HomeMy WebLinkAboutR44-Economic Development
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
ORIGINAL
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Mary's Mercy Center - Termination of the
HOME Grant Agreement and Approve the
2009 Low- and Moderate-Income Housing
Funds Grant Agreement for Veronica's Home
of Mercy II Transitional Housing Project
(IVDA Redevelopment Project Area)
DATE: June 9, 2009
Svnonsis of Previous Commission/Council/Committee Action!s):
On May 7, 2009, Redevelopment Conunittee Members Johnson and Brinker unanimously voted to reconunend that the
Community Development Commission consider this action for approval.
Recommended Motion!s):
(Communitv Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and
authorizing the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino
("Agency") to execute (I) the Termination Agreement of the HOME Grant Agreement dated December 19,
2005, by and between Mary's Mercy Center, Inc., and the Agency; and (2) the 2009 Low and Moderate Income
Housing Funds Grant Development Agreement by and between Mary's Mercy Center, Inc., and the Agency for
Veronica's Home of Mercy II transitional housing project (IVDA Redevelopment Project Area)
Contact Person(s):
Musibau Arogundade
Phone:
(909) 663-1044
Proj ect Area( s):
IVDA Redevelopment Project Area
Ward(s):
I"
Supporting Data Attached:
o Staff Report iii Resolution(s) iii Agreement(s)/Contract(s) IiIMap(s) 0 Letter(s)
Funding Requirements:
Amount $
600,000
Source:
Low and Moderate Income Housing Funds
Budget Authority:
FY 2008-2009 Budget
Signature:
Emil A. Marzullo, Interim Execut
L
Fiscal Revie .
Services Director
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P:lAgclIdaslCommDcv Commis.;on\CDC 2009\06-15-09 Marys McrcyCenler HOME Grant Agreement Terminalion SR_doc COMMISSION MEETING AGENDA
Meeting Date: 06/15/2009
Agenda Item Number: JW
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
____~_______________________________________________________________________________ _________________________________________________________________________________________n ___________________________________
MARY'S MERCY CENTER - TERMINATION OF THE HOME GRANT AGREEMENT AND
APPROVE THE 2009 LOW- AND MODERATE-INCOME HOUSING FUNDS GRANT
AGREEMENT FOR VERONICA'S HOME OF MERCY II TRANSITIONAL HOUSING
PROJECT (IVDA REDEVELOPMENT PROJECT AREA)
BACKGROUND:
Mary's Mercy Center Inc. ("Mary's"), is a local non-profit Agency that provides hot meals, food bags and laundry
services to homeless individuals and families, and transitional housing to women with children at their facility
located at 641 Roberds Avenue in the City of San Bernardino ("City"). In 2003, Mary's was awarded $300,000
from the U.S. Department of Housing and Urban Development ("HUD") to be combined with funds raised for the
development of Veronica's Home of Mercy II transitional housing project. The project is a two and one-half story
building consisting of 22 dwelling units that will provide up to 70 beds for single women and children, with
conference rooms, offices, a nursery room, kitchen and dining room, play room, laundry rooms, restrooms and
storage rooms ("Project") at an estimated cost of $2 million.
Mary's raised the following funds towards the Project cost:
a) Funds Raised
b) Weingart Foundation pledge
c) HUD Grant
d) HomeAide Inland Empire pledge
Total:
$401,500
$100,000
$300,000
$600.000
$1,401,500
Shortfall:
$ 600,000
In 2005, Mary's Executive Director requested the Agency's assistance in bridging a $600,000 shortfall between the
estimated Project cost of $2 million and funds raised with pledges of $1,401,500. On December 19, 2005, the
Community Development Commission approved the HOME Grant Agreement to assist Mary's with $600,000 for
the Project. Mary's received the Plarming Commission's plan approval on August 19, 2003, for General Plan
Amendment No. 02-03 and CUP No. 02-02, and Extension of time No. 05-09 on December 6, 2005, and submitted
detailed building and grading plans for plan checks and permits.
Shortly after the plan check approval, HUD advised Mary's that the $300,000 approved for the Project had been de-
obligated because the Project had fallen behind schedule. Most recently, HomeAide Inland Empire's in-kind
donation pledged to Mary's was also reduced to $150,000 because of the decline in the current economic
conditions. In February 2009, Mary's began another fund raising effort to close the $300,000 and $450,000 gap by
submitting funding requests of $200,000 to the Kresge Foundation and $750,000 to the San Manuel Band of
Mission Indians. On May 13, 2009, San Manuel Band of Mission Indians presented Mary's with $500,000 towards
the funds needed for the project while the Kresge Foundation has expressed to Mary's that funds are not available.
CURRENT ISSUE:
Mary's began Project construction in September 2008, and work has progressed with framing, plumbing, electrical,
HV AC system, and the installation of windows and doors. Roof shingle installation is in progress. To date, a total
of $994,643 has been expended on the Project, while exterior stucco, on- and off-site improvements, job finishing
and clean-up remains to be completed at an estimated cost of $1.01 million. The $994,643 expended includes a
P:\Agendas\Comm Dcv Commission\CDC 2009\06-15-09 Marys Mercy Cenler HOME Grant Agreement Terminalion SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 06/15/2009
Agenda Item Number: R lJ<f
Economic Development Agency Staff Report
Mary's - Veronica's Home Transitional Housing Project
Page 2
temporary $75,000 loan from Mary's other charity program that is intended to be repaid from the construction
funds.
To date, the work done on the Project was procured using a sole source method of Project bidding, not to mention
that the Agency's HOME Grant Agreement commitment of $600,000 to the Project requires compliance with
various Federal HOME Program regulations, including, but not limited to, using open bid procurement methods
and compliance with federal prevailing wage requirements. As a result, Federal HOME Funds can not be used to
complete the Project.
In February 2009, Mary's Board of Directors requested and held several meetings with Agency Staff to seek and
explore alternative options in funding to complete the Project. At the conclusion of the meetings, Agency Staff
proposed terminating the HOME Grant Agreement to free up the $600,000 funds for other eligible HOME projects
and enter into a Low and Moderate Income Housing Set Aside Funds Grant Agreement to assist Mary's with a
$600,000 grant to complete the Project. The use of the Low and Moderate Income Housing Set Aside Funds for
affordable housing projects is exempt from compliance with State prevailing wage requirements under Section
1720 (c)(4) of the State Labor Code.
As a condition of making Agency Grant Funds available for the Project, Mary's has agreed to have Agency funds
deposited in a fund control escrow account. Funds will be drawn from the escrow account after the purchase of
materials and completed work have been verified, approved by the funds control agent and material and labor lien
releases are received. Mary's has requested a repayment of the $75,000 temporary loan from the proposed
$600,000 grant and Agency Staff has agreed to the repayment of the $75,000 temporary loan to Mary's from
escrow. The $500,000 from the San Manuel Band of Mission Indians and from the Agency's $600,000 for a total
of $1,100,000 will provide sufficient funds needed to complete the Project. In exchange for assisting Mary's, the
Agency will receive and record a 55-year Affordable Housing Covenant Conditions and Restrictions ("CC&R") on
the Project. This CC&R will allow the Agency to meet its affordable housing obligations under the Community
Redevelopment Law and IVDA Redevelopment Project Area Plan.
ENVIRONMENTAL IMPACT:
The Planning Commission has reviewed the Project and adopted a Negative Declaration with Mitigative measures
for the Project in compliance with the California Environmental Quality Act ("CEQA") requirements.
FISCAL IMPACT:
$600,000 in Low and Moderate Income Housing Funds Grant are currently budgeted and available in the Agency's
2008-2009 budget.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
L
Emil A. Marzullo, Interim
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Meeting Date: 06/15/2009
Agenda Item Number: flJI<I
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND .
AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE (1) THE TERMINATION AGREEMENT OF
THE HOME GRANT AGREEMENT DATED DECEMBER 19, 2005, BY
AND BETWEEN MARYS MERCY CENTER, INC., AND THE AGENCY;
AND (2) THE 2009 LOW AND MODERATE INCOME HOUSING FUNDS
GRANT DEVELOPMENT AGREEMENT BY AND BETWEEN MARY'S
MERCY CENTER, INC., AND THE AGENCY FOR VERONICA'S HOME
OF MERCY II TRANSITIONAL HOUSING PROJECT (IVDA
REDEVELOPMENT PROJECT AREA)
WHEREAS, Mary's Mercy Center, Inc., a California non-profit public benefit corporation
("Mary's"), and the Agency entered into that certain HOME Grant Agreement dated December 19,
2005 ("HOME Grant Agreement"), to make available $600,000 in HOME Grant Funds towards the
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development of Veronica's Home of Mercy II transitional housing project; and
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WHEREAS, Mary's and the Agency mutually desire to terminate the HOME Grant
Agreement in accordance with the HOME Grant Termination Agreement ("Termination
Agreement") for the purpose of mutually releasing each other from the binding responsibilities
contained in the HOME Grant Agreement; and
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
public body, corporate and politic; and
WHEREAS, Mary's located at 641 Roberds Avenue, provides food and other services to
homeless individuals and families and a transitional housing services for women with children; and
WHEREAS, Mary's owns the property located on the southeast comer of Western and
Victoria Avenues (APN: 0138-035-13) and Mary's is developing Veronica's Home of Mercy II
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transitional housing project on the site; and
WHEREAS, the development is a two and one-half story building consisting of 22 dwelling
units that will provide up to 70 beds for single women and children and an on-site property
manager, with conference rooms, offices, a nursery room, kitchen and dining room, play room,
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laundry rooms, restrooms and storage rooms ("Project") at an estimated cost of $2 million; and
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P-lAgendas\Resolutions\Resolutions\2009\06-15.()9 Mary's Mercy Center HOME Grant Agreement Tennination CDC Resodoc
1 WHEREAS, on August 19, 2003, the Planning Commission approved the General Plan
2 Amendment No. 02-03, and Extension of time No. 05-09 on December 6,2005, for the Project; and
3 WHEREAS, Mary's has the background, experience, and financial capability of developing
4 the Project and has been successful in securing a construction funds commitment for the Project;
5 and
6 WHEREAS, the Agency wishes to assist Mary's with an amount not to exceed Six Hundred
7 Thousand Dollars ($600,000) in Low and Moderate Income Housing Funds Grant for the
8 development of the Project per the terms of the 2009 Low and Moderate Income Housing Funds
9 Grant Agreement ("Grant Agreement") as authorized, pursuant to Health and Safety Code Section
10 33334.2; and
11 WHEREAS, the Agency will receive and record a 55-year Affordable Housing Covenant
12 Conditions and Restrictions ("CC&R") on the Project and allowing the Agency to meet its
13 affordable housing obligations under the Community Redevelopment Law and IVDA
14 Redevelopment Project Area Plan; and
15 WHEREAS, the Agency relied on the Planning Commission review and adopted Negative
16 Declaration with Mitigative measures on the Project in compliance with the California
17 Environmental Quality Act ("CEQA").
18 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
19 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
20 FOLLOWS:
21 Section 1. The Commission hereby approves and authorizes the Interim Executive
22 Director of the Redevelopment Agency of the City of San Bernardino ("Agency") to execute (1)
23 the Termination Agreement and (2) the Grant Agreement on behalf of the Agency, to make minor
24 corrections, additions and clarifications, provided such changes are not substantive in nature, do not
25 increase the monetary impact to the Agency and the changes are approved by the Agency Counsel.
26 Section 2.
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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 THE INTERIM EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE (1) THE TERMINATION AGREEMENT OF
THE HOME GRANT AGREEMENT DATED DECEMBER 19, 2005, BY
AND BETWEEN MARYS MERCY CENTER, INC., AND THE AGENCY;
AND (2) THE 2009 LOW AND MODERATE INCOME HOUSING FUNDS
GRANT DEVELOPMENT AGREEMENT BY AND BETWEEN MARY'S
MERCY CENTER, INC., AND THE AGENCY FOR VERONICA'S HOME
OF MERCY II TRANSITIONAL HOUSING PROJECT (IVDA
REDEVELOPMENT PROJECT AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
Development Commission of the City of San Bernardino at a
meeting
, 2009, by the following vote to wit:
Navs
Abstain
Absent
Secretary
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22 The foregoing Resolution is hereby approved this
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26 Approved as to Form:
27By:\~j
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day of
,2009.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
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REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
HOME GRANT TERMINATION AGREEMENT
MARY'S MERCY CENTER, INC.
THE HOME GRANT AGREEMENT dated as of December 19, 2005, by and between
tbe Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic
(tbe "Agency"), and Mary's Mercy Center, Inc., a California non-profit public benefit
corporation (the "Grantee") is hereby terminated as of June 15, 2009, by tbe terms and
provisions of this HOME Grant Termination Agreement (this "Termination Agreement") as
further described below and subject to tbe conditions and as agreed to hereinafter by tbe parties.
NOW THEREFORE, THE PARTIES TO THIS HOME GRANT TERMINATION
AGREEMENT COVENANT AND AGREE AS FOLLOWS:
Section 1.
(a) The parties intend tbat this Termination Agreement shall effectively
terminate tbe above referenced HOME Grant Agreement (tbe "Agreement") dated as of
December 19, 2005, based upon the reasons hereinafter set forth. The Grantee covenants and
warrants that all actions required of the Grantee pursuant to tbe Agreement required to be
undertaken by tbe Grantee has not been completed (as defined in tbe Agreement).
(b) The Grantee further certifies and represents to the Agency that tbe
conditions for tbe transfer and use of tbe entire amount of the $600,000 intended for tbe
development of the project of the Grantee has not been met.
(c) The parties desire for their independent reasons as well as for tbe mutual
benefit of tbe parties hereto, to cause tbe Agreement to be terminated as of the date set forth
herein. All duties, obligations and performance requirements of tbe Grantee under tbe
Agreement shall be void and no longer enforceable as against the Grantee from and after the
affective date of this Termination Agreement. All rights, duties and obligations of the parties to
each otber, including the obligation of tbe Grantee to indemnify tbe Agency, shall be as set forth
in this Termination Agreement and not as otberwise required in tbe Agreement.
(d) The parties hereby represent and warrant tbat each such party is not now
in default of tbeir respective obligations and duties pursuant to tbe Agreement. The parties
intend to mutually agree to terminate tbe Agreement by the execution of this Termination
Agreement and such termination shall not place tbe Agency in any greater risk of [mancial
liability nor shall the Agency be deemed to have conferred any monetary benefit upon tbe
Grantee. The parties recognize that this Termination Agreement may be validly executed by tbe
undersigned individuals witbout any further actions of tbe respective governing board of tbe
Grantee but subject to tbe approval of the governing board of tbe Agency. This Termination
Agreement is intended to place both parties in the same position tbey held prior to the
undertaking of the tasks required pursuant to tbe Agreement and the origination of the HOME
Grant.
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Section 2. The Grantee hereby agrees to defend, indemnifY and hold harmless the
Agency and the City and the officials, officers, attorneys, employees and agents of the City and
the Agency from and against any and all claims or liability arising from the Grantee's actions
under the Agreement and this Termination Agreement or from the conduct of the Grantee's
business or from any activity, work or things done, permitted or suffered by the Grantee and
shall further defend, indemnifY. and hold harmless the Agency and City and their officials,
officers, attorneys, employees and agents from and against any and all claims arising from any
breach or default in the performance of any obligation of the Grantee under the terms of the
Agreement and this Termination Agreement arising from any negligent or wrongful act or
omission of the Grantee or Grantee'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. The Grantee's agreement to defend, 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 Grantee's development and operation of the Project
during the term of the Agreement. For the purposes hereof, "attorneys' fees" means and includes
the salaries and benefits of lawyers employed by the Office of the City Attorney of the City of
San Bernardino who provide legal services to the Agency in connection with any such
enforcement proceedings.
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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,
a public body, corporate and politic
Date
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content
By: '\ /~ MJ_
Agency ~....-
P ARTICIP ANT
Mary's Mercy Center, Inc., a California non-profit
public benefit corporation
Date
By:
Title:
By:
Title:
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P:\Agendas\A,senda AttIclunents\Agenda Atlachments\Agcnda AttaclunenlS\Agrmls-Amend 2009\06-15-09 2005 Mary's Mercy Home Gmrt Tcro1ination Agrcement.doe
2009
LOW AND MODERATE INCOME HOUSING FUNDS GRANT
DEVELOPMENT AGREEMENT
By and Between
Redevelopment Agency of the
City of San Bernardino, California
(Agency)
And
Mary's Mercy Center, Inc.,
a California Non-Profit Public Benefit Corporation
(Developer)
Veronica's Home of Mercy II Transitional Housing Project
Central City North
Redevelopment Project Area
2009
LOW AND MODERATE INCOME HOUSING FUNDS GRANT DEVELOPMENT
AGREEMENT
This 2009 Low and Moderate Income Housing Funds Grant Development Agreement
(this "Agreement") is dated as of , 2009, by and between the Redevelopment
Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and
Mary's Mercy Center, Inc., a California non-profit public benefit corporation (the "Developer").
This Agreement is entered into with respect to certain facts presented in these Recitals:
-- RECITALS --
(a) The Developer owns the vacant parcel of land located at the southeast corner of
Western and Victoria Avenues, San Bernardino, California 92410 (APN: 0138-035-13), as more
specifically described in Exhibit "A", attached hereto and incorporated herein by reference (the
"Property"). The Developer, pursuant to the terms of this Agreement plans to develop and
construct the Project, pursuant to the terms, covenants and conditions of this Agreement; and
(b) The Developer desires to construct and operate a 2 Y, story building consisting of
22 units that will provide 70 beds for single women and children with conference rooms, offices,
a nursery room, kitchen and dining room, playroom, laundry rooms, restrooms and storage
rooms ("Project"); and
(c) The Project proposed shall be constructed on the Property (the "Site"). The legal
description for the Site is depicted and described on Exhibit "A", attached hereto and
incorporated herein by this reference; and
(d) The Developer has received pledges and donations towards the Project in the
approximate amount of Two Million Dollars ($2,000,000); and
(e) The Agency is willing to grant to the Developer a sum not to exceed Six Hundred
Thousand Dollars ($600,000) in Agency Affordable Housing Grant (the "Agency Affordable
Housing Grant"), subject to the terms, covenants and conditions ofthis Agreement; and
(f) The Agency participation in the Project is limited to the amounts set forth in this
Agreement; and
(g) The Developer is responsible for the construction of the said Project at its sole
expense, from the funding sources described above, and from any other funding source available
to it for that purpose; and
(h) The Agency has determined that development of the Site pursuant to this
Agreement and the fulfillment generally of the Agreement are in the vital and best interest of the
City and of the Agency.
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NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SET FORTH
ABOVE AND THE MUTUAL PROMISES AND COVENANTS SET FORTH HEREIN, THE
AGENCY AND THE DEVELOPER HEREBY AGREE AS FOLLOWS:
1. Definitions.
In addition to the meaning ascribed to certain words and phrases as set forth in the
Recitals of this Agreement, other words and phrases shall have the meaning described below:
Agency Affordable Housing Grant. The term "Agency Affordable Housing Grant"
refers to a sum not to exceed Six Hundred Thousand Dollars ($600,000) which the Developer
shall use to pay for the development and construction of the project by the Developer, as
provided in Section 4.9.
Agency Regulatory Agreement. The term "Agency Regulatory Agreement" shall mean
that certain Agency Regulatory Agreement and Affordable Housing Development Declaration of
Restrictive Covenants affecting this Site and the Project by and between the Developer and the
Agency in the form attached hereto as Exhibit "E".
Certificate of Completion. The term "Certificate of Completion" shall mean that certain
Certificate of Completion, attached hereto as Exhibit "B".
City. The term "City" shall mean the City of San Bernardino, a charter city, having its
offices at 300 North "0" Street, San Bernardino, California 92418.
Escrow. The term "Escrow" shall mean the disbursement of Agency Affordable
Housing Grant funds for the construction of the Project to be funded through the escrow
department of a Title Company. For the purpose of this Agreement, the parties hereby designate
the escrow department of the First American Title Company to serve as the "Escrow Agent".
Hazardous Substances. The term "Hazardous Substances" shall mean (i) any hazardous
or toxic substance or material including petroleum, petroleum-based products, asbestos and
asbestos containing materials (ACM) and lead-based paint (LBP), or waste which is or becomes
regulated by any local governmental authority, the State of California or the United States
Government and/or (ii) any substance or material identified by the United States Government,
the State of California or any local governmental authority as hazardous or toxic and which is
included on any list of such substances published by any such governmental entity.
Low-Income Household. The term "Low-Income Household" shall refer to a household
which has the household income characteristics of a "low-income family" as set forth at 42
United States Code Section 1437a(b) and 24 California Code of Regulation Section 6914.
Project. The term "Project" shall mean all of the work of investigation, design,
construction, improvement, modification, and fmancing necessary in order for the Developer to
construct and to place in service thereon the affordable transitional housing project consisting of
twenty-one (21) units for occupancy by single women and children and one (I) unit reserved for
occupancy by on-site management personnel. The Project also includes all related landscaping,
driveways, utilities, and any improvements which may be required by the City on the Site or
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within the public rights-of-way adjacent to the Site. The functional elements of the Project are
more particularly described in the Scope of Development attached hereto as Exhibit "0" (the
"Scope of Development").
Redevelopment Plan. The term "Redevelopment Plan" shall mean the Redevelopment
Plan for the Central City North Redevelopment Project Area. A copy of the Redevelopment Plan
is on file in the Office of the City Clerk of the City. The Redevelopment Plan is incorporated
herein by this reference as though fully set forth herein.
Schedule of Performance. The term "Schedule of Performance" shall mean that certain
Schedule of Performance, attached hereto as Exhibit "C".
Site. The term "Site" shall mean that certain improved real property located within the
Project Area in the City of San Bernardino, County of San Bernardino, State of California,
consisting of 1.71 acres of land (more or less) and more particularly described in the legal
description, attached hereto as Exhibit "A".
Title Company. The term "Title Company" shall mean First American Title Company
or such other title company mutually agreeable to the Agency and to the Developer.
2. Purpose of the Agreement.
The purpose of this Agreement is to effectuate the Redevelopment Plan by improving the
Site as well as to assist in providing transitional housing which is reserved for occupancy by
single women and children Low-Income Households. The redevelopment of the Project on the
Site and the fulfillment generally of this Agreement are in the best interests of the City and the
welfare of its residents and are in accordance with the public purposes and provisions of the
applicable state, and local laws and regulations under which the Project has been undertaken and
is being assisted.
3. Escrow.
3.1. Escrow. The Developer and the Agency hereby agree to establish the Escrow for
the disbursement of Agency Affordable Housing Grant from the Agency to the Developer. The
Developer and the Agency shall cause the Escrow to be opened within thirty (30) calendar days
following the full execution of this Agreement. This Agreement shall constitute the joint escrow
instructions of the Agency and the Developer, and a duplicate original of this Agreement shall be
delivered to the Escrow Agent and the Escrow shall be deemed to be opened when the Escrow
Agent has received a fully executed copy of this Agreement and assigned its escrow account
transaction identification to this Agreement. The Escrow Agent is empowered to act under these
instructions. The Agency and the Developer shall cooperate with the Escrow Agent and
promptly prepare, execute, and deliver to the Escrow Agent such additional escrow instructions
consistent with the terms herein as shall be reasonably necessary. No provision of any additional
escrow instructions shall modify this Agreement and in the event of any conflict between the
provisions of this Agreement and such additional escrow instructions, the provisions of this
Agreement shall prevail.
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3.2. Conditions of Escrow Funds Disbursement.
(i) the Agency has deposited into the Escrow Agency's Affordable Housing
Grant an amount of $600,000 for on-going construction of the Project after verification of
work completed and material and labor lien releases;
(ii) the Developer has obtained all necessary approvals from governmental
agencies with jurisdiction over the Project for the issuance of all permits and other
entitlements for the construction of the Project;
(iii) the Title Company has confirmed that it has issued escrow instructions
and Funds Control Agreement in a form acceptable to the Developer and the Agency;
(iv) the Agency has executed and delivered to the Escrow Agent in recordable
form the Agency Regulatory Agreement and all other documents required under this
Agreement in recordable form; and
Any waiver of the satisfaction of the foregoing conditions by the Developer must be
expressed and in writing. In the event that the foregoing conditions have not been satisfied
within the time provided in the Schedule of Performance but not in all events by a date not later
than thirty (30) calendar days after written request from the Developer, or in the event that the
Agency may be in default, the Developer may terminate this Agreement by delivering a written
notice to the Agency, subject to any cure rights provided therein. From time-to-time, during the
period when the Escrow is open, the Agency may send written notices to the Developer, and
within ten (10) calendar days following the receipt of such a notice the Developer shall provide
the Agency with a suitably detailed written report which describes the action, if any, which the
Developer believes may be necessary in order for any of the Developer Conditions of Escrow be
satisfied.
(a) The obligation of the Agency to transfer funds to escrow for the benefit of the
Developer shall be contingent upon the satisfaction, or waiver by the Agency, of each of the
following conditions (collectively, the "Agency Conditions") by the date set forth herein:
(i) the Developer has not made or attempted to make a Transfer in violation
of Section 4.3 and no default by the Developer exists under this Agreement;
(ii)
the Agency
Agreement;
the Developer has deposited into Escrow and executed in recordable form
Regulatory Agreement and the other documents required under this
(iii) the Developer shall have timely performed each and every other obligation
of the Developer hereunder;
(iv) the Developer has submitted the fmal building plans for the Project for
approval by the Agency as provided in Section 4. I below and the Agency has approved
such final building plans;
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(v) the Developer has obtained all other necessary governmental approvals for
the issuance of all permits and other entitlement for the construction of the Project;
(vi) the Developer has deposited a request for reimbursement of $75,000 to
escrow for payment as agreed upon for the temporary loan take out by the Developer; and
Any waiver of the satisfaction of the foregoing conditions by the Agency must be
expressed and in writing. In the event that the foregoing conditions have not been satisfied
within the time provided in the Schedule of Performance, or in the event that the Developer may
be in default, the Agency may terminate this Agreement by delivering a written notice to the
Developer, subject to any cure rights provided therein. From time-to-time, during the period
when the Escrow is open the Developer may send written notices to the Agency, and within ten
(10) calendar days following the receipt of such notice the Agency shall provide the Developer
with a suitably detailed written report which describes the action, if any, which the Agency
believes is necessary in order for any of the foregoing Agency Conditions of escrow be satisfied.
3.3. Developer Financing.
(a) Within the time set forth in the Schedule of Performance, the Developer shall
submit to the Interim Executive Director of the Agency (the "Interim Executive Director") for
approval evidence reasonably satisfactory to the Interim Executive Director that the Developer
has the financial capability necessary for the development of the Project and operation of the
transitional housing facility following its completion, pursuant to this Agreement. Such evidence
of financial capability shall include all of the following:
(i) reliable cost estimates for the Developer's total cost of developing the
Project (including both hard and soft costs);
(ii) a financial statement and/or other documentation reasonably satisfactory
to the Interim Executive Director sufficient to demonstrate that the Developer has
adequate funds available and committed (inclusive of the funds available to the
Developer under the Agency Affordable Housing Grant) to cover the development costs
of the Project;
(iii) a copy of the proposed contract between the Developer and its general
contractor for all of the improvement of the Project certified by the Developer to be a true
and correct copy thereof. The Interim Executive Director shall also have the right to
review and approve any revisions that are made to the proposed contract with the general
contractor after its approval by the Interim Executive Director;
(iv) evidence of the good faith efforts of the Developer to implement a local
resident employment history program during the course of construction and improvement
of the Project as set forth in Section 4.7;
(v) Project operating cost projections and a completed Project management
operations plan in a form reasonably satisfactory to the Interim Executive Director which
demonstrates that the Developer has an acceptable plan of operation and management of
the Project.
5
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(b) the Developer covenants and agrees to take all action, furnish all information,
give all consents and pay all sums required to complete the construction of the Project and shall
comply with all conditions thereof, and shall promptly execute, acknowledge and deliver all
applications, credit applications and data, financial statements, and documents in connection
therewith, and shall actually draw upon and utilize the full amount of Grant funds only for the
costs of the Project authorized for architectural, engineering, legal, organizational, insurance and
developer fees and for paying for the cost of construction and improvement of the Project.
3.4 Condition of the Site.
The Developer shall certify that the site is build-able and the physical condition of
the Property, including its soil and environmental condition, based upon the Developer's
inspection of the Property.
The Developer has specifically reviewed and accepts the provisions of this Section 3.4,
and this provision shall survive the Close of Escrow.
Initials of Developer
3.5. Cost of Escrow. The Agency is responsible for paying the fund control
disbursement fee.
3.6. Responsibilities ofthe Escrow Agent.
(a) All funds received in Escrow shall be deposited by the Escrow Agent in an
escrow account with any state or national bank doing business in the State of California.
(b) All communications from the Escrow Agent shall be directed to the addresses and
in the manner provided in Section 7.2 of this Agreement for notices, demands and
communications between the Agency and the Developer.
(c) The Escrow Agent is not to be concerned with the sufficiency, validity,
correctness of form, or content of any document prepared outside of Escrow and delivered to
Escrow. The sole duty of the Escrow Agent is to accept such documents and follow the
Developer's and the Agency's instructions for their use.
(d) Upon the satisfaction of the Developer's Conditions and the Agency's Conditions,
the Escrow Agent shall comply with written Escrow instructions addressed to the Escrow Agent
by the Developer and by the Agency.
(e) The Escrow Agent shall in no case or event be liable for the failure of any of the
conditions to forgeries or false impersonation, unless such liability or damage is the result of
negligence or willful misconduct by the Escrow Agent.
6
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3.7. No Real Estate or Broker Commission Payable. The parties mutually represent
and warrant that no real estate broker commission or finder's fee is payable to a third party in
connection with the transfer ofthe Property by the Agency to the Developer.
4. Development of the Project by the Developer.
4.1. Scope of Development.
(a) It is the intent of the parties that promptly the Developer shall commence the
work of improvement of the Project on the Site. The Project consists of the elements set forth in
the Scope of Development (see Exhibit "D").
(b) The City's zoning ordinance and the City's building requirements will be
applicable to the use of the Site and development of the Project. The Developer acknowledges
that the plans for development of the Site as set forth in the Scope of Development shall be
subject to the City's zoning ordinance and building requirements. No action by the Agency or
the City with reference to this Agreement or related documents shall be deemed to constitute a
waiver of any City requirements which are applicable to the Site or to the Developer or to any
successor-in-interest of the Developer except by modification or variance duly approved by the
City in accordance with the applicable law in its sole and absolute discretion.
(c) The Scope of Development set forth in Exhibit "D", is hereby approved by the
Agency upon its execution of this Agreement. The Project shall be developed and completed in
conformance with the Scope of Development and any and all other plans, specifications and
similar development documents required by this Agreement, except for such changes as may be
mutually agreed upon in writing by and between the Developer and the Agency. The Interim
Executive Director of the Agency is authorized to approve the preliminary and the final
construction plans for the Project, together with the preliminary and the final landscaping plans
provided that the Interim Executive Director finds at the time of such approval that such plans
are reasonably consistent with the Scope of Development.
(d) The approval of the Scope of Development by the Agency shall not be binding
upon the Mayor and Common Council of the City of San Bernardino ("Council") or the Planning
Commission of the City of San Bernardino ("Planning Commission") with respect to any
approvals of the Project required by such other bodies under applicable law. If any revision of
the Scope of Development is required by another government official, agency, department or
bureau having jurisdiction over the development of the Site and the Project as a result of
development project permits, reviews and approvals under applicable law, the Developer and the
Agency shall cooperate in efforts to either modifY the Scope of Development to accommodate
such regulatory requirements or obtain waivers or recommendation of such revisions by the
regulatory agencies. The Agency shall not unreasonably withhold approval of such revisions to
the Scope of Development as may be required by such regulatory approval powers.
(e) Notwithstanding any provision to the contrary in this Agreement, the Developer
agrees to accept and comply fully with any and all reasonable conditions of approval applicable
to all permits and other governmental actions affecting the development of the Site and the
Project.
7
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(f) The Developer shall, at its sole cost and expense cause landscaping plans in
connection with development of the Project to be prepared and submitted to the City by a
licensed landscape architect within the times provided in the Schedule of Performance. The
Developer shall prepare and submit to the City for its approval, preliminary and landscaping
plans for the Project which are consistent with City Code requirements. These plans shall be
prepared, submitted and approved within the times respectively established therefore in the
Schedule of Performance as shown on Exhibit "C", and shall be consistent with the Scope of
Development.
(g) The Developer shall, at its sole cost and expense prepare and submit development
plans, construction drawings and related documents within the times provided in the Schedule of
Performance for the development of the Project. Such development plans, construction drawings
and related documents shall be prepared and submitted in sufficient detail necessary to obtain all
necessary building permits from the City for construction of the Project. The Agency shall
cooperate with and shall assist the Developer in order for the Developer to obtain the approval of
any and all development plans, construction drawings and related documents submitted by the
Developer to the City consistent with this Agreement within thirty (30) calendar days following
the City's receipt of said plans. Any failure by the City to approve any of such plans or to issue
necessary permits for the development of the Site within said thirty (30) calendar day period
shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended
by that period of time beyond said thirty (30) calendar day period in which the City approves
said plans; provided, however, that in the event that the City disapproves of any of such plans,
the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and
resubmit such plans in accordance with the City's requirements and in such form and substance
so as to obtain the City's approval thereof. If the City fails to approve or disapprove the plans
within thirty (30) calendar days following submission, the plans are deemed approved.
(h) During the preparation of all drawings and plans in connection with the
development of the Project, the Developer shall provide to the Agency regular progress reports
to advise the Agency of the status of the preparation by the Developer, and the submission to and
review by the City of construction plans and related documents. The Developer shall
communicate and consult with the Agency as frequently as is necessary to ensure that any such
plans and related documents submitted by the Developer to the City are being processed in a
timely fashion.
(i) The Agency shall have the right of reasonable architectural review and approval
of building exteriors and design of the structures to be constructed on the Site. The Agency shall
also have the right to review all plans, drawings and related documents pertinent to the
development of the Project in order to ensure that they are consistent with this Agreement and
with the Scope of Development.
(j) [RESERVED--NO TEXT]
(k) [RESERVED--NO TEXT]
(I) The Interim Executive Director of the Agency shall approve any modified or
revised plans, drawings and related documents to which reference is made in this Agreement
within the times established in the Schedule of Performance as long as such plans, drawings and
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related documents are generally consistent with the Scope of Development and any other plans
which have been approved by the Agency. Upon any disapproval of plans, drawings or related
documents, the Interim Executive Director of the Agency shall state in writing, the reasons for
such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly
revise such disapproved portions of the plans, drawings or related documents in a manner that
addresses the reasons for disapproval and reasonably meets the requirements of the Agency in
order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans,
drawings and related documents to the Agency as soon as possible after its receipt of the notice
of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Interim
Executive Director of the Agency shall approve or disapprove such revised plans, drawings and
related documents in the same manner and within the same times as provided in this Section for
approval or disapproval of plans, drawings and related documents initially submitted to the
Agency.
(m) If the Developer desires to make any change in the construction drawings, plans
and specifications and related documents after their approval by the Agency and/or by the City,
the Developer shall submit the proposed change in writing to the Interim Executive Director of
the Agency and/or to the City for their independent approval. The Interim Executive Director of
the Agency shall notify the Developer of approval or disapproval thereof in writing within thirty
(30) calendar days after submission to the Agency. This thirty (30) calendar day period may be
extended by mutual consent of the Developer and the Interim Executive Director of the Agency.
Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in
whole or in part, by written notice thereof submitted by the Interim Executive Director of the
Agency to the Developer, setting forth in detail the reasons therefore, and such rejection shall be
made within said thirty (30) calendar day period unless extended as permitted herein. The
Agency shall use its best efforts to cause the City to review and approve or disapprove any such
change as provided in Section 4.1(s) hereof.
(n) The Developer, upon receipt of a notice of disapproval by the Agency and/or by
the City, may revise such portions of the proposed change in construction drawings, plans and
specifications and related documents as are rejected and shall thereafter resubmit such revisions
to the Agency and/or to the City for their independent approval in the manner provided in
Section 4.1(g) hereof.
(0) The Developer shall have the right, during the course of construction of the
Project to make changes in construction of structures and "minor field changes" without seeking
the approval of the Agency; provided, however, that such changes do not affect the type of use to
be conducted within all or any portion of a structure. Said "minor field changes" shall be defined
as those changes from the approved construction drawings, plans and specifications which have
no substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section shall be deemed
to constitute a waiver of or change in the City's Building Code requirements governing such
"minor field changes" or in any and all approvals by the City otherwise required for such "minor
field changes".
(P) The cost of designing, constructing, installing and equipping the Project,
including the installation of all off-site public improvements, shall be borne by the Developer.
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(q) [RESERVED--NO TEXT]
(r) The Developer shall pay for any and all costs, including, but not limited to, the
costs of design, construction, relocation and securing of permits for utility improvements and
connections which may be required in developing the Project. The Developer shall obtain any
and all necessary approvals for utility services prior to the commencement of applicable portions
of said construction, and the Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
(s) The Developer shall commence the work of improvements of the Project on the
Site within ninety (90) calendar days following the Close of Escrow for the Site, and thereafter
shall diligently prosecute such construction to completion. All construction and development
obligations and responsibilities of the Developer as related to the Project shall be initiated and
completed within the times specified in the Schedule of Performance, or within such reasonable
extensions of such times as may be granted by the Agency or as otherwise provided for in this
Agreement. The Developer shall substantially complete the improvement of the Project by the
date set forth in the Schedule of Performance. During the course of the construction of the
Project the Schedule of Performance may be revised, from time-to-time, as mutually agreed upon
in writing by and between the Developer and the Agency. Any and all deadlines for
performance by the parties shall be extended for any times attributable to delays which are not
the fault of the performing party and are caused by the other party, other than periods for review
and approval or reasonable disapprovals of plans, drawings and related documents, specifications
or applications for permits as provided in this Agreement.
(t) During the period of construction of the Project, the Developer shall submit to the
Agency written progress reports when and as reasonably requested by the Agency but in no
event more frequently than every four (4) weeks. The reports shall be in such form and detail as
may reasonably be required by the Agency, and shall include a reasonable number of
construction photographs taken since the last such report submitted by the Developer. In
addition, the Developer will attend Agency meetings when requested to do so by Agency Staff.
(u) Prior to entry by the Developer to conduct limited testing on the Property
pursuant to Section 3.4, and following the Closing before the commencement of any construction
by the Developer of the Project, the Developer shall procure and maintain, at its sole cost and
expense, in a form and content satisfactory to the Agency, during the entire term of such entry or
construction, the following policies of insurance:
(i) a policy of comprehensive general liability insurance written on a per
occurrence basis in an amount not less than either (i) a combined single limit of One
Million Dollars ($1,000,000.00) or (ii) bodily injury limits of Five Hundred Thousand
Dollars ($500,000.00) per person, One Million Dollars ($1,000,000.00) per occurrence,
One Million Dollars ($1,000,000.00) products and completed operations and property
damage limits of Five Hundred Thousand Dollars ($500,000.00) per occurrence and Five
Hundred Thousand Dollars ($500,000.00) in the aggregate.
(ii) a policy of workers' compensation insurance in such amount as will fully
comply with the laws of the State of California and which shall indemnify, insure and
provide legal defense for both the Developer and the Agency, and the City against any
10
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loss, claim or damage arising from any injuries or occupational diseases occurring to any
worker employed by or any persons retained by the Developer in the course of carrying
out the work or services contemplated in this Agreement.
(iii) a policy of comprehensive automobile liability insurance written on a per
occurrence basis in an amount not less than either (i) bodily injury liability limits of Two
Hundred Fifty Thousand Dollars ($250,000.00) per person and Five Hundred Thousand
Dollars ($500,000.00) per occurrence and property damage liability limits of One
Hundred Thousand Dollars ($100,000.00) per occurrence and One Hundred Thousand
Dollars ($100,000.00) in the aggregate or (ii) combined single limit liability of Five
Hundred Thousand Dollars ($500,000.00). Said policy shall include coverage for owned,
non-owned, leased and hired vehicles.
(iv) during the course of construction and improvement of the Project, a policy
of builder's risk insurance covering the full replacement value of the Project.
All of the above policies of insurance shall be primary insurance and shall name the City
and the Agency, and their officers, employees, and agents as additional insureds. The insurer
shall waive all rights of subrogation and contribution it may have against the City and the
Agency and their officers, employees and agents and their respective insurers. All of said
policies of insurance shall provide that said insurance may not be amended or canceled without
providing thirty (30) calendar days prior written notice by registered mail to the Agency. In the
event any of the said policies of insurance are canceled, the Developer shall, prior to the
cancellation date, submit new evidence of insurance in conformance with this Section to the
Interim Executive Director of the Agency. No work or improvement of the Site or operation of
the Project shall commence until the Developer has provided the Agency with certificates of
insurance or appropriate insurance binders evidencing the above insurance coverages, and said
certificates of insurance or binders are approved by the Agency.
The policies of insurance required by this Agreement shall be satisfactory only if issued
by companies qualified to do business in California, rated at least "A(vii)" or better in the most
recent edition of Bests Insurance Rating Guide or an equivalent rating in The Key Rating Guide
or in the Federal Register unless such requirements are modified or waived by the Interim
Executive Director of the Agency due to unique circumstances.
The Developer shall provide in all contracts with contractors, subcontractors, architects,
and engineers who provide services in connection with the improvement of the Project that such
persons shall maintain the same policies of insurance required to be maintained by the Developer
pursuant to this Section, unless waived by the Interim Executive Director of the Agency.
The Developer agrees that the provisions of this Section shall not be construed as limiting
in any way the extent to which the Developer may be held responsible for the payment of
damages to any persons or property resulting from the Developer's activities or omissions or the
activities or omissions of any individual or entity for which the Developer is otherwise
responsible.
(v)
construction
The Developer, for itself and its
of the Project, the Developer will
Jl
successors and assigns agrees that in the
not discriminate against any employee or
P:lAgendas\Agellda Anaclunents\Agenda AttachmentslAgenda Anaclunents\Agrmts-Amend 2009\06-1S-09 Marys Mercy - Low and Modente 1nc:ome Housing Funds Grant Agreement.doc::
applicant for employment because of sex, marital status, race, color, religion, creed, national
origin, or ancestry.
(w) The Developer shall carry out its construction of the Project in conformity with all
applicable laws, including all applicable state labor standards and requirements. .
(x) The Developer shall, at its own expense, secure or shall cause to be secured, any
and all permits which may be required for such construction, development or work by the City or
any other governmental agency having jurisdiction. The Agency shall cooperate in good faith
with the Developer in the Developer's efforts to obtain from the City or any other appropriate
governmental agency, any and all such permits applicable to the development of the Project.
(y) Officers, employees, agents or representatives of the Agency shall have the right
of reasonable access to the Site, without the payment of charges or fees, during normal
construction hours during the period of construction of the Project for the purpose of verifying
compliance by the Developer within the terms of this Agreement. Such officers, employees,
agents or representatives of the Agency shall be those persons who are so identified by the
Interim Executive Director. Any and all officers, employees, agents or representatives of the
Agency who enter the Site pursuant hereto shall identify themselves at the job site office upon
their entrance on to the Site and shall at all times be accompanied by a representative of the
Developer while on the Site; provided, however, that the Developer shall make a representative
of the Developer available for this purpose at all times during normal construction hours upon
reasonable notice from the Agency. The Agency shall indemnify and hold the Developer
harmless from injury, property damage or liability arising out of the exercise by the Agency
and/or the City of this right of access, other than injury, property damage or liability relating to
the negligence of the Developer or its officers, agents or employees.
(z) The Agency shall inspect relevant portions of the construction site prior to issuing
any written statements reflecting adversely on the Developer's compliance with the terms and
conditions of this Agreement pertaining to development of the Site.
4.2. Taxes, Assessments, Encumbrances and Liens. The Developer shall pay prior
to the delinquency, all real property taxes and assessments assessed and levied on or against the
Site. The Developer shall not place and shall not allow to be placed on the Site any mortgage,
trust deed, deed of trust, encumbrance or lien not otherwise authorized by this Agreement. The
Developer shall remove, or shall have removed, any levy or attachment made on the Site, or shall
assure the satisfaction thereof. Nothing herein contained shall be deemed to prohibit the
Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien,
nor to limit the remedies available to the Developer in respect thereto. The covenants of the
Developer set forth in this Section relating to the placement of any unauthorized mortgage, trust
deed, deed of trust, encumbrance or lien, shall remain in effect only until the Certificate of
Completion has been recorded with respect to redevelopment of the Project.
4.3. Change in Ownership Management and Control of the Developer --
Assignment and Transfer.
(a) Transfer, as used in this Section 4.3, the term "Transfer" means:
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(1) Any total or partial sale, assignment or conveyance, or any trust or power,
or any transfer in any other mode or form, by the Developer of more than a 49% interest
(or series of such sales, assignments and the like, which in the aggregate, exceed a
disposition of more than a 49% interest) with respect to its interest in this Agreement, the
Site, or the Project, or any part thereof, or any interest therein, or of the improvements
constructed thereon, or any contract or agreement to do any of the same; or
(2) Any total or partial sale, assignment, conveyance, or transfer in any other
mode or form, of or with respect to any ownership interest of the Developer, its nonprofit
corporation business organization (or series of such sales, assignments and the like,
which in the aggregate, exceeded a disposition of more than a 49% interest); or
(3) Any merger, consolidation, sale or lease of all or substantially all of the
assets of the Developer in the Agreement, the Site or the Project(or series of such sales,
assignments and the like, which in the aggregate, exceeded a disposition of more than a
49% interest); or
(4) The leasing of part or all of the Site or the Project except for the
occupancy of the Project upon its completion by the Developer to single women and
children.
(b) This Agreement is entered into solely for the purpose of the redevelopment of the
Site and the improvement of the Project and the subsequent operation and use of the Site by the
Developer for dwelling unit to be occupancy by Low-Income Households in accordance with the
terms of this Agreement. The Developer recognizes that the qualifications and identity of the
Developer are of particular concern to the Agency, in view of:
(1) the importance of the development of the Site to the general welfare of the
community; and
(2) the fact that a Transfer is for all practical purposes a transfer or disposition
of the responsibilities of the Developer, as applicable, with respect to the development of
the Site and the Project.
The Developer further recognizes and acknowledges that it is because of the
qualifications and identity of the Developer that the Agency is entering into this Agreement with
the Developer, and, as a consequence, Transfers are permitted only as provided in this
Agreement.
(c) The limitations on a Transfer as set forth in this Section 4.3 shall apply until such
time as a Certificate of Completion is approved by the Agency and filed for recordation as
provided in Section 4.6. Except as expressly permitted in this Agreement, the Developer
represents and agrees that it has not made nor shall it create or suffer to be made or created, any
Transfer, either voluntarily or by operation of law without the prior written approval of the
Agency until such time as a Certificate of Completion has been recorded. Any Transfer made in
contravention of this Section 4.3 shall be voidable at the election of the Agency and shall then be
deemed to be a default under this Agreement. After the date of recordation of a Certificate of
Completion, certain other provisions of this Agreement shall nonetheless be applicable to
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subsequent conveyances of interest in the Site, or portions thereof, as provided in the Agency
Regulatory Agreement.
(d) The following types of a Transfer shall be permitted and approved by the Agency
and are referred to herein as a "Permitted Transfer";
(I) Any Transfer directly resulting from the foreclosure of a Security
Financing Interest created by the Developer in the Site or the granting of a deed in lieu of
foreclosure of a Security Financing Interest;
(2) Any Transfer of any interest in the Developer, irrespective of the
percentage of ownership to any non-profit affiliate of or other non-profit entity controlled
by the Developer, or to any other entity in which the Developer owns a controlling
interest;
(e) No Permitted Transfer of this Agreement or any interest in the Site or the Project,
by the Developer (other than a Permitted Transfer created pursuant to a Security Financing
Interest under Section 4.3(d)) shall be effective unless, at the time of the Permitted Transfer, the
person or entity to which such Transfer is made, shall expressly assume the obligations of the
Developer under this Agreement and such person also agrees to be subject to the conditions and
restrictions to which the Developer is subject under this Agreement. Such an assumption of
obligation shall be evidenced by a written instrument delivered to the Agency in a recordable
form which is satisfactory to the Agency.
(f) The Agency may, in its reasonable discretion, approve in wntmg any other
Transfer as requested by the Developer, provided such proposed transferee can demonstrate
successful and satisfactory experience in the ownership, operation, and management of a Low-
Income transitional housing facility operation similar to the Project. Any such transferee for
itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all
of the obligations of the Developer to the Agency under this Agreement. There shall be
submitted to the Agency for review, all instruments and other legal documents proposed to effect
any such other Transfer; and the approval or disapproval of the Agency, shall be provided to the
Developer in writing within thirty (30) calendar days of receipt by the Agency of the
Developer's request, and the Agency approval of a transfer and shall not be unreasonably
withheld or delayed upon written notice to the Agency.
(g) Following the issuance of a Certificate of Completion, the Developer shall be
released by the Agency from any liability under this Agreement which may arise from a default
of a successor-in-interest occurring; provided, however that the covenants of the Developer as set
forth in the Agency Regulatory Agreement shall run with the land for the term as provided in the
Agency Regulatory Agreement.
4.4. Security Financing; Right of Holders.
(a) Notwithstanding any provision of Section 4.3 to the contrary, mortgages, deeds of
trust, or any other form of lien required for any reasonable method of financing the construction
and improvement of the Project, including, without limitation, any security interest or lien in the
Site are permitted before the recordation of the Certificate of Completion (referred to in Section
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4.6 of this Agreement). The Developer shall notifY the Agency in writing in advance of any
mortgage, deed of trust, or other form of lien for fmancing if the Developer proposes to enter
into the same before the recordation of any Certificate of Completion. The Developer shall not
enter into any such other conveyance for construction financing without the prior written
approval of the Agency, which approval the Agency shall grant if: (i) such approval by the
Agency is a condition of the disbursement of the proceeds to the Developer for the Project; or (ii)
any such other conveyance is permitted under the Grant for the Project and is given to a
responsible fmancial or lending institution including, without limitation, banks, savings and loan
institutions, insurance companies, real estate investment trusts, pension programs and the like, or
other acceptable persons or entities for the purpose of constructing the Project on the Site.
(b) The Developer shall promptly notifY the Agency of any mortgage, deed of trust or
other refinancing, encumbrance or lien that has been created or attached thereto prior to
completion of the construction of the improvements on the Site whether by voluntary act of the
Developer or otherwise; provided, however, that no notice of filing of preliminary notices or
mechanic's liens need be given by the Developer to the Agency prior to suit being filed to
foreclose such mechanic's lien.
(c) The words "mortgage" and "deed of trust" as used herein shall be deemed to
include all other customary and appropriate modes of financing, real estate construction and land
development.
(d) The holder of any mortgage, deed of trust or other security interest authorized by
this Agreement shall in no manner be obligated by the provisions of this Agreement to construct
or complete the improvement of the Site or to guarantee such construction or completion.
(e) Whenever the Agency shall deliver any notice or demand to the Developer with
respect to any breach or default by the Developer in the completion of construction of the
Project, or any breach or default of any other obligations which, if not cured by the Developer,
entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property, or a
portion thereof under the Agency shall at the same time deliver to each holder of record of any
mortgage, deed of trust or other security interest authorized by this Agreement a copy of such
notice or demand. Each such holder shall (insofar as the rights of the Agency are concerned)
have the right, at its option, to commence the cure or remedy of any such default and to
diligently and continuously proceed with such cure or remedy within one hundred twenty (120)
calendar days after the receipt of the notice; and to add the cost thereof to the security interest
debt and the lien of its security interest. If such default shall be a default which can only be
remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain
possession with diligence and continuity through a receiver or otherwise, and shall remedy or
cure such default within one hundred twenty (120) calendar days after obtaining possession;
provided that in the case of a default which cannot with diligence be remedied or cured, or the
remedy or cure of which cannot be commenced, within such one hundred twenty (120) calendar
day period, such holder shall have such additional time as is reasonably necessary to remedy or
cure such default of the Developer. Nothing contained in this Agreement shall be deemed to
permit or authorize such holder to undertake or continue the construction or completion of the
Project (beyond the extent necessary to conserve or protect the improvements or construction
already made) without first having expressly assumed the Developer's obligations by written
agreement satisfactory to the Agency. The holder in that event must agree to complete, in the
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manner provided in this Agreement, the improvements to which the lien or title of such holder
relates and must submit evidence satisfactory to the Agency that it has the qualifications and
financial responsibility necessary to perform such obligations. Any such holder completing such
improvements in accordance herewith shall be entitled, upon written request made to the
Agency, to be issued a Certificate of Completion by the Agency.
(f) In any case, where one hundred eighty (180) calendar days after default by the
Developer, if the holder of any mortgage, deed of trust or other security interest creating a lien or
encumbrance upon the Site or any portion thereof has not exercised the option to construct the
applicable portions of the Project, or has exercised the option but has not proceeded diligently
and continuously with construction, the Agency may purchase the mortgage, deed of trust or
other security interest by payment to the holder of the amount of the unpaid debt, including
principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to
the holder by the Developer under the loan documents between the holder and the Developer. If
the ownership of the Property has vested in the holder, the Agency, may, at its option, but not its
obligation, be entitled to a conveyance from the holder to the Agency upon payment to the
holder of an amount equal to the sum of the following:
(I) The unpaid mortgage, deed of trust or other security interest debt,
including principal, accrued and unpaid interest, late charges, costs, expenses and other
amounts payable to the holder by the Developer under the loan documents between the
holder and the Developer, at the time title became vested in the holder (less all
appropriate credits, including those resulting from collection and application of rentals
and other income received during foreclosure proceedings).
(2) All expenses, if any, incurred by the holder with respect to foreclosure.
(3) The net expenses, if any (exclusive of general overhead), incurred by the
holder as a direct result of the subsequent ownership or management of the Property,
such as insurance premiums and real estate taxes.
(4) The cost of any improvements made by such holder.
(5) An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such amounts become part of the mortgage or deed of
trust debt and such debt had continued in existence to the date of payment by the Agency.
(6) After expiration of the aforesaid one hundred eighty (180) calendar day
period, the holder of any mortgage, deed of trust or other security affected by the option
created by this Section, may demand, in writing, that the Agency act pursuant to the
option granted hereby. If the Agency fails to exercise the right herein granted within
sixty (60) calendar days from the date of such written demand, the Agency shall be
conclusively deemed to have waived such right of purchase of the mortgage, deed of trust
or other security interest.
(g) In the event of a default or breach by the Developer of a mortgage, deed of trust
or other security interest with respect to the Property (or any portion thereof) prior to the
issuance of a Certificate of Completion for the Project (or any portion thereof), and the holder
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has not exercised its option to complete the development, the Agency may cure the default but is
under no obligation to do so prior to completion of any foreclosure. In such event, the Agency
shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the
Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as
may arise under this Section 4.4(g) upon the Property or the Site (or any portion thereof) to the
extent of such costs and disbursements; provided however, any such lien in favor of the Agency
as may arise under this Section 4.4(g). Any such lien shall be subordinate and subject to
mortgages, deeds of trust or other security instruments executed by the Developer for the
purpose of obtaining the funds to construct and improve the Site as authorized herein.
4.5. Right of the Agency to Satisfy Other Liens on the Site
Prior to the recordation of the Certificate of Completion (referred to in Section 4.6 of this
Agreement), and after the Developer has had a reasonable time to challenge, cure or satisfy any
unauthorized liens or encumbrances on the Property, the Agency shall after one hundred twenty
(I 20) calendar days prior written notice to the Developer have the right, but not the obligation, to
satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall
require the Developer to payor make provisions for the payment of any tax, assessment, lien or
charge so long as the Developer in good faith shall contest the validity or amount thereof, and so
long as such delay in payment shall not subject the Site, or any portion thereof, to forfeiture or
sale.
4.6. Certificate of Completion.
(a) Following the written request therefore by the Developer and the completion of
construction of the Project, excluding any normal and minor building "punch-list" items to be
completed by the Developer, the Agency shall furnish the Developer with a Certificate of
Completion for the Site substantiated in the form set forth in Exhibit "B".
(b) The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive
determination of satisfactory completion of all of the work of improvement of the Project. After
the recordation of the Certificate of Completion, any party then owning or thereafter purchasing,
leasing or otherwise acquiring any interest in the Site shall not (because of such ownership,
purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that
such party shall be bound by any covenants contained in the Agency Regulatory Agreement.
(c) Any Certificate of Completion shall be in such form as to permit it to be recorded
in the Recorder's Office of San Bernardino County where the Site is located.
(d) If the Agency refuses or fails to furnish a Certificate of Completion after written
request from the Developer, the Agency shall, within fifteen (I5) calendar days of the written
request or within three (3) calendar days after the next regular meeting of the Agency, whichever
date occurs later, provide to the Developer a written statement setting forth the reasons with
respect to the Agency's refusal or failure to furnish a Certificate of Completion. The statement
shall also contain the Agency's opinion of the action the Developer must take to obtain a
Certificate of Completion. If the reason for such refusal is confmed to the immediate
unavailability of specific items or materials for construction or landscaping at a price reasonably
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acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its
Certificate of Completion upon the posting of a bond, cash or irrevocable letter of credit,
reasonably approved as to form and substance by the Agency Counsel and obtained by the
Developer in an amount representing a fair value of the work not yet completed as reasonably
determined by the Agency. For the purpose of the preceding sentence, the words "minor
building punch-list items" refers to Project construction items which do not in the aggregate
exceed a total cost of ten percent (10%) of the amount of the approved construction budget for
the Project. If the Agency shall have failed to provide such written statement within the
foregoing period, the Developer shall be deemed conclusively and without further action of the
Agency to have satisfied the requirements of this Agreement with respect to the Site as if a
Certificate of Completion had been issued therefore.
(e) A Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a
mortgage securing money loaned to fmance the improvements described herein, or any part
thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as
referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the
continuing covenants or conditions subsequent contained in the Agency Regulatory Agreement
attached hereto as Exhibit "E".
4.7. Developer Job Program.
(a) The Developer will use good faith efforts to cause the general contractor who
shall be retained by the Developer to construct the Project to recruit (and to encourage its
subcontractors to recruit) local residents of the City of San Bernardino to perform work and
construction services relating to the improvement of the Project. Such good faith efforts
covenant of the Developer shall remain in effect during the course of the construction and
improvement of the Project. The Agency shall consult with the Developer, from time-to-time, to
assist the Developer in formulating programs to implement the foregoing; provided, however,
that this covenant of the Developer is not intended to require the Developer (or its general
contractor and subcontractors) to implement any program or engage in any pattern or practice of
recruitment or hiring at the Project which would violate applicable law.
(b) The Developer agrees to use good faith efforts to hire residents of the City of San
Bernardino for available job openings in the completed Project. Such good faith efforts covenant
of the Developer shall remain in effect during the term of the Agency Regulatory Agreement.
The Agency shall consult with the Developer, from time to time, to assist the Developer in
formulating programs to implement the foregoing. The foregoing is not intended to require the
Developer to implement any program or engage in any pattern or practice of recruitment or
hiring at the Project which would violate applicable law.
4.8. [RESERVED - NO TEXT).
4.9. Agency Affordable Housing Grant.
(a) The Agency Affordable Housing Grant funds not exceeding the amount specified
in Section I shall be used and disbursed by the Escrow Agent to pay for all eligible construction
materials and costs. Except for the use by the Developer of the Agency Affordable Housing
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Grant funds to pay for all development costs, the Developer shall pay all costs and expenses to
construct, to develop and to complete the Project. Except for the payment by the Agency of the
Agency Affordable Housing Grant funds in accordance with this Agreement, the Agency shall
have no duty or obligation to pay for any fees, cost, or expenses (including, without limitation,
attorneys' fees and/or court costs) in connection with the construction, the development and/or
the completion of the Project by the Developer.
(b) Provided the Developer is not in default under this Agreement, and provided the
Developer's Conditions and the Agency's Conditions have been fully performed, unless waived,
the Agency shall tender the Agency Affordable Housing Grant funds to the Escrow Agent for
use and disburse the Agency Affordable Housing Grant funds to pay construction materials and
development costs.
5. Use of the Site.
5.1. Use of the Site. The Developer hereby covenants and agrees, for itself and its
successors and assigns, that the Site shall be developed, used and maintained as transitional
housing for occupancy by single women and children as more fully set forth in the Agency
Regulatory Agreement (Exhibit "E").
5.2. No Inconsistent Uses. The Developer covenants and agrees that it shall not
devote the Site, or any part thereof, to uses inconsistent with the Agency Regulatory Agreement.
5.3. Discrimination Prohibited. Except as provided in the Agency Regulatory
Agreement, with respect to the reservation of each of the units in the Project for occupancy by
single women and children, there shall be no discrimination against, or segregation of, any
persons, or group of persons, on account of race, color, creed, religion, sex, marital status, age,
familial status, physical or mental disability, ancestry or national origin including all other
protected classes of persons and groups of persons as may be considered as such by any local,
State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435
and Section 33436 in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of
the Site, or any portion thereof, nor shall the Developer, or any person claiming under or through
the Developer, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location,. number, use, or occupancy of tenants, lessees,
subtenants, sublessees, or vendees of the Site or any portion thereof. The nondiscrimination and
nonsegregation covenants contained herein and in the Agency Regulatory Agreement shall
remain in effect in perpetuity.
5.4. Effect of Covenants. Subject to the provisions hereof, the Agency is deemed a
beneficiary of the terms and provisions of this Agreement and of the restrictions and community
redevelopment and affordable housing covenants running with the land, whether or not
appearing in the Agency Regulatory Agreement for and in its own right and for the purposes of
protecting the interests of the community in whose favor and for whose benefit the covenants
running with the land have been provided. The community redevelopment and affordable
housing covenants in favor of the Agency shall run without regard to whether the Agency has
been, remains or is an owner of any land or interest therein in the Site, and shall be effective as
both covenants and equitable servitudes against the Site. The Agency shall have the right, if any,
of the community redevelopment and affordable housing covenants set forth in this Agreement
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which are provided for its benefit are breached, to exercise all rights and remedies and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing
of such breaches to which it may be entitled. No other person or entity shall have any right to
enforce the terms of this Agreement under a theory of third-party beneficiary or otherwise,
except the City as the successor in regulatory function of the Agency as provided in Health and
Safety Code Section 33334.4, or other applicable law. The covenants running with the land and
their duration are set forth in the Agency Regulatory Agreement. Nothing in this Agreement or
in the Agency Regulatory Agreement shall be deemed to limit the power of the City to enforce
any provision of any development project permit which it may approve in connection with the
Project, or to otherwise enforce any provision of law against the Developer and the Site and the
Project.
6. Enforcement.
6.1. General Conditions.
(a) In the event that either the Developer Conditions or the Agency Conditions have
not been approved, disapproved or waived by the parties, as the case may be, by the applicable
date set forth in the Schedule of Performance, then the remedies of the parties shall be as set
forth in this Agreement. In the event that a breach or default may occur and subject to the
extension of time set forth in Section 7.5 hereof, failure or delay by either party to perform any
term or provision of this Agreement shall constitute a default under. this Agreement; provided
however, that if a party otherwise in default commences to cure, correct or remedy such default
within thirty (30) calendar days after receipt of written notice specifying such default and shall
diligently and continuously prosecute such cure, correction or remedy to completion (and where
any time limits for the completion of such cure, correction or remedy are specifically set forth in
this Agreement, then within said time limits), such party shall not be deemed to be in default
hereunder.
(b) Subject to the extensions of time set forth in Section 7.5 hereof, failure or delay
by either party to perform any term or provision of this Agreement shall constitute a default
under this Agreement; provided, however, that if a party otherwise in default commences to cure,
correct or remedy such default within thirty (30) calendar days after receipt of written notice
specifying such default and shall diligently and continuously prosecute such cure, correction or
remedy to completion (and where any time limits for the completion of such cure, correction or
remedy are specifically set forth in this Agreement, then within said time limits), such party shall
not be deemed to be in default hereunder.
(c) The injured party shall give written notice of default to the party in default,
specifying the default complained of by the nondefaulting party. Delay in giving such notice
shall not constitute a waiver of any default nor shall it change the time of default.
(d) Any failure or delays by either party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies.
Delays by either party in asserting any of its rights and remedies shall not deprive either party of
its right to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies.
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6.2. Legal Actions.
(a) In addition to any other rights or remedies, either party may institute legal action
to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in
the Superior Court of the County of San Bernardino, State of California, in any other appropriate
court in that County, or in the Federal District Court in the Central District of California.
(b) The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
(c) In the event that any legal action is commenced by the Developer against the
Agency, service of process on the Agency shall be made by personal service upon the Interim
Executive Director or Chair of the Agency, or in such other manner as may be provided by law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service on the
Developer for service of process and at such address as may be specified in written notice to the
Agency, or in such other manner as may be provided by law, and shall be valid whether made
within or without the State of California.
6.3. Rights and Remedies are Cumulative. Except with respect to any rights and
remedies expressly declared to be exclusive in Section 3.3 of this Agreement as relates to a
failure of conditions precedent occurring, the rights and remedies of the parties as set forth in this
Section 6 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.
6.4. Damages. If either party defaults with regard to any provision of this Agreement,
the nondefaulting party shall serve written notice of such default upon the defaulting party. If
the defaulting party does not diligently commence to cure such default after service of the notice
of default and promptly complete the cure of such default within a reasonable time, not to exceed
thirty (30) calendar days (or such shorter period as may otherwise be specified in this Agreement
for default) after the service of written notice of such a default. In the event that a default relates
to a matter arising the defaulting party shall be liable to the other party for damages caused by
such default.
6.5. [RESERVED--NO TEXT]
6.6. Right to Enter.
(a) The Agency shall, upon thirty (30) calendar days notice to the Developer, which
notice shall specify this Section 6.6, have the right, at its option, to terminate, if after execution
of the Agreement, the Developer (or its successors-in-interest) shall:
(I) Fail to commence construction of all or any portion of the improvements
as required by this Agreement for a period of ninety (90) calendar days after written
notice to proceed from the Agency; provided that the Developer shall not have obtained
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an extension or postponement to which the Developer may be entitled pursuant to Section
7.5 hereof; or
(2) Abandon or substantially suspend construction of all or any portion of the
improvements for a period of ninety (90) calendar days after written notice of such
abandonment or suspension from the Agency; provided that the Developer shall not have
obtained an extension or postponement to which the Developer may be entitled to
pursuant to Section 7.5 hereof; or
(3) Assign or attempt to assign this Agreement, or any rights herein, or
transfer, or suffer any involuntary transfer, of the Site or the Project or any part thereof,
in violation of this Agreement, and such violation shall not have been cured within thirty
(30) calendar days after the date of receipt of written notice thereof from the Agency to
the Developer.
(b) The thirty (30) calendar day written notice specified in this Section shall specify
that the Agency proposes to take action pursuant to this Section and shall specify which of the
Developer's obligations set forth in Subsections (I) through (3) herein have been breached. The
Agency shall proceed with its remedy set forth herein only in the event that the Developer
continues in default of said obligation(s) for a period of thirty (30) calendar days following such
notice, or upon commencing to cure such default, fails to diligently and continuously prosecute
said cure to a satisfactory conclusion.
(c) The right of the Agency to, terminate, and shall be subject and subordinate to,
shall be limited by and shall not defeat, render invalid or limit:
(I) Any mortgage, deed of trust or other security interest permitted by this
Agreement;
(2) Any rights or interests provided in this Agreement for the protection of the
holders of such mortgages, deeds of trust or other security interests;
(3) Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents applicable to the Site.
(d) The Agency Regulatory Agreement shall contain appropriate references and
provisions to give effect to the Agency's right, as set forth in this Section under specified
circumstances prior to tlle recordation of a Certificate of Completion with respect to such
portion, to terminate this Agreement with the Developer.
(e) Upon the termination of this Agreement, the Agency shall, pursuant to its
responsibilities under State law, assign the Agreement to a responsible party or parties (as
determined by the Agency) who will assume the obligations of making or completing the
inlprovements, or such other improvements in their stead as shall be satisfactory to the Agency
and in accordance with the uses specified for the Site, or any part thereof.
6.7. Mutual Iudemnification. The Developer agrees to indemnify and hold the City
and the Agency, and their officers, employees and agents, harmless from and against all claims
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for liability for damages, judgments, costs, expenses and fees arising from or related to any act or
omission of the Developer in performing its obligations hereunder other than claims for liability,
claims for damages, judgments, costs, expenses and/or fees arising from or related to the
wrongful conduct by, or any gross negligent act or gross omission of, the Agency, its agents,
employees, representatives or consultants. The Agency agrees to indemnifY and hold the
Developer and its officers, employees and agents, harmless from and against all claims or
liability for damages, judgments, costs, expenses and fees arising from or related to any act or
omission of the Agency in performing its obligations hereunder other than claims for liability,
claims for damages, judgments, costs, expenses and/or fees arising from or related to the
wrongful conduct by, or any negligent act or omission of, the Developer, its agents, employees,
representatives or consultants.
6.8. Attorneys' Fees. In the event of litigation between the parties arising out of this
Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees, court
costs and other costs and expenses incurred, including such fees and costs incurred on appeal, in
addition to whatever other relief to which it may be entitled. As used in the preceding sentence,
the words "reasonable attorney's fees" in the case of the Agency include the salary and benefits
payable to lawyers employed in the Office of the City Attorney of the City, who provide legal
counsel to the Agency in such litigation as allocated on an hourly basis.
7. Miscellaneous.
7.1. Governing Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
7.2. Notices. Notices, demands, and communications between the Agency and the
Developer shall be sufficiently given if personally delivered or dispatched by registered or
certified mail, postage prepaid or return receipt requested, to the following addresses:
AGENCY:
Redevelopment Agency
of the City of San Bernardino
Attention: Emil A. Marzullo, Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Phone: (909) 663-1044
Fax: (909) 888-9413
DEVELOPER:
Mary's Mercy Center, Inc.
P.O.Box 7563
San Bernardino, California 92411
Phone: (909) 889-2558
Fax: (909) 386-7704
Any notice shall be deemed to have been received as of the earlier time of actual receipt
by the addressee thereof or the expiration of forty-eight (48) hours after depositing of such notice
in the United States Postal System in the manner described in this Section. Such written notices,
demands, and communications may be sent in the same manner to such other addresses as a
party may, from time to time, designate by mail.
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7.3. Conflicts of Interest. No member, official, or employee of the Agency shall
have any personal interest, direct or indirect, in this Agreement nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interests of any corporation, partnership, limited liability company, or
association in which he is, directly or indirectly, interested.
7.4. Non-liability of Agency Officials and Employees. No member, official,
employee, or consultant ofthe Agency or the City shall be personally liable to the Developer, or
any successor-in-interest of the Developer, in the event of any default or breach by the Agency
or for any amount which may become due to the Developer or to its successor, or on any
obligations under the terms of this Agreement.
7.5. Enforced Delay: Extension of Time of Performance. In addition to specific
provisions of this Agreement, performance by either party hereunder shall not be deemed to be in
default, or considered to be a default, where delays or defaults are due to the force majeure
events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of
God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of
transportation, weather-caused delays, inability to secure necessary labor, materials or tools,
delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the
party claiming an extension of time to prepare, or acts or failure to act of any public or
governmental agency or entity (provided that acts or failure to act of the City or the Agency shall
not extend the time for the Agency to act hereunder except for delays associated with lawsuit or
injunction including, but without limitation to, lawsuits pertaining to the approval of the
Agreement, and the like). An extension oftime for any such force majeure cause shall be for the
period of the enforced delay and shall commence to run from the date of occurrence of the delay;
provided, however, that the party which claims the existence of the delay has first provided the
other party with written notice of the occurrence of the delay within ten (10) calendar days of the
commencement of such occurrence of delay.
The inability of the Developer to obtain a satisfactory financial commitment to develop
the site or to satisfY any other condition of this Agreement relating to the Site and the
redevelopment of the Project shall not be deemed to be a force majeure event or otherwise
provide grounds for the assertion of the existence of a delay under this Section 7.5. The parties
hereto expressly acknowledge and agree that changes in either general economic or regulatory
conditions or changes in the economic or regulatory assumptions of any of them which may have
provided a basis for entering into this Agreement and which occur at any time after the execution
of this Agreement, are not force majeure events and do not provide any party with grounds for
asserting the existence of a delay in the performance of any covenant or undertaking which may
arise under this Agreement. Each party expressly assumes the risk that changes in general
economic or regulatory conditions or changes in such economic assumptions relating to the
terms and covenants of this Agreement could impose an inconvenience or hardship on the
continued performance of such party under this Agreement, but that such inconvenience or
hardship is not a force majeure event and does not excuse the performance by such party of its
obligations under this Agreement.
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7.6. Books and Records.
(a) Maintenance of Books and Records. The Developer shall prepare and maintain
all books, records and reports necessary to substantiate the Developer's compliance with the
terms of this Agreement or reasonably required by the Agency.
(b) Right to Inspect. The Agency shall have the right, upon not less than seventy-
two (72) hours notice, at all reasonable times, to inspect the books and records of the Developer
pertinent to the purposes of this Agreement. Said right of inspection shall not extend to
documents privileged under attorney-client or other such privileges.
7.7. Modifications. Any alteration, change or modification of or to this Agreement,
in order to become effective, shall be made by written instrument or endorsement thereon and in
each such instance executed on behalf of each party hereto.
7.8. Merger of Prior Agreements and Understandings. This Agreement and all
documents incorporated herein contain the entire understanding among the parties hereto relating
to the transactions contemplated herein and all prior or contemporaneous agreements,
understandings, representations, and statements, oral or written are merged herein and shall be of
no further force or effect.
7.9. Representations and Warranties of the Developer The Developer hereby
makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Agency has been made in material reliance by the Agency on
such covenants, representations and warranties:
(I) The Developer is a duly organized and validly existing California non-
profit public benefit corporation. The Developer has the legal right, power and authority
to enter into this Agreement and the instruments and documents referenced herein and to
consummate the transactions contemplated hereby. The persons executing this
Agreement and the instruments referenced herein on behalf of the Developer hereby
represent and warrant that such persons have the power, right and authority to bind the
Developer.
(2) The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the instruments and
documents referenced herein and the consummation of the transactions contemplated
hereby, and no consent of any other party is required.
(3) This Agreement is, and all agreements, instruments and documents to be
executed by the Developer pursuant to this Agreement shall be, duly executed by and are
or shall be valid and legally binding upon the Developer and enforceable in accordance
with their respective terms.
(4) Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a default under
any other agreement, document, instrument or other obligation to which the Developer is
a party or by which the Developer may be bound, or under law, statute, ordinance, rule,
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governmental regulation or any writ, injunction, order or decree of any court or
governmental body applicable to the Developer or to the Site.
All representations and warranties contained in this Section 7.9 are true and correct on
the date hereof and the Developer's liability for misrepresentation or breach of warranty,
representation or covenant, wherever contained in this Agreement, shall survive this Agreement.
7.10. Representations and Warranties of the Agency. The Agency hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Developer has been made with and by the Developer of the Site will have
been made in material reliance by the Developer on such covenants, representations and
warranties:
(I) Each and every undertaking and obligation of the Agency under this
Agreement shall be performed by the Agency timely when due; and that all
representations and warranties of the Agency under this Agreement and its exhibits shall
be true in all material respects as though they were made at the time.
(2) The Agency is a community redevelopment agency, duly formed and
operating under the laws of California. The Agency has the legal power, right and
authority to enter into this Agreement and to execute the instruments and documents
referenced herein, and to consummate the transactions contemplated hereby.
(3) The Agency has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the instruments and
documents referenced herein and the consummation of the transactions contemplated
hereby, and no consent of any other party is required.
(4) The persons executing any instruments for or on behalf of the Agency
have been authorized to act on behalf of the Agency and that the Agreement is valid and
enforceable against the Agency in accordance with its terms and each instrument to be
executed by the Agency pursuant hereto or in connection therewith will, when executed,
be valid and enforceable against the Agency in accordance with its terms. No approval,
consent, order or authorization of, or designation or declaration of any other person, is
required in connection with the valid execution and delivery of and compliance with this
Agreement by the Agency.
(5) The Agency has no ownership interest in the property. The Developer has
acquired hereunder) the entire right, title and interest in the Property to effectively vest in
the Developer, a good and marketable fee simple title to the Property, that the Developer
construct the Property free and clear of all liens, encumbrances, claims, rights, demands,
easements, leases or other possessory interests, agreements, covenants, conditions, and
restrictions of any kind or character (including, without limiting the generality of the
foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title
retention agreement, deeds of trust, security agreements and pledges and mechanics lien)
except for the matters covered in Section 3.6(a) of this Agreement and except for the title
exceptions, exclusions and matters identified in the preliminary title report relating to the
Property in accordance with Section 3.6(b) of this Agreement.
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(6) There are no contracts or agreements to which the Agency is a party
relating to the operation, maintenance, service, repair, development, improvement or
ownership of the Property which will survive except as may be set forth in the Agency
Regulatory Agreement.
(7) The Agency has taken all appropriate action to reserve the sum of Six
Hundred Thousand Dollars ($600,000) from the Agency Affordable Housing Grant for
the Project, as provided in Section 4.9.
If the Agency becomes aware of any act or circumstance which would change or render
incorrect, in whole or in part, any representation or warranty made by the Agency under this
Agreement, whether as of the date given or any time thereafter whether or not such
representation or warranty was based upon the Agency's knowledge and/or belief as of a certain
date, the Agency will give immediate written notice of such changed fact or circumstance to the
Developer, but such notice shall not release the Agency of its liabilities or obligations with
respect thereto.
All representations and warranties contained in this Section 7. IO are true and correct on
the date hereof and the Agency's liability for misrepresentation or breach of warranty,
representation or covenant, wherever contained in this Agreement, shall survive this Agreement.
7.11. Binding Effect of the Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their legal representatives, successors and assigns.
This Agreement shall likewise be binding upon and obligate the Site and the successors in
interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of
such Site.
7.12. Assurances to Act in Good Faith. The Agency and the Developer agree to
execute all agreements, documents and instruments and to take all action and shall use their best
efforts to accomplish the purposes of this Agreement. The Agency and the Developer shall each
diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to
their approval.
7.13. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
III
III
III
III
III
III
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IN WITNESS WHEREOF the Agency and the Developer have executed this Agreement
as of the date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
BY\~
Agency un I
DEVELOPER
Mary's Mercy Center, Inc.,
a California non-profit public benefit corporation
Dated:
By:
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Lots 26, 27, 28 and 32 Tract No. 3137, in the City of San Bernardino, as per plat recorded in
Book 42 of Maps, page 86, records of San Bernardino County.
APN: 0138-035-10 and I3.
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EXHIBIT "B"
When Recorded, Mail to:
Redevelopment Agency
of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
CERTIFICATE OF COMPLETION
The undersigned officer of the Redevelopment Agency of the City of San
Bernardino (the "Agency") hereby certifies as follows:
By its Resolution No. CDC , adopted and approved
200 and Resolution No. , adopted and approved ,200_, the Agency has
resolved as follows:
Section 1. The improvements required to be constructed in accordance with that
certain 2009 Low and Moderate Income Housing Funds Grant Development Agreement (the
"Agreement") dated as of , 2009 by and between the Agency and Mary's Mercy
Center Inc., a California non-profit public benefit corporation (the "Developer") on the lands (the
"Property") more fully described in Exhibit "A" attached hereto and incorporated herein by this
reference, have been completed in accordance with the provisions of the Agreement.
Section 2. This Certificate of Completion shall constitute a conclusive
determination of satisfaction of the agreements and covenants contained in the Agreement with
respect to the obligations of the Developer, and its successors and assigns, to construct and
develop the improvements on the Property, excluding any normal and customary tenant
improvements and minor building "punch-list" items, and including any and all buildings and
any and all parking, landscaping and related improvements necessary to support or which meet
the requirements applicable to the building and its use and occupancy on the Property, whether
or not said improvements are on the Property or on other property subject to the Agreement, all
as described in the Agreement, and to otherwise comply with the Developer's obligations under
the Agreement with respect to the Property and the dates for the beginning and completion of
construction of improvements thereon under the Agreement; provided, however, that the Agency
may enforce any covenant surviving this Certificate of Completion in accordance with the terms
and conditions of the Agreement and the Agency Regulatory Agreement (Recorded Instrument
No. ) pursuant to which the Property was conveyed under the Agreement. The
Agreement is an official record of the Agency and a copy of the Agreement may be inspected in
the office of the Secretary of the Agency, 201 North "E" Street, Suite 301, San Bernardino,
California, during regular business hours.
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Section 3. The Property to which this Certificate of Completion pertains is more
fully described in Exhibit "A" attached hereto.
DATED AND ISSUED this _ day of
,200_
Emil A. Marzullo
Interim Executive Director
[NOTARYACKNOWLEDGEMENT ATTACHED]
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Lots 26, 27, 28 and 32 Tract No. 3137, in the City of San Bernardino, as per plat recorded in
Book 42 of Maps, page 86, records of San Bernardino County.
APN: 0138-035-10 and 13.
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EXHIBIT "C"
Schedule of Performance
Execution of Agreement
The Agreement shall be authorized,
executed and delivered by the Developer
to the Agency.
Evidencing of Financing
The Developer shall provide Agency with
financing for the Project pursuant to
Section 3.7 of the Agreement.
Design
The Developer shall prepare all plans and
specifications and obtain all required
permits.
Evidence of Insurance
The Developer shall furnish to the Agency a
certificate of insurance as set forth in
Section 4.I(u) of the Agreement.
Opening of Escrow
The Agency and the Developer shall open escrow
for the disbursement of Affordable Housing Grant
funds
Agencv Funding
Commencement of Construction
The Developer shall commence construction
of the improvements ofthe Site pursuant
to Section 4.1 and Exhibit "C".
Completion of Construction
The Developer shall complete the construction of all
improvements on the Site as well as off-site
improvements.
Certificate of Completion
To be issued by the Agency at the request of
the Developer upon completion of construction
in accordance with Section 4.6 of the Agreement
Close of Escrow
On or before June 30, 2009.
On or before June 30, 2009
No later than June 30, 200
No later than June 30, 2009
Within 30 calendar days after written
request from the Agency or the
Developer.
On or before June 30, 2009.
Within five (5) calendar days after
June 30. 2009.
December 31, 2009
Within fifteen (15) calendar days after
written request from the Developer
to the Agency.
On or before December 31, 2009
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EXHIBIT "C"
Schedule of Performance (Continued)
It is understood that this Schedule of Performance is subject to all of the terms and conditions of
the text of the Agreement. The summary of the items performance in this Schedule of
Performance is not intended to supersede or modifY the more complete description in the text; in
the event of any conflict of or inconsistency between this Schedule of Performance and the text
of the Agreement, the text of the Agreement shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by
written agreement signed by both the Developer and the Agency. The Interim Executive
Director of the Agency shall have the authority to approve extensions of time without action of
the Community Development Commission of the Agency not to exceed a cumulative total of 180
calendar days.
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EXHIBIT "D"
Scope of Development
A. General Proiect Description
The Site contains approximately 74,488 square feet. The Project shall consist of 2 Y,
story structure including approximately 15,000 square feet interior area with the
construction of twenty-ones (21) one-bedroom units to be occupied by single women and
children and designated one (I) for the on-site manager's unit.
B. Design Obiectives
The following is a statement of design objectives for development of the Site:
I. The creation and achievement of an attractive and pleasant environment reflecting
a high level of concern for architectural and urban design principles both in terms
of the development itself and its compatibility and suitability with the surrounding
community.
2. The provision of a pleasing, safe and well-maintained living environment and
vehicle parking in an urban environment.
C. Development Standards
III
III
III
III
III
III
III
III
III
III
III
III
The Project shall be designed and constructed in accordance with the approved terms and
conditions of approval of the land use entitlements approved by the City of San
Bernardino for this Project, attached hereto and incorporated herein by reference.
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EXHIBIT "E"
Agency Regulatory Agreement
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
)
)
)
)
)
)
)
)
)
)
)
Redevelopment Agency
of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 9240 I
NO RECORDING FEE PURSUANT TO
GOVERNMENT CODE SECTION 27383
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AGENCY REGULATORY AGREEMENT
AND
TRANSITIONAL HOUSING DEVELOPMENT DECLARATION OF RESTRICTIVE
COVENANTS
(Health and Safety Code Section 33334.2)
This Agency Regulatory Agreement and Transitional Housing Development Declaration
of Restrictive Covenants (the "Agency Regulatory Agreement") is made and entered into as of
this _ day of , 2009, by and between the Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic (the "Agency"), and Mary's Mercy Center, Inc.,
a California non-profit public benefit corporation (the "Developer").
-- RECITALS --
A. The Agency and the Developer have entered into the 2009 Low and Moderate
Income Housing Funds Grant Development Agreement, dated as of _, 2009
(the "Agreement"). A copy of the Agreement is on file with the Agency Secretary.
B. Pursuant to the terms of the Agreement, the Agency will provide resources to the
Developer for improvement of the "Project" subject to the conditions of terms that are more
specifically described in the Agreement, and the Agency has agreed to provide the Developer
with an Agency Low and Moderate Income Housing Funds Affordable Housing Grant (the
"Agency Affordable Housing Grant") in support of the Project, subject to certain conditions.
C. In consideration for the Agency Affordable Housing Grant, the Developer has
agreed to maintain and make all except the on-site manager's unit dwelling units in the Project
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available to single women with children as these terms are defined in the Agreement for the term
of this Agency Regulatory Agreement and to further agree to observe all the terms and
conditions set forth below.
D. The Agency has agreed to provide the Agency Affordable Housing Grant on the
condition that the Project be maintained and operated in accordance with Health and Safety Code
Sections 33334.2 and 33413 and in accordance with certain additional restrictions concerning
affordability, operation, and maintenance of the Project, as specified in this Agency Regulatory
Agreement.
E. In order to ensure that the Project will be used and operated in accordance with
these conditions and restrictions, the Agency, and the Developer wish to enter into this Agency
Regulatory Agreement for themselves and their successors and assigns.
THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, ITS SUCCESSORS AND ASSIGNS, AND MARY'S MERCY CENTER,
INC., ITS SUCCESSORS AND ASSIGNS, HEREBY COVENANT AND AGREE AS
FOLLOWS:
ARTICLE I
DEFINITIONS
1.1. Definitions. When used in this Agency Regulatory Agreement, certain terms and
phrases as denoted by an initially capitalized letter shall have the same meaning as found in the
Agreement unless the specific context of the usage of a term or phrase may otherwise require,
and certain additional defined terms which appear below in this Section 1.1 shall have the
meaning in this Agency Regulatory Agreement as ascribed below:
"Adjusted Income" shall mean the total anticipated annual income of all persons
in a household which occupies (or is proposed to occupy) a Unit as calculated in
accordance with 25 California Code of Regulations Section 6914 or pursuant to a
successor state housing program regulation that utilizes a reasonably similar
method of calculation of adjusted annual income. In the event that no such
program exists, the Agency shall provide the Developer with a reasonably similar
method of calculation of adjusted income as provided in 25 California Code of
Regulations Section 6914.
"Agency Regulatory Agreement" shaH mean this Agency Regulatory Agreement
and Transitional Housing Development Declaration of Restrictive Covenants.
"Agreement" means that certain 2009 Low and Moderate Income Housing Funds
Grant Development Agreement dated as of _, 2009, by and
between the Developer and the Agency. A copy of the Agreement is on file with
the Agency Secretary and is incorporated herein by this reference.
"Certificate of Occupancy Date" means the date of issuance by the City of the
initial certificate of occupancy for the Project.
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"City" shall mean the City of San Bernardino, California.
"Closing Date" shall mean the date of recordation of this Agency Regulatory
Agreement.
"Developer" shall mean Mary's Mercy Center, Inc., a California nonprofit public
benefit corporation.
"Lower Income" shall mean the annual income for lower income households with
an Adjusted Income as established and amended from time-to-time pursuant to
Section 8 of the United States Housing Act of 1937, as amended, and as published
by the State of California Department of Housing and Community Development.
"Management Agent" shall mean the experienced management agent selected by
the Developer for the management of the Project as provided in Section 5.2 of this
Agency Regulatory Agreement.
"Rent" shall mean the total of each monthly payment by the tenants of a Unit to
the Developer for the following: use and occupancy of the Unit and land and
associated facilities, including parking (other than parking services acquired by
tenants on an optional basis), any separately charged fees or service charges
assessed by the Developer which are required of all tenants, other than security
deposits, the cost of an adequate level of service for utilities paid by the tenant,
including garbage collection, sewer, common area, water, electricity, gas and
other heating, and refrigeration costs, but not telephone service, any other interest,
taxes, fees or charges for use of the land or associated facilities and assessed by a
public or private entity other than the Developer, and paid by the tenant.
"Site" shall mean the real property described in Exhibit "A" attached hereto and
incorporated herein.
"Term" shall mean the period of fifty-five (55) years, beginning on the date of
recordation of the Agency Regulatory Agreement and ending on the fifty-fifth
(55th) anniversary following such date.
"Units" shall mean the twenty-one (21) units and the one (1) bedroom manager's
dwelling unit to be constructed by the Developer on the Site.
ARTICLE 2
LOW INCOME HOUSEHOLD UNITS
-- RENT AND OCCUPANCY AFFORDABILITY COVENANTS--
2.1. Occupancv Reauirement. During the first fifty-five (55) years of the Term of this
Agreement not less than twenty-one (21) of the Units shall be rented or occupied by, or if
vacant, available for rental and occupancy by Lower Income Households.
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2.2. Allowable Rent for Units.
a. Subject to Section 2.3 below, the Rent charged the occupants of the Units shall
not exceed thirty percent (30%) of one-twelfth of the Adjusted Income, adjusted for household
size.
b. In calculating the allowable Rent for the Units, the household Size shall be
assumed to be one (1) person per Unit.
c. At least one hundred eighty (180) calendar days prior to increasing Rent on any
Unit, the Developer shall submit to the Agency for review and approval a written request for
such increase. Households occupying Units shall be given at least ninety (90) calendar days
written notice prior to any increase in Rent.
Rent for a Unit may only be increased one time per year and the Rent levels following an
increase, or upon a new occupancy, shall not exceed the applicable Rent levels set forth in
Section 2.2.a., above.
2.3. Increased Income of a Low Income Household Occupancv of a Unit.
a. In the event, upon recertification of an occupant household's income for a Unit,
the Developer discovers that a Lower Income household no longer qualifies as a Lower Income
household, then such household shall not be required to vacate the Project and the Rent
chargeable to that household shall be increased to an amount of Rent which is the lesser amount
of (i) thirty percent (30%) of that household's actual monthly income; or (ii) the amount payable
by the tenant under State or local law. However, when the Unit is vacated by that household the
Unit shall be rented to a Lower Income household at the Rent level allowed in Section 2.2 for a
Unit as of the date of commencement of such a new occupancy. Moreover, a Unit occupied by a
Lower Income household shall be deemed, upon the termination of such Lower Income
household's tenancy to be continuously occupied by a Lower Income household until that Unit is
reoccupied.
b. If the Project is subject to state or federal rules governing low-income housing tax
credits, the provisions of those rules regarding continued occupancy by, and Rent charged to,
households whose incomes exceed the eligible income limitation shall apply in place of the
provisions set forth in Section 2.3 .a., above.
2.4. Lease Provisions.
a. The Developer shall include in leases or rental agreements for all Units provisions
which authorize the owner to immediately terminate the tenancy of any household one or more
of whose members misrepresented any fact material to the household's qualification as a Lower
Income Household and for all Units (except the on-site manager's unit) any misrepresentation
relating to the Senior Citizen Household qualification. Each lease or rental agreement for a Unit
shall also provide that the household is subject to annual certification in accordance with Section
4.1 below, and that, if the household's income increases above the applicable limits for a Lower
Income household such household's Rent may be subject to increase to the lesser of (i) thirty
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percent (30%) of that household's actual adjusted monthly income; or (ii) the amount payable by
the Tenant under the State or local law, or the household may be required to vacate the Unit.
ARTICLE 3
OPERATION AND MAINTENANCE OF THE PROJECT
3.1. Use as Transitional Housing. The Project shall be operated only as transitional
housing for low income Households single women and children, except for not more than one (I)
of the Units which may be used and occupied by on-site resident manager(s) employed by the
Developer and/or the Management Agent. No part of the Project shall be operated as transient
housing.
3.2. Compliance with the Agreement. The Developer shall comply with all the terms
and provisions of the Agreement.
3.3. rRESERVED--NO TEXTl
3.4. Taxes and Assessments. The Developer shall pay all real and personal property
taxes, assessments and charges and all franchise, income, employment, withholding, sales, and
other taxes assessed against it, or payable by it, at such times and in such manner as to prevent
any penalty from accruing, or any lien or charge from attaching to the Site; provided, however,
that the Developer shall have the right to contest in good faith, any such taxes, assessments, or
charges. In the event the Developer exercises its right to contest any tax, assessment, or charge
against it, the Developer, on fmal determination of the proceeding or contest, shall immediately
payor discharge any decision or judgment rendered against it, together with all costs, charges
and interest. This Section 3.4 shall in no way limit the Developer's right to apply for property
tax exemption(s) and other tax exemptions which may otherwise be available to the Developer.
3.5. Nondiscrimination. Except as otherwise required by the rental requirements, all
of the Units shall be available for occupancy on a continuous basis to low income Household
members of the general public (who are also income eligible with respect to the Units). The
Developer shall not give preference to any particular class or group of persons in renting the
Units. There shall be no discrimination against or segregation of any person or group of persons,
on account of race, color, creed, religion, sex, sexual orientation, age, marital status, national
origin, or ancestry, including all other protected classes of persons and groups of persons as may
be considered as such by any local, State or Federal law and as shall be required pursuant to
Health & Safety Code Section 33435 and Section 33436, in the leasing, subleasing, transferring,
use, occupancy, tenure, or enjoyment of any Unit. Neither the Developer nor any person
claiming under or through the Developer, shall establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection
with the employment of persons for the operation and management of any Unit. All deeds,
leases or contracts made or entered into by the owner as to the Units or the Site or portion
thereof, shall contain covenants prohibiting discrimination as prescribed herein. The Developer
shall include a statement in all advertisements, notices and signs for the availability of Units for
rent to the effect that the owner is an Equal Housing Opportunity provider.
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ARTICLE 4
LOW INCOME HOUSEHOLD AND INCOME
CERTIFICATION AND REPORTING
4.1. Income Certification.
a. The Developer shall obtain and complete prior to initial occupancy and thereafter
maintain on file income certifications from each tenant household renting any of the Units. The
Developer shall make a good faith effort to verifY that the income provided by an applicant or
occupying low income Household in an income certification is accurate by taking one or more of
the following steps as part of the verification process: (I) obtain an income tax return for the
most recent tax year; (2) conduct a credit agency or similar search; (3) obtain an income
verification form from the applicant's current employer; (4) obtain an income verification form
from the United States Social Security Administration and/or the California Department of
Social Services if the applicant receives assistance from either of such agencies; or (5) if the
applicant is unemployed and has no such tax return, obtain another form of independent
verification. On the anniversary of the occupancy of such Unit the Developer shall recertifY the
household income of the low income Household occupying the Unit. Copies of tenant income
certification shall be available to the Agency upon request.
b. The Developer shall verifY, prior to the occupancy of each Unit, that the low
income Household satisfies the requirements of a low income Household as provided in the
Agreement. Thereafter, the Developer shall annually verifY that the low income Household
retains its qualification as a low income Household.
4.2. Annual Unit Rental Affordabilitv Report to the Agencv. Commencing on the
June 30 next following the Certification of the Occupancy Date and on each June 30 thereafter
during the Term of the Agency Regulatory Agreement, the Developer shall submit a report to the
Agency, in a form approved by the Agency. The annual report shall include for each Unit
covered by this Agency Regulatory Agreement, the Rent and the income and family size of the
Senior Citizen Household occupying the Unit. The report shall also state the date the tenancy
commenced for each Unit and such other information as the Agency may be required by law to
obtain; provided, however, that the Agency shall take reasonable steps to maintain the
confidential nature of the information contained therein relating to any Unit.
4.3. Additional Information. The Developer shall provide any additional information
reasonably requested by the Agency, including, without limitation, such Project-related income
and expense accounting information. The Agency shall have the right to examine and make
copies of all books, records or other documents of the Developer which pertain to any Unit;
provided, however, that the Agency shall take reasonable steps to maintain the confidential
nature of the information contained therein.
4.4. Records. The Developer shall maintain complete, accurate and current records
pertaining to the Units, and shall permit any duly authorized representative of the Agency
(during business hours and upon not less than seventy-two (72) hours notice) to inspect records,
including records pertaining to income and household size of tenant households of the Units;
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provided, however, that the Agency shall take reasonable steps to maintain the confidential
nature of the information contained therein relating to any household.
ARTICLE 5
PROPERTY MANAGEMENT
5.1. Management Responsibilities. The Developer shall be responsible for
management of the Project, including, without limitation, the selection of tenants, certification
and recertification of household size, and income for the Units and the head-of-household of all
Units, evictions, collection of rents and deposits, maintenance, landscaping, routine and
extraordinary repairs, replacement of capital items, and security. The Agency shall have no
responsibility for the management or operation of the Site or the Project.
5.2. Management Agent. The Project shall at all times be managed by an experienced
management agent (the "Management Agent") reasonably acceptable to the Agency, with
demonstrated ability to operate transitional residential unit facilities similar to the Project in a
manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if the
Developer directly performs the functions of the Management Agency by its employees or by
means of a service contract with an entity owned or controlled by the Developer, such a
Management Agent shall be deemed approved by the Agency. If the Management Agent is an
entity or person other than the Developer, its employees or an entity owned or controlled by the
Developer, the Developer shall submit for the Agency's approval the identity of any proposed
Management Agent together with additional information relevant to the background, experience
and financial condition of any proposed Management Agent as reasonably requested by the
Agency. If the proposed Management Agent meets the standard for a qualified Management
Agent as set forth above, the Agency shall approve the proposed Management Agent by
notifying the Developer in writing. Unless the proposed Management Agent is disapproved by
the Agency within thirty (30) calendar days, which disapproval shall state with reasonable
specificity the basis for disapproval, it shall be deemed approved. The Developer is hereby
approved by the Agency as the Management Agent for the Project.
5.3. Maintenance of the Site and the Project.
a. The Developer shall maintain the Site and the Project in good repair and a neat,
clean and orderly condition, ordinary wear and tear excepted. In the event that, at any time
during the term of this Agency Regulatory Agreement, there is an occurrence of an adverse
condition on any area of the Site in contravention of the general maintenance standard described
above (a "Maintenance Deficiency"), then the Agency shall notify the Developer in writing of
the Maintenance Deficiency and give the Developer (60) calendar days from receipt of such
notice to cure the Maintenance Deficiency as identified in the notice. In the event the Developer
fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the
Agency may conduct a public hearing following transmittal of written notice thereof to the
Developer ten (10) calendar days prior to the scheduled date of such public hearing in order to
verify whether a Maintenance Deficiency exists and whether the Developer has failed to comply
with the provision of this Section 5.3.a. If, upon the conclusion of a public hearing, the Agency
makes a fmding that a Maintenance Deficiency exists and that there appears to be non-
compliance with the general maintenance standard, as described above, thereafter the Agency
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shall have the right, but not the obligation, to enter the Site and perform all acts necessary to cure
the Maintenance Deficiency, or take other action at law or equity, the Agency may then have to
accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for
the abatement of a Maintenance Deficiency as authorized by this Section 5.3.a shall become a
lien on the Site. If the amount of the lien is not paid within thirty (30) calendar days after written
demand for payment by the City or by the Agency has been presented to the Developer, the
Agency shall have the right to enforce the lien in the manner as provided in Section 5.3.c.
b. Graffiti which is visible from any public right-of-way which is adjacent or
contiguous to the Site shall be removed by the Developer from any exterior surface of a structure
or improvement on the Site by either painting over the evidence of such vandalism with a paint
which has been color-matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on
the Site and such graffiti is visible from an adjacent or contiguous public right-of-way and
thereafter such graffiti is not removed within seventy-two (72) hours following the time of its
application; then in such event and without notice to the Developer, the Agency shall have the
right, but not the obligation, to enter the Site and to remove the graffiti. Notwithstanding any
provision of Section 5.3 to the contrary, any sum expended by the Agency for the removal of
graffiti from the Site as authorized by this Section 5.b, shall become .a lien on the Site. If the
amount of the lien is not paid within thirty (30) calendar days after written demand for payment
by the Agency to the Developer, the Agency shall have the right to enforce its lien in the manner
as provided in Section 5.3c.
c. The parties hereto further mutually understand and agree that the rights conferred
upon the Agency under this Section 5.3 expressly include the power to establish and enforce a
lien or other encumbrance against the Site, or any portion thereof, in the manner provided under
California Civil Code Sections 2924, 2924b and 2924c in the amount reasonably necessary to
restore the Site to the maintenance standard required under Section 5.3.a, or Section 5.3 .b,
including reasonable attorneys' fees and costs of the Agency associated with the abatement of
the Maintenance Deficiency or removal of graffiti and the collection of the costs of the Agency
in connection with such action. The provisions of this Section 5.3 shall be a covenant running
with the land for the Term of the Agency Regulatory Agreement and shall be enforceable by the
Agency, and its successors and assigns. Nothing in the foregoing provisions of this Section 5.3
shall be deemed to preclude the Developer from making any alterations, additions, or other
changes to any structure or improvement or landscaping on the Site, provided that such changes
comply with applicable law. No lien as may arise under this Section 5.3 shall interfere with or
be superior to the security interest of any mortgage secured by the Site.
5.4. Insurance Coverage. The Developer shall cause to have in full force and effect
during the term of this Agency Regulatory Agreement, insurance coverage as follows:
(i) If any building or improvements erected by the Developer on the Site shall be
damaged or destroyed by an insurable cause, the Developer shall, at its own cost
and expense, diligently repair or restore the Site and the Project consistent with
the original plans and specifications for the Project. Such work or repair shall be
commenced within one hundred twenty (120) calendar days after the damage or
loss occurs and shall be completed within one year thereafter. All insurance
proceeds collected for such damage or destruction shall be applied to the cost of
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such repairs or restoration and, if such insurance proceeds shall be insufficient for
such purpose, the Developer shall make up the deficiency;
(ii) a policy of comprehensive general liability insurance written on a per occurrence
basis in an amount not less than either (i) a combined single limit of One Million
Dollars ($1,000,000.00) or (ii) bodily injury limits of Five Hundred Thousand
Dollars ($500,000.00) per person, One Million Dollars ($1,000,000.00) per
occurrence, One Million Dollars ($1,000,000.00) products and completed
operations and property damage limits of Five Hundred Thousand Dollars
($500,000.00) per occurrence and Five Hundred Thousand Dollars ($500,000.00)
in the aggregate.
(iii) a policy of workers' compensation insurance in such amount as will fully comply
with the laws of the State of California and which shall indemnify, insure and
provide legal defense for both the Developer, the Agency, and the City against
any loss, claim or damage arising from any injuries or occupational diseases
occurring to any worker employed by or any persons retained by the Developer in
the course of carrying out the activities in this Agency Regulatory Agreement.
(iv) a policy of comprehensive automobile liability insurance written on a per
occurrence basis in an amount not less than either (i) bodily injury liability limits
of Two Hundred Fifty Thousand Dollars ($250,000.00) per person and Five
Hundred Thousand Dollars ($500,000.00) per occurrence and property damage
liability limits of One Hundred Thousand Dollars ($100,000.00) per occurrence
and One Hundred Thousand Dollars ($100,000.00) in the aggregate or (ii)
combined single limit liability of Five Hundred Thousand Dollars ($500,000.00).
Said policy shall include coverage for owned, non-owned, leased and hired
vehicles.
All of the above policies of insurance shall be primary insurance and shall name the City
and the Agency, and their officers, employees, and agents as additional insureds. The insurer
shall waive all rights of subrogation and contribution it may have against the City and the
Agency and their officers, employees and agents and. their respective insurers. All of said
policies of insurance shall provide that said insurance may not be amended or canceled without
providing thirty (30) calendar days prior written notice by registered mail to the Agency. In the
event any of said policies of insurance are canceled, the Developer shall, prior to the cancellation
date, submit new evidence of insurance in conformance with this Section to the Interim
Executive Director of the Agency. No operation of the Project shall commence until the
Developer has provided the Agency with certificates of insurance or appropriate insurance
binders evidencing the above insurance coverages, and said certificates of insurance or binders
are approved by the Agency.
The policies of insurance required by this Agreement shall be satisfactory only if issued
by companies qualified to do business in California, rated at least "A(vii)" or better in the most
recent edition of Bests Insurance Rating Guide or an equivalent rating in The Key Rating Guide
or in the Federal Register unless such requirements are modified or waived by the Interim
Executive Director of the Agency due to unique circumstances.
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The Developer agrees that the provisions of this Section shall not be construed as limiting
in any way the extent to which the Developer may be held responsible for the payment of
damages to any persons or property resulting from the Developer's activities or the activities of
any person or persons for which the Developer is otherwise responsible.
Upon prior written notice from the Agency to the Developer, the Developer, at its sole
cost and expense, shall immediately increase any insurance policy coverage amounts and the
Developer shall immediately obtain and maintain additional insurance policies in such coverage
amounts as reasonably determined by the Agency.
ARTICLE 6
MISCELLANEOUS
6.1. Term. The provisions of this Agency Regulatory Agreement shall apply to the
Site for the entire Term. This Agency Regulatory Agreement shall bind any successor, heir or
assign of the Developer, whether a change in interest occurs voluntarily or involuntarily, by
operation of law or otherwise, with or without the approval of the Agency, except as expressly
released by the Agency.
6.2. rRESERVED--NO TEXT]
6.3. Non-Liability of Officials, EmDlovees and Agents. The Agency shall not be
personally liable to the Developer for any obligation created under the terms of this Agency
Regulatory Agreement except in the case of actual fraud or willful misconduct by such person.
6.4. Covenants to Run With the Land. Subject to the provisions of Section 6.2, the
Agency and the Developer hereby declare their express intent that the conditions, covenants and
restrictions set forth in this Agency Regulatory Agreement are affordable redevelopment housing
covenants and that each and every provision of this Agency Regulatory Agreement shall run with
the land, and shall bind all successors-in-title to the Site and/or to the Project; provided, however,
that on the expiration of the Term of this Agency Regulatory Agreement said conditions,
covenants and restrictions shall expire.
6.5. Enforcement bv the Agencv. If the Developer fails to perform any obligation
under this Agency Regulatory Agreement, and fails to cure the default within thirty (30) calendar
days after the Agency has notified the Developer in writing of the default or, if the default cannot
be cured within thirty (30) calendar days, fails to commence to cure within thirty (30) calendar
days and thereafter fails to diligently pursue such cure, the Agency shall have the right, but not
the obligation, to enforce this Agency Regulatory Agreement by any or all of the following
actions, or any other remedy provided by law:
Action to ComDel Performance or for Damages. The Agency may bring an action
at law or in equity to compel the performance of the obligations of the Developer
under this Agency Regulatory Agreement, and/or for damages;
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6.6. Attornevs' Fees and Costs. In any action brought to enforce this Agency
Regulatory Agreement, the prevailing party shall be entitled to all costs and expenses of suit,
including attorneys' fees and court costs. This section shall be interpreted in accordance with
California Civil Code Section 1717 and judicial decisions interpreting that statute. For the
purposes of this Section 6.7, the salary, fringe benefits and overhead expenses of lawyers
employed in the Office of the City Attorney of the City of San Bernardino shall be deemed to be
attorney's fees.
6.7. Recording and Filing. The Agency and the Developer shall cause this Agency
Regulatory Agreement, and all amendments and supplements to it, to be recorded in the Official
Records of the County of San Bernardino, California.
6.8. Governing Law. This Agency Regulatory Agreement shall be governed by the
laws of the State of California, except those provisions preempted by federal law.
6.9. Amendments. This Agency Regulatory Agreement may be amended only by a
written instrument executed by all the parties hereto or their successors-in-title, and duly
recorded in the real property records of the County of San Bernardino, California.
6.10. Notice. All notices given or certificates delivered under this Agency Regulatory
Agreement shall be deemed received on the delivery or refusal date shown on the delivery
receipt, if: (i) personally delivered by a commercial service which furnishes signed receipts of
delivery, or (ii) mailed by certified mail, return receipt requested, postage prepaid, addressed as
shown on the signature page. Any of the parties may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or communications shall
be sent.
6.11. Severability. If any. provision of this Agency Regulatory Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
portions of this Agency Regulatory Agreement shall not in any way be affected or impaired
thereby.
6.12. rRESERVED--NO TEXT.]
6.13. Relationship of the Parties. The relationship between the Agency and the
Developer during the term of this Agency Regulatory Agreement shall not be construed as ajoint
venture, equity venture, or partnership. The Agency does not undertake nor assume any
responsibility or duty to the Developer or any third party with respect to the ownership of the
Site or the operation of the Project or the actions ofthe Developer. The Developer shall have no
authority to act as an agent of the Agency or to bind the Agency to any obligation.
6.14. Waiver. Any waiver by the Agency of any obligation in this Agency Regulatory
Agreement must be in writing. No waiver will be implied from any delay or failure by the
Agency to take action on any breach or default of the Developer or to pursue any remedy
allowed under this Agency Regulatory Agreement or applicable law. Any extension of time
granted to the Developer to perform any obligation under this Agency Regulatory Agreement
shall not operate as a waiver or release from any of its obligations under this Agency Regulatory
Agreement. Consent by the Agency to any act or omission by the Developer shall not be
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construed to be a consent to any other or subsequent act or omission or to waive the requirement
for the Agency's written consent to future waivers.
6.15. Other Agreements. The Developer represents that it has not entered into any
agreements that would restrict or compromise its ability to comply with the terms of this Agency
Regulatory Agreement. The Developer shall not enter into any agreements that are inconsistent
with the terms of this Agency Regulatory Agreement without the express approval by the
Agency in writing.
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IN WITNESS WHEREOF, the Agency and the Developer have for themselves and their
successors and assigns executed this Agency Regulatory Agreement by duly authorized
representatives in counterpart original copies, all as of the date first written above.
AGENCY
Redevelopment Agency of the
City of San Bernardino,
a public body, corporate and politic
Date:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By:
Agency Counsel
DEVELOPER
Mary's Mercy Center, Inc.,
a California non-profit public benefit corporation
Date:
By:
By:
[ALL OFFICERlPRINCIPAL
SIGNATURES TO BE NOTARIZED]
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
Lots 26, 27, 28 and 32 Tract No. 3137, in the City of San Bernardino, as per plat recorded in
Book 42 of Maps, page 86, records of San Bernardino County.
APN: 0138-035-10 and 13.
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