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RESOLUTION (ID #3480) DOC ID: 3480 B
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Agreement/Contract Amendment
From: Allen Parker M/CC Meeting Date: 09/15/2014
Prepared by: Brandon Mims, (909) 384-5122
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the
Execution of Amendment Number 2 to the Regulatory Agreement and Declaration of Restrictive
Covenants in Place at "Tuscany Apartments" (2225 Pumalo Street). (#3480)
Current Business Registration Certificate: Not Applicable
Financial Impact:
There is no financial impact to the City by approving this agreement.
Motion: Adopt the Resolution.
Synopsis of Prior Council Action
On May 1, 1996 the Community Development Commission approved issuance of bonds totaling
$7,000,000 for the purpose of providing permanent financing for Silverwood Apartment Project
and repaying a prior loan for certain other rehabilitation costs associated with the project.
On April 21, 2003 the Community Development Commission approved a first amendment to the
May 1, 1996 Regulatory Agreement authorize the sale of that property to 328/AF XXX, LLC.
On August 4, 2014, the Council adopted Amendment #2 to the existing low-income regulatory
agreement to allow Tuscany Apartments to extend the duration of the low-income restrictions for
another 15 years.
Backl1round
MG Tuscany Apartments, L.P. ("Owner/Operator") owns and operates the subject property, 328
units (66 affordable units) at 2225 East Pumalo Street as the "Tuscany Apartments." In addition,
the firm also owns and operates "Little Zion Manor" and "Sycamore Ridge" in the City of San
Bernardino,both are residential housing projects.
Pursuant to the regulatory agreement in place at the Tuscany Apartments, Section 2, "Term of
Restrictions and Agreement," and more specifically Section Nos. 2(a), 2(b), 2(c) and 2(d) of the
original regulatory agreement, the affordable housing restrictions at the subject apartment
complex expire when the bonds are paid off or 15 years from the original date of issuance. Since
the original 15-year term lapsed several years ago, the survival of the regulatory agreement is
conditioned upon the life of the bond financing. Once the bond used to finance the project is
paid off, the requirement to provide 66 units of affordable housing is eliminated;all of the units
at the property could be converted to market rate units.
Updated: 9/9/2014 by Jolena E. Grider B Packet Pg. 223
5.0
3480
To preserve the 66 affordable units at the Tuscany Apartments, the owner is proposing to amend
sections 2(a) and 2(b) of the existing regulatory agreement to read as follows:
Section 2. Term of Restrictions and Agreement
(a) Occupancy Restrictions. Occupancy Restrictions as defined and cited in Section 4 shall
commence on August 1, 2014 and shall end on the date which is 15 years from the
commencement date.
(b) Rental Restrictions. The term of the Rental Restrictions as defined and cited in Section 5
shall commence and end according to the term of the Occupancy Restrictions set forth in
Section 2(a).
Statement of the Issue
At the request of the owner, staff has prepared this item to adjust the agreement adopted on
August 4, 2014 as follows (the revised agreement is attached):
1. The name of the property owner and the signature block were updated to reflect the name
of the entity that owns the property(CF Aventerra, LP, a California limited partnership).
Recommendation
Adopt the attached Resolution.
City Attorney Review:
Supporting Documents:
Tuscany Regulatory Agreement Resolution Final (DOC)
Third Tuscany Agreement-Amendment No. 2 (DOCX)
Original Tuscany Agreement (PDF)
Second Tuscany Agreement-Prior Amendment No. 2 Approved by Council (PDF)
Updated:9/9/2014 by Jolena E.Grider B Packet Pg. 224
5.C.a
1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT
3 NUMBER 2 TO THE REGULATORY AGREEMENT AND DECLARATION OF
4 RESTRICTIVE COVENANTS IN PLACE AT "TUSCANY APARTMENTS"(2225
PUMALO STREET) 2
5
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6 WHEREAS, the Issuer and U.S. Bank National Association, successor by merger to
7 U.S. Bank Trust National Association formerly known as First Trust of California, National
8
Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1,
9
10 1996(the "Indenture"), in connection with the issuance of the Issuer's $7,000,000 Variable ¢
_
11 Rate Demand Multifamily Housing Revenue Bonds (Silverwoods Apartments Project) Series
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12 1996 (the "Bonds"); and
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13 WHEREAS, the Issuer loaned the proceeds of the Bonds to Magellan Silverwoods It
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Partnership, an Arizona general partnership (the "Original Borrower"),pursuant to the original u
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16 Loan Agreement, dated as of May 1, 1996 (the "Loan Agreement"), among the Issuer, the
17 Trustee and the Original Borrower; and
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18 WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other E
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19 costs associated with the construction and development of a multi-family residential rental Q
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housing project originally known as Silverwoods Apartments and now known as Tuscany c
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Apartments (the "Project") located in San Bernardino, California; and
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23 WHEREAS, the Issuer, Original Borrower and Trustee entered into that certain N
24 Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory
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25
Agreement") which was recorded against the Project in the records of the office of the San
26 Bernardino County Recorder as Instrument Number 19960251735 as a requirement to the a
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issuance of the Bonds; and
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Packet Pg. 225
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I WHEREAS, the Project was sold to San Bernardino 328/AF XXX, LLC, a California
2 limited liability company in 2001, and San Bernardino 328/AF XXX, LLC caused the
3 delivery to the Trustee of a letter of credit providing credit support for the Bonds issued by
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Wells Fargo Bank,National Association, to replace the existing letter of credit issued by Bank
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One, Arizona,NA; and o
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7 WHEREAS, the Project was acquired by MG Tuscany Apartments LP in 2003, a
8 California limited partnership (the 'Borrower") and the Borrower has caused the delivery to
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9 the Trustee of a direct pay in transferable credit enhancement instrument (the "Credit
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10 Facility") issued by FANNIE MAE, a corporation organized and existing under the Federal
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11 National Mortgage Association Charter Act (12 USC Section 1716 et seq.) (the "Credit
12
Facility Provider") to replace the existing letter of credit issued by Bank One, Arizona,NA. co
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14 WHEREAS,the Project was acquired by Tuscany Holdings, LLC, a California limited
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15 liability company, 2006; and o
16 WHEREAS,the Project was acquired by CF Aventerra, L.P., a California limited o
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17 partnership ("Owner") in 2007; and
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18 WHEREAS,to preserve 66 affordable housing units, Owner has requested to amend
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the Regulatory Agreement in place to allow for extension of the affordability covenants, and
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21 WHEREAS, Owner intends to transfer the Project to CF Tuscany 2014, LP,which is
22 permitted under Section 7 of the Regulatory Agreement without an assignment and
23 assumption agreement by virtue of the fact that CF Tuscany 2014, LP will have 100%
24 identical ownership as Owner.
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1 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
FOLLOWS:
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SECTION 1. That the City Manager is hereby authorized to execute Amendment E
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5 Number 2 to the Regulatory Agreement, a copy of which is attached hereto as Exhibit "A" Q
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6 and incorporated by this reference.
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SECTION 2. That the Regulatory Agreement in place at 2225 Pumalo Street (Tuscany
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Apartments)be amended to provide the City's acknowledgement that CF Tuscany 2014, LP is 0
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a permitted transferee of the Project.
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11 SECTION 3. This Resolution shall take effect from and after its date of adoption by M
12 the Mayor and Common Council.
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S.C.a
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE EXECUTION OF AMENDMENT
2 NUMBER 2 TO THE REGULATORY AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS IN PLACE AT "TUSCANY APARTMENTS"(2225
3 PUMALO STREET)
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor Q
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and Common Council of the City of San Bernardino at a meeting
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thereof, held on the day of , 2014,by the following vote, to wit:
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9 Council Members: AYES NAYS ABSTAIN ABSENT t
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10 MARQUEZ
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BARRIOS
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VALDIVIA co
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14 SHORETT
15 NICKEL o
16 JOHNSON N
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MULVIHILL =
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20 Georgeann Hanna, City Clerk L
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21 The foregoing resolution is hereby approved this day of 2014.
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23 R. Carey Davis, Mayor
24 City of San Bernardino
25 Approved as to form:
26 Gary D. Saenz, City Attorney a
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By:
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5.C.b
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
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City of San Bernardino )
300 N. "D" Street, Sixth Floor )
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San Bernardino, CA 92418 )
Attention: City Attorney ) E
The document is exempt from the payment of Q
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a recording fee pursuant to Government o
Code§27383.
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AMENDMENT NO. 2 TO THE REGULATORY AGREEMENT FOR THE TUSCANY
APARTMENTS LOCATED AT 2225 PUMALO STREET E
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This Amendment No. 2 to the Regulatory Agreement for the Tuscany Apartments located Q
at 2225 Pumalo Street is dated July 21, 2014 between the City of San Bernardino (the "City")
and C.F. Aventerra, L.P., a California limited partnership (the "Owner").
WITNESSETH: o
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WHEREAS, the Issuer and U.S. Bank National Association, successor by merger to U.S.
Bank Trust National Association formerly known as First Trust of California, National o
Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1, Z
1996(the "Indenture"), in connection with the issuance of the Issuer's $7,000,000 Variable Rate W
Demand Multifamily Housing Revenue Bonds (Silverwoods Apartments Project) Series 1996 =
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(the "Bonds"); and
WHEREAS, the Issuer loaned the proceeds of the Bonds to Magellan Silverwoods
Partnership, an Arizona general partnership (the "Original Borrower"), pursuant to the original
Loan Agreement, dated as of May 1, 1996 (the "Loan Agreement"), among the Issuer, the Q
Trustee and the Original Borrower; and
WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other costs
associated with the construction and development of a multi-family residential rental housing
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project originally known as Silverwoods Apartments and now known as Tuscany Apartments
(the "Project") located in San Bernardino, California, and more particularly described in the legal w
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description attached hereto as Exhibit A; and E
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WHEREAS, the Issuer, Original Borrower and Trustee entered into that certain
Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") Q
which was recorded against the Project in the records of the office of the San Bernardino County
Recorder as Instrument Number 19960251735 as a requirement to the issuance of the Bonds; and
051022\642086Sv2 1
Packet Pg. 229
WHEREAS, the Project was sold to San Bernardino 328/AF XXX, LLC, a California
.:.. limited liability company in 2001, and San Bernardino 328/AF XXX, LLC caused the delivery to
the Trustee of a letter of credit providing credit support for the Bonds issued by Wells Fargo
Bank, National Association, to replace the existing letter of credit issued by Bank One, Arizona,
NA; and
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WHEREAS, the Project was acquired by MG Tuscany Apartments LP in 2003, a L
California limited partnership (the 'Borrower") and the Borrower caused the delivery to the a
Trustee of a direct pay in transferable credit enhancement instrument (the "Credit Facility") o
issued by FANNIE MAE, a corporation organized and existing under the Federal National
Mortgage Association Charter Act (12 USC Section 1716 et seq.) (the "Credit Facility Provider")
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to replace the existing letter of credit issued by Bank One, Arizona,NA; and
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WHEREAS, the Project was acquired by Tuscany Holding, LLC, a California limited E
liability company, in 2006; a
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WHEREAS, the Project was acquired by Owner in 2007
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WHEREAS, Owner intends to transfer the Project to CF Tuscany 2014, LP,which is
permitted under Section 7 of the Regulatory Agreement without an assignment and assumption
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agreement by virtue of the fact that CF Tuscany 2014, LP will have 100% identical ownership as M
Owner; N
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WHEREAS, to preserve 66 affordable housing units, Owner has requested to amend the
Regulatory Agreement in place to allow for extension of the affordability covenants.
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NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto Q
agree as follows:
1. Sections 2a and 2b are stricken from the agreement and replaced entirely with the
following new text: a
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"Section 2. Term of Restrictions and Agreement y
a) Occupancy Restrictions. Occupancy Restrictions as defined and cited in Section 4
shall commence on August 1, 2014 and shall end on the date which is 15 years from
the commencement date.
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b) Rental Restrictions. The term of the Rental Restrictions as defined and cited in 2
Section 5 shall commence and end according to the term of the Occupancy Q
Restrictions set forth in Section 2(a).
051022\6420865v2 2
Packet Pg. 230
2. The City acknowledges and agrees that CF Tuscany 2014, LP, is a permitted
transferee of the Project.
IN WITNESS THEREOF,the parties hereto have caused this Amendment No. 2 to be
executed by and through their respective authorized officers, as of the date first above written.
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City of San Bernardino
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By: v
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Allen J. Parker, City Manager D
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APPROVED AS TO FORM:
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Gary D. Saenz, City Attorney _
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Owner Z
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CF Aventerra, L.P.,
a California limited partnership
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By: AOF/Pacific Aventerra, LLC,
a Delaware limited liability company
its Managing General Partner
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By: AOF/Pacific Affordable Housing Corp.,
a California nonprofit public benefit corporation,
its Manager 3
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By:
Raman Nayar, President
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By: Aventerra Management, LLC
a Delaware limited liability company a
its Co-General Partner Q
By.
Naty Saidoff, Manager
051022\6420865v2 3
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EXHIBIT A
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STATE OF CALIFORNIA )
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COUNTY OF )
On September , 2014 before me,
(insert name and title of the officer),
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personally appeared , who proved to me on the w
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within a
instrument and acknowledged to me that he/she/they executed the same in his/her/their c
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
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WITNESS my hand and official seal. Q
Signature: �-
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STATE OF CALIFORNIA )
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COUNTY OF )
On September 2014 before me,
(insert name and title of the officer), _
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personally appeared ,who proved to me on the L
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within Q
instrument and acknowledged to me that he/she/they executed the same in his/her/their o
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument. a,
I certify under PENALTY OF PERJURY under the laws of the State of California that the Y
foregoing paragraph is true and correct.
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WITNESS my hand and official seal. Q
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REGULATORY AGREEMENT AND DECLARATION OF Q
RESTRICTIVE COVENANTS ,
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Among
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MAGELLAN SILVERWOOD & CROSS CREEK GENERAL PARTNERSHIP,
an Arizona General Partnership, _
REDEVELOPMENT AGENCY OF t
THE CITY 0- SPIN BERNARDINO, CALIFORNIA Q
and
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FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION,
as Trustee o
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Relating to
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$7, 000, 000 m
Redevelopment Agency of the City of San Bernardino W
Multifamily Housing Revenue Bonds a
(Silveri ocd Apartments Project) _
1996 Series
Dated as of May 1, 1996 ~
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(This document was recorded on May 21, 1996 as Document No . 96- Q
0177770 and is being rerecorded in order to correct certain
typographical errors]
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TABLE OF CONTENTS
Section Paae
Section 1 . Definitions . . . . . . . . . . . . . . . . . . . . 2
Section 2 . Term of Restrictions and Agreement . . . . . . . . 3
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Section 3 . Project Restrictions, . . . . . . . . . . . . . . . 4
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Section 4 . OccMl?ancy Restrictions . . . . . . : . . . . . . . 6
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Section 5 . Rental Restrictions . . . . . . . . . . . . . . . . 9
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Section 6. Compliance with Law, Code and Rules . . . . . . . . 9
Section 7 . Transfer Restrictions . . . . . . . . . . . . . . 10
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Section 8 . Enforcement . . . . . . . . . . . . . . . . . . . 10 4
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Section. 9 . Indemnification . . . . . . . . . . . . . . . 11
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Section 10 . Miscellaneous . 12
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EXHIBIT "A" Form of Certification of Tenant Eligibility
EXHIBIT "B" Form of Certificate of Continuing Program
Compliance
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EXHIBIT "C" Tire Land a,
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SBEO\0156\DOC\18.2
7\10\96. 230 law
REGULATORY AGREEMENT AND DECLARATION
OF RESTRICTIVE COVENANTS
This REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS dated as of May 1, 1996 (including any amendments or
supplements hereto, the "Regulatory Agreement" ) , among Magellan
Silverwood & Cross Creek General Partnership, an Arizona General E
Partnership (including permitted successors and assigns, the a
"Borrower") , the Redevelopment Agency of The City of San Bernardino
(including any successor hereunder, the "Issuer" ) and First Trust
of California, National Association, as trustee (including any
successor hereunder, the "Trustee") ,
WITNESSETH:
WHEREAS, the Issuer is a public body corporate and E
politic, duly organized and validly existing under and pursuant to
Division 24, Part 1, Chapter 1, of the Health and Safety Code C
(commencing with Section 33000) (the "Act") of the State of
California (the "State") , and is authorized pursuant to the Law to �
issue revenue bonds for the purpose of assisting in the financing 3
of multifamily rental housing projects for low- and moderate-income ~
individuals and families; co
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WHEREAS, the Borrower, an Arizona General Partnership
duly organized and existing under the laws of the State of Arizona, a
previously obtained temporary financing for the acquisition, E
construction and installation of a 328-unit multifamily rental
'rousing project located within the City of San Bernardino (the
"Project" ) tor occupancy in Tart (at least 20%) bby in ivy ua s or �f\` �t
fame ies o low- or moderate--income within the me,anzng or an _ U�
the period required by Section 142 (d) of the Internal Revenue OM
6t 19 as amended (the "Code" ) , in the form of a loan from Bank
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One Columbus, NA (the "Prior Loan" ) ; and =
WHEREAS, the Borrower has requested the Issuer to issue
its variable Rate Demand Multifamily Housing Revenue. Bonds
(Siiverwoo Apartments Project) Series 1996 (the -"Ponds" ) in
accordance with the provisions of the Act, and to loan the proceeds
thereof to the Borrower pursuant to a Loan Agreement dated as of Q
May 1, 1996, for the purpose of providing permanent financing for .
the Project and repaying the Prior Loan and for certain other
rehabilitation costs associated with the Project; and
WHEREAS, to evidence the Loan, the Borrower has delivered
a Promissory Note dated as of May 1, 1996, to the Issuer in the
principal amount of $7, 000, 000; and
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Packet Pg.237
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WHEREAS, interest on the Bonds is and shall remain
excludable from gross income for federal income tax purposes if,
among other things, the Project continuously complies with Section
142 (d) of the Code and the Treasury regulations and revenue rulings
promulgated thereunder; and
WHEREAS, compliance of the Project with Section 142 (d) of
the Code and the Treasury regulations and revenue rulings
promulgated thereunder is, in large part, within the control of the
Borrower;
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WHEREAS, the Issuer will not loan the proceeds of the Q
Bonds to the Borrower unless the Borrower, by its execution and o
delivery of this Regulatory Agreement, consents to be regulated by
the Issuer to, among other things, assure preservation of the tax-
exempt status of the Bonds under Section 142 (d) ; and
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WHEREAS, all conditions, things and acts required by the
Act, and by all other laws of the State of California, to exist, E
have happened and have been performed precedent to and in Q.
connection with the issuance of the Bonds exist, have happened, and
have been performed in due time, form and manner as required by
law, and the Issuer is now duly authorized and empowered, pursuant y
to, each and every requirement of law, to issue the Bonds for the
purpose, in the manner and upon the terms herein provided; and
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NOW, THEREFORE, the Borrower, the Issuer and the Trustee,
each in consideration of the representations, covenants and
agreements of the others as set forth herein, mutually represent,
covenant and agree as follows : m
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Section. 1 . Definitions . The following capitalized terns
i.ave the meanings specified in the foregoing recitals :
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Act Prior Loan
Bonds Project
Borrower Regulatory Agreement a�
Code State o
T_ssuer Trustee
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All other capitalized terms used herein, unless the
context clearly otherwise requires, shall have the meanings set ;g
forth in the Indenture, the Loan Agreement or as follows .
"Cecttlf,sate of Cont.inu�ng Program Compliance" means a
Certificate o£ Continuing Program "°Compliance in substantially the
form of Exhibit •" hereto .
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"Certification of Tenant Eligibility" means a
Certification of Tenant Eligibility in substantially in the form of
Exhibit "A" hereto.
"Occupancy Restrictions" means the occupancy restrictions
set forth in Section 4 .
"Qualified Project Period" means that period of time
defined in Section 2 (a) hereof.
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"Qualifying Tenant" means an individual or family of low-
or moderate-income as determined under Section 4 (a) . Q
"Rental Restrictions" means the rental restrictions set
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forth in Section S.
"Section 8" means Section 8 of the U. S . Housing Act of
1987, as amended. a
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Section 2 . Term of Restrictions and Agreement. Q.
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(a) Occupancy Restrictions . The term of the Occupancy
Restrictions commence on May 21, 1996,_ and shall end on the later N
of : (i) the date- which is 15 years from May 21,_199 , (ii� ) the F
first day on which none of the Bonds or and other ta_-exempt
private activity bonds issued with respect to the Project are v
outstanding, or (iii) the termination date for any assistance
provided with respect to the Project under Section 8,Jor such other
"date as to w is . an opinion of Bond Counsel is delivered to the E
Trustee to the effect that termination of the Occupancy
Restrictions on such date will not adversely affect the exclusion a
of interest on the Bonds from gross income for federal income tax
purposes (the "Qualified Project Period") .
(b) Rental Restrictions . The term of the Rental
Restrictions shall be the longer of: (i) the period during which
any of the Bonds or any other tax-exempt private activity bonds a�
issued with respect to the Project remain outstanding, or (ii) the p
term of the Occupancy Restrictions set forth in Section 2 (a) .
a)
(c) Early Termination of gestrictions . This Regulatory
Agreement and the restrictions hereunder shall cease to apply to
the Project in the event of involuntary noncompliance as a result a
of unforeseen events such as fire, seizure, requisition,
foreclosure, transfer of title by a deed in lieu of foreclosure or
other similar events, a change in a federal law or an action of a
federal agency after the date of issue that prevents the Issuer
from enforcing the provisions of this Regulatory Agreement or a
condemnation or similar event, so long as either: (i) the Bonds
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4 Loan, including investment earnings, have been or will be used to
provide an airplane, a skybox or other private luxury box, a
facility primarily used for gambling, or a store the principal
business of which is the sale of alcoholic beverages for
consumption off premises; and (ii) less than 25% of the proceeds of
the Bonds and the Prior Loan have been or will be used directly or
indirectly for the acquisition of land or any interest therein;
(g) The weighted average maturity of the Bonds does not
exceed 120% of the weighted average reasonably expected useful life
of the Project financed by the Bonds, which is at least 40 years;
(h) The "first use" of the Project (and fixtures located o
therein as of the date of the building acquisition) is pursuant to
this financing, as required by Section 147 (d) of the Code . a,
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(i) If assistance is subsequently provided with respect r
to the Project under a Section 8 assistance program, in
administering the Project restrictions set forth in this Section 3, E
the Borrower will comply with all such Section 8 requirements; M.
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(j ) The Borrower shall not discriminate on the basis of
race, creed, 'color, sex, or rational origin in the lease, use o=
occupancy of the Project or in connection with the employment or
application for employment or persons for the operation and o
co
management of the Project;
(k) None of the proceeds of the Bonds will he used to
finance commercial _property, and no more than 5% of the proceeds of E
the Bonds will be used other than to finance residential rental
property; a
(1) All tenant lists, applications, and waiting lists
relating to the Project shall at all times be kept separate and 0)
identifiable from any other business of the Borrower which is iM
unrelated to the Project, and shall be maintained in the State in
a reasonable condition for proper audit and subject to examination
during business hours by representatives of the Issuer, the Trustee p
or the Owners of the Bonds .
a�
(m) All tenant leases (including existing renewals ol`
leases) shall be expressly subordinate to any deed of trust, and
all leases (including existing renewals of leases) of units to ¢
Qualifying Tenants shall contain clauses, among others, wherein
each individual lessee: (i) certifies the accuracy of the
statements made in its application and Certification of Tenant
Eligibility; (ii) agrees that the family income, family composition
and other eligibility requirements at the time the lease is
executed shall be deemed substantial and material obligations of
-5-
Packet Pg.240
his tenancy and that he/she/they will comply promptly with all
requests for income, family composition and other information
relevant to determining low- or moderate-income status from the
Borrower, the Issuer or the Trustee, and that his/her/their failure
or refusal to comply with a request for information with respect
thereto shall be deemed a violation of a substantial obligation of
his/her/their tenancy; and (iii) agrees that his/her/their lease
may be terminated on 30 days notice after any noncompliance by such
tenant if such noncompliance would adversely affect the federal a
tax-exempt status of interest on the Bonds; and E
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(n) If the Project includes a rental or management
office, such office shall be used exclusively for the rental or
management of the Project . °
(o) The Borrower will comply with, and take any and all
steps reasonably necessary to become certified by, the City of San
Bernardino Crime Free Rental Housing Program.
E
Section 4 . Occ=anay Restrictions . The Borrower �
represents, warrants and covenants that : Q
a,
(a) In accordance with Section 2 herein, commencing on � ..
May 21 , 1996, at,:.leas:t �,2, Qr,::;the,:._units =ice the Project shall be
occupied (or treated as occupied as provided herein) or held vacant '
"rrI and available for occupancy nts, and such units CD
will be of comparable quality a ill be a range of sizes and
number of bedrooms comparable to those units which are available to
other tenants . In addition, at feast ( of .su, ii,ts" shall be
occupied (or treated as occupied as provided herein) or held vacant
and available for occupancy by, e4a t,$
For purposes of this Regulatory Agreement, the term
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"Qua111 fyznr Tenant meant an individual or family who the Borrower
determines from time to time to be of "low- or; �nodr.ate_. com "
within the meaning of Section 142 (d) (1) (A)7 o the Code . Occupants
of a unit are considered an ' individual or family of low- or l .=
moderate-income only if their combined adjusted income (computed in �� o
the manner prescribed in Section 1 . 167 (k) -3 (b) (3) of the Treasury ..
regulations as in effect on the date of issuance of the Bonds and
treating all occupants as a single family) does -.not :exc.e_ed 5t t :f
the area median gross income, with adjustments oz�smaller and
larger families as set forth in Exhibit "A" hereto . Q
The term "Very Low Income Tenant" means an individual or
family whose income does not exceed the qualifying limits for very
low income families as established and determined by the Borrower,
from time to time within the meaning of California Health" and
Safety Code Section 50105 .
Packet Pg.241
Notwithstanding anything herein to the contrary,
occupants of a unit (including Very Low Income Tenants) shall not
be deemed to be Qualifying Tenants if all the occupants of such
unit at any time are "students" within the meaning of Section
151 (c) (4) of the Code, no one of whom is entitled to file a joint
return under Section 6013 of the Code. The determination of
whether an individual or family is of low-- or moderate-income or
very low income, as applicable, shall be made at the time the
tenancy commences and on an ongoing basis thereafter, determined at
least_ annually. Any unit occupied by an individual or of-milt'whio E
is a Qualifying Tenant or Very Low Income Tenant, as applicable, at' L
the commencement of occupancy shall not continue to be treated as Q
if occupied by a Qualifying Tenant or Very Low Income Tenant during
their tenancy in such unit if such individual or family
subsequently ceases to be of low- or moderate-income or very low.
income, as applicable, unless such individual ' s or family' s income
does not exceed 140% of the maximum income qualifying as low- or N
moderate-income for a family of its size, with respect to a
Qualifying Tenants that-,are not Very Low Income Tenants, or 1405 of E
the maximum income qualifying as very low-income for a family of
its s`ze, with respect tc Qualifying Tenants that are Very Low Q
Income Tenants . In the event that a unit ceases to be treated as �
occupied by a Qualifying Tenant or a Very Low Income Tenant, as �
applicable, for such reason, and thereupon less than 20% of the
vrr�. completed units in the Project would not be occupied by, or held
vacant and available for occupancy by, Qualifying Tenants or Very co
Low Income Tenants, as applicable, the next vacant unit of
comparable or smaller size not previously occupied by a Qualifying
Tenant -or Very Low Income Tenant, as applicable, must be rented to a
a Qualifying Tenant or Very Low Income Tenant, -as applicable, or E
held vacar:t and available for occupancy by a Qualifying Tenant or
Very Low Income Tenant, as applicable . Any completed unit vacated Q
by a Qualifying Tenant or Very Low Income Tenant which results in
the Project not being in compliance with the provisions of this N
Section must be rented (on other than a temporary basis) to a
Qualifying Tenant or Very Low Income Tenant, as applicable,. before
any other units in the Project are rented to tenants who are not S
Quali*ying Tenants, or Very Low Income Tenants, as applicable, 0
until the Project is again in cc:rpliance .
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In addition, the monthly rents charged to Very Low Income E
Tenants shalt not exceed 30� of S0% of the median adjusted gross �
income for the area, divided by twelve, adjusted for family -size, Q
with presumed family sizes as follows : a family of one in the case
of a studio unit, a family of two in the case of a one--bedroom
unit, a family of three in the case of a two-bedroom unit and a
family of four in the case of a three-bedroom unit .
(b) As a condition tc initial and continuing occupancy,
each person who is intended to be a Qualifying Tenant shall be
-7-
Packet Pg.242
required annually to sign and deliver to Borrower a Certification
of Tenant Eligibility, or such other form as may be approved by
Bond Counsel, in which the prospective Qualifying Tenant certifies
that he or his family qualifies as being of low or moderate income.
In addition, such person shall be required to provide whatever
other information, documents or certifications are deemed necessary
by the Issuer to substantiate the Certification of • Tenant
Eligibility on an ongoing annual basis, and to verify that such
tenant continues to be a Qualifying Tenant within the meaning of
Section 4 (a) .
d
L
(c) The form of lease to be utilized by the Borrower in Q
renting any units in the Project to any person who is intended to
be a Qualifying Tenant shall provide for termination of the lease 0
and consent by such person to immediate eviction in accordance with
applicable law for failure to qualify as a Qualifying Tenant as a
result of any material misrepresentation made by such person with W
respect to the Certification of Tenant Eligibility.
E
(d) The Borrower will maintain on file Certifications of
Tenant Eligibility with respect to each Qualifying Tenant who C.
resides in a Project unit or resided therein during the immediately c
preceding calendar year, and the Borrower will, promptly upon_ a
receipt, file a copy thereof with the Issuer .
(e) On the later of the first day of - the Qualified o
Project Period or the date of issue of the Bonds, and on or before M
the first day of each January, . r: 3 ; .July acid ptober t-her.eaf.t ,
c commencing July _l, 1996, the Borrower will submit to the Issuer a a
Certificate of Continuing Program Compliance, executed by the
Borrower stating the percentage of units of the Project which were
occupied by Qualifying Tenants at all times since the first day of Q
the Qualified Project Period, with respect to the first Certificate =
of Continuing Program Compliance, and during the preceding three N
months, with respect to subsequent Certificates of Continuing F
Program Compliance, and identifying Qualifying Tenants who
commenced or terminated occupancy of the Project during such period
(provided that if such percentage exceeds the percentage required r
by this agreement to be held for occupancy by Qualifying Tenants, u
the Borrower may certify as to that percentage of units) .
E
( f) The Borrower covenants and agrees that during the
term of this Regulatory Agreement, it will prepare and submit to Q
the Issuer and the Trustee on or before July 1 of each year,
commencing July 1, 1996, a report certified to be accurate by the
Borrower (i) identifying the tenancies and the dates of occupancy
(or vacancy) for all dwelling units in the Project including the
percentage of the dwelling units of the Project which were occupied
by Qualified Tenants (or held vacant and available for occupancy by
Qualified Tenants) at all times during the year preceding the date
-8-
Packet Pg.243
of such certificate, (ii) describing all transfers or other changes
in ownership of the Project or any interest therein, and (iii)
stating that to the best knowledge of the person executing such
certificate after due inquiry, all units were rented or available
for rental on a continuous basis during such year to members of the
general public and that the Borrower was not otherwise in default
under this Regulatory Agreement during such year (provided that as
to clauses (i) and (ii) , the Borrower may provide information as to
only the percentage of units required by this Regulatory Agreement
to be held for occupancy by Qualifying Tenants) . E
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(g) On July 1, 1996, and each July 1 thereafter, the a
Borrower shall certify to the y Depa:rntment
e Project and the tenants thereof
r with the °
restrictions set forth in Sections 3 (a) and 4 (a) , a`s provided in 5
Section 142 (d) (7) of the Code .
N
(h) In order to assure compliance with this Section 4,
the Borrower shall advise the IsSUer "nd the Trustee in �rz� t�ng o B
the first day on which: (i) the initial residential unit" 'ar" units a
in the Project were first occupied, (ii) 10% of the residential C
units in the Project were first occupied and (iii) 50* of the
residential units in the Project were first occupied.
N
(i) The Borrower will immediately notify the Issuer at r
any time the dwelling units in the Project axe not o,c:cuga:ed ,"orr Q
avaa 1b1 fircciipan as provided above .
(j ) The Borrower will obtain and maintain on file with E
respect to each Qualifying Tenant residing in the Project, evidence
reasonably satisfactory to the Issuer as to such Qualifying �
-e-an- ' s income for the taxable year immediately preceding such a
Qualifying Tenant ' s initial occupancy in the Project, which may
include OMB Form No. 2502-0204, "Certification and Recertification. N
of Tenant Eligibility. "
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Section 5 . Rental Restrictions . The Borrower
represents, covenants and warrants that each unit in the Project O
will be rented or available for rental to members of the general
public on a continuous basis throughout the term of the Rental a
Restrictions (other than units for a resident manager or
maintenance personnel as provided in Section 3 (n) and units for
Qualifying Tenants as provided in Section 4 (a) , including any units q
that may hereafter be rented under a Section 8 assistance program,
which units would be leased to eligible tenants in accordance with
Section 8 requirements) .
Section 6 . Compliance with Law Code and Rules . The
Borrower covenants and agrees that : (i) it will comply with all
requirements of law applicable to it or to the Project, and (ii) at
-9-
Packet Pg.244
no time will it take any action, or fail to take any action, which
action or failure to act would adversely affect - the exclusion of
interest on the Bonds from gross income for federal income tax
purposes .
Section 7 . Transfer RestriC ions. The Borrower
represents, covenants and agrees that as a condition precedent to
any conveyance, transfer, assignment or any other disposition of
the Project (a "Transfer" ) prior to the termination of the Rental
Restrictions and Occupancy Restrictions provided herein, the
transferee of the Project, except for any Transfer to an entity of
which the Borrower owns a greater than 50% interest, will assume by Q
a writing, in a form acceptable to the Issuer, all duties and
obligations of the Borrower under this Regulatory Agreement, o
including this Section 7 and the Loan Agreement (the "Assumption
Agreement") . The Borrower shall deliver to the Issuer: (a) the
fully executed Assumption Agreement and (b) an opinion of Bond
Counsel to the effect that the Transfer will not adversely affect
the exclusion of such interest on the Bonds from gross income for
federal income tax purposes, in connection with any Transfer of the
Project prior to the expiration cA the Rental Restrictions and the B
Occupancy Restrictions, and each and every contract, deed or other a
instrument executed covering or conveying the Project or any v
portion thereof shall conclusively be held to have been executed,
delivered and accepted subject tc the covenants, reservations and �-
restrictions set forth herein, regardless of whether such
covenants, reservations and restrictions are set forth in such v
contract, deed or other instrument . F,
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Section 8 . Enforcement.
as
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(a) The Borrower shhall permit any duly authorized Q
representative of the Issuer, including the Trustee, to inspect any
books and records of the Borrower regarding the Project and with
respect to the incomes of Qualifying Tenants which pertain to F
compliance with the provisions of this Regulatory Agreement, the
Act and Section 142 (d) or any successor provision of the Code .
L
(b) The Borrower shall submit any information, documents o
or certificates requested by the =ssuer or the Trustee which either
of them deem reasonably necessary to substantiate the Borrower' s E
continuing compliance with the provisions of this Regulatory
Agreement, the Act, and Section 142 (d) or any successor provision Q
of the Code .
(c) The Issuer and the Borrower each covenant that it
will not knowingly take or permit any action to be taken that would
adversely affect the exclusion off interest on the Bonds from gross
income for federal income tax purposes . Moreover, each covenants
to take any lawful action (including amendment of this Regulatory
Packet Pg.245
Agreement as may be necessary, in the opinion of Bond Counsel) to
comply fully with all applicable rules, rulings, policies,
procedures, regulations or other official statements promulgated or
proposed by the Department of the Treasury or the Internal Revenue
Service from time to time pertaining to obligations the interest on
which is tax-exempt under Section 142 (d) or any successor provision
of the Code affecting the Project.
(d) The Borrower covenants and agrees to give written
notice to the Issuer of any violation of the Borrower' s obligations
hereunder within five days after first discovering any such
violation. If any such violation is not corrected to the Q
satisfaction of the Issuer within the period of time specified by
the Issuer, which shall be at least 30 days after the date any o
notice to the Borrower is mailed, or within such further time as 5
the Issuer determines is necessary to correct the violation without
loss of tax exemption of interest on the Bonds, but not to exceed
any limitations set by applicable regulations, without further
notice the Issuer shall declare a default under this Regulatory W
ygreement effective on the date of such declaration of default, and
upon such default the Borrower hereby agrees to pay the Issuer an C
amount equal to any rents or other amounts received by the Borrower
for any units in the Project which were in violation of this
Regulatory Agreement during the period such violation continued,
and the Issuer shall apply to any court, state or federal, for r
specific performance of this Regulatory Agreement or an injunction e
against any violation of this Regulatory Agreement, or any other co
remedies at law or in equity or any such other actions as shall be
necessary or desirable so as to correct noncompliance with this
regulatory Agreement . a)
a)
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(e) The Borrower and the Issuer each acknowledge that
the primary purpose for requiring compliance by the Borrower with
the restrictions provided in this Regulatory Agreement is to comply
with the Act and to preserve the exclusion of interest on the Bonds
from gross income for federal income tax purposes, and that the
Owners of the Bonds, who are declared to be third party r-
beneficiaries of this Regulatory Agreement, shall be entitled, for a'
any breach of the provisions hereof, to all remedies both at law 0
and in equity in the event of any default hereunder .
E
( f) The Rental Restrictions imposed by this Section and
the Occupancy Restrictions of Section 4 (a) may be enforced by the Q
Issuer by an action for specific performance .
Section 9 . Indemnification. The Borrower hereby
indemnifies, and agrees to defend and hold harmless, the Issuer and
Trustee from and against all liabilities, losses, damages, costs,
expenses ( including attorneys ' fees and expenses) , causes of
action, suits, allegations, claims, demands and judgments of any
-11-
Packet Pg.246
nature arising from the consequences of a legal or administrative
proceeding or action brought against them, or any of them, on
account of any failure by the Borrower to comply with the terms of
this Regulatory Agreement, or on account of any representation or
warranty contained herein being untrue.
Section 10 . Miscellaneous .
(a) Age s . The Issuer and the Trustee shall have the
right to appoint an agent to carry out any of its duties and E
obligations hereunder, and shall inform the Borrower of any such i
agency appointment by written notice . Q
(b) Interpretation. Any terms not defined in this
Regulatory Agreement shall have the same meaning as terms defined
in the Indenture or in the Act or in Section 142 (d) of the Code and
Treasury regulations applicable thereto. N
(c) Amendment. It is agreed that the parties hereto E
shall promptly amend this Regulatory Agreement (in a form suitable t z
for recording) : (i) to the extent and when necessary or advisable, <
a
in the opinion of Bond Counsel, to preserve the exclusion of
interest on the Bonds from gross income for federal income tax
purposes, and (ii) to the extent requested by any party if, in the
opinion of Bond Counsel, such amendment will not adversely affect
L exclusion of interest on the Bonds from gross income for
federal income tax purposes; provided that no such amendments shall M
be permitted or required hereunder if there is pending before =
Congress, or either house of Congress, legislation which if enacted
would be applicable to the Bonds, unless such amendment would not
adversely affect_ the tax-exemp_ status of interest on the Bonds if
suc^: legislation were to become law. This Regulatory Agreement may Q
also be amended as provided in the Indenture.
N
(d) Severability. The invalidity of any clause, part or F
provision of this Regulatory Agreement shall not affect the
validity of the remaining portions thereof.
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(e) Notices . All notices to be given pursuant to this
Regulatory Agreement shall be in writing and shall be deemed given
when mailed by certified or registered mail, return receipt E
requested, to the parties hereto at the addresses set forth below, r
or to such other place as a party may from time to time designate Q
in writing. A duplicate copy of each notice, certificate or other
communication given hereunder by the Issuer or the Borrower shall
also be given to the Trustee at the address set forth below. The
Issuer, the Borrower and the Trustee may, by notice given
ff hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be
-12-
Packet Pg.247
sent . The initial addresses for notices and other communications
are as follows :
To the Borrower: Magellan Silverwood and
Cross Creek General Partnership
2198 E. Camelback Road, Suite 325
Phoenix, Arizona 85016
To the Issuer: Redevelopment Agency of the
city of San Bernardino E
201 North "E" Street, Third Floor L
San Bernardino,_ California 92401
Q
Attn: Development Director
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To the Trustee: First Trust of California,
National Association
m
550 South Hope Street, Suite 500
Los Angeles, California 90071
Reference: San Bernardino/Silverwood
(f) Governing Law. This Regulatory Agreement shall be
governed by the laws of the State of California and, where
applicable, the laws of the United States of America.
(g) Attorneys ' Fees . In case any action at law or in Q
equity, including an action. for declaratory relief, is brought M
against the Borrower to enforce the provisions of this Regulatory
Agreement, the Borrower agrees to pay reasonable attorneys ' fees a
and other reasonable expenses incurred by the Issuer or the Trustee E
in connection with such action .
a
(h) Regulatory Agreement Binding. This Regulatory C
Agreement and the covenants contained herein shall run with the N
land upon which the Project is located (the "Land") , as described
in Exhibit "C" attached hereto and incorporated herein by
reference, and shall bind the Borrower, its heirs, legal. S
representatives, executors, administrators, successors in office or o
interest, and assigns, and all subsequent owners of the Project or 0
any interest therein, and the benefits shall inure to the Issuer a
and its successors and assigns and the Trustee and its successors E
and assigns, for the term of this Regulatory Agreement as provided L)
in Section 2 (d) . a
(i) Concerning the Trustee. The Trustee is entering
into this Regulatory Agreement solely in its capacity as Trustee
under the Indenture and not -in its individual or personal capacity
and in the exercise of any of the duties, powers and liabilities of
the Trustee hereunder shall be entitled to the protections,
-13-
Packet Pg.248
{.. {.
limitations from liability, indemnities and immunities afforded it
under the Indenture. The Trustee shall act specifically as
provided herein and no implied duties or obligations shall be read
into this Regulatory Agreement against the Trustee. The Trustee
may rely upon statements and certificates of the Borrower and in
determining whether any default or lack - bf compliance by the
Borrower exists hereunder shall not be required to conduct any
review or investigation of the records of the Borrower and may rely
solely upon any notice, document or certificate delivered to the
Trustee hereunder. The Trustee shall have no duty to monitor the
compliance by the Borrower with the terms of this Regulatory a
Agreement . From and after the date none of the Bonds remain Q
Outstanding as provided in the Indenture, the Trustee shall have no
duties or responsibilities under this Regulatory Agreement . o
(j ) Execution in Count_erRart This Regulatory
agreement may be executed in counterparts, each of which shall
constitute an original and all of which shall constitute one and
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IN WITNESS WHEREOF, the parties have caused this
Regulatory Agreement to be signed by their respective duly
authorized representatives, as of the day and year first written
above.
MAGELLAN SILVERWOOD & CROSS CREEK
GENERAL PARTNERSHIP,
an Arizona general partnership
By: Magellan Silverwood &
Cross Creek
Properties Limited Partnership, L
an Arizona limited partnership, Q
General Partner L
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By: Magellan Silverwood &
Cross Creek
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Properties I, L.L.C. , an Arizona
limited liability company,
General Partner
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By: Magellan Management C
Corporation,
an Arizona corporation, Manager
By: ~CD
Leslie S. Litwin 00
Its:President
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Packet Pg.250
ATTEST:
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO,
as Issuer
By:
Secr Vary
By:
Ronald /E. Winkler
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FIRST TRUST OF CALIFORNIA, o
NATIONAL ASSOCIATION,
as Trustee �+
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Assis a ice-President
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Packet Pg.251
STATE OF ARIZONA )
} ss.
COUNTY OF MARICOPA )
On the day of 1996, before me, the undersigned, a Notary
Public in and for said State,pers pally appeared V-a. " 5• yl -ALOL;-
personally known to me (or proved to me on the basis of satisfactory evidence) to be
the person whose name is subscribed on the within instrument and acknowledged to
me that he executed the same in his authorized capacity, and that by his signature on E
the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument. Q
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WITNESS my hand and official seal.
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Seat BOWR] Signature f Notary Public CD
Nciar!Puh is-stats cf kizona MMCCPA CCUNi( /� rr'' �
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I' Packet Pg.252
STATE OF CALIFORNIA }
COUNTY OF SAN BERNARDINO )
On May 15, 1996 before me, LA VONDA M-PEARSON,Notary Public, personally
appeared Ranaid Winkler ,proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted, executed the E
instrument.
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WITNESS my hand and official seal. / o
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STATE OF C IFORNI )
COUNTY OF c' )
On� before me,
( Br
here ins t' n e a d itle of the officer) , personally appeared
personally known to me (or proved to
me on the-basis of satisfactory evidence) to be the persons) whose
name(s) is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their
authorized capacity(ies) , and that by his/her/their signature(s) on (D
the instrument the person(s) , or the entity upon behalf of which 4)
the person(s) acted, executed the instrument. a,
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WITNESS my ha d official seal.
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•f NOTARY PU13UC.CALIFORNI.
LOS ANGELES COUNTY cC
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EXHIBIT "A"
FORM OF CERTIFICATION OF TENANT ELIGIBILITY,
RENTAL UNIT:
Street Address : Unit No. :
City: Zip Code:
I/We, the undersigned, being first duly sworn, state that I/we
have read and answered fully and truthfully each of the following E
questions for all persons who are to occupy the unit in the above a
apartment development for which application . is made, all of whom
are listed below: Q
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Name of
Members Relationship Social
of the to dead of Security Place of
HOUsehold HousAhold Aae Number Emolovment CL
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Date of Occupancy of Rental Unit by Tenant: P
Date of Lease Signed for Rental Unit by Tenant : Q
Certification Date (Earlier of Date of Occupancy or Date Lease
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signed) -
6 . Anticipated Annual Income. The anticipated total annual �-
income- from all sources of each person listed in 1 for the twelve
month period beginning on the Certification Date listed above,
including income described in (a) below, but excluding all income o
described in (b) below, is $
I (a) The amount set forth above includes all of the following
income (unless such income is described in (b) below) :
(i) all wages and salaries, overtime pay, commissions,
fees, tips and bonuses before payroll deductions;
(ii) net income from the operation of a business or
profession or from the rental of real or personal property
(without deducting expenditures for business expansion or
A-1
Packet Pg.255
amortization of capital indebtedness or any allowance for
depreciation of capital assets) ;
(iii) interest and dividends (including income from
assets as set forth in item 7 (b) below) ;
(iv) full amount of periodic payments received from
Social security, annuities, insurance policies, retirement
funds, pensions, disability or death benefits and other
similar types of periodic receipts; E
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(v) payments in lieu of earnings, such as unemployment
and disability compensation, worker' s compensation and Q
severance pay; 0
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(vi) the maximum amount of public assistance available to
the above persons; e
(vii) periodic and determinable allowances, such as
alimony and child support payments and regular contributions E
and gifts received from persons not residing in the dwelling; a
(viii) all regular pay, special pay and allowances of a
member of the Armed Forces (whether or not living in the N
dwelling) who is the head of the household or spouse; and
(ix) any earned income tax credit to the extent it CO
exceeds income tax liability.
(b) The following income is excluded from the amount set
`orth above : a
(i) casual, sporadic or irregular gifts;
(ii) amounts that are specifically for or in
reimbursement of medical expenses;
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( iii) lump sum additions to family assets, such as
inheritances, insurance payments (including payments under p
health and accident insurance and worker' s compensation) ,
capital gains and settlement for personal or property losses; E
(iv) amounts of educational scholarships paid directly to Y
student or educational institution, and amounts paid by the a
government to a veteran for use in meeting the costs of
tuition, fees, books and equipment, but in either case only to
the extent used for such purposes;
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A-2
Packet Pg.256
(v) hazardous duty pay to a member of the household in
the armed forces who is away from home and exposed to hostile
fire;
(vi) relocation payments under Title II of the Uniform
Relocation Assistance and Real Property Acquisition Policies
Act of 1970;
(vii) income from employment of children (including
foster children) under the age of 18 years;
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(viii) foster child care payments;
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(ix) the value of coupon allotments under the Food Stamp o
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Act of 1977;
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(ix) payments to volunteers under the Domestic Volunteer
Service Act of 1973;
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(x) payments received under the Alaska Native Claims e_
Settlement Act; C
(xi) income derived from certain submarginal land of the
United States that is held in trust for certain Indian tribes; N
CO (xii) payments on allowances made under the Department of CO
Health and Human Services ' Low-Income Home Energy Assistance CO
Program; and
41
(xiii) payments received from the Job Partnership E
Training Acs. . a
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7 . Net Family Assets . If any of the persons described in item 1 Q
above (or any person whose income or contributions were included in o
item 6) has any savings, stocks, bonds, equity in real property or
other form of capital investment (excluding interests in Indian �-
trust lands) , provide : c
(a) the total value of all such assets owned by all such O
persons : $ , and c
a)
(b) the amount of income expected to be derived from such
assets in the 12-month period commencing this date: $
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8 . Students
(a) Will all of the persons listed in item 1 above be or have
they been full-time students during five calendar months of this
calendar year at an educational institution (other than a
correspondence school) with regular faculty and students?
A-3
Packet Pg.257
Yes No
(b) (Complete only if the answer to Question 8 (a) is "Yes") .
Is any such person (other than nonresident aliens) married and
eligible to file a joint federal income tax return?
Yes No
The above information is full, true and complete to the best
of my knowledge. I have no objections to inquiries being made for
the purpose of verifying the statements made herein:
L
{ I acknowledge that all of the above information is relevant to Q
the status under federal income tax law of the interest on bonds 0
0
issued to finance construction of the Project for which application
is being made. I consent to the disclosure of such information to
the issuer of such bonds, the owners of such bonds, any trustee or W
agent acting on their behalf and any authorized agent of the
Treasury Department or Internal Revenue Service .
Q
Date :
Signature
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STATE OF CALIFORNIA }
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COUNTY OF SAN BERNARDINO )
On , 1996, before me,
NOTARY PUBLIC, personally appeared and
, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s)
whose name (s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity (ies) , and that by his/her/their a
signature (s) on the instrument such person (s) , or the entity upon
behalf of which such person (s) acted, executed the instrument. o
WITNESS my hand and official seal .
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FOR COMPLETION BY PROJECT OWNER ONLY:
A. Calculation of eligible income:
(1) Enter amount entered for entire household in 6
above: $
(2) If the amount entered in 7 (a) above is greater than
$5, 000, enter
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(i) the product of the amount entered in 7(a) above m
multiplied by the current passbook savings rate as a�
determined by HUD: Q
$ L
(ii) the amount entered in 7 (b) above :
$
(iii) enter the greater of line (i) or line (ii) :
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$
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(3) TOTAL ELIGIBLE INCOME (Line A(1) plus line Q
A(2) (iii) ) . _
$
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B . Enter number of family members listed in item 1 above:
0
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C . The amount entered in A(3) (Total Eligible Income) is : v
$ c
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Less than $ of median income for the area in which
the Project is located, which is the maximum income a,
at which a household may be determined to be a
Qualifying Tenant as that term is defined in the
Regulatory Agreement and Declaration of Restrictive
Covenants (the "Regulatory Agreement") ( "Qualifying F
Tenant" ) .
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More than the above-mentioned amount .
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D. Number of apartment unit assigned:
E . Monthly rent : $ r
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F. This apartment unit (was/was not) last occupied for a
period of 31 consecutive days by a person or persons whose adjusted
income, as certified in the above manner, was equal to or less than
the amount at which a person would have qualified as a Qualifying
Tenant under the terms of the Regulatory Agreement .
A-6
Packet Pg.260
G. Applicant:
Qualifies as a Qualifying Tenant.
Does not qualify as a Qualifying Tenant.
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EXHIBIT "B"
CERTIFICATE OF
CONTINUING PROGRAM COMPLIANCE
I
Date : 19
The following information with respect to Silverwood
Apartments (the "Project" ) , is being provided by Magellan
Silverwood Partnership, an Arizona general partnership (the E
"Borrower") to the Redevelopment Agency of the City of San
Bernardino (the "Issuer") pursuant to that certain Regulatory Q
Agreement and Declaration of Restrictive Covenants dated as of May
1, 1996 (the "Regulatory Agreement") , with respect to the Project:
(A) The total number of residential units which are completed
and available for occupancy is The total number of such N
units occupied is a
(B) The following residential units (identified by unit
number; have been designated for occupancy by "Qualified Tenants, " a
as such term is defined in the Regulatory Agreement (for a total of �
) v
(C) The following residential units which are included in (B)
above, have been redesignated as units for Qualified Tenants since co
19 , the date on which the last "Certificate of V
Continuing Program Compliance" was filed with the Issuer by the =
:orrower : E
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Un r Previous Delignat on Replacing
Number of Unit (if anvt Unit N' r Q
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(D) The following residential units are considered to be
occupied by Qualified Tenants based on the information set forth
below:
Number of Date of Name of persons Residing Total Adjusted Initial
Unit Unit N_o. Tenant In the Unit Gross Income
{1)
(2)
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(4) o
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(E) The Borrower has obtained a "Certification of Tenant M
Eligibility, , in the form provided as Exhibit "A" to the
Regulatory Agreement, from each Tenant named in (D) above, and each w
!Zuch Certification is being maintained by the Borrower in its d
records with respect to the Prcject . Attached hereto is the most a�
recent "Certification of Tenant Eligibility" for each Tenant named Q
(D) above who signed such a Certification since
19 the date on which the last "Certificate of Continuing
Program Compliance" was filed with the Trustee by the Borrower.
(r) In renting the residential units in the Project, the c
Borrower has not given preference to any particular group or class LM
of persons (except for persons who qualify as Qualified Tenants) ; O
and none of the units listed in (D) above have been rented for
occupancy entirely by students, no one of which is entitled to file E
a joint return for federal income tax purposes . All of the
residential units in the Project have been rented pursuant to a
written lease, and the term of each lease is at least _
months .
(G) The information provided in this "Certificate of
Continuing Program Compliance" is accurate and complete, and no
:Natters have come to the attention of the Borrower which would
B-2
Packet Pg.263
.. (. S.C.c
indicate that any of the information provided herein, or in any
"Certification of Tenant Eligibility" obtained from the Tenants
named herein, is inaccurate or incomplete in any respect.
IN WITNESS WHEREOF, I have hereunto affixed my signature, on
behalf of the Borrower, on 119
MAGELLAN SILVERWOOD & CROSS CREEK
GENERAL PARTNERSHIP,
an Arizona general partnership
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By: Magellan Silverwood &
Cross Creek
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Properties Limited Partnership, �.
an Arizona limited partnership, °
General Partner
By: Magellan Silverwood &
Cross Creek
Properties I, L.L.C. , an Arizona E
limited liability company, t
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General Partner
By: Magellan Management
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Corporation,
an Arizona corporation, Manager
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EXHIBIT "C"
THE LAND
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EXHIBIT "C"
PARCEL A:
Parcel 1 -of Parcel Map No. 8414, in the City of San Bernardino, County of San Bernardinc
State of California, recorded in Book 95 of Parcel Maps, Pages 68 and 69, records of sal
County.
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PARCEL B:
Parcel 2 of Parcel Map No. 8414, in the City of San Bernardino, County of San Bern ard'
State of California, recorded in Book 95 of Parcel Maps, Pages 68 and 69, records of sai 0,
County. a,
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5.C.d
AMENDMENT NO.2 TO THE REGULATORY AGREEMENT FOR THE TUSCANY
APARTMENTS LOCATED AT 2225 PUMALO STREET E
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This Amendment No. 2 to the Regulatory Agreement for the Tuscany Apartments located e
at 2225 Pumalo Street is dated July 21, 2014 between the City of San Bernardino and MG o
Tuscany Apartments LP. 3
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WITNESSETH:
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WHEREAS, the Issuer and U.S. Bank National Association, successor by merger to U.S.
Bank Trust National Association formerly known as First Trust of California, National
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Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1, Q
1996(the "Indenture"), in connection with the issuance of the Issuer's $7,000,000 Variable Rate
Demand Multifamily Housing Revenue Bonds (Silverwoods Apartments Project) Series 1996
(the "Bonds"); and
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WHEREAS, the Issuer loaned the proceeds of the Bonds to Magellan Silverwoods M
Partnership, an Arizona general partnership (the "Original Borrower"), pursuant to the original
Loan Agreement, dated as of May 1, 1996 (the "Loan Agreement"), among the Issuer, the
0
Trustee and the Original Borrower; and v
WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other costs
associated with the construction and development of a multi-family residential rental housing 2
project originally known as Silverwoods Apartments and now known as Tuscany Apartments C
(the "Project") located in San Bernardino, California; and N
6
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WHEREAS, the issuer, Original Borrower and Trustee entered into that certain =
Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") E
whichh was recorded against the Project in the records of the office of the San Bernardino County
Recorder as Instrument Number 19960251735 as a requirement to the issuance of the Bonds;and Q
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WHEREAS, the Project was sold to San Bernardino 328/AF XXX, LLC, a California a
limited liability company in 2001, and San Bernardino 328/AF XXX, LLC caused the delivery to
the Trustee of a letter of credit providing credit support for the Bonds issued by Wells Fargo E
Bank, National Association, to replace the existing letter of credit issued by Bank One, Arizona,
NA; and Q
WHEREAS, the Project was acquired by MG Tuscany Apartments LP in 2003, a N
California limited partnership (the "Borrower") and the Borrower has caused the delivery to the ~
Trustee of a direct pay in transferable credit enhancement instrument (the "Credit Facility") o
issued by FANNIE MAE, a corporation organized and existing under the Federal National in
Mortgage Association Charter Act(12 USC Section 1716 et seq.) (the "Credit Facility Provider")
to replace the existing letter of credit issued by Bank One, Arizona,NA; and
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Packet Pg. 267
5.C.d
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(D
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WHEREAS, to preserve 66 affordable housing units,MG Tuscany Apartments has L
requested to amend the Regulatory Agreement in place to allow for extension of the affordability
covenants. `o
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
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agree as follows:
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Sections 2a and 2b are stricken from the agreement and replaced entirely with the Q
following new text: Q
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"Section 2. Term of Restrictions and Agreement N
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a) Occupancy Restrictions. Occupancy Restrictions as defined and cited in Section 4
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shall commence on August 1, 2014 and shall end on the date which is 15 years from
the commencement date. M
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b) Rental Restrictions. The term of the Rental Restrictions as defined and cited in
Section 5 shall commence and end according to the term of the Occupancy
Restrictions set forth in Section 2(a)."
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IN WITNESS THEREOF,the parties hereto have caused this Amendment No. 2 to be <
executed by and through their respective authorized officers, as of the date first above written. z6
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City of San Bernardino MG Tuscany Apartments, LP 4)
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By: By: E
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Allen J. Parker, City Manager Its: Q
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APPROVED AS TO FORM: "
Gary D. Saenz, City Attorney o
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