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Home My WebLink AboutR26-Economic Development CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Recommended Intermediary Services Providers in support of the Neighborhood Stabilization Program ("NSP") Request for Proposal ("RFP") DATE: June 24, 2009 Svnoosis of Previous Commission/Council/Committee Action(s): On April 23, 2009, the Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend the Community Development Commission consider this action for approval. Recommended Motion(s): (Communitv Develooment 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 enter into a Master Agreement with each of the selected Intermediaries identified through the Neighborhood Stabilization Program ("NSP") Intermediary Services RFP procurement process for the purpose of rehabilitating and selling Agency identified and approved foreclosed and/or abandoned single-family residences within the City of San Bernardino ----------------------------- ------------------------------ ----------------------- --------------------- ------------------------ --------------------- ---------__________ ______________________ _____________u_ Contact Person(s): Carey K. Jenkins Phone: (909) 663-1 044 All Project Area(s): Supporting Data Attached: N/A Ward(s): o Staff Report 0 Resolution(s0Agreement(s)/Contract(s) 0 Map(s)DLetter(s) Funding Requirements: Amount: $ 8,408,588 Source: Federal Neighborhood Stabilization Program Fiscal Year 2008-2009 Budget Budget Authority: 'm;~"""" D;~m Fiscal Review: ,"/ij:,~ (hJ '. Signature: Interim Administrative Services Director Commission/Council Notes: mm_mn1f9nm- --(7Jl/ij6iOO9~37--_n fR.eVIIJU$L-Lj R!5q 7/l/~ _n_n_n__.__nn__nn n__n_n__nnnnn _nn__n__un_nnn_ nn_n__n_n_ _n_n__nn__n_nn n_n__.__n_n___ n_n_n___n_nn _nn_nnn__n__ P\Agenda_<WOlTIm Dev COll\mi,,;on\CDC 2009\07-06-09 )\iSP Intermediary Services SR. doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2009 Agenda Item Number: /2.20 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT __________________________ _____________________________u_____________________ _______________________________________________~ _____________________________~ _______________________ RECOMMENDED INTERMEDIARY SERVICES PROVIDERS IN SUPPORT OF THE NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") REQUEST FOR PROPOSAL ("RFP") BACKGROUND: On November 17,2008, the Mayor and Common Council of the City of San Bernardino ("Council") approved the City of San Bernardino Economic Development Agency's ("Agency") response to the Neighborhood Stabilization Program ("NSP"). The Agency's plan for deploying the NSP funds was detailed in the Agency's "Substantial Amendment to the Fiscal Year 2008-2009 Annual Action Plan". As described in this amendment, the Agency plans to allocate its NSP award of approximately $8.4 million among four different housing sub- components. These four sub-components are: (1) Down Payment Assistance ($920,000); (2) Housing Opportunities for Households at or below 50% Area Median Income ("AMI") ($2.1 million); (3) Acquisition, Demolition and Redevelopment ($920,000); and (4) Acquisition, Rehabilitation and Resale of single-family residences, better known as the Intermediary Services Program ("Program") ($3.7 million). The remainder of the funds shall be used to pay for NSP administrative costs. Of the four sub-components mentioned above, the Program most directly addresses the foreclosure cnSlS currently affecting the single-family home market in the City of San Bernardino ("City"). For the period beginning January 1, 2008 and ending March 31, 2009, the City had 3,799 foreclosures of residential dwellings.! (Please see the attached map of the City that identifies the location of these properties identified as Attachment "I "). Under this Program, foreclosed upon homes will be acquired at a discount, either by the Agency or Agency approved Intermediaries, and then the homes will be rehabilitated and resold to homebuyers whose household income is at or below 120% AMI. Since the foreclosure problem is evident throughout the City, the Agency originally planned to make the Program available on a city-wide basis using NSP funds. However, the United States Department of Housing and Urban Development ("HUD") determined the Agency needed to focus its NSP funds in those areas of the City that had been most negatively impacted by the foreclosure crisis. As a result, the Agency utilized and relied upon the methodology and data prepared by HUD, to conduct its needs analysis of specific geographic areas of the City. The three metrics provided by HUD used to make this determination included: (1) the incidence of sub-prime mortgages, (2) the foreclosure and abandonment risk level and (3) the projected foreclosure rate for the next 18 months. The Agency studied these three factors for all census tract blocks within the City. Those census tract blocks registering the highest reading for each of the above three metrics were determined to be the areas within the City with the greatest need. Further, the Agency determined that certain census tract blocks, primarily within Wards 1,2, and 6 were most severely impacted by the foreclosure crisis. These census tract blocks were combined to form the NSP Target Zone, which was ultimately accepted by HUD (please see Attachment "2"). _~_!''!_'!!:~~_:_]{_e'!!!i!:~a_c_____________________________________________________________________________________________________________m________ P:\Agendas\Comm Dev CommissionlCDC 2009\07-06-09 NSP Intermediary Services SR.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2009 Agenda Item Number: lset Economic Development Agency Staff Report NSP Intermediary Services Page 2 CURRENT ISSUE: As a policy goal of implementing the Program on a city-wide basis, the Agency recommends using NSP funding to acquire and rehabilitate properties within the NSP Target Zone, and utilizing tax increment housing set-aside funds to subsidize the rehabilitation of those homes located outside of the NSP Target Zone. Please see the attached map for a depiction of the City areas falling outside the NSP Target Zone (Attachment "3"). Funding for the Intermediary Services Program needs to be bifurcated in this fashion because, according to HUD regulations, NSP funds can only be spent within the NSP Target Zone. However, this is not an impediment to making the Program available on a city-wide basis since the Agency can use other funding sources, such as the tax increment housing set-aside funds, to promote the rehabilitation of foreclosed homes outside of the NSP Target Zone. The end result will be that the foreclosure problem will be addressed by the Agency on a city-wide basis, but it will use different funding sources for homes within the NSP Target Zone than those falling outside of the Target Zone. The Agency has completed its procurement process, and as a result, has identified five firms to partner with to rehabilitate and resell foreclosed upon residential properties and maintain the program requirements and policy objectives of the Program. Major milestones in the Agency's procurement process were as follows: . The issuance ofthe NSP Intermediary Services Request for Proposal ("RFP") on February 20, 2009. RFP mailed electronically and through U.S. Mail to a long list of firms previously known to the Agency. Also, the RFP was posted on the Agency's website. . Advertisement ofthe RFP in the San Bernardino County Sun newspaper on March 3, 2009. · Proposers Conference held at the Agency's offices on March 4, 2009. · Proposals submitted to the Agency on March 20, 2009; there were 11 responses, seven of which were deemed responsive. . Proposals were further evaluated by the review panel starting March 23, 2009. · Interviews of the seven remaining firms, were carried out on April 14, 2009; five firms were recommended for inclusion in the Agency's pool of qualified Intermediaries as a result of this procurement process. The review panel consisted ofthe following Agency Staff, as well as external housing professionals: I. Director of Housing and Community Development, EDA, San Bernardino, CA. 2. Project Manager, EDA, San Bernardino, CA. 3. Director of Acquisitions, National Core Developers, Rancho Cucamonga, CA. 4. Vice President, Construction, Vanir Construction Management, Inc., San Bernardino, CA. 5. Financial Development Officer, Major Projects, Los Angeles Housing Department, Los Angeles, CA. Upon reviewing the applications, the review panel determined the respondents could be grouped into two primary categories: (1) Smaller, local developers with a focus on San Bernardino and neighboring Inland Empire communities, and (2) Integrated, non-profit housing organizations with significant resources seeking to enter the Inland Empire market. Because these two types of entities are vastly different in terms of resources and focus, the review panel decided to separate the two types of firms. The smaller/local developers were compared to each other and the integrated/non-profits were compared to their peers, as well. --------_______________________~_________________________~ ____n______________________ ______________________ ____________________________~________________________.~_____________________________________ P:\Agendas\Comm DevCommission\CDC 2009\07-06-09 NSP Inlermediary Services SRdoc COMMISSION MEETING AGENDA Meeting Date: 07/06/2009 Agenda Item Number: -'l- ~ Economic Development Agency Staff Report NSP Intermediary Services Page 3 The final five firms were recommended based on a scoring system which took into account industry experience, organizational capacity, pricing competitiveness and the completeness of the application. The firms that scored the lowest within each of the two categories named above were withdrawn from the final pool. This left the following five remaining firms: Smaller/Local Developers ANR Industries, Inc., Santa Fe Springs, CA G.F.R. Enterprises, Inc., Upland, CA The Nunez Team/TELACU, Ontario, CA Integrated Non-Profits Mercy Housing California, Los Angeles, CA Stratus Development/Jamboree Housing, Irvine, CA Firms Removed From Further Consideration Omni Community Development, LLC, San Bernardino, CA Warmington Residential/Bridge Housing, San Ramon, CA As part of the program implementation, the Agency has embedded many internal controls designed to protect against profiteering by developers, contractors and other real estate entities; and to ensure the quality of the homes, the continued affordability of the homes, and that all homebuyers are qualified and educated on the homeownership process prior to their purchase. Please see Attachment "4" for a listing of these controls. ENVIRONMENTAL IMPACT: None. FISCAL IMPACT: There will be no fiscal impact to the City's General Fund. The services provided under the Intermediary Services Program and the associated administration costs will be funded either with NSP funds derived from HUD or funds from the Agency's Tax Increment Housing Set-Aside. As it relates to the Agency's Tax Increment Housing Set-Aside Funds, funds have already been allocated to assist with NSP activities in the form of the Agency's citywide Housing Assistance Program. Additional funds will be allocated for this activity in the Agency's 2009-2010 Fiscal Year Budget. RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. C;. C~~:~- Emil A. Marzullo, Interim Executive Director P:\Agendas\Comm Dev Commission\CDC 2009\07-06-09 NSP Intennediary Services SR.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2009 Agenda Item Number: .1-5" Attachment 1 Properties foreclosed upon from January 1, 2008 to March 31 , 2009 Legend ..----. L___J Ward 1 (680 Properties) r---, L___J Ward 2 (819 Properties) o Ward 3 (302 Properties) ,.----1 L___J Ward" (328 Properties) ..----1 '-___J Ward 5 (546 Properties) ..----, L___J Ward 6 (527 Properties) ..----1 '-___.I Ward 7 (597 Properties) W.E S Total Properties: 3,799 Data Source: RealtyTrac Pr.pwW By: RMI Pr PrlntIrJf Dm: Apd ZIt, lllOl FJIe:P:IGISrJ.'-IIIll'DslHousingl FwKIoaw. homelI ApnI2OOf.Xff.mJ<<l C/tyol San s.matdno EDA ~ .", "'" '.. ~ ~ i .ASELlNERD ~~ ~ GRfE"llPOTRD FO(I....~81VD " """ RlALTQAI/E I, ~ . I 'AAI_AADlNOAVf ...... _RD..OAW: . ~ l , I I Sl.O'o'l!IOlAW- . ~ i ! i li;R'I!DLAHD&IJl.VD i ~ ~ JURUP......~ ....RTOItR o ! ~ ~ City of San Bernardino Properties foreclosed upon from January 1st. 2008 to March 31, 2009 Attachment 2 NSP Intermediary Target Zone I G I -$- I I ill .UD Attachment 3 NSP Intermediary Program Eligible Areas within the City ~ ~" , II II 1 , II !'IOD ATTACHMENT "4" INTERMEDIARY SERVICES PROGRAM REGULATORY AND PROGRAMMATIC CONTROLS Protect Aqainst Profiteerinq: Per NSP regulations the maximum sales price to the homebuyer is the lower of appraisal value or total development cost An Agency selected appraiser will advise the Agency on the value of the homes prior to the Agency's decision to acquire and to re-sell the homes The Agency approves of the acquisition cost of the homes prior to acquisition The Agency approves of the rehabilitation cost and other development costs of the homes before any construction work commences An Agency selected home inspector will develop the scope of work and cost estimate for this scope prior to the commencement of work The Agency generated scope of work and cost will be used to check the developer/contractor's invoiced cost Affordability Covenants with a term of 45 years will be placed on title of the sold homes, ensuring that the homes can only be re-sold at an affordable cost If provided, a second trust deed will be placed on title of the sold homes, securing the Agency's Down Payment Assistance Loan Upon early re-sale of the homes, the buyer must share the equity appreciation of the home with the Agency Ensure the Qualitv of the Homes: Agency selected home inspectors will inspect the homes and advise the Agency on the quality of construction prior to the Agency's decision to acquire the homes Agency selected environmental consultants will inspect the homes and advise the Agency on the environmental condition and the measures required for regulatory compliance prior to the Agency's decision to acquire the homes Agency staff or Agency selected consultants will inspect the rehabilitation work on the property periodically to ensure that all work is performed as specified in the Agency approved scope of work The Intermediaries will not be compensated for their services until the Agency issues an official Notice of Completion for the work performed on the house All government approvals and inspector sign-offs for the rehabilitation work must be approved prior to re-selling of the homes P:\AgendasIRedevelopment COITIIll;ttee\RDA 2009\04-23-09 NSP Intermediary Services RFP doc Redevelopment Committee Agenda Meeting Date: 04/23/2009 Item No: 4 Title must be cleared of all mechanic's liens and any other liens not approved by the Agency prior to re-sale of the homes Continued Affordabilitv of the Homes: Affordability covenants with a term of 45 years will be placed on title of each of the homes sold under this program Effective January 1, 2008, Chapter 690 of Community Redevelopment Law requires that a "Notice of Affordability Restrictions on Transfer of Property" be placed on title for each home sold to a low-moderate income household The affordability covenants require that the home only be re-sold by eventual homebuyers to other low-income buyers at an affordable cost When down payment assistance is necessary, the Agency will place a second trust deed on title of the homes with a term of 45 years, securing the Agency's Down Payment Assistance Loan; this requires the title company to notify the Agency in the event a change in title is being sought Homebuvers are Qualified and Knowledqeable of the Homeownership Process: All prospective low-to-moderate income homebuyers will be asked to submit a host of documents verifying their income, employment, credit, number of people in the household, and other information as part of their application to purchase a home and receive down payment assistance from the Agency The homebuyer application will be reviewed by the Agency to ensure compliance with all program guidelines and requirements All homebuyers will be required to complete an 8 hour home education course given by Neighborhood Housing Services of the Inland Empire The Intermediaries are required to assist the prospective homebuyers in applying for private home financing as well as the Agency Down Payment Assistance Loan Escrow on the sale of the homes will not close until the Agency has received and approved of the homebuyers' application Escrow on the sale of the homes will not close until the homebuyers provide adequate proof of all hazard property insurance ensuring the total value of the rehabilitated home P-IAgcndas\Redevelopment COlTIIl1ineelRDA 2009\04-1J-09 NSP Intermediary Services RFl' doc Redevelopment Committee Agenda Meeting Date: 04/23/2009 Item No: 4 1 RESOLUTION NO. cor 2 3 4 5 6 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 ENTER INTO A MASTER AGREEMENT WITH EACH OF THE SELECTED INTERMEDIARIES IDENTIFIED THROUGH THE NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") INTERMEDIARY SERVICES RFP PROCUREMENT PROCESS FOR THE PURPOSE OF REHABILITATING AND SELLING AGENCY IDENTIFIED AND APPROVED FORECLOSED AND/OR ABANDONED SINGLE- FAMILY RESIDENCES WITHIN THE CITY OF SAN BERNARDINO 7 8 9 10 WHEREAS, the City, pursuant to a duly adopted Resolution on this date authorized the 11 Redevelopment Agency of the City of San Bernardino (the "Agency") to administer funds received 12 through the Neighborhood Stabilization Program ("NSP") as shall be received by the City of San 13 Bernardino ("City"), pursuant to a grant from the United States Department of Housing and Urban 14 Development ("HUD") and to otherwise provide for and administer the NSP program that shall be 15 undertaken within the City by the Agency as required of the City under the Funding Approval and 16 Grant Agreement duly executed by and between the City and HUD as NSP Grant Number B-08- 17 MN-06-0520; and 18 WHEREAS, the City, pursuant to same duly adopted Resolution referenced above, 19 authorized and directed that the NSP funds received by the City shall be administered by the 20 Agency, and an amount up to $3,700,000 of these funds shall be used and applied for the 21 acquisition, rehabilitation and resale of single-family foreclosed and/or abandoned residences 22 through an Intermediary Services Program ("Intermediaries"), as may be initiated and approved by 23 the Community Development Commission of the City of San Bernardino ("Commission") for the 24 Agency either by the Agency or through non-profit corporations which are either independent of the 25 Agency or controlled by the Agency; and 26 WHEREAS, the Agency completed a Request For Proposal procurement process on April 27 16,2009, to select the firms who will serve as intermediaries under the Intermediaries; and 28 P IAgendas'.Resolutions\Resolulior",2009\07_0b_Q'/ l'SP Intermediary Services (DC Reso doc 1 WHEREAS, the City recogmzes that the Intermediaries, which are independent of the 2 Agency, will be rehabilitating and selling single-family foreclosed and/or abandoned homes on 3 behalf of the Agency for the purpose of making affordable housing available to households whose 4 income is at or below 120% Area Median Income ("AMI") and to reduce the number of foreclosed 5 single-family residences in the City; and 6 WHEREAS, it is necessary at this time for the Commission to specifically authorize the 7 Interim Executive Director of the Agency to enter into a Master Agreement with each of the 8 Intermediaries in furtherance of the use of the NSP funds by the Agency on behalf of the City. 9 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 10 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 11 FOLLOWS: 12 Section 1. The facts set forth in the Recitals to this Resolution are accurate and correct in all 13 respects. 14 Section 2. The Commission hereby authorizes the Interim Executive Director of the Agency 15 to enter into a Master Agreement with each of the Intermediaries named below for the purpose of 16 rehabilitating and selling foreclosed and/or abandoned single-family residences within the City 17 identified and approved by the Agency. 18 Smaller/Local Developers 19 ANR Industries, Inc., Santa Fe Springs, CA 20 G.F.R. Enterprises, Inc., Upland, CA 21 The Nunez Team/TELACU, Ontario, CA 22 Integrated Non-Profits 23 Mercy Housing California, Los Angeles. CA 24 Stratus Development/Jamboree Housing, Irvine, CA 25 Section 3. This Resolution shall take effect from and after its date of adoption by this 26 Commission. 27 / / / 28 / / / 2 P\Agendas\Re5olutions\Resolulions\200'l\07-06-09 ~SP Intennediarv Services CDC Reso doc 1 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 ENTER INTO A MASTER AGREEMENT WITH EACH OF THE SELECTED INTERMEDIARIES IDENTIFIED THROUGH THE NEIGHBORHOOD STABILIZATION PROGRAM ("NSP") INTERMEDIARY SERVICES RFP PROCUREMENT PROCESS FOR THE PURPOSE OF REHABILITATING AND SELLING AGENCY IDENTIFIED AND APPROVED FORECLOSED AND/OR ABANDONED SINGLE- FAMIL Y RESIDENCES WITHIN THE CITY OF SAN BERNARDINO 2 3 4 5 6 7 8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 9 Development Commission of the City of San Bernardino at a meeting , 2009, by the following vote to wit: Navs Abstain Absent 20 Secretary 21 The foregoing Resolution is hereby approved this 22 23 24 day of ,2009. Patrick J. Morris. Chairperson Community Development Commission of the City of San Bernardino 25 26 Approved as to Form: 27 By: V:~~U Agenc 0 nsel 28 3 P ".A!?endas\Resolutions\ResoluIKms\:!OO9\07_06_09 NSP lnlermediu\ Services CDC Reso doc REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO MASTER AGREEMENT FOR INTERMEDIARY SERVICES [Name of Consultant] This Master Agreement for Intermediary Services (the "Agreement") is made and entered into as of July 6, 2009, by and between the Redevelopment Agency of the City of San Bernardino ("Agency"), a public body, corporate and politic, and , a , ("Consultant"). NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS AND MUTUAL PROMISES CONTAINED HEREIN AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS: 1. Supervision of Consultant. The Agency personnel designated in Exhibit "B" attached hereto (collectively, the "Agency Staff') shall be responsible for the direction of any work to be performed by the Consultant and any other consultants or subconsultants to the Agency under this Agreement. The Consultant shall not undertake any work under the terms of this Agreement, unless instructed to do so by anyone of the Agency Staff. No other Agency personnel is authorized by the Agency to request services from the Consultant pursuant to this Agreement. Approval by anyone of the Agency Staff shall constitute approval by the Agency. 2. Term of Al!:reement. The term of this Agreement shall commence on the date first appearing in this Agreement and will terminate two (2) years after this date, unless earlier terminated as provided in this Agreement. The Agency will have the option to extend the term of this Agreement for three one-year terms at the sole option and discretion of the Agency with the written consent of the Consultant. The Agency reserves the right through the actions of the Interim Executive Director of the Agency to terminate this Agreement at anytime either with or without cause and at the sole convenience of the Agency upon delivery of notice of termination to the Consultant; provided, however, that upon the effective date of any such termination, the Agency shall be responsible to pay and/or reimburse the Consultant for all services, materials and supplies as may have been furnished to the Agency prior to the date of the termination of this Agreement in accordance with the Scope of Services as referenced in Section 3. 3. Scope of Consultant Services. The Agency hereby retains the Consultant to provide the professional consulting services set forth in the Scope of Services attached hereto as Exhibit "A" and incorporated herein by this reference. The Consultant hereby agrees to perform the work set forth in the Scope of Services, in accordance with the terms of this Agreement. The Consultant shall perform the services as set forth on said Scope of Services within the time periods to be identified by the appropriate Agency Staff. The Consultant shall comply with those laws, regulations or ordinances governing fair housing and equal opportunity practices and the abatement of lead-based paint, asbestos and mold practices as required under the Neighborhood Stabilization Program promulgated by the United States Department of Housing and Urban Development ("HUD") pursuant to the provisions of the Housing and Economic -1- P\Agendas\Agenda Attachments\Agenda Anachments\Agenda Anachmenu\Agrmts.Amend 2009\07-06-09I"SP Intermediary Services Muter Agreemen{. FinaLdoo:: Recovery Act of 2008, Public Law 110-289 - July 30, 2008, Title III - Emergency Assistance for the Redevelopment of Abandoned and Foreclosed Homes, Section 2301 et seq., as the same may be hereafter amended, restated or supplemented from time to time, and the Notice of Allocations, Application Procedures, Regulatory Waivers Granted to and Alternative Requirements for Emergency Assistance for Redevelopment of Abandoned and Foreclosed Homes Grantees under the Housing and Economic Recovery Act, 2008 issued by HUD and found at the Federal RegisterIVol. 73, No. 194/Monday, October 6, 2008/Notices, as the same may be hereafter amended, restated or supplemented from time to time (collectively, the "NSP Regulations") 4. Pavment by the Al!ency for Work Performed by the Consultant. A. The Agency shall compensate the Consultant for completion of the services described in the Scope of Services set forth in Exhibit "A" in accordance with the guidelines stipulated in Exhibit "E". B. The compensation designated in subsection 4.A. shall be the "Total Fee" for the performance of the work and the delivery of the final work product materials, as set forth in the Scope of Services for each property acquired directly or indirectly by the Agency for which the services were provided by the Consultant in accordance with this Agreement. The Total Fee shall include, but not be limited to, the materials and salaries of all subcontractors and vendors retained by the Consultant and all employees of the Consultant to perform work pursuant to this Agreement and all general overhead expense of the Consultant inclusive of all costs and expenses incurred for mileage, travel, graphics, telephone, printing, fax transmission, postage, copies and such other expenses related to completion of the work set forth in the Scope of Services. C. The Consultant shall invoice the Agency for work performed by the Consultant under this Agreementat the close of the sales escrow for the property that the Consultant was contracted to rehabilitate, manage and re-sell ("Rehabilitated Property"). D. The Consultant shall submit invoices under this Agreement to: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 E. The Consultant's invoice shall set forth the direct labor and materials incurred in performance of the Scope of Services, the fees described in Exhibit "E" and the finance costs associated with the rehabilitation of the Rehabilitated Property. Each invoice of the Consultant shall be accompanied by copies of all third party invoices for any subcontractors or other consultants hired, any invoices for materials and the bank statement indicating the total finance charges incurred in the performance of the Scope of Services. The Agency shall pay all amounts set forth on the invoices of the Consultant and approved by the authorized Agency Staff who requested the services, upon the close of the sales escrow. -2- P\Agendas\Agenda Attacrunents\Agcnda AttachmenuIAgenda Attachments\Agrmts-Amend 2009\07..()6.()9 Y-;SP Intermediary Services Master Agreement _ Final doc 5. Records Retention. Records, maps, field notes and supporting documents and all other records pertaining to the use of funds paid to the Consultant hereunder shall be retained by the Consultant and shall be made available to the Agency for examination and for purposes of performing an audit for a period of five (5) years from the date of expiration or termination of this Agreement or for a longer period, as required by law. Such records shall be available to the Agency and to appropriate county, state or federal agencies and officials for inspection during the regular business hours of the Consultant. If the Consultant does not maintain regular business hours, then such records shall be available for inspection between the hours of 9 a.m. and 5 p.m. Monday through Friday, excluding federal and state government holidays. In the event of litigation or an audit relating to this Agreement or funds paid to the Consultant by the Agency under this Agreement, such records shall be retained by the Consultant until all such litigation or audit has been resolved. 6. Indemnification. The Consultant shall defend, indemnify and hold harmless the Agency, its officers, employees, representatives, and agents (collectively, the "Indemnified Parties") from and against any and all actions, suits, proceedings, claims, demands, losses, costs and expenses, including audit fees and other audit related costs, legal costs and attorneys fees, for injury or damage of any type claimed as a result of the acts or omissions of the Consultant, its officers, employees, subcontractors and agents, arising from or related to performance by the Consultant of the work required under this Agreement; provided, however, in no event shall the Consultant be liable to the Indemnified Parties in the event that any such actions, suits, proceedings, claims, demands, losses, costs and expenses result from the gross negligence, fraudulent conduct or willful misconduct of the Indemnified Parties, or anyone of them. Moreover, the Consultant shall not be liable to the Indemnified Parties for defects not normally identified. Notwithstanding the foregoing, under no circumstances shall the Consultant be liable to the Indemnified Parties as a result of the failure of the Agency to provide to the Consultant any amounts due to the Consultant in accordance with this Agreement, unless such failure was the result of gross negligence, fraudulent conduct or willful misconduct on the part of the Consultant. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Agreement by the Consultant, that there shall be absolutely no personal liability on the part of any shareholder, director, officer, manager, member or employee of the Consultant with respect to any of the terms, covenants and conditions of this Agreement. The Agency hereby waives all claims, demands and causes of action against the shareholders, directors, officers, members or employees of the Consultant in the event of any breach by the Consultant of any of the terms, covenants and conditions of this Agreement. 7. Insurance. The Consultant shall maintain insurance, as set forth in Exhibit "C" to this Agreement, throughout the term of this Agreement. The Consultant shall remain liable to the Agency pursuant to Section 6 above to the extent the Consultant is not covered by applicable insurance for all losses and damages incurred by the Agency that are caused directly or indirectly -3- P\Agendas\Agcnda Anachments\Agenda Anachments\Agenda Attachments'Agrmts-Amend 2009\07-06-Q9 NSP Intermediary Services Master Agreement _ Final dOG through the actions or inactions, willful misconduct or negligence of the Consultant in the performance of the duties incurred by the Consultant pursuant to this Agreement. The Agency shall maintain insurance against loss or damage to real property under an "all risk" or "special form" property insurance policy, which shall include coverage against ali risks of direct physical loss, including loss by fire, lightning, terrorism, ordinance or law, and other risks normally included in the standard ISO special form (which shall include flood insurance if the property is located within a flood hazard area and which shall include earthquake insurance if the property is located in an area where earthquake insurance is customarily maintained for similar residential property). Such insurance shall be in amounts sufficient to prevent the Consultant from becoming a co-insurer under the policy, and in any event, after application of deductible, in amounts not less than 100% of the full insurable replacement cost. The Consultant shall be named as a ["loss payee"] for amounts invested by the Consultant up until the time that each Rehabilitated Property is sold. 8. Press Releases. Press or news releases, including photographs or public announcements, or confirmation of the same related to the work to be performed by the Consultant under this Agreement shall only be made by the Consultant with the prior written consent of the Agency, which consent shall not be unreasonably withheld. This Section 8 does not apply to the advertising or other promotional materials used by the Consultant to sell the Rehabilitated Properties. 9. Default and Remedies. A. The occurrence of any of the events listed in Exhibit "G", Section A.(1) through (7), shall after the giving of any written notice described therein, constitutes a default by Consultant hereunder ("Event of Default"). B. Upon the occurrence of an Event of Default, the Agency may, III its sole discretion, take any of the actions listed in Exhibit "G", Section B.(1) through (7). C. Any failure or delay by a party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. Except with respect to rights and remed.ies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties under this Agreement are cumulative and the exercise by any 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. D. The Consultant has the right to implement the remedies in Exhibit "G", Section C.(1) and (2), upon the default or failure of the Agency to meet any of its obligations under this Agreement without curing such failure within thirty (30) calendar days after receipt of written notice of such failure from the Consultant specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. -4- PlAgend3s\Agenda AnachmenlSlAgenda Attachmenls\Agenda AnachmentslAgrmls-Amend 2009\07..Q6.09 NSP Intermediary Services Master Agr~ment _ Finaldlll: 10. Termination. A. This Agreement may be terminated by either party for any reason by giving the other party fifteen (15) calendar days' prior written notice. The Agency shall pay the Consultant for all work authorized by the Agency and completed, prior to the effective termination date. B. In the event of a termination of this Agreement, the Consultant shall provide all documents, notes, maps, reports, data or other work product developed in performance of the Scope of Services of this Agreement to the Agency, within ten (10) calendar days after such termination and without additional charge to the Agency. C. In the event of the expiration or early termination of this Agreement for any reason, the Agency shall pay and/or reimburse the Consultant for all services, materials and supplies as may have been furnished to the Agency prior to the date of the termination of this Agreement. 11. Notice. All notices given hereunder shall be in wntmg. Notices shall be presented in person or by certified or registered United States Mail, return receipt requested, postage prepaid or by overnight delivery by a nationally recognized delivery service to the addresses set forth below. Notice presented by United States Mail shall be deemed effective on the third (3'd) business day following the deposit of such Notice with the United States Postal Service. This Section 11 shall not prevent the parties hereto from giving notice by personal service or telephonically verified fax transmission, which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by notifying the other party in writing of a new address for delivering notice to such party. CONSULTANT: Attention: Phone: Fax: 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 12. Compliance with Law. The Consultant shall comply with all local, state and federal laws, including, but not limited to, environmental acts, rules and regulations applicable to the work to be performed by the Consultant under this Agreement. The Consultant shall maintain all necessary licenses and registrations for the lawful performance of the work required of the Consultant under this Agreement. -5- P:\AgendasIAgenda Attachments'Agenda Auachmenu\Agenda Attachmenls\Agrmls-Amend 2009\07-Q6..09 NSP Intennediary Services Master Agreement. Final doc 13. Nondiscrimination. The Consultant shall not discriminate against any person on the basis of race, color, creed, religion, natural origin, ancestry, sex, marital status or physical handicap in the performance of the Scope of Services of this Agreement. Without limitation, the Consultant hereby certifies that it will not discriminate against any employee or applicant for employment because of race, color, religion, sex, marital status or national origin. Further, the Consultant shall promote affirmative action in its hiring practices and employee policies for minorities and other designated classes in accordance with federal, state and local laws. Such action shall include, but not be limited to, the following: recruitment and recruitment advertising, employment, upgrading and promotion. In addition, the Consultant shall not exclude from participation under this Agreement any employee or applicant for employment on the basis of age, handicap or religion in compliance with state and federal laws. 14. Consultant and each Subcontractor are Indenendent Contractors. The Consultant shall at all times during the performance of any work described in the Scope of Services be deemed to be an independent contractor. Neither the Consultant nor any of its subcontractors shall at any time or in any manner represent that it or any of its employees are employees of the Agency or any department, commission or subsidiary entity of the Agency. The Agency shall not be requested or ordered to assume any liability or expense for the direct payment of any salary, wage or benefit to any person employed by the Consultant or its subcontractors and vendors to perform any item of work described in the Scope of Services. The Consultant is entirely responsible for the immediate payment of all subcontractor liens. 15. Severability. Each and every section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 16. Entire Al!reement. This Agreement constitutes the entire agreement between the parties. This Agreement supersedes all prior negotiation, discussions and agreements between the parties concerning the subject matters covered herein. The parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms. 17. Amendment or Modification. This Agreement may only be modified or amended by written instrument duly approved and executed by each of the parties hereto. Any such modification or amendment shall be valid, binding and legally enforceable only if in written form and executed by each of the parties hereto, following all necessary approvals and authorizations for such execution. Any such amendment or modification to be effective as to the Agency must be approved by the official action of the Community Development Commission of the City of San Bernardino ("Commission") acting as the governing body of the Agency. -6- P\Agendas\Agenda AttachmenlslAgenda Anachmenls\Agenda Anachmcnts\Agrmts-Amend 2009\07-06-09 NSP Intermediary Services Master Agreement. Final.doc 18. Governine: Law. This Agreement shall be governed by the laws of the State of California. Any legal action arising from or related to this Agreement shall be brought in the Superior Court of the State of California in and for the County of San Bernardino. 19. Non-Waiver. Failure of either party to enforce any provision of this Agreement shall not constitute a waiver of the right to compel enforcement of the same provision or any remaining provisions of this Agreement. 20. Assil!nment. This Agreement shall be assignable by the Consultant only if the Consultant obtains the prior express written consent of the Agency, which consent may be withheld by the Agency in its sole discretion. Notwithstanding anything to the contrary in this Agreement, no purported assignment of this Agreement shall be effective if such assignment would violate the terms, conditions and restrictions of any applicable governmental restrictions. The Agency's consent to such assignment shall be expressly conditioned upon (i) the assignee's execution of such documents as required by the Agency in its sole discretion, including, without limitation, any and all documents deemed necessary by the Agency to provide for said assignee's assumption of all of the obligations of the Consultant hereunder and under any documents executed by the Consultant in connection herewith, and (ii) the Agency's approval of the financial and credit-worthiness of such proposed assignee and the assignee's ability to perform all of the Consultant's obligations under this Agreement and all documents executed in connection herewith, as may be determined by the Agency at its sole discretion. 21. Representations of Persons Executinl! the Al!reement. The persons executing this Agreement warrant that they are duly authorized to execute this Agreement on behalf of and bind the parties each purports to represent. 22. Execution in Counternarts. This Agreement may be executed in one (I) or more counterparts, each of which will constitute an original. 23. Effectiveness of the Ae:reement as to the Al!encv. This Agreement shall not be binding on the Agency until signed by an authorized representative of the Consultant, approved by the Agency through the Commission and executed by the Interim Executive Director of the Agency or his designee. The Agency shall provide the Consultant with written notice of the approval of this Agreement by the Commission. 24. Conflicts of Interest. The Consultant hereby represents that it has no interests adverse to the Agency, at the time of execution of this Agreement. The Consultant hereby agrees that, during the term of this Agreement, the Consultant shall not enter into any agreement or acquire any interests detrimental or adverse to the Agency. Additionally, the Consultant hereby represents and warrants to the Agency that the Consultant and any partnerships, individual persons or any other party or parties comprising the Consultant, together with each subcontractor who may hereafter be designated to perform services pursuant to this Agreement, do not have and, during the term of this Agreement, shall not acquire any property ownership interest, business interests, professional employment relationships, contractual relationships of any nature or any other financial arrangements relating to the Agency, property over which the Agency has jurisdiction or any members or staff of the Agency that have not been previously disclosed in -7- PlAgendas\Agenda Anachments\Agenda Attachmenls\Agenda Attacbmenls\Agrmts.-Amend 2009\07-06-09 NSP Intermediary Services Master Agreement. Finaldoc writing to the Agency, and that any such property ownership interests, business interests, professional employment relationships, contractual relationships or any nature or any other financial arrangements will not adversely affect the ability of the Consultant to perform the services to the Agency as set forth in this Agreement. The Agency acknowledges and agrees that the foregoing shall not prohibit the Consultant or any affiliates thereof from managing or applying for funds granted by HUD pursuant to the Neighborhood Stabilization Program and allocated or awarded to jurisdictions outside of the City of San Bernardino, California or from receiving a direct grant of funds from HUD pursuant to the Neighborhood Stabilization Program 25. Non-Exclusivitv. This Agreement shall not create an exclusive relationship between the Agency and the Consultant for the services set forth in Exhibit "A" or any similar or related services. The Agency may, during the term of this Agreement, contract with other consultants for the performance of the same, similar or related services as those that may be performed by the Consultant under this Agreement. The Agency reserves the discretion and the right to determine the amount of services to be performed by the Consultant for the Agency under this Agreement, including not requesting any services at all. This Agreement only sets forth the terms upon which any such services will be provided to the Agency by the Consultant, if such services are requested by the Agency, as set forth in this Agreement. 26. Consequential Damal!:es and Limitation of Liabilitv. The Agency and the Consultant agree that except as otherwise provided in this Section 26, in no event will either be liable to the other under this Agreement for any damages including but not limited to, special damages, loss of revenue, loss of profit, operating costs or business interruption losses, regardless of cause, including breach of contract, negligence, strict liability or otherwise. The limitations and exclusions of liability set forth in this Section 26 shall apply regardless of fault, breach of contract, tort, strict liability or otherwise of the Consultant and the Agency, their employees or subconsultants. 27. Business Rel!:istration Certificate. The Consultant warrants that it possesses, or shall obtain immediately after the execution and delivery of this Agreement, and maintain during the period of time that this Agreement is in effect, a business registration certificate pursuant to Title 5 of the City of San Bernardino Municipal Code, together with any and all other licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to be maintained by the Consultant to conduct its business activities within the City. 28. Al!:encv'sAssil!:nment to Non-Profit. The Agency reserves the right to assign its full interest in this Agreement to Affordable Housing Solutions of San Bernardino, a California 501(c)3 organization ("AHS"), or any other entity designated by the Agency. [SIGNATURES ON FOLLOWING PAGE] -8- P\Agendas\Agenda Attachmcnts\Agenda Attaehmenls\Agenda Attachrnenls\Agrrnts--Amend 2009\07-06-09 NSP Intermediary Services Mastt'r Agreement _ Finaldrn:: IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: Timothy J. Sabo, Agency Counsel CONSULTANT , a Dated: By: Name: Title: Dated: By: Name: Title: -9- P\Agendas\Agenda Attacllmellls'Agenda Anachments'Agenda Anachments'Agrmts-Amend 2009\07-06-09 NSP Intermediary Services Master Agr~menl- Final.doc Exhibit " A" Scope of Services 1. Secure Property - Ensure that adequate locked fencing is installed on the perimeter of the site when necessary. Board up windows and outer doorways when necessary in order to prevent looting and vandalism of the property. 2. Property Management - Maintain utilities service, pay for monthly utilities bill(s) during the holding period (the Consultant will be reimbursed for this cost at the close of the home sale), interior and exterior appearance and marketability of the property as needed. 3. Budget Estimate - Provide a total budget estimate for the Agency derived Scope of Work to be written in the Agency's format as reflected in Exhibit "0" (Total Development Cost Pro Forma). This budget estimate shall include all costs associated with the rehabilitation of the property, including labor and materials for rehabilitation work, contingency, construction loan interest, construction loan origination fee, the Property Management Fee, the General Contractor Fee/Overhead, the Sales Commission Fee and the Homebuyer Qualirying Fee, which shall include the cost of enrolling the buyer of the Rehabilitated Property that satisfies all of the NSP requirements to purchase such property ("Qualified Homebuyer") in the NHS!E Homebuyer Education Cours 4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in Exhibit "!" for completion of the various steps involved in the acquisition, rehabilitation and resale of the particular homes that may be presented to the Consultant for preparation of a specific proposal. The time line shall start from the point that the selected Consultant enters into a contract for each specific property with the Agency through the close of sale to the Qualified Homebuyer. Major steps to be included in the timeline are construction period, completion of construction, issuance of the Certificate of Completion, start of marketing period for the home, projected number of weeks needed to identiry a Qualified Homebuyer, escrow period and close of escrow. 5. Project Management Services - Provide project management services for rehabilitation of projects, which shall include but not be limited to: establishing a scope of work, obtaining the financing to pay for all labor and materials, conducting weekly on-site project inspections, managing relationships with all subcontractors, verifying permits and City compliance, administering both conditional and unconditional lien releases, advertising the homes for sale through various local media, partnering with NHSIE to ensure that the prospective Qualified Homebuyer attends the Agency approved homebuyer education course, identirying the prospective Qualified Homebuyers, processing the homebuyer application, coordinating -10- quick close of escrow, expediting lender requirements, managing the Qualified Homebuyer's file for property and lender compliances and optionally, conducting mass mailings targeted at potential home buyers. 6. Marketing - Market the property and the Neighborhood Stabilization Program overall through advertising and published promotional materials. Adhere to the Agency's Affirmative Marketing Guidelines (Please see Exhibit "H"). 7. Identify Homebuyer - Identify prospective Qualified Homebuyers to be approved by the Agency in writing, facilitate adequate homebuyer training and facilitate financing of property which may include Agency Down Payment Assistance, pre-qualify the homebuyer for eligibility to purchase the home and receive the Agency's Down Payment Assistance and collect the following application documents from the Qualified Homebuyer, as specified in Section III, Step I of the Agency's Homebuyer Assistance Program Program Manual ("HAP Manual"): - Last three (3) years tax returns (State and Federal) (1040's) signed with W2's. Two (2) current pay stubs for all household members who are working and will reside in the home. - Verification for Applicant Eligibility Form completely filled out and signed by both the Qualified Homebuyer and Lender. - Application Affidavit - Completely filled out and signed by Qualified Homebuyer. - Copy of Credit Report. - Signed Lead-Base Paint Disclosure Form (pre 1978). The Agency does not supply this form. - Copy of Employment Verification for each Homebuyer. - 2 months of Current Bank Statements. - HAP Worksheet. - 3 year housing history. - Income Certification - Homebuyer Education Certificate from NHSIE -11- In addition, the Consultant is required to make best efforts to ensure that a fixed rate permanent loan secured by a first trust deed ("First Mortgage Loan") is made available to each Qualified Homebuyer at the lowest commercially available rate and most favorable terms. 8. Financing - Secure adequate rehabilitation financing from sources other than the Agency to finance the Agency approved Scope of Work for each property to be undertaken by the Consultant. 9. Escrow - Work with the Agency selected title company and manage the escrow process through closing on behalf of the Qualified Homebuyer, ensure that all Agency loan and property documents are executed, notarized and recorded as needed. 10. Files - Maintain adequate files for each property, ensuring compliance with all Agency and lender requirements, files should include all documents listed in Section III, Step 1 of the HAP Manual, and all documents required to verify compliance with the Affirmative Marketing Guidelines such as homebuyer waiting lists, copies of advertisements published in local and community newspapers, etc. II. Appraisal - Work with Agency designated Appraiser to determine sales price for properties acquired by the Agency or a non-profit corporation controlled by the Agency or otherwise designated by the Agency to assist in the acquisition of such sites within the NSP Target Zone (the Agency and any such non-profit corporation of the Agency to assist in the acquisition of such sites are collectively referred to herein as the "Agency"). 12. Environmental - Ensure that all environmental mitigation measures recommended by the Agency's Environmental Consultant are carried out as part of the rehabilitation work performed on the property. Provide proof of completion of these mitigation measures. 13. Proposal Procedures within the NSP Target Zone (a) Agencv Identified Properties Within the NSP Target Zone (I) These procedures only apply to sites located within the NSP Target Zone that were identified and acquired by the Agency. Upon notification by the Agency, the Consultant shall be invited to submit a proposal for the management, maintenance, rehabilitation and re-sale of a set of properties located within the NSP Target Zone. The Agency will provide the Consultant with a listing, description and the scope of work for the properties to be rehabilitated, including any environmental mitigation measures that must be completed to the extent known by the Agency at such time. The proposal must consist of the following documents: -12- i. Development Pro-Forma (in the form of Exhibit "D") - A development pro- forma must be completed and submitted by the Consultant for each of the properties that the Consultant is contracted to rehabilitate and resell on behalf of the Agency. The costs and fees reflected in the Development Pro Forma serve as the budget for the project, and the Consultant will be expected to complete the work in accordance with that budget. This budget must be approved by the Agency staff prior to the start of any rehabilitation work by the Consultant. n. Project Timeline - The Consultant must indicate their projected schedule with major milestones indicated, for completing the scope of work provided by the Agency and marketing and selling the subject set of properties, in the format shown in Exhibit "I". (2) The Consultant's proposal will be due five (5) working days after the Agency has invited some or all of the selected Intermediary consulting teams to submit proposals. The Agency shall only invite proposals after the Agency acquires title to the subject property (3) Within two (2) working days after the deadline for Consultant proposals, the Agency will notify the Consultant if their firm was selected. The selected Consultant and the Agency will then have three (3) working days to negotiate a final contract for the rehabilitation, management and resale of the subject properties. If after the end of the negotiation period, the Agency and initial selected Consultant do not enter into an agreement, the Agency, at its discretion, may select another Consultant from the pool of other consultants, or it may initiate the proposal selection process once again. (4) If the Consultant and the Agency do reach agreement on the terms for a contract, the Consultant will be required to execute a sub-agreement to this Agreement for the purposes of implementing the program as described in this Agreement for a specific Rehabilitated Property or set of Rehabilitated Properties ("Sub-agreement")prior to the start of construction. The Development Pro Forma and project timeline attached to the budget for each Rehabilitated Property shall serve as the approved budget and schedule of performance for that particular Rehabilitated Property. Any changes to the budget or the schedule of performance must first be pre-approved by the Agency staff. Any budget overruns or schedule delays that are not approved by the Agency staff will give the Agency cause to declare the Consultant in default of their Sub-agreement with the Agency, at the Agency's discretion. (b) Consultant Identified Properties within the NSP Target Zone (I) For properties that are located within the NSP Target Zone, but were first identified by the Consultant (i.e., brought to the attention of the Agency by the Consultant, prior to the Agency's awareness ofthe availability of those properties) the Consultant responsible for the identification of the properties shall have the exclusive right to rehabilitate, manage and re-sell those properties on behalf of the Agency, subject to the following conditions: -13- I. The properties comply with all of the NSP acquisition requirements. ii. The Consultant submits a Development Pro Forma for each identified property in the form of Exhibit "0". 111. The Consultant submits a project timeline for each identified property in the form of Exhibit "I". IV. The acquisition price, development budget and project timeline are acceptable to the Agency staff. v. The Agency and the Consultant are able to negotiate an agreement for the acquisition and rehabilitation of the identified properties within fifteen (IS) days after the Agency has received a written notice from the Consultant of the identified properties. (2) The requirements described in Sections 13(a)(3) and (4), herein, also apply to Consultant Identified Properties that are located within the NSP Target Zone. 14. Procedures for Properties Located Outside the NSP Target Zone For properties located outside the NSP Target Zone, the Agency will commit to provide Qualified Homebuyers with subordinate financing ("Forward Commitment") in the form of Agency Down Payment Assistance Loans for a specific number of properties, subject to the following conditions: I. The properties acquired or to be acquired by the Consultant must be foreclosed properties and located within the City boundaries, but outside the NSP Target Zone. II. The Consultant submits a Development Pro forma for each identified property in the form of Exhibit "0". 111. The Consultant submits a project timeline for each identified property in the form of Exhibit "I". iv. The acquisition price, development budget, project timeline and projected sale price after rehabilitation are acceptable to the Agency staff. v. The Consultant submits to the Agency. a lead-based paint, asbestos and moss assessment for each property and a plan for remediation for the presence of such elements should remediation be required. vi. The Agency and the Consultant are able to negotiate an agreement for the acquisition and rehabilitation of the identified properties within fifteen (15) calendar days after the Agency has received a written notice from the Consultant of the identified properties. -14- vii. No rehabilitation or construction work of any kind is performed on the properties prior to written authorization from one of the Agency staff identified in Exhibit "B" notifying the Consultant of the Agency's Forward Commitment. 15. Closing Requirements A. The Consultant shall cause the closing of the sale of Rehabilitated Properties by following the procedures and complying with the requirements set forth in Exhibit "F" Section A. B. The Consultant shall cause the closing of the Agency Down Payment Assistance Loans in accordance with the procedures and requirements established in Exhibit "F" Section B. 16. Building Standards The Consultant shall adhere to the building standards stipulated in Exhibit "J" when performing any rehabilitation work on the Rehabilitated Property. .15- Exhibit "B" Supervisory Staff Personnel Agencv Staff: Carey K. Jenkins, Director of Housing and Community Development Fernando S. Portillo, Project Manager Emil A. Marzullo, Interim Executive Director -16- EXHIBIT "COO Insurance Requirements The Consultant shall maintain insurance policies issued by an insurance company or companies authorized to do business in the State of California and that maintain during the term of the policy a "General Policyholders Rating" of at least A(v), as set forth in the then most current edition of "Bests Insurance Guide," as follows: (I) Automobile Insurance. The Consultant and each of its subcontractors shall maintain comprehensive automobile liability insurance of not less than One Million Dollars ($1,000,000) combined single limit per occurrence for each vehicle leased or owned by the Consultant or its subcontractors and used in performing work under this Agreement. (2) Worker's Compensation Insurance. The Consultant and each of its subcontractors shall maintain worker's compensation coverage in accordance with California workers' compensation laws for all workers under the Consultant's and/or subcontractor's employment performing work under this Agreement. (3) Liability Insurance. The Agency requires comprehensive liability insurance, including coverage for personal injury, death, property damage and contractual liability, with a limit of at least One Million Dollars ($1,000,000), including products and completed operations coverage. Said insurance shall be primary insurance with respect to the Agency. The Consultant shall require and ensure that the Consultant's contractors include the Agency and any Agency designated non-profit controlled by the Agency and established for the purpose of acquiring properties, as per this Agreement, as additional insureds on all general liability insurance covering work at the Rehabilitated Property. If required by the Agency from time to time, the Consultant shall increase the limits of the Consultant's liability insurance to reasonable amounts customary for owners of improvements similar to the Project. The policy shall contain a waiver of subrogation for the benefit of the Agency. Concurrent with the execution of this Agreement and prior to the commencement of any work by the Consultant, the Consultant shall deliver to the Agency, copies of policies or certificates evidencing the existence of the insurance coverage required herein, which coverage shall remain in full force and effect continuously throughout the term of this Agreement. Each policy of insurance that the Consultant purchases in satisfaction of the insurance requirements of this Agreement shall name the Agency as an additional insured and shall provide that the policy may not be cancelled, terminated or modified, except upon thirty (30) days prior written notice to the Agency. -17 - Failure on the part of Consultant to procure or maintain the insurance coverage required in this Exhibit "C" for fifteen (15) days or longer shall constitute a material breach of this Agreement pursuant to which the Agency may exercise all rights and remedies set forth herein and, at its sole discretion, and without waiving such default or limiting the rights or remedies of the Agency, procure or renew such insurance and pay any and all premiums in connection therewith and all monies so paid by the Agency shall be reimbursed by the Consultant to the Agency upon demand including interest thereon at the rate often percent (10%) per anntqll interest compounded annually from the date paid by the Agency to the date reimbursed by the Consultant. The Agency shall have the right, at its election, to participate in and control any insurance claim adjustment or dispute with the insurance carrier. The Consultant's failure to assert or delay in asserting any claim shall not diminish or impair the rights of the Agency against the Consultant or the insurance carrier. -18- Exhibit "D" Development Pro Forma Template -19- EXHIBIT D TOTAL DEVELOPMENT COST PRO FORMA Acauisiton Costs List Price Discount Purchase Price Closing Costs Subtotal ACQuisition Costs Rehabilitation Costs Direct Rehabilitation Contingency Property Management Fee Subtotal Rehabilitation Costs Indirect Costs Property Taxes Homebuyer Qualifying Fee General Contractor fee/O.H. Sales Commission Sales Closing Costs Sublo/allndirect Costs Financina Costs Construction Loan Interest Loan Origination Fee Subtotal Financina Costs TOTAL DEVELOPMENT COST Sales Price Rehabilitated Market Sales Price (Appraisal) Total Development Cost EOA FINAL SALES PRICE Intermediary Proceeds Property Management Fee General Contractor Fee/O.H. Homebuyer Qualifying Fee Sales Commission Fee Reimbursement Canst. Loan lot Reimbursement Loan Orign. Fee TOTAL INTERMEDIARY PROCEEDS 19. 1. 2. 3 4. 5. 6. 7. 6 9. 10. 11. 12. 13. 14. 15. 16. 17. 16. Exhibit D Listed price before rehab Amount of discount allowed by the seller Difference between List Price and Discount Escrow and Title Fees, etc. Cost estimated to complete scope of work Intermediary fixed fee for managing property Property taxes incurred during holding period Intermediary fixed fee per homebuyer Intermediary Fee: fixed % of Dir. Rehab. + Contingency Intermediary Fee: % of EDA Final Price Escrow, title fees, taxes etc. at sale closing Interest paid on construction/rehab loan Fee for construction/rehab loan Appraisal value of home after rehabilitation Total cost calculated above (No. 10) I. The lower of market sales price or tot. dev. cost From NO.1 above From No.3 above From NO.4 above From NO.5 above From NO.7 above From NO.8 above Total of 13 through 16 above Exhibit "E" Consultant Payment and Reimbursement The Consultant can expect to receive payment of its fees and reimbursement for its eligible costs in accordance with the provisions below. For Rehabilitated Properties that are located within the NSP Target Zone, the Consultant shall be paid four (4) different fees by the Agency. The four (4) fees that the Consultant is eligible to receive are: I. Property Management Fee; 2. General Contractor Fee/Overhead; 3. Homebuyer Qualifying Fee; and 4. Sales Commission Fee. The amount of the fees is established prior to the commencement of each project to rehabilitate a foreclosed home, and is recorded in the Development Pro Forma (Please see Exhibit "D") that the Consultant is required to submit as part of their proposal for the rehabilitation of a set of foreclosed properties. The costs reflected in the Development Pro Forma serve as the budget for the project, and the Consultant will be required to complete the work in accordance with that budget. This budget must be approved by Agency staff prior to the start of any rehabilitation work by the Consultant. Property Management Fee - The Property Management Fee is the compensation received by the Consultant for securing and maintaining the property. Some of the tasks that might be included under this function are such things as, fencing the property, mowing the lawn, clearing debris from the lawn, removal of graffiti, etc. The Property Management Fee may also include any marketing costs incurred by the Consultant, such as online or print advertising and website design, as approved by the Agency. The Consultant will be paid a one-time fee from NSP funding for the performance of this function. In performing this function, the Consultant will be expected to pay for all costs associated with the management and maintenance of the property. The Consultant will not be reimbursed directly for these costs at the close of escrow, but rather the Consultant is advised to factor their maintenance and management costs in their quote for the Property Management Fee. This should allow the Consultant to recover their direct costs in managing the property and eam a satisfactory return for their services. General Contractor Fee/Overhead - The General Contractor Fee/Overhead is the payment received by the Consultant for managing the rehabilitation work. The amount of this fee is calculated as a fixed percentage of the budgeted cost of the rehabilitation work or a fixed fee dollar amount. The costs of the rehabilitation work shall include direct labor and materials involved in the performance of the work plus the budgeted contingency for this work. The financing costs associated with a loan or credit line required for the labor and materials are not included in the rehabilitation cost. Also, any costs incurred in marketing the property are not included in this category. .20- Any additional costs arising from unexpected conditions on the site or other difficulties must be written up as a change order and the Agency staff must sign and approve the change order at the discretion of the Agency staff in order for these costs to be included as part of the overall rehabilitation costs, which would then increase the absolute amount of the General Contractor Fee/Overhead, if the Consultant chooses to utilize a fixed percentage option. Homebuyer Qualifying Fee - This fee is paid to the Consultant for identifying and assisting the Agency in qualifying the prospective home buyer for the acquisition of the subject property. This is a one-time fixed fee. This fee will include the Consultant's reimbursement for any costs associated with the prospective homebuyer's "Homebuyer Education Training" and payments to third party service providers. The Homebuyer Qualifying Fee shall be paid upon the close of escrow for each sale of a Rehabilitated Property to the Qualified Homebuyer Sales Commission Fee - The sales Commission Fee represents the payment received by the Consultant for managing the sale escrow process on behalf of the Qualified Homebuyer. The amount of this fee is calculated as a fixed percentage of the final sales price to the Qualified Homebuyer. The Sale Commission Fee shall be paid upon the close of escrow for each sale of a Rehabilitated Property to the Qualified Homebuyer. Reimbursed Expenses - In addition to the four (4) fees mentioned in this Exhibit "E", within the NSP Target Zone the Consultant is eligible to be reimbursed for their rehabilitation costs and financing costs at the close of escrow, marketing costs are not an eligible reimbursable expense. The costs of the rehabilitation work shall include direct labor and materials involved in the performance of the work plus the budgeted contingency for this work. The financing costs shall include the construction interest cost and any loan origination fees. These are negotiated up front as part of the budgeting process for the project. The interest rate to be charged for the loan or credit line plus the amount of any origination fees shall be subject to negotiation with the Agency staff depending on financial market conditions, but such fees and interest rate must be approved by the Agency prior to the start of the project. The Agency's approval of the Total Development Cost Pro Forma with respect to a property shall constitute approval of the loan fees and interest rate. The Consultant shall only be reimbursed for their financing costs not in excess of the budgeted amount. Only when the project requires change orders that are pre-approved by the Agency staff, will the Agency staff reimburse the Consultant for financing costs that exceed the budgeted amount. .21- Exhibit "F" Closing Requirements A. Sale of Rehabilitated Properties The Consultant shall initiate the sale of a Rehabilitated Property to a Qualified Homebuyer by submitting to the Agency a purchase/sale agreement executed by the prospective homebuyer, verifYing documentation from the prospective buyer with respect to residency, income and the property condition as the Agency, or its designee, may reasonably request (collectively, "Homebuyer Application"). [NOTE: NSP regulations limit the income on NSP funded properties. The Agency should be involved in the negotiation of sales documents of the properties.] The Homebuyer Application shall consist of the following information in the form provided or approved by the Agency: 1. Last Three (3) Years Tax Returns (State and Federal) (1040's) signed with W2's attached. Two (2) Current Pay Stubs for all household members who will reside in the home. 11. A California Association of Realtors California Residential Purchase Agreement fully executed by the prospective homebuyer. lll. Application Affidavit - Completely filled out and signed by the prospective homebuyer. IV. Signed Lead-Base Paint Disclosure Form (for homes built prior to 1978). The Agency does not supply this form. v. Copy of Employment Verification for each Homebuyer. VI. 2 Months of Current Bank Statements. V11. 3 Year Rental History Vlll. Income Certification IX. Homebuyer Education Certificate from NHSIE Within seven (7) calendar days after the receipt of the Homebuyer Application by the Agency, the Agency staff will notifY the Consultant of approval or denial of the prospective homebuyer's eligibility and confirmation of such eligibility by means of a Reservation Letter (all reservations will be automatically valid for sixty (60) calendar days from the date of confirmation) [NOTE: The Agency should execute the sales agreement]. Upon notification by the Agency staff of the prospective homebuyer's eligibility, the Consultant shall open an Escrow account with an Agency approved escrow .22- company (the "Escrow Holder"). The Agency shall furnish the Escrow Holder with executed escrow instructions. The Consultant shall not permit any Escrow to close for the sale of a Rehabilitated Property until and unless the escrows instructions executed by the Agency (and countersigned, if requested by the Agency staff, by the First Trust Deed Lender) have been submitted to the Escrow Holder. As provided in the Agency escrow instructions, Escrow shall also not close unless and until: 1. The Escrow Holder holds the following documents: (I) the Community Redevelopment Law Housing Affordability Covenants and Restrictions executed by the Qualified Homebuyer in favor of the Agency; (2) Agency Notice of Affordability executed by the Qualified Homebuyer; and (3) a grant deed with respect to the Rehabilitated Property purchased by the Qualified Homebuyer, executed and acknowledged by selling entity containing provisions as to those covenants that shall run with the land (the "Agency Grant Deed"); and 2. Proof of hazardous insurance for the full replacement cost of the Rehabilitated Property is provided to the Agency naming the Agency as additionally insured; and 3. Rehabilitation of the Rehabilitated Property shall have been completed in accordance with this Agreement and with all applicable City permits and ordinances, and the City shall have issued a final certificate of occupancy for the Rehabilitated Property; and 4. The Consultant's execution and delivery to the Agency of the Sub- agreement. No Event of Default shall exist under this Agreement or under any agreement or instrument relating to any financing for the Project or the Rehabilitated Property. B. Agency Down Payment Assistance Loans In the case where the prospective homebuyer seeks to reserve Agency Down Payment Assistance Loan assistance to facilitate the purchase of a Rehabilitated Property, the Consultant must include in the Homebuyer Application described in Section A, herein, the following information in the form provided or approved by the Agency: 1. Verification for Applicant Eligibility, completely filled out and signed by the prospective homebuyer and the First Trust Deed Lender; ll. Copy of Credit Report. If the prospective home buyer lacks credit history or scores are lower than 640, please provide secondary credit such as a landlord letter or utility statements; and iii. Agency Down Payment Assistance Loan Worksheet. .23- The obligation of the Agency to fund each Agency Down Payment Assistance Loan under this Agreement shall be expressly subject to satisfaction of all of the conditions stated in Section A, herein, together with the following conditions (collectively, the "Closing Conditions"): (a) The Escrow Holder holds the following documents: 1) the Qualified Homebuyer Agency Down Payment Assistance Loan Agreement executed by the Qualified Homebuyer and the Agency; (2) the Agency Promissory Note executed by the Qualified Homebuyer in favor of the Agency in the same amount as the Agency Down Payment Assistance Loan; and (3) the Agency Subordinate Deed of Trust and Assignment of Rents acknowledged and executed by the Qualified Homebuyer in favor of the Agency; and (b) Receipt by the Agency from the Consultant of such other documents, certifications and authorizations as are reasonably required by the Agency, in form and substance satisfactory to the Agency, evidencing that (i) this Agreement, the Sub-agreement for the Rehabilitated Property, and all other documents given or executed by the Consultant in connection herewith are duly and validly executed by and on behalf of the Consultant and constitute the valid and enforceable obligation of the Consultant pursuant to the respective terms of each of such documents, and (ii) the execution and delivery of this Agreement, the Sub-agreement for the Rehabilitated Property, and all of the other documents given or executed in connection herewith, and the performances thereunder by the Consultant, will not breach or violate any law or governmental regulation nor constitute a breach of or default under any instrument or agreement to which the Consultant may be a party; and] (c) Anyone of the following title companies whether (i) First American Title, (ii) North American Title, (iii) Chicago Title, (iv) Stewart Title or (v) another title insurer approved by the Agency staff ("Title Company") shall have assured the Agency in writing that with respect to each Agency Down Payment Assistance Loan, the Agency shall receive upon recordation of the Agency Subordinate Deed of Trust and Assignment of Rents a CLTA lenders policy of title insurance in the amount of the Agency Down Payment Assistance Loan Note (the "Agency Title Policy") insuring the priority of the Agency Subordinate Deed of Trust and Assignment of Rents, subject only to the First Mortgage Loan and other exceptions approved by the Agency following the Agency's prior review of a preliminary title report for the Rehabilitated Property, which preliminary title report must be received by the Agency no later than seven (7) calendar days after the approval by the Agency of the Homebuyer Application; and (d) The Agency shall have reviewed and approved the Qualified Homebuyer for the Agency Down Payment Assistance Loan in the Agency's sole discretion, and the eligibility conditions in Section LB. and Sections II. B. 1 - 6, 9 - 13 of the HAP Manual shall have been satisfied. Rehabilitated Properties located -24- within the NSP Target Zone are not restricted for sale to first-time homebuyers; therefore, these properties are exempt from the requirements in Section II. B. 1. of the HAP Manual; and No Event of Default shall exist under this Agreement or under any agreement or instrument relating to any financing for the Project or the Rehabilitated Property. (e) No stop notice or mechanics' lien shall have been filed against the Rehabilitated Property unless discharged as provided by law. -25- EXHIBIT "G" Events of Default and Remedies A. Events of Default The occurrence of any of the following shall, after the giving of any notice described therein, constitute a default by Consultant hereunder ("Event of Default"): (I) The failure of Consultant to payor perform any monetary covenant or obligation under the Agreement or any of the documents executed in connection herewith, without curing such failure within ten (10) calendar days after receipt of written notice of such default from the Agency (or from any party authorized by the Agency to deliver such notice as identified by the Agency in writing to the Consultant); (2) The failure of the Consultant to perform any nonmonetary covenant or obligation hereunder or any of the documents executed in connection herewith that results in a material adverse effect to the Agency, without curing such failure within thirty (30) calendar days after receipt of written notice of such default from the Agency (or from any party authorized by the Agency to deliver such notice as identified by the Agency in writing to the Consultant) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency; provided, however, that if any default with respect to a nonmonetary obligation is such that it cannot be cured within a thirty- day period, it shall be deemed cured if the Consultant commences the cure within said thirty-day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default descnbed in Sections (3) through (6) below; (3) The falsity of any representation or breach of any warranty or covenant made by the Consultant under the terms of this Agreement or any documents executed in connection herewith; (4) The Consultant or any constituent member or partner, or majority shareholder, of the Consultant shall (a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (b) fail to payor admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) calendar days after the filing thereof or an answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; -26- (5) If without the application, approval or consent of the Consultant, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of the Consultant or any constituent member or partner, or majority shareholder, of the Consultant, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Consultant or of all or any substantial part of the Consultant's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Consultant, in good faith, the same shall (a) result in the entry of an order for relief or any such adjudication or appointment, or (b) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive calendar days; (6) Voluntary cessation of the construction activities, operation of a Project or the active property management for a continuous period of more than ten (10) calendar days or the involuntary cessation of the above named activities in accordance with this Agreement for a continuous period of more than thirty (30) calendar days; (7) A mechanic's lien or any other type of encumbrance on the Agency's property resulting from the Consultant's failure to fulfill its financial or other contractual obligations with respect to any of its vendors or subcontractors is not removed within ten (10) calendar days after receipt of written notice of such default from the Agency (or from any party authorized by the Agency to deliver such notice as identified by the Agency in writing to the Consultant). B. The Agency Remedies Upon the occurrence of an Event of Default hereunder, the Agency may, in its sole discretion, take anyone or more of the following actions: (1) Cease making any further Agency Down Payment Assistance Loans to Qualified Buyers unless and until the Event of Default (if curable) is cured; (2) Withhold any payment of fees or reimbursement of eligible expenses to the Consultant unless and until the Event of Default (if curable) is cured or this Agreement is terminated in accordance with Section 9 of this Agreement; (3) Demand reimbursement from the Consultant for any payments made to it by the Agency for which the contracted work product was not satisfactorily delivered by the Consultant; (4) Confiscate any material or other work product purchased or produced by the Consultant for the Project; (5) Take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion ofthe Agency, to enforce performance and observance of any obligation, agreement or .27- covenant of the Consultant under this Agreement or under any other document executed in connection herewith; (6) Upon the occurrence of an Event of Default which is occasioned by the Consultant's failure under this Agreement to pay money, the Agency may, but shall not be obligated to, make such payment. If such payment is made by the Agency, shall deposit with the Agency, upon written demand therefore, such sum plus interest at the rate of ten percent (10%) per annum with interest to be compounded annually. In either case, the Event of Default with respect to which any such payment has been made by the Agency shall not be deemed cured until such repayment (as the case may be) has been made by the Consultant; (7) Upon the occurrence of an Event of Default described in Section A.(4) or A.(5) hereof, the Agency shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for any amount owing to the Agency under this Agreement and unpaid and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of the Agency and its counsel to protect the interests of the Agency and to collect and receive any monies or other property in satisfaction of its claim. C. Agency Default and Consultant Remedies Upon fault or failure of the Agency to meet any of its obligations under this Agreement without curing such failure within thirty (30) calendar days after receipt of written notice of such failure from the Consultant specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency, the Consultant may, as its sole and exclusive remedies: (1) Bring an action in equitable relief seeking the specific performance by the Agency of the terms and conditions of this Agreement or seeking to enjoin any act by the Agency which is prohibited hereunder; and/or (2) Bring an action for declaratory relief seeking judicial determination of the meaning of any provision of this Agreement. Without limiting the generality of the foregoing, the Consultant shall in no event be entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or nature from the Consultant arising out of or in connection with this Agreement, and in connection with such waiver the Consultant is familiar with and hereby waives the provisions of Section 1542 of the California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE MA TERIALL Y AFFECTED HIS SETTLEMENT WITH THE DEBTOR." -28- EXHIBIT "H" Affirmative Marketing Requirements In accordance with the California Fair Employment and Housing Act and the policy of the Agency, Agency or its designees must adhere to the following affirmative marketing guidelines in order to create awareness for the general public and certain community groups as to the availability of Rehabilitated Properties designated for lower and/or moderate-income. I. Provide an affirmative marketing plan and procedures for all developments with designated Rehabilitated Properties. Procedures to be used must identify how persons in the housing market area who are not likely to apply for the housing without special outreach shall be informed and made aware of available affordable housing opportunities. The Agency has identified two groups as least likely to apply without special outreach efforts, namely, African-American and Hispanic persons. 2. The Agency or designee's Affirmative Marketing Plan shall consist of a written marketing strategy designed to provide information and to attract eligible persons in the housing market area to the available Rehabilitated Properties without regard to race, color, national origin, sex, religion, marital and familial status, disability, medical condition, sexual orientation, or ancestry. It shall describe initial advertising, outreach (community contacts) and other marketing activities, which will inform potential buyers of the availability of the Rehabilitated Properties. It shall also outline an outreach program which includes special measures designed to attract those groups identified as least likely to apply without special outreach efforts, (because of existing neighborhood racial or ethnic patterns, location of housing or other factors) and other efforts designed to attract persons from the total eligible population. 3. Insert Equal Housing Opportunity logotype, statement or slogan on all written outreach tools (Le., signs, advertisements, brochures, direct mail solicitations, press releases, etc.) 4. In addition to the above, the Affirmative Fair Housing Marketing Plan shall outline: a. Commercial Media to be used (i.e., community newspapers and non-English language newspapers, radio, television, billboards, religious or local real estate publications, etc.). b. Marketing efforts to be used (i.e., brochures, letters, handouts, direct mail, signs, etc.) -29- c. Community contacts to supplement formal communications media for the purpose of soliciting those groups least likely to purchase the available housing without special outreach efforts. They should be individuals or organizations (i.e., service agencies, community organizations, places of worship, etc.) that have direct and frequent contact with those identified as least likely to apply. The contacts should also be chosen on the basis of their positions of influence within the general community and the particular target group. The Agency or its designees must agree to establish and maintain contact with the identified contacts. 5. The Agency or designee shall maintain records of all prospective homebuyer applicants, including their race, ethnicity and gender, reasons for denial of application, placement on a waiting list, etc. 6. The Agency or designee shall also provide for the selection of applicants from a written waiting list in the chronological order of their application, insofar as is practicable, and provide prompt written notification to any rejected applicants of the grounds for any rejection. 7. The Agency or designee shall apply for first trust deed financing to be applied towards the purchase of a Rehabilitated Property from a lender listed on the Agency's Approved Lender List. If the Qualified Homebuyer elects to use a lender that is not on the Agency's Approved Lender List, then the Agency or designee need to demonstrate and document that the Qualified Homebuyer applied and was qualified for a first mortgage loan by an Agency approved lender. -30- l- ra ::I: >< W l- e:( :!!: 0:: o LL.. 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'" c o .., III ~ '" C "" '" III I- o z "" '" III I- EXHIBIT "J" TO THE INTERMEDIARY MASTER AGREEMENT SUB-AGREEMENT CITY OF SAN BERNARDINO THIS SUB-AGREEMENT ("Sub-agreement") is made as of the _day of ,20_, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic ("Agency"), AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO, a 501(c)3 organization ("AHS") and , a California ("Consultant"), for the purpose of rehabilitating, managing and selling the property whose address is indicated below and whose legal description is attached as Exhibit "A" ("Project") in accordance with the terms of that certain Master Agreement dated as of , 20_ entered into between Consultant and the Agency (the "Master Agreement"). Consultant will further attach to this Sub-agreement: (i) a completed version of Exhibit "B" Development Pro Forma, attached herewith, for the above described Project; and (ii) a project timeline in the format of Exhibit "c" for completion of the Project, attached herewith; and (iii) a scope of the rehabilitation work to be completed as part of the Project in a format provided by the Agency. Together these documents shall memorialize the Development Budget required to complete the Project, the Schedule of Performance for the Project and the Scope of Work to be completed as part of the Project, agreed upon by the Consultant, AHS and the Agency. By the execution and submittal of this Sub-agreement, and upon acceptance hereof by the Agency and AHS, the Consultant shall apply all requirements of the NSP program as required by federal law, rules and regulations in addition to all other requirements contained in the Master Agreement. [Continued on Next Page] Sub-agreement I P:\Agendas'.Agenda Attachments\Exhibits'JOO9',07-Q6+09 I"SP Inll:rmediaJ'}' Services Master Agreement - Sub-Agreement (Exhibit 1) doc IN WITNESS WHEREOF, the undersigned have executed this Sub-agreement as of the date first above written. AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Emil A. Marzullo, Interim Executive Director By: Timothy J. Sabo, Agency Counsel CONSULTANT: , a California By: Sub-agreement 2 P \Agendas"Agenda Anachments'.Exhibits'200907-06-09 ~SP Inlermedial)' Services \tasler Agreement - Sub-Agreement {Exhibit J)dlJC