provisions of Section 7.1. Participant shall be responsible for interviewing
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and selecting occupants for the Rental Units and, shall file with the Agency the tenant eligibility
certification in the form of Exhibit "H" commencing on the July 1 first following the initial
occupancy of any of the Rental Units and on each July I annually thereafter during the term of
the Loan.
7.3 The Participant may charge rent for the occupancy of each Rental Unit which is
defined to be an affordable housing cost in accordance with the initial rent schedule attached
hereto as Exhibit "1" and incorporated herein by this reference. During the term of the Loan
Exhibit "I" may be amended from time-to-time upon the written request of the Participant and
approved by the Agency Executive Director to conform to rent schedules that are prescribed
under the HOME Program guidelines and provided by HUD annually. For any household,
which at the time of an Annual Household Income Recertification, may no longer be an
"eligible" household under Section 7.1(ii), Participant may increase the rent payable by such a
household to the then applicable fair market rent for the Rental Unit occupied by such
household; provided, however, that upon the termination of occupancy of such Rental Unit by
the non-eligible household, such Rental Unit shall be reserved for use and occupancy by an
eligible household under Section 7.1 (i) or (ii), as applicable.
Section 8. Management of Rental Housing Units
(a) Participant hereby agrees to manage the units and be responsible for collecting all
rents due and payable in connection with the occupancy of the Rental Units and upon the
collection of such rents, pay for all costs and expenses incurred in connection with the operation
and occupancy of the Rental Units. All remaining revenues shall be placed in reserve account
after all debt obligation have been met for the benefit of the Rental Units.
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(b) Promptly following the close ofthe escrows, as set forth in Section 4, Participant
shall establish, and thereafter maintain, a capital replacement and reserve fund for the Project
with an initial fund balance of not less than $2,000.00. The funds deposited by Participant each
year to such capital replacement and reserve fund shall be used and applied by the Participant to
pay for the costs of capital replacement of improvement to the Project, and for such
extraordinary costs and expenses of the operation and maintenance of the Project as may be
approved in writing by the Agency. Such capital replacement and reserve fund shall be
specifically identified in the books and financial accounting records of Participant as funds held
in trust by Participant for the Project. The cash balance of such capital replacement and reserve
fund may be invested with other funds of the Participant until applied by the Participant to pay
for capital replacement costs of the Project. Each year during the term of this Agreement,
Participant shall contribute additional funds to such capital replacement and reserve fund in an
amount of at least four percent (4%) of gross rents annually payable from the Rental Units.
Participant shall provide the Agency with suitably detailed accounting records relating to the
balance and use of the monies deposited into the capital replacement and reserve fund upon the
written request ofthe Agency.
Section 9. Period ofPerformance/Affordabilitv
This Project assisted with HOME Program funds will meet a fifteen (15) year
affordability requirement with respect to the Rental Units on each Parcel in accordance with 24
CFR Part 92.252, commencing upon the recordation of the HOME Program Regulatory
Agreement for each Parcel and continuing until the expiration of the affordability period, without
regard to the term of the mortgage or to transfer of ownership (hereinafter referred to as the
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"Affordability Period"). A breach of the Rental Unit affordability requirements (as set forth in
Section 7.1) shall be deemed an event of default under the Loan.
Section 10. Repavments
Any repayment of by Participant to the Agency of principal, or replacement funds, if any,
and other return on the investment of HOME Program funds shall be remitted to the Agency.
Such repayments will be deposited by the Agency in a HOME Program Income Account and
used for other HOME Program eligible activities.
Section 11. Uniform Administrative Reauirements
As a non-profit organization and a recipient of HOME Program funds, Participant
certifies and warrants that it meets the requirements of OMB Circular No. A-122 and the
following requirements of OMB circular No. A-II 0: Attachment B; Attachment F; Attachment
H, Paragraph 2; and Attachment O. The Agency shall monitor the activities of Participant in
order to ensure the continued compliance with these provisions and any other provisions
applicable under the HOME Program.
Section 12. Proiect Reauirements
The parties hereby agree as follows:
12.1 Maximum Per-Unit Subsidv Amount. The amount of HOME Program funds that
Participant may invest on a per-unit basis in affordable housing does not exceed limits
established by HUD for this type of project.
12.2 Property Standards. The Project upon completion shall, at a minimum, meet
Federal (Housing Authority) Section 8 Housing Quality Standards ("HQS") for the term of
affordability and the property maintenance provisions of the HOME Program Regulatory
Agreement for each Parcel. Participant hereby agrees that the Agency or its designee shall be
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permitted regular access to the Parcels in order to physically inspect the units and ensure
compliance with the terms of this Agreement. Such inspections shall occur at least annually, but
not more frequently than once every calendar quarter.
12.3 [RESERVED-NO TEXTl
12.4 Recertification ofOccupancv and Rent Reauirements
Participant shall re-examine the income of each tenant household occupying the Rental
Units at least annually and shall provide documentation to the Agency to ensure continued
compliance with the provisions of the HOME Program. The monthly rent for a particular Rental
Unit may be recalculated by Participant based upon increases (or decreases) in the household
income of the household since the time of the previous recertification report to the Agency. Any
increase in rent for a Rental Unit shall be subject to the provisions of outstanding leases.
Participant may increase rent for each Rental Unit not more frequently than once per year and the
Participant shall provide tenants of those Rental Units where an increase of rent is proposed not
less than thirty (30) days prior written notice before implementing an increase in rent.
12.5 Increases in Tenant Income. Rental Units shall qualify as affordable housing
despite a temporary household income noncompliance by tenant occupants if the noncompliance
is caused by increases in the incomes of existing tenants of Rental Units following initial
occupancy of a Rental Unit by such tenant and if actions satisfactory to HUD and the Agency are
being taken by Participant to ensure that all vacancies of Rental Units occupancy after the time
that non-compliance may occur under this Section 12.5 are rented to new households in
accordance with Section 7.1(i) until the noncompliance is corrected. Tenants who no longer
qualify as low-income households under Section 7.1 shall pay as rent computed for the Rental
Units which such tenant occupancy, as a fair market rent as provided in Section 7.3.
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12.6 Tenant Protection.
(i) Lease. For the Rental Units, the lease between each tenant and Participant must
be for not less than one year, unless by mutual agreement between the tenant and Participant,
with the prior written approval of the Agency.
The lease shall provide that the maximum occupancy of the Rental Units shall be two
persons for each bedroom plus one additional person for each unit.
(ii) Prohibited Lease Terms. The lease may not contain any of the following
proVISIOns:
(a) an agreement by the tenant to be sued, to admit guilt, or to a judgment in
favor of Participant in a lawsuit brought in connection with the lease.
(b) an agreement by the tenant that Participant may take, hold, or sell personal
property of household members without notice to the tenant and a court decision on the
rights of the parties. This prohibition, however, does not apply to an agreement by the
tenant concerning disposition of personal property remaining in the Rental Unit after the
tenant has moved out of the Rental Unit. Participant may dispose of this personal
property in accordance with State of California law.
(c) an agreement by the tenant not to hold Participant or Participant's agency
legally responsible for any action or failure to act, whether intentional or negligent.
(d) an agreement of the tenant that Participant may institute a lawsuit without
notice to the tenant.
(e) an agreement of the tenant that Participant may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has
the opportunity to present a defense, or before a court decision on the rights of the parties.
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(f) an agreement by the tenant to waive any right to a trial by jury.
(g) an agreement by the tenant to waive the tenant's right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease.
(h) an agreement by the tenant to pay attorneys' fees or other legal costs, even
if the tenant wins in a court proceeding by the owner against the tenant. The tenant,
however, may be obligated to pay costs if the tenant loses.
12.7 Termination of Tenancv. Participant may not terminate the tenancy or refuse to
renew the lease of a tenant for any Rental Unit except for serious or repeated violation of the
terms and conditions of the lease, for violation of applicable federal, state, or local law, or for
other good cause. Any termination or refusal to renew must be preceded by not less than 30 days
by Participant's service upon the tenant of a written notice specifYing the grounds of the action.
Section 13. Other Requirements
13.1 Rehabilitation of Rental Units. Promptly following the Participants acquisition of
each of the Parcels, the Participant shall commence and thereafter diligently complete in a good
and workman like fashion the work of rehabilitation and improvement of each Rental Unit on
each Parcel in accordance with the Scope of Work set forth in Exhibit "C". Participant shall
substantially complete the work of rehabilitation and improvement of each such Rental Unit
within 180 days following the recordation of the Agency's Deed of Trust on the Parcel where the
Rental Unit is situated. For the purposes hereof the words "substantially complete" mean and
refer to the date on which the City issues its certificate of occupancy for the Rental Unit as
rehabilitated by Participant.
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13.2 Maintenance and ReDlacement. Participant must maintain the Project in
compliance with all applicable housing quality standards and local code requirements, including,
but not limited, to the San Bernardino Municipal Code.
13.3 Tenant Selection. Participant must adopt written tenant selection policies and
criteria for the Rental Units that:
(i) are consistent with the purpose of providing housing for very low-income
and low-income families;
(ii) are reasonably related to HOME Program eligibility and the applicants'
ability to perform the obligations of the lease;
(iii) give reasonable consideration to the housing needs of families that would
have a federal preference under section 960.211 of Title II of the Cranston-Gonzalez
National Affordable Housing Act of 1992; and
(iv) provide for the selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable, and the prompt written
notification, to any rejected applicant setting forth the grounds for any rejection.
(v) provide that a preference be given to residents or occupants of the City of
San Bernardino with respect to the occupancy of the Rental Units.
13.4 ComDliance. Participant must carry out each activity in compliance with all
Federal laws and regulations described in 24 CFR Part 92 and outlined hereinafter, except that
Participant does not assume the Agency's responsibilities for environmental review in 24 CFR
Part 92.352 or the intergovernmental review process in 24 CFR Part 92.359. These Federal laws
and regulations must be complied with as follows:
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(i) Equal Opportunity. No person shall be excluded from participation in, be denied
the benefits of or be subjected to discrimination under any program or activity funded in whole
or in part with HOME funds. In addition, HOME funds must be made available in accordance
with all laws and regulations listed in 24 CFR Part 92.350(a).
(ii) Fair Housing. In accordance with the certification made with its housing strategy,
each participating jurisdiction receiving HOME Program funds, must affirmatively further fair
housing. Actions described in Section 570.904( c) of Title II of the Cranston-Gonzalez National
Affordable Housing Act will satisty this requirement.
(iii) Affirmative Marketing. Participant must adopt affirmative marketing procedures
and requirements for the Rental Units. These must include:
(a) Methods for informing the public;
(b) Requirements and practices that Participant must adhere to in order to
carry out the City of San Bernardino's affirmative marketing procedures and
requirements;
(c) Procedures used by Participant to inform and solicit applications from persons
in the housing market area who are not likely to apply without special outreach;
(d) Records that will be kept describing actions taken by Participant to
affirmatively market units and records to assess the results of these actions; and
(e) A description of how Participant will assess the success of affirmative
marketing actions and what corrective actions will be taken where affirmative marketing
requirements are not met.
(iv) Displacement, Relocation and Acquisition. Consistent with the other goals and
objectives of 24 CFR Part 92, and if applicable, Participant must ensure that it has taken all
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reasonable steps to minimize the displacement of persons as a result of the Project. To the extent
feasible, residential tenants must be provided a reasonable opportunity to lease and occupy a
suitable, decent, safe, sanitary and affordable dwelling unit upon project completion. Participant
agrees to minimize displacement in accordance with 24 CFR Part 92.353.
(v) Labor. If applicable, any contract executed by Participant for the rehabilitation of
affordable housing with 12 or more rental units using HOME Program funds must contain a
provision requiring that not less than the wages prevailing in the locality, as predetermined by
the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 2761-5), will be paid to all
laborers and mechanics employed in the development of affordable housing involved, and such
contacts must also be subject to overtime provisions, as applicable, of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-332). The Agency may require certification as to
compliance with the provisions of 24 CFR Part 92.354 before making any payment under such
contract.
(vi) Lead-based Paint. It is understood that the rehabilitation, improvement and
maintenance of the Rental Units is subject to 24 CFR Part 35.
(vii) Conflict of Interest. Participant shall comply with all requirements set forth
regarding conflict of interest provisions as they apply in 24 CFR Part 92.356.
(viii) Debarment and Suspension. As required in 24 CFR Part 92.357, Participant will
comply with all debarment and suspension certifications.
(ix) Flood Insurance. Under the Flood Disaster Protection Act of 1973, HOME
Program funds may not be used with respect to the acquisition or rehabilitation of a project
located in an area identified by the Federal Emergency Management Agency (FEMA) as having
special flood hazards, unless:
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(A) The community in which the area is situated is participating in the National
Flood Insurance Program, or less than a year has passed since FEMA notification
regarding such hazards; and
(B) Flood insurance is obtained as a condition of approval of the commitment.
(C) The Agency is responsible for assuring that flood insurance under the
National Flood Insurance Program is obtained and maintained.
Section 14. Requests for Disbursements of Funds for Rehabilitation of Rental Units
14.1 Participant, in its sole discretion, shall be responsible for the selection of the
contractors to undertake and cause the rehabilitation of the Rental Units.
14.2 Participant may not request disbursement of funds under this Agreement until
funds are needed for payment of eligible costs. The amount of each request must be limited to
the amount requested through approved invoicing reflecting completed work or required
payment of obligation incurred.
Section 15. Records and Reoorts
15.1 The Agency will require that Participant maintain and supply the Agency upon
written request the following records and reports for the affordability period in order to assist the
Agency in meeting its record keeping and reporting requirements:
(i) development and all funding documentation for the Project;
(ii) property management and building maintenance reserves and related records;
(iii) files on the annual review and certification of all applicable tenant income;
(iv) terms and conditions of all signed leasehold agreements between tenants and
Participant; and
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(v) any legal reports and records required by City Attorney's Office or the Agency, as
requested.
15.2 Program Agent, on behalf of the Agency, will review the Project annually for the
period of affordability for:
(i) recertification oftenant income;
(ii) review of rent and utility allowances;
(iii) on-site inspections for compliance with Section 8 Housing Quality Standards; and
(vi) review of Participant compliance with this written Agreement.
Section 16. Indemnification
The Participant shall indemnify and hold harmless the Agency and the City and the
officials, officers, employees and agents of the City and the Agency from and against any and all
claims or liability arising from Participant's actions under this Agreement or from the conduct of
Participant's business or from any activity, work or things done, permitted or suffered by
Participant and shall further indemnify and hold harmless the Agency and City and their officers,
employees and agents from and against any and all claims arising from any breach or default in
the performance of any obligation of Participant under the terms of this Agreement arising from
any negligent or wrongful act or omission of the Participant or Participant's agents, contractors,
employees or invitees and from and against all costs, attorneys' fees, expenses and liability
incurred in the defense of any such claim or any action or proceeding brought thereon.
Participant's agreement to indemnify and hold the Agency and City harmless shall extend to any
claims or liabilities, including but not limited to claims pertaining to environmental conditions,
alleged construction defects, or other matters, that may arise as a result of the Participant's
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acquisition and ownership of the Parcels and the rehabilitation, improvement and occupancy of
each Rental Unit thereon.
Section 17
Breach and Termination.
(a) Termination Without Default or Breach Prior to Transfer of Title in the Parcels to
the Participant. This Agreement may be terminated for the convenience of either party who is
not then in default upon sixty (60) days notice to the other party at any time prior to the date on
which the Participant acquires title to the Parcels.
(b) Defaults and Breach - General. Failure or delay by either party to perform any
material term or provision of this Agreement shall constitute a default under this Agreement;
provided however, that if the party who is otherwise claimed to be in default by the other party
commences to cure, correct or remedy the alleged default within thirty (30) calendar days after
receipt of written notice specifying such default and shall diligently complete such cure,
correction or remedy, such party shall not be deemed to be in default hereunder.
The party which may claim that a default has occurred shall give written notice of default
to the party in default, specifying the alleged default. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default; provided, however, the
injured party shall have no right to exercise any remedy for a default hereunder without
delivering the written default notice as specified herein.
Any failure to delay by a party in asserting any of its rights and remedies as to any default
shall not operate as a waiver of any default or of any rights or remedies associated with a default.
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
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more of such rights or remedies shall not preclude the exercise by it, at the same or different
times, of any other rights or remedies for the same default or any other default by the other party.
In the event that a default of either party may remain uncured for more than thirty (30)
calendar days following written notice, as provided above, a "breach" shall be deemed to have
occurred. In the event of a breach, the party who is not in default shall be entitled to terminate
this Agreement and seek any appropriate remedy or damages by initiating legal proceedings, if
necessary.
(c) In the event that either party brings an action to enforce any condition or
covenant, representation or warranty arising out of this Agreement, the prevailing party in such
action shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by
the court in which a judgment is entered, as well as the costs of such suit. For the purposes of
this Section l7( c), the words "reasonable attorneys' fees" in the case of the Agency include the
salaries, costs and overhead of lawyer's employed in the Office of the City Attorney of the City
of San Bernardino.
Section 18. Enforcement of this Agreement
18.1 The Agency shall have the right, by prior written notice to Participant, to enforce
affordability and occupancy requirements. Should any such violation be brought to the attention
of the Agency regarding the Project, the Agency shall have the right, by prior written notice to
Participant, to suspend or terminate this Agreement and may avail itself of all remedies under
this Agreement, the Promissory Note, the Deed of Trust and the Agency HOME Program
Regulatory Agreement.
18.2 The Agency at its discretion may terminate this Agreement, in whole or in part,
by giving Participant written notice in accordance with 24 CFR Part 85.44.
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18.3 The Agency also reserves the right to reallocate HOME funds prior to
commitment of said funds to particular projects.
Section 19. Monitoring
The Agency is responsible for managing the day-to-day operations of its HOME Program
for monitoring the performance of all entities receiving HOME funds from the Agency to ensure
compliance with the requirements of 24 CFR Part 92, and for taking appropriate action when
performance problems arise.
IN WITNESS HEREOF, the Agency and Participant have executed this Agreement as of
the date first hereinabove set forth.
AGENCY
Redevelopment Agency of the
City of San Bernardino
Date
By:
Executive Director
PARTICIPANT
Neighborhood Housing Services of the
Inland Empire, Inc., a California non-profit
corporation
Date
By:
Title:
By:
Title:
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EXIDBIT "A"
Legal Description of the Parcels
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EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
,
The North 49.6 feet of the South 297.60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
. 1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 otTract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof.
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,.
in the office of the County Recorder of said County.
1501 -1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
File No.: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181,15 feet of lot 3,
Block 33, Rancho San Bernardino, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 7, page(s)
2, of Maps, in the office of the county Recorder of said County.
Page 3 or 6
.
. ,
,
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No, 1957, Kimmel's Magnolia Tract, in the City of 5AN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
,
..
CLTA Preliminary Report Form (Rev 1/1/95)
TQ20001CA (2/99)
Page J of 6
/.
i
rile No,: 6027161
EXHIBIT "A"
,
Lot 10, Block "B" of Ede.e" Tract, in the City of SAN BeRNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 5, page(s)
35 of Maps, in the office of the County Recorder of said County,
Page 3 or 6
E'd m 1 'ON
I'ld6s:t IOOl"6l'Nnr
.L b -) '"' U ~ I I' t II ,i i U .,;...
"
20009101600244
EXHIBIT "A"
LOT II, TRACT NO. 1785, TN THE CITY OF SAN BERNARDINO. COUNTY OF
5AN BERNARDINO, 51 ATE OF OJ.IFORNIA, AS PER MAP RECORDED IN
BOOK26 OF MAPS, PAGE 19, IN THE OFFICE! OF THE COUNTY RECORDER OF
SAID COUNTY.
~
Order. .00019068
Description: 2001.187745
Pagff 2 of J
- Comment: CHRIS
EXHIBIT "B"
HOME Program Covenants
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RECORDING REQUESTED BY
And when Recorded mail to:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
Recordation of this Instrument is
Exempt from all Fees and Taxes
NEIGHBORHOOD HOUSING SERVICE (NHS)
REGULATORY AGREEMENT, PROPERTY USE AND COVENANT
THIS REGULATORY AGREEMENT ("AGREEMENT") is entered into this 17th day
of September 2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO, a public body (hereinafter known as "Agency"), and Neighborhood
Housing Services of the Inland Empire, Inc., a California non-profit corporation (hereinafter
known as "Participant").
RECITALS
WHEREAS, Participant owns that certain real property located within the City and
described as: 1441-1443 Mt. View (APN 0146-163-4300), 1495 Mt. View & 1915-1917
Magnolia (APN 0146-163-02000), 1501-1503 Pershing (APN 0146-132-18000), and 1379
Arrowhead (APN 0146-162-22000) a legal description of which is attached as Exhibit "A"
hereto (the "Property"); and
WHEREAS, Participant desires to manage eleven (11) rental units (herein "Affordable
Units") on the Property for occupancy at HOME Affordable Rents to HOME Qualified Low-
Income Households. Participant intends to rehabilitate the Affordable Units utilizing the
proceeds of a deferred loan from the Agency's allocation of HOME funds in the amount of One
Hundred Forty Seven Thousand dollars ($147,000) (the "Loan").
WHEREAS, the Agency has agreed to extend the Agency Loan to the Participant
pursuant to the terms and conditions ofthat certain HOME Investment Partnership Agreement by
and between the Participant and the Agency (the "Loan Agreement").
WHEREAS, the Agency has agreed to make the Agency Loan to the Participant on the
condition that the Project be maintained and operated in accordance with the HOME regulations
and restrictions concerning affordability, operation, and maintenance of the Project, as specified
in this Agreement.
1
WHEREAS, a purpose of this Agreement is to ensure that Affordable Units which are
developed pursuant to the requirements hereunder shall be available to HOME eligible
Households for the term of fifteen (15) years and that rental units are to be maintained as
Affordable Units in accordance with the provisions of this Regulatory Agreement.
1. DEFINITIONS.
A. "Affordable Rent" shall mean the maximum rent allowed as established by the
Department of Housing and Urban Development HOME Program.
B. "Affordable Units" shall mean the units on the Property required to be available
to, occupied by, or held vacant for occupancy only to HOME Eligible Households and rented at
an Affordable Rent, as set forth in this Agreement.
C. "Agreement" shall mean this Regulatory Agreement.
D. "Agency" shall mean the Redevelopment Agency, City of San Bernardino, a
California municipal corporation.
E. "City Loan" shall mean the loan from HOME funds allocated to the Participant,
which loan is the subject of the Loan Agreement.
F. "HOME Program" shall mean the HOME Investment Partnership Act, 42 V.S.C.
~ 12701, et seq. as it now exists and, subject to the provisions of Section 2.2 herein, as may
hereafter be amended.
G. "HOME Regulations" shall mean the implementing regulations of the HOME
Program set forth at 24 CFR 92 as it now exists and, subject to the provisions of Section 2.2
herein, as may hereafter be amended.
H. "Loan Agreement" shall mean the Home Investment Partnership Agreement
entered into by and between the Participant and the Agency.
1. "Participant" shall mean the Neighborhood Housing Services of the Inland
Empire, Inc., a California non-profit corporation.
J. "Parties" shall mean the Agency and the Participant.
K. "Project" shall mean the Acquisition and Rehabilitation of units located at the
Project site, described in Exhibit A attached hereto and by this reference incorporated herein.
Other HOME eligible improvements at the Project site as defined herein which have received
prior written approval by the Agency Executive Director his/her designee in accordance with the
provisions set forth herein and in the Regulatory Agreement.
L. "Property" shall mean the real property located in San Bernardino, California, as
more particularly described in the Project site description attached hereto as Exhibit A and
2
incorporated herein by reference, together with the buildings, fixtures and other improvements
located thereon.
M. "HOME Eligible Households" shall mean those households identified by the
United States Department of Housing and Urban Development.
N. "Term" shall mean the period commencing on the date of recordation of this
Agreement and ending on the date which is fifteen (15) years following the date of execution of
this Agreement.
II. LAND USE REGULATIONS
A. Permitted Uses. The Property shall be used only for private multi-family
rental dwelling purposes and related amenity uses, but for no other purposes. Throughout the
Term, the Participant covenants and agrees to make available, restrict occupancy to, and rent
each of the dwelling units on the Property as Affordable Units at an Affordable Rent as set forth
in Section B. herein below. None of the dwelling units on the Property shall at any time be
utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel,
motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium
or rest home. The Participant shall not convert the Property to condominium ownership which
approval the Agency may grant, withhold or deny in its sole and absolute discretion.
B. Affordable Units. The Participant covenants and agrees for itself, its
successors, its assigns and every successor in interest to the Property or any part thereof, that
throughout the Term, the Participant, such successors and assigns, shall use, maintain and
operate the Property as specified in this Agreement. During the fifteen (15) year term, all uses
undertaken by the Participant pursuant to this Agreement shall conform to the HOME
Regulations and HOME Program and to all applicable provisions of San Bernardino Municipal
Code. In the event the Participant desires to change the affordable housing, maintenance or
operation requirements for the Property from the specific requirements set forth in this
Agreement in order to comply with a subsequently enacted amendment to the HOME Program or
the HOME Regulations, Participant shall notify Agency in writing of such proposed change to
implementing such change. In the event the Agency disapproves of such change and the
Participant's interpretation of the amendment related thereto, Agency shall notify the Participant
of its disapproval in writing and the parties shall seek clarification from the appropriate HUD
Field Office. Only ifHUD concurs with Participant's interpretation of the HOME Program and
HOME Regulations shall Participant be permitted to implement the proposed change.
1. Throughout the fifteen (15) year Term, the Participant shall devote the units
located on the Property as Affordable Units which shall be rented and occupied by or, if vacant
available for rental and occupancy by, HOME Eligible Households.
2. Prior to leasing an Affordable Unit, Participant shall verify the income eligibility
of the tenant applicant by obtaining verification of all household sources of income in order to
assure compliance with the rent and occupancy restrictions and monitoring requirements of this
3
Agreement. The Participant shall, upon request by the Agency, complete such Income
verification on Agency-approved forms provided by the Agency.
3. None of the dwelling units on the Property shall at any time be utilized on a
transient basis nor shall the Property or any portion thereof ever be used as a hotel, motel,
dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest
home. The Participant shall not convert the Property to condominium ownership during the
Term without the prior written approval of the Agency, which approval the Agency may grant,
withhold or deny in its sole and absolute discretion.
C. Determination of Affordable Rent. All Affordable Units shall be rented at
Affordable Rent in accordance with this Section C. and as required by the applicable sections of
the HOME Regulations.
1. Increases in Tenant Income. The units shall qualify as affordable housing as required
despite a temporary non-compliance with Section III. A., of this part, if the non-compliance is
caused by increases in the incomes of existing tenants and if actions satisfactory to HUD are
being taken to ensure that all vacancies are filled in accordance with this section until the non-
compliance is corrected. Tenants who no longer qualify as low-income families must pay as rent
lot less than 30 percent of the family's adjusted monthly income, as recertified ammally.
2. Adiustment of Affordable Rent. HUD may adjust the Affordable Rent established for
the Project under paragraph (I) of this section, only ifHUD finds that an adjustment is necessary
to support the continued financial viability of the Project and only by an amount that HUD
determines is necessary to maintain financial viability of the Project.
3. Market Rent. Where the income of a tenant household may increase after its initial
occupancy to a level at which such tenant no longer qualifies as "low-income", Participant may
thereafter increase the rent payable by such tenant to a fair market rent for the size of the
Affordable Unit which such tenant occupies; provided however, that at such time as such tenant
may no longer lawfully occupy the Affordable Unit the rent payable for such Affordable Unit
shall be reset to an Affordable Rent for the HOME Eligible Household who next occupies that
Affordable Unit.
D. Tenant Protections.
1. Rental AlITeement/Lease. The Participant shall execute or cause to be executed a
written rental agreement/lease in a form with each tenant household identifying by name all
permitted occupants, both adults and minors, occupying each Affordable Unit. The rental
agreement/lease between tenants occupying the Affordable Units and Participant must be for not
less than one year, unless by mutual agreement between the tenant and the Participant.
2. Prohibited Rental AlITeement/Lease Terms. The rental agreement/lease mav not
contain any ofthe following provisions:
4
a. Agreement to be sued. Agreement by the tenant to be sued, to admit guilty, or
to ajudgrnent in favor of the Participant in a lawsuit brought in connection with the lease;
b. Treatment of orooertv. Agreement by tenant that the Participant may take,
hold, or sell personal property of household members without notice to the tenant and a
court decision on the rights of the parties. This prohibition, however, does not apply to
an agreement by the tenant concerning disposition of personal property remaining in the
unit after the tenant has moved out of the unit. The Participant may dispose of this
personal property in accordance with state law;
c. Excusing Particioant from resoonsibilitv. Agreement by the tenant not to hold
Participant or Participant's agents legally responsible for any action or failure to act,
whether intentional or negligent;
d. Waiver of notice. Agreement of the tenant that the Participant may institute a
lawsuit without notice to the tenant;
e. Waiver of legal oroceedings. Agreement by the tenant or household members
without instituting a civil court proceeding in which the tenant has the opportunity to
present a defense, or before a court decision on the rights of the parties;
f. Waiver of a iury trial. Agreement by the tenant to waive any right to a trial by
Jury;
g. Waiver of right to aooeal court decision. Agreement by the tenant to waive the
tenant's right to appeal, or to otherwise challenge in court, a court decision in connection
with the lease; and
h. Tenant chargeable with cost of legal actions regardless of outcome.
Agreement by the tenant to pay attorneys' fees or other legal costs even ifthe tenant wins
in a court proceeding by the owner against the tenant. The tenant, however, may be
obligated to pay costs if the tenant loses.
3. Termination of Tenancv. The Participant may not terminate the tenancy or refuse to
renew the lease of a tenant of the Project except for serious or repeated violation of the terms and
conditions of the lease; for violation of applicable federal, state, or local law; or for other good
cause. Any termination, except for termination for non-payment of rent, or refusal to renew must
be preceded by not less than 30 days by the Participant's service upon the tenant of a written
notice specifying the grounds for the action.
4. Tenant Selection. Participant shall not refuse to rent a unit in the Project to a holder of
a Rental Voucher or a Rental Certificate or comparable document evidencing participation in the
Section 8 Program or other tenant-based assistance program. Participant must adopt written
tenant selection policies and criteria approved by the Agency that:
5
a. Are consistent with the purpose of providing housing for HOME Eligible
Households;
b. Are reasonably related to HOME Program eligibility and the applicants' ability
to perform the obligations ofthe lease;
c. Give reasonable consideration to the housing needs of families that would have
a federal preference under Section 960.211 of Title II of the Cranston-Gonzalez National
Affordable Housing Act of 1992; and
d. Provide for:
1. The selection of tenants from a written waiting list in the chronological
order of their application, insofar as is practicable; and
2. The prompt written notification to any rejected applicant of the grounds
for any rejection.
5. Tenant Certification. Participant shall require every tenant of the Property to certifY
that he or she will not participate in illegal or gang related activities.
E. Compliance with Use and Occupancv Laws. Participant agrees that for each lease, the
Participant shall comply with all applicable state and local laws, statutes, ordinances, rules and
regulations, which in any way restrict the use and occupancy and resale of the Property.
F. Nondiscrimination. All Units shall be available for occupancy on a continual basis to
members of the general public who are income eligible in accordance with Article II. hereof.
There shall be no discrimination against or segregation of any person or group of persons, on
account of race, color, creed, religion, sex, sexual orientation, marital status, national origin,
ancestry, or disability in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of any unit nor shall the Participant establish or permit any such practice or practices
of discrimination or segregation with reference to the election, location, subtenants, or vendees
of any unit or in connection with the employment of persons for the operation and management
of the Property. All deeds, rental agreements, leases or contracts made or entered into by the
Participant as to the Affordable Units or the Property or portion thereof, shall contain covenants
concerning discrimination as prescribed by the Loan Agreement.
Nothing in this Section II. F., is intended to require the Participant change the character,
design, use or operation of the Project form, or to require the Participant to obtain licenses or
permits other than those required for, a rental housing development for persons capable of
independent living.
III. OPERATION AND MANAGEMENT OF THE PROJECT
A. Compliance with Loan Agreement. The Participant shall comply with all the terms
and provisions of the Loan Agreement between the parties.
6
B. Taxes and Assessments. The Participant 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 Property; provided,
however, that the Participant shall have the right to contest in good faith, any such taxes,
assessments, or charges. In the event the Participant exercises its right to contest any tax,
assessment, or charge against it" Participant, 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.
C. Operation and Management. Participant shall manage the maintenance and operation
of the Property, or shall contract with a property management company of well established
character and reputation reasonably acceptable to the Agency for the maintenance and operation
of the Property, and such approved by the Agency shall not be unreasonably withheld,
conditional or delayed. In the event the Participant desires to designate a replacement property
manager, Participant shall also give written notice thereof to the Agency and such approval by
the Agency shall not be unreasonably withheld, conditional or denied. The Participant shall
remain liable for the management, maintenance and operation of the Property in accordance with
the requirements herein.
D. Management Plan and Securitv. Participant shall prepare and submit a Management
Plan for the Property which will address issues of tenant responsibilities, owner responsibilities,
property maintenance and security concerns therein. Such Management Plan shall be submitted
to the Agency at the Office of the Redevelopment Agency. Ifmore information is required, then
Participant agrees to provide such information.
Participant agrees to submit a Starns Report to the Agency on the first day of each quarter
of each year for the term of this Regulatory Agreement. Such Starns Report shall be completed
in the form which is attached hereto as Exhibit B.
E. Record Keeping. Throughout the fifteen (15) years of the Term, Participant shall
comply with all applicable record keeping and monitoring requirements set forth in Section
92.508 of the HOME Regulations and as they may be amended and shall annually complete and
submit to Agency a Certification of Continuing Program compliance in the form attached as
Exhibit C and provided to Participant by Agency.
Representatives of the Agency shall be entitled to enter the Property, upon at least
twenty-four (24) hours notice, to monitor compliance with this agreement, to inspect the records
of the Project with respect to the Affordable Units, and to conduct an independent audit of such
records. The Participant agrees to cooperate with the Agency in making the Property available
for such inspection. If for any reason the Agency is unable to obtain the Participant's consent to
such an inspection, the Participant understands and agrees that the Agency may obtain at
Participant's expense an administrative inspection warrant or other appropriate legal order to
obtain access to and search the Property. Participant agrees to maintain records in a business-
7
like manner and make such records available to the Agency upon twenty-four (24) hours notice.
Unless the Agency otherwise approves, such records shall be maintained throughout the Term.
lV. OBLIGATION TO MAINTAIN, REPAIR AND REBUILD
A. Maintenance bv Participant. The Participant shall, at its sole cost and expense, and as
funds are available, maintain and repair the Property keeping the same in good condition and
making all repairs as they may be required by this Agreement and by all applicable Municipal
Code and Uniform Code provisions.
B. Maintenance and Replacement. The Participant shall, as funds are available, maintain
the Property in good repair and working order, and in a safe, decent and sanitary condition,
including the walkways, driveways and landscaping, and from time to time make all necessary
and proper repairs, renewals and replacements in order to keep the Property in a safe, decent and
sanitary condition. Participant shall manage and maintain the Project in accordance with all
applicable housing quality standards and local code requirements, concerning marketing,
operation, maintenance, repair, security, rental policy and method of selection of tenants.
C. Rental Housing Program. To the extent that the City of San Bernardino offers such a
program (or successor program) to owners of residential rental property in the City, Participant
shall participate in the City of San Bernardino Crime Free Rental Housing Program, and
Participant shall provide the Agency upon its request, of suitable evidence that the Participant,
and its management and operations employees or agents responsible for the Property, have
participated in such program.
D. Interior Maintenance. Participant shall maintain the interior of buildings, including
carpet, drapes and paint, in clean and habitable condition.
E. Exterior Building Maintenance. All exterior, painted surfaces shall be maintained at
all times in a clean and presentable manner, free from chipping, cracking and defacing marks.
All graffiti and defacement of any type, including marks, words and pictures must be removed
and any necessary painting or repair completed within seventy-two (72) hours of their creation or
within seventy-two (72) hours after notice to Participant.
F. Landscaping. All front set back areas that are not buildings, driveways or walkways
shall be adequately and appropriately landscaped in accordance with minimum standards
established by the Agency and shall be maintained in good condition in accordance with the
minimum standards established from time to time by the Agency.
G. Damage and Destruction Affecting Lots- Participant's Dutv to Rebuild. IF all or any
portion of the Property and the improvements thereon is damaged or destroyed by fire or other
casualty, it shall be the duty of the Participant to rebuild, repair or construct said portion of the
Property and/or the improvements in a timely manner which will restore it to San Bernardino
Municipal or Building Code compliance condition as approved by the Agency.
8
In furtherance of the requirements of this Section IV. B., Participant shall keep the
improvements on the Property insured by carriers at all times satisfactory to Agency against loss
by fire, rent loss and such other hazards, casualties, liabilities and contingencies as included
within an all risk extended coverage of the improvements. In the event of loss, Participant shall
give prompt notice to the insurance carrier and the Agency.
H. Time Limitation. Upon damage to the Property or the improvements thereon, the
Participant shall be obligated to proceed with all due diligence hereunder and commence
reconstruction within two (2) months after the damage occurs and complete reconstruction
within six (6) months after the damage occurs, or if appropriate to demolish and vacate the
Property within two (2) months, unless prevented by causes beyond its reasonable control.
V. MISCELLANEOUS PROJECT REQUIREMENTS
A. Equal Opportunitv. As set forth in section 92.350 of the HOME Regulations, no
person shall be excluded from participation in, be denied the benefits of or be subjected to
discrimination under any program or activity funded in whole or in part with HOME funds.
B. Affirmative Marketing. As required by Section 92.351 of the HOME Regulations,
Participant must adopt affirmative marketing procedures and requirements. These must include:
1. Methods for informing the public;
2. Requirements and practices that Participant must adhere to in order to
carry out the City of San Bernardino's affirmative marketing procedures and
requirements;
3. Procedures used by Participant to inform and solicit applications from
persons in the housing market area who are not likely to apply without special outreach;
4. Records that will be kept for a period of five (5) years after the expiration
of the affordability period describing actions taken by Participant to affirmatively market
units and records to assess the results of these actions; and
5. A description of how the Participant will assess the success of affirmative
marketing actions and what corrective actions will be taken where affirmative marketing
requirements are not met.
C. Displacement, Relocation and Acquisition. The Participant must ensure that it has
taken all reasonable steps to minimize the displacement of persons as a result of this Project
assisted with HOME funds.
D. Lead-Based Paint. It is understood that the Project is subject to 24 CFR, Part 35.
This requirement shall be met as required by that section and any cost of rehabilitation on the
Property shall be disclosed to the Agency as such should testing and abatement be undertaken.
9
E. Conflict of Interest. Participant will hereby comply with all requirements set forth
regarding conflict of interest provisions as they apply in Section 92.356 of the HOME
Regulations.
F. Debarment and Suspension. As required in Section 92.357 of the HOME
Regulations, Participant will comply with all debarment and suspension certifications.
G. Flood Insurance. Under the Flood Disaster Protection Act of 1973, HOME funds
may not be used with respect to the acquisition or rehabilitation of a project located in an area
identified by the Federal Emergency Management Agency (FEMA) as having special flood
hazards, unless:
1. The community in which the area is situated is participating in the National
Flood Insurance Program, or less than a year has passed since FEMA notification
regarding such hazards; and
2. Flood insurance is obtained as a condition of approval ofthe commitment.
VII. ENFORCEMENT AND REMEDIES
A. Remedies. In the event of default or breach of any of the terms or conditions of this
Agreement by Participant, its heirs, executors, administrators or assigns, Agency may pursue the
remedy thereof by any and all means of enforcement, both in equity and at law, as provided by
the laws of the State of California, including, but not limited to, injunctive relief and/or specific
performance.
B. Rights of the Agencv. The Agency has the right to enforce all of the provisions of
this Agreement. This Agreement does not in any way infringe on the right or duties of the
Agency to enforce any of the provisions of the Municipal Code including, but not limited to, the
abatement of dangerous buildings. In addition to the general rights of enforcement, the Agency
shall have the right, through its agents and employees, to enter upon any part of the Property for
the purpose of enforcing the California Vehicle Code, and the ordinances and other regulations
of the City, and for maintenance and/or repair of any or all publicly owned utilities.
C. Nuisance. The result of every act or omission whereby any of the covenants
contained in this Agreement are violated in whole or in part is hereby declared to be and
constitutes a nuisance, and every remedy allowable at law or equity, against a nuisance, either
public or private, shall be applicable against every result and may be exercised by any owner or
its successors in interest, without derogation ofthe Agency's rights under law.
D. Right of Entrv. The Agency has the right of entry at reasonable hours and upon and
after reasonable attempts to contact Participant or Operator, to effect emergency repairs or
maintenance which the Participant or Owner has failed to perform. Subsequent to sixty (60)
days written notice to the Participant or owner specifically outlining the non-compliance the
Agency shall have the right of entry at reasonable hours to enforce compliance with this
Agreement which the Participant or Operator has failed to perform.
10
E. Costs of Repair. The costs borne by the Agency of any such repairs or maintenance
emergency and/or non-emergency, shall become a charge for which Participant shall be
responsible; and may, if unpaid, be assessed as a lien against the Property.
F. Cumulative Remedies. The remedies herein provided for breach of the covenants
contained in this Agreement shall be deemed cumulative, and none of such remedies shall be
deemed exclusive.
G. Failure to Enforce. The failure to enforce any of the covenants contained in this
Agreement shall not constitute a waiver ofthe right to enforce the same thereafter.
VIII. HOLD HARMLESS
Participant agrees to defend and to hold Agency, and its officer, agents, employees,
representatives, elected and appointed boards and officials harmless from liability for damage or
claims for any type of damage including, but not limited to, personal injury and claims for
property damage, which may arise from the activities of Participant or those of Participant's
contractors, subcontractors, agents, employees or other persons acting on Participant's behalf and
which relate to the Proj ect. Participant agrees to and shall defend Agency, and its officers,
agents, employees, representatives, elected and appointed boards and officials from any action
for damages caused or alleged to have been caused by reason of Participant's activities in
connection with the Project.
IX. ASSIGNMENT OF AGREEMENT
This Agreement shall be binding upon Participant, its executors, administrators and
assigns and all persons claiming under or through Participant. Wherever this Agreement
employs the term "Participant", it shall be deemed to include Participant, its executors,
administrators and assigns and all persons claiming under or through Participant. Participant
shall not voluntarily assign any of its rights or obligations under this Agreement without the prior
written consent of the Agency and any purported assignment made without said consent shall be
null and void for all purposes.
X. RECORDATION
Participant agrees that this Agreement and any amendment or cancellation hereof shall be
recorded in the official records of San Bernardino County by Participant within ten (10) days
after the effective date of this Agreement and within ten (10) days after any amendment or
cancellation hereof. Participant agrees to provide Agency with two copies of the recorded
Agreement within five (5) days of the recording date.
11
XI. NOTICE
Written notice, demands and communications between Agency and Participant shall be
deemed sufficient if dispatched by first class mail, postage prepaid, to the principal offices of the
Agency and Participant, the addresses of which are hereinafter set forth. Such written notices,
demands and communications may be sent in the manner prescribed to each other's addresses as
either party may, from time to time, designate by mail, or the same may be deliver in person to
representatives of either party upon such premises. Said addresses are as follows:
If to Agency:
Redevelopment Agency
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
If to Participant:
Executive Director
Neighborhood Housing Services
1390 North "D" Street
San Bernardino, California 92405
Notices herein shall be deemed given as of the date of personal service or three (3)
consecutive calendar days after deposit of the same in the custody of the United States Postal
Service.
XII. WAIVER
Failure by a party to insist upon the strict performance of any of the provisions of this
Agreement by other party or the failure by the party to exercise its rights under or upon a default
by the other party herein shall not constitute a waiver or such party's right to demand strict
compliance from such other party in the future.
XIII. SEVERABILITY
If anyone or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provisions shall be deemed
severable from the remaining provisions contained in this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision(s) had never been contained
herein.
XIV. CAPTION AND PRONOUNS
The captions and headings of the various sections of this Agreement are for convenience
only, and are not to be construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular, and masculine, feminine and neuter shall be freely
interchangeable.
12
XV. ATTORNEYS' FEES
In any action to interpret or enforce any provisions of this Agreement, the prevailing
party shall be entitled to its costs and reasonable attorneys' fees. For the purposes hereof,
"reasonable attorneys' fees" means and includes the salaries and benefits of lawyers employed
by the Office of City Attorney of the City of San Bernardino who provide legal services to the
Agency in connection with any such enforcement proceedings.
XVI. MODIFICATION OF AGREEMENT
This Agreement may be modified or amended by mutual consent of all of the parties,
provided that all amendments are in writing.
XVII. SOLE AND ONLY AGREEMENT
This Agreement, including the documents referenced herein, contains the sole and entire
agreement and understanding of the parties with respect to the subject matter hereof.
No representations, oral or otherwise, express or implied, other than those contained
herein, have been made by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
PARTICIPANT
Neighborhood Housing Services
Ofthe Inland Empire, Inc.
a California non-profit Corporation
AGENCY
Redevelopment Agency ofthe
City of San Bernardino
By:
Title:
By:
Executive Director
By:
Title:
APPROVED AS TO FORM:
Agency Counsel
P:\Fonns\Housing Fonns\HOME Forms\NHS Regulatory Agreement.doc
13
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
The North 49.6 feet of the South 297.60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof.
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,
in the office of the County Recorder of said County.
~1501 -1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
File No,: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181.15 feet of Lot 3,
Block 33, Rancho San Bernardino, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 7, page(s)
2, of Maps, in the office of the County Recorder of said county.
Page 3 of 6
. ,
. .
,
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
,
~
CLTA PrelimInary Report Form (Rev 1/1/95)
TQ20001CA (2/99)
Page 3 or 6
"
.
i
fil. No.: 60271161
EXHIBIT "A"
,
Lot 10, Black "8" of Ede.en Tract, in the City of SAN BeRNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 5, page(s)
35 of Maps, in the office ot the Coupty Recorder of said County.
I.
I
I
I
I
I
I
I.
I
I
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I
I
,
Page 3 0' 6
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20009101600244
EXHIBIT "A"
LOT II, TRACT NO. 1785, TN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 26 OF MAPS, PAGE 19, IN THE OFFICE OF' THE COUNTY RECORDER OF',
SAID COUNTY.
~
Order: .000190158
Description: 2001.187745
Pltge 2 of 3
Comment: CHRIS
EXHIBIT B
STATUS REPORT
EXHIBIT "B"
QUARTERLY STATUS REPORT
Property Bedroom/Bathroom HOUSEHOLD Unit Occu Died
Address/Unit Size Size Ethnicity Income Rent Yes No
Number
Total Number of Units occupied:
Vacant:
Total Number of low income unit(s) designated:
Number of low income units occupied:
Vacant:
Replacement units designated for the Quarter:
The above information is full, true and complete to the best of my knowledge.
Date:
Signature:
NHS Representative
EXHIBIT C
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
EXHIBIT "C"
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Date:
, 2001
The following information with respect to the eleven (11) units acquisition and
rehabilitation (the "Project"), is being provided by Neighborhood Housing Services of the
Inland Empire, Inc. (the "Borrower") to the Redevelopment Agency of the City of San
Bernardino (the "Agency") pursuant to that certain Regulatory Agreement and
Declaration of Restrictive Covenants dated as of , 2001 (the
"Regulatory Agreement"), with respect to the Project:
(A) The total number of residential units which are completed and available for
occupancy is . The total number of such units occupied is
(B) The following residential units (identified by unit number) have been
designated for occupancy by "Qualified Tenants", as such term is defined in the
Regulatory Agreement (for a total of ):
(C) The following residential units which are included in (B) above, have been
redesignated as units for Qualified Tenants since , 2001, the date on
which the last "Certificate of Continuing Program Compliance" was filed with the Issuer
by the Borrower:
Unit
Number/Address
Previous Designation
of Float Units (if anv)
Replacing Float
Units Number
C-l
(D) The following residential units are considered to be occupied by Qualified
Tenants based on the information setforth below:
Number of Unit Size Date Unit Name of Number of Ethnicity Total Initial
Units/Address Became Tenant Persons Adjusted Occupancy
Available Residing in Gross Dale
Unit Income
(E) The Borrower has obtained a "Certification of Tenant Eligibility," in the
form provided as Exhibit "C" to the Regulatory Agreement, from each Tenant named in
(0) above, and each such Certification is being maintained by the Borrower in its
records with respect to the Project. Attached hereto is the most recent "Certification of
Tenant Eligibility" for each Tenant named in (0) above who signed such a Certification
since , 2001, the date on which the last "Certificate of Continuing
Program Compliance" was filed with the Agency by the Borrower.
(F) In renting the residential units in the Project, the Borrower has not given
preference to any particular group or class of persons (except for persons who qualify
as Qualified Tenants); and none of the units listed in (0) above have been rented for
occupancy entirely by students, no one of which is entitled to file a joint return for
federal income tax purposes. All of the residential units in the Project have been rented
pursuant to a written lease, and the term of each lease is at least
months.
(G) The information provided in this "Certificate of Continuing Program
Compliance" is accurate and complete, and no matters have come to the attention of
the Borrower which would indicate that any of the information provided herein, or in any
"Certification of Tenant Eligibility" obtained from the Tenants named herein, is
inaccurate or incomplete in any respect.
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IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the
Borrower, on , 2001.
NEIGHBORHOOD HOUSING SERVICES
OF THE INLAND EMPIRE, INC.
By:
Executive Director
C-4
EXHIBIT "c"
Project Description/Scope of Work
C:\windows\TEMP\NHS CHDO Loan Agreement.doc
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Neighborhood Housing Services of the Inland Empire
MultiFamily Rennovation and Affordable Rental Program
Purchase ProForma
August 1. 2001
Number of Dwelling Units
Building Square Footage
11
PERMANENT LOAN
Loan Amount
Interest Rate
Term (years)
Monthly PMT
327,503
9_00%
30
($2,635.16)
Property Address:
City:
Mt.View/ArrowheadlPershing
San Bernardino
Descriction:
TOTAL S PER SF %OF PURCHASE ANALYSIS
COST $ PER UNIT SLDG TOTAL
1. LAND COSTS: (Credit for matenals alreadv purchased)
Purchase Price 129,000 11,727 #DIVlOl
Transfer Tax 0 0 #DIVlOl
TOTAL LAND COSTS 129.000 11.727 #OIVIO! 26%
2. FEESJPERMITS & STUDIES:
Building Fees and Permits 18,000 1,636 #DIVIOI
Architectural and Enoineerino Fees 5.000 455 #OIVIO!
TOTAL FcESIPERMITS & STUDIES 23.000 2,091 #DJVIOI 5%
3. DIRECT CONSTRUCTION COSTS:
Carpet and Vinyl 0 #DIVIQ!
Replace windOYlS 0 #DIVlOl
Replace roof two bUilding and porch 0 #DJVIOI
HVAC & Heaters 0 #D1VIO!
Plumbing 0 #D1VIO!
Carpentry Work InVExt 0 #DIVIOI
Electrical 0 #DIVIO!
Appliance 0 #DIVlOl
Interior Paint 0 #DIVIOI
Exterior 0 #DIVIO!
Light Fixtures 0 #DIVIOI
Finish 0 #DIVlOl
Landscaping 0 #DIVIO!
Play Area 0 #DIVIO!
Laundry & Office 0 #DIVIO!
Front Entry, Fence & Gate 0 #DIV/C!
Continoencv 286.440 26.040 #DIVIOI
TOTAL DIRECT CONSTRUCTION COSTS 286.440 26,040 #DIV/OI 59%
4. INDIRECT CONSTRUCTION COSTS
Developer's Fee 7,740 704 #DIVIO!
Development Consultant 5,160 469 #DIVlOl
Construction Manager 10,000 909 #DIVlOl
Builders RisklUability Insurance 1,000 91 #DIVIOI
Real Estate Taxes/Insurance 0 0 #DIVIOI
Legal 750 68 #DIVIOI
Accountino 1,000 91 #DIVIO!
TOTAL INDIRECT CONSTRUCTION COSTS 25.650 2.332 #OIVIO! 5%
S, RENT-UP COSTS
Rental Mat1<eting 3,500 3'8 #DIVIOI --
Ooeratino Reserve 2.SOO 227 #DIVIO! //
TOTAL RENT-UP COSTS 6.000 545 #DIVIO! 1%
//
S, FINANCING COSTS /
Bank Appraisal 1,200 '09 #QIVIOI /
Construction Interest 12,000 1.091 OOIVIllI
Permanent Loan Fees/Closing Costs 6,000 545 OOIVIllI
Title and Recordino fConstlPerm\ 0 0 #IOIVIOI
TOTAL FINANCING COSTS 19.200 1,745 #OIVIO! .%
TOTAL DEVELOPMENT COSTS 48',2'0 44,481 1D1V101 100%
Less NH$IE Down Payment 15,000 1,364 #DIVJOI 3%
Less ROA HOME Grant (30% ofTotat DevCosts) 146.787 13,344 #DIVIllI 30% 01 PURCHASE PRICE OFFER
NET DEVElOPMENT COSTS 327 503 29 770 IDIVIOl 67% 01 OFFER PER UNI
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Neighborhood Housing Services of the Inland Empire
MultiFamily Rennovation and Affordable Rental Program
Operating Expenses
August 1, 2001
Property Address Mt. View/Arrowhead/Pershing
City San Bernardino
Annual Per UnitlYr. Monthly Per Unit/Mo. % Total
MANAGEMENT
Management $4,400 $400 $367 $33
TOTAL MANAGEMENT $4,400 $400 $367 $33 23%
ADMINISTRATION
Marketing $1,760 $160 $147 $13
Accounting $1,467 $133 $122 $11
Legal $1,000 $91 $83 $8
Office Expenses $750 $68 $63 $6
TOTAL ADMINISTRATION $4,977 $452 $415 $38 26%
MAINTENANCE
Repairs $1,760 $160 $147 $13
Landscaping $1,440 $131 $120 $11
Pest Control $1,440 $131 $120 $11
TOTAL MAINTENANCE $4,640 $422 $387 $35 24%
UTILITIES NOT PAID BY TENANTS
Trash Removal $0 $0 $0 $0
Electricity $0 $0 $0 $0
Water/Sewer $3,960 $360 $330 $30
Gas $0 $0 $0 $0
TOTAL UTILITIES $3,960 $360 $330 $30 21%
INSURANCE
Property & Liability Insurance $1,000 $91 $83 $8
TOTAL INSURANCE $1,000 $91 $83 $8 5%
TAXES
Real Estate Taxes $0 $0 $0 $0
TOTAL TAXES $0 $0 $0 $0 0%
TOTAL OPERATING EXPENSES $18,977 $1,725 $1,581 $144 100%
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EXHIBIT "D"
Schedule of Performance
C:\windows\TEMP\NHS Cl-IDO Loan Agreement.doc
Schedule of Renovation:
1501 Pershing Ave.
1441-1443 N. Mountain View
1495 N. Mountain View/195-197 Magnolia
1397 N. Arrowhead
Note: The projected start date is within 10 days after the notice to proceed.
Rehabilitation work will occur concurrently on all four properties. City Plan Check
may be necessary for the garage conversion on both 197 Magnolia and 1397 N.
Arrowhead. This may affect the projected scheduling time line.
PHASE ONE:
Pull permits, demolition, concrete work, property clean-up, trash removal,
fencing, irrigation, and landscaping.
Estimated completion: 2 weeks from start date
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PHASE TWO:
Roofing, replacement windows, exterior door replacement, exterior
improvements.
Estimated completion: 5 weeks from start date
PHASE THREE:
Electrical, plumbing, framing of walls (if needed), kitchen and bath remodel, wall
repair, interior paint, exterior paint or color coat, flooring.
Estimated completion: 13 weeks from start date
FINAL PHASE:
Corrections, pick-up work (punch list), final clean up, final inspection.
Estimated compJetion:14 Y2 weeks from start date
EXHIBIT "E"
Form of Promissory Note
C:\windows\TEMP\NHS CHDO Loan Agreement.doc
Neighborhood Housing Services (NHS)
1390 North "D" Street
San Bernardino, California 92405
2001-HOME-CHDO
PROMISSORY NOTE
PAYABLE TO A PUBLIC AGENCY
Borrower:
Lender:
Neighborhood Housing Services
(NHS)
Redevelopment Agency of
the City of San Bernardino
201 North "E" Street
Suite 301
San Bernardino, California 92401
Principal Amount: $147,000
For Note secured by Parcel No.1:
$49,000,
or -
For Note secured by Parcel No.2:
$49,000,
- or-
For Note secured by Parcel No.3:
$49,000
Date of Promissory Note:
,2001
Interest Rate: N/A
[No interest shall accrue, except upon
default]
[TO BE CONFIRMED BY AGENCY AT
TIME OF INITIAL ADVANCE]
Maturity Date of Promissory Note:
-,2016
[TO BE CONFIRMED BY AGENCY AT
TIME OF INITIAL ADVANCE]
PROMISE TO PAY. Neighborhood Housing Services of the Inland Empire, Inc., a California
non-profit corporation, (hereafter the "Borrower") promises to pay to the Redevelopment
Agency of the City of San Bernardino (the "Agency"), or order, in lawful money of the United
I
States of America, the principal amount of One Hundred Forty Seven Thousand Dollars
($147,000), or so much as may be outstanding under this Promissory Note.
INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the
Agency under the terms 2000 HOME Community Housing Development Organization (CHDO)
multi-family Loan Agreement dated as of October 1, 2001, (the "HOME Loan Agreement") by
and among the Borrower and the Agency. A copy of the Loan Agreement is on file with the
Agency Secretary as a public record of the Agency.
PAYMENT. The outstanding principal balance of this Promissory Note shall be payable on the
fifteenth (15th) anniversary following the date of this Promissory Note (the "Maturity Date"),
subject to the provisions of the next paragraph:
Provided that if the Borrower has timely submitted to the Agency the "tenant eligibility
certificates" as required under the HOME Loan Agreement for each annual reporting period and
that Borrower is not otherwise in default under the HOME Loan Agreement, the Agency shall
credit to the account of the Borrower as a prepayment of this Promissory Note the sum of
$3,266.67 [e.g. 1I15th of the original principal balance] as of each anniversary date following the
date of this Promissory Note next following the Agency's receipt of such tenant eligibility
certificates.
INTEREST. Provided that no default has occurred, no interest shall occur or be payable to the
Agency on this Promissory Note. In the event that a default has occurred and has not been cured
and in addition to any other remedy which the Agency may seek, then a default rate of interest
shall occur on the then outstanding prepaid balance of this Promissory Note at a rate per annum
of ten percent (10%) payable to the Agency, commencing on the date of such default until such
default is cured and the default interest amount is paid to the Agency.
PREPAYMENT. Borrower may pay without penalty all or prorated portion of the amount
owed under this Promissory Note earlier than it is due.
SPECIAL EVENT OF ACCELERATION. The outstanding principal balance of this
Promissory Note, is subject to acceleration prior to the Maturity Date upon the occurrence of any
of the following each of which is referred to as a "special event of acceleration":
(a) the Borrower sells or transfers its interest to any person other than a permitted Successor-
In-Interest as set forth in the HOME Loan Agreement;
(b) the Borrower ceases to utilize the property for its original intent (rental purpose); or
2
(c) the Borrower may refinance the purchase money mortgage loan provided to the Borrower
by the First Mortgage Lender of even date herewith without the prior written approval of
the Agency.
DEF AUL T. Borrower will be in default if any of the following happens:
(a) Borrower breaks any promise Borrower made to the Agency in the HOME Loan
Agreement, or Borrower fails to comply with or to perform when due any other term,
obligation, covenant, or condition contained in this Promissory Note or any agreement
related to this Promissory Note.
(b) Borrower defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay this
Promissory Note or the ability of Borrower to perform its other obligations under this
Promissory Note or the Deed of Trust.
(c) Any representation or statement made or furnished to the Agency by Borrower or on
Borrower's behalf under the HOME Loan Agreement is false or misleading in any
material respect either now or at the time made or furnished.
(d) Any creditor tries to take any of Borrower's property on or in which the Agency has a
lien or security interest.
(e) A material adverse charge occurs in Borrower's financial condition, or the Agency
believes the prospect of performance of the Borrower's obligations under the HOME
Loan Agreement is impaired.
If any default (other than a default described in (a)or (d), above) is curable, and if Borrower has
not been given a notice of a default of the same provision of this Promissory Note within the
preceding twelve (12) months, such a default may be cured (and in such event no default will be
deemed to have occurred) if Borrower, after receiving written notice from the Agency
demanding cure of such default:
(i) cures the default within ten (10) days; or
(ii) ifthe cure requires more than ten (10) days, immediately initiates steps which the Agency
deems in its sole discretion to be sufficient to cure the default, and thereafter Borrower
continues and
3
ASSIGNMENT AND ASSUMPTION OF THIS PROMISSORY NOTE BY A PERMITTED
SUCCESSOR-IN-INTEREST APPROVED BY THE HOLDER. The Borrower may assign its
obligation to pay the Agency the principal of this Promissory Note to a permitted Successor-In-
Interest approved in writing by the Agency, and such approval shall not be unreasonably
withheld. The words "Successor-In-Interest" mean a successor at any time prior to the Maturity
Date by purchase, assignment, transfer or otherwise. The Successor-In-Interest shall be a
successor that satisfy the requirements of the HOME Loan Agreement and the Agency Deed of
Trust.
RIGHTS OF THE HOLDER. Upon default the Agency may exercise any of its rights provided
under the HOME Loan Agreement, as this term is defined herein including without limitation,
the declaration by the Holder that the entire unpaid principal balance on this Promissory Note is
immediately due, without notice, and then Borrower will pay that amount. The Agency may hire
or pay someone else to help collect this Promissory Note if the Borrower does not pay. The
Borrower also will pay the Holder that amount. This includes, subject to any limits under
applicable law, the Agency's reasonable attorneys' fees and the legal expenses of the Holder
whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. The Borrower also will pay any
court costs, in addition to all other sums provided by law. This Promissory Note has been
delivered to the Holder and accepted by the Holder in the State of California. If there is a lawsuit
arising under this Promissory Note, the Superior Court of San Bernardino County, the State of
California, shall have jurisdiction of such lawsuit. This Promissory Note shall be governed by
and construed in accordance with the laws of the State of California.
COLLATERAL. The Maker acknowledges this Promissory Note is secured by a deed of
trust and assignment of rents of even date herewith. Such Agency Deed of Trust affects the
property as generally described as [INSERT APPROPRIATE ADDRESS/REFERENCE], San
Bernardino, California. The Agency Deed of Trust contains the following due on sale/due on
special event of acceleration provision:
"THE AGENCY MAY, AT ITS OPTION, DECLARE IMMEDIATELY DUE AND PAYABLE
ALL SUMS SECURED BY THIS DEED OF TRUST UPON THE OCCURRENCE OF A
SPECIAL EVENT OF ACCELERATION, AS THIS TERM IS DEFINED BELOW.
A "special event of acceleration" shall occur when there is a sale, transfer, refinancing of the
purchase money mortgage loan of the First Mortgage Lender except as provided in General
Provisions, below, or conveyance of any right, title or interest in the Property to any person other
than a permitted Successor-In-Interest, who has been approved in writing by the Lender as set
forth above in the section entitled "Permitted Successor-In-Interest," whether such sale,
refinancing or transfer is legal, beneficial, or equitable, whether voluntary or involuntary,
4
whether by sale, deed, installment sale contract, land contract, lease option contract, or by sale,
assignment, or transfer of any beneficial interest in the Property to any land trust."
GENERAL PROVISIONS. The Holder may delay or forego enforcing any of its rights or
remedies under this Promissory Note without losing them. The Maker and any other person who
signs, guarantees or endorses the Promissory Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly
stated in writing, no party who signs this Promissory Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that
the Holder may renew or extend (repeatedly and for any length of time) this Promissory Note, or
release any party, or guarantor or collateral; or impair, fail to realize upon or perfect its security
interest in the collateral; and take any other action deemed necessary by the Holder in its sole
discretion without the consent of or notice to anyone. All such parties also agree that the Holder
may modify this Promissory Note and/or the Loan Agreement in writing without the consent of
or notice to anyone other than the party with whom the modification is made. The Holder may
assign its interest in this Promissory Note and the Deed of Trust to a third party at any time.
The Borrower acknowledges this Promissory Note is secured by a Deed of Trust of even date
herewith. The Deed of Trust affects certain real property described in the Loan Agreement.
PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND
UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF
THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY HEREOF.
BORROWER
Neighborhood Housing Services of the Inland Empire, Inc.,
a California non-profit corporation
By:
Title:
By:
Title:
5
EXHIBIT "F"
Form of Deed of Trust
C:\windows\TEMP\NHS CHDO Loan Agreement.doc
RECORDATION REQUESTED BY:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street
Third Floor
San Bernardino, California 92401-1507
Attn: Executive Director
Space Above This Line is
For Recorder's Use Only
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
Neighborhood Housing Service
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES AND RENTS AND FIXTURE FILING (the "Deed of Trust") is dated
2001, among Neighborhood Housing Service (the
"Trustor"), whose address is 1390 North "D" Street, San Bernardino,
California 92405; the Redevelopment Agency of the City of San
Bernardino, a body corporate and politic, whose address is 201 North
"E" Street, Third Floor, San Bernardino, California 92401-1507 (the
"Lender" or the "Beneficiary"); and First American Title Insurance
Company (the "Trustee").
1.0 CONVEYANCE AND GRANT. For valuable consideration, Trustor
irrevocably grants, transfers and assigns to Trustee in trust,
with power of sale, for the benefit of Lender as Beneficiary,
all of Trustor's right, title, and interest in and to that
certain real property described (APN 0146-163-43000, APN 0146-
163-02000, APN 0146-162-22000 and APN 0146-132-18000) in
Exhibit "A" attached hereto and incorporated herein by this
reference (the "Property"), together with all existing or
subsequently erected or affixed buildings, improvements and
fixtures; all easements, rights of way, and appurtenances and
all other rights, royalties, and profits relating to the real
property, including and without limitation all minerals, oil,
gas, geothermal and similar matters located in San Bernardino
County, State of California (the "Mortgaged Property") .
882001:23708.1
1
Trustor presently assigns to the Lender all of Trustor's right.
title and interest in and to all present and future leases of
the Mortgaged Property and all Rents from the Mortgaged
Property. In addition, Trustor grants Lender a Uniform
Commercial Code security interest in the Rents and the Personal
Property as set forth herein.
2.0 DEFINITIONS. The following words shall have the following
meanings when used in this Deed of Trust. Terms not otherwise
defined in this Deed of Trust shall have the meanings
attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money
of the United States of America:
Beneficiary. The word "Beneficiary" means the Redevelopment
Agency of the City of San Bernardino, a body corporate and
politic, its successors and assigns.
Deed of Trust. The words "Deed of Trust" mean this Deed of
Trust and Assignment of Leases and Rents and Fixture Filing
among Trustor, Lender, and Trustee, and includes without
limitation all assignment and security interest provisions
relating to the Personal Property and Rents.
Improvements. The word "Improvements" means and includes all
existing improvements on the Property and all improvements to
be constructed on the Property.
Indebtedness. The word "Indebtedness" means all principal and,
if applicable, interest payable under the Promissory Note and
any amounts expended or advanced by Lender to discharge
obligations of Trustor or expenses incurred by Trustee or
Lender to enforce obligations of Trustor under the Promissory
Note and this Deed of Trust, together with interest on such
amounts. This Deed of Trust secures, in addition to the
amounts specified in the Promissory Note, any future advances,
together with all interest thereon, that may be made by the
Lender pursuant to the Loan Agreement and/or the Related
Documents so long as Trustor complies with all the terms and
conditions of the Promissory Note, Loan Agreement and/or the
Related Documents.
Lender. The word "Lender" means the Redevelopment Agency of
the City of San Bernardino, its successors and assigns.
802001:23708.1
2
Loan Agreement. The words "Loan Agreement" mean that
certain 2000 HOME Loan Agreement, dated as of , ~ ani
between the Trustor and the Lender which provides for the loan
to the Trustor which is secured by this Deed of Trust.
Mortgaged Property. The
refer to the Property,
Rents, together with:
words "Mortgaged Property mean and
Improvements, Personal Property and
all right, title, and interest (including any claim or
demand or demand in law or equity) that Trustor now has or
may later acquire in or to such Mortgaged Property; all
easements, rights, privileges, tenements, hereditaments,
and appurtenances belonging or in any way appertaining to
the Mortgaged Property; all of the estate, right, title,
interest, claim, demand, reversion, or remainder of
Trustor in or to the Mortgaged Property, either at law or
in equity, in possession or expectancy, now or later
acquired; all exterior landscaping on the Mortgaged
Property; all development rights or credits and air
rights; all water and water rights (whether or not
appurtenant to the Mortgaged Property) and shares of stock
pertaining to such water or water rights, ownership of
which affects the Mortgaged Property; all minerals, oil,
gas, and other hydrocarbon substances and rights thereto
in, on, under, or upon the Mortgaged Property and all
royalties and profits from any such rights or shares of
stock; all right, title, and interest of Trustor in and to
any streets, ways, alleys, strips, or gores of land
adjoining the Property or any part of it that Trustor now
owns or at any time later acquires and all adjacent lands
within enclosures or occupied by buildings partly situated
on the Mortgaged Property;
all intangible Mortgage Property and rights
the Mortgaged Property or its operation
connection with it, including, without
permits, licenses, plans, specifications,
contracts, subcontracts, bids, deposits
services, installations, refunds due Trustor,
trademarks, and service marks;
relating to
or used in
limitation,
construction
for utility
trade names,
all of the right, title, and interest of Trustor in and to
the land lying in the bed of any street, road, highway, or
avenue in front of or adjoining the Property;
582001:23708.1
3
502001:23708.1
any and all awards previously made or later to be made by
any governmental authority to the present and all
subsequent owners of the Mortgaged Property that may be
made with respect to the Mortgaged Property as a result of
the exercise of the right of eminent domain, the
alteration of the grade of any street, or any other injury
to or decrease of value of the Mortgaged Property, which
award or awards are assigned to the Lender, and which the
Lender, at its option, is authorized, directed, and
empowered to collect and receive the proceeds of any such
award or awards from the authorities making them and to
give proper receipts and acquittances for them, and to
apply them as provided in this Deed of Trust;
all leases of the Mortgaged Property or any part of it now
or later entered into and all right, title, and interest
of the Trustor under such leases, including cash or
securities deposited by the tenants to secure performance
of their obligations under such leases (whether such cash
or securities are to be held until the expiration of the
terms of such leases or applied to one or more of the
installments of rent coming due immediately before the
expiration of such terms), all rights to al insurance
proceeds and unearned insurance premiums arising from or
relating to the Mortgaged Property, all other rights and
easements of the Trustor now or later existing pertaining
to the use and enjoyment of the Mortgaged Property, and
all right, title, and interest of the Trustor in and to
all declarations of covenants, conditions, and
restrictions as may affect or otherwise relate to the
Mortgaged Property;
any and all proceeds of any insurance policies covering
the Mortgaged Property, whether or not such insurance
policies were required by the Lender as a condition of
making the loan secured by this Deed of Trust or are
required to be maintained by the Trustor as provided below
in this Deed of Trust; which proceeds are assigned to the
Lender, and which the Lender, at its option, is
authorized, directed, and empowered to collect and receive
the proceeds of such insurance policies from the insurers
issuing the same and to give proper receipts and
acquittances for such policies, and to apply the same as
provided below;
all plans and specifications for the Improvements; all
contracts and subcontracts relating to the Improvements;
4
all deposits (including tenants' security deposits;
provided, however, that if the Lender acquires possession
or control of tenants' security deposits the Lender shall
use the tenants' security deposits only for such purposes
as governmental requirements permit), funds, accounts,
contract rights, instruments, documents, general
intangibles, and notes or chattel paper arising from or in
connection with the Property or other Mortgaged Property;
all permits, licenses, certificates, and other rights and
privileges obtained in connection with the Property or
other Mortgaged Property; all soils reports, engineering
reports, land planning maps, drawings, construction
contracts, notes, drafts, documents, engineering and
architectural drawings, letters of credit, bonds, surety
bonds, any other intangible rights relating to the
Property and Improvements, surveys, and other reports,
exhibits, or plans used or to be used in connection with
the construction, planning, operation, or maintenance of
the Property and Improvements and all amendments and
modifications; all proceeds arising from or by virtue of
the sale, lease, grant of option, or other disposition of
all or any part of the Property, Personal Property, or
other Mortgaged Property (consent to same is not granted
or implied); and all proceeds (including premium refunds)
payable or to be payable under each insurance policy
relating to the Property, the Personal Property, or other
Mortgaged Property;
all tax refunds, bills, notes, inventories, accounts and
charges receivable, credits, claims, securities, and
documents of all kinds, and all instruments, contract
rights, general intangibles, bonds and deposits, and all
proceeds and products of the Trustor in the Mortgaged
Property;
all accounts, contract rights, chattel paper, documents,
instruments, books, records, claims against third parties,
money, securities, drafts, notes, proceeds, and other
items relating to the Mortgaged Property;
all proceeds of any of the foregoing.
As used in this Deed of Trust, "Mortgaged Property" is
expressly defined as meaning allor, when the context permits
or requires, any portion of it and allor, when the context
permits or requires, any interest in it.
502001:23708.1
5
Personal Property. The words "Personal Property" mean all of
the right, title and interest of Trustor now or hereafter
existing in and to the following now or hereafter located in,
upon, within or about, or used in connection with or generated
by the construction, use, operation or occupancy of the
Property and any business or activity conducted thereon or
therein, together with all accessories, additions, accessions,
renewals, replacements and substitutions thereto or therefore
and the proceeds and products thereof: (a) all materials,
supplies, furniture, floor coverings window coverings,
furnishings, appliances, office supplies, equipment,
construction materials, vehicles, machinery, computer hardware
and software, maintenance equipment, window washing equipment,
repair equipment and other equipment, tools, telephone and
other communications equipment, food service preparation
equipment and utensils, chinaware, glassware, silverware and
hollowware, food and beverage service equipment, food items and
food stuffs; (b) all books, ledgers, records accounting
records, files, tax records and returns, policy manuals,
papers, correspondence, and electronically recorded data; (c)
all "General Intangibles" (as defined in the California Uniform
Commercial Code), instruments, money, "Accounts" (as defined in
the California Uniform Commercial Code), accounts receivable,
notes, certificates of deposit, chattel paper, letters of
credit, chooses in action, good will, rights to pay of money,
rents, rental fees, equipment fees and other amounts relating
to the development or use of the Property or payable by persons
who utilize the Property or any of the Improvements or paid by
persons in order to obtain the right to use the Property and
any of the Improvements, whether or not so used; trademarks,
service marks, trade dress, trade names, licenses, sales
contracts, deposits, plans and specifications, drawings,
working drawings, studies, maps, surveys; soils, environmental
engineering or other reports, architectural and engineering
contracts, construction contracts, construction management
contracts, surety bonds, feasibility and market studies,
management and operating agreements, service agreements and
contracts, landscape maintenance agreements, security service
and other services agreements and vendors agreements; (d) all
compensation, awards and other payments of relief (and claims
therefore) made for a taking by eminent domain, or by any event
in lieu thereof (including, without limitation, property and
rights and interests in property received in lieu of any such
taking), of all or any part of such Personal Property, together
with interest thereon, and any and all proceeds (or claims for
proceeds) of casualty, liability or other insurance pertaining
to such Personal Property, together with interest thereon; (e)
50200 I :23708.1
6
any and all claims or demands against any person with respect
to damage or diminution in value to such Personal Property or
damage or diminution in value to any business or other activity
conducted on Property; (f) any and all security deposits,
deposits of security or advance payments made to others to
Trustor with respect to: (i) insurance policies relating to the
Property; (ii) prepayments and/or periodic deposits or
improvements for property taxes or assessments of any kind or
nature affecting the Property; (iii) utility services for the
Property and/or the Improvements; (iv) maintenance, repair or
similar services for the Property or any other services or
goods to be used by any business or other activity conducted on
the Property; (g) any and all authorizations, consents,
licenses, permits and approvals of and from all persons
required from time to time in connection with the construction,
use, occupancy or operation of the Property, the improvements,
or any business or activity conducted thereon or therein or in
connection with the operation, occupancy or use thereof; (h)
all warranties, guaranties, utility or street improvement
bonds, construction completion and payment surety bonds,
utility contracts, telephone exchange numbers, yellow page or
other directory advertising and the like; (i) all goods,
contract rights, and inventory; (j) all leases and use
agreements of machinery, equipment and other personal property;
(k) all insurance policies covering all or any portion of the
Property; (I) all reserves and funds held in escrow by the
Lender or other persons for the Lender's benefit under the Loan
Agreement and all funds deposited with the Lender pursuant to
the Loan Agreement, all accounts into which such funds are
deposited and all accounts, contract rights and general
intangibles or other rights relating thereto; (m) all names by
which the Property is now or hereafter known; (n) all interests
in the security deposits of tenants; (0) all management
agreements, blueprints, plans, maps, documents, books' and
records relating to the Property; (p) the proceeds from sale,
assignment, conveyance or transfer of all or , any portion of
the Property or any interest therein, or from the sale of any
goods, inventory or services from upon or within the Property
and/or the Improvements; ) (q) all documents of membership in an
owner or members association or similar group having
responsibility for managing or operating any part of the
Property; (r) all other property (other than "Fixtures," as
defined in the Uniform Commercial Code) of any kind or
character as defined in or subject to the provisions of the
California Uniform Commercial Code, Secured Transactions, as
amended and; (s) all proceeds of the conversions, voluntarily
502001:23708.1
7
or involuntarily, of any of the foregoing into cash or
liquidated claims.
Promissory Note. The words "Promissory Note" mean the
Promissory Note of even date herewith, in the principal amount
of one hundred forty-seven thousand dollars ($147,000)
delivered by the Trustor to the Redevelopment Agency of the
City of San Bernardino, as Lender, together with all renewals,
extensions, modifications, refinancing, and substitutions for
the Promissory Note.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments,
agreements and documents, by and between the Trustor and the
Lender whether now or hereafter existing, evidencing or
securing the Indebtedness.
Rents. The word "Rents" means all present and future
revenues, income, issues, royalties, profits, and
benefits derived from the Property.
rents,
other
Trustee. The word "Trustee" means First American Title
Insurance Company, and any substitute or successor trustees.
Trustor. The word "Trustor" means the Trustor named above and
its successors and assigns.
3.0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF LEASES AND
RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL
PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS
AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER
THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF
TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN
AND ACCEPTED ON THE FOLLOWING TERMS:
3.1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this
Deed of Trust, Trustor shall pay to Lender all amounts secured
by this Deed of Trust as they become due, and shall strictly
and in a timely manner perform all of Trustor's obligations
under the Promissory Note, this Deed of Trust, the Loan
Agreement and the Related Documents.
3.2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees
that Trustor I s possession and use of the Property and the
502001:23708.1
8
Mortgaged Property shall be governed by the following
provisions:
Possession and Use. Until the occurrence of an Event of
Default, Trustor may (a) remain in possession and control of
the Mortgaged Property and collect Rents as they become due and
(b) use, develop, operate or manage the Property for the
purposes authorized in the Loan Agreement.
Duty to Maintain and Preserve. Trustor shall: (al maintain
the Property and the Mortgaged Property in good condition and
repair; (b) shall construct and improve the Property in
accordance with the Loan Agreement; (c) restore and repair the
Improvements or any part of the Mortgaged Property that may be
damaged or destroyed, including but not limited to construction
defects, soil subsidiances and environmental damages whether
or not insurance proceeds are available to cover any part of
such cost of restoration or repair (regardless of whether the
proceeds of insurance may be available to the Trustor under
this Deed of Trust); (d) pay when due all claims for labor
performed and materials furnished in connection with the
Improvements and not permit any mechanics' liens or materials
suppliers' liens to arise against the Property; (el not permit
any waste on the Property, or commit, suffer or permit any
nuisance to occur on the Property; (fl not abandon the
Mortgaged Property; (g) notify the Beneficiary in writing of
any condition at or on the Property that may have a material
affect on the market value of the Mortgaged Property; and (hl
maintain .the Property and the Improvements and generally
operate it in a manner to realize it maximum rental potential.
Hazardous Substances.
(al The terms "hazardous wastes", "hazardous substance",
"disposal," "release", and "threatened release", as used in
this Deed of Trust, shall have the same meanings as set forth
in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S. C. Section 9601, et
sea. ("CERCLA"l, the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act. 49 U.S.C. Section 1801, et sea.,
the Resource Conservation and Recovery Act, 49 U.S.C. Section
6901, et sea., Chapters 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, et sea., or
other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing.
502001 :23708.1
9
(b) [OMITTED - - NO TEXT]
(c) Trustor represents and warrants that neither the Trustor
nor any tenant of Trustor occupying and improving any portion
of the Mortgaged Property or any contractor, agent or other
authorized user of any such tenant shall use, generate,
manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, about or from any of the
Mortgaged Property, except in compliance with all applicable
law relating to the transportation, storage, disposal or lawful
use of any hazardous waste or substance. Trustor shall comply
and cause each of its tenants and all contractors, agents or
other authorized users of the Mortgaged Property to comply with
all applicable laws relating to any hazardous wastes or
substances, including without limitation, obtaining and filing
all applicable notices, licenses, permits and similar
authorizations. Trustor shall establish and maintain a
hazardous wastes and substances management and operations
policy for the Mortgaged Property in order to assure and
monitor continued compliance by the Trustor and each of its
tenants and all contractors, agents, or other authorized users
of the Property with all laws relating to hazardous wastes or
substances.
(d) Trustor authorizes Lender and its agents to enter upon the
Mortgaged Property upon reasonable notice to make such
inspections and tests as Lender may deem appropriate to
determine compliance by the Trustor with this paragraph of
Section 3.2 if Lender reasonably believes a violation of law
has occurred. Any inspections or tests made by Lender shall be
at Trustor's expense and for Lender's purposes only and shall
not be construed to create any responsibility or liability on
the part of Lender to Trustor or to any other person. Trustor
hereby agrees to indemnify and hold harmless Lender against any
and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or
suffer resulting from breach of this paragraph of Section 3.2.
The provisions of this paragraph of Section 3.2 of the Deed of
Trust, including the obligation to indemnify the Lender, shall
survive the payment of the Indebtedness and the satisfaction
and reconveyance of the lien of this Deed of Trust and shall
not be affected by Lender's acquisition of any interest in the
Property, whether by foreclosure or otherwise.
Compliance with Governmental Requirements. Trustor shall
promptly comply with all laws, ordinances, and regulations, now
or hereafter in effect, of all governmental authorities
502001:23708.1
10
applicable to the use or occupancy of the Mortgaged Property.
Trustor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Trustor has notified
Lender in writing prior to doing so and so long as, in Lender's
reasonable opinion, Lender's interests in the Mortgaged
Property are not jeopardized. Lender may require Trustor to
post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duty to Protect. Trustor agrees neither to abandon nor leave
unattended the Mortgaged Property. Trustor shall do all other
acts, in addition to those acts set forth above in this
section, which from the character and use of the Mortgaged
Property are reasonably necessary to protect and preserve the
Mortgaged Property.
3.3 DUE ON SALE. Lender may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the
sale or transfer, without the Lender's prior written approval,
of all or any part of the Mortgaged Property, or any interest
in the Mortgaged Property. A" sale or transfer" means the
conveyance of the Mortgaged Property or any right, title or
interest therein; whether legal or equitable; whether voluntary
or involuntary; whether by outright sale, deed, installment
sale contract, land contract, contract for deed, leasehold
interest with a term greater than one (1) year, lease-option
contract, or by sale, assignment or transfer of any beneficial
interest in or to any land trust holding title to the Mortgaged
Property or by any other method of conveyance of the property
interest. This option shall be exercised by the Lender in
accordance with the provisions of Section 5.1 hereof; provided
however, this option shall not be exercised if such remedy is
prohibited by applicable law.
3.4
TAXES AND LIENS.
taxes and liens on
of Trust:
The following provisions relating to the
the Mortgaged Property are part of this Deed
Payment. Trustor shall pay when due (and in all events prior
to delinquency) all taxes, special taxes, assessments, charges
(including water and sewer), fines and impositions levied
against or on account of the Mortgaged Property, and shall pay
when due all claims for work done on or for services rendered
or material furnished to the Mortgaged Property. Trustor shall
maintain the Mortgaged Property free of all liens having
priority over or equal to the interest of Lender under this
502001:23708.1
11
Deed of Trust, except for the lien of property taxes and
assessments not due.
Right to Contest. Trustor may withhold payment of any tax,
assessment, or claim in connection with a good faith dispute
over the obligation to pay, so long as Lender's interest in the
Mortgaged Property is not jeopardized. If a lien arises or is
filed as a result of nonpayment, Trustor shall within sixty
(60) days after the lien arises or, if a lien is filed, within
sixty (60) days after Trustor has notices of the filing, seoure
the discharge of the lien, or if requested by Lender, deposit
with Lender cash or a sufficient corporate surety bond or other
security satisfactory to Lender in an amount sufficient to
discharge the lien plus any costs and attorneys' fees or other
charges that could accrue as a result of a foreclosure or sale
under the lien; provided, however, that Trustor shall not be
required to payor make provisions for the payment of any tax,
assessment, lien or charge so long as the Trustor in good faith
shall contest the validity or amount thereof and so long as
such delay in payment does not subject the Property to
forfeiture or sale. In any contest, Trustor shall defend
itself and Lender and shall satisfy any adverse judgment before
enforcement against the Property. Trustor shall name Lender as
an additional obligee under any surety bond furnished in the
contest proceedings.
Evidence of Payment. Trustor shall upon demand furnish to
Lender satisfactory evidence of payment of the taxes or
assessments and shall authorize the appropriate governmental
official to deliver to Lender at any time a written statement
of the taxes and assessments against the Property.
3.5 CONDEMNATION. The following provisions relating to
condemnation proceedings are a part of this Deed of Trust:
Proceedings. If any proceeding in condemnation is filed
affecting any portion of the Mortgaged Property, Trustor shall
promptly notify the Beneficiary in writing, and Trustor shall
promptly take such steps as may be necessary to defend the
action and obtain the award. Trustor may be the nominal party
in such proceeding, but the Beneficiary shall be entitled to
participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Trustor will
deliver or cause to be delivered to the Beneficiary such
instruments as may be requested by it from time to time to
permit such participation.
502001:23708.1
12
3.6 CASUALTY INSURANCE. The Trustor shall at all times keep the
Mortgaged Property insured for the benefit of the Trustee and
the Beneficiary as additional insured as follows:
Against damage or loss by fire and such other hazards
(including lightning, windstorm, hail, explosion, riot, acts of
striking employees, civil commotion, vandalism, malicious
mischief, aircraft, vehicle, and smoke) as are covered by the
broadest form of extended coverage endorsement available from
time to time, including course of construction and builders
risk endorsements in an amount not less than the full insurable
value of the Mortgaged Property, with a deductible amount not
to exceed Ten Thousand Dollars ($10,000); provided however,
that prior to the recordation of the "Construction Loan" as
this term is defined in the Loan Agreement, such insured amount
shall be not less than $1,000,000, and upon the recordation of
such Construction Loan the full insurable value shall be not
less than the principal amount of such Construction Loan, plus
the principal amount of the Indebtedness;
Against damage or loss from (a) sprinkler system leakage and
(b) boilers, boiler tanks, heating and air conditioning
equipment, pressure vessels, auxiliary piping, and similar
apparatus, on such basis and in such amounts as the Beneficiary
may require;
Liabili ty Insurance. Trustor shall procure and maintain
workers' compensation insurance for employees and comprehensive
general liability insurance covering Trustor, Trustee, and the
Beneficiary against claims for bodily injury or death or for
damage occurring in, on, about, or resulting from the Mortgaged
Property, or any street, drive, sidewalk, curb, or passageway
adjacent to it, in standard form and with such insurance
company or companies and in an. amount of at least One Million
Dollars ($1,000,000) combined single limit, or such greater
amount as the buyer may require, which insurance shall include
completed operations, product liability, and blanket
contractual liability coverage that insures contractual
liability under the indemnifications set forth in this Deed of
Trust (but such insurance coverage or its amount shall in no
way limit such indemnification).
Other Insurance. The Trustor shall procure and maintain such
other insurance or such additional amounts of insurance,
covering the Trustor or the Mortgaged Property, as (a) may be
required by the terms of any construction contract for the
502001:23708.1
13
improvements or by any governmental authority, or (bl may be
reasonably required by the Beneficiary from time to time.
Form of Policies. All insurance required under this paragraph
shall be paid for and nonassessable. The policies shall
contain such provisions, endorsements, and expiration dates as
the Beneficiary from time to time reasonably requests and shall
be in such form and amounts, and be issued by such insurance
companies admitted as surety companies and doing business in
the State of California, as the Beneficiary shall approve in
the Beneficiary's sole and absolute discretion. Unless
otherwise expressly approved in writing by the Beneficiary,
each insurer shall have a Best Rating of not less than
"A(vii)", or better. All policies shall (a) contain a waiver
of subrogation endorsement; (b) provide that the policy will
not lapse or be canceled, amended, or materially altered
(including by reduction in the scope or limits of coverage)
without at least thirty (30) days prior written notice to the
Beneficiary; (c) with the exception of the comprehensive
general liability policy, contain a mortgagee's endorsement
(438 BFU Endorsement or equivalent), and name the Beneficiary
and trustee as insureds; and (d) include such deductibles as
the Beneficiary may approve. If a policy required under this
paragraph contains a co-insurance or overage clause, the policy
shall include a stipulated value or agreed amount endorsement
acceptable to the Beneficiary.
Duplicate Originals or Certificates. Duplicate original
policies evidencing the insurance required under this paragraph
and any additional insurance that may be purchased on the
Mortgaged Property by or on behalf of Trustor shall be
deposited with and held by the Beneficiary (al receipts
evidencing payment of all premiums on the policies and (b)
duplicate original renewal policies or a binder with evidence
satisfactory to the Beneficiary of payment of all premiums at
least thirty (30l days before the policy expires. In lieu of
the duplicate original policies to be delivered to the
Beneficiary under this paragraph, Trustor may also deliver
original certificates from the issuing insurance company,
evidencing that such policies are in full force and effect and
containing information that, in the reasonable judgment of the
Beneficiary, is sufficient to allow Lender to ascertain whether
such policies comply with the requirements of this Paragraph.
No Separate Insurance. The Trustor shall not carry separate
or additional insurance concurrent in form or contributing in
the event of loss with that required under this paragraph
502001:23708.1
14
unless endorsed in favor of Trustee and the Beneficiary as
required by this paragraph and otherwise approved by the
Beneficiary in all respects.
Transfer of Title. In the event of foreclosure of this Deed of
Trust or other transfer of title or assignment of the Mortgaged
Property in extinguishment, in whole or in part, of the
Indebtedness, all right, title, and interest of the Trustor in
and to all insurance policies required under this paragraph or
otherwise then in force with respect to the Mortgaged Property
and all proceeds payable under, and unearned premiums on, such
policies shall immediately vest in the purchaser or other
transferee of the Mortgaged Property.
Beneficiary's Right to Obtain. Trustor shall deliver to the
Beneficiary original policies or certificates evidencing such
insurance at least thirty (30) days before the existing
policies expire. If any such policy is not so delivered to the
Beneficiary or if any such policy is canceled, whether or not
Lender has the policy in its possession, and no reinstatement
or replacement policy is received before termination of
insurance, the Beneficiary, without notice to or demand on
Trustor, may (but is not obligated tol obtain such insurance
insuring only the Beneficiary and Trustee with such company as
the Beneficiary may deem satisfactory, and pay the premium for
such policies, and the amount of any premium so paid shall be
charged to and promptly paid by Trustor or, at the
Beneficiary's option, may be added to the Indebtedness. The
Beneficia:o:y acknowledges that, if the Beneficiary obtains
insurance, it is for the sole benefit of the Beneficiary and
Trustee, and Trustor shall not rely on any insurance obtained
by the Beneficiary to protect Trustor in any way.
Duty to Restore After Casualty. If any act or occurrence of
any kind or nature (including any casualty for which insurance
was not obtained or obtainable) results in damage to or loss or
destruction of the Mortgaged Property, Trustor shall
immediately give notice of such loss or damage to the
Beneficiary and, if the Beneficiary so instructs, shall
promptly, at the Trustor's sole cost and expense, regardless of
whether any insurance proceeds will be sufficient for the
purpose, commence and continue diligently to completion to
restore, repair, replace, and rebuild the Mortgaged Property as
nearly as possible to its value, condition, and character
immediately before the damage, loss, or destruction.
502001:23708.1
15
3 .7 ASSIGNMENT TO THE BENEFICIARY. The proceeds of any award or
claim for damages, direct or consequential, in connection with
any condemnation or other taking of or damage or injury to the
Mortgaged Property, or any part of it, or for conveyance in
lieu of condemnation, are assigned to and shall be paid to the
Beneficiary, regardless of whether the Beneficiary's security
is impaired. All causes of action, whether accrued before or
after the date of this Deed of Trust, of all types for damages
or injury to the Mortgaged Property or any part of it, or in
connection with any transaction financed by funds lent to the
Trustor by the Beneficiary and secured by this Deed of Trust,
or in connection with or affecting the Mortgaged Property or
any part of it, including, without limitation, causes of action
arising in tort or contract or in equity, are assigned to the
Beneficiary as additional security, and the proceeds shall be
paid to the Beneficiary. The Beneficiary, at its option, may
appear in and prosecute in its own name any action or
proceeding to enforce any such cause of action and may make
compromise or settlement of such action. The Trustor shall
notify the Beneficiary in writing immediately on obtaining
knowledge of any casualty damage to the Mortgaged Property or
damage in any other manner in excess of Ten Thousand Dollars
($10,000) or knowledge of the institution of any proceeding
relating to the condemnation or other taking of or damage or
injury to all or any portion of the Mortgaged Property. The
Beneficiary in its sole and absolute discretion, may
participate in any such proceedings and may join borrower in
adjusting any loss covered by insurance. Trustor covenants and
agrees with the Beneficiary, at Beneficiary's request, to make,
execute, and deliver, at Trustor's expense, any and all
assignments and other instruments sufficient for the purpose of
assigning the aforesaid award or awards, causes of action, or
claims of damages or proceeds to the Beneficiary free, clear,
and discharged of any and all encumbrances of any kind or
nature.
Compensation and Insurance Payments. All compensation, awards,
proceeds, damages, claims, insurance recoveries, rights of
action, and payments that Trustor may receive or to which the
Beneficiary may become entitled with respect to the Mortgaged
Property if any damage or injury occurs to the Mortgaged
Property, other than by the Beneficiary condemnation or partial
taking of the Mortgaged Property, shall be paid over to the
Beneficiary and shall be applied first toward reimbursement of
all costs and expenses of the Beneficiary in connection with
their recovery and disbursement, and shall then be applied as
follows:
502001:23708.1
16
502001 :23708.1
The Beneficiary shall consent to the application of such
payments to the restoration of the Mortgaged Property so
damages only the Beneficiary has met all the following
conditions (a breach of one of which shall constitute a
default under this Deed of Trust, the Promissory Note, and
any Related Document): (al Trustor is not in default under
any of the terms, covenants, and conditions of the Related
Documents; (b) all then-existing leases affected in any
way by such damage will continue in full force and effect;
(c) the Beneficiary is satisfied that the insurance or
award proceeds, plus any sums added by Trustor, shall be
sufficient to fully restore and rebuild the Mortgaged
Property under then current governmental requirements; (d)
within sixty (60) days after the damage tot he Mortgaged
Property, Trustor presents to the Beneficiary a
restoration plan satisfactory to the Beneficiary and each
local agency with jurisdiction, which includes cost
estimates and schedules; (e) construction and completion
of restoration and rebuilding of the Mortgaged Property
shall be completed in accordance with plans and
specifications and drawings submitted to the Beneficiary
within thirty (30) days after receipt by the Beneficiary
of the restoration plan and thereafter approved the
Beneficiary; which plans, specifications, and drawings
shall not be substantially modified, changed, or revised
without the Beneficiary's prior written consent; (f)
within ninety (90) days after such damage, Trustor and a
licensed contractor satisfactory to the Beneficiary enter
into a fixed price or guaranteed maximum price contract
satisfactory to the Beneficiary, providing for complete
restoration in accordance with such restoration plan for
an amount not to exceed the amount of funds held or to be
held by the Beneficiary; (gl all restoration of the
Improvements so damaged or destroyed shall be made with
reasonable promptness and shall be of a value at least
equal to the value of the Improvements so damages or
destroyed before such damage or destruction; (h) the
Beneficiary reasonably determines that there is an
identified source (whether from income from the Mortgaged
Property or another source) sufficient to pay all debt
service and operating expenses of the Mortgaged Property
during its restoration as required above; and (i) any and
all funds that are made available for restoration and
rebuilding under this subparagraph shall be disbursed at
the sole election of the Beneficiary through the Trustee,
or a title insurance or trust company satisfactory to the
17
Beneficiary, in accordance with standard construction
lending practices and mechanics' lien waivers and title
insurance date-downs, and the provision of payment and
performance bonds by the Trustor, or in any other manner
approved by the Beneficiary in the Beneficiary's sole and
absolute discretion; or
If fewer than all conditions (al through (i) in the
preceding subparagraph are satisfied, then such payments
shall be applied in the sole and absolute discretion' of
the Beneficiary: to the payment of the Indebtedness
secured by this Deed of Trust; or to the reimbursement of
Trustor's expenses incurred in the rebuilding and
restoration of the Mortgaged Property. If the Beneficiary
elects to make any funds available to restore the
Mortgaged Property, then all of the conditions (a) through
(i) in the preceding subparagraph shall apply, except for
such conditions that the Beneficiary in its sole and
absolute discretion, may waive.
Material Loss Not Covered. If any material part of the
Mortgaged Property is damaged or destroyed and the loss, is not
adequately covered by insurance proceeds collected or in the
process of collection, the Trustor shall deposit with the
Beneficiary, within thirty (30) days after the Beneficiary's
request, the amount of the loss not so covered.
Total Condemnation Payment. All compensation, awards,
proceeds, damages, claims, rights of action, and payments that
Borrower may receive or to which the Trustor may become
entitled with respect to the Mortgaged Property in the event of
a total condemnation or other total taking of the Mortgaged
Property by a public agency shall be paid over to the
Beneficiary and shall be applied first to the reimbursement of
all Beneficiary's costs and expenses in connection with their
recovery, and shall then be applied to the payment of the
Indebtedness. Any surplus remaining after payment and
satisfaction of the Indebtedness shall be paid to the Trustor
as its interest may then appear.
Partial Condemnation Payments. All compensation, awards,
proceeds, damages, claims, insurance recoveries, rights of
action, and payments ("funds") that the Trustor may receive or
to which the Trustor may become entitled with respect to the
Mortgaged Property in the event of a partial condemnation or
other partial taking of the Mortgaged Property by a public
agency, unless the Trustee and Beneficiary otherwise agree in
502001:23708.1
18
writing, shall be divided into two portions, one equal to the
principal balance of the Promissory Note at the time of receipt
of such funds and the other equal to the amount by which such
funds exceed the principal balance of the Promissory Note at
the time of receipt of such funds.
The first such portion shall be applied to the sums secured by
this Deed of Trust, whether or not then due, including but not
limited to principal, accrued interest, and advances with the
balance of the funds paid to the Trustor.
No Cure of Waiver of Default. Any application of such amounts
or any portion of it to any Indebtedness secured by this Deed
of Trust shall not be construed to cure or waive any default or
notice of default under this Deed of Trust or invalidate any
act done under any such default or notice.
3.8 EXPENDITURES BY LENDER. If Trustor fails to comply with any
provision of this Deed of Trust, or if any action or proceeding
is commenced against the Mortgaged Property that would
materially affect Lender's interests in the Property, Lender on
Trustor's behalf may, but shall not be required to, take any
action that Lender reasonably deems appropriate. Any amount
that Lender expends in do doing will bear interest at the rate
charged under the Promissory Note from the date incurred or
paid by Lender to the date of repayment by Trustor. All such
expenses, at Lender's option, will (a) be payable on demand,
(b) be added to the balance of the Promissory Note and be
apportioned among and be payable with any installment payments
to become due during the remaining term of the Promissory Note,
or (cl be treated as a balloon payment which will be due and
payable at the Promissory Note's maturity. This Deed of Trust
also will secure payment of these amounts. The rights provided
for in this paragraph shall be .in addition to any other rights
or any remedies to which Lender may be entitled on account of
the default. Any such action by Lender shall not be construed
as curing the default so as to bar Lender from any remedy that
it otherwise would have had.
3.9
WARRANTY. Trustor warrants that the Mortgaged Property
Trustor's use of the Mortgaged Property complies with
existing applicable laws, ordinances, and regulations
governmental authorities.
and
all
of
502001:23708.1
19
3.10 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL
AUTHORITIES. The following provisions relating to
governmental taxes, fees and charges are a part of this Deed of
Trust:
Current Taxes, Fees and Charges. Upon request by Lender,
Trustor shall execute such documents in addition to this Deed
of Trust and take whatever other action is requested by Lender
to perfect and continue Lender's lien and security interest on
the Property. Trustor shall reimburse Lender for all taxes, as
described below, together with all expenses incurred in
recording, perfecting or continuing this Deed of Trust,
including without limitation all taxes, fees, documentary
stamps, and other charges for recording or registering this
Deed of Trust.
Taxes. The following shall constitute taxes to which this
section applies: (a) a specific tax upon this type of Deed of
Trust or upon all or any part of the Indebtedness secured by
this Deed of Trust; (b) a specific tax on Trustor which Trustor
is authorized or required to deduct from payments on the
Indebtedness secured by this type of Deed of Trust; (c) a tax
on this type of Deed of Trust chargeable against the Lender or
the holder of the Promissory Note; and (d) a specific tax on
all or any portion of the Indebtedness or on payments of
principal and interest made by Trustor.
Subsequent Taxes. If any tax to which this section applies is
enacted subsequent to the date of this Deed of Trust, this
event shall have the same effect as an Event of Default (as
defined below),' and Lender may exercise any or all of its
available remedies for an Event of Default as provided below
unless Trustor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the
Taxes and Liens section and deposits with Lender cash or a
sufficient corporate surety bond or other security satisfactory
to Lender.
3.11 SECURITY AGREEMENT; FINANCING STATEMENTS. The
provisions relating to this Deed of Trust as
agreement are a part of this Deed of Trust:
following
a security
Security Agreement. This instrument shall constitute a security
agreement to the extent of any of the Mortgaged Property
constitutes fixtures or other personal property, and Lender
shall have all of the rights of a secured party under the
Uniform Commercial Code as amended from time to time.
502001:23708.1
20
Security Interest. Upon request by Lender, Trustor shall
execute financing statements and take whatever other action is
requested by Lender to perfect and continue Lender's security
interest in the Rents and Personal Property in a manner and at
a place reasonably convenient to Trustor and Lender and make it
available to Lender within ten (10) days after receipt of
written demand from Lender.
Addresses. The mailing addresses of Trustor (debtor) and
Lender (secured party), from which information concerning the
security interest granted by this Deed of Trust may be obtained
(each as required by the Uniform Commercial Code), are as
stated on the first page of this Deed of Trust.
3.12 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions
relating to further assurances and attorney-in-fact are a part
of this Deed of Trust:
Further Assurances. At any time, and from time to time, upon
request of Lender, Trustor will make, execute and deliver, or
will cause to be made, executed or delivered, to Lender or to
Lender's designee, and when requested by Lender, cause to be
filed, recorded, refiled, or rerecorded, as the case may be, at
such times and in such offices and places as Lender may deem
appropriate, any and all such mortgages, deeds of trust,
security deeds, security agreements, financing statements,
continuation statements, instruments of further assurance,
certificates, and other documents as may, in the sole opinion
of Lender, be necessary or desirable in order to effectuate,
complete, perfect, continue, or preserve (a) the obligations of
Trustor under the Promissory Note, this Deed of Trust, and the
Related Documents, and (b) the liens and security interests
created by this Deed of Trust as second priority liens on the
Mortgaged Property, whether now owned or hereafter acquired by
Trustor. Unless prohibited by law or agreed to the contrary by
Lender in writing. Trustor shall reimburse Lender for all
costs and expenses incurred in connection with the matters
referred to in this paragraph.
Attorney-In-Fact. If Trustor fails to do any of the things
referred to in the preceding paragraph, Lender may do so for
and in the name of Trustor and at Trustor's expense. For such
purposes, Trustor hereby irrevocably appoints Lender as
Trustor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other
things as may be necessary or desirable, in Lender I s sole
502001:23708.1
21
opinion, to accomplish the matters referred to in the preceding
paragraph.
4 . 0 FULL PERFORMANCE AND RECONVEYANCE. If Trus tor pays all the
Indebtedness, including without limitation, all future
advances, when due, and otherwise performs all the obligations
imposed upon Trustor under the Loan Agreement, the Promissory
Note and this Deed of Trust, Lender shall execute and deliver
to Trustee a request for full reconveyance and shall execute
and deliver to Trustor suitable statements of termination of
any financing statement on file evidencing Lender's security
interest in the Rents and Personal Property. Lender may charge
Trustor a reasonable reconveyance fee at the time of
reconveyance.
5.0 DEFAULT. Each of the following, at the option of Lender, shall
constitute an event of default ("Event of Default") under this
Deed of Trust:
Default on Indebtedness. Failure of Trustor to make any payment
when due under the Promissory Note if not cured within thirty
(30) days after written notice from the Lender.
Default on Other Payments. Failure of Trustor within the
time required by this Deed of Trust to make any payment for
taxes or insurance, or any other payment necessary to prevent
filing of or to effect discharge of any lien.
Compliance Default. Failure of Trustor to comply with any other
term, obligation, covenant or condition contained in this Deed
of Trust, the Promissory Note, the Loan Agreement, the Related
Documents, including without limitation the OPA, after notice
and any applicable cure period has expired.
Breaches. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Trustor under this Deed
of Trust, the Promissory Note, the Loan Agreement, or any of
the Related Documents is, or at the time made or furnished was,
false in any material respect.
Insolvency. The insolvency of Trustor, appointment of a
receiver for any part of Trustor's property, any assignment for
the benefit of creditors, the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Trustor,
which is not discharged or dismissed within ninety (90) days,
or the dissolution or termination of Trustor's existence as a
going business (if Trustor is a business) .
502001:23708.1
22
Foreclosure, etc. Commencement of foreclosure, whether by
judicial proceeding, self-help, repossession or any other
method, by any creditor of Trustor against any of the Mortgaged
Property. However, this subsection shall not apply in the
event of a good faith dispute by Trustor as to the validity or
reasonableness of the claim which is the basis of the
foreclosure, provided that Trustor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the
claim satisfactory to Lender.
5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any
Event of Default and at any time thereafter, Trustee or Lender,
at its option, may exercise anyone or more the following
rights and remedies, in addition to any other rights or
remedies provided by law:
Foreclosure by Sale. Upon an Event of Default under this
Deed of Trust, Beneficiary may declare the entire Indebtedness
secured by this Deed of Trust immediately due and payable by
delivery to Trustee of written declaration of default and
demand for sale and of written notice of default and of
election to cause the Mortgaged Property to be sold, which
notice Trustee shall cause to be filed for record. Beneficiary
also shall deposit with Trustee this Deed of Trust, the
Promissory Note, other documents requested by Trustee, and all
documents evidencing expenditures secured hereby. After the
lapse of such time may then be required by law following the
recordation of the notice of default, and notice of sale having
been given as then required by law, Trustee, without demand on
Trustor, shall sell the Mortgaged Property at the time and
place fixed by it in the notice of sale, either as a whole or
in separate parcels, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money
of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of the Mortgaged Property
by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public
announcement at the time filed by the preceding postponement in
accordance with applicable law. Trustee shall deliver to such
purchaser its deed conveying the Mortgaged Property so sold,
but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary may purchase at such
sale. After deducting all costs, fees and expenses of Trustee
and of this Trust, including cost of evidence of title in
502001:23708.1
23
connection with sale, Trustee shall apply the proceeds of sale
to payment of: all sums expended under the terms hereof, not
then repaid, with accrued interest at the amount allowed by law
in effect at the date hereof; all other sums then secured
hereby; and the remainder, if any, to the person or persons
legally entitled thereto.
Judicial Foreclosure. With respect to all or any part of the
Mortgaged Property, Lender shall have the right in lieu of
foreclosure by power of sale to foreclose by judicial
foreclosure in accordance with and to the full extent provided
by California law. It is understood and agreed by the parties
hereto that no action taken by the Lender shall result in the
imposition of personal liability on any of the members,
partners, directors, shareholders and officers, as applicable,
of Trustor or on Trustor itself or its constituent members.
UCC Remedies. With respect to all or any part of the Mortgaged
Property, Lender shall have the rights and remedies of a
secured party under the Uniform Commercial Code, including
without limitation the right to recover any deficiency in the
manner and to the full extent provided by California law.
Collect Rents. Lender shall have the right, without notice to
Trustor, to take possession of and manage the Mortgaged
Property and collect the Rents, including amounts past due and
unpaid, and apply the net proceeds, over and above Lender's
costs, against the Indebtedness. In furtherance of this right,
Lender may require any tenant or other user of the Mortgaged
Property to make payments of rent or use fees directly to
Lender. If the Rents are collected by Lender, then Trustor
irrevocably designates Lender as Trustor's attorney-in-fact to
endorse instruments received in payment thereof in the name of
Trustor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the
payments are made, whether or not any property grounds for the
demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a
receiver appointed to take possession of all or any part of the
Mortgaged Property, with the power to protect and preserve the
Mortgaged Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the
Mortgaged Property and apply the proceeds, over and above the
cost of the recei vership against the Indebtedness. The
502001:23708.1
24
receiver may serve without bond if permitted by law. Lender's
right to the appointment of a receiver shall exist whether or
not the apparent value of the Mortgaged Property exceeds the
indebtedness by a substantial amount. Employment by Lender
shall not disqualify a person from serving as a receiver.
Tenancy at Sufferance. If Trustor remains in possession of
the Mortgaged Property after the Property is sold as provided
above or Lender otherwise becomes entitled to possession of the
Property upon default of Trustor, Trustor shall become a tenant
at sufferance of Lender or the purchaser of the Mortgaged
Property and shall, at Lender's option, either (a) pay a
reasonable rental for the use of the Property, or (b) vacate
the Mortgaged Property immediately upon the demand of Lender.
Other Remedies. Trustee or
right or remedy provided in
Promissory Note or by law.
Lender shall have any other
this Deed of Trust or the
Notice of Sale. Lender shall give Trustor reasonable. notice
of the time and place of any public sale of the Personal
Property or of the time after which any private sale or other
intended disposition of the Personal Property is to be made.
Reasonable notice shall mean notice given at least thirty (30)
days before the time of the sale or disposition. Any sale of
Personal Property may be made in conjunction with any sale of
the Mortgaged Property.
Sale of the Mortgaged Property. To the extent permitted by
applicable law, Trustor hereby waives any and all rights to
have the Mortgaged Property marshaled. In exercising its
rights and remedies, the Trustee or Lender shall be free to
sell all or any part of the Property together or separately, in
one sale or by separate sales.' . Lender shall be entitled to bid
at any public sale on all or any portion of the Mortgaged
Property.
Waiver; Election of Remedies. A waiver by any party of a breach
of a provision of this Deed of Trust shall not constitute a
waiver of or prejudice the party's rights otherwise to demand
strict compliance with that provision or any other provision.
Election by Lender to pursue any remedy provided in this Deed
of Trust, the' Promissory Note, in any Related Document, or
provided by law shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to
perform an obligation of Trustor under this Deed of Trust
50200 I :23708.1
25
after failure of Trustor to perform shall not affect Lender's
right to declare a default and to exercise any of its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or
action to enforce any of the terms of this Deed of Trust,
Lender shall be entitled to recover such sum as the court may
adjudge reasonable as attorneys' fees at trial and on any
appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender which in Lender's
opinion are necessary at any time for the protection of its
interest or the enforcement of its rights shall become a part
of the Indebtedness payable on demand and shall bear interest
at the Promissory Note rate from the date of expenditure until
repaid. Expenses covered by this paragraph include, without
limitation, however subject to any limits under applicable law,
Lender's attorneys' fees whether or not there is a lawsuit,
including attorneys' fees for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction),
appeals and any anticipated post-judgment collection services,
the cost of searching records, obtaining title reports
(including foreclosure reports), surveyors' reports, appraisal
fees, title insurance, and fees for the Trustee, to the extent
permitted by applicable law. For the purposes hereof, the
words "Lender's attorneys' fees" include the salaries, benefits
and expenses of attorneys employed in the office of the City
Attorney computed on an hourly basis for any such legal
services provided in connection with the enforcement of the
rights of the Lender hereunder. Trustor also will pay any
court costs, in addition to all other sums provided by law.
Rights of Trustee. Trustee shall have all of the rights and
duties of Lender as set forth in this section.
6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions
relating to the powers and obligations of Trustee are part of
this Deed of Trust:
Powers of Trustee. In addition to all powers of Trustee
arising as a matter of law, Trustee shall have the power to
take the following actions with respect to the Property upon
the written request of Lender and Trustor: (a) join in
preparing and filing a map or plat of the Mortgaged Property,
including the dedication of streets or other rights to the
public; and (b) join in granting any easement or creating any
restriction on the Mortgaged Property. .
502001:23708.1
26
Obligations to Notify. Trustee shall not be obligated to
notify any other party of a pending sale under any other trust
deed or lien, or of any action or proceeding in which Trustor,
Lender, or Trustee shall be a party, unless the action or
proceeding is brought by Trustee.
Trustee. Trustee shall meet all qualifications required for
Trustee under applicable law. In addition to the rights and
remedies set forth above, with respect to all or any part of
the Mortgaged Property, the Trustee shall have the right to
foreclose by notice and sale, and Lender shall have the right
to foreclose by judicial foreclosure, in either case in
accordance with and to the full extent provided by applicable
law.
Successor Trustee. Lender, at Lender's option, may from time
to time appoint a successor Trustee to any Trustee appointed
hereunder by an instrument executed and acknowledged by Lender
and recorded in the office of the recorder of San Bernardino
County, California. The instrument shall contain, in addition
to all other matters required by state law, the names of the
original Lender, Trustee, and Trustor the book and page where
this Deed of Trust is recorded, and the name and address of the
successor trustee, and the instrument shall be executed and
acknowledged by Lender or its successors in interest. The
successor trustee, without conveyance of the Mortgaged
Property, shall succeed to all the title, power, and duties
conferred upon the Trustee in this Deed of Trust and by
applicable law. This procedure for substitution of trustee
shall govern to the exclusion of all other provisions for
substitution.
502001:23708.1
27
7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this
Deed of Trust shall be in writing and shall be effective when
actually delivered or, if mailed, shall be deemed effective
three business days after it is deposited in the United States
mail first class, registered mail, postage prepaid, directed to
the addresses shown near the beginning of this Deed of Trust.
Any party may change its address for notices under this Deed of
Trust by giving formal written notice to the other parties,
specifying that the purpose of this notice is to change the
party's address. All copies of notices of foreclosure from the
holder of any lien which has priority over this Deed of Trust
shall be sent to Lender's address, as shown near the beginning
of this Deed of Trust. For Notice purposes, Trustor agrees to
keep Lender and Trustee informed at all times of Trustor's
current address. Each Trustor requests that copies of any
notices of default and sale be directed to Trustor's address
shown near the beginning of this Deed of Trust.
8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount
not to exceed the statutory maximum, for furnishing the
statement of obligation as provided by Section 2943 of the
Civil Code of California.
9.0 [RESERVED]
10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant,
transfer or assignment effectuated hereby, without in any
manner limiting the generality of the grants in the conveyance
and grant section hereof, Trustor shall assign to Beneficiary,
as security for the indebtedness secured hereby, Trustor's
interest in all agreements, contracts, leases, licenses and
permits affecting the Property in any manner whatsoever, such
assignments to be made, if so requested by Beneficiary, by
instruments in form satisfactory to Beneficiary; but no such
assignment shall be construed as a consent by Beneficiary to
any agreement, contract license or permit so assigned, or to
impose upon Beneficiary any obligations with respect thereto.
11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be
maintained, proper and accurate books, records and accounts
reflecting all items of income and expense in connection with
the operation of the Mortgaged Property or in connection with
any services, equipment or furnishings provided in connection
wi th the operation of the Mortgaged Property, whether such
income or expense be realized by Trustor or by any other person
or entity whatsoever excepting persons unrelated to and
unaffiliated with Trustor and who leased from Trustor portions
502001:23708.1
28
of the Mortgaged Property for the purposes of occupying the
dame. Upon the request of Beneficiary, Trustor shall prepare
and deliver to Beneficiary such financial statements regarding
operation of the Mortgaged Property as Beneficiary may
reasonably request. Beneficiary, or its designee, shall have
the right from time to time during normal business hours to
examine such books, records and accounts and to make copies or
extracts therefrom.
12.0 MISCELLANEOUS PROVISIONS. The following
provisions are a part of this Deed of Trust:
miscellaneous
Environmental Default and Remedies. In the event that any
portion of the Mortgaged Property is determined to be
"environmentally impaired", or an "affected parcel" as these
terms are defined at Code of Civil Procedure Section 725.5(e),
then in such event and without limiting or in any way affecting
the another rights and remedies of the Trustee and the
Beneficiary under this Deed of Trust, the Beneficiary may elect
to exercise its rights under Code of civil Procedure Section
725.5(a) to waive its lien or such portion of the Mortgaged
Property and to exercise its rights and remedies to recover the
Indebtedness under a judgment as an unsecured creditor of the
Trustor and/or to exercise any other remedy authorized by law.
The Trustor shall be deemed to have willfully permitted or
acquired in a or release or threatened release of a hazardous
substance, if such release or threatened release was knowingly
or negligently caused or contributed by to by any lessee,
occupant, user of the Mortgaged Property which caused or
contributed to the release or threatened release of a hazardous
substance. All costs and expenses of the Beneficiary,
including reasonable attorney's fees, plus interest at a rate
per annum of eight percent (8%) until paid, as incurred in
connection with an action as may be brought by the Beneficiary
as provided in Code of civil Procedure Section 725.5(b).
Amendments. This Deed of Trust, together with any Related
Documents, constitutes the entire understanding and agreement
of the parties as to the matters set forth in this Deed of
. Trust. No alteration of or amendment to this Deed of Trust
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
altercation or amendment.
Acceptance by Trustee. Trustee accepts this Trust when this
Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law.
502001:23708.1
29
Applicable Law. This Deed of Trust has been delivered to
Lender and accepted by Lender in the State of California. This
Deed of Trust shall be governed by and construed in accordance
with the laws of the State of California.
Caption Headings. Caption headings in this Deed of Trust are
for convenience purposes only and are not to be used to
interpret or define the provisions of this Deed of Trust.
Merger. There shall be no merger of the interest or estate
created by this Deed of Trust with any other interest or estate
in the Property at any time held by or for the benefit of
Lender in any capacity, without the written consent of Lender.
Severability. If a court of competent jurisdiction finds any
provision of this Deed of Trust to be invalid or unenforceable
as to any person or circumstance, such finding shall not render
that provision invalid or unenforceable as to any other persons
or circumstances. If feasible, any such offending provision
shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other
provisions of this Deed of Trust in all other respects shall
remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in
this Deed of Trust on transfer of Trustor's interest, this Deed
of Trust shall be binding upon and inure to the benefit of the
parties, their successors and assigns. If ownership of the
Property becomes vested in a person other Trustor, Lender,
without notice to Trustor, may deal with Trustor's successors
with reference to this Deed of Trust and the indebtedness by
way of forbearance or extension without releasing Trustor from
the obligations of this Deed of Trust or liability under the
Indebtedness.
Time is of the Essence. Time is of the essence in the
performance of this Deed of Trust.
waivers and Consents. Lender shall not be deemed to have
waived any rights under this Deed of Trust (or under the
Related Documents) unless such waiver is in writing and signed
by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or
any other right. A waiver by and any party of a provision of
this Deed of Trust shall not constitute a waiver of or
502001:23708.1
30
prejudice the party's right otherwise to demand strict
compliance with that provision or. any other prov~s~on. No
prior waiver by Lender, nor any course of dealing between
Lender and Trustor, shall constitute a waiver of any of
Lender's rights or any of Trustor's obligations as to any
future transactions. Whenever consent by Lender is required in
this Deed of Trust, the granting of such consent by Lender in
any instance shall not constitute continuing consent to
subsequent instances where such consent is required.
Fixture Filing. This Deed of Trust also constitutes a
fixture filing as defined in the California Uniform Commercial
Code, as amended or recodified from time to time. This Deed
of Trust is to be recorded in the real estate records of San
Bernardino County, California, and covers goods which are to
become fixtures.
THE TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED
OF TRUST, AND THE TRUSTOR AGREES TO ITS TERMS, AND THE TERMS OF THE
PROMISSORY NOTE SECURED BY THIS DEED OF TRUST.
TRUSTOR
Neighborhood Housing Services
Date:
By:
Executive Director
[SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT]
502001 :23708.1
31
EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
The North 49.6 feet of the South 297.60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 ofTract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof.
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,
in the office of the County Recorder of said County.
1501 - 1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
File No.: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181.15 feet of Lot 3,
Block 33, Rancho San Bernardino, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Elook 7, page(s)
2, of Maps, in the office of the County Recorder of said County.
Page 3 of'6
.
. '
. .
.
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
I
~
CLTA Preliminary Report Form (Rev 1/1/95)
TQ20001CA (2/99).
Page 3 of 6
/.
.
i
file No.: 60271161
I
I.
i EXHIBIT "A"
,
, Lot 10, Block "B" of Ede'en Tract, in the City of SAN BI!RNARDINO, county of
I SAN BERNARDINO, State of California, as per map recorded in Book S, page(s)
i 3S of Maps, in the office 01 the County Recorder 01 said County.
I
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.\'.G. -29 OJ l'tIED' 10 ~,
EXHIBIT "A"
20009101600244
LOT 11, TRACT NO. 1785, TN DiE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 26 OF MAPS. PAGE 19, IN THE OFFICE! OF THE COUNTY RECORDER OF
SAID COUNTY.
,
Order. -00019068
Descripffon:2001.187745
Page 2 of 3
Comment: CHRIS
EXHIBIT "G"
Form of Agency Subordination Agreement
C:\windows\TEMP\NHS CHDO Loan Agreement.doc
Recording Requested By: )
Redevelopment Agency of the City )
of San Bernardino )
)
)
)
)
)
and After Recording Mail To:
201 North "E" Street
Suite 301
San Bernardino, CA 92401
(Space above for Recorder' 5 Use)
ACOUlSITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT
NOTICE: THIS ACQUISITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST
IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS CONSTRUCTION LOAN SUBORDINATION AGREEMENT, made September I 7,
2001, by and among Neighborhood Housing Services of the Inland Empire, Inc., a California non-
profit corporation as the owner of the land hereinafter described and hereinafter referred to as the
"Owner", and the Redevelopment Agency of the City of San Bernardino, present owner and holder
of the deed of trust and note first hereinafter described and hereinafter referred to as the
"Beneficiary";
WITNESSETH
THAT WHEREAS, OWner has executed a deed of trust, dated to
as trustee, covering that certain real property described as: See Attached
Legal Exhibit to secure a note in the sum of $147,000, dated September 17, 2001 in favor of
Beneficiary, which deed of trust is to be recorded concurrently herewith; and
WHEREAS, Owner has executed, or is about to execute, a acquisition and rehabilitation
loan, deed of trust and note in the original principal sum of $327,503, dated , in
favor of hereinafter referred to as "Lender", payable with interest and upon
the terms and conditions described herein, which deed of trust is also to be recorded concurrently
herewith; and
WHEREAS, it is a condition precedent to obtaining said loan from Lender that said deed of
trust last above mentioned shall be and remain at all times a lien or charge upon the land
P:\Forms\Housing fonns\HOME Forms\NHS SUbordination.wpd
hereinbefore described, prior and superior to the lien or charge of the deed of trust first above
mentioned; and
WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same
is a lien or charge upon the above described property prior and superior to the lien or charge of the
deed of trust first above mentioned and provided that Beneficiary will specifically subordinate the
lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in
favor of Lender; and
WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to
Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded,
constitute a lien or charge upon said land which is prior and superior to the lien or charge of the deed
of trust first above mentioned.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto
and other valuable consideration, the receipt and sufficiency of which consideration is hereby
acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby
declared, understood and agreed as follows:
(I) That said deed of trust securing said note in favor of Lender, be and remain
at all times a lien or charge on the property therein described, prior and superior to the lien
or charge of the deed of trust first above mentioned.
(2) That Lender would not make its loan above described without this
subordination agreement.
(3) That this subordination agreement shall be the whole and only agreement with
regard to the 'subordination of the lien or charge of the deed of trust first above mentioned
to the lien or charge of the deed of trust in favor of Lender above referred to and shall
supersede and cancel, but only insofar as would affect the priority between the deeds of trust
herein before specifically described, any prior agreements as to such subordination including,
but not limited to, those provisions, if any, contained in the deed of trust first above
mentioned, which provide for the subordination of the lien or charge thereof to another deed
or deeds of trust or to another mortgage or mortgages.
(4) That Lender and Owner shall not materially amend or modify any agreements
between them to, or in any other manner or form, increase the outstanding principal amount
secured by the deed of trust last above mentioned to an amount in excess of the original
principal sum, set forth above, without the prior written consent of the Beneficiary.
Beneficiary declares, agrees and acknowledges that:
2
P:\Forms\Housing Forms\HOME Forms\NHS Subordination.wpd
(a) It consents to and approves (i) all provisions of the note and deed of trust in
favor ofLenderreferred above need, and (ii) all agreements, including but not limited to any
loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds
of Lender's loan;
(b) Lender in making disbursements pursuant to any such agreement is under no
obligation or duty to, nor has Lender represented that it will, see to the application of such
proceeds by the person or persons to whom Lender disburses such proceeds and any
application or use of such proceeds for purposes other than those provided for in such
agreement or agreements shall not defeat the subordination herein made in whole or in part;
(c) It intentionally waives, relinquishes and subordinates the lien or charge of the
deed of trust first above mentioned in favor of the lien or charge upon said land of the deed
of trust in favor of Lender above referred to and understands that in reliance upon, and in
consideration of this waiver, relinquishment and subordination specific loans and advances
are being and will be made and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or entered into but
for said reliance upon this waiver, relinquishment and subordination; and
(d) An endorsement has been placed upon the note secured by the deed of trust
first above mentioned that said deed of trust has by this instrument been subordinated to the
lien or charge of the deed of trust in favor of Lender above referred to.
NOTICE: THIS ACQUISITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY
SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE
EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.
BENEFICIARY
OWNER
Redevelopment Agency of the City of San
Bernardino
Neighborhood Housing Services of the Inland
Empire, Inc., a California non-profit
corporation
By:
By:
Title:
By:
Title:
3
P:\Fonns\Housing Fonns\HOME Fonns\NHS SUbordination.wpd
EXHIBIT "H"
Tenant Eligibility Certification Form
C:\windows\TEMP\NHS CHDO Loan Agreement.doc
EXHIBIT "H"
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
HOME
CERTIFICATION/ANNUAL RECERTIFICATION OF TENANT ELIGIBILITY
Rental Unit:
Street Address:
City:
Bedroom Size:
Unit No.:
Zip Code:
IlWe, the undersigned, being first duly sworn, state that I/we have read and answered
fully and truthfully each of the following questions for all persons who are to occupy the
unit in the above apartment development for which application is made, all of whom are
listed below:
HOUSEHOLD Age Ethnicity Social Security # Place of Employment
Name of Members Relationship
Date of Occupancy of Rental Unit by Tenant:
Date of Lease Signed for Rental Unit by Tenant:
Certification Date (Earlier of Date of Occupancy or Date Lease Signed):
Anticipated Annual Income
The anticipated total annual income from all sources of each person listed in 1 for the
twelve month period beginning on the Certification Date listed above, including income
described in (a) below, but excluding all income described in (b) below, is $
(a) The amount set forth above includes all of the following income (unless such
income is described in (b) below):
(i) all wages and salaries, overtime pay, commissions, fees, tips and
bonuses before payroll deductions;
H-I
P:\Clerical Services Dept\Stephanie\Musi's Worlc\HOME Recenificalion.Exhibit H.doc
(ii) net income from the operation of a business or profession or from the
rental of real or personal property (without deducting expenditures for
business expansion or amortization of capital indebtedness or any
allowance for depreciation of capital assets);
(iii) interest and dividends (including income from assets as set forth in item
(b) below);
(iv) full amount of periodic payments received from Social Security, annuities,
insurance policies, retirement funds, pensions, disability or death benefits
and other similar types of periodic reports;
(v) payments in lieu of earnings, such as unemployment and disability
compensation, worker's compensation and severance pay;
(vi) the maximum amount of public assistance available to the above persons;
(vii) periodic and determinable allowances, such as alimony and child support
payments and regular contributions and gifts received from persons not
residing in the dwelling;
(viii) all regular pay, special pay and allowances of a member of the Armed
Forces (whether or not living in the dwelling) who is the head of the
household or spouse; and
(ix) any earned income tax credit to the extent it exceeds income tax liability.
(b) The following income is excluded from the amount set forth above:
(i) casual, sporadic or irregular gifts;
(ii) amounts that are specifically for or in reimbursement of medical expenses;
(iii) lump sum additions to family assets, such as inheritances, insurance
payments (including payments under health and accident insurance and
worker's compensation), capital gains and settlement for personal or
property losses;
(iv) amounts of educational scholarships paid directly to student or
educational institution, and amounts paid by the government to a veteran
for use in meeting the costs of tuition, fees, books and equipment, but in
either case only to the extent used for such purposes;
(v) hazardous duty pay to a member of the household in the armed forces
who is away from home and exposed to hostile fire;
H-2
P:\Clerical Services Dcp1\Stephanie\Musi's Work\HOME Recenification-Exbibit H.doc:
(vi) relocation payments under Title II of the Uniform Relocation Assistance
. and Real Property Acquisition Policies Act of 1970;
(vii) income from employment of children (including foster children) under the
age of 18 years;
(viii) foster child care payments;
(ix) the value of coupon allotments under the Food Stamp Act of 1977;
(x) payments to volunteers under the Domestic Volunteer Service Act of
1973;
(xi) payments received under the Alaska Native Claims Settlement Act;
(xii) income derived from certain submarginal land of the United States that is
held in trust for certain Indian tribes;
(xiii) payments on allowances made under the Department of Health and
Human Services' Low-Income Home Energy Assistance Program; and
(xiv) payments received from the Job Partnership Training Act
Net Family Assets
If any of the persons described in Members of the Household (or any person whose
income or contributions were included in Anticipated Annual Income has any savings,
stocks, bonds, equity in real property or other form of capital investment (excluding
interest in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons: $
, and
(b) the amount of income expected to be derived from such assets in the 12-month
period commencing this date: $
Students
(a) Will all of the persons listed in Members of Household above be or have they
been fulltime students during five calendar months of this calendar year at an
educational institution (other than a correspondence school) with regular faculty
and students? 0 Yes 0 No
(b) If yes, is any such person (other than non-resident aliens) married and eligible to
file a joint federal income tax return? 0 Yes 0 No
H-3
P:\Clerical Services Dcpt\Slcphanie\Musi's Work\HOME Recertification-Exhibit H.doc
The above information is full, true and complete to the best of my knowledge. I have no
objections to inquiries being made for the purpose of verifying the statements made
herein.
I acknowledge that all of the above information is relevant to the status under federal
law of the HOME funds used in the acquisition and rehabilitation of the Project for which
application is being made. I consent to the disclosure of such information to the
Economic Development Agency of the City of San Bernardino, County, State and
Federal Department of Housing and Urban Development or agent acting on their behalf
and any authorized agent of the Treasury Department or Internal Revenue Service.
Signature:
Date:
(Signature Must be Notarized)
H-4
P:\Clericat Services Dcpt\Slephanie\Musj's Work\HOME Re<<nificalion-Exhibil H.doc:
FOR COMPLETION BY NEIGHBORHOOD HOUSING SERVICES OF THE INLAND
EMPIRE, INC., ONLY:
A. Calculation of Eligible Income
(1) Enter amount entered for entire household in Anticipated Annual Income:
$
(2) If the amount entered in (a) of Net Family Assets above is greater than
$5,000, enter:
(i) the product of the amount entered in (a) of Net Family Assets
above multiplied by the current passbook savings rate as
determined by HUD: $
(ii) the amount entered in (b) of Net Family Assets above:
$
(Hi) enter the greater of line (i) or line (ii): $
(3) TOTAL ELIGIBLE INCOME (Line A (1) plus line A (2) (Hi): $
B. Enter Number of family members listed in item 1 above:
C. The amount entered in A (3) (Total Eligible Income) is: $
o Less than $ of median income for the area in which the Project is located,
which is the maximum income at which a household may be determined to
be a Qualifying Tenant as that term is defined in the Grant Agreement and
Declaration of Restrictive Covenants (the "Regulatory Agreement")
("Qualifying . Tenant").
o More than the above mentioned amount.
D. Number of apartment units assigned:
E. Monthly Rent: $
F. This apartment unit (was/was not) last occupied for a period of 31 consecutive
days by a person or persons whose adjusted income, as certified in the above
manner, was equal to or less than the amount at which a person would have
qualified as a Qualifying Tenant under the terms of the Regulatory Agreement.
H-5
P:\Clerical Services Dept\Stepbanie\Musi's Wortc\HOME Rccertification-Exhibit H.dol;
G. Applicant:
o Qualifies as a Qualifying Tenant, household income is at or below 50% of
the area median income
o Qualifies as a Qualifying Tenant, household income is at or below 60% of
the area median income
o Qualifies as a Qualifying Tenant, household income is at or below 80% of
the area median income
o Does Not Qualify as a Qualifying Tenant
H-6
P;\Clerical Services Dept\Stcphanie\Musi's Work\HOME Recenification-Exhibit H.doc
EXHIBIT "I"
Initial Rent Schedule for Rental Units
C:\windows\TEMP\NHS CHDQ Loan Agreement.doc
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R29. A Resolution of the Community Development Commission of the
City of San Bernardino, as the governing body of the
Redevelopment Agency of the City of San Bernardino, approving
the sale of Silverwood Apartments Project to San Bernardino
328/ AF XXX, LLC; approving and authorizing execution of certain
amendments to the Indenture and Loan Agreement relating to
$7,000,000 Redevelopment Agency of the City of San Bernardino
Variable Rate Demand Multifamily Housing Revenue Bonds
(Silverwood Apartments Project) Series 1996; approving and
authorizing execution of an Assumption Agreement in connection
with the sale of Silverwood Apartments Project; appointing Bond
Counsel in connection with the sale of Silverwood Apartments
Project and amendments to the Indenture and Loan Agreement;
and authorizing distribution of a Supplement to the Placement
Memorandum relating to $7,000,000 Redevelopment Agency of the
City of San Bernardino Variable Rate Demand Multifamily Housing
Revenue Bonds (Silverwood Apartments Project) Series 1996. (See
Attached) (No cost to the Agency -- $7,000,000 Bonds are not a
liability or debt of Agency or City.) Ward 4
Approved
MOTION:
That said resolution be adopted.
Adopted CDC/2001-37
R30, Resolution of the Community Development Commission of the City
of San Bernardino approving and authorizing (I) the Executive
Director of the Agency to execute a HOME Program Community
Housing Development Organization (CHDO) Agreement (Fiscal
Year 2000-2001) by and between Neighborhood Housing Services
of the Inland Empire, Inc., (NHS) the and Redevelopment Agency of
the City of San Bernardino (1 I units multi-family housing
acquisition and rehabilitation) and (2) making certain findings of
environmental exemption. (See Attached) (Cost to the Agency --
$147,000 from HOME/CHDO Funds.)
Failed
MOTION: That said resolution be adopted.
Approved
MOTION: That the matter be continued to,October 1,2001. .
15
9/17/2001
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
APPROVAL TO ENTER INTO A HOME
CHDO AGREEMENT WITH
NEIGHBORHOOD HOUSING
DATE: August 28, 2001 SERVICES OF THE INLAND EMPIRE,
_________m___________________________________________________________m__________________________________}_~_~,1~_~1______..________________________________________
Svnopsis of Previous Commission/CouncWCommittee Action(s):
FROM:
Maggie Pacheco, Director
Housing and Community Development
SUBJECT:
On August 9, 2001, the Redevelopment Committee recommended that this item be sent to the Community Development
Commission for approval.
Recommended Motiop(s):
(Communitv Development Commission)
MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING AND AUTHORIZING (I) THE EXECUTIVE DIRECTOR OF THE
AGENCY TO EXECUTE A HOME PROGRAM COMMUNITY HOUSING DEVELOPMENT
ORGANIZATION (CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC., (NHS) AND
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (II UNITS MULTI-FAMILY
HOUSING ACQUISITION AND REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
Contact Person(s): Gary Van OsdellMaggie Pacheco
Project Area(s) N/A
Phone:
663-1044
Ward(s):
Second
Supporting Data Attached: Ii'l Staff Report Ii'l Resolution(s) Ii'l Agreement(s)/Contract(s) Ii'l Map(s) 0 Letter/Memo
SIGNATURE:
Source: HOME-CHDO #804604099 and 804600899
FUNDING REQUIREMENTS
Budget Authority:
_ ly. 2000-2001 Budgy)
"/7c~ (/~
Maggie Pacheco, Director
Housing and Community Development
Commission/Council Notes:
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Number: "~D
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
---------------------------------------------------------------------------------------------------------------------
ADDroval To Enter Into A Home CHDO Al!reement With
Neil!hborhood Housinl! Services Of The Inland EmDire. Inc.. (NHSIE)
BACKGROUND
Neighborhood Housing Services of the Inland Empire, Inc., (NHS) is a non-profit 50Ic(3)
housing and community development corporation established in 1981 and is located in the City
of San Bernardino. The mission of NHS is to revitalize neighborhoods through housing
development, down payment assistance, homebuyer education, Y outhBuild and neighborhood
revitalization. Through these various programs, NHS has assisted over 1000 prospective
homebuyers through its education program, over 25 youth through its YouthBuild Program and
200 households through the Agency's Mobile Home Repair Grant Program and other housing
rehabilitation programs.
NHS is also a City/Agency approved and certified Community Housing Development
Organization (CHDO) and is eligible to receive federal HOME funds to improve, construct and
preserve affordable housing for low/moderate-income households.
In fiscal year 2000/01, the Community Development Commission approved a grant for $80,000
("Grant Agreement") to NHS to expand their housing capacity in the area of multi-family.
Specifically, the grant was provided for NHS to increase its staffing and technical skills in the
area of acquisition and property management of multi-family units with the goal of eventually
grooming NHS to become an owner of multi-family units within the City or selected NIP areas.
NHS had previous limited property management experience in that they owned and managed
more than 200 units at the Royal Palm Apartments in San Bernardino.
CURRENT ISSUE
As per the Agency/County of San Bernardino Cooperative Agreement, Neighborhood Initiative
Program (NIP), the Agency is obligated to purchase all properties within the NIP Areas. The
properties, when available, have been bought from the County by the Agency and sold in back-
to-back escrows to approved ARR Partners. The Partners then rehabilitate the properties and sell
them to qualified first-time homebuyer5.
Similarly, more and more multi-family units are becoming available for mandatory acquisition
under the Cooperative Agreement, which the Agency has to buy and reselL Based on the goals
established in the Grant Agreement and to effectuate a comprehensive block-by-block
revitalization NlP approach, Staff and NHS have identified possible multi family units for their
acquisition, rehabilitation and management.
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/1712001
Agenda Item Number: 1<.30
Economic Development Agency Staff Report
NHS - CHDO
August 28, 2001
Page Number -2-
---------------------------------------------------------------------------------------------------------------------
The first multi-family property that the Agency can make available to NHS is the property
located at 1379 Arrowhead (4 units), which is a donation from the County to the Agency
pursuant to the Cooperative Agreement. Staff proposes to donate this property to NHS, and sell
other available multifamily units at: 1441-1443 Mt. View (2 units), 1495 Mt. View and 195-197
West Magnolia (3 units) and 1501-1503 Pershing (2 units) (the "Properties"). Under the
Cooperative Agreement, the Agency is required to buy these three properties at the cost of
$129,000. Along with the Arrowhead donation, the Agency would sell these 3 Properties to
NHS in a back-to-back escrow. NHS's estimated total costs to buy, rehabilitate and manage
these I I units, is approximately $490,000. This includes acquisition costs, over $286,000 for
rehabilitation costs and the difference is for construction management, marketing, reserves, etc.
In order to make this Project financially feasible and leverage resources, NHS will obtain a
senior first mortgage in the approximate amount of $328,000, provide a down payment of
$15,000 and obtain an Agency Loan for the difference in an amount not to exceed $147,000.
The Agency Loan will be structured as a second subordinate, 15-year forgivable loan (10% of
the loan amount forgiven annually and conditioned upon adequate property management and
maintaining affordability). The Agency Loan would be used by NHS to buy the three properties
at the costs of $129,000 and $18,000 will be used for other costs such as rehabilitation, reserves,
marketing, etc.
The Agency's Loan will be funded from the 15% Set Aside HOME/CHDO funds which the
Agency, by federal regulation, must make available to approved CHDO'5.
After the units have been fully rehabilitated, NHS will lease the units to low-income renters. The
proposed rents will range from $230 per month for a I-bedroom unit and $530 per month for a 2-
bedroom unit. The rents are annually capped per federal regulations. The rents collected by NHS
will go to pay the first mortgage loan, property maintenance, reserves, landscaping, management,
administration, and insurance cost. Furthermore, NHS will be conditioned to use any and all
Project surplus cash flow (not anticipated until year 3) and any equity in the Project to acquire
subsequent multi family units or invest in other affordable housing opportunities. Although,
NHS' 5 property management experience is limited, staff believes the interim management plan
for the project will work until such time that NHS has developed a sufficient multi-family
portfolio to hire a professional property management company (see attached Management Plan).
Moreover, NHS Multi-family Management Staff will be required to participate in the Police
Department's Crime Free Multi-Family Housing Program as a condition of the Agency Loan.
FISCAL IMPACT
Funds in the amount of $147,000 are available in the Agency 2000 HOME/CHDO account #'5
804601099 and 804600899.
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Number: !I. 30
Economic Development Agency Staff Report
NHS - CHDO
August 28, 2001
Page Number -3-
ENVIRONMENTAL
Prior to the release of any federal resources, the Agency must adhere to the National
Environmental Protection Agency (NEPA) environmental guidelines and requirements. All
mandated notices ofthe public hearing and NEP A have been adhered to.
RECOMMENDATION
That the Community Development Commission adopt the attached Resolution.
~G~
Maggie Pacheco, Director
Housing and Community Development
GVO:MA:ssj:
COMMISSION MEETING AGENDA
Meeting Date: 09/17/2001
Agenda Item Number: -.A..312-
1
RESOLUTION NO.
2
3
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING (I)
THE EXECUTNE DIRECTOR OF THE AGENCY TO EXECUTE A HOME
PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
(CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC.,
(NHS) AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO (11 UNITS MULTI-FAMILY HOUSING ACQUISITION
AND REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
4
5
6
7
8
9
WHEREAS, Neighborhood Housing Services of the Inland Empire, Inc. (NHS), a
to
California non-profit corporation (the "Participant") known locally and internationally for
11
building affordable homes for low and moderate income households, has requested financial
12
assistance in the amount of one hundred forty-seven thousand dollars ($147,000) from the
13
Agency to purchase and rehabilitate eleven (11) multi-family housing units in the City; and
14
WHEREAS, pursuant to the request, the Participant is contributing fifteen thousand
15
dollars ($15,000) as a down payment together with other private resources to provide as
16
affordable rental units for low income households on the Properties identified as: APN 0146-
17
163-43000, APN 146-163-0200, APN 146-162-2200 and APN 0146-132-18000 (the "HOME
18
Proj ect"); and
19
20
WHEREAS, it is proposed that the Agency shall provide certain City HOME Program
Funds to Participant and the HOME Project, as set forth under the terms of the Agreement.
21
22
NOW THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO,
AS THE GOVERNING BOARD OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO, AS FOLLOWS:
23
24
25
-1-
Section 1.
A detailed description of the HOME Project is set forth in the HOME
2 Agreement.
3 Section 2. Subject to the terms and conditions of the HOME Agreement, the
4 Community Development Commission ("Commission") hereby reserves the sum of not-to-
5 exceed one hundred forty-seven thousand dollars ($147,000) in fiscal year 2000 and 2001 City
6 HOME CHDO Funds as approved and budgeted in the Agency budget by the Commission for
7 such purposes, for the use and application by the Participant for the HOME Project.
8 Section 3. The Commission hereby finds and determines that the approval of the
9 HOME Agreement, and the disbursement ofthe City HOME/CHDO Fiscal Year 2000 and 2001
10 Program funds administered by the Agency for the HOME Project as reserved for the
11 Participant under Section 2 of this Resolution, requires no further environmental assessment
12 under the provisions of the National Environmental Protection Act in view of the categorized
13 exemption applicable to the HOME Project as set forth at 24 CFR Part 58.35( c )(2). The
14 Commission further finds and determines that the approval of the HOME Agreement, and the
15 disbursement of the City HOME/CHDO Program fiscal year 2000 and 2001 funds by the
16 Agency as reserved for the HOME Project under Section 2 of this Resolution requires no further
17 environmental assessment by the Commission under the provisions of the California
18 Environmental Quality Act in the view of the exemption found at Public Resources Code
19 Section 21080.14 (affordable housing for lower income persons in urbanized areas). The
20 Executive Director of the Agency is hereby authorized and directed to prepare the appropriate
21 forms of written notice of the determinations of categorical exemption for the HOME Project as
22 provided for in this Section 3.
23 Section 4. The Commission hereby approves the form of the HOME Agreement as
24 presented at the meeting at which this Resolution is adopted. The Executive Director of the
25 Agency is hereby authorized and directed to execute the HOME Agreement on behalf of the
-2-
1 Agency, together with such technical and conforming changes as may be recommended by the
2 Agency Counsel. The Executive Director of the Agency is further authorized and directed to
3 execute all ancillary and related documents and agreements subject to the terms and conditions
4 as set forth therein.
5 Section 5.
6 fIll
7 fIll
8 fIll
9 fIll
10 fIll
11 fIll
12 fIll
13 fIll
14 fIll
15 fIll
16 fIll
17 fIll
18 fIll
19 fIll
20 fIll
21 fIll
22 fIll
23 fIll
24 fIll
25 fIll
This Resolution shall become effective immediately upon its adoption.
-3-
1
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING (1)
THE EXECUTNE DIRECTOR OF THE AGENCY TO EXECUTE A HOME
PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
(CHDO) AGREEMENT (FISCAL YEAR 2000-2001) BY AND BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC.,
(NHS) AND REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO (ll UNITS MULTI-FAMILY HOUSING ACQUISITION AND
REHABILITATION) AND (2) MAKING CERTAIN FINDINGS OF
ENVIRONMENTAL EXEMPTION.
2
3
4
5
6
7
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
8 Community Development Commission of the City of San Bernardino at a
meeting thereof, held on the day of , 2001, by the following vote to wit:
9
10
Commission Members:
Abstain
Absent
Aves
Nav5
ESTRADA
11
LIEN
12 MCGINNIS
13
SCHNETZ
SUAREZ
ANDERSON
MC CAMMACK
14
15
16
17
18
Rachel G. Clark, City Clerk
19
The foregoing resolution is hereby approved this
day of
,2001.
20
21
22 Approved as to form and Legal Content:
Judith Valles, Chairperson
Community Development Commission
City of San Bernardino
23
24 By:
25
-4-
Property Management by NHSIE
On August 3, 2001 NHSIE is interviewing for the position of Operations Manager.
This position will allow us to take considerable steps forward in the control of our
daily internal and external operational needs. It also enables us to again increase
our capacity to accept increasing responsibility for multi-family properties in the core
areas of the City of San Bernardino.
Internally, the person in this position will be directly responsible for all real estate and
construction program activities of the corporation, and will also add a layer of
oversight to our accounting department. In relationship to these internal
management responsibilities, property management and maintenance will be daily
responsibilities of this person.
Physically, the two primary duties of property management will be split: YouthBuild
will be responsible for all maintenance and administrative staff will be responsible for
other management issues. YouthBuild will provide yard and exterior maintenance
on a regular basis, as well as being responsible for all repairs requested by tenants.
Two of the units will be occupied by qualified students who will be enrolled in the full
YouthBuild program, where the student will learn property maintenance and repair
throughout the school year. The Operations Manager will be directly responsible for
the oversight of all staff involved in maintenance and upkeep of our properties. We
expect our properties to be maintained in such a manner that all residents and city
staff are pleased to have these properties in the neighborhood.
Administrative staff will cover collection of rents, evictions (in relationship to a
qualified firm), lease signing, credit and application checks and other responsibilities,
which are the tasks of management. The office of the Operations Manager, which
has secretarial support, will receive applications. Approval after appropriate
examinations will be under this offices' authority. Control of keys, deposits, lease
execution and explanation of property rules will rest with this department also.
Deposits will be held in a non-interest bearing separate escrow account under the
control of our accounting department, which has a staff of two. Rents will be paid by
mail or by directly giving the rent check to the secretary who is in the reception area
of our administrative office at 1390 North D St. Rents and other property information
will be logged by the secretary, funds will be turned over to the bookkeeper, and all
information related to the property will be entered into a database created to track
and maintain the units. Systems will be created or expanded to manage all aspects
of property management. We presently service hundreds of loans, run credit checks
for future home buyers, do extensive background checks and drug screening on
perspective employees and random drug checks of students. It is an easy task to
extend this expertise to multi-family housing to assure quality properties and tenants.
In order to do so we are presently evaluating Property Management Software from
Data-Trak and Spectra, and will have the appropriate system in place before the first
residents move in.
We are confident that at least 50 units of multi-family housing can be managed
effectively in this manner. As we reach an income level from the management of
these properties that allows us to hire a qualified property manager, we will take that
C:IWINDOWSITemporary Internet FileslOLKA 11PropertyManagernentbyNHSI EAug01.doc
(
step. We project this will occur two to three years from now and after we have over
50 units of housing under management.
C:IWINDOWSITemporary Internet FileslOLKA 1\PropertyManagemenlbyNHSIEAug01.doc
/
NIP TARGET AREA 1
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NHS MULTI-FAMILY PROJECT
o 1495 Mountain View1195-197 Magnolia
G 1441-1443 Mountain View
e 1501-1503 Pershing
o County Donation.
1379 Arrowhead Ave.
COMMUNITY POCKET PARK
9 1650 N. Sierra Way
/
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
LOAN AGREEMENT FOR
COMMUNITY HOUSING DEVELOPMENT ORGANIZATION
MULTI-FAMILY HOUSING ACQUISITION AND REHABILITATION
2000 HOME-CHDO
THIS AGREEMENT is dated as of September 17, 2001, by and between the
Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the
"Agency"), and Neighborhood Housing Services of the Inland Empire, Inc., a California non-
profit corporation (the "Participant") and is entered into in light of the facts set forth in the
following Recitals:
RECITALS
I. The City of San Bernardino (the "City") has been designated to receive and is
eligible to receive certain Federal funds under the Home Investment Partnership Act ("HOME
Program") allocation for Fiscal Year 2000 and Federal funds under the HOME Community
Housing Development Organization ("CHDO") allocation for Fiscal Year 2000, from the United
States Department of Housing and Urban Development ("HUD") in order to carry out eligible
activities of the City and the Agency in accordance with Federal program regulations set forth at
Title 24 Code of Federal Regulations Part 92; and
2. The City has designated and authorized the Redevelopment Agency to administer
and implement the HOME Program; and
P:\Fonns\Housing Forms\HOME Fonns\NHS CHDO Loan Agreement.doc
1
3. In accordance with the HUD guidelines under the HOME Program, at least fifteen
percent (15%) of HOME funds must be set aside for locally based non-profit entities known as
community housing development organizations ("CHDO'5"); and
4. The Participant is a CHDO, as this term is defined at 24 CFR Part 92.300, and the
Participant desires to participate with the Agency in activities eligible under the HOME Program,
and the Participant further agrees that the beneficiaries of its activities under the HOME Program
and this Agreement, are or will be families and persons who meet the income eligibility
guidelines of24 CFR Part 92.216 and Part 92.217; and
5. The Agency deems that the activities and HOME Program funded services to be
provided by Participant are consistent with and supportive of the HOME Program description for
the Agency in Fiscal Years 2000, and that the financial assistance of the Agency is necessary and
appropriate to initiate the activities of the Participant as set forth herein; and
6. The Participant shall certify to the Agency that it qualifies as a CHDO under the
requirements as set forth in the HOME Program; and
7. The Agency deems it desirable to enter into this Agreement with Participant in
order to provide for the acquisition and rehabilitation of eleven (11) residential dwelling units by
the Participant (hereinafter referred to as the "Project"). The Project shall be situated on four (4)
separate non-contiguous parcels of land situated in the City (each such parcel hereinafter referred
to as a "Parcel"):
Parcel No.1 consists of2 rental dwelling units: 1441-1493 Mt. View APN-OI46-
163-43000;
Parcel No.2 consists of 3 rental dwelling units 1495 Mt. View and 1915-1917
Magnolia (comer parcel): APN 0146-163-0200; and
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
2
Parcel No.3 consists of 2 rental dwelling units 1501-1503 Pershing: APN 0146-
132-18000.
Parcel No.4 consists of 4 rental dwelling units (rehabilitation only - Property was
donated by the County) 1379 Arrowhead: APN 0146-162-22000.
Parcel No.1, Parcel No.2, Parcel No.3, and Parcel No.4, are more particularly
described in the legal description attached hereto as Exhibit "A" and incorporated herein by this
reference; and
8. Each Parcel shall be subject to the affordable housing HOME Program covenants,
conditions and restrictions, as noted in Exhibit "B" and incorporated herein by this reference;
and
9. The Participant shows a history of serving the residents of the City for at least one
year, Agency deems it desirable to assist the Participant to acquire and rehabilitate each of the
Parcels and undertake the Project as more fully described in the Scope of Work attached hereto
as Exhibit "C" and incorporated herein by this reference, in order to facilitate use and operation
of each Parcel for uses consistent with the HOME Program; and
10. With respect to the use of the Project by the Participant after the completion of
rehabilitation work on each Parcel, it is deemed desirable that each of the dwelling units on each
Parcel be reserved for use by eligible households qualifying as low-income households III
accordance with the HOME Program provisions as more fully set forth herein.
NOW THEREFORE, THE PARTIES TO THIS AGREEMENT COVENANT AND
AGREE AS FOLLOWS:
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
3
Section I. Oualifications
The terms and provisions of the Recitals of this Agreement are material to its
consideration and formation and are hereby incorporated into this Agreement. Participant has
fully reviewed all of the requirements of a CHDO under the HOME Program and hereby certifies
and warrants to the Agency that it is a CHDO and that the Participant has satisfied the
qualifications and rights of a CHDO as set forth in 24 CFR Part 92.2. Participant hereby further
warrants and covenants to the Agency that it has met the following requirements:
1.1 Legal Status. Participant is organized under State law, as evidenced by its articles
of incorporation. No part of its net earnings inure to the benefit of any member, founder,
contributor, or individual. Participant has a tax exemption ruling from the Internal Revenue
Service (hereinafter referred to as the "IRS") under Section 501 (c) of the Internal Revenue Code
of 1986, as evidenced by a certificate from the IRS. Also, Participant has among its purposes the
provision of safe, decent and affordable housing that is affordable to low and moderate-income
people.
1.2 Capacity. Participant conforms to the financial accountability standards of
Attachment F of Office of Management and Budget Circular A-I 10, as evidenced by a notarized
statement by the organization's Certified Public Accountant. Participant is qualified to carry out
activities assisted with HOME Program funds through the experience of key staff members.
1.3 Organizational Structure. The governing board of directors of Participant contains at
least 33 percent low-income representation. Participant provides a formal process for low-
income program beneficiaries to advise the organization in all of its decisions regarding the
design, siting, development, and management of all affordable housing projects through its by-
laws and operating procedures approved by the governing board of directors.
P:\Forms\Housing Fonns\HOME Forms\NHS CHDO Loan Agreement.doc
4
1.4 Relationship with For-Profit Entities. Participant is not controlled nor receives
directions from individuals or entities seeking profit from the organization. Participant is free to
contract for goods and services from vendor(5) of its own choosing.
1.5 Maintenance of Warranties During Term of Loan. During the term of the Loan as
described in Section 2 of this Agreement, the Participant shall maintain each of the foregoing
covenants set forth in this Section 1.
SCOPE OF SERVICES
Section 2.
Loan and Scope of Services
Subject to the terms and conditions of this Agreement, the Agency shall make available
to the Participant a total amount not to exceed one hundred forty-seven thousand dollars
($147,000) in HOME Program funds as a deferred loan (the "Loan"). No other source of
Agency funds or the City are pledged or otherwise made available to the Participant for the
Project. The proceeds of the Loan shall be used and applied by the Participant (together with
other funds to be provided by the Participant) for the acquisition and rehabilitation of the Project.
The proceeds ofthe Loan shall be used for the following purposes: (i) up to one hundred twenty-
nine thousand Dollars ($129,000) shall be used and applied by Participant, together with other
funds, to acquire the Parcels; and (ii) up to eighteen thousand Dollars ($18,000) shall be used and
applied by Participant to cause the substantial rehabilitation of the 1 I -units located upon the
Parcels. The Loan shall be evidenced by three (3) separate promissory notes which shall each be
secured by a separate Parcel, and the proceeds of the Loan shall be disbursed by the Agency to
the Participant upon receipt from Participants of appropriate documentation requesting a draw of
the Loan funds. During the term of the Loan Participant shall own and shall have effective
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
5
management control of the Project and the Participant shall comply with the provisions of 24
CFR 92.504.
The Agency will set aside HOME Program Funds for FY 2000 for Participant. The
Agency will submit the "Designation of Community Housing Development Organization", Form
HUD-40098, to reserve funds for use by Participant promptly following the approval of this
Agreement by the governing board of the Agency. The HOME Program funds for FY 2000,
which are set aside for use by Participant and which are not committed by or for Participant
within 12 months following the approval of this Agreement, will be automatically returned to the
HOME Line of Credit and shall not be available for disbursement to Participant thereafter.
Section 3. Pavrnent ofProiect Costs
The total estimated cost of the Project (acquisition of the Parcels and rehabilitation of
each of the 11 rental dwelling units) is presently estimated by the Participant to be approximately
$489,290. The Loan shall cover a portion of these Project costs and the Participant anticipates
receipt of not less than $327,503 in senior lender funds from a commercial lending institution
(the "Senior Lender") and contribute $15,000 as equity down payment on the project.
Participant shall pay any and all fees and costs incurred as a result of acquisition and
development of the Proj ect using the funds provided by the Senior Lender and equity contributed
by Participant. Funds representing the Loan proceeds shall only be used by Participant to pay for
acquisition of the Parcels and the rehabilitation of the II dwelling units thereon (each referred to
as a "Rental Unit") unless otherwise first approved in writing by the Agency. The Agency shall
have the right, upon reasonable notice, to inspect and audit all books and records of Participant
pertaining to the payment of Project fees and costs.
P:\Fonns\Housing Fonns\HOME Forms\NHS CHDO Loan Agreement.doc
6
Section 4. The Proiect and Initial Disbursement of Loan to Participant.
(a) Subject to the terms and conditions of this Agreement, the Participant hereby
agrees to undertake the Project.
(b) The Participant shall acquire each of the Parcels from the Agency as provided
below. Concurrently with the approval of this Agreement by the governing board ofthe Agency,
the Participant shall also execute one or more real property transfer and escrow agreements with
the Agency for the transfer of the fee title interest of each of the Parcels subject to the
satisfaction of the terms and conditions of that certain asset transfer agreement by and between
the Agency and the County of San Bernardino (the "County/FHA Transfer Agreement"). The
transfer of the marketable fee title interest in each of the Parcels by the Agency to Participant
shall be subject to the terms and conditions of the County/FHA Transfer Agreement and
compliance by the Participant with terms of each related escrow agreement with the Agency.
(c) Concurrently with the close of each of the escrows for the transfer of the Parcels
referenced in Section 4(b), the Agency shall disburse a portion of the proceeds of the Loan to
Participant as follows:
(i) at close of the escrow for Parcel No. I, $32,500, plus reasonable escrow
closing costs and expenses;
(ii) at close of the escrow for Parcel No.2, $59,000, plus reasonable escrow
closing costs and expenses; and
(iii) at close of the escrow for Parcel No.3, $37,500, plus reasonable escrow
closing costs and expenses.
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
7
(iv) at close of the escrow for Parcel No.4, $0 (donation from County) plus
reasonable escrow closing costs and expenses.
(d) The Agency shall disburse the proceeds of the Loan to fund the acquisition of the
Parcels when the Participant has satisfied the following conditions:
(i) the Participant has provided the Agency with a written financing
commitment of the Senior Lender in form satisfactory to the Executive Director of the
Agency to provide at least $327,503 in funds to the Participant for the rehabilitation of
the Rental Units;
(ii) the Participant has provided the Agency with evidence of insurance
coverage as required under this Agreement and each deed Oftru5t;
(iii) each of the escrows referenced in Section 4(b) is otherwise in a condition
to close;
(iv) the Participant has executed each of the Promissory Notes and Deeds of
Trust and HOME Regulatory Agreements in favor ofthe Agency as provided in Section 5
and has executed appropriate escrow instructions in favor of the Agency relating to the
recordation of each deed of trust and HOME Regulatory Agreement; and
(v) the Participant has complied with each of the other provisions of this
Agreement and is not in default hereunder.
(e) Provided no default has occurred, the remaining balance of the Loan shall be
disbursed to Participant by the Agency after each of the three (3) escrows described in Section
4(b) has closed when:
(i) the Participant has certified in writing to the Agency either: (A) the work
of rehabilitation of at least four (4) Rental Units has been completed and each such
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
8
Rental Unit is ready for occupancy or (B) at least 20% of the work of improvement and
rehabilitation of all of the Rental Units has been completed by Participant; and
(ii) no default has occurred under this Agreement.
Section 5. Loan Documents
(a) The Loan shall be evidenced by three (3) promissory notes (each a "Promissory
Note") which shall each be secured by a deed of trust on a parcel as follows:
(i) Promissory Note secured by Deed of Trust on Parcel No. I, $32,500, plus
reasonable escrow closing costs;
(ii) Promissory Note secured by Deed of Trust on Parcel No.2, $59,000, plus
reasonable escrow closing costs;
(iii) Promissory Note secured by Deed of Trust on Parcel No.3, $37,500, plus
reasonable escrow closing costs;
(iv) Promissory Note secured by Deed of Trust on Parcel No.4, $0, plU55
reasonable escrow closing costs;
provided however the aggregate amount of the principal balance of all three Promissory Notes
shall not exceed the sum of $147,000 and further provided that the Executive Director of the
Agency shall at the time of closing of the escrows under Section 4(b) designate one of the deeds
of trust to additionally secure amounts of the Loan to be disbursed to Participant by the Agency
under Section 4e.
(b) The form of the Promissory Note is attached hereto as Exhibit "E". The date and
precise principal amount of each of the Promissory Notes shall be confirmed at the time of close
of each ofthe escrows referenced in Section 4(b).
P:\Forms\Housing Fonns\HOME Fonns\NHS CHDO Loan Agreement.doc
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The term of each Promissory Note shall be fifteen (15) years from its date which shall be
the close of each such escrow and each Promissory Note shall bear no interest prior to maturity
provided no default exists. Provided that Participant is in full compliance with all of the terms
and conditions of this Agreement, the principal amount of each Promissory Note shall be
forgiven as follows: annually from the date of the Promissory Note, one fifteenth (1/15th) of the
original principal balance shall be forgiven. If the outstanding principal balance of each
Promissory Note is paid prior to maturity, Participant shall be released from those terms and
conditions imposed by the Agency under the HOME Regulatory Agreement on the Parcel which
secures the repayment of the Promissory Note as they relate to the HOME Program and those
terms shall be deemed satisfied.
(c) Each ofthe Promissory Notes shall be secured by a deed of trust on the applicable
Parcel substantially in the form as attached as Exhibit "F".
(d) Provided no default has occurred, upon the written request of the Participant, the
Executive Director of the Agency shall execute and deliver on behalf of the Agency a loan
subordinate agreement in favor of the Senior Lender substantially in the form as attached as
Exhibit "G".
(e) Concurrently with the close of each escrow referenced in Section 4(b) and the
disbursement of the proceeds of the Loan to Participant, the Participant shall execute and cause
to be recorded in favor of the Agency a HOME Covenants, Conditions and Restrictions
substantially in the form attached as Exhibit "B".
Section 6. Schedule for Completion of Tasks
The Project shall be commenced and completed in accordance with the Schedule of
Performance, a copy of which is attached hereto as Exhibit "D" and incorporated herein by this
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reference; provided however, that the Participant shall acquire fee title interest in the Parcels by a
date not later than December 31, 200 I, or this Agreement shall have no further force of effect.
Section 7. Occupancv of Units
7.1 Participant shall ensure that the eleven (11) units (hereinafter referred to as the
"Rental Units") in the Project shall be reserved for occupancy by eligible households as follows:
(i) 20% (3 Rental Units) shall be rented or reserved for occupancy by very
low-income households. For the purposes of this Agreement, very low-income shall be
defined as those households earning fifty percent (50%) of median income, or below;
(ii) the remaining balance (8 Rental Units) shall be rented or reserved for
occupancy by households earning (80%) eighty percent of the area median income or
below; and
(iii) over all not less than 10 Rental Units shall be rented or reserved for
occupancy by households earning sixty percent (60%) of the area median income or
below.
7.2 Participant shall ensure that each of the Rental Units shall be available and
remained to be available for occupancy by individuals or farnilies who are income-eligible in
accordance with the provisions of Section 7.1. Participant shall be responsible for interviewing
and selecting occupants for the Rental Units and, shall file with the Agency the tenant eligibility
certification in the form of Exhibit "H" commencing on the July I first following the initial
occupancy of any of the Rental Units and on each July I annually thereafter during the term of
the Loan.
7.3 The Participant may charge rent for the occupancy of each Rental Unit which is
defined to be an affordable housing cost in accordance with the initial rent schedule attached
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hereto as Exhibit "f' and incorporated herein by this reference. During the term of the Loan
Exhibit "I" may be amended from time-to-time upon the written request of the Participant and
approved by the Agency Executive Director to conform to rent schedules shall be as prescribed
by HOME Program guidelines and provided by HUD.
Section 8. Management of Rental Housing Units
Participant hereby agrees to manage the units and be responsible for collecting all rents
due and payable in connection with the occupancy of the Rental Units and upon the collection of
such rents, pay for all costs and expenses incurred in connection with the operation and
occupancy of the Rental Units. All remaining revenues shall be placed in reserve account after
all debt obligation have been met for the benefit of the Rental Units.
Section 9. Period ofPerformance/Affordabilitv
This Project assisted with HOME Program funds will meet a fifteen (15) year
affordability requirement with respect to the Rental Units on each Parcel in accordance with 24
CFR Part 92.252, commencing upon the recordation of the HOME Program Regulatory
Agreement for each Parcel and continuing until the expiration of the affordability period, without
regard to the term of the mortgage or to transfer of ownership (hereinafter referred to as the
"Affordability Period"). A breach of the Rental Unit affordability requirements (as set forth in
Section 7.1) shall be deemed an event of default under the Loan.
Section 10. Repavment5
Any repayment of principal, or replacement funds, if any, and other return on the
investment of HOME Program funds shall be remitted to the Agency. The repayments will be
deposited by the Agency in a HOME Program Income Account and used for other HOME
Program eligible activities.
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Section I I. Uniform Administrative Requirements
As a non-profit organization and a recipient of HOME Program funds, Participant
certifies and warrants that it meets the requirements of OMB Circular No. A-122 and the
following requirements of OMB circular No. A-II 0: Attachment B; Attachment F; Attachment
H, Paragraph 2; and Attachment O. The Agency shall monitor the activities of Participant in
order to ensure the continued compliance with these provisions and any other provisions
applicable under the HOME Program.
Section 12. Proiect Requirements
The parties hereby agree as follows:
12.1 Maximum Per-Unit SUb5idv Amount. The amount of HOME Program funds that
Participant may invest on a per-unit basis in affordable housing does not exceed limits
established by HUD for this type of project.
12.2 Propertv Standards. The Project upon completion shall, at a minimum, meet
Federal (Housing Authority) Section 8 Housing Quality Standards ("HQS") for the term of
affordability and the property maintenance provisions of the HOME Program Regulatory
Agreement for each Parcel. Participant hereby agrees that the Agency or its designee shall be
permitted regular access to the Parcels in order to physically inspect the units and ensure
compliance with the terms of this Agreement. Such inspections shall occur at least annually, but
not more frequently than once every calendar quarter.
12.3 [RESERVED-NO TEXTl
12.4 Recertification ofOccupancv and Rent Requirements
Participant shall re-examine the income of each tenant household occupying the Rental
Units at least annually and shall provide documentation to the Agency to ensure continued
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compliance with the provisions of the HOME Program. The monthly rent for a particular Rental
Unit may be recalculated by Participant based upon increases (or decreases) in the household
income of the household since the time of the previous recertification report to the Agency. Any
increase in rent for a Rental Unit shall be subject to the provisions of outstanding leases.
Participant may increase rent for each Rental Unit not more frequently than once per year and the
Participant shall provide tenants of those Rental Units where an increase of rent is proposed not
less than thirty (30) days prior written notice before implementing an increase in rent.
12.5 Increases in Tenant Income. Rental Units shall qualify as affordable housing
despite a temporary household income noncompliance by tenant occupants if the noncompliance
is caused by increases in the incomes of existing tenants of Rental Units following initial
occupancy of a Rental Unit by such tenant and if actions satisfactory to HUD and the Agency are
being taken by Participant to ensure that all vacancies of Rental Units occupancy after the time
that non-compliance may occur under this Section 12.5 are rented to new households in
accordance with Section 7.I(i) until the noncompliance is corrected. Tenants who no longer
qualify as low-income households under Section 7.I shall pay as rent, not less than 30 percent of
the household's adjusted monthly income as recertified annually.
12.6 Tenant Protection.
(i) Lease. For the Rental Units, the lease between each tenant and Participant must
be for not less than one year, unless by mutual agreement between the tenant and Participant,
with the prior written approval ofthe Agency.
The lease shall provide that the maximum occupancy of the Rental Units shall be two
persons for each bedroom plus one additional person for each unit.
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(ii) Prohibited Lease Terms. The lease may not contain any of the following
provIsIOns:
(a) an agreement by the tenant to be sued, to admit guilt, or to a judgment in
favor of Participant in a lawsuit brought in connection with the lease.
(b) an agreement by the tenant that Participant may take, hold, or sell personal
property of household members without notice to the tenant and a court decision on the
rights of the parties. This prohibition, however, does not apply to an agreement by the
tenant concerning disposition of personal property remaining in the Rental Unit after the
tenant has moved out of the Rental Unit. Participant may dispose of this personal
property in accordance with State of California law.
(c) an agreement by the tenant not to hold Participant or Participant's agency
legally responsible for any action or failure to act, whether intentional or negligent.
(d) an agreement of the tenant that Participant may institute a lawsuit without
notice to the tenant.
(e) an agreement of the tenant that Participant may evict the tenant or
household members without instituting a civil court proceeding in which the tenant has
the opportunity to present a defense, or before a court decision on the rights of the parties.
(f) an agreement by the tenant to waive any right to a trial by jury.
(g) an agreement by the tenant to waive the tenant' 5 right to appeal, or to
otherwise challenge in court, a court decision in connection with the lease.
(h) an agreement by the tenant to pay attorneys' fees or other legal costs, even
if the tenant wins in a court proceeding by the owner against the tenant. The tenant,
however, may be obligated to pay costs ifthe tenant loses.
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12.7 Termination of Tenancv. Participant may not terminate the tenancy or refuse to
renew the lease of a tenant for any Rental Unit except for serious or repeated violation of the
terms and conditions of the lease, for violation of applicable federal, state, or local law, or for
other good cause. Any termination or refusal to renew must be preceded by not less than 30 days
by Participant's service upon the tenant of a written notice specifying the grounds ofthe action.
Section 13. Other ReQuirements
13.1 Rehabilitation of Rental Units. Promptly following the Participants acquisition of
each of the Parcels, the Participant shall commence and thereafter diligently complete in a good
and workman like fashion the work of rehabilitation and improvement of each Rental Unit on
each Parcel in accordance with the Scope of Work set forth in Exhibit "C". Participant shall
substantially complete the work of rehabilitation and improvement of each such Rental Unit
within 120 days following the recordation of the Agency's Deed of Trust on the Parcel where the
Rental Unit is situated. For the purposes hereof the words "substantially complete" mean and
refer to the date on which the City issues its certificate of occupancy for the Rental unit as
rehabilitated by Participant.
13.2 Maintenance and Replacement. Participant must maintain the Project in
compliance with all applicable housing quality standards and local code requirements, including,
but not limited, to the San Bernardino Municipal Code.
13.3 Tenant Selection. Participant must adopt written tenant selection policies and
criteria for the Rental Units that:
(i) are consistent with the purpose of providing housing for very low-income
and low-income families;
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(ii) are reasonably related to HOME Program eligibility and the applicants'
ability to perform the obligations ofthe lease;
(iii) give reasonable consideration to the housing needs of families that would
have a federal preference under section 960.21 I of Title II of the Cranston-Gonzalez
National Affordable Housing Act of 1992; and
(iv) provide for the selection of tenants from a written waiting list in the
chronological order of their application, insofar as is practicable, and the prompt written
notification, to any rejected applicant setting forth the grounds for any rejection.
(v) provide that a preference be given to residents or occupants of the City of
San Bernardino with respect to the occupancy of the Rental Units.
13.4 Compliance. Participant must carry out each activity in compliance with all
Federal laws and regulations described in 24 CFR Part 92 and outlined hereinafter, except that
Participant does not assume the Agency's responsibilities for environmental review in 24 CFR
Part 92.352 or the intergovernmental review process in 24 CFR Part 92.359. These Federal laws
and regulations must be complied with as follows:
(i) Equal Opportunitv. No person shall be excluded from participation in, be denied
the benefits of or be subjected to discrimination under any program or activity funded in whole
or in part with HOME funds. In addition, HOME funds must be made available in accordance
with all laws and regulations listed in 24 CFR Part 92.350(a).
(ii) Fair Housing. In accordance with the certification made with its housing strategy,
each participating jurisdiction receiving HOME Program funds, must affirmatively further fair
housing. Actions described in Section 570.904(c) of Title II of the Cranston-Gonzalez National
Affordable Housing Act will satisfy this requirement.
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(iii) Affirmative Marketing. Participant must adopt affirmative marketing procedures
and requirements for the Rental Units. These must include:
(a) Methods for informing the public;
(b) Requirements and practices that Participant must adhere to in order to
carry out the City of San Bernardino's affirmative marketing procedures and
requirements;
(c) Procedures used by Participant to inform and solicit applications from persons
in the housing market area who are not likely to apply without special outreach;
(d) Records that will be kept describing actions taken by Participant to
affirmatively market units and records to assess the results of these actions; and
(e) A description of how Participant will assess the success of affirmative
marketing actions and what corrective actions will be taken where affirmative marketing
requirements are not met.
(iv) Displacement. Relocation and Acquisition. Consistent with the other goals and
objectives of 24 CFR Part 92, and if applicable, Participant must ensure that it has taken all
reasonable steps to minimize the displacement of persons as a result of the Project. To the extent
feasible, residential tenants must be provided a reasonable opportunity to lease and occupy a
suitable, decent, safe, sanitary and affordable dwelling unit upon project completion. Participant
agrees to minimize displacement in accordance with 24 CFR Part 92.353.
(v) Labor. If applicable, any contract executed by Participant for the rehabilitation of
affordable housing with 12 or more rental units using HOME Program funds must contain a
provision requiring that not less than the wages prevailing in the locality, as predetermined by
the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 2761-5), will be paid to all
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laborers and mechanics employed in the development of affordable housing involved, and such
contacts must also be subject to overtime provisions, as applicable, of the Contract Work Hours
and Safety Standards Act (40 U.S.c. 327-332). The Agency may require certification as to
compliance with the provisions of 24 CFR Part 92.354 before making any payment under such
contract.
(vi) Lead-based Paint. It is understood that the rehabilitation, improvement and
maintenance of the Rental Units is subject to 24 CFR Part 35.
(vii) Conflict of Interest. Participant shall comply with all requirements set forth
regarding conflict of interest provisions as they apply in 24 CFR Part 92.356.
(viii) Debarment and Suspension. As required in 24 CFR Part 92.357, Participant will
comply with all debarment and suspension certifications.
(ix) Flood Insurance. Under the Flood Disaster Protection Act of 1973, HOME
Program funds may not be used with respect to the acquisition or rehabilitation of a project
located in an area identified by the Federal Emergency Management Agency (FEMA) as having
special flood hazards, unless:
(A) The community in which the area is situated is participating in the National
Flood Insurance Program, or less than a year has passed since FEMA notification
regarding such hazards; and
(B) Flood insurance is obtained as a condition of approval of the commitment.
(C) The Agency is responsible for assuring that flood insurance under the
National Flood Insurance Program is obtained and maintained.
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Section 14. Reauest5 for Disbursements of Funds for Rehabilitation of Rental Units
14.1 Participant, in its sole discretion, shall be responsible for the selection of the
contractors to undertake and cause the rehabilitation of the Rental Units.
14.2 Participant may not request disbursement of funds under this Agreement until
funds are needed for payment of eligible costs. The amount of each request must be limited to
the amount requested through approved invoicing reflecting completed work or required
payment of obligation incurred.
Section 15. Records and Reports
15.1 The Agency will require that Participant maintain and supply the Agency upon
written request the following records and reports for the affordability period in order to assist the
Agency in meeting its record keeping and reporting requirements:
(i) development and all funding documentation for the Proj ect;
(ii) property management and building maintenance reserves and related records;
(iii) files on the annual review and certification of all applicable tenant income;
(iv) terms and conditions of all signed leasehold agreements between tenants and
Participant; and
(v) any legal reports and records required by City Attorney's Office or the Agency, as
requested.
15.2 Program Agent, on behalf of the Agency, will review the Project annually for the
period of affordability for:
(i) recertification of tenant income;
(ii) review of rent and utility allowances;
(iii) on-site inspections for compliance with Section 8 Housing Quality Standards; and
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(vi) review of Participant compliance with this written Agreement.
Section 16. Indemnification
The Participant shall indemnify and hold harmless the Agency and the City and the
officials, officers, employees and agents ofthe City and the Agency from and against any and all
claims or liability arising from Participant's actions under this Agreement or from the conduct of
Participant's business or from any activity, work or things done, permitted or suffered by
Participant and shall further indemnify and hold harmless the Agency and City and their officers,
employees and agents from and against any and all claims arising from any breach or default in
the performance of any obligation of Participant under the terms of this Agreement arising from
any negligent or wrongful act or omission of the Participant or Participant's agents, contractors,
employees or invitees and from and against all costs, attorneys' fees, expenses and liability
incurred in the defense of any such claim or any action or proceeding brought thereon.
Participant's agreement to indemnify and hold the Agency and City harmless shall extend to any
claims or liabilities, including but not limited to claims pertaining to environmental conditions,
alleged construction defects, or other matters, that may arise as a result of the Participant's
acquisition and ownership of the Parcels and the rehabilitation, improvement and occupancy of
each Rental Unit thereon.
Section 17
Breach and Termination.
(a) Termination Without Default or Breach Prior to Transfer of Title in the Parcels to
the Participant. This Agreement may be terminated for the convenience of either party who is
not then in default upon sixty (60) days notice to the other party at any time prior to the date on
which the Participant acquires title to the Parcels.
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(b) Defaults and Breach - General. Failure or delay by either party to perform any
material term or provision of this Agreement shall constitute a default under this Agreement;
provided however, that if the party who is otherwise claimed to be in default by the other party
commences to cure, correct or remedy the alleged default within thirty (30) calendar days after
receipt of written notice specifying such default and shall diligently complete such cure,
correction or remedy, such party shall not be deemed to be in default hereunder.
The party which may claim that a default has occurred shall give written notice of default
to the party in default, specifying the alleged default. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default; provided, however, the
injured party shall have no right to exercise any remedy for a default hereunder without
delivering the written default notice as specified herein.
Any failure to delay by a party in asserting any of its rights and remedies as to any default
shall not operate as a waiver of any default or of any rights or remedies associated with a default.
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 different
times, of any other rights or remedies for the same default or any other default by the other party.
In the event that a default of either party may remain uncured for more than thirty (30)
calendar days following written notice, as provided above, a "breach" shall be deemed to have
occurred. In the event of a breach, the party who is not in default shall be entitled to terminate
this Agreement and seek any appropriate remedy or damages by initiating legal proceedings, if
necessary.
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(c) In the event that either party brings an action to enforce any condition or
covenant, representation or warranty arising out of this Agreement, the prevailing party in such
action shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by
the court in which a judgment is entered, as well as the costs of such suit. For the purposes of
this Section 17( c), the words "reasonable attorneys' fees" in the case of the Agency include the
salaries, costs and overhead of lawyer's employed in the Office of the City Attorney of the City
of San Bernardino.
Section 18. Enforcement of this Agreement
18.1 The Agency shall have the right, by prior written notice to Participant, to enforce
affordability and occupancy requirements. Should any such violation be brought to the attention
of the Agency regarding the Project, the Agency shall have the right, by prior written notice to
Participant, to suspend or terminate this Agreement and may avail itself of all remedies under
this Agreement, the Promissory Note, the Deed of Trust and the Agency HOME Program
Regulatory Agreement.
18.2 The Agency at its discretion may terminate this Agreement, in whole or in part,
by giving Participant written notice in accordance with 24 CFR Part 85.44.
18.3 The Agency also reserves the right to reallocate HOME funds prIor to
commitment of said funds to particular projects.
Section 19. Monitoring
The Agency is responsible for managing the day-to-day operations of its HOME Program
for monitoring the performance of all entities receiving HOME funds from the Agency to ensure
compliance with the requirements of 24 CFR Part 92, and for taking appropriate action when
performance problems arise.
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IN WITNESS HEREOF, the Agency and Participant have executed this Agreement as of
the date first hereinabove set forth.
AGENCY
Redevelopment Agency of the
City of San Bernardino
Date
By:
Executive Director
PARTICIPANT
Neighborhood Housing Services of the
Inland Empire, Inc., a California non-profit
corporation
Date
By:
Title:
By:
Title:
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EXHIBIT "A"
Legal Description ofthe Parcels
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EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
The North 49.6 feet of the South 297.60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof.
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block UB" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,
in the office of the County Recorder of said County.
1501 -1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
- ~. - ~ ~. . - "- ."..
File No.: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181.15 feet of Lot 3,
Block 33, Rancho San Bernardino, in the City of SAN B~RNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 7, page(s)
2, of Maps, in the office of the county Recorder of said County.
Page 3 of 6
.
t
- .
,
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
,
.,.
CLTA Preliminary Report Form (Rev 1/1/95)
TQ20001CA (2/99)
Page 3 of 6
.
"
,.
rile No.: 6027861
I
I
I
I
EXHIBIT "A"
,
Lot 10, Block "B" of Ede'en Tract, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 5, pagers)
35 of Maps, in the office of the COUlIty Recorder of said County.
I
I
I
I
I
I
I
I
I.
I
I
i
I
I
,
Page lo'6
E'd m I 'ON
l'ld5s:t 1002 '5 I 'linr
.iLG. -29 01 [IIEDI 10 32
P 004
.
20009101600244
EXHIBIT "A"
LOT 11, TRACT NO. 1785, IN THE CITY OF' SAN 8ERNARDINO. COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA. AS PER. MAP RECORDED IN
BOOK 26 OF MAPS. PAGE 19, IN THE OFFICE OF THE COUNTY RECORDER OF
SAIn COUNTY.
,
Order: -00019068
Description: 2001.187745
Page 2 of .3
Comment: CHRIS
EXHIBIT "B"
HOME Program Covenants
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RECORDING REQUESTED BY
And when Recorded mail to:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
Recordation ofthis Instrument is
Exempt from all Fees and Taxes
NEIGHBORHOOD HOUSING SERVICE (NHS)
REGULATORY AGREEMENT, PROPERTY USE AND COVENANT
THIS REGULATORY AGREEMENT ("AGREEMENT") is entered into this 17th day
of September 2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO, a public body (hereinafter known as "Agency"), and Neighborhood
Housing Services of the Inland Empire, Inc., a California non-profit corporation (hereinafter
known as "Participant").
RECITALS
WHEREAS, Participant owns that certain real property located within the City and
described as: 1441-1443 Mt. View (APN 0146-163-4300), 1495 Mt. View & 1915-1917
Magnolia (APN 0146-163-02000), 1501-1503 Pershing (APN 0146-132-18000), and 1379
Arrowhead (APN 0146-162-22000) a legal description of which is attached as Exhibit "A"
hereto (the "Property"); and
WHEREAS, Participant desires to manage eleven (II) rental units (herein "Affordable
Units") on the Property for occupancy at HOME Affordable Rents to HOME Qualified Low-
Income Households. Participant intends to rehabilitate the Affordable Units utilizing the
proceeds of a deferred loan from the Agency's allocation of HOME funds in the amount of One
Hundred Forty Seven Thousand dollars ($147,000) (the "Loan").
WHEREAS, the Agency has agreed to extend the Agency Loan to the Participant
pursuant to the terms and conditions ofthat certain HOME Investment Partnership Agreement by
and between the Participant and the Agency (the "Loan Agreement").
WHEREAS, the Agency has agreed to make the Agency Loan to the Participant on the
condition that the Project be maintained and operated in accordance with the HOME regulations
and restrictions concerning affordability, operation, and maintenance of the Project, as specified
in this Agreement.
502001 :25553.1
I
WHEREAS, a purpose of this Agreement is to ensure that Affordable Units which are
developed pursuant to the requirements hereunder shall be available to HOME eligible
Households for the term of thirty years and that rental units are to be maintained as Affordable
Units in accordance with the provisions of this Regulatory Agreement.
1. DEFINITIONS.
A. "Affordable Rent" shall mean the maximum rent allowed as established by the
Department of Housing and Urban Development HOME Program.
B. "Affordable Units" shall mean the units on the Property required to be available
to, occupied by, or held vacant for occupancy only to HOME Eligible Households and rented at
an Affordable Rent, as set forth in this Agreement.
C. "Agreement" shall mean this Regulatory Agreement.
D. "Agency" shall mean the Redevelopment Agency, City of San Bernardino, a
California municipal corporation.
E. "City Loan" shall mean the loan from HOME funds allocated to the Participant,
which loan is the subject of the Loan Agreement.
F. "HOME Program" shall mean the HOME Investment Partnership Act, 42 U.S.C.
S 12701, et seq. as it now exists and, subject to the provisions of Section 2.2 herein, as may
hereafter be amended.
G. "HOME Regulations" shall mean the implementing regulations of the HOME
Program set forth at 24 CFR 92 as it now exists and, subject to the provisions of Section 2.2
herein, as may hereafter be amended.
H. "Loan Agreement" shall mean the Home Investment Partnership Agreement
entered into by and between the Participant and the Agency.
1. "Participant" shall mean the Neighborhood Housing Services of the Inland
Empire, Inc., a California non-profit corporation.
J. "Parties" shall mean the Agency and the Participant.
K. "Project" shall mean the Acquisition and Rehabilitation of units located at the
Project site, described in Exhibit A attached hereto and by this reference incorporated herein.
Other HOME eligible improvements at the Project site as defined herein which have received
prior written approval by the Agency Executive Director hi5/her designee in accordance with the
provisions set forth herein and in the Regulatory Agreement.
L. "Property" shall mean the real property located in San Bernardino, California, as
more particularly described in the Project site description attached hereto as Exhibit A and
502001:25553.1
2
incorporated herein by reference, together with the buildings, fixtures and other improvements
located thereon.
M. "HOME Eligible Households" shall mean those households identified by the
United States Department of Housing and Urban Development.
N. "Term" shall mean the period commencing on the date of recordation of this
Agreement and ending on the date which is fifteen (15) years following the date of execution of
this Agreement.
II. LAND USE REGULATIONS
A. Permitted Uses. The Property shall be used only for private multi-family
rental dwelling purposes and related amenity uses, but for no other purposes. Throughout the
Term, the Participant covenants and agrees to make available, restrict occupancy to, and rent
each of the dwelling units on the Property as Affordable Units at an Affordable Rent as set forth
in Section B. herein below. None of the dwelling units on the Property shall at any time be
utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel,
motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium
or rest home. The Participant shall not convert the Property to condominium ownership which
approval the Agency may grant, withhold or deny in its sole and absolute discretion.
B. Affordable Units. The Participant covenants and agrees for itself, its
successors, its assigns and every successor in interest to the Property or any part thereof, that
throughout the Term, the Participant, such successors and assigns, shall use, maintain and
operate the Property as specified in this Agreement. During the fifteen (15) year term, all uses
undertaken by the Participant pursuant to this Agreement shall conform to the HOME
Regulations and HOME Program and to all applicable provisions of San Bernardino Municipal
Code. In the event the Participant desires to change the affordable housing, maintenance or
operation requirements for the Property from the specific requirements set forth in this
Agreement in order to comply with a subsequently enacted amendment to the HOME Program or
the HOME Regulations, Participant shall notify Agency in writing of such proposed change to
implementing such change. In the event the Agency disapproves of such change and the
Participant's interpretation of the amendment related thereto, Agency shall notify the Participant
of its disapproval in writing and the parties shall seek clarification from the appropriate HUD
Field Office. Only ifHUD concurs with Participant's interpretation of the HOME Program and
HOME Regulations shall Participant be permitted to implement the proposed change.
1. Throughout the fifteen (15) year Term, the Participant shall devote the units
located on the Property as Affordable Units which shall be rented and occupied by or, if vacant
available for rental and occupancy by, HOME Eligible Households.
2. Prior to leasing an Affordable Unit, Participant shall verify the income eligibility
of the tenant applicant by obtaining verification of all household sources of income in order to
assure compliance with the rent and occupancy restrictions and monitoring requirements of this
502001:25553.1
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Agreement. The Participant shall, upon request by the Agency, complete such income
verification on Agency-approved forms provided by the Agency.
3. None of the dwelling units on the Property shall at any time be utilized on a
transient basis nor shall the Property or any portion thereof ever be used as a hotel, motel,
dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest
home. The Participant shall not convert the Property to condominium ownership during the
Term without the prior written approval of the Agency, which approval the Agency may grant,
withhold or deny in its sole and absolute discretion.
C. Determination of Affordable Rent. All Affordable Units shall be rented at
Affordable Rent in accordance with this Section C. and as required by the applicable sections of
the HOME Regulations.
1. Increases in Tenant Income. The units shall quality as affordable housing as required
despite a temporary non-compliance with Section III. A., of this part, if the non-compliance is
caused by increases in the incomes of existing tenants and if actions satisfactory to HUD are
being taken to ensure that all vacancies are filled in accordance with this section until the non-
compliance is corrected. Tenants who no longer qualify as low-income families must pay as rent
lot less than 30 percent of the family's adjusted monthly income, as recertified amlUally.
2. Adiu5tment of Affordable Rent. HUD may adjust the Affordable Rent established for
the Project under paragraph (a) of this section, only ifHUD finds that an adjustment is necessary
to support the continued financial viability of the Project and only by an amount that HUD
determines is necessary to maintain financial viability of the Proj ect.
D. Tenant Protections.
I. Rental Agreement/Lea5e. The Participant shall execute or cause to be executed a
written rental agreement/lease in a form with each tenant household identifying by name all
permitted occupants, both adults and minors, occupying each Affordable Unit. The rental
agreement/lease between tenants occupying the Affordable Units and Participant must be for not
less than one year, unless by mutual agreement between the tenant and the Participant.
2. Prohibited Rental Agreement/Lease Terms. The rental agreement/lease mav not
contain any ofthe following provisions:
a. Agreement to be sued. Agreement by the tenant to be sued, to admit guilty, or
to ajudgment in favor of the Participant in a lawsuit brought in connection with the lease;
b. Treatment of propertv. Agreement by tenant that the Participant may take,
hold, or sell personal property of household members without notice to the tenant and a
court decision on the rights of the parties. This prohibition, however, does not apply to
an agreement by the tenant concerning disposition of personal property remaining in the
unit after the tenant has moved out of the unit. The Participant may dispose of this
personal property in accordance with state law;
SB200 1:25553.1
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c. Excusing Participant from re5Pon5ibilitv. Agreement by the tenant not to hold
Participant or Participant's agents legally responsible for any action or failure to act,
whether intentional or negligent;
d. Waiver of notice. Agreement of the tenant that the Participant may institute a
lawsuit without notice to the tenant;
e. Waiver of legal proceedings. Agreement by the tenant or household members
without instituting a civil court proceeding in which the tenant has the opportunity to
present a defense, or before a court decision on the rights of the parties;
f. Waiver of a iury trial. Agreement by the tenant to waive any right to a trial by
JUry;
g. Waiver of right to appeal court decision. Agreement by the tenant to waive the
tenant' 5 right to appeal, or to otherwise challenge in court, a court decision in connection
with the lease; and
h. Tenant chargeable with cost of legal actions regardless of outcome.
Agreement by the tenant to pay attorneys' fees or other legal costs even if the tenant wins
in a court proceeding by the owner against the tenant. The tenant, however, may be
obligated to pay costs ifthe tenant loses.
3. Termination of Tenancv. The Participant may not terminate the tenancy or refuse to
renew the lease of a tenant ofthe Project except for serious or repeated violation of the terms and
conditions of the lease; for violation of applicable federal, state, or local law; or for other good
cause. Any termination, except for termination for non-payment of rent, or refusal to renew must
be preceded by not less than 30 days by the Participant's service upon the tenant of a written
notice specifying the grounds for the action.
4. Tenant Selection. Participant shall not refuse to rent a unit in the Project to a holder of
a Rental Voucher or a Rental Certificate or comparable document evidencing participation in the
Section 8 Program or other tenant-based assistance program. Participant must adopt written
tenant selection policies and criteria approved by the Agency that:
a. Are consistent with the purpose of providing housing for HOME Eligible
Households;
b. Are reasonably related to HOME Program eligibility and the applicants' ability
to perform the obligations of the lease;
c. Give reasonable consideration to the housing needs offamilie5 that would have
a federal preference under Section 960.21 I of Title II of the Cranston-Gonzalez National
Affordable Housing Act of 1992; and
SB2001 :25553.1
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d. Provide for:
I. The selection of tenants from a written waiting list in the chronological
order of their application, insofar as is practicable; and
2. The prompt written notification to any rejected applicant of the grounds
for any rejection.
5. Tenant Certification. Participant shall require every tenant of the Property to certify
that he or she will not participate in illegal or gang related activities.
E. Compliance with Use and Occupancy Laws. Participant agrees that for each lease, the
Participant shall comply with all applicable state and local laws, statutes, ordinances, rules and
regulations, which in any way restrict the use and occupancy and resale of the Property.
F. Nondiscrimination. All Units shall be available for occupancy on a continual basis to
members of the general public who are income eligible in accordance with Article II. hereof.
There shall be no discrimination against or segregation of any person or group of persons, on
account of race, color, creed, religion, sex, sexual orientation, marital status, national origin,
ancestry, or disability in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of any unit nor shall the Participant establish or permit any such practice or practices
of discrimination or segregation with reference to the election, location, subtenants, or vendees
of any unit or in connection with the employment of persons for the operation and management
of the Property. All deeds, rental agreements, leases or contracts made or entered into by the
Participant as to the Affordable Units or the Property or portion thereof, shall contain covenants
concerning discrimination as prescribed by the Loan Agreement.
Nothing in this Section II. F., is intended to require the Participant change the character,
design, use or operation of the Project form, or to require the Participant to obtain licenses or
permits other than those required for, a rental housing development for persons capable of
independent living.
III. OPERATION AND MANAGEMENT OF THE PROJECT
A. Compliance with Loan Agreement. The Participant shall comply with all the terms
and provisions of the Loan Agreement between the parties.
B. Taxes and Assessments. The Participant 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 Property; provided,
however, that the Participant shall have the right to contest in good faith, any such taxes,
assessments, or charges. In the event the Participant exercises its right to contest any tax,
assessment, or charge against it" Participant, 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.
5B2001 :25553.1
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C. Ooeration and Management. Participant shall manage said Property or shall contract
with a property management company and notifY the Agency of said property manager for the
Property. In the event the Participant desires to designate a replacement property manager,
Participant shall give written notice thereof to the Agency and shall notifY the Agency of the
designation of the replacement property managers, the Participant shall remain liable for the
management, maintenance and operation of the Property in accordance with the requirements
herein.
D. Management Plan and Securitv. Participant shall prepare and submit a Management
Plan for the Property which will address issues of tenant responsibilities, owner responsibilities,
property maintenance and security concerns therein. Such Management Plan shall be submitted
to the Agency at the Office of the Redevelopment Agency. If more information is required, then
Participant agrees to provide such information.
Participant agrees to submit a Status Report to the Agency on the first day of each quarter
of each year for the term of this Regulatory Agreement. Such Status Report shall be completed
in the form which is attached hereto as Exhibit B.
E. Record Keeping. Throughout the fifteen (15) years of the Term, Participant shall
comply with all applicable record keeping and monitoring requirements set forth in Section
92.508 of the HOME Regulations and as they may be amended and shall annually complete and
submit to Agency a Certification of Continuing Program compliance in the form attached as
Exhibit C and provided to Participant by Agency.
Representatives of the Agency shall be entitled to enter the Property, upon at least
twenty-four (24) hours notice, to monitor compliance with this agreement, to inspect the records
of the Project with respect to the Affordable Units, and to conduct an independent audit of such
records. The Participant agrees to cooperate with the Agency in making the Property available
for such inspection. If for any reason the Agency is unable to obtain the Participant's consent to
such an inspection, the Participant understands and agrees that the Agency may obtain at
Participant's expense an administrative inspection warrant or other appropriate legal order to
obtain access to and search the Property. Participant agrees to maintain records in a business-
like manner and make such records available to the Agency upon twenty-four (24) hours notice.
Unless the Agency otherwise approves, such records shall be maintained throughout the Term.
IV. OBLIGATION TO MAINTAIN, REPAIR AND REBUILD
A. Maintenance bv Participant. The Participant shall, at its sole cost and expense, and as
funds are available, maintain and repair the Property keeping the same in good condition and
making all repairs as they may be required by this Agreement and by all applicable Municipal
Code and Uniform Code provisions.
B. Maintenance and Replacement. The Participant shall, as funds are available, maintain
the Property in good repair and working order, and in a safe, decent and sanitary condition,
including the walkways, driveways and landscaping, and from time to time make all necessary
SB2001 :25553.1
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and proper repairs, renewals and replacements in order to keep the Property in a safe, decent and
sanitary condition. Participant shall manage and maintain the Project in accordance with all
applicable housing quality standards and local code requirements, concerning marketing,
operation, maintenance, repair, security, rental policy and method of selection oftenants.
C. Rental Hosing Program. Participant shall participant in the San Bernardino
Apartment Owner's Association and the City of San Bernardino Crime Free Rental Housing
Program or other similar organization or program approved by the Agency during the Term of
the Agreement.
D. Interior Maintenance. Participant shall maintain the interior of buildings, including
carpet, drapes and paint, in clean and habitable condition.
E. Exterior Building Maintenance. All exterior, painted surfaces shall be maintained at
all times in a clean and presentable manner, free from chipping, cracking and defacing marks.
All graffiti and defacement of any type, including marks, words and pictures must be removed
and any necessary painting or repair completed within seventy-two (72) hours of their creation or
within seventy-two (72) hours after notice to Participant.
F. Landscaping. All front set back areas that are not buildings, driveways or walkways
shall be adequately and appropriately landscaped in accordance with minimum standards
established by the Agency and shall be maintained in good condition in accordance with the
minimum standards established from time to time by the Agency.
G. Damage and Destruction Affecting Lots- Participant's Dutv to Rebuild. IF all or any
portion of the Property and the improvements thereon is damaged or destroyed by fire or other
casualty, it shall be the duty of the Participant to rebuild, repair or construct said portion of the
Property and/or the improvements in a timely manner which will restore it to San Bernardino
Municipal or Building Code compliance condition as approved by the Agency.
In furtherance of the requirements of this Section IV. B., Participant shall keep the
improvements on the Property insured by carriers at all times satisfactory to Agency against loss
by fire, rent loss and such other hazards, casualties, liabilities and contingencies as included
within an all risk extended coverage of the improvements. In the event of loss, Participant shall
give prompt notice to the insurance carrier and the Agency.
H. Time Limitation. Upon damage to the Property or the improvements thereon, the
Participant shall be obligated to proceed with all due diligence hereunder and commence
reconstruction within two (2) months after the damage occurs and complete reconstruction
within six (6) months after the damage occurs, or if appropriate to demolish and vacate the
Property within two (2) months, unless prevented by causes beyond its reasonable control.
SB2001:25553.1
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V. MISCELLANEOUS PROJECT REQUIREMENTS
A. Equal Opportunitv. As set forth in section 92.350 of the HOME Regulations, no
person shall be excluded from participation in, be denied the benefits of or be subjected to
discrimination under any program or activity funded in whole or in part with HOME funds.
B. Affirmative Marketing. As required by Section 92.351 of the HOME Regulations,
Participant must adopt affirmative marketing procedures and requirements. These must include:
I. Methods for informing the public;
2. Requirements and practices that Participant must adhere to in order to
carry out the City of San Bernardino's affirmative marketing procedures and
requirements;
3. Procedures used by Participant to inform and solicit applications from
persons in the housing market area who are not likely to apply without special outreach;
4. Records that will be kept for a period of five (5) years after the expiration
of the affordability period describing actions taken by Participant to affirmatively market
units and records to assess the results of these actions; and
5. A description of how the Participant will assess the success of affirmative
marketing actions and what corrective actions will be taken where affirmative marketing
requirements are not met.
C. Displacement. Relocation and Acquisition. The Participant must ensure that it has
taken all reasonable steps to minimize the displacement of persons as a result of this Project
assisted with HOME funds.
D. Lead-Based Paint. It is understood that the Project is subject to 24 CFR, Part 35.
This requirement shall be met as required by that section and any cost of rehabilitation on the
Property shall be disclosed to the Agency as such should testing and abatement be undertaken.
E. Conflict of Interest. Participant will hereby comply with all requirements set forth
regarding conflict of interest provisions as they apply in Section 92.356 of the HOME
Regulations.
F. Debarment and Suspension. As required in Section 92.357 of the HOME
Regulations, Participant will comply with all debarment and suspension certifications.
G. Flood Insurance. Under the Flood Disaster Protection Act of 1973, HOME funds
may not be used with respect to the acquisition or rehabilitation of a project located in an area
identified by the Federal Emergency Management Agency (FEMA) as having special flood
hazards, unless:
SB2001 :25553.1
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1. The community in which the area is situated is participating in the National
Flood Insurance Program, or less than a year has passed since FEMA notification
regarding such hazards; and
2. Flood insurance is obtained as a condition of approval of the commitment.
VII. ENFORCEMENT AND REMEDIES
A. Remedies. In the event of default or breach of any of the terms or conditions of this
Agreement by Participant, its heirs, executors, administrators or assigns, Agency may pursue the
remedy thereof by any and all means of enforcement, both in equity and at law, as provided by
the laws of the State of California, including, but not limited to, injunctive relief and/or specific
performance.
B. Rights of the Agencv. The Agency has the right to enforce all of the provisions of
this Agreement. This Agreement does not in any way infringe on the right or duties of the
Agency to enforce any of the provisions of the Municipal Code including, but not limited to, the
abatement of dangerous buildings. In addition to the general rights of enforcement, the Agency
shall have the right, through its agents and employees, to enter upon any part of the Property for
the purpose of enforcing the California Vehicle Code, and the ordinances and other regulations
of the City, and for maintenance and/or repair of any or all publicly owned utilities.
C. Nuisance. The result of every act or omission whereby any of the covenants
contained in this Agreement are violated in whole or in part is hereby declared to be and
constitutes a nuisance, and every remedy allowable at law or equity, against a nuisance, either
public or private, shall be applicable against every result and may be exercised by any owner or
its successors in interest, without derogation of the Agency's rights under law.
D. Right of Entry. The Agency has the right of entry at reasonable hours and upon and
after reasonable attempts to contact Participant or Operator, to effect emergency repairs or
maintenance which the Participant or Owner has failed to perform. Subsequent to sixty (60)
days written notice to the Participant or owner specifically outlining the non-compliance the
Agency shall have the right of entry at reasonable hours to enforce compliance with this
Agreement which the Participant or Operator has failed to perform.
E. Costs of Repair. The costs borne by the Agency of any such repairs or maintenance
emergency and/or non-emergency, shall become a charge for which Participant shall be
responsible; and may, if unpaid, be assessed as a lien against the Property.
F. Cumulative Remedies. The remedies herein provided for breach of the covenants
contained in this Agreement shall be deemed cumulative, and none of such remedies shall be
deemed exclusive.
G. Failure to Enforce. The failure to enforce any of the covenants contained in this
Agreement shall not constitute a waiver ofthe right to enforce the same thereafter.
SB2001 :25553.1
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VIII. HOLD HARMLESS
Participant agrees to defend and to hold Agency, and its officer, agents, employees,
representatives, elected and appointed boards and officials harmless from liability for damage or
claims for any type of damage including, but not limited to, personal injury and claims for
property damage, which may arise from the activities of Participant or those of Participant's
contractors, subcontractors, agents, employees or other persons acting on Participant's behalf and
which relate to the Project. Participant agrees to and shall defend Agency, and its officers,
agents, employees, representatives, elected and appointed boards and officials from any action
for damages caused or alleged to have been caused by reason of Participant's activities in
connection with the Project.
IX. ASSIGNMENT OF AGREEMENT
This Agreement shall be binding upon Participant, its executors, administrators and
assigns and all persons claiming under or through Participant. Wherever this Agreement
employs the term "Participant", it shall be deemed to include Participant, its executors,
administrators and assigns and all persons claiming under or through Participant. Participant
shall not voluntarily assign any of its rights or obligations under this Agreement without the prior
written consent of the Agency and any purported assignment made without said consent shall be
null and void for all purposes.
X. RECORDATION
Participant agrees that this Agreement and any amendment or cancellation hereof shall be
recorded in the official records of San Bernardino County by Participant within ten (10) days
after the effective date of this Agreement and within ten (10) days after any amendment or
cancellation hereof. Participant agrees to provide Agency with two copies of the recorded
Agreement within five (5) days of the recording date.
XI. NOTICE
Written notice, demands and communications between Agency and Participant shall be
deemed sufficient if dispatched by first class mail, postage prepaid, to the principal offices of the
Agency and Participant, the addresses of which are hereinafter set forth. Such written notices,
demands and communications may be sent in the manner prescribed to each other's addresses as
either party may, from time to time, designate by mail, or the same may be deliver in person to
representatives of either party upon such premises. Said addresses are as follows:
If to Agency:
Redevelopment Agency
201 North "E" Street, Suite 301
San Bernardino, California 92401
Attention: Executive Director
SB2001 :25553.1
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If to Participant:
Executive Director
Neighborhood Housing Services
1390 North "D" Street
San Bernardino, California 92405
Notices herein shall be deemed given as of the date of personal service or three (3)
consecutive calendar days after deposit of the same in the custody of the United States Postal
Service.
XII. WAIVER
Failure by a party to insist upon the strict performance of any of the provisions of this
Agreement by other party or the failure by the party to exercise its rights under or upon a default
by the other party herein shall not constitute a waiver or such party's right to demand strict
compliance from such other party in the future.
XIII. SEVERABILITY
If anyone or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provisions shall be deemed
severable from the remaining provisions contained in this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision(s) had never been contained
herein.
XIV. CAPTION AND PRONOUNS
The captions and headings of the various sections of this Agreement are for convenience
only, and are not to be construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular, and masculine, feminine and neuter shall be freely
interchangeable.
XV. ATTORNEYS' FEES
In any action to interpret or enforce any provisions of this Agreement, the prevailing
party shall be entitled to its costs and reasonable attorneys' fees. For the purposes hereof,
"reasonable attorneys' fees" means and includes the salaries and benefits of lawyers employed
by the Office of City Attorney of the City of San Bernardino who provide legal services to the
Agency in connection with any such enforcement proceedings.
XVI. MODIFICATION OF AGREEMENT
This Agreement may be modified or amended by mutual consent of all of the parties,
provided that all amendments are in writing.
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XVII. SOLE AND ONLY AGREEMENT
This Agreement, including the documents referenced herein, contains the sole and entire
agreement and understanding of the parties with respect to the subject matter hereof.
No representations, oral or otherwise, express or implied, other than those contained
herein, have been made by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
PARTICIPANT
Neighborhood Housing Services
Of the Inland Empire, Inc.
a California non-profit Corporation
AGENCY
Redevelopment Agency of the
City of San Bernardino
By:
Title:
By:
Executive Director
By:
Title:
APPROVED AS TO FORM:
Agency Counsel
P:\Forms\Housing Fonns\HOME Forms\NHS Regulatory Agreement.doc
SB2001 :25553.1
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EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
The North 49.6 feet of the South 297.60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof.
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,
in the office of the County Recorder of said County.
1501 -1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
. '.
_.' _ w w. .... ....
File No.: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181.15 feet of Lot 3,
Block 33, Rancho San Bernardino, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 7, page(s)
2, of Maps, in the office of the county Recorder of said County.
Page 3 of 6
.
~ "
. .
,
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded In Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
,
.,.
CLTA Preliminary Report Form (Rev 1/1/95)
TQ20001CA (2/99)
Page 3 of 6
"
.
1-
Pil. No.: 6027161
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I
I
EXHIBIT "A"
I
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, St~te of California, as per map recorded in Book 5, page(s)
35 of Maps, in the office of the County Recorder Of said County.
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Page 3 0'6
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20009101600244
EXHIBIT "A"
LOT 11, TRACT NO. 1785, TN THE CITY OF SAN BERNARDINO. COUNTY OF
SAN BERNARDINO, ST ATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 26 OF MAPS, PAGE 19. IN THE OFFICE! OF THE COUNTY RECORDER OF
SAID COUNTY.
,
Order: ,00019068
Description: 2001.187745
Pagf;l 2 of 3
Comment: CHRIS
EXHIBIT B
STATUS REPORT
EXHIBIT "B"
QUARTERLY STATUS REPORT
Property Bedroom/Bathroom HOUSEHOLD Unit Occu pied
Address/Unit Size Size Ethnicity Income Rent Yes No
Number
Total Number of Units occupied:
Vacant:
Total Number of low income unites) designated:
Number of low income units occupied:
Vacant:
Replacement units designated for the Quarter:
The above information is full, true and complete to the best of my knowledge.
Date:
Signature:
NHS Representative
EXHIBIT C
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
EXHIBIT "C"
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
Date:
, 2001
The following information with respect to the eleven (11) units acquisition and
rehabilitation (the "Project"), is being provided by Neighborhood Housing Services of the
Inland Empire, Inc. (the "Borrower") to the Redevelopment Agency of the City of San
Bernardino (the "Agency") pursuant to that certain Regulatory Agreement and
Declaration of Restrictive Covenants dated as of , 2001 (the
"Regulatory Agreement"), with respect to the Project:
(A) The total number of residential units which are completed and available for
occupancy is . The total number of such units occupied is
(B) The following residential units (identified by unit number) have been
designated for occupancy by "Qualified Tenants", as such term is defined in the
Regulatory Agreement (for a total of ):
(C) The following residential units which are included in (B) above, have been
redesignated as units for Qualified Tenants since , 2001, the date on
which the last "Certificate of Continuing Program Compliance" was filed with the Issuer
by the Borrower:
Unit
Number/Address
Previous Designation
of Float Units (if anv)
Replacing Float
Units Number
C-l
(D) The following residential units are considered to be occupied by Qualified
Tenants based on the information setforth below:
Number of Unit Size Date Unit Name of Number of Ethnicily Totai Initial
Units/Address Became Tenant Persons Adjusted Occupancy
Available Residing in Gross Date
Unit Income
(E) The Borrower has obtained a "Certification of Tenant Eligibility," in the
form provided as Exhibit "C" to the Regulatory Agreement, from each Tenant named in
(D) above, and each such Certification is being maintained by the Borrower in its
records with respect to the Project. Attached hereto is the most recent "Certification of
Tenant Eligibility" for each Tenant named in (D) above who signed such a Certification
since , 2001, the date on which the last "Certificate of Continuing
Program Compliance" was filed with the Agency by the Borrower.
(F) In renting the residential units in the Project, the Borrower has not given
preference to any particular group or class of persons (except for persons who qualify
as Qualified Tenants); and none of the units listed in (D) above have been rented for
occupancy entirely by students, no one of which is entitled to file a joint return for
federal income tax purposes. All of the residential units in the Project have been rented
pursuant to a written lease, and the term of each lease is at least
months.
(G) The information provided in this "Certificate of Continuing Program
Compliance" is accurate and complete, and no matters have come to the attention of
the Borrower which would indicate that any of the information provided herein, or in any
"Certification of Tenant Eligibility" obtained from the Tenants named herein, is
inaccurate or incomplete in any respect.
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IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the
Borrower, on , 2001.
NEIGHBORHOOD HOUSING SERVICES
OF THE INLAND EMPIRE, INC.
By:
Executive Director
C-4
EXHIBIT "c"
Project Description/Scope of Work
P:\Forms\Housing Forms\HOME Fonns\NHS CHDO Loan Agreement.doc
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Neighborhood Housing Services of the Inland Empire
MultiFamily Rennovation and Affordable Rental Program
Purchase ProForma
August 1, 2001
Number of Dwelling Untts
BUilding Square Footage
11
PERMANENT LOAN
Loan Amount
Interest Rate
Term (years)
Monthly PMT
327,503
9,00%
30
($2,635,16)
Property Address:
City:
Mt,View/ArrowheadJPershing
San Bernardino
DeSCrlotlon:
TOTAL $ PER SF %OF PURCHASE ANALYSIS
COST S PER UNIT SLOG TOTAL
1. LAND COSTS: (Credit for materials alrea"'" "'urchased\
Purchase Price 129,000 11,727 #DIVlOI
Transfer Tax 0 0 #DIVIOI
TOTAL LAND COSTS 129,000 11,727 #DIV/O! 26%
2. FEESJPERMITS & STUDIES:
Building Fees and Permits 18,000 1,636 #DIVIOI
Architectural and Enaineerina Fees 5000 455 #DIVIOI
TOTAL FEESIPERMJTS & STUDIES 23,000 2,091 #DIV/O! 5%
3. DIRECT CONSTRUCTION COSTS:
Carpet and Vinyl 0 #DIVIO!
Replace windO'WS 0 #DIV/OI
Replace roof two building and porch 0 #DIVIO!
HV AC & Heaters 0 #DIVIOI
Plumbing 0 #DIVIO!
Carpenby Work IntlExt 0 #OIVIO!
Electrical 0 #OIV/OI
Appliance 0 #DIV/OI
Interior Paint 0 #DIVlO!
Exterior 0 #DIV/O!
Light Fixtures 0 #DIVlO!
Finish 0 #DIV/O!
Landscaping 0 #DIV/D!
Play Area 0 #D1V/OI
Laundry & Office 0 #DIVIOI
Front Entry, Fence & Gate 0 #DIVIOI
Continnenev 286 440 26 040 #DIVIOI
TOTAL DIRECT CONSTRUCTION COSTS 286,440 26,040 #DIVIO! 59%
4. INDIRECT CONSTRUCTION COSTS
Develope~s Fee 7,740 704 #DIVIOI
Development Consultant 5,160 469 #DIVIOI
Construction Manager 10,000 909 #DIVIOI
Builders Risk/Liability Insurance 1,000 91 #DIVIO!
Real Estate Taxesl)nsurance 0 0 #DIVIOI
Legal 750 68 #DIVIOI
Accountina 1000 91 #DIVIOI
TOTAL INDIRECT CONSTRUCTION COSTS 25,650 2,332 #DIV/O! 5%
5. RENT-UP COSTS
Rental Marketing 3,500 318 #DIVIOI
Ooeratina ReselVe 2500 227 #DIVIOI
TOTAL RENT-UP COSTS 6,000 545 #DIV/O! 1%
6. FINANCING COSTS
Bank Appraisal 1,200 109 #DIV/Ol
Construction Interest 12,000 1,091 #DIV/OI
Permanent Loan Fees/Closing Costs 6,000 545 #DIV/OI
Title and Recordina (ConsUPerml 0 0 #DIVIOI
TOTAL FINANCING COSTS 19,200 1,745 #DIV/O! 4%
TOTAL DEVELOPMENT COSTS 489,290 44,481 #OIV/OI 100%
Less NHSIE Down Payment 15,000 1,364 #DIVIOI 3%
Less RDA HOME Grant (30% of Total Dev Costs) 146,787 13,344 #DIVIOI 30% 01 PURCHASE PRICE OFFER
NET DEVELOPMENT COSTS 327 503 29 773 #DIVlOI 67% 01 OFFER PER UNI
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Neighborhood Housing Services of the Inland Empire
MultiFamily Rennovation and Affordable Rental Program
Operating Expenses
August 1, 2001
Property Address Mt. View/Arrowhead/Pershing
City San Bernardino
Annual Per UnitlYr. Monthly Per Unit/Mo. % Total
MANAGEMENT
Management $4,400 $400 $367 $33
TOTAL MANAGEMENT $4,400 $400 $367 $33 23%
ADMINISTRATION
Marketing $1,760 $160 $147 $13
Accounting $1,467 $133 $122 $11
Legal $1,000 $91 $83 $8
Office Expenses $750 $68 $63 $6
TOTAL ADMINISTRATION $4,977 $452 $415 $38 26%
MAINTENANCE
Repairs $1,760 $160 $147 $13
Landscaping $1,440 $131 $120 $11
Pest Control $1,440 $131 $120 $11
TOTAL MAINTENANCE $4,640 $422 $387 $35 24%
UTILITIES NOT PAID BY TENANTS
Trash Removal $0 $0 $0 $0
Electricity $0 $0 $0 $0
Water/Sewer $3,960 $360 $330 $30
Gas $0 $0 $0 $0
TOTAL UTILITIES $3,960 $360 $330 $30 21%
INSURANCE
Property & Liability Insurance $1,000 $91 $83 $8
TOTAL INSURANCE $1,000 $91 $83 $8 5%
TAXES
Real Estate Taxes $0 $0 $0 $0
TOTAL TAXES $0 $0 $0 $0 0%
TOTAL OPERATING EXPENSES $18,977 $1,725 $1,581 $144 100%
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EXHIBIT "D"
Schedule of Performance
P:\Fonns\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
28
Schedule of Renovation:
1501 Pershing Ave,
1441-1443 N, Mountain View
1495 N. Mountain View/195-197 Magnolia
1397 N, Arrowhead
Note: The projected start date is within 10 days after the notice to proceed,
Rehabilitation work will occur concurrently on all four properties, City Plan Check
may be necessary for the garage conversion on both 197 Magnolia and 1397 N,
Arrowhead. This may affect the projected scheduling time line,
PHASE ONE:
Pull permits, demolition, concrete work, property clean-up, trash removal,
fencing, irrigation, and landscaping,
Estimated completion: 2 weeks from start date
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PHASE TWO:
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Roofing, replacement windows, exterior door replacement, exterior
improvements,
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Estimated completion: 5 weeks from start date
PHASE THREE:
Electrical, plumbing, framing of walls (if needed), kitchen and bath remodel, wall
repair, interior paint, exterior paint or color coat, flooring,
Estimated completion: 13 weeks from start date
FINAL PHASE:
Corrections, pick-up work (punch list), final clean up, final inspection,
Estimated completion: 14 Y2 weeks from start date
EXHffin "E"
Form of Promissory Note
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
29
Neighborhood Housing Services (NilS)
1390 North "D" Street
San Bernardino, California 92405
2000-HOME-CHDO
PROMISSORY NOTE
PAYABLE TO A PUBLIC AGENCY
Borrower:
Lender:
Neighborhood Housing Services
(NHS)
Redevelopment Agency of
the City of San Bernardino
20 I North "E" Street
Suite 301
San Bernardino, California 92401
Principal Amount: $147,000
For Note secured by Parcel No. I:
$32,500, plus reasonable escrow costs;
or -
For Note secured by Parcel No, 2:
$59,000, plus reasonable escrow costs;
- or-
For Note secured by Parcel No, 3:
$37,500, plus reasonable escrow costs
Date of Promissory Note:
September 17, 200 I
Interest Rate: N/ A
[No interest shall accrue except upon
default]
[TO BE CONFIRMED BY AGENCY AT
TIME OF INITIAL ADV ANCEl
Maturity Date of Promissory Note:
September 17, 2016
[TO BE CONFIRMED BY AGENCY AT
TIME OF INITIAL ADV ANCEl
PROMISE TO PAY. Neighborhood Housing Services of the Inland Empire, Inc" a California
non-profit corporation, (hereafter the "Borrower") promises to pay to the Redevelopment
Agency of the City of San Bernardino (the "Agency"), or order, in lawful money of the United
SB2001 :25552,)
I
States of America, the principal amount of One Hundred Forty Seven Thousand Dollars
($147,000), or so much as may be outstanding under this Promissory Note,
INDEBTEDNESS, This Promissory Note evidences the indebtedness of the Borrower to the
Agency under the terms 2000 HOME Community Housing Development Organization (CHDO)
multi-family Loan Agreement dated as of September 17, 2001, (the "HOME Loan Agreement")
by and among the Borrower and the Agency, A copy of the Loan Agreement is on file with the
Agency Secretary as a public record ofthe Agency.
PAYMENT. The outstanding principal balance of this Promissory Note shall be payable on the
fifteenth (15th) anniversary following the date of this Promissory Note (the "Maturity Date"),
subject to the provisions of the next paragraph:
Provided that if the Borrower has timely submitted to the Agency the "tenant eligibility
certificates" as required under the HOME Loan Agreement for each annual reporting period and
that Borrower is not otherwise in default under the HOME Loan Agreement, the Agency shall
credit to the account of the Borrower as a prepayment of this Promissory Note the sum of$9,800
[e.g, IIl5th of the original principal balance] as of each anniversary date following the date of
this Promissory Note next following the Agency's receipt of such tenant eligibility certificates.
INTEREST. Provided that no default has occurred, no interest shall occur or be payable to the
Agency on this Promissory Note, In the event that a default has occurred and has not been cured
and in addition to any other remedy which the Agency may seek, then a default rate of interest
shall occur on the then outstanding prepaid balance of this Promissory Note at a rate per annum
of ten percent (10%) payable to the Agency, commencing on the date of such default until such
default is cured and the default interest amount is paid to the Agency,
PREP A YMENT. Borrower may pay without penalty all or prorated portion of the amount
owed under this Promissory Note earlier than it is due.
SPECIAL EVENT OF ACCELERATION, The outstanding principal balance of this
Promissory Note, is subject to acceleration prior to the Maturity Date upon the occurrence of any
of the following each of which is referred to as a "special event of acceleration":
(a) the Borrower sells or transfers its interest to any person other than a permitted Successor-
In-Interest as set forth in the HOME Loan Agreement;
(b) the Borrower ceases to utilize the property for its original intent (rental purpose); or
(c) the Borrower may refinance the purchase money mortgage loan provided to the Borrower
by the First Mortgage Lender of even date herewith without the prior written approval of
the Agency,
SB200 1:25552,1
2
DEF AUL T, Borrower will be in default if any of the following happens:
(a) Borrower breaks any promise Borrower made to the Agency in the HOME Loan
Agreement, or Borrower fails to comply with or to perform when due any other term,
obligation, covenant, or condition contained in this Promissory Note or any agreement
related to this Promissory Note.
(b) Borrower defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay this
Promissory Note or the ability of Borrower to perform its other obligations under this
Promissory Note or the Deed of Trust.
(c) Any representation or statement made or furnished to the Agency by Borrower or on
Borrower's behalf under the HOME Loan Agreement is false or misleading in any
material respect either now or at the time made or furnished,
(d) Any creditor tries to take any of Borrower's property on or in which the Agency has a
lien or security interest.
(e) A material adverse charge occurs in Borrower's financial condition, or the Agency
believes the prospect of performance of the Borrower's obligations under the HOME
Loan Agreement is impaired,
If any default (other than a default described in (a)or (d), above) is curable, and if Borrower has
not been given a notice of a default of the same provision of this Promissory Note within the
preceding twelve (12) months, such a default may be cured (and in such event no default will be
deemed to have occurred) if Borrower, after receiving written notice from the Agency
demanding cure of such default:
(i) cures the default within ten (10) days; or
(ii) if the cure requires more than ten (10) days, immediately initiates steps which the Agency
deems in its sole discretion to be sufficient to cure the default, and thereafter Borrower
continues and
8B2001 :25552,1
3
ASSIGNMENT AND ASSUMPTION OF THIS PROMISSORY NOTE BY A PERMITTED
SUCCESSOR-IN-INTEREST APPROVED BY THE HOLDER. The Borrower may assign its
obligation to pay the Agency the principal of this Promissory Note to a permitted Successor-In-
Interest approved in writing by the Agency, and such approval shall not be unreasonably
withheld, The words "Successor-In-Interest" mean a successor at any time prior to the Maturity
Date by purchase, assignment, transfer or otherwise, The Successor-In-Interest shall be a
successor that satisfy the requirements of the HOME Loan Agreement and the Agency Deed of
Trust.
RIGHTS OF THE HOLDER, Upon default the Agency may exercise any of its rights provided
under the HOME Loan Agreement, as this term is defined herein including without limitation,
the declaration by the Holder that the entire unpaid principal balance on this Promissory Note is
immediately due, without notice, and then Borrower will pay that amount. The Agency may hire
or pay someone else to help collect this Promissory Note if the Borrower does not pay, The
Borrower also will pay the Holder that amount. This includes, subject to any limits under
applicable law, the Agency's reasonable attorneys' fees and the legal expenses of the Holder
whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. The Borrower also will pay any
court costs, in addition to all other sums provided by law, This Promissory Note has been
delivered to the Holder and accepted by the Holder in the State of California, If there is a lawsuit
arising under this Promissory Note, the Superior Court of San Bernardino County, the State of
California, shall have jurisdiction of such lawsuit. This Promissory Note shall be governed by
and construed in accordance with the laws of the State of California,
COLLATERAL. The Maker acknowledges this Promissory Note is secured by a deed of
trust and assignment of rents of even date herewith, Such Agency Deed of Trust affects the
property as generally described as 1441-1443 Mt. View (APN 0146-163-4300), 1495 Mt. View
& 1915-1917 Magnolia (APN 0146-163-02000),1501-1503 Pershing (APN 0146-132-18000),
and 1379 Arrowhead (APN 0146-162-22000), San Bernardino, California. The Agency Deed of
Trust contains the following due on sale/due on special event of acceleration provision:
"THE AGENCY MAY, AT ITS OPTION, DECLARE IMMEDIATELY DUE AND PAYABLE
ALL SUMS SECURED BY THIS DEED OF TRUST UPON THE OCCURRENCE OF A
SPECIAL EVENT OF ACCELERATION, AS THIS TERM IS DEFINED BELOW.
A "special event of acceleration" shall occur when there is a sale, transfer, refinancing of the
purchase money mortgage loan of the First Mortgage Lender except as provided in General
Provisions, below, or conveyance of any right, title or interest in the Property to any person other
than a permitted Successor-In-Interest, who has been approved in writing by the Lender as set
forth above in the section entitled "Permitted Successor-In-Interest," whether such sale,
refinancing or transfer is legal, beneficial, or equitable, whether voluntary or involuntary,
8B2001 :25552,\
4
whether by sale, deed, installment sale contract, land contract, lease option contract, or by sale,
assignment, or transfer of any beneficial interest in the Property to any land trust."
GENERAL PROVISIONS, The Holder may delay or forego enforcing any of its rights or
remedies under this Promissory Note without losing them. The Maker and any other person who
signs, guarantees or endorses the Promissory Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly
stated in writing, no party who signs this Promissory Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such parties agree that
the Holder may renew or extend (repeatedly and for any length of time) this Promissory Note, or
release any party, or guarantor or collateral; or impair, fail to realize upon or perfect its security
interest in the collateral; and take any other action deemed necessary by the Holder in its sole
discretion without the consent of or notice to anyone, All such parties also agree that the Holder
may modify this Promissory Note and/or the Loan Agreement in writing without the consent of
or notice to anyone other than the party with whom the modification is made. The Holder may
assign its interest in this Promissory Note and the Deed of Trust to a third party at any time,
SB2001 :25552,1
5
The Borrower acknowledges this Promissory Note is secured by a Deed of Trust of even date
herewith. The Deed of Trust affects certain real property described in the Loan Agreement.
PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND
UNDERSTANDS ALL OF ITS PROVISIONS, BORROWER AGREES TO THE TERMS OF
THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY HEREOF,
BORROWER
Neighborhood Housing Services ofthe Inland Empire, Inc"
a California non-profit corporation
By:
Title:
By:
Title:
SB2001 :25552,1
6
EXHffiIT "F"
Form of Deed of Trust
P:\Forms\Housing Fonns\HOME Forms\NHS CHDO Loan Agreement.doc
30
RECORDATION REQUESTED BY:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of San Bernardino
201 North "E" Street
Third Floor
San Bernardino, California 92401-1507
Attn: Executive Director
Space Above This Line is
For Recorder's Use Only
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
Neighborhood Housing Service
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES AND RENTS AND FIXTURE FILING (the "Deed of Trust") is dated
2001, among Neighborhood Housing Service (the
"Trustor"), whose address is 1390 North "D" Street, San Bernardino,
California 92405; the Redevelopment Agency of the City of San
Bernardino, a body corporate and politic, whose address is 201 North
"E" Street, Third Floor, San Bernardino, California 92401-1507 (the
"Lender" or the "Beneficiary"); and First American Title Insurance
Company (the "Trustee").
1.0 CONVEYANCE AND GRANT. For valuable consideration, Trustor
irrevocably grants, transfers and assigns to Trustee in trust,
with power of sale, for the benefit of Lender as Beneficiary,
all of Trustor's right, title, and interest in and to that
certain real property described (APN 0146-163-43000, APN 0146-
163-02000, APN 0146-162-22000 and APN 0146-132-18000) in
Exhibit "A" attached hereto and incorporated herein by this
reference (the "Property"), together with all existing or
subsequently erected or affixed buildings, improvements and
fixtures; all easements, rights of way, and appurtenances and
all other rights, royalties, and profits relating to the real
property, including and without limitation all minerals, oil,
gas, geothermal and similar matters located in San Bernardino
County, State of California (the "Mortgaged Property") .
SB200 1 :23708.1
1
Trustor presently assigns to the Lender all of Trustor's right,
title and interest in and to all present and future leases of
the Mortgaged Property and all Rents from the Mortgaged
Property. In addition, Trustor grants Lender a Uniform
Commercial Code security interest in the Rents and the Personal
Property as set forth herein.
2.0 DEFINITIONS. The following words shall have the following
meanings when used in this Deed of Trust. Terms not otherwise
defined in this Deed of Trust shall have the meanings
attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money
of the United States of America:
Beneficiary. The word "Beneficiary" means the Redevelopment
Agency of the City of San Bernardino, a body corporate and
politic, its successors and assigns.
Deed of Trust. The words "Deed of Trust" mean this Deed of
Trust and Assignment of Leases and Rents and Fixture Filing
among Trustor, Lender, and Trustee, and includes without
limitation all assignment and security interest provisions
relating to the Personal Property and Rents.
Improvements. The word "Improvements" means and includes all
existing improvements on the Property and all improvements to
be constructed on the Property.
Indebtedness. The word "Indebtedness" means all principal and,
if applicable, interest payable under the Promissory Note and
any amounts expended or advanced by Lender to discharge
obligations of Trustor or expenses incurred by Trustee or
Lender to enforce obligations of Trustor under the promissory
Note and this Deed of Trust, together with interest on such
amounts. This Deed of Trust secures, in addition to the
amounts specified in the Promissory Note, any future advances,
together with all interest thereon, that may be made by the
Lender pursuant to the Loan Agreement and/or the Related
Documents so long as Trustor complies with all the terms and
conditions of the Promissory Note, Loan Agreement and/or the
Related Documents.
Lender. The word "Lender" means the Redevelopment Agency of
the City of San Bernardino, its successors and assigns.
SB2001 :23708,}
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Loan Agreement. The words "Loan Agreement" mean that
certain 2000 HOME Loan Agreement, dated as of , l<f ani
between the Trustor and the Lender which provides for the loan
to the Trustor which is secured by this Deed of Trust.
Mortgaged Property. The
refer to the Property,
Rents, together with:
words "Mortgaged Property mean and
Improvements, Personal Property and
all right, title, and interest (including any claim or
demand or demand in law or equity) that Trustor now has or
may later acquire in or to such Mortgaged Property; all
easements, rights, privileges, tenements, hereditaments,
and appurtenances belonging or in any way appertaining to
the Mortgaged Property; all of the estate, right, title,
interest, claim, demand, reversion, or remainder of
Trustor in or to the Mortgaged Property, either at law or
in equity, in possession or expectancy, now or later
acquired; all exterior landscaping on the Mortgaged
Property; all development rights or credits and air
rights; all water and water rights (whether or not
appurtenant to the Mortgaged Property) and shares of stock
pertaining to such water or water rights, ownership of
which affects the Mortgaged Property; all minerals, oil,
gas, and other hydrocarbon substances and rights thereto
in, on, under, or upon the Mortgaged Property and all
royalties and profits from any such rights or shares of
stock; all right, title, and interest of Trustor in and to
any streets, ways, alleys, strips, or gores of land
adjoining the Property or any part of it that Trustor now
owns or at any time later acquires and all adjacent lands
within enclosures or occupied by buildings partly situated
on the Mortgaged Property;
all intangible Mortgage Property and rights
the Mortgaged Property or its operation
connection with it, including, without
permits, licenses, plans, specifications,
contracts, subcontracts, bids, deposits
services, installations, refunds due Trustor,
trademarks, and service marks;
relating to
or used in
limitation,
construction
for utility
trade names,
all of the right, title, and interest of Trustor in and to
the land lying in the bed of any street, road, highway, or
avenue in front of or adjoining the Property;
SB2001:23708,l
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SB2001 :23708,1
any and all awards previously made or later to be made by
any governmental authority to the present and all
subsequent owners of the Mortgaged Property that may be
made with respect to the Mortgaged property as a result of
the exercise of the right of eminent domain, the
alteration of the grade of any street, or any other injury
to or decrease of value of the Mortgaged Property, which
award or awards are assigned to the Lender, and which the
Lender, at its option, is authorized, directed, and
empowered to collect and receive the proceeds of any such
award or awards from the authorities making them and to
give proper receipts and acquittances for them, and to
apply them as provided in this Deed of Trust;
all leases of the Mortgaged Property or any part of it now
or later entered into and all right, title, and interest
of the Trustor under such leases, including cash or
securities deposited by the tenants to secure performance
of their obligations under such leases (whether such cash
or securities are to be held until the expiration of the
terms of such leases or applied to one or more of the
installments of rent coming due immediately before the
expiration of such terms), all rights to al insurance
proceeds and unearned insurance premiums arising from or
relating to the Mortgaged Property, all other rights and
easements of the Trustor now or later existing pertaining
to the use and enjoyment of the Mortgaged Property, and
all right, title, and interest of the Trustor in and to
all declarations of covenants, conditions, and
restrictions as may affect or otherwise relate to the
Mortgaged Property;
any and all proceeds of any insurance policies covering
the Mortgaged Property, whether or not such insurance
policies were required by the Lender as a condition of
making the loan secured by this Deed of Trust or are
required to be maintained by the Trustor as provided below
in this Deed of Trust; which proceeds are assigned to the
Lender, and which the Lender, at its option, is
authorized, directed, and empowered to collect and receive
the proceeds of such insurance policies from the insurers
issuing the same and to give proper receipts and
acquittances for such policies, and to apply the same as
provided below;
all plans and specifications for the Improvements; all
contracts and subcontracts relating to the Improvements;
4
all deposits (including tenants' security deposits;
provided, however, that if the Lender acquires possession
or control of tenants' security deposits the Lender shall
use the tenants' security deposits only for such purposes
as governmental requirements permit), funds, accounts,
contract rights, instruments, documents, general
intangibles, and notes or chattel paper arising from or in
connection with the Property or other Mortgaged Property;
all permits, licenses, certificates, and other rights and
privileges obtained in connection with the Property or
other Mortgaged Property; all soils reports, engineering
reports, land planning maps, drawings, construction
contracts, notes, drafts, documents, engineering and
architectural drawings, letters of credit, bonds, surety
bonds, any other intangible rights relating to the
Property and Improvements, surveys, and other reports,
exhibits, or plans used or to be used in connection with
the construction, planning, operation, or maintenance of
the Property and Improvements and all amendments and
modifications; all proceeds arising from or by virtue of
the sale, lease, grant of option, or other disposition of
all or any part of the Property, Personal Property, or
other Mortgaged Property (consent to same is not granted
or implied); and all proceeds (including premium refunds)
payable or to be payable under each insurance policy
relating to the Property, the Personal Property, or other
Mortgaged Property;
all tax refunds, bills, notes, inventories, accounts and
charges receivable, credits, claims, securities, and
documents of all kinds, and all instruments, contract
rights, general intangibles, bonds and deposits, and all
proceeds and products of the Trustor in the Mortgaged
Property;
all accounts, contract rights, chattel paper, documents,
instruments, books, records, claims against third parties,
money, securities, drafts, notes, proceeds, and other
items relating to the Mortgaged Property;
all proceeds of any of the foregoing.
As used in this Deed of Trust, "Mortgaged Property" is
expressly defined as meaning allor, when the context permits
or requires, any portion of it and allor, when the context
permits or requires, any interest in it.
SB2001 :23708.1
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Personal Property. The words "Personal Property" mean all of
the right, title and interest of Trustor now or hereafter
existing in and to the following now or hereafter located in,
upon, within or about, or used in connection with or generated
by the construction, use, operation or occupancy of the
Property and any business or activity conducted thereon or
therein, together with all accessories, additions, accessions,
renewals, replacements and substitutions thereto or therefore
and the proceeds and products thereof: (a) all materials,
supplies, furniture, floor coverings window coverings,
furnishings, appliances, office supplies, equipment,
construction materials, vehicles, machinery, computer hardware
and software, maintenance equipment, window washing equipment,
repair equipment and other equipment, tools, telephone and
other communications equipment, food service preparation
equipment and utensils, chinaware, glassware, silverware and
hollowware, food and beverage service equipment, food items and
food stuffs; (b) all books, ledgers, records accounting
records, files, tax records and returns, policy manuals,
papers, correspondence, and electronically recorded data; (cl
all "General Intangibles" (as defined in the California Uniform
Commercial Code), instruments, money, "Accounts" (as defined in
the California Uniform Commercial Code), accounts receivable,
notes, certificates of deposit, chattel paper, letters of
credit, chooses in action, good will, rights to pay of money,
rents, rental fees, equipment fees and other amounts relating
to the development or use of the Property or payable by persons
who utilize the Property or any of the Improvements or paid by
persons in order to obtain the right to use the Property and
any of the Improvements, whether or not so used; trademarks,
service marks, trade dress, trade names, licenses, sales
contracts, deposits, plans and specifications, drawings,
working drawings, studies, maps, surveys; soils, environmental
engineering or other reports, architectural and engineering
contracts, construction contracts, construction management
contracts, surety bonds, feasibility and market studies,
management and operating agreements, service agreements and
contracts, landscape maintenance agreements, security service
and other services agreements and vendors agreements; (d) all
compensation, awards and other payments of relief (and claims
therefore) made for a taking by eminent domain, or by any event
in lieu thereof (including, without limitation, property and
rights and interests in property received in lieu of any such
taking), of all or any part of such Personal Property, together
with interest thereon, and any and all proceeds (or claims for
proceeds) of casualty, liability or other insurance pertaining
to such Personal Property, together with interest thereon; (e)
SB200 1 :23708,1
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any and all claims or demands against any person with respect
to damage or diminution in value to such Personal Property or
damage or diminution in value to any business or other activity
conducted on Property; (f) any and all security deposits,
deposits of security or advance payments made to others to
Trustor with respect to: (i) insurance policies relating to the
Property; (ii) prepayments and/or periodic deposits or
improvements for property taxes or assessments of any kind or
nature affecting the Property; (iii) utility services for the
Property and/or the Improvements; (iv) maintenance, repair or
similar services for the Property or any other services or
goods to be used by any business or other activity conducted on
the Property; (g) any and all authorizations, consents,
licenses, permits and approvals of and from all persons
required from time to time in connection with the construction,
use, occupancy or operation of the Property, the improvements,
or any business or activity conducted thereon or therein or in
connection with the operation, occupancy or use thereof; (h)
all warranties, guaranties, utility or street improvement
bonds, construction completion and payment surety bonds,
utility contracts, telephone exchange numbers, yellow page or
other directory advertising and the like; (i) all goods,
contract rights, and inventory; (j) all leases and use
agreements of machinery, equipment and other personal property;
(k) all insurance policies covering all or any portion of the
Property; (1) all reserves and funds held in escrow by the
Lender or other persons for the Lender's benefit under the Loan
Agreement and all funds deposited with the Lender pursuant to
the Loan Agreement, all accounts into which such funds are
deposited and all accounts, contract rights and general
intangibles or other rights relating thereto; (m) all names by
which the Property is now or hereafter known; (n) all interests
in the security deposits of tenants; (0) all management
agreements, blueprints, plans, maps, documents, books and
records relating to the Property; (p) the proceeds from sale,
assignment, conveyance or transfer of all or , any portion of
the Property or any interest therein, or from the sale of any
goods, inventory or services from upon or within the Property
and/or the Improvements; ) (q) all documents of membership in an
owner or members association or similar group having
responsibility for managing or operating any part of the
Property; (r) all other property (other than "Fixtures," as
defined in the Uniform Commercial Code) of any kind or
character as defined in or subject to the provisions of the
California Uniform Commercial Code, Secured Transactions, as
amended and; (s) all proceeds of the conversions, voluntarily
SB2001 :23708.1
7
or involuntarily, of any of the foregoing into cash or
liquidated claims.
Promissory Note. The words "Promissory Note" mean the
Promissory Note of even date herewith, in the principal amount
of one hundred forty-seven thousand dollars ($147,000)
delivered by the Trustor to the Redevelopment Agency of the
City of San Bernardino, as Lender, together with all renewals,
extensions, modifications, refinancing, and substitutions for
the Promissory Note.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments,
agreements and documents, by and between the Trustor and the
Lender whether now or hereafter existing, evidencing or
securing the Indebtedness.
Rents. The word "Rents" means all present and future
revenues, income, issues, royalties, profits, and
benefits derived from the Property.
rents,
other
Trustee. The word "Trustee" means First American Title
Insurance Company, and any substitute or successor trustees.
Trustor. The word "Trustor" means the Trustor named above and
its successors and assigns.
3 .0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF LEASES AND
RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL
PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS
AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER
THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF
TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN
AND ACCEPTED ON THE FOLLOWING TERMS:
3.1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this
Deed of Trust, Trustor shall pay to Lender all amounts secured
by this Deed of Trust as they become due, and shall strictly
and in a timely manner perform all of Trustor's obligations
under the Promissory Note, this Deed of Trust, the Loan
Agreement and the Related Documents.
3.2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees
that Trustor's possession and use of the Property and the
SB2001:23708,1
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Mortgaged Property shall be governed by the following
provisions:
Possession and Use. Until the occurrence of an Event of
Default, Trustor may (a) remain in possession and control of
the Mortgaged Property and collect Rents as they become due and
(b) use, develop, operate or manage the Property for the
purposes authorized in the Loan Agreement.
Duty to Maintain and Preserve. Trustor shall: (a) maintain
the Property and the Mortgaged Property in good condition and
repair; (b) shall construct and improve the Property in
accordance with the Loan Agreement; (c) restore and repair the
Improvements or any part of the Mortgaged Property that may be
damaged or destroyed, including but not limited to construction
defects, soil subsidiances and environmental damages whether
or not insurance proceeds are available to cover any part of
such cost of restoration or repair (regardless of whether the
proceeds of insurance may be available to the Trustor under
this Deed of Trust); (d) pay when due all claims for labor
performed and materials furnished in connection with the
Improvements and not permit any mechanics' liens or materials
suppliers' liens to arise against the Property; (e) not permit
any waste on the Property, or commit, suffer or permit any
nuisance to occur on the Property; (f) not abandon the
Mortgaged Property; (g) notify the Beneficiary in writing of
any condition at or on the Property that may have a material
affect on the market value of the Mortgaged Property; and (h)
maintain the Property and the Improvements and generally
operate it in a manner to realize it maximum rental potential.
Hazardous Substances.
(a) The terms "hazardous wastes", "hazardous substance",
"disposal," "release", and "threatened release", as used in
this Deed of Trust, shall have the same meanings as set forth
in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S. C. Section 9601, et
seq. ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act. 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 49 U.S.C. Section
6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, et seq., or
other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing.
SB2001:23708,1
9
(b) [OMITTED - - NO TEXT]
(c) Trustor represents and warrants that neither the Trustor
nor any tenant of Trustor occupying and improving any portion
of the Mortgaged Property or any contractor, agent or other
authorized user of any such tenant shall use, generate,
manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, about or from any of the
Mortgaged Property, except in compliance with all applicable
law relating to the transportation, storage, disposal or lawful
use of any hazardous waste or substance. Trustor shall comply
and cause each of its tenants and all contractors, agents or
other authorized users of the Mortgaged Property to comply with
all applicable laws relating to any hazardous wastes or
substances, including without limitation, obtaining and filing
all applicable notices, licenses, permits and similar
authorizations. Trustor shall establish and maintain a
hazardous wastes and substances management and operations
policy for the Mortgaged Property in order to assure and
monitor continued compliance by the Trustor and each of its
tenants and all contractors, agents, or other authorized users
of the Property with all laws relating to hazardous wastes or
substances.
(d) Trustor authorizes Lender and its agents to enter upon the
Mortgaged Property upon reasonable notice to make such
inspections and tests as Lender may deem appropriate to
determine compliance by the Trustor with this paragraph of
Section 3.2 if Lender reasonably believes a violation of law
has occurred. Any inspections or tests made by Lender shall be
at Trustor's expense and for Lender's purposes only and shall
not be construed to create any responsibility or liability on
the part of Lender to Trustor or to any other person. Trustor
hereby agrees to indemnify and hold harmless Lender against any
and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or
suffer resulting from breach of this paragraph of Section 3.2.
The provisions of this paragraph of Section 3.2 of the Deed of
Trust, including the obligation to indemnify the Lender, shall
survive the payment of the Indebtedness and the satisfaction
and reconveyance of the lien of this Deed of Trust and shall
not be affected by Lender's acquisition of any interest in the
Property, whether by foreclosure or otherwise.
Compliance with Governmental Requirements. Trustor shall
promptly comply with all laws, ordinances, and regulations, now
or hereafter in effect, of all governmental authorities
SB2001:23708,1
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applicable to the use or occupancy of the Mortgaged Property.
Trustor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Trustor has notified
Lender in writing prior to doing so and so long as, in Lender's
reasonable opinion, Lender's interests in the Mortgaged
Property are not jeopardized. Lender may require Trustor to
post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duty to Protect. Trustor agrees neither to abandon nor leave
unattended the Mortgaged Property. Trustor shall do all other
acts, in addition to those acts set forth above in this
section, which from the character and use of the Mortgaged
Property are reasonably necessary to protect and preserve the
Mortgaged Property.
3.3 DUE ON SALE. Lender may, at its option, declare immediately
due and payable all sums secured by this Deed of Trust upon the
sale or transfer, without the Lender's prior written approval,
of all or any part of the Mortgaged Property, or any interest
in the Mortgaged Property. A "sale or transfer" means the
conveyance of the Mortgaged Property or any right, title or
interest therein; whether legal or equitable; whether voluntary
or involuntary; whether by outright sale, deed, installment
sale contract, land contract, contract for deed, leasehold
interest with a term greater than one (1) year, lease-option
contract, or by sale, assignment or transfer of any beneficial
interest in or to any land trust holding title to the Mortgaged
Property or by any other method of conveyance of the property
interest. This option shall be exercised by the Lender in
accordance with the provisions of Section 5.1 hereof; provided
however, this option shall not be exercised if such remedy is
prohibited by applicable law.
3.4
TAXES AND LIENS.
taxes and liens on
of Trust:
The following provisions relating to the
the Mortgaged property are part of this Deed
Payment. Trustor shall pay when due (and in all events prior
to delinquency) all taxes, special taxes, assessments, charges
(including water and sewer), fines and impositions levied
against or on account of the Mortgaged Property, and shall pay
when due all claims for work done on or for services rendered
or material furnished to the Mortgaged Property, Trustor shall
maintain the Mortgaged Property free of all liens having
priority over or equal to the interest of Lender under this
SB2001:23708.1
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Deed of Trust, except for the lien of property taxes and
assessments not due.
Right to Contest. Trustor may withhold payment of any tax,
assessment, or claim in connection with a good faith dispute
over the obligation to pay, so long as Lender's interest in the
Mortgaged Property is not jeopardized. If a lien arises or is
filed as a result of nonpayment, Trustor shall within sixty
(60) days after the lien arises or, if a lien is filed, within
sixty (60) days after Trustor has notices of the filing, secure
the discharge of the lien, or if requested by Lender, deposit
with Lender cash or a sufficient corporate surety bond or other
security satisfactory to Lender in an amount sufficient to
discharge the lien plus any costs and attorneys' fees or other
charges that could accrue as a result of a foreclosure or sale
under the lien; provided, however, that Trustor shall not be
required to payor make provisions for the payment of any tax,
assessment, lien or charge so long as the Trustor in good faith
shall contest the validity or amount thereof and so long as
such delay in payment does not subject the Property to
forfeiture or sale. In any contest, Trustor shall defend
itself and Lender and shall satisfy any adverse judgment before
enforcement against the Property. Trustor shall name Lender as
an additional obligee under any surety bond furnished in the
contest proceedings.
Evidence of Payment. Trustor shall upon demand furnish to
Lender satisfactory evidence of payment of the taxes or
assessments and shall authorize the appropriate governmental
official to deliver to Lender at any time a written statement
of the taxes and assessments against the Property.
3.5 CONDEMNATION. The following provisions relating to
condemnation proceedings are a part of this Deed of Trust:
Proceedings. If any proceeding in condemnation is filed
affecting any portion of the Mortgaged Property, Trustor shall
promptly notify the Beneficiary in writing, and Trustor shall
promptly take such steps as may be necessary to defend the
action and obtain the award. Trustor may be the nominal party
in such proceeding, but the Beneficiary shall be entitled to
participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Trustor will
deliver or cause to be delivered to the Beneficiary such
instruments as may be requested by it from time to time to
permit such participation.
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3.6 CASUALTY INSURANCE. The Trustor shall at all times keep the
Mortgaged Property insured for the benefit of the Trustee and
the Beneficiary as additional insured as follows:
Against damage or loss by fire and such other hazards
(including lightning, windstorm, hail, explosion, riot, acts of
striking employees, civil commotion, vandalism, malicious
mischief, aircraft, vehicle, and smoke) as are covered by the
broadest form of extended coverage endorsement available from
time to time, including course of construction and builders
risk endorsements in an amount not less than the full insurable
value of the Mortgaged Property, with a deductible amount not
to exceed Ten Thousand Dollars ($10,000); provided however,
that prior to the recordation of the nConstruction Loan" as
this term is defined in the Loan Agreement, such insured amount
shall be not less than $1,000,000, and upon the recordation of
such Construction Loan the full insurable value shall be not
less than the principal amount of such Construction Loan, plus
the principal amount of the Indebtedness;
Against damage or loss from (a) sprinkler system leakage and
(b) boilers, boiler tanks, heating and air conditioning
equipment, pressure vessels, auxiliary piping, and similar
apparatus, on such basis and in such amounts as the Beneficiary
may require;
Liabili ty Insurance. Trustor shall procure and maintain
workers' compensation insurance for employees and comprehensive
general liability insurance covering Trustor, Trustee, and the
Beneficiary against claims for bodily injury or death or for
damage occurring in, on, about, or resulting from the Mortgaged
Property, or any street, drive, sidewalk, curb, or passageway
adj acent to it, in standard form and with such insurance
company or companies and in an amount of at least One Million
Dollars ($1,000,000) combined single limit, or such greater
amount as the buyer may require, which insurance shall include
completed operations, product liability, and blanket
contractual liability coverage that insures contractual
liability under the indemnifications set forth in this Deed of
Trust (but such insurance coverage or its amount shall in no
way limit such indemnification) .
Other Insurance. The Trustor shall procure and maintain such
other insurance or such additional amounts of insurance,
covering the Trustor or the Mortgaged Property, as (a) may be
required by the terms of any construction contract for the
SB2001 :23708.1
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improvements or by any governmental authority, or (b) may be
reasonably required by the Beneficiary from time to time.
Form of Policies. All insurance required under this paragraph
shall be paid for and nonassessable. The policies shall
contain such provisions, endorsements, and expiration dates as
the Beneficiary from time to time reasonably requests and shall
be in such form and amounts, and be issued by such insurance
companies admitted as surety companies and doing business in
the State of California, as the Beneficiary shall approve in
the Beneficiary's sole and absolute discretion. Unless
otherwise expressly approved in writing by the Beneficiary,
each insurer shall have a Best Rating of not less than
"A(vii)", or better. All policies shall (a) contain a waiver
of subrogation endorsement; (b) provide that the policy will
not lapse or be canceled, amended, or materially altered
(including by reduction in the scope or limits of coverage)
without at least thirty (30) days prior written notice to the
Beneficiary; (c) with the exception of the comprehensive
general liability policy, contain a mortgagee's endorsement
(438 BFU Endorsement or equivalent), and name the Beneficiary
and trustee as insureds; and (d) include such deductibles as
the Beneficiary may approve. If a policy required under this
paragraph contains a co-insurance or overage clause, the policy
shall include a stipulated value or agreed amount endorsement
acceptable to the Beneficiary.
Duplicate Originals or Certificates. Duplicate original
policies evidencing the insurance required under this paragraph
and any additional insurance that may be purchased on the
Mortgaged Property by or on behalf of Trustor shall be
deposited with and held by the Beneficiary (a) receipts
evidencing payment of all premiums on the policies and (b)
duplicate original renewal policies or a binder with evidence
satisfactory to the Beneficiary of payment of all premiums at
least thirty (30) days before the policy expires. In lieu of
the duplicate original policies to be delivered to the
Beneficiary under this paragraph, Trustor may also deliver
original certificates from the issuing insurance company,
evidencing that such policies are in full force and effect and
containing information that, in the reasonable judgment of the
Beneficiary, is sufficient to allow Lender to ascertain whether
such policies comply with the requirements of this Paragraph.
No Separate Insurance. The Trustor shall not carry separate
or additional insurance concurrent in form or contributing in
the event of loss with that required under this paragraph
SB2001:23708.1
14
unless endorsed in favor of Trustee and the Beneficiary as
required by this paragraph and otherwise approved by the
Beneficiary in all respects.
Transfer of Title. In the event of foreclosure of this Deed of
Trust or other transfer of title or assignment of the Mortgaged
Property in extinguishment, in whole or in part, of the
Indebtedness, all right, title, and interest of the Trustor in
and to all insurance policies required under this paragraph or
otherwise then in force with respect to the Mortgaged Property
and all proceeds payable under, and unearned premiums on, such
policies shall immediately vest in the purchaser or other
transferee of the Mortgaged Property.
Beneficiary's Right to Obtain. Trustor shall deliver to the
Beneficiary original policies or certificates evidencing such
insurance at least thirty (30) days before the existing
policies expire. If any such policy is not so delivered to the
Beneficiary or if any such policy is canceled, whether or not
Lender has the policy in its possession, and no reinstatement
or replacement policy is received before termination of
insurance, the Beneficiary, without notice to or demand on
Trustor, may (but is not obligated to) obtain such insurance
insuring only the Beneficiary and Trustee with such company as
the Beneficiary may deem satisfactory, and pay the premium for
such policies, and the amount of any premium so paid shall be
charged to and promptly paid by Trustor or, at the
Beneficiary's option, may be added to the Indebtedness. The
Beneficiary acknowledges that, if the Beneficiary obtains
insurance, it is for the sole benefit of the Beneficiary and
Trustee, and Trustor shall not rely on any insurance obtained
by the Beneficiary to protect Trustor in any way.
Duty to Restore After Casualty. If any act or occurrence of
any kind or nature (including any casualty for which insurance
was not obtained or obtainable) results in damage to or loss or
destruction of the Mortgaged Property, Trustor shall
immediately give notice of such loss or damage to the
Beneficiary and, if the Beneficiary so instructs, shall
promptly, at the Trustor's sole cost and expense, regardless of
whether any insurance proceeds will be sufficient for the
purpose, commence and continue diligently to completion to
restore, repair, replace, and rebuild the Mortgaged Property as
nearly as possible to its value, condition, and character
immediately before the damage, loss, or destruction.
5B200 1 :23708,1
15
3.7 ASSIGNMENT TO THE BENEFICIARY. The proceeds of any award or
claim for damages, direct or consequential, in connection with
any condemnation or other taking of or damage or injury to the
Mortgaged Property, or any part of it, or for conveyance in
lieu of condemnation, are assigned to and shall be paid to the
Beneficiary, regardless of whether the Beneficiary's security
is impaired. All causes of action, whether accrued before or
after the date of this Deed of Trust, of all types for damages
or injury to the Mortgaged Property or any part of it, or in
connection with any transaction financed by funds lent to the
Trustor by the Beneficiary and secured by this Deed of Trust,
or in connection with or affecting the Mortgaged Property or
any part of it, including, without limitation, causes of action
arising in tort or contract or in equity, are assigned to the
Beneficiary as additional security, and the proceeds shall be
paid to the Beneficiary. The Beneficiary, at its option, may
appear in and prosecute in its own name any action or
proceeding to enforce any such cause of action and may make
compromise or settlement of such action. The Trustor shall
notify the Beneficiary in writing immediately on obtaining
knowledge of any casualty damage to the Mortgaged Property or
damage in any other manner in excess of Ten Thousand Dollars
($10,000) or knowledge of the institution of any proceeding
relating to the condemnation or other taking of or damage or
injury to all or any portion of the Mortgaged Property. The
Beneficiary in its sole and absolute discretion, may
participate in any such proceedings and may join borrower in
adjusting any loss covered by insurance. Trustor covenants and
agrees with the Beneficiary, at Beneficiary's request, to make,
execute, and deliver, at Trustor's expense, any and all
assignments and other instruments sufficient for the purpose of
assigning the aforesaid award or awards, causes of action, or
claims of damages or proceeds to the Beneficiary free, clear,
and discharged of any and all encumbrances of any kind or
nature.
Compensation and Insurance Payments. All compensation, awards,
proceeds, damages, claims, insurance recoveries, rights of
action, and payments that Trustor may receive or to which the
Beneficiary may become entitled with respect to the Mortgaged
Property if any damage or injury occurs to the Mortgaged
Property, other than by the Beneficiary condemnation or partial
taking of the Mortgaged Property, shall be paid over to the
Beneficiary and shall be applied first toward reimbursement of
all costs and expenses of the Beneficiary in connection with
their recovery and disbursement, and shall then be applied as
follows:
SB2001:23708.1
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SB2001 :23708,1
The Beneficiary shall consent to the application of such
payments to the restoration of the Mortgaged Property so
damages only the Beneficiary has met all the following
conditions (a breach of one of which shall constitute a
default under this Deed of Trust, the Promissory Note, and
any Related Document): (a) Trustor is not in default under
any of the terms, covenants, and conditions of the Related
Documents; (b) all then-existing leases affected in any
way by such damage will continue in full force and effect;
(c) the Beneficiary is satisfied that the insurance or
award proceeds, plus any sums added by Trustor, shall be
sufficient to fully restore and rebuild the Mortgaged
Property under then current governmental requirements; (d)
within sixty (60) days after the damage tot he Mortgaged
Property, Trustor presents to the Beneficiary a
restoration plan satisfactory to the Beneficiary and each
local agency with jurisdiction, which includes cost
estimates and schedules; (e) construction and completion
of restoration and rebuilding of the Mortgaged Property
shall be completed in accordance with plans and
specifications and drawings submitted to the Beneficiary
within thirty (30) days after receipt by the Beneficiary
of the restoration plan and thereafter approved the
Beneficiary; which plans, specifications, and drawings
shall not be substantially modified, changed, or revised
without the Beneficiary's prior written consent; (f)
within ninety (90) days after such damage, Trustor and a
licensed contractor satisfactory to the Beneficiary enter
into a fixed price or guaranteed maximum price contract
satisfactory to the Beneficiary, providing for complete
restoration in accordance with such restoration plan for
an amount not to exceed the amount of funds held or to be
held by the Beneficiary; (g) all restoration of the
Improvements so damaged or destroyed shall be made with
reasonable promptness and shall be of a value at least
equal to the value of the Improvements so damages or
destroyed before such damage or destruction; (h) the
Beneficiary reasonably determines that there is an
identified source (whether from income from the Mortgaged
Property or another source) sufficient to pay all debt
service and operating expenses of the Mortgaged Property
during its restoration as required above; and (i) any and
all funds that are made available for restoration and
rebuilding under this subparagraph shall be disbursed at
the sole election of the Beneficiary through the Trustee,
or a title insurance or trust company satisfactory to the
17
Benef iciary, in accordance with standard construction
lending practices and mechanics' lien waivers and title
insurance date-downs, and the provision of payment and
performance bonds by the Trustor, or in any other manner
approved by the Beneficiary in the Beneficiary's sole and
absolute discretion; or
If fewer than all conditions (a) through (i) in the
preceding subparagraph are satisfied, then such payments
shall be applied in the sole and absolute discretion of
the Beneficiary: to the payment of the Indebtedness
secured by this Deed of Trust; or to the reimbursement of
Trustor's expenses incurred in the rebuilding and
restoration of the Mortgaged Property. If the Beneficiary
elects to make any funds available to restore the
Mortgaged Property, then all of the conditions (a) through
(i) in the preceding subparagraph shall apply, except for
such conditions that the Beneficiary in its sole and
absolute discretion, may waive.
Material Loss Not Covered. If any material part of the
Mortgaged Property is damaged or destroyed and the loss, is not
adequately covered by insurance proceeds collected or in the
process of collection, the Trustor shall deposit with the
Beneficiary, within thirty (30) days after the Beneficiary's
request, the amount of the loss not so covered.
Total Condemnation Payment. All compensation, awards,
proceeds, damages, claims, rights of action, and payments that
Borrower may receive or to which the Trustor may become
entitled with respect to the Mortgaged Property in the event of
a total condemnation or other total taking of the Mortgaged
Property by a public agency shall be paid over to the
Beneficiary and shall be applied first to the reimbursement of
all Beneficiary's costs and expenses in connection with their
recovery, and shall then be applied to the payment of the
Indebtedness. Any surplus remaining after payment and
satisfaction of the Indebtedness shall be paid to the Trustor
as its interest may then appear.
Partial Condemnation Payments. All compensation, awards,
proceeds, damages, claims, insurance recoveries, rights of
action, and payments ("funds") that the Trustor may receive or
to which the Trustor may become entitled with respect to the
Mortgaged Property in the event of a partial condemnation or
other partial taking of the Mortgaged Property by a public
agency, unless the Trustee and Beneficiary otherwise agree in
SB200 I :23708,1
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writing, shall be divided into two portions, one equal to the
principal balance of the Promissory Note at the time of receipt
of such funds and the other equal to the amount by which such
funds exceed the principal balance of the Promissory Note at
the time of receipt of such funds.
The first such portion shall be applied to the sums secured by
this Deed of Trust, whether or not then due, including but not
limited to principal, accrued interest, and advances with the
balance of the funds paid to the Trustor.
No Cure of Waiver of Default. Any application of such amounts
or any portion of it to any Indebtedness secured by this Deed
of Trust shall not be construed to cure or waive any default or
notice of default under this Deed of Trust or invalidate any
act done under any such default or notice.
3.8 EXPENDITURES BY LENDER. If Trustor fails to comply with any
provision of this Deed of Trust, or if any action or proceeding
is commenced against the Mortgaged Property that would
materially affect Lender's interests in the Property, Lender on
Trustor's behalf may, but shall not be required to, take any
action that Lender reasonably deems appropriate. Any amount
that Lender expends in do doing will bear interest at the rate
charged under the Promissory Note from the date incurred or
paid by Lender to the date of repayment by Trustor. All such
expenses, at Lender's option, will (a) be payable on demand,
(b) be added to the balance of the Promissory Note and be
apportioned among and be payable with any installment payments
to become due during the remaining term of the Promissory Note,
or (c) be treated as a balloon payment which will be due and
payable at the Promissory Note's maturity. This Deed of Trust
also will secure payment of these amounts. The rights provided
for in this paragraph shall be in addition to any other rights
or any remedies to which Lender may be entitled on account of
the default. Any such action by Lender shall not be construed
as curing the default so as to bar Lender from any remedy that
it otherwise would have had.
3.9
WARRANTY. Trustor warrants that the Mortgaged Property
Trustor's use of the Mortgaged Property complies with
existing applicable laws, ordinances, and regulations
governmental authorities.
and
all
of
SB200 I :23708,1
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3.10 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL
AUTHORITIES. The following provisions relating to
governmental taxes, fees and charges are a part of this Deed of
Trust:
Current Taxes, Fees and Charges. Upon request by Lender,
Trustor shall execute such documents in addition to this Deed
of Trust and take whatever other action is requested by Lender
to perfect and continue Lender's lien and security interest on
the Property. Trustor shall reimburse Lender for all taxes, as
described below, together with all expenses incurred in
recording, perfecting or continuing this Deed of Trust,
including without limitation all taxes, fees, documentary
stamps, and other charges for recording or registering this
Deed of Trust.
Taxes. The following shall constitute taxes to which this
section applies: (a) a specific tax upon this type of Deed of
Trust or upon all or any part of the Indebtedness secured by
this Deed of Trust; (b) a specific tax on Trustor which Trustor
is authorized or required to deduct from payments on the
Indebtedness secured by this type of Deed of Trust; (c) a tax
on this type of Deed of Trust chargeable against the Lender or
the holder of the Promissory Note; and (d) a specific tax on
all or any portion of the Indebtedness or on payments of
principal and interest made by Trustor.
Subsequent Taxes. If any tax to which this section applies is
enacted subsequent to the date of this Deed of Trust, this
event shall have the same effect as an Event of Default (as
defined below), and Lender may exercise any or all of its
available remedies for an Event of Default as provided below
unless Trustor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the
Taxes and Liens section and deposits with Lender cash or a
sufficient corporate surety bond or other security satisfactory
to Lender.
3.11 SECURITY AGREEMENT; FINANCING STATEMENTS. The
provisions relating to this Deed of Trust as
agreement are a part of this Deed of Trust:
following
a security
Security Agreement. This instrument shall constitute a security
agreement to the extent of any of the Mortgaged Property
constitutes fixtures or other personal property, and Lender
shall have all of the rights of a secured party under the
Uniform Commercial Code as amended from time to time.
SB200 I :23708,1
20
Security Interest. Upon request by Lender, Trustor shall
execute financing statements and take whatever other action is
requested by Lender to perfect and continue Lender's security
interest in the Rents and Personal Property in a manner and at
a place reasonably convenient to Trustor and Lender and make it
available to Lender within ten (10) days after receipt of
written demand from Lender.
Addresses. The mailing addresses of Trustor (debtor) and
Lender (secured party), from which information concerning the
security interest granted by this Deed of Trust may be obtained
(each as required by the Uniform Commercial Code), are as
stated on the first page of this Deed of Trust.
3.12 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions
relating to further assurances and attorney-in-fact are a part
of this Deed of Trust:
Further Assurances. At any time, and from time to time, upon
request of Lender, Trustor will make, execute and deliver, or
will cause to be made, executed or delivered, to Lender or to
Lender's designee, and when requested by Lender, cause to be
filed, recorded, refiled, or rerecorded, as the case may be, at
such times and in such offices and places as Lender may deem
appropriate, any and all such mortgages, deeds of trust,
security deeds, security agreements, financing statements,
continuation statements, instruments of further assurance,
certificates, and other documents as may, in the sole opinion
of Lender, be necessary or desirable in order to effectuate,
complete, perfect, continue, or preserve (a) the obligations of
Trustor under the Promissory Note, this Deed of Trust, and the
Related Documents, and (b) the liens and security interests
created by this Deed of Trust as second priority liens on the
Mortgaged Property, whether now owned or hereafter acquired by
Trustor. Unless prohibited by law or agreed to the contrary by
Lender in writing. Trustor shall reimburse Lender for all
costs and expenses incurred in connection with the matters
referred to in this paragraph.
Attorney-In-Fact. If Trustor fails to do any of the things
referred to in the preceding paragraph, Lender may do so for
and in the name of Trustor and at Trustor's expense. For such
purposes, Trustor hereby irrevocably appoints Lender as
Trustor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other
things as may be necessary or desirable, in Lender's sole
SB2001 :23708,1
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opinion, to accomplish the matters referred to in the preceding
paragraph.
4.0 FULL PERFORMANCE AND RECONVEYANCE. If Trustor pays all the
Indebtedness, including without limitation, all future
advances, when due, and otherwise performs all the obligations
imposed upon Trustor under the Loan Agreement, the Promissory
Note and this Deed of Trust, Lender shall execute and deliver
to Trustee a request for full reconveyance and shall execute
and deliver to Trustor suitable statements of termination of
any financing statement on file evidencing Lender's security
interest in the Rents and Personal Property. Lender may charge
Trustor a reasonable reconveyance fee at the time of
reconveyance.
5.0 DEFAULT. Each of the following, at the option of Lender, shall
constitute an event of default ("Event of Default") under this
Deed of Trust:
Default on Indebtedness. Failure of Trustor to make any payment
when due under the Promissory Note if not cured within thirty
(30) days after written notice from the Lender.
Default on Other Payments. Failure of Trustor within the
time required by this Deed of Trust to make any payment for
taxes or insurance, or any other payment necessary to prevent
filing of or to effect discharge of any lien.
Compliance Default. Failure of Trustor to comply with any other
term, obligation, covenant or condition contained in this Deed
of Trust, the Promissory Note, the Loan Agreement, the Related
Documents, including without limitation the OPA, after notice
and any applicable cure period has expired.
Breaches. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Trustor under this Deed
of Trust, the Promissory Note, the Loan Agreement, or any of
the Related Documents is, or at the time made or furnished was,
false in any material respect.
Insol vency. The insolvency of Trustor, appointment of a
receiver for any part of Trustor's property, any assignment for
the benefit of creditors, the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Trustor,
which is not discharged or dismissed within ninety (90) days,
or the dissolution or termination of Trustor's existence as a
going business (if Trustor is a business) .
SB200 I :23708,1
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Foreclosure, etc. Commencement of foreclosure, whether by
judicial proceeding, self-help, repossession or any other
method, by any creditor of Trustor against any of the Mortgaged
Property. However, this subsection shall not apply in the
event of a good faith dispute by Trustor as to the validity or
reasonableness of the claim which is the basis of the
foreclosure, provided that Trustor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the
claim satisfactory to Lender.
5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any
Event of Default and at any time thereafter, Trustee or Lender,
at its option, may exercise anyone or more the following
rights and remedies, in addition to any other rights or
remedies provided by law:
Foreclosure by Sale. Upon an Event of Default under this
Deed of Trust, Beneficiary may declare the entire Indebtedness
secured by this Deed of Trust immediately due and payable by
delivery to Trustee of written declaration of default and
demand for sale and of written notice of default and of
election to cause the Mortgaged Property to be sold, which
notice Trustee shall cause to be filed for record, Beneficiary
also shall deposit with Trustee this Deed of Trust, the
Promissory Note, other documents requested by Trustee, and all
documents evidencing expenditures secured hereby. After the
lapse of such time may then be required by law following the
recordation of the notice of default, and notice of sale having
been given as then required by law, Trustee, without demand on
Trustor, shall sell the Mortgaged Property at the time and
place fixed by it in the notice of sale, either as a whole or
in separate parcels, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money
of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of the Mortgaged Property
by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public
announcement at the time filed by the preceding postponement in
accordance with applicable law. Trustee shall deliver to such
purchaser its deed conveying the Mortgaged Property so sold,
but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary may purchase at such
sale. After deducting all costs, fees and expenses of Trustee
and of this Trust, including cost of evidence of title in
SB2001:2370g,1
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connection with sale, Trustee shall apply the proceeds of sale
to payment of: all sums expended under the terms hereof, not
then repaid, with accrued interest at the amount allowed by law
in effect at the date hereof; all other sums then secured
hereby; and the remainder, if any, to the person or persons
legally entitled thereto.
Judicial Foreclosure. With respect to all or any part of the
Mortgaged Property, Lender shall have the right in lieu of
foreclosure by power of sale to foreclose by judicial
foreclosure in accordance with and to the full extent provided
by California law. It is understood and agreed by the parties
hereto that no action taken by the Lender shall result in the
imposition of personal liability on any of the members,
partners, directors, shareholders and officers, as applicable,
of Trustor or on Trustor itself or its constituent members.
UCC Remedies. With respect to all or any part of the Mortgaged
Property, Lender shall have the rights and remedies of a
secured party under the Uniform Commercial Code, including
without limitation the right to recover any deficiency in the
manner and to the full extent provided by California law.
Collect Rents. Lender shall have the right, without notice to
Trustor, to take possession of and manage the Mortgaged
Property and collect the Rents, including amounts past due and
unpaid, and apply the net proceeds, over and above Lender's
costs, against the Indebtedness. In furtherance of this right,
Lender may require any tenant or other user of the Mortgaged
Property to make payments of rent or use fees directly to
Lender. If the Rents are collected by Lender, then Trustor
irrevocably designates Lender as Trustor's attorney-in-fact to
endorse instruments received in payment thereof in the name of
Trustor and to negotiate the same and collect the proceeds.
Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the
payments are made, whether or not any property grounds for the
demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a
receiver appointed to take possession of all or any part of the
Mortgaged Property, with the power to protect and preserve the
Mortgaged Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the
Mortgaged Property and apply the proceeds, over and above the
cost of the recei vership against the Indebtedness. The
SB200 I :23708,1
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receiver may serve without bond if permitted by law. Lender's
right to the appointment of a receiver shall exist whether or
not the apparent value of the Mortgaged Property exceeds the
indebtedness by a substantial amount. Employment by Lender
shall not disqualify a person from serving as a receiver.
Tenancy at Sufferance. If Trustor remains in possession of
the Mortgaged Property after the Property is sold as provided
above or Lender otherwise becomes entitled to possession of the
Property upon default of Trustor, Trustor shall become a tenant
at sufferance of Lender or the purchaser of the Mortgaged
Property and shall, at Lender's option, either (a) pay a
reasonable rental for the use of the Property, or (b) vacate
the Mortgaged Property immediately upon the demand of Lender.
Other Remedies. Trustee or
right or remedy provided in
Promissory Note or by law.
Lender shall have any other
this Deed of Trust or the
Notice of Sale. Lender shall give Trustor reasonable notice
of the time and place of any public sale of the Personal
Property or of the time after which any private sale or other
intended disposition of the Personal Property is to be made.
Reasonable notice shall mean notice given at least thirty (30)
days before the time of the sale or disposition. Any sale of
Personal Property may be made in conjunction with any sale of
the Mortgaged Property.
Sale of the Mortgaged Property. To the extent permitted by
applicable law, Trustor hereby waives any and all rights to
have the Mortgaged Property marshaled. In exercising its
rights and remedies, the Trustee or Lender shall be free to
sell all or any part of the Property together or separately, in
one sale or by separate sales. Lender shall be entitled to bid
at any public sale on all or any portion of the Mortgaged
Property.
Waiver; Election of Remedies. A waiver by any party of a breach
of a provision of this Deed of Trust shall not constitute a
waiver of or prejudice the party's rights otherwise to demand
strict compliance with that provision or any other provision.
Election by Lender to pursue any remedy provided in this Deed
of Trust, the Promissory Note, in any Related Document, or
provided by law shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to
perform an obligation of Trustor under this Deed of Trust
SB200 I :23708,1
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after failure of Trustor to perform shall not affect Lender's
right to declare a default and to exercise any of its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or
action to enforce any of the terms of this Deed of Trust,
Lender shall be entitled to recover such sum as the court may
adjudge reasonable as attorneys' fees at trial and on any
appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender which in Lender's
opinion are necessary at any time for the protection of its
interest or the enforcement of its rights shall become a part
of the Indebtedness payable on demand and shall bear interest
at the Promissory Note rate from the date of expenditure until
repaid. Expenses covered by this paragraph include, without
limitation, however subject to any limits under applicable law,
Lender's attorneys' fees whether or not there is a lawsuit,
including attorneys' fees for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction),
appeals and any anticipated post-judgment collection services,
the cost of searching records, obtaining title reports
(including foreclosure reports), surveyors' reports, appraisal
fees, title insurance, and fees for the Trustee, to the extent
permitted by applicable law. For the purposes hereof, the
words "Lender's attorneys' fees" include the salaries, benefits
and expenses of attorneys employed in the office of the City
Attorney computed on an hourly basis for any such legal
services provided in connection with the enforcement of the
rights of the Lender hereunder. Trustor also will pay any
court costs, in addition to all other sums provided by law.
Rights of Trustee. Trustee shall have all of the rights and
duties of Lender as set forth in this section.
6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions
relating to the powers and obligations of Trustee are part of
this Deed of Trust:
Powers of Trustee. In addition to all powers of Trustee
arising as a matter of law, Trustee shall have the power to
take the following actions with respect to the Property upon
the written request of Lender and Trustor: (a) join in
preparing and filing a map or plat of the Mortgaged Property,
including the dedication of streets or other rights to the
public; and (b) join in granting any easement or creating any
restriction on the Mortgaged Property.
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Obligations to Notify. Trustee shall not be obligated to
notify any other party of a pending sale under any other trust
deed or lien, or of any action or proceeding in which Trustor,
Lender, or Trustee shall be a party, unless the action or
proceeding is brought by Trustee.
Trustee. Trustee shall meet all qualifications required for
Trustee under applicable law. In addition to the rights and
remedies set forth above, with respect to all or any part of
the Mortgaged Property, the Trustee shall have the right to
foreclose by notice and sale, and Lender shall have the right
to foreclose by judicial foreclosure, in either case in
accordance with and to the full extent provided by applicable
law.
Successor Trustee. Lender, at Lender's option, may from time
to time appoint a successor Trustee to any Trustee appointed
hereunder by an instrument executed and acknowledged by Lender
and recorded in the office of the recorder of San Bernardino
County, California. The instrument shall contain, in addition
to all other matters required by state law, the names of the
original Lender, Trustee, and Trustor the book and page where
this Deed of Trust is recorded, and the name and address of the
successor trustee, and the instrument shall be executed and
acknowledged by Lender or its successors in interest. The
successor trustee, without conveyance of the Mortgaged
Property, shall succeed to all the title, power, and duties
conferred upon the Trustee in this Deed of Trust and by
applicable law. This procedure for substitution of trustee
shall govern to the exclusion of all other provisions for
substitution.
SB2001 :23708.1
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7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this
Deed of Trust shall be in writing and shall be effective when
actually delivered or, if mailed, shall be deemed effective
three business days after it is deposited in the United States
mail first class, registered mail, postage prepaid, directed to
the addresses shown near the beginning of this Deed of Trust.
Any party may change its address for notices under this Deed of
Trust by giving formal written notice to the other parties,
specifying that the purpose of this notice is to change the
party's address. All copies of notices of foreclosure from the
holder of any lien which has priority over this Deed of Trust
shall be sent to Lender's address, as shown near the beginning
of this Deed of Trust. For Notice purposes, Trustor agrees to
keep Lender and Trustee informed at all times of Trustor's
current address. Each Trustor requests that copies of any
notices of default and sale be directed to Trustor's address
shown near the beginning of this Deed of Trust.
8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount
not to exceed the statutory maximum, for furnishing the
statement of obligation as provided by Section 2943 of the
Civil Code of California.
9.0 [RESERVED]
10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant,
transfer or assignment effectuated hereby, without in any
manner limiting the generality of the grants in the conveyance
and grant section hereof, Trustor shall assign to Beneficiary,
as security for the indebtedness secured hereby, Trustor 1 s
interest in all agreements, contracts, leases, licenses and
permits affecting the Property in any manner whatsoever, such
assignments to be made, if so requested by Beneficiary, by
instruments in form satisfactory to Beneficiary; but no such
assignment shall be construed as a consent by Beneficiary to
any agreement, contract license or permit so assigned, or to
impose upon Beneficiary any obligations with respect thereto.
11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be
maintained, proper and accurate books, records and accounts
reflecting all items of income and expense in connection with
the operation of the Mortgaged Property or in connection with
any services, equipment or furnishings provided in connection
with the operation of the Mortgaged Property, whether such
income or expense be realized by Trustor or by any other person
or entity whatsoever excepting persons unrelated to and
unaffiliated with Trustor and who leased from Trustor portions
SB2001:23708.1
28
of the Mortgaged Property for the purposes of occupying the
dame. Upon the request of Beneficiary, Trustor shall prepare
and deliver to Beneficiary such financial statements regarding
operation of the Mortgaged Property as Beneficiary may
reasonably request. Beneficiary, or its designee, shall have
the right from time to time during normal business hours to
examine such books, records and accounts and to make copies or
extracts therefrom.
12.0 MISCELLANEOUS PROVISIONS. The following
provisions are a part of this Deed of Trust:
miscellaneous
Environmental Default and Remedies. In the event that any
portion of the Mortgaged Property is determined to be
"environmentally impaired", or an "affected parcel" as these
terms are defined at Code of Civil Procedure Section 725.5(e),
then in such event and without limiting or in any way affecting
the another rights and remedies of the Trustee and the
Beneficiary under this Deed of Trust, the Beneficiary may elect
to exercise its rights under Code of Civil Procedure Section
725.5(a) to waive its lien or such portion of the Mortgaged
Property and to exercise its rights and remedies to recover the
Indebtedness under a judgment as an unsecured creditor of the
Trustor and/or to exercise any other remedy authorized by law.
The Trustor shall be deemed to have willfully permitted or
acquired in a or release or threatened release of a hazardous
substance, if such release or threatened release was knowingly
or negligently caused or contributed by to by any lessee,
occupant, user of the Mortgaged Property which caused or
contributed to the release or threatened release of a hazardous
substance. All costs and expenses of the Beneficiary,
including reasonable attorney's fees, plus interest at a rate
per annum of eight percent (8%) until paid, as incurred in
connection with an action as may be brought by the Beneficiary
as provided in Code of Civil Procedure Section 725.5(b).
Amendments. This Deed of Trust, together with any Related
Documents, constitutes the entire understanding and agreement
of the parties as to the matters set forth in this Deed of
Trust. No alteration of or amendment to this Deed of Trust
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
altercation or amendment.
Acceptance by Trustee. Trustee accepts this Trust when this
Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law.
SB2001 :23708,)
29
Applicable Law. This Deed of Trust has been delivered to
Lender and accepted by Lender in the State of California. This
Deed of Trust shall be governed by and construed in accordance
with the laws of the State of California.
Caption Headings. Caption headings in this Deed of Trust are
for convenience purposes only and are not to be used to
interpret or define the provisions of this Deed of Trust.
Merger. There shall be no merger of the interest or estate
created by this Deed of Trust with any other interest or estate
in the Property at any time held by or for the benefit of
Lender in any capacity, without the written consent of Lender.
Severability. If a court of competent jurisdiction finds any
provision of this Deed of Trust to be invalid or unenforceable
as to any person or circumstance, such finding shall not render
that provision invalid or unenforceable as to any other persons
or circumstances. If feasible, any such offending provision
shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other
provisions of this Deed of Trust in all other respects shall
remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in
this Deed of Trust on transfer of Trustor's interest, this Deed
of Trust shall be binding upon and inure to the benefit of the
parties, their successors and assigns. If ownership of the
Property becomes vested in a person other Trustor, Lender,
without notice to Trustor, may deal with Trustor's successors
with reference to this Deed of Trust and the indebtedness by
way of forbearance or extension without releasing Trustor from
the obligations of this Deed of Trust or liability under the
Indebtedness.
Time is of the Essence. Time is of the essence in the
performance of this Deed of Trust.
waivers and Consents. Lender shall not be deemed to have
waived any rights under this Deed of Trust (or under the
Related Documents) unless such waiver is in writing and signed
by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or
any other right. A waiver by and any party of a provision of
this Deed of Trust shall not constitute a waiver of or
SB2001:23708,1
30
prejudice the party's right otherwise to demand strict
compliance with that provision or any other provision. No
prior waiver by Lender, nor any course of dealing between
Lender and Trustor, shall constitute a waiver of any of
Lender I s rights or any of Trustor I s obligations as to any
future transactions. Whenever consent by Lender is required in
this Deed of Trust, the granting of such consent by Lender in
any instance shall not constitute continuing consent to
subsequent instances where such consent is required.
Fixture Filing. This Deed of Trust also constitutes a
fixture filing as defined in the California Uniform Commercial
Code, as amended or recodified from time to time. This Deed
of Trust is to be recorded in the real estate records of San
Bernardino County, California, and covers goods which are to
become fixtures.
THE TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED
OF TRUST, AND THE TRUSTOR AGREES TO ITS TERMS, AND THE TERMS OF THE
PROMISSORY NOTE SECURED BY THIS DEED OF TRUST.
TRUSTOR
Neighborhood Housing Services
Date:
By:
Executive Director
[SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT]
SB2001:23708,1
31
EXHIBIT A
LEGAL DESCRIPTION
1441-1443 Mountain View Avenue
APN 0146-163-43000
The North 49.6 feet of the South 297,60 feet of the West 181.5 feet of Lot 3, Block 33,
Rancho San Bernardino, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 7, page(s) 2, ,of Maps,
in the office of the County Recorder of said County.
1495 Mountain View Avenue & 195 -197 Magnolia Avenue
APN 0146-163-02000
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO,
County of SAN BERNARDINO, State of California, as per map recorded in Book 28,
page(s) 55, of Maps, in the office of the County Recorder of said County.
Except the East 5.00 feet thereof,
1379 Arrowhead Avenue
APN 0146-162-22000
Lot 10, Block "B" of Edelen Tract, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 5, page(s) 35 of Maps,
in the office of the County Recorder of said County.
1501 -1503 Pershing
APN 0146-132-18000
Lot 11, Tract No. 1785, in the City of SAN BERNARDINO, County of SAN
BERNARDINO, State of California, as per map recorded in Book 26 of Maps, page 19,
in the office of the County Recorder of said County.
File No.: 6026978
EXHIBIT "A"
The North 49.6 feet of the South 297.60 feet of the West 181.15 feet of Lot 3,
Block 33, Rancho San Bernardino, in the City of SAN BERNARDINO, County of
SAN BERNARDINO, State of California, as per map recorded in Book 7, page(s)
2, of Maps, in the office of the County Recorder of said County.
Page 3 of6
.
't.....
File No.: 6011390
EXHIBIT "A"
Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN
BERNARDINO, County of SAN BERNARDINO, State of California, as per map
recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder
of said County.
Except the East 5.00 feet thereof.
I
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CLTA Preliminary Report Form (Rev 1/1/95)
TQ20001CA (2199)
Page 3 of 6
"
.
I
! PiI. No.: 6027161
I
I' EXHIBIT "A"
I I
I
I Lot 10, Block "B" of Ede'en Tract, In the City of SAN BI!!RNARDINO, County of
I SAN BERNARDINO, Sute of California, as per map recorded in Book 5, page(s)
I 35 of Maps, in the office of the COUlIty Recorder of said County.
I
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Page 3 0' 6
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20009101600244
EXHIBIT "A"
LOT 11, TRACT NO, 1785, TN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF C.'\LIFORNIA, AS PER MAP RECORDED IN
BOOK 26 Of MAPS, PAGE 19, IN THE OFFICE! OF THE COUNTY RECORDER OF
SAID COUNTy,
~
Order: -00019068
Description: 2001,187745
Page 2 of 3
Comment: CHRIS
EXHIBIT "G"
Form of Agency Subordination Agreement
P:\Forms\Housing Forms\HOME Forms\NHS CHDO Loan Agreement.doc
31
Recording Requested By: )
Redevelopment Agency of the City )
of San Bernardino )
)
)
)
)
)
and After Recording Mail To:
201 North "E" Street
Suite 301
San Bernardino, CA 92401
(Space above for Recorder' s Use)
ACOUlSITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT
NOTICE: THIS ACQUISITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST
IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT,
THIS CONSTRUCTION LOAN SUBORDINATION AGREEMENT, made September 17,
2001, by and among Neighborhood Housing Services ofthe Inland Empire, Inc" a California non-
profit corporation as the owner ofthe land hereinafter described and hereinafter referred to as the
"Owner", and the Redevelopment Agency of the City of San Bernardino, present owner and holder
of the deed of trust and note first hereinafter described and hereinafter referred to as the
"Beneficiary";
WITNESSETH
THAT WHEREAS, Owner has executed a deed of trust, dated to
as trustee, covering that certain real property described as: See Attached
Legal Exhibit to secure a note in the sum of $147,000, dated September 17, 2001 in favor of
Beneficiary, which deed of trust is to be recorded concurrently herewith; and
WHEREAS, Owner has executed, or is about to execute, a acquisition and rehabilitation
loan, deed of trust and note in the original principal sum of $327,503, dated , in
favor of hereinafter referred to as "Lender", payable with interest and upon
the terms and conditions described herein, which deed of trust is also to be recorded concurrently
herewith; and
WHEREAS, it is a condition precedent to obtaining said loan from Lender that said deed of
trust last above mentioned shall be and remain at all times a lien or charge upon the land
P:\Forms\Housing Fonns\HOME Fonns\NHS Subordination.wpd
hereinbefore described, prior and superior to the lien or charge of the deed of trust first above
mentioned; and
WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same
is a lien or charge upon the above described property prior and superior to the lien or charge of the
deed of trust first above mentioned and provided that Beneficiary will specifically subordinate the
lien or charge of the deed of trust first above mentioned to the lien or charge ofthe deed oftrust in
favor of Lender; and
WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to
Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded,
constitute a lien or charge upon said land which is prior and superior to the lien or charge of the deed
of trust first above mentioned,
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto
and other valuable consideration, the receipt and sufficiency of which consideration is hereby
acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby
declared, understood and agreed as follows:
(I) That said deed of trust securing said note in favor of Lender, be and remain
at all times a lien or charge on the property therein described, prior and superior to the lien
or charge of the deed of trust first above mentioned.
(2) That Lender would not make its loan above described without this
subordination agreement.
(3) That this subordination agreement shall be the whole and only agreement with
regard to the subordination of the lien or charge of the deed of trust first above mentioned
to the lien or charge of the deed of trust in favor of Lender above referred to and shall
supersede and cancel, but only insofar as would affect the priority between the deeds of trust
herein before specifically described, any prior agreements as to such subordination including,
but not limited to, those provisions, if any, contained in the deed of trust first above
mentioned, which provide for the subordination of the lien or charge thereof to another deed
or deeds of trust or to another mortgage or mortgages,
(4) That Lender and Owner shall not materially amend or modifY any agreements
between them to, or in any other manner or form, increase the outstanding principal amount
secured by the deed of trust last above mentioned to an amount in excess of the original
principal sum, set forth above, without the prior written consent of the Beneficiary,
Beneficiary declares, agrees and acknowledges that:
2
P:\Forms\Housing Fonns\HOME Forms\NHS Subordination.wpd
(a) It consents to and approves (i) all provisions of the note and deed of trust in
favor of Lender referred above need, and (ii) all agreements, including but not limited to any
loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds
of Lender's loan;
(b) Lender in making disbursements pursuant to any such agreement is under no
obligation or duty to, nor has Lender represented that it will, see to the application of such
proceeds by the person or persons to whom Lender disburses such proceeds and any
application or use of such proceeds for purposes other than those provided for in such
agreement or agreements shall not defeat the subordination herein made in whole or in part;
(c) It intentionally waives, relinquishes and subordinates the lien or charge of the
deed of trust first above mentioned in favor of the lien or charge upon said land of the deed
of trust in favor of Lender above referred to and understands that in reliance upon, and in
consideration of this waiver, relinquishment and subordination specific loans and advances
are being and will be made and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or entered into but
for said reliance upon this waiver, relinquishment and subordination; and
(d) An endorsement has been placed upon the note secured by the deed of trust
first above mentioned that said deed of trust has by this instrument been subordinated to the
lien or charge of the deed oftrust in favor of Lender above referred to,
NOTICE: THIS ACQUISITION AND REHABILITATION LOAN
SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY
SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE
EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND,
BENEFICIARY
OWNER
Redevelopment Agency of the City of San
Bernardino
Neighborhood Housing Services ofthe Inland
Empire, Inc., a California non-profit
corporation
By:
By:
Title:
By:
Title:
3
P:\Fonns\Housing Forms\HOME Forms\NHS Subordination,wpd
EXHffiIT "H"
Tenant Eligibility Certification Form
P:\Forms\Housing Fonns\HOME Forms\NHS CHDO Loan Agreement.doc
32
EXHIBIT "H"
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
HOME
CERTIFICATION/ANNUAL RECERTIFICATION OF TENANT ELIGIBILITY
Rental Unit:
Street Address:
City:
Bedroom Size:
Unit No,:
Zip Code:
I/We, the undersigned, being first duly sworn, state that I/we have read and answered
fully and truthfully each of the following questions for all persons who are to occupy the
unit in the above apartment development for which application is made, all of whom are
listed below:
HOUSEHOLD Age Ethnicity Social Security # Place of Employment
Name of Members Relationship
Date of Occupancy of Rental Unit by Tenant:
Date of Lease Signed for Rental Unit by Tenant:
Certification Date (Earlier of Date of Occupancy or Date Lease Signed):
Anticipated Annual Income
The anticipated total annual income from all sources of each person listed in 1 for the
twelve month period beginning on the Certification Date listed above, including income
described in (a) below, but excluding all income described in (b) below, is $
(a) The amount set forth above includes all of the following income (unless such
income is described in (b) below):
(i) all wages and salaries, overtime pay, commissions, fees, tips and
bonuses before payroll deductions;
H-l
P:\Clerical Services Dept\Stephanie\Musi's Work\HOME Recertification-Exhibit H.doc
(ii) net income from the operation of a business or profession or from the
rental of real or personal property (without deducting expenditures for
business expansion or amortization of capital indebtedness or any
allowance for depreciation of capital assets);
(iii) interest and dividends (including income from assets as set forth in item
(b) below);
(iv) full amount of periodic payments received from Social Security, annuities,
insurance policies, retirement funds, pensions, disability or death benefits
and other similar types of periodic reports;
(v) payments in lieu of earnings, such as unemployment and disability
compensation, worker's compensation and severance pay;
(vi) the maximum amount of public assistance available to the above persons;
(vii) periodic and determinable allowances, such as alimony and child support
payments and regular contributions and gifts received from persons not
residing in the dwelling;
(viii) all regular pay, special pay and allowances of a member of the Armed
Forces (whether or not living in the dwelling) who is the head of the
household or spouse; and
(ix) any earned income tax credit to the extent it exceeds income tax liability.
(b) The following income is excluded from the amount set forth above:
(i) casual, sporadic or irregular gifts;
(ii) amounts that are specifically for or in reimbursement of medical expenses;
(iii) lump sum additions to family assets, such as inheritances, insurance
payments (including payments under health and accident insurance and
worker's compensation), capital gains and settlement for personal or
property losses;
(iv) amounts of educational scholarships paid directly to student or
educational institution, and amounts paid by the government to a veteran
for use in meeting the costs of tuition, fees, books and equipment, but in
either case only to the extent used for such purposes;
(v) hazardous duty pay to a member of the household in the armed forces
who is away from home and exposed to hostile fire;
H-2
P:\Clerical Services Dept\Stephanie\Musi's Work\HOME Recertification-Exhibit H.doc
(vi) relocation payments under Title II of the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970;
(vii) income from employment of children (including foster children) under the
age of 18 years;
(viii) foster child care payments;
(ix) the value of coupon allotments under the Food Stamp Act of 1977;
(x) payments to volunteers under the Domestic Volunteer Service Act of
1973;
(xi) payments received under the Alaska Native Claims Settlement Act;
(xii) income derived from certain submarginal land of the United States that is
held in trust for certain Indian tribes;
(xiii) payments on allowances made under the Department of Health and
Human Services' Low-Income Home Energy Assistance Program; and
(xiv) payments received from the Job Partnership Training Act
Net Family Assets
If any of the persons described in Members of the Household (or any person whose
income or contributions were included in Anticipated Annual Income has any savings,
stocks, bonds, equity in real property or other form of capital investment (excluding
interest in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons: $
. and
(b) the amount of income expected to be derived from such assets in the 12-month
period commencing this date: $
Students
(a) Will all of the persons listed in Members of Household above be or have they
been fulltime students during five calendar months of this calendar year at an
educational institution (other than a correspondence school) with regular faculty
and students? 0 Yes 0 No
(b) If yes, is any such person (other than non-resident aliens) married and eligible to
file a joint federal income tax return? 0 Yes 0 No
H-3
P:\Clerical Services Dept\Stephanie\Musi's Work\HOME Recertification.Exhibit H.doc
The above information is full, true and complete to the best of my knowledge. I have no
objections to inquiries being made for the purpose of verifying the statements made
herein,
I acknowledge that all of the above information is relevant to the status under federal
law of the HOME funds used in the acquisition and rehabilitation of the Project for which
application is being made. I consent to the disclosure of such information to the
Economic Development Agency of the City of San Bernardino, County, State and
Federal Department of Housing and Urban Development or agent acting on their behalf
and any authorized agent of the Treasury Department or Internal Revenue Service,
Date:
Signature:
(Signature Must be Notarized)
H-4
P:\Clerical Services Dept\Stephanie\Musi's Work\HOME Recertification-Exhibit H.doc
FOR COMPLETION BY NEIGHBORHOOD HOUSING SERVICES OF THE INLAND
EMPIRE, INC" ONLY:
A. Calculation of Eligible Income
(1) Enter amount entered for entire household in Anticipated Annual Income:
$
(2) If the amount entered in (a) of Net Family Assets above is greater than
$5,000, enter:
(i) the product of the amount entered in (a) of Net Family Assets
above multiplied by the current passbook savings rate as
determined by HUD: $
(ii) the amount entered in (b) of Net Family Assets above:
$
(iii) enter the greater of line (i) or line (Ii): $
(3) TOTAL ELIGIBLE INCOME (Line A (1) plus line A (2) (iii): $
B. Enter Number of family members listed in item 1 above:
C. The amount entered in A (3) (Total Eligible Income) is: $
o Less than $ of median income for the area in which the Project is located,
which is the maximum income at which a household may be determined to
be a Qualifying Tenant as that term is defined in the Grant Agreement and
Declaration of Restrictive Covenants (the "Regulatory Agreement")
("Qualifying Tenant"),
o More than the above mentioned amount.
D. Number of apartment units assigned:
E, Monthly Rent: $
F. This apartment unit (was/was not) last occupied for a period of 31 consecutive
days by a person or persons whose adjusted income, as certified in the above
manner, was equal to or less than the amount at which a person would have
qualified as a Qualifying Tenant under the terms of the Regulatory Agreement.
H-5
P:\Clerica! Services Dept\Stephanie\Musi's Work\HOME Recertification-Exhibit H.doc
G. Applicant:
o Qualifies as a Qualifying Tenant, household income is at or below 50% of
the area median income
o Qualifies as a Qualifying Tenant, household income is at or below 60% of
the area median income
o Qualifies as a Qualifying Tenant, household income is at or below 80% of
the area median income
o Does Not Qualify as a Qualifying Tenant
H-6
P:\Clerical Services Dept\Stephanie\Musi's Work\HOME Recertification-Exhibit H.doe
"f'
EXHffiIT ':P
Initial Rent Schedule for Rental Units
P:\Fonns\Housing Fonns\HOME Forms\NHS CHDO Loan Agreement.doc
34
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** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted): i(')- \ -0 \
Vote: Ayes -l- (,., Nays
Change to motion to amend original documents:
Item#~
..& Abstain
Resolution #
COc/zool-1o
.
Absent ~
f"J
Reso, # On Attacbments:
Contract term:
Note on Resolution of Attachment stored separately: ~,
Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY
Date Sent to Mayor: \ C::l - ~ - () ,
Date of Mayor's Signature: 10-::>'--0\
DateofClerk/CDC Signature: 1C)-3-6 \
Date Memo/Letter Sent for Signature:
60 Day Reminder Letter Sent on 30th day:
90 Day Reminder Letter Sent on 45th day:
See Attached:
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):
Updaled Traffic Folders (3985, 8234, 655, 92,389):
Copies Distributed to:
City Attorney
Parks & Rec,
Code Compliance
Dev, Services
Police
Public Services
Water
Notes:
NullNoid After: -
By:
Reso, Log Updated: .,..,.-
Seal Impressed: ,/
Date Returned:
Yes ,/ No By
Yes No ---L- By
Yes No ...L By
Yes No / By
Yes No ..L By
EDA
,/ Finance
Others:
MIS
BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE
YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.)
Ready to File: .l/lL Date: ~
Revised 0 I /12/0 I
Nei,hb.mood "ousin, "'vie..
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CITY OF SAN BERNARDINO
PROPOSED MULTI-FAMILY
PROJECT
AND OTHER
PAST PROJECTS
OCTOBER 1,2001
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City of San Berno. w...,
MULTI-FAMILY UNITS
1495 N. MOUNTAIN VIEW
195-197 MAGNOLIA
1441-1443 N. MOUNTAIN VIEW
1379 ARROWHEAD AVENUE
1501 PERSHING AVENUE
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1149 RIAL TO AVENUE
1762 NORTH LUGO AVENUE
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1149 Rialto St, May 2000
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CONSTRUCTION
IN PROCESS
1556 NORTH MT. VIEW
1662 SIERRA WAY
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PREVIOUSLY OWNED
MULTI-FAMIL Y
COMPLEX
ROYAL PALMS APARTMENTS
BASELINE AVENUE
SAN BERNARDINO
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VACANT LOTS
OWNED BYNHSIE
FUTURE SITE FOR LOW-INCOME HOUSING.
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