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HomeMy WebLinkAbout05.D- City Manager 5.D RESOLUTION (ID#3411) DOC ID: 3411 CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION Agreement/Contract Amendment From: Allen Parker M/CC Meeting Date: 08/04/2014 Prepared by: Linda Sutherland, (909) 384- 5002 Dept: City Manager Ward(s): All Subject: Resolution of the Mayor and Common Council of the City of San Bernardino Amending the Regulatory Agreement and Declaration of Restrictive Covenants in Place at "Tuscany Apartments" (2225 Pumalo Street). (#3411) 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. 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. 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: Updated: 7/30/2014 by Linda Sutherland Packet Pg. 25 5.D 3411 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). Recommendation Staff recommends adoption of the attached Resolution as means of preserving quality affordable housing in the City of San Bernardino. City Attorney Review: Supporting Documents: reso 3386 (PDF) agrmt 3386 (PDF) Original Tuscany Agreement (PDF) tuscany amendment (PDF) Tuscany Externtion Ltr 7-15-2013 (PDF) 0 Undated:7/30/2014 by Linda Sutherland Packet Pg. 26 5.D.a RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AMENDING THE 3 REGULATORY AGREEMENT AND DECLARATION OF 4 RESTRICTIVE COVENANTS IN PLACE AT "TUSCANY APARTMENTS"(2225 PUMALO STREET). 5 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 Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1, 8 1996(the "Indenture"), in connection with the issuance of the Issuer's $7,000,000 Variable E Rate Demand Multifamily Housing Revenue Bonds (Silverwoods Apartments Project) Series 1996 (the "Bonds"); and a 10 0 WHEREAS, the Issuer loaned the proceeds of the Bonds to Magellan Silverwoods 0M 1..1 Partnership, an Arizona general partnership (the "Original Borrower"),pursuant to the original 12 Loan Agreement, dated as of May 1, 1996 (the "Loan Agreement"), among the Issuer, the Trustee and the Original Borrower; and 13 t WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other Q 14 costs associated. with the construction and development of a multi-family residential rental C7 housing project originally known as Silverwoods Apartments and now known as Tuscany 15 Apartments (the "Project") located in San Bernardino, California; and N 16 WHEREAS, the Issuer, Original Borrower and Trustee entered into that certain 17 Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory T- Agreement") which was recorded against the Project in the records of the office of the San 18 Bernardino County Recorder as Instrument Number 19960251735 as a requirement to the M 19 issuance of the Bonds; and o 20 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 cc 21 delivery to the Trustee of a letter of credit providing credit support for the Bonds issued by 22 Wells Fargo Bank,National Association, to replace the existing letter of credit issued by Bank One, Arizona,NA; and Q 23 24 WHEREAS, the Project was acquired by MG Tuscany Apartments LP in 2003, a 25 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 26 Facility") 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 27 Facility Provider") to replace the existing letter of credit issued by Bank One, Arizona, NA; 28 and 1 Packet Pg. 27 1 WHEREAS, to preserve 66 affordable housing units, MG Tuscany Apartments has 2 requested to amend the Regulatory Agreement in place to allow for extension of the affordability covenants. 3 4 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND 5 ORDER, AS FOLLOWS: 6 SECTION 1. The City Manager is hereby authorized to execute Amendment No. 2 7 to the Regulatory Agreement in place at 2225 Pumalo Street (Tuscany Apartments), attached c 8 hereto as Exhibit "A" and incorporated herein. E as 9 SECTION 2. This Resolution shall take effect from and after its date of adoption by 10 the Mayor and Common Council. o 11 12 13 y' 14 15 N 7 16 Ili 17 w* 18 °° M o 19 L 20 m E 21 �a 22 a 23 24 ` 25 26 27 28 lI 2 Packet Pg.28 5.D.a, RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF ✓ THE CITY OF SAN BERNARDINO AMENDING THE 2 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS IN PLACE AT "TUSCANY 3 APARTMENTS"(2225 PUMALO STREET). 4 5 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 meeting Common Council of the City of San Bernardino at a g 7 r thereof, held on the day of , 2014, by the following vote,to wit: 8 as 9 Council Members: AYES NAYS ABSTAIN ABSENT a lQ MARQUEZ BARRIOS cn 12 VALDIVIA 13 CL S I 10 RETT 1.4E c 1 { NICK-El, M U N H JOHNSON MUI,VIHILIL 00 18 ; M M 1 ? Georgeann Hanna, City Clerk d 2 The foregoing resolution is hereby approved this day of , 2014. E 22 Q 2: R. Carey Davis, Mayor 2 City of San Bernardino 25 Approved as to form: 2' ' Gary D. Saenz, City Attorney 0 2/ _ By; 28 ! t 3 Packet Pg.29 F AMENDMENT NO.2 TO THE REGULATORY AGREEMENT FOR THE TUSCANY APARTMENTS LOCATED AT 2225 PUMALO STREET This Amendment No. 2 to the Regulatory Agreement for the Tuscany Apartments located at 2225 Pumalo Street is dated July 21, 2014 between the City of San Bernardino and MG Tuscany Apartments LP. WITNESSETH: 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 Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1, 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 Q (the "Bonds"); and 0 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 Trustee and the Original Borrower; and E t= CU WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other costs a associated with the construction and development of a multi-family residential rental housing project originally known as Silverwoods Apartments and now known as Tuscany Apartments (the "Pr(ject") located in San Bernardino, California; and WHEREAS, the Issuer, Original Borrower and Trustee entered into that certain Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") whichh was recorded against the Project in the records of the office of the San Bernardino County M Recorder as Instrument Number 19960251735 as a requirement to the issuance of the Bonds;and E L WHEREAS, the Project was sold to San Bernardino 328/AF XXX, LLC, a California w 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, Q NA; and WHEREAS, the Project was acquired by MG Tuscany Apartments LP in 2003, a 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") 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") to replace the existing letter of credit issued by Bank One, Arizona,NA; and S.D.b WHEREAS, to preserve 66 affordable housing units,MG Tuscany Apartments has requested to amend the Regulatory Agreement in place to allow for extension of the affordability covenants. 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 agree as follows: Sections 2a and 2b are stricken from the agreement and replaced entirely with the r c following new text: d "Section 2. Term of Restrictions and Agreement a, .� a a) Occupancy Restrictions. Occupancy Restrictions as defined and cited in Section 4 c shall commence on August 1, 2014 and shall end on the date which is 15 years from the commencement date, d c 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)." a v 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. r M co City of San Bernardino MG Tuscany Apartments,LP M E L _ E By: By: r i� Q Allen J. Parker, City Manager Its: APPROVED AS TO FORM: Gary D. Saenz, City Attorney By: Packet Pg. 31 _ E REGULATORY AGREEMENT AND DECLARATION OF Q RESTRICTIVE COVENANTS 0 Among rn a� MAGELLAN SILVERWOOD & CROSS CREEK GENERAL PARTNERSHIP, N an Arizona General Partnership, _ REDEVELOPMENT AGENCY OF t THE CITY OF SAN BERNARDINO, CALIFORNIA C and a FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee M Relating to _ m $7, 000, 000 E Redevelopment Agency of the City of San Bernardino Multifamily Housing Revenue Bonds Q (Silvertiocd Apartments Project) a 1996 Series M N Dated as of May 1, 1996 ~ 0 Y _ Q� E V [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] Packet Pg.32 TABLE OF CONTENTS Section Paae Section 1 . Definitions . . . . . . . . . . . . . . . . . . . . 2 Section 2 . Term of Restrictions and Aareement . . . . . . . . 3 E Section 3 . Project Restriction . . . . . . . . . . . . . . . 4 L Restrictions a� Q Section. 4 . Occupancy Restrictions . . . . . . : . . . . . . . 6 � 0 ca Section 5 . Rental Restriations . . . . . . . . . . . . . . . . 9 rn m Section 6. Compliance with Law, ;ode and Rules . . . . . . . . 9 c Section 7 . Transfer Restrictions . . . . . . . . . . . . . . 10 E Section. 8 . Enforcement . . . . . . . . . . . . . . . . . . . 10 4 c Section 9 . Indemnification . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . r Section 10 . Miscellaneous 12 M EXHIBIT "A" Form of Certification of Tenant Eligibility = EXHIBIT "B" Form of Certificate of Continuing Program Compliance EXHIBIT "C" T-e Land a� Q u _ L O Y Q� E s c� r Q Packet Pg. 33 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 L "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 o successor hereunder, the "Trustee") , WITNESSETH: Y WHEREAS, the Issuer is a public body corporate and politic, duly organized and validly existing under and pursuant to DWvision 24, Part 1, Chapter 1, of the Health and Safety Code (commencing with Section 33000) (the "Act") of the State of California (the "State") , and is authorized pursuant to the Law to U issue revenue bonds for the purpose of assisting in the financing of multifamily rental housing projects for low- and moderate--income individuals and families; M WHEREAS, the Borrower, an Arizona General Partnership duly organized and existing under the laws of the State of Arizona, previously obtained temporary financing for the acquisition, E _ construction and installation of a 328-unit -multifamily rental (D housing project located within the City of San Bernardino (the bra Project ) or occupancy in oart (at least 20 ) bby in ivi ua s or fame ies o low- or moderate--income within the meaning of an _ �r the period required by Section 142 (d) of the Internal Revenue e 6f i98b, as amen a (t e "Code" ) , in the form of a loan from Bank One Columbus, NA (the "Prior Loan" ) ; and = LM L WHEREAS, the Borrower has requested the Issuer to issue its Variable Rate Demand Multifamily Housing Revenue Bonds C (Siiverwoe Apartments Project) Series . 1996 (the "$ohds") 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 -1_ Packet Pg. 34 S.D.c 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 E Borrower; L 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 0 the Issuer to, among other things, assure preservation of the tax- , exempt status of the Bonds under Section 142 (d) ; and 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 CL 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 N to each and every requirement of law, to issue the Bonds for the purpose, in the manner -and upon the terms herein provided; and r 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, E covenant and agree as follows : a rn Sactior_ 1 . Definitions . The following capitalized terrors nave the meanings specified in the foregoing recitals : a Act Prior Loan Bonds Project = Borrower Regulatory Agreement a> L Code State o Issuer Trustee m All other capitalized terms used herein, unless the context clearly otherwise requires, shall have the meanings set forth in the Indenture, the Loan Agreement or as follows . "Certificate of. Continuing Program Compliance" means a Certificate of Continuing' Compliance in substantially the form of 'Exhibit -2- Packet Pg.35 ' 1 "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. as "Qualifying Tenant" means an individual or family of low- or moderate-income as determined under Section 4 (a) . L "Rental Restrictions" means the rental restrictions set forth in Section S. a� "Section 8" means Section 8 of the U. S . Housing Act of v, 1987, as amended. d E Section 2 . Term of Restrictions and Agreement. M Q (a) Occupancy Restrictions . The term of the Occupancy c Restrictions commence on May 21 1996, and shall end on the later 0 of : W the date- which is 15 years from May Z1,-1-9-9- , (ii) the first day on which none oz the Bonds or any other taxz_e_ meme pt private activity bonds issued with respect to the Project are outstanding, or (iii) the termination date for any assistance �? provided with respect to the Project under Section 8, or such other `date as to w zc . an opinion of Bond Counsel is delivered to the E Trustee to the effect that termination of the Occupancy a Restrictions on such date will not adversely affect the exclusion. Q 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) . aD (c) Early Termination of Restrictions. This Regulatory Agreement and the restrictions hereunder shall cease to apply to the Project in the event of involuntary noncompliance as a result 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 -3- Packet Pg. 36 f t. 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 a 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 . m (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; Q 5 ¢ (j ) The Borrower shall not discriminate on the basis of race, creed, 'color, sex, or national origin in the lease, use or N occupancy of the Project or in connection with the employment or F application for employment of ' persons for the operation and management of the Project; V- (k) None of the proceeds of the Bonds will he used to finance commercial _property, and no more than 5% of the proceeds of the Bonds will be used other than to finance residential rental L f property; (1) All tenant lists, applications, and waiting lists relating to the Project shall at all times be kept separate and 3 identifiable from any other business of the Borrower which is I- unrelated to the Project, and shall be maintained in the State in a reasonable condition for proper audit and subject to examination a, during business hours by representatives of the Issuer, the Trustee p or the Owners of the Bonds . r a� (m) All tenant leases (including existing renewals of U leases) shall be expressly subordinate to any deed of trust, and 2 all leases (including existing renewals of leases) of units to Q 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 0 and other eligibility requirements at the time the lease is executed shall be deemed substantial and material obligations of -5- Packet Pg. 37 ( { IL I 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 tax-exempt status of interest on the Bonds; and E aD (n) If the Project includes a rental or management Q 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 N Bernardino Crime Free Rental Housing Program. c a� Section 4 . Occupancy Restriptions . The Borrower t represents, warrants and covenants that : a (a) In accordance with Section 2 herein, commencing on Mav 21 , 1996, at;. -,3eas,t � car,.:-th�e:..,units ==gin the Project shall be occupied (or treated as occupied as provided herein) or held vacant ' and available for occupancy Qafyxng Tents, and such units r will be of comparable quality'" a d ill be a range of sizes . and M number of bedrooms comparable to those units which are available to other tenants . In addition, at east 50 :c'f .sui,its shall be occupied (or treated as occupied a3 provided herein) or held vacant E and available for occupancy by a For purposes of this Regulatory Agreement, the term = "2ua111rying Tenant mean an individual or family who the Borrower deteririiries ° fram time to time to be of "low ox; mod rate,_ oml " 3 within the meaning of Section 142 (d) (1-) (A) o the Code. occupants of a unit are considered an individual or family of low- or l c 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 a treating all occupants as a single family) does -ft :exceed SfJ o':f _._ . _ the area median gross income, with adjustments orsmaller and larger families as set forth in Exhibit "A" hereto . 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 . -6- Packet Pg.38 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 family'w�io",�� E is a Qualifying Tenant or Very Low Income Tenant, as applicable, at` 0. 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, in_cQmQ, as_ app_1i.cable, 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 d Qualifying Tenants thatrate not Very Low Income Tenants, or 140% of E the maximum income qualifying as very low-income for a family of its size, with respect to 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 completed units in the Project would not be occupied by, or held vacant and available for occupancy by, Qualifying Tenants or Very r Low Income Tenants, as applicable, the next vacant unit of M comparable or smaller size not previously occupied by a Qualifying Tenant -or Very Low Income Tenant, as applicable, must be rented to � a Qualifying Tenant or Very Low Income Tenant, -as applicable, or E held vacanr and available for occupancy by a Qualifying Tenant or Very LOW T-come Tenant, as applicable . Any completed unit vacated by a Qualifying Tenant or Very Low Income Tenant which results in the Project not being in compliance with the provisions of this Section must be rented (an other than a temporary basis) to a F Qualifying Tenant or Very Low Income Tenant, as applicable,. before any other units in the Project are rented to tenants who are not S� Qualifying Tenants, or Very Low Income Tenants, as applicable, 0 until the Project is again in compliance . c d In addition, the monthly rents charged to Very Low Income s Tenants shalt not exceed 30x of 50% 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 to initial and continuing occupancy, each person who is intended to be a Qualifying Tenant shall be -7- Packet Pg.39 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) . E a� L (c) The form of lease to be utilized by the Borrower in d renting any units in the Project to any person who is intended to be a Qualifying Tenant shall provide for termination of the lease 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 respect to the Certification of Tenant Eligibility. CD B (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 preceding calendar year, and the Borrower will, promptly upon � receipt, file a copy thereof with the Issuer . (e) On the later of the first day of - the Qualified T Project Period or the date of issue of the Bonds, and on or before the, zirst day of each January, A �.l,, July arsd Qctober therea .te , commencing July 1, - 1996, the Borrower will submit to the Issuer a Certificate of Continuing Program Compliance, executed by the E Borrower stating the percentage of units of the Project which were occupied by Qualifying Tenants at all times since the first day of a the Qualified Project Period, with respect to the first Certificate = of Continuing Program Compliance, and during the preceding three months, with respect to subsequent Certificates of Continuing Program Compliance, and identifying Qualifying Tenants who commenced or terminated occupancy of the Project during such period 9 (provided that if such percentage exceeds the percentage required o by this agreement to be held for occupancy by Qualifying Tenants, the Borrower may certify as to that percentage of units) . E (f) The Borrower cove-ants and agrees that during the L) 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.40 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 L (g) On July 1, 1996, and each Jly 1F thereafter, the Q $o.rrower shall certify to the „Un ,5,U y- -D par�tment Y`at e Project and the tenants thereoft3 with the restrictions set forth in Sections 3 (a) and 4 CA' asp provided in Section 142 (d) (7) of the Code . h (h) In order to assure compliance with this Section 41 the Borrower shall advise the issuer gnd the Trustee in c �r�t�ng ofd the first day on which: (i) the initial residential unit°'`or— its in the Project were first occupied, (ii) 10� of the residential Q units in the Project were first occupied and (iii) 50-% of the residential units in the Project were first occupied. (i) The Borrower will immediately notify the Issuer ar- .. any time the dwelling units in the Projectx� jo ; ,ae.cupi ed . orb avalble ;fQr :flcctipany as provided above . M j (j } The Borrower will obtain and maintain on file with a respect to each Qualifying Tenant residing in the Project, evidence E reasonably satisfactory to the Issuer as to such Qualifying 'enant ' s income for the taxable year immediately preceding such Qualifying Tenant ' s initial occupancy in the Project, which may include OMB Form No. 2502-0204, "Certification and Recertification_ N of Tenant Eligibility. " Section 5 . Rental Restrictions. The Borrower represents, covenants and warrants that each unit in the Project will be rented or available for rental to members of the general public on a continuous basis throughout the term of the Rental v Restrictions (other than units for a resident manager or E maintenance personnel as provided in Section 3 (n) and units for U Qualifying Tenants as provided in Section 4 (a) , including any units 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.41 5.D.c 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 Restrictions. 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 E 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 >1 obligations of the Borrower under this Regulatory Agreement, o including this Section 7 and the Loan Agreement (the "Assumption 2 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 CL Occupancy Restrictions, and each and every contract, deed or other instrument executed covering or conveying the Project or any portion: thereof shall conclusive'_ be held to have been executed, 3 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 M contract, deed or other instrument . a� Section 8 . Enforcement. B a� w L (a) The Borrower sh-all 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 compliance with the provisions of this Regulatory Agreement, the Act and Section 142 (d) or any successor provision of the Code . LM (b) The Borrower shall submit any information, documents 0 or certificates requested by the Issuer or the Trustee which either of them deem reasonably necessar_.• 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 a 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 of 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 --1t;- Packet Pg.42 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 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 Agreement effective on the date of such declaration of default, and t upon such default the Borrower hereby agrees to pay the Issuer an CL amount equal to any rents or other amounts received by the Borrower for any uni..ts in the Project which were in violation of this U 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 r against any violation of this Regulatory Agreement, or any other M remedies at law or in equity or any such other actions as shall be necessary or desirable so as to correct noncompliance with this a -egulat.ory Agreement . E 4) Q L (e) The Borrower and the Issuer each acknowledge that a he primary purpose for requiring compliance by the Borrower with the restrictions provided in this Regulatory Agreement is to comply N 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 °' any breach of the provisions hereof, to all remedies both at law o 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 Packet Pg.43 � t 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) Aaents , 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 agency appointment by written notice . a' Q L (b) Internreta ign. Any terms not defined in this Regulatory Agreement shall have the same meaning as terms defined 3 in the Indenture or in the Act or in Section 142 (d) of the Code and Treasury regulations applicable thereto . N c (c) Amendment- . It is agreed that the parties hereto E shall promptly amend this Regulatory Agreement (in a form suitable for recording) : (i) to the extent and when necessary or advisable, c' in the opinion of Bond Counsel, to preserve the exclusion of interest on the Bonds from gross income for federal income tax U purposes, and (ii) to the extent requested by any party if, in the opinion of Bond Counsel, such amendment will not adversely affect the . exclusion of interest on the Bonds from gross income for federal income tax purposes; provided that no such amendments shall 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 a) adversely affect the tax-exemp= status of interest on the Bonds if such legislation were to become law. This Regulatory Agreement may � also be amended as provided in the Indenture. u (d) Severgibility. The invalidity of any clause, part or F provision of this Regulatory Agreement shall not affect the validit-y of the remaining portions thereof. .c O (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 requested, to the parties hereto at the addresses set forth below, 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 hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be -12-- Packet Pg.44 sent . The initial addresses for notices and other communications are as follows : To the Borrower: Magellan Silverwood and Cross Creek General Partnership j 2198 E. Camelback Road, Suite 325 j Phoenix, Arizona 85016 To the Issuer: Redevelopment Agency of the City of San Bernardino E 201 North "E" Street, Third Floor d San Bernardino,_ California 92401 a Attn: Development Director 0 To the Trustee: First Trust of California, National Association 550 South Hope Street, Suite 500 W 41 Los Angeles, California 90071 c Reference: San Bernardino/Silverwood W E CL ( f) Governing Law. Tnis Regulatory Agreement shall be governed by the laws of the State of California and, where U applicable, the laws of the United States of America. (g) Attorneys ' Fees_. In case any action at law or in r 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 and other reasonable expenses incurred by the Issuer or the Trustee E in connection with such action . a� a (h) Regulatory Agreement Binding. This Regulatory 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 representatives, executors, administrators, successors in office or o interest, and assigns, and all subsequent owners of the Project or any interest therein, and the benefits shall inure to the Issuer and its successors and assigns and the Trustee and its successors E and assigns, for the term of this Regulatory Agreement as provided in Section 2 (d) . Q (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.45 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- of 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 E compliance by the Borrower with the terms of this Regulatory Agreement . From and after the date none of the Bonds remain a Outstanding as provided in the Indenture, the Trustee shall have no duties or responsibilities under this Regulatory Agreement . o (j ) Execution in Counterparts . This. Regulatory agreement may be executed in counterparts, each of which shall N constitute an original and all of which shall constitute one and c d the same instrument . E n. c N - - a- d' M � C N E N d L Q V N R �7 0 E r r a -14- Packet Pg.46 OWN 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 0) Properties Limited Partnership, a� an Arizona limited partnership, Q General Partner 2!1 0 By: Magellan Silverwood & Cross Creek a� Properties I, L.L.C. , an Arizona limited liability company, General Partner E t By: Magellan Management Q Corporation, an Arizona corporation, Manager U in By: Leslie S Litwin- � Its:!?resident - c m E • m m L a� d U N 0 H ca C L O Q� E s r Q -15-- Packet Pg.47 { ( _ ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, as Issuer By: SecibVary By: Ronald [E. Winkler c a� E as as L FIRST TRUST OF CALIFORNIA, a NATIONAL ASSOCIATION, as Trustee a� c By: E Assis a ice-President Q. c N r r d° M C di E 9P 93 L a'! ¢ A C co U N h L E U R r r d -16- Packet Pg.48 1 STATE OF ARIZONA } ss. COUNTY OF MA.RICOPA } On the J day of 1996, before me, the undersigned,a Notary Public in and for said State,pens pally appeared U.'— , 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 the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. Q Q WITNESS my hand and official seal. OFFIC:AI SEAL '�J DKIM-r,M!^ic SOVER1 Signature f Notary Public Nclarl Pub m-scats cf Arizona 1_ eal 8�ARICUA CCUN a itity C3.nn.EXP:M Ap614, 1999 Commission Expires: � Z t C49 - Q c v N ry c a� E W CD CD _ Q a c U N F- C .i O C U E U f6 Q Packet Pg.49 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On May 15, 1996 before me, LA VONDA M-PEARSON,Notary Public,personally appeared Ranakd W_in er , 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. a� L Q WITNESS my hand and official seal/. ' o U VONDA WPW$0S 4 a, Off,#914738 �' / r rte' 1..^i+ic C.Q�1}OM�Q + affSe Signature 3=�:�- c,�o ca:rrrr t: VOIV�J'A.lv� hARSON Ny Comm.E ��s`%cl a E �. a , Q U N r d' M C QS E 0? N i CD Q U N 7 H R 0 y E U iJ W Q Packet Pg.50 STATE OF C IFORNT ) COUNTY OF �' ) On /4,f before me, (here in� n e a d 'tie of the offlcer) , personally appeared � y1 , 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 Z- r- authorized capacity(ies) , and that by his/her/their signature(s) on a) the instrument the person(s) , or the entity upon behalf of which w the person(s) acted, executed the instrument. Q WITNESS my h seal. Signatur (Seal) W a� E ` Alicia M- i=stradgl- :°:c`` Comas.. #1021151 NOTARY PU9UC•CALWORNI/ LOS ANGELES COUNTY (()) ro .s Comm.S)Vt"htlrcn 20. 1998-a vvi I— r M a� _ E 4) N L Q _ U Z r _ L 0 a.+ _ E U w. Q Packet Pg. 51 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 questions for all persons who are to occupy the unit in the above a apartment development for which application . is made, all of whom Q are listed below: 0 .r ca 1 . 2 . 3 . 4 . 5. m Name of Members Relationship Social of the to dead of Security Place of Household Hou5�hold Aae NNim r Employment Q. Ar A _ U N - f r d' M C W E Date of Occupancy of Rental Unit by Tenant: L Date of Lease Signed for Rental Unit by Tenant : Q Certification Date (Earlier of Date of Occupancy or Date Lease signed) - U 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, :2) including income described in (a) below, but excluding all income o described in (b) below, is $ E (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:'52 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 m (v) payments in lieu of earnings, such as unemployment and disability compensation, worker' s compensation and severance pay; o Y (vi) the maximum amount of public assistance available to the above persons; W N (vii) periodic and determinable allowances, such as a alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; Q. a (viii) all regular pay, special pay and allowances of a C 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 V- exceeds income tax liability. =' c (b) The following income is excluded from the amount set E Forth above: a L (i) casual, sporadic or irregular gifts; C M (ii) amounts that are specifically for or in N reimbursement of medical expenses; ( iii) lump sum additions to family assets, such as c S, inheritances, insurance payments (including payments under 0 health and accident insurance and worker' s compensation) , capital gains and settlement for personal or property losses; 0 (iv) amounts of educational scholarships paid directly to c student or educational institution, and amounts paid by the d 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; A-2 Packet Pg.53 (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; a) a� (viii) foster child care payments; , (ix) the value of coupon allotments under the Food Stamp o 0 Act of 1977; (ix) payments to volunteers under the Domestic Volunteer Service Act of 1973; ar (x) payments received under the Alaska Native Claims E Settlement Act; Q. (xi) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (xii) payments on allowances made under the Department of T Health and Human Services ' Low-Income Home Energy Assistance Program; and (xiii) payments received from the Job Partnership -rain*_ng Act . a��r a� 7 . Net Family Assets . If any of the persons described in item 1 ¢ above (or any person whose income or contributions were included in v item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands) , provide : (a) the total value of all such assets owned by all such O persons : $ and r_ (b) the amount of income expected to be derived from such assets in the 12-month period commencing this date: $ ¢ 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. 54 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. a I acknowledge that all of the above information is relevant to the status under federal income tax law of the interest on bonds issued to finance construction of the Project for which application is being made. I consent to the disclosure of such information to a, the issuer of such bonds, the owners of such bonds, any trustee or agent acting on their behalf and any authorized agent of the c Treasury Department or Internal Revenue Service . r- M Date : >, Signature = H r r c E L a U I- tC _ 'i _ d E U t� Q A-4 Packet Pg. 55� STATE OF CALIFORNIA ) } 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) ;chose name (s) is/are subscribed to the within instrument and E 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 0 WITNESS my hand and official seal . c a� E Q ,Seal) Signature c U N r r> c a� E a� a� a� d A C U N tC C i E U ' l4 a+ Q A-5 Packet Pg. 56 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 y c as (i) the product of the amount entered in 7(a) above E multiplied by the current passbook savings rate as determined by HUD: Q $ a (ii) the amount entered in 7 (b) above : $ (iii) enter the greater of line (i) or line (ii) : $ A{1} plus line (3) TOTAL ELIGIBLE INCOME (Line Q a A(2) (iii) ) . $ v F B . Enter number of family members listed in item 1 above : r C . The amount entered in A(3) (Total Eligible Income) is : y $ c Less than $ of median income for the area in which uhe Pro-iect is located, which is the maximum income a, a= 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" ) . i More than the above-mentioned amount . p D. Number of apartment unit assigned: E . Monthly rent : $ d 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.57 G. Applicant: I Qualifies as a Qualifying Tenant. Does not qualify as a Qualifying Tenant. c c: E a� a� L Q N� I.L Y E Q. Q U N . H T M C N E d G3 L a m U N 3 H L �L O d E U Q A-7 Packet Pg. 58 EXHIBIT "B" CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE Date: 19 The following information with respect to Silverwood Apartments (the "Project" ) , is being provided by Magellan Silverwood Partnership, an Arizona general partnership (the "Borrower") to the Redevelopment Agency of the City of San Bernardino (the "Issuer") pursuant to that certain Regulatory ct Agreement and Declaration of Restrictive Covenants dated as of May o 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 units occupied is a E (B) The following residential units (identified by unit Q number; have been designated for occupancy by "Qualified Tenants, " as such term is defined in the Regulatory Agreement (for a total of (C) The following residential units which are included in (B) above, have been redesignated as units for Qualified Tenants since 19 , the date en which the last "Certificate of M Continuing Program Compliance" was filed with the Issuer by the as S-zo r rower : E d N •-ni Previ-ous Designa*_ion Replacing Q T u Tab er of Unix (if anv) Unit- Number � U L O .V _ N E V Q B-1 Packet Pg. 59 (D) The following residential units are considered to be occupied by Qualified Tenants based on the information set forth I below: Number of Date of Name of persons Residing Total Adjusted initial Unit Unit -No. Tenant in the Unit Gross Income (1) (2) a� (3) a (4) o 0 (5} a) W ( o) In c m (7) E a ( i0) t- (E) The Borrower has obtained a "Certification of Tenant M Eligibility, ", in the form provided as Exhibit "A" to the S Regulatory Agreement, from each Tenant named in (D) above, and each w such 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. (F) In renting the residential units in the Project, the Borrower has not given preference to any particular group or class L 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 a 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 Q 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 atterzion of the Borrower which would C B-2 Packet Pg. 60 . 5.D.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 E By: Magellan Silverwood & Cross Creek Q Properties Limited Partnership, a an Arizona limited partnership, General Partner By: Magellan Silverwood & 0 Cross Creek w Properties I, L.L.C. , an Arizona E limited liability company, General Partner c By: Magellan Management v Corporation, an Arizona corporation, Manager T11 By: c d E cj Q c v r . o c a� E s U Q B-3 Packet Pg. 61 r, 5Ac /Owl , EXHIBIT "C" THE LAND c m E a� m Q L 0 I N C W E t t m Q AF Q A Rf U N 7 T r Cl) �V E Q� L a a U N 7 H C .i.i G Q1 E • U fC a.+ w Q C'1 Packet Pg. 62 'EXHIBIT "C" PARCEL A; Parcel 1 -of Parcel Map No. 8414, in the City of San Bernardino, County of San Bernardino State of California, recorded in Book 95 of Parcel Maps, Pages 68 and 69, records of sai County. ' a E PARCEL I v Parcel Z of Parcel Map No. 8414, in the City of San Bernardino, County of San Bernardino , State of California, recorded in Book 95 of Parcel Maps, Pages 68 and 69, records of sail County. m iz _ U to T T M _ OP E {v CT/oc a, d _ 0 _ E Q C-1 Packet Pg. 63 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: U.S.BANK NATIONAL ASSOCIATION C/O LEWIS BRISBOIS BISGAARD&SMITH 221 NO.FIGUEROA ST. SUITE 1200 LOS ANGELES,CA 90012 ATTN:ALEXIS CRUMP E a� a� L (Space Above for Recorder's Use) Q AMENDMENT TO REGULATORY AGREEMENT o AND DECLARATION OF RESTRICTIVE COVENANTS a� a� to c a� E L m Q. Q r� U N r r M C d E E m C U to C N E U t4 a. a.� Q Packet Pg.64 AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this "Amendment") is dated as of May 1, 2003, among the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic organized under and pursuant to the laws of the State of California (the "Issuer"), U.S. Bank National Association, a national banking organization organized and existing under the laws of the United States of America, as trustee (the "Trustee"), and MG Tuscany Apartments, L.P., a w L California limited partnership (the"Borrower"). WITNESSETH: ° 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 Association (the "Trustee") entered into that certain Indenture of Trust, dated as of May 1, 1996 (the "Indenture"), in connection with the issuance of the Issuer's $7,000,000 Variable Rate E Demand Multifamily Housing Revenue Bonds (Silverwoods Apartments Project) Series 1996 a (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 Trustee and the Original Borrower; and M WHEREAS, proceeds of the Bonds were used, in part, to construct and pay other costs a associated with the construction and development of a multifamily residential rental housing project originally known as Silverwoods Apartments and now known as Tuscany Apartments (the"Project") located in San Bernardino, California; and _ U N WHEREAS,the Issuer, Original Borrower and Trustee entered into that certain Regulatory Agreement and Declatation of Restrictive Covenants (the"Regulatory Agreement") E 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 Q 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 WHEREAS, at that time the Indenture was amended by that certain First Supplemental 2 Packet Pg. 65 Indenture dated as of September 1, 2001; and WHEREAS, the Project has been acquired by MG Tuscany Apartments LP, a California limited partnership (the `Borrower"} and the Borrower has caused the delivery to the Trustee of a direct pay irrevokable transferable credit enhancement instrument (the "Credit Facility") 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") to replace the existing letter of credit issued by Bank One,Arizona,NA; and E aD aD L WHEREAS, in connection with the delivery of the Credit Facility, the Borrower and the a Credit Facility Provider have requested certain amendments to the Regulatory Agreementbe o made as follows. a� NOW, THEREFORE, in consideration of the above premises and the mutual covenants W contained herein and for other good and valuable consideration, the parties hereto agree as follows: L_ CU CL Section 1. Unless defined elsewhere in this Amendment, initially-capitalized terms shall have the respective meanings assigned to such terms in the Regulatory Agreement. r Section 2. The first sentence of Section 2 (c) shall be amended to delete the first word, "This" and add in its place: "In the event that the Issuer receives an opinion of Bond Counsel stating that the Bonds must be redeemed in order to prevent interest on the Bonds from = being includable in the gross income of the holders thereof for Federal income tax purposes, E this..." v E Section 3. [Fannie Mae Rider to be inserted here] U Section 4. This Amendment may be executed in several counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. E U Section 5. This Amendment shall be governed by and construed in accordance with Q the laws of the State of California. Section 5. Except as specifically set forth in this Amendment, the terms and provisions of the Regulatory Agreement are not altered, amended or modified hereby. 3 Packet Pg.66 5.D.d [Remainder of page intentionally left blank. Signatures appear on following page.] c E a� a� d 0 m Y c E Y Q d a c U N I- r r M Y C E C d E tC C U N 3 Y Y E U � w Y Q 1 i t Q 4 Packet Pg.67 IN WITNESS WHEREOF, the Issuer, the Trustee and the Borrower have caused this Amendment to be executed as of the date first written above. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Name: a E a Title: L U.S. BANK NATIONAL ASSOCIATION, as Trustee a� By: c Name: E Title: a Q a MG Tuscany Apartments L.P. a California CU limited partnership U) By: Gleiberman Investments, Inc., a California corporation, its administrative General Partner M By: a� Mark Gleiberman, President E E U j j 11 I f X 5 Packet Pg. 68 S.D.d The Credit Facility Provider hereby consents to the terms and the making of this Amendment. FANNIE MAE a corporation organized and existing under the Federal National Mortgage Association Charter Act(12 USC Section 1716 et seq.) c as E a� L By: Name: Q 0 Title: a) N a� E r L ! ca F 4 � r f M G E C E C U C N E U tg a.+ a.+ Q 6 ,-�A__ITAL , � HT S a i d o f f Real Estate Holdings C—ch`orn;c © Cc;orcuc 0 !Nevada Texcs July 15, 2013 Allen J. Parker, City Manager E 300 N. "D" St . 6"' Floor San Bernardino, CA 92418 a Subject: Request to Extend Affordable Housing Regulatory Agreement Tuscany Apartments , 2225 E. Pumalo Street, San Bernardino, CA 92404 APN: 0288-175-15 and -16 E Dear Mr. Parker, Please accept this letter as our formal request to work with the Successor Agency to the City of San Bernardino's Redevelopment Agency to execute an extension of the existing u affordable housing regulatory agreement for our 328-unit apartment community known as Tuscany Apartments. P r For reference, please note the following: M M 1) Property Acquired October 19, 2006 and Regulatory Agreement assumed. N 2) 1St Amendment to the Regulatory Agreement May 1, 2003 per Document No. LO 2003-0289378. 3) Original Regulatory Agreement with Redevelopment Agency on July 16, 1996 per Document No. 1996-0251735. c According to the conditions of the Regulatory Agreement, the affordable housing restrictions expire the later of the date that the outstanding bonds are paid off or 15 w years from the original date, which has now elapsed. We are currently in the process of refinancing the existing bonds with a HUD 223(f) Moderate Renovation Loan. The HUD y loan will have a 35 year maturity. As such, it is necessary to extend the term of the existing regulatory agreement in order to preserve the status of the affordable units. With your direction, your staff (Brandon Mims, Henry Empeno, Mike Trout and Musibau Arogundade) will help to expedite this time sensitive process. a Sincerely, Scott W. Gra Director of Operations `?98°3 4eve: G1er, Circe, Suit 30J Be Air, Ccii` mie 90077 31 0.695.06'6 3"0.696.0633 ir