HomeMy WebLinkAboutCDC/2009-37
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RESOLUTION NO. CDC/2009-37
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-
F AMIL Y RESIDENCES WITHIN THE CITY OF SAN BERNARDINO
WHEREAS, the City, pursuant to a duly adopted Resolution on this date authorized the
Redevelopment Agency of the City of San Bernardino (the "Agency") to administer funds received
through the Neighborhood Stabilization Program ("NSP") as shall be received by the City of San
Bernardino ("City"), pursuant to a grant from the United States Department of Housing and Urban
Development ("HUD") and to otherwise provide for and administer the NSP program that shall be
undertaken within the City by the Agency as required of the City under the Funding Approval and
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
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CDC/2009-37
1 WHEREAS, the City recogmzes that the Intermediaries, which are independent of the
2 Agency, will be rehabilitating and selling single-family foreclosed andlor 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 Develooers
19 ANR Industries, Inc., Santa Fe Springs, CA
20 G.F.R. Enterprises, Inc., Upland, CA
21 The Nunez Tcam/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 III
28 III
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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-
FAMILY RESIDENCES WITHIN THE CITY OF SAN BERNARDINO
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
9 Development Commission of the City of San Bernardino at a j oint regular
meeting
10 thereof, held on the 20th day of July
,2009, by the following vote to wit:
11 Commission Members:
Nays
Abstain
Absent
Aves
12 ESTRADA
13 BAXTER
14 BRINKER
15 SHORETT
x
x
x
x
16
KELLEY
JOHNSON
MC CAMMACK
-1L
x
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18
~
'.
--- \
~~ . .
Secretary . .'.
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21 The foregoing Resolution is hereby approved thisc7\/,rday of
22
July
,2009.
23
~--" -
P . J. Morris. CIiail ~C;1 ~on
Community Development Commission
of the City of San Bernardino
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25
26 Approved as to Form:
27 By: ~~vJ /~
Agene oiTn:el
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CDC/2009-37
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MASTER AGREEMENT FOR INTERMEDIARY SERVICES
DE COMMERCIAL AND INDUSTRIAL PROPERTIES, INC.,
DBA THE NUNEZ TEAM
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 DE Commercial and Industrial
Properties, Inc., dba The Nunez Team, a California corporation ("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. SUDervision 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
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and Urban Development ("HUD") pursuant to the provisions of the Housing and Economic
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 RegisterNol. 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. Payment bv the Aeencv for Work Performed bv 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 9240 I
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
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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.
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
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insurance for all losses and damages incurred by the Agency that are caused directly or indirectly
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 all
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.(l) 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, m its sole
discretion, take any of the actions listed in Exhibit "G", Section B.( I) 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 remedies 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.(l) 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.
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10. Termination.
A. This Agreement may be terminated by either party for any reason by giving the
other party fifteen (IS) 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 II 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:
DE Commercial and Industrial Properties,lnc.,
dba The Nunez Team
Attention: Mike Nunez
4120 Concours Street, Suite 100
Ontario, CA 91764
Phone: (909) 815-1522
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. Comnliance 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
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maintain all necessary licenses and registrations for the lawful performance of the work required
of the Consultant under this Agreement.
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 IndeDendent 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. Severabilitv. 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 Aereement. 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.
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18. Governinl! Law. This Agreement shall be govemed by the laws of the State of
Califomia. 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. ReDresentations 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 CounterDarts. This Agreement may be executed in one (1) or
more counterparts, each of which will constitute an original.
23. Effectiveness of the Al!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
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wntmg 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 Dama!!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 Re!!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. A!!encv's Assi!!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]
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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: rfj~~~r
By: ~-:.~
Emil A. Marzullo, Intenm Executive Director
Approved as to Form and Legal Content:
By: "Jvn~ 8 SMo ~ Ufn
Timothy J. Sabo, Agency ounsel
CONSULTANT
DE Commercial and Industrial
DBA The Nunez Team,
Corporation
Properties, Inc.,
a California
Dated: 7/;./0 q
By:
Name:
Title:
Dated:
By:
Name:
Title:
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CDC/2009-37
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 montWy 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 "D" (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 QualifYing 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
NHSIE Homebuyer Education Cours
4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in
Exhibit "1" 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 identify 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, identifYing the
prospective Qualified Homebuyers, processing the homebuyer application, coordinating
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CDC12009-37
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 homebuyers.
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 ofthe Agency's Homebuyer Assistance Program Program Manual ("HAP
Manual"):
- Last three (3) years tax returns (State and Federal) 0040'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
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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 I 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.
11. 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
(1) 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:
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1. Development Pro-Forma (in the form of Exhibit "0") - 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.
11. 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
(1) 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 of the 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:
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I. The properties comply with all of the NSP acquisition requirements.
!I. The Consultant submits a Development Pro Forma for each identified
property in the form of Exhibit "D".
!II. 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 (15)
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.
!I. The Consultant submits a Development Pro forma for each identified property in the
form of Exhibit "D".
!II. The Consultant submits a project timeline for each identified property in the form of
Exhibit"!",
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 mold
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.
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VU. 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
"fl' 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.
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CDC12009-37
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
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EXHIBIT "C"
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) Liabilitv 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.
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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 of ten percent (10%) per annum 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.
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CDC12009-37
Exhibit "D"
Development Pro Forma Template
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EXHIBIT D
TOTAL DEVELOPMENT COST PRO FORMA
Acauisiton Costs
List Price
Discount
Purchase Price
Closing Costs
Subtotal Acauisition Costs
Rehabilitation Costs
Direct Rehabilitation
Contingency
Property Management Fee
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
1. _ Intermediary fixed fee for managing property
Subtotal Rehabilitation Costs
Indirect Costs
Property Taxes
Homebuyer Qualifying Fee
General Contractor Fee/O.H.
Sales Commission
Sales Closing Costs
Subtotal fndirect 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 11.
EDA FINAL SALES PRICE 12.
Intermediary Proceeds
Property Management Fee 13.
General Contractor Fee/O.H. 14.
Homebuyer Qualifying Fee 15.
Sales Commission Fee 16.
Reimbursement Canst. Loan Int. 17.
Reimbursement Loan Origo. Fee 18.
TOTAL INTERMEDIARY PROCEEDS 19.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Exhibit 0
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.1 0)
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 18 above
CDC/2009-37
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:
1. 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 earn 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.
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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 homebuyer 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.
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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.
111. 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 s11pply this form.
v. Copy of Employment Verification for each Hornebuyer.
VI. 2 Months of Current Bank Statements.
V11. 3 Year Rental History
V111. Income Certification
IX. Homebuyer Ed11cation 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 homeb11yer'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 sho11ld 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
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CDC12009-37
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:
I. 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;
11. 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.
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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: I) 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 (il) 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, (il)
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 CL T A 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 I.B. and Sections 11. B. 1 - 6, 9 - 13 of
the HAP Manual shall have been satisfied. Rehabilitated Properties located
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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. I. 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.
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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"):
(J) 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 (J 0) 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 described 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 (J 0) 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;
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(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:
(I) 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 of the
Agency, to enforce performance and observance of any obligation, agreement or
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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:
(I) 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 MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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CDC12009-37
EXHIBIT "H"
Affirmative Marketing Requirements
In accordance with the Califomia 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 (i.e., 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.)
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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.
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CDC/2009-37
EXHIBIT .oJ"
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 CAHS") and , a California
("ConsultanC), for the purpose of rehabilitating,
managing and selling the property whose address is indicated below and whose legal
description is attached as Exhibit "A" ("ProjecC) in accordance with the terms of that
certain Master Agreement dated as of July 6, 2009, 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 the format of Exhibit "0", attached herewith. 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 hereofby 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
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CDC/2009-37
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
Approved as to Legal Form and Content
By:
Timothy J. Sabo, Agency Counsel
CONSULTANT:
a California
By:
Sub-agreement
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CDC/2009-37
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MASTER AGREEMENT FOR INTERMEDIARY SERVICES
JAMBOREE HOUSING CORPORATION
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 Jamboree Housing
Corporation, a public body, corporate and politic ("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. SUDervision 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. ScoDe 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
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CDC/2009-37
Recovery Act of 2008, Public Law 110-289 - July 30, 2008, Title 111 - 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 RegisterNol. 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 bv the Aeencv for Work Performed bv 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.
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CDC12009-37
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. Tlte 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
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CDC12009-37
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 all
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 "0", Section A.(l) 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, In its sole
discretion, take any of the actions listed in Exhibit "0", Section B.(l) 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 remedies 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 "0", Section
C.(l) 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.
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CDC12009-37
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 wrltmg. 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") 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:
Jamboree Housing Corporation
Attention: Laura Archuleta, President
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Phone: (949) 263-8676, xl03
Fax: (949) 263-0647
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.
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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 Indeoendent 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.
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CDC12009-37
18. Govemin!! 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. Assi!!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 assigmnent of this Agreement shall be effective if such assigmnent
would violate the terms, conditions and restrictions of any applicable governmental restrictions.
The Agency's consent to such assigmnent 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 Executin!! the A!!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 Counterparts. This Agreement may be executed in one (1) or
more counterparts, each of which will constitute an original.
23. Effectiveuess of the A!!reement as to the A!!eucv. 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
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wntmg 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's Assil!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
50l(c)3 organization ("AHS"), or any other entity designated by the Agency.
[SIGNATURES ON FOLLOWING PAGE]
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CDC/2009-37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date indicated next to the authorized signatmes of the officers of eaeh of them as appear
below.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public hody, corporate and politic
Dated: yJ2'/2Wf
~
)
/
By:
Emil A. Marzu
Approved as to Form and Legal Content:
By: Vvro-<U&...5QJKJ / -e.X.rvu
Timothy J. 0, Agency/Couosel
CONSULTANT
Jamboree Housing Corporation,
a California 501c(3) public benefit corporation
Dated:
By:
t-z^---
Name:
Title:
P ('f' (-') to cl-e \/--1-
Dated:
By:
Name:
Title:
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CDC/2009-37
Exhibit "A"
Scope of Services
I. 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 Qualifying 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
NHSIE Homebuyer Education Cours
4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in
Exhibit "I" 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 timeline 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 identify 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, identifying the
prospective Qualified Homebuyers, processing the homebuyer application, coordinating
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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 homebuyers.
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
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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 I 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
(1) 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:
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1. Development Pro-Forma (in the form of Exhibit "0") - 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 Consnltant 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
bndget 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 of the 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:
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I. The properties comply with all of the NSP acquisition requirements.
11. The Consultant submits a Development Pro Forma for each identified
property in the form of Exhibit "D".
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 (15)
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.
11. The Consultant submits a Development Pro forma for each identified property in the
form of Exhibit "D".
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 mold
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.
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VU. 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.
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Exhibit "B"
Supervisory Staff Personnel
Agencv Staff:
Carey K. J eokins,
Director of Housing and Community Development
Fernando S. Portillo,
Project Manager
Emil A. Marzullo,
Interim Executive Director
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EXHIBIT "C"
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:
(1) 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) Liabilitv 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.
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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 annum 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.
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Exhibit "D"
Development Pro Forma Template
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EXHIBIT D
TOTAL DEVELOPMENT COST PRO FORMA
Acauisiton Costs
List Price
Discount
Purchase Price
Closing Costs
Subtotal Acauisition Costs
Rehabilitation Costs
Direct Rehabilitation
Contingency
Property Management Fee
Listed price before rehab
Amount of discount allowed by the seller
Difference between List Price and Discount
Escrow and Title Fees, etc.
Subtotal Rehabilitation Costs
1. _ Intermediary fixed fee for managing property
Cost estimated to complete scope of work
Indirect Costs
Property Taxes
Homebuyer Qualifying Fee
General Contractor Fee/O.H.
Sales Commission
Sales Closing Costs
Sublata/lndirect Costs
Financina Costs
Construction Loan Interest
Loan Origination Fee
Subtotaf Financina Costs
TOTAL DEVELOPMENT COST
Sales Price
Rehabilitated Market Sales Price (Appraisal)
Total Development Cost 11.
EDA FINAL SALES PRICE 12.
Intermediarv Proceeds
Property Management Fee 13.
General Contractor Fee/O.H. 14.
Homebuyer Qualifying Fee 15.
Sales Commission Fee 16.
Reimbursement Const. Loan Int. 17.
Reimbursement Loan Orign. fee 18.
TOTAL INTERMEDIARY PROCEEDS 19.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Exhibit D
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)
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 18 above
CDC12009-37
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:
1. 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 "0") 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 earn 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.
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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 homebuyer 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.
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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.
Ill. 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.
Vll. 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
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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, ifrequested 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 : (J) 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;
n. Copy of Credit Report. If the prospective homebuyer 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.
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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: I) 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 CL T A 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 I.B. and Sections 11. B. 1 - 6, 9 - 13 of
the HAP Manual shall have been satisfied. Rehabilitated Properties located
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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.
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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 described 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;
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(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 of the
Agency, to enforce performance and observance of any obligation, agreement or
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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 MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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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 (i.e., 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.)
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CDC/2009-37
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.
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CDC/2009-37
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 July 6, 2009, 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 the format of Exhibit "D", attached herewith. 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
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.
CDC/2009-37
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
Approved as to Legal Form and Content
By:
Timothy 1. Sabo, Agency Counsel
CONSULTANT:
,
a California
By:
Sub-agreement
2
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CDC12009-37
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MASTER AGREEMENT FOR INTERMEDIARY SERVICES
MERCY HOUSING CALIFORNIA
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 Mercy Housing California, a
California non-profit public benefit corporation ("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. Suoervision of Consultant. The Agency personnel designated in Exhibit "B"
attached hereto (collectively, the "Agency Staft") 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. Scooe 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
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CDC/2009-37
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 RegisterNol. 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. Payment by the A!!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.
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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
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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 all
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.(J) 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, m its sole
discretion, take any of the actions listed in Exhibit "G", Section B.(J) 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 remedies 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.(!) 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.
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10. Termination.
A. This Agreement may be terminated by either party for any reason by giving the
olber party fifteen (15) calendar days' prior written notice. The Agency shall pay lbe 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 lbe Agency.
C. In lbe event of lbe 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 lbe Agency prior to the date of lbe termination of this
Agreement.
11. Notice. All notices given hereunder shall be in writing. 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") business day following the deposit of such Notice with the United States Postal
Service. This Section II 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:
Mercy Housing California
Attention: Jane M. Graf
1500 South Grand Avenue, Suite 100
Los Angeles, CA 9001 5
Phone: (213) 743-5820
Fax: (213) 743-5828
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 lbe Consultant under this Agreement.
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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 Independent 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. Severabilitv. 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 A!!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.
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18. Governin!! 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. Assi!!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. Revresentations of Persons Executin!! the A!!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 Countervarts. This Agreement may be executed in one (I) or
more counterparts, each of which will constitute an original.
23. Effectiveness of the A!!reement as to the A!!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
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CDC12009-37
wntmg 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 Dama!!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 Re!!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. A!!encv's Assi!!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]
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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
~/2d<7!
Dated:
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
By: ?: ~~
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By:vunw1, ~ . 0auo IctN\....J
Timothy J. a 0, Agency Counsel
CONSULTANT
Mercy Housing California, a California nonprofit
public benefit corporation
. I'ct ..;J--Pd&-o 9
c
s, 1~/PJ/
Nan-( JIITJE ~ 6 ~
1rL.e711)!?/V I
Title:
Dated:
By:
Name:
Title:
CDC/2009-37
Exhibit "A"
Scope of Services
I. 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 "D" (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 QualifYing 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
NHSIE Homebuyer Education Cours
4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in
Exhibit "I" 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 identify 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, identifying the
prospective Qualified Homebuyers, processing the homebuyer application, coordinating
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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 homebuyers.
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
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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 I 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.
I I. 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) Agency 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:
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1. 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.
11. 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
(J) 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 of the 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:
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1. 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 "D".
Ill. The Consultant submits a project timeline for each identified property in the
form of Exhibit "I".
IV. The acquisition price, development budget and project time line 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 (15)
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:
1. 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.
11. The Consultant submits a Development Pro forma for each identified property in the
form of Exhibit "D".
Ill. The Consultant submits a project time line 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 mold
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.
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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.
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Exhibit "B"
Supervisory Staff Personnel
Agencv Staff:
Carey K. Jenkins,
Director of Honsing and Community Development
Fernando S. Portillo,
Project Manager
Emil A. Marzullo,
Interim Executive Director
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EXHIBIT "c"
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:
(1) 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) Liabilitv 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.
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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 cormection 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 armum interest compounded armually 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.
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Exhibit "D"
Development Pro Forma Template
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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
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
1. _ Intermediary fixed fee for managing property
Subtotal Rehabilitation Costs
Indirect Costs
Property Taxes
Homebuyer Qualifying Fee
General Contractor Fee/O.H.
Sales Commission
Sales Closing Costs
Sublata/lndirect Costs
Financino Costs
Construction Loan Interest
Loan Origination Fee
Subtotal Financina Costs
TOTAL DEVELOPMENT COST
Sales Price
Rehabilitated Market Sales Price (Appraisal)
Total Development Cost 11.
EDA FINAL SALES PRICE 12.
/ntermediarv Proceeds
Property Management Fee 13.
General Contractor Fee/O.H. 14.
Homebuyer Qualifying Fee 15.
Sales Commission Fee 16.
Reimbursement Const. Loan lnt. 17.
Reimbursement Loan Orign. Fee 18.
TOTAL INTERMEDIARY PROCEEDS 19.
2.
3.
4.
5.
6.
7.
8.
9.
10. I
Exhibit D
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 constructionlrehab loan
Fee for construction/rehab loan
Appraisal value of home after rehabilitation
Total cost calculated above (No. 10)
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 18 above
CDC12009-37
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:
1. 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 earn 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 ofthis 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.
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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 homebuyer 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.
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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.
111. 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.
v!. 2 Months of Current Bank Statements.
Vll. 3 Year Rental History
VIll. Income Certification
IX. Homebuyer Education Certificate from NHSlE
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
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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:
I. 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:
l. 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 homebuyer 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.
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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: I) 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 Assigmnent 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 Assigmnent of Rents a CL T A 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
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CDC12009-37
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.
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CDC12009-37
EXHIBIT "G"
Events of Default and Remedies
A. Events of Default
The occurrence of aoy of the following shall, after the giving of aoy notice described
therein, constitute a default by Consultaot hereunder ("Event of Default");
(1) The failure of Consultant to payor perform aoy monetary covenaot
or obligation under the Agreement or aoy 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 aoy party authorized by the Agency to
deliver such notice as identified by the Agency in writing to the Consultant);
(2) The failure of the Consultaot to perform aoy nonmonetary
covenant or obligation hereunder or aoy 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 aoy 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 aod the action required to cure such deficiency;
provided, however, that if aoy 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 aod diligently prosecutes
such cure to completion thereafter. Notwithstaoding aoything herein to the contrary, the
herein described notice requirements and cure periods shall not apply to any Event of
Default described in Sections (3) through (6) below;
(3) The falsity of aoy representation or breach of aoy warraoty or
covenaot made by the Consultaot under the terms of this Agreement or any documents
executed in connection herewith;
(4) The Consultaot or any constituent member or partner, or majority
shareholder, of the Consultaot 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 baokrupt or insolvent or (e)
commence a voluntary case under the Federal baokruptcy 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 ao order for
relief or seeking to take advantage of any insolvency law or file ao answer admitting the
material allegations of a petition filed against it in any baokruptcy or insolvency
proceeding;
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(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 ofthe 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 (J 0)
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:
(I) 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 of the
Agency, to enforce performance and observance of any obligation, agreement or
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CDC12009-37
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:
(I) 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 ] 542 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 MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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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 (i.e., 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.)
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CDC/2009-37
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.
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CDC/2009-37
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 July 6, 2009, 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 the format of Exhibit "0", attached herewith. 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
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P;.A~,ndll,...\g"nd" Attachment' L,hibns :OO~ O'i-O(,-O~ '(SP lnte""edial'Y SeTY;""; M",lcr ..\gTe,menl _ Sub-Agrcc-mcm (hhibit 1).do<:
CDC12009-37
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
Approved as to Legal Form and Content
By:
Timothy J. Saba, Agency Counsel
CONSULT ANT:
a California
By:
Sub-agreement
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CDC/2009.37
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MASTER AGREEMENT FOR INTERMEDIARY SERVICES
GFR ENTERPRISES, INC.
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 GFR Enterprises, Inc., a
California Corporation ("ConsultanC).
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 Aereement. 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 tennination
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 perfonn 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
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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 RegisterNol. 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 bv the Al!encv for Work Performed bv the Consultant.
A. The Ageucy 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.
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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 attomeys 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
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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 all
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.(I) 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 remedies 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.
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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 writing. 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 II 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:
GFR Enterprises, Inc.
Attention: Felizardo Robles, Sr., President
434 North Second Avenue
Upland, CA 91786
Phone: (909) 949-1400
Fax: (909) 949-6091
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. ComDliance 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.
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13. Nondiscrimination. The Consultaot 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 Independent 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. Severabilitv. 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 Aereement. 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.
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18. Governin!! 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. Assi!!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 docmnents
executed by the Consultant in connection herewith, and (il) 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. Reoresentations of Persons Executin!! the A!!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 Counteroarts. This Agreement may be executed in one (I) or
more counterparts, each of which will constitute an original.
23. Effectiveness of the Al!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
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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's Assil!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]
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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
Dated: f/;;L~(Fl
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
~~
By:
Emil A. Marzu, . xecutive Director
Approved as to Form and Legal Content:
By:
Timothy J.
CONSULTANT
GFR Enterprises, Inc., a California Corporation
Dated: J(/~Y 03) ZDD,?
By:
7f~
Name: F.Et./a.A-l'liU /?.lJIJJ..L5. S'II?
Tille: ,o/Z,Ls,tlr",r
Dated:
By;--""
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CDC/2009-37
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 "D" (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 Qualifying 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
NHSIE Homebuyer Education Cours
4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in
Exhibit "I" 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 timeline 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 identify 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, identifying the
prospective Qualified Homebuyers, processing the homebuyer application, coordinating
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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 homebuyers.
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
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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 I 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:
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1. 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.
ll. 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 of the 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:
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I. The properties comply with all of the NSP acquisition requirements.
11. The Consultant submits a Development Pro Forma for each identified
property in the form of Exhibit "0".
iii. 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 (15)
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.
11. The Consultant submits a Development Pro forma for each identified property in the
form of Exhibit "0".
Ill. 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 mold
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.
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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.
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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
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EXHIBIT "C"
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:
(1) 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 Comoensation 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) Liabilitv 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.
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Failure on the part of Consultant to procure or maintain the insurance coverage
required in this Exhibit "C" for fifteen (\ 5) 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 of ten percent (10%) per annum 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.
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Exhibit "D"
Development Pro Forma Template
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EXHIBIT D
TOTAL DEVELOPMENT COST PRO FORMA
Acauisiton Costs
List Price
Discount
Purchase Price
Closing Costs
Subtotal Acauisition Costs
Rehabilitation Costs
Direct Rehabilitation
Contingency
Property Management Fee
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
1. _ Intermediary fixed fee for managing property
Subtotal Rehabilitation Costs
Indirect Costs
Property Taxes
Homebuyer Qualifying Fee
General Contractor Fee/O.H.
Sales Commission
Sales Closing Costs
Subtotal Indirect 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 11.
EDA FINAL SALES PRICE 12.
Intermediarv Proceeds
Property Management Fee 13.
General Contractor Fee/O.H. 14.
Homebuyer Qualifying Fee 15.
Sales Commission Fee 16.
Reimbursement Const. Loan Int. 17.
Reimbursement Loan Orign. Fee 18.
TOTAL INTERMEDIARY PROCEEDS 19.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Exhibit D
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)
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 18 above
CDC/2009-37
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:
1. 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 earn 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.
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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 homebuyer 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.
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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.
111. 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.
v!. 2 Months of Current Bank Statements.
vu. 3 Year Rental History
V111. 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
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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: (1) 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;
11. Copy of Credit Report. If the prospective homebuyer 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.
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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 CL T A 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
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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.
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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"):
(1) 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 described 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;
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(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:
(I) 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 of the
Agency, to enforce performance and observance of any obligation, agreement or
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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; andlor
(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 MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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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 (i.e., 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.)
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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 orgaoizations (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.
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CDC12009-37
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
("ConsultanC), 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 July 6, 2009, entered into between Consultant and
the Agency (the "Master AgreemenC).
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 the format of Exhibit "D", attached herewith. 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 Ana,-hmcnl> hhihi\s :'009 0'7.ll6.09 !\SP Intermediary Sen.ice, \-laslor AgrCC'Tll"nl _ Suh_Agreement (bhibit J).d~c
CDC/2009-37
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
Approved as to Legal Form and Content
By:
Timothy J. Sabo, Agency Counsel
CONSULTANT:
,
a California
By:
Sub-agreement
2
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CDC/2009-37
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
MASTER AGREEMENT FOR INTERMEDIARY SERVICES
ANR INDUSTRIES, INC.
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 ANR Industries, Inc., a
California corporation ("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
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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 RegisterNol. 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 bv the A!!encv for Work Performed bv 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 ofthe sales escrow.
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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
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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 all
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 remedies 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.
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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 wrltmg. 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") 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:
ANR Industries, Inc.
Attention: George Jordan, Vice President
10702 Hathaway Drive, Unit 1
Santa Fe Springs, CA 90670
Phone: (562) 777-7807
Fax: (562) 777-7808
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.
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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. Severabilitv. 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 A!!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.
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18. Governin!! 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. Assi!!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 (il) 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 Executin!! the A!!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 Counterparts. This Agreement may be executed in one (I) or
more counterparts, each of which will constitute an original.
23. Effectiveness of the A!!reement as to the A!!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 ofthis 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
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CDC/2009-37
wntmg 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 Dama!!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 Re!!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. A!!encv's Assi!!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]
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CDC/2009-37
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
Dated:J !Z/U01
Redevelopment Agency of the City of San
Bernardino, a public body, corporate and politic
c=~
By: ?.... '
Emil A. Marzullo, Intenm Executive Director
Approved as to Form and Legal Content:
By: .:1"r~ g- , 0cU-,-v I '" trn
Timothy J. alio, Agency/Counsel
CONSULTANT
ANR Industries, Inc., a California Corporation
Dated:
u !Z/S/(JD;
By: .~ ,-
Name: G""'~ ~~
Title: \.( I U. Pvc.SI ,~'--O
Dated:
By:
Name:
Title:
CDC/2009-37
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 Qualifying 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
NHSIE Homebuyer Education Cours
4. Project Timeline - Provide an estimated timeline in the Agency's format as reflected in
Exhibit "I" 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 timeline 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 identify 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, identifying the
prospective Qualified Homebuyers, processing the homebuyer application, coordinating
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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 homebuyers.
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
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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 I 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.
I I. 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:
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1. Development Pro-Forma (in the form of Exhibit "0") - 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.
11. 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
(1) 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 of the availability ofthose 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;
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1. The properties comply with all of the NSP acquisition requirements.
11. 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 (15)
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 conunit to provide
Qualified Homebuyers with subordinate financing ("Forward Conunitment") in the form of
Agency Down Payment Assistance Loans for a specific number of properties, subject to the
following conditions:
1. 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.
11. The Consultant submits a Development Pro forma for each identified property in the
form of Exhibit "0".
Ill. 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 mold
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.
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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.
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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
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CDC12009-37
EXHIBIT "c"
Insurance Requirements
The Consultant shall maintain insurance policies issued by an insurance company or
companies authorized to do business in the State of Califomia 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 ($1,000,000) combined single limit per occurrence for each
vehicle leased or owned by the Consultant or its subcontractors and used in performing
work under this Agreement.
(2) Worker's Compensation Insurance. The Consultant and each of its
subcontractors shall maintain worker's compensation coverage in accordance with
California workers' compensation laws for all workers under the Consultant's and/or
subcontractor's employment performing work under this Agreement.
(3) Liabilitv Insurance. The Agency requires comprehensive liability
insurance, including coverage for personal injury, death, property damage and contractual
liability, with a limit of at least One Million Dollars ($ I ,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.
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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 of ten percent (10%) per annum 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.
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Exhibit "D"
Development Pro Forma Template
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EXHIBIT D
TOTAL DEVELOPMENT COST PRO FORMA
Acauisilon Costs
List Price
Discount
Purchase Price
Closing Costs
Subtotal Acauisition Costs
Rehabilitation Costs
Direct Rehabilitation
Contingency
Property Management Fee
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
1. _ Intermediary fixed fee for managing property
Subtotal Rehabilitation Costs
Indirect Costs
Property Taxes
Homebuyer Qualifying Fee
General Contractor Fee/O.H.
Sales Commission
Sales Closing Costs
Sublota/lndirect Costs
Financina Costs
Construction Loan Interest
Loan Origination Fee
Subtotal Financina Costs
TOTAL DEVELOPMENT COST
Safes Price
Rehabilitated Market Sales Price (Appraisal)
Total Development Cost 11.
EDA FINAL SALES PRICE 12.
Intermediarv Proceeds
Property Management Fee 13.
General Contractor Fee/O.H. 14.
Homebuyer Qualifying Fee 15.
Sales Commission Fee 16.
Reimbursement Const. Loan Int. 17.
Reimbursement Loan Orign. Fee 18.
TOTAL INTERMEDIARY PROCEEDS 19.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Exhibit D
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)
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 18 above
CDC/2009-37
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:
1. 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 "0") 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 earn 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.
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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.
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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 ftmded 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:
I. 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.
II. A California Association of Realtors California Residential Purchase
Agreement fully executed by the prospective home buyer.
111. 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
V111. 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
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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, ifrequested 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:
I. 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;
n. Copy of Credit Report. If the prospective homebuyer 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.
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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: I) 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 (il) 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, (il)
North American Title, (ili) 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 I.B. and Sections II. B. I - 6, 9 - 13 of
the HAP Manual shall have been satisfied. Rehabilitated Properties located
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CDC12009-37
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.
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CDC12009-37
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"):
(1) 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 nomnonetary 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 described 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;
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CDC/2009-37
(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:
(I) 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 of the
Agency, to enforce performance and observance of any obligation, agreement or
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CDC/2009-37
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 ofthe 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] 542 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 MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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CDC12009-37
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 affmnative 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.
1. Provide an affirmative marketing plan and procedures for all developments with
designated Rehabilitated Properties. Procedures to be used must identity 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 (i.e., 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.)
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CDC/2009-37
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.
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CDC/2009-37
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CDC12009-37
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 July 6, 2009, 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 the format of Exhibit "D", attached herewith. 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
J':.Agendas Agcnd" Att"enm.m, Exhihits :004 07-0&-0') I\SP Imerl1lcdi,,,y Sory;c., Mo,t" Agreement _ Sub-Agreement IE~hibit Jl.doc
CDC12009-37
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
Approved as to Legal Form and Content
By:
Timothy J. Sabo, Agency Counsel
CONSULTANT:
a California
By:
Sub-agreement
2
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