HomeMy WebLinkAboutRS1- Economic Development ECO 3MIC DEVELOPMENT At NCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
FROM: TIMOTHY SABO SUBJECT: RAMONA SENIOR
Special Counsel COMPLEX
DATE: March 31, 1994
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Synopsis of Previous Commission/Council/Committee Action(s):
None
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Recommended Motion(s):
(Mayor and Common Council)
MOTION A: That the Mayor and Common Council approve Grant Agreement among Ramona Senior Complex,
the County of San Bernardino and the City for $300,000.
(Community Development Commission)
MOTION B: That the Community Development Commission approve amendments to Owner Participation
Agreement by and between Ramona Senior Complex and the Agency in the form of the amended
composite OPA as attached.
TIMOTHY S 0, Special Counsel
Economic Development Agency
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Contact Person(s): Timothy Sabo Phone: 5081
Project Area(s): Ward(s):
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: $ Source:
Budget Authority:
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Commission/Council Notes:
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TCS:lag:04-01-03.cdc COMMISSION MEETING AGENDA
MEETING DATE: 04/04/1994
n
Agenda Item Number:
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Ramona Senior Complex
In August, 1991, the Community Development Commission (the "Commission") approved in
concept the construction financing of the Ramona Senior Complex Project consisting of 44 units
of senior citizen housing. The Commission authorized a construction loan of $2,326,215 to be
repaid in part with a California Housing Finance Agency ("CHFA") tax exempt financing in the
amount of$1,720,000 as the permanent financing for the Project. The Commission additionally
committed to provide secondary financing of $490,030 at a 3% interest rate for ten (10) years.
As a result of changing market conditions in the rental rates since the Project was initially
approved, and because of the unforeseen Project cost overruns, it is not practical at this time to
attempt to utilize any form of a CHFA tax exempt financing. Ramona Senior Complex reviewed
the financing options available and determined in approximately October, 1993, to obtain tax
credit financing through the grant of low-income housing tax credits from the California Tax
Credit Allocation Committee. The initial application to the Tax Credit Allocation Committee was
defective in several respects and was not considered by the Committee Staff as a completed
application for purposes of any 1993 grants of low-income housing tax credits.
Ramona Senior Complex has subsequently decided to submit another application to the Tax
Credit Allocation Committee by the April 15, 1994 deadline. Three consultants were retained
by Ramona Senior Complex with funds provided by the Economic Development Agency for each
contract which is less than $10,000 with each of the three separate consultants.
A completed application to the Tax Credit Allocation Committee requires several amendments
to the previously executed Owner Participation Agreement ("OPA") to include the following
items:
1. Recognition that low-income housing tax credits will be obtained
as an alternative to the CHFA tax-exempt financing.
2. Modification of the repayment terms for the not-to-exceed$490,030
secondary loan; repayment to be from 50% of excess proceeds
available upon funding of the tax credits and the first mortgage
permanent loan, thereafter periodic repayments will be made only
from Distributable Cash Flow as defined in the amended OPA prior
to payments on any other subordinate loans.
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TCS:lag:04-01-03.cdc COMMISSION MEETING AGENDA
MEETING DATE: 04/04/1994
Agenda Item Number: .4 ,
ECONOMIC DEVELOP? NT AGENCY STAFF REPORT
Ramona Senior Complex
March 30, 1994
Page Number -2-
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3. Clarification that the County grant of $300,000 must remain as a
funding source for Project costs in furtherance of housing purposes
and not used for any other non-housing purpose.
4. Casa Ramona has loaned up to $320,000 to Ramona Senior
Complex and will receive a proportionate payment of principal on
said amount from 50% of the available monies upon funding the
tax credits and the permanent loan; after the Commission's not-to-
exceed $490,030 second loan has been paid in full, surplus Cash
Flow will then be available to retire the remaining principal and
interest on the Casa Ramona Loan.
5. As a result of the ongoing monitoring of the project rent-up and
operations that will be required by the State,the tax credit investors
and the tax credit syndicators, and because the Project is virtually
completed at this time, the previously created oversite committee
will no longer function as of the date of this amendment to the
OPA
It is estimated that total Project costs consisting or those items which constitute eligible basis for
tax credit computation and other Project costs will total approximately $3.1M under the criteria
as authorized both by the applicable Federal tax laws and the rules and regulations of the Tax
Credit Allocation Committee. The funding sources necessary to achieve the repayment of the
Commission's construction loan and the payment or reimbursement of all other Project costs will
be accomplished in accordance with the following:
Tax Credit Proceeds $1,600,000
First Mortgage Loan $500,000 to $800,000
County Grant $300,000
Casa Ramona Loan Not-to-Exceed $320,000
Commission Secondary Loan Not-to-Exceed $490,000
Total Approximately $3,100,000
As part of the Tax Credit Application and to enable the Project to receive the most favorable
review of the staff of the Tax Credit Allocation Committee,Ramona Senior Complex will commit
the rental of the units to rental rates not-to-exceed the following limitations:
20% of the units at rental rates and at income limits not to exceed
40% of area median income
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TCS:1ag:04-01-03.cdc COMMISSION MEETING AGENDA
MEETING DATE: 04/04/1994 /
Agenda Item Number: ` v I
ECONOMIC DEVELOPMENT AGENCY STAFF REPORT
Ramona Senior Complex
March 30, 1994
Page Number -3-
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40% of the units at rental rates and at income limits not-to-exceed
50% of area median income
40% of the units at rental rates and at income limits not-to-exceed
60% of area median income
It is typical for tax credit investors to remain as limited partner investors in a housing project for
anywhere from 12 to 15 years and the first mortgage loan is in most cases a 30-year fully
amortized loan. The Tax Credit Allocation Committee requires a 55-year Regulatory Agreement
to maintain the affordability of the units for lower income tenants. The income and rental
limitations imposed by the Tax Credit Allocation Committee would be substantially more
restrictive than those imposed by either the Commission for the use of its low- and moderate-
income housing fund, or by the County for the use of its grant funds.
Also included for Mayor and Common Council action is a Grant Agreement among Ramona
Senior Complex, the County and the City whereby the County will deposit $300,000 to the City
for administration purposes, and ultimate granting to Ramona Senior Complex for housing
purposes. Monies available pursuant to the Grant Agreement will be monitored by the City for
complaince purposes with indemnification provisions by Ramona Senior Complex in favor of the
City and County with a further indemnification by the City in favor of the County.
The use of the low income housing tax credits is the only viable financing methond at this time
that would allow the Commission to have some prospect of reducing its $490,030 loan and
eventually having it paid in full. Even under the originally proposed CHFA financing the
$490,030 loan would have had little ability to be repaid unless the CHFA interest rate had been
reduced and Project costs had not increased.
Staff recommends adoption of the form motion.
ti
TIMOTH*)SABO, Special Counsel
Economic Development Agency
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TCS:lag:04-01-03.cdc COMMISSION MEETING AGENDA
MEETING DATE: 04/04/1994
Agenda Item Number: " '
MRR 30 '94 04:10PM P.Z
AGR MOM REGARDING THE GRANT
OF LOW-AND MODERATE INCOME HOUSING FUNDS
THIS AGREEMENT REGARDING THE GRANT OF LOW- AND
MODERATE-INCOME HOUSING FUNDS ("Agreement") is made this day of
, 1994 by and between the COUNTY OF SAN BERNARDINO, a political
subdivision of the State of California ("County"), the CITY OF SAN BERNARDINO, a
municipal corporation ("City"), and RAMONA SENIOR COMPLEX, INC., created pursuant
to the California Non-Profit Corporation Act and validly existing as a non-profit corporation
under federal and state tax laws ("Ramona") and is entered into by the parties hereto with
reference to the following facts;
RECITALS
WHEREAS, n 1992, the Redevelopment Agency of the City of San Bernardino
("Agency") and Ramona entered into an Owner Participation Agreement ("OPA') pursuant to
which the Agency agreed to provide financial assistance to Ramona with respect to Ramona'$
development and construction of a forty-four (44) unit senior citizens apartment complex
consisting of thirty-nine (39)one bedroom units and five (5) two bedroom units ("Project"), on
certain real property consisting of an approximately 1.$5 acre site generally located at 1524 West
7th Street ("Property"), which is located in proximity to the project area subject to the
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MHK 30 '94 04:11PM P.3
Redevelopment Plan for the Mt. Vernon Corridor Redevelopment Project(°Mt. Vernon Corridor
Project Area"); and
WHEREAS, the Project will provide as affordable residential base to persons and
households who may be presently residing in the Mt. Vernon Corridor Project Area and in other
redevelopment project areas of the Agency; and
WHEREAS, the Project provides for not less than eight(8)very low income one-
bedroom units for a household whose income does not exceed such percentage of area median
income for a household size whose rent shall not exceed such percentage of actual gross monthly
income as shall be determined pursuant to the applicable financing documents; and
WHEREAS, the Project further provides for not less than one (1) very low
income two-bedroom unit for a household whose income does not exceed such percentage of
area median income for a household size whose rent shall not exceed such percentage of actual
gross monthly income as shall be determined pursuant to the applicable financing documents;
and
WHEREAS, the County and the City deem it desirable to use low-and moderate-
income housing funds attributable to the County's portion of the Inland Valley Redevelopment
Project Area ("Inland Valley Project Area") to assist and subsidize the Project in furtherance of
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r1HK -10 '94 04:11HM p.q
increasing, improving and preserving the supply of low- and moderate-income housing within
the Inland Valley Project Area.
NOW,THEREFORE, the County,the City,and Ramona hereby agree as follows:
A(:RFAMT_-sNT
i. In accordance with Health and Safety Code Section 33334.2 and in order
to assist and subsidize the Project: (i) the County hereby grants to Ramona the sum of THREE
HUNDRED THOUSAND DOLLARS ($300,000)of low-and moderate-income housing funds
attributable to the County's portion of the Inland Valley Project Area; and (ii) the City hereby
agrees to assure that such sums are applied by Ramona for the purposes set forth in Section 2
of this Agreement and in conformity with the terms of the Agreement ftarding The Allocation
Of Low- And Moderate-Income Housing Funds, which the County and the Inland Valley
Development Agency ("IVDA°) intend to enter into in Appall, 1994 ("IVDA Agreement!).
2. In consideration for the sums granted under this Agreement, Ramona
hereby agrees to apply such sums to the development and construction of not less than eight(8)
very low income one-bedroom units and not less than one (1) very low income two-bedroom
units provided for by the Project, and to comply with all applicable bond and/or tax restrictions,
income limitations, affordability covenants, and rental restrictions on the units comprising the
Project or upon the individuals who may rent and occupy such units. In compliance with these
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NHK -iU 't,14 04:5(HM P.2
restrictions, Ramona shall provide documentation to the City and to the County evidencing that
it has entered into Covenants, Conditions and Restrictions(CC&R's)and Regulatory Agreements
and that such are in place. The grant amount of$300,000 shall be deposited by the County with
the City upon final execution of this Agreement and the elimination of the condition contained
in Section 8 hereof. This Agreement shall be administered by either the City or the Economic
Development Agency of the City of San Bernardino on behalf of the City and disbursed in
accordance with and subject to that certain Owner Participation Agreement, as amended, by and
between Ramona and the Agency.
3. The restrictions imposed by the grant of sums under this Agreement shall
remain in force at least thirty (30) years and shall run concurrently with any and all existing
restrictions imposed by the Project, including without limitation, bond and/or tax restrictions,
income limitations, affordability covenants, and rental restrictions on the units comprising the
Project or upon the individuals who may rent and occupy such units.
4. Ramona shall timely prepare and submit all necessary written reports to
the City and the County which are sufficient to enable the43Mg to comply with the reporting
requirements imposed on it by the State of California concerning the use of low-and moderate-
income housing funds, in conformity with the IVDA Agreement.
5. Ramona shall indemnify and hold the County,the City,and their respective
officers, directors, employees, representatives and successors In interest free and harmless from
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NHK 0 `y4 L14;leFM P.6
and against any and all claims, known and unknown obligations, liabilities, demands, damages,
expenses, costs, attorneys' fees and causes of action of any kind whatsoever, arising from the
performance or non-performance of Ramona's obligations under the terms of this Agreement,
including without limitation, Ramona's non-use or misuse of the County's low- and moderate-
income housing funds granted hereunder.
6. The City shall indemnify and hold the County, its officers, directors,
employees,representatives and successors in interest free and harmless from and against any and
all claims known and unknown obligations, liabilities, demands, damages, expenses, Costs,
attorneys' fees and causes of action of any kind whatsoever, arising from the performance or
non-performance of the City's or Ramona's obligations under the terms of this Agreement,
including without limitation, the non-use or misuse of the County's low-and moderate-income
housing funds granted hereunder.
7. In the event of a breach of this Agreement, the non-breaching party's
exclusive remedy shall be an action for monetary damages or specific performance, and may not
terminate this Agreement.
S. The County, the City and Ramona each hereby agree that in the event the
IVDA does not approve the IVDA AgreemenA, this Agreement shall be of no force and effect.
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MAR 30 '94 04:13PM P.7
IN WITNESS WHEREOF, the County, the City, and Ramona have executed this
Agreement on the date first above written.
COUNTY OF SAN BERNARDINO
BY
APPROVED AS TO FORM AND LEGAL CONTENT:
By:
CITY OF SAN BERNARDINO
By
Clerk
APPROVED AS TO FORM AND LEGAL CONTENT:
By:
RAMONA SENIOR COMPLEX, INC., a
California non-profit oorporation
By
Secretary
APPROVED AS TO FORM AND LEGAL CONTENT:
By
8880/0001-30/D0CM6
31301%355
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SBE00001/DOC/588/ew
3/31/94 12:00
RECORDING REQUESTED BY:
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND WHEN RECORDED RETURN TO:
SABO & GREEN,
a Professional Corporation
Suite 400
6320 Canoga Avenue
Woodland Hills, California 91367
(Space Above for Recorder' s Use)
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
OWNER PARTICIPATION AGREEMENT
(RAMONA SENIOR COMPLEX PROJECT)
By and Between
REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO
and
RAMONA SENIOR COMPLEX, INC.
a California non-profit corporation
�5 - 1
TABLE OF CONTENTS
Paae
RECITALS 1
Section1 . Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2 . Public Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section3 . Agency Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4 . Construction Loan Funding Procedure. . . . . . . . . . . . . . 14
Section 5 . Construction of the Project. . . . . . . . . . . . . . . . . . . . . . 19
Section 6 . Compliance with Community Redevelopment
Law; Income and Rental Price Limitations. . . . . . . . . 20
Section 7 . Participating Owner' s Responsibilities. . . . . . . . . . . 22
Section 8 . Certain Sales or Transfers of the Project. . . . . . . . 25
Section 9 . Notice of Sales and Transfers. . . . . . . . . . . . . . . . . . . . 25
Section 10 . Public Bid and Compliance with State Laws . . 25
Section 11 . Plans and Specifications. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12 . Remedies. . . . . . . . . . . . . . . . . . . 26
Section 13 . Obligation to Obtain Financing. . . . . . . . . . . . . . . . . . . 28
Section 14 . Notices. . . . . . . . . . . . . . . . . . . . 28
Section 15 . Applicability of Laws and Litigation Costs . . . . . . . 29
Section 16 . Nondiscrimination and Related Covenants . . . . . . . . . . 30
Section 17 . Certificate of Completion. . . . . . . . . . . . . . . . . . . . . . . . 32
Section 18 . Successors and Assigns; Assignment. . . . . . . . . . . . . . . 32
Section 19 . Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 20 . Entire Agreement; Amendment. . . . . . . . . . . . . . . . . . . . . . 34
Section 21 . Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 22 . Section Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 23 . Meaning of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 24 . Indemnification. . . . . . . . . . . . . 36
Section 25 . Effective Date of This Agreement; Execution;
Termof Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
EXHIBIT "A" - Legal Description
EXHIBIT "B" - Scope of Development
EXHIBIT "C" - Promissory Note
EXHIBIT "D" - Deed of Trust
EXHIBIT "E" - Certificate of Completion
EXHIBIT "F" - Organizational Charter of the
Ramona Senior Complex Committee
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SBE00001/0PA/NEW.RAM
3/31/94 330
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
OWNER PARTICIPATION AGREEMENT
(RAMONA SENIOR COMPLEX PROJECT)
This Owner Participation Agreement (the "Agreement" ) is
entered into this day of , 1992 , and has been
amended as of this day of April, 1994, by and between the
Redevelopment Agency of the City of San Bernardino, a public body,
corporate and politic duly organized and existing pursuant to the
Community Redevelopment Law of the State of California (hereinafter
referred to as the "Agency" ) and Ramona Senior Complex, Inc. , created
pursuant to the California Non-Profit Corporation Act and validly
existing as a non-profit corporation under federal and state tax laws
(hereinafter referred to as the "Participating Owner" ) and is entered
into by the parties hereto with reference to the following facts:
RECITALS
WHEREAS , the Agency is authorized and empowered by the
Community Redevelopment Law, Chapter 1 of Division 24 of the
California Health and Safety Code, as amended (the "Law" ) , to permit
owner participation in the redevelopment of real property; to enter
into agreements for the acquisition, disposition and development of
property or to otherwise assist in the redevelopment of real property
within a redevelopment project area conforming with a redevelopment
plan adopted for such area; to acquire real and personal property in
redevelopment project areas; to receive consideration for the
provision of redevelopment assistance; to make and execute contracts
and other instruments necessary or convenient to the exercise of its
powers; and to incur indebtedness to finance or refinance
redevelopment projects; and
WHEREAS, the Redevelopment Plan for the Mt. Vernon Corridor
Redevelopment Project, has been approved and adopted by the City of
San Bernardino, California (the "City" ) , by Ordinance No. MC 733 (the
"Redevelopment Plan" ) ; and
WHEREAS, the Participating Owner is in a position to
acquire ownership of certain real property consisting of an
approximately 1 .85 acre site generally located at 1524 West 7th
Street which is located in proximity to the project area subject to
the Redevelopment Plan (the "Project Area" ) , as legally described in
Exhibit "A" attached hereto and incorporated herein by reference (the
"Property" ) ; and
WHEREAS, the Participating Owner intends to undertake the
development of the Property by undertaking the construction thereon
of a forty-four (44) unit senior citizens apartment complex
consisting of thirty-nine ( 39 ) one bedroom units and five (5 ) two
bedroom units (the "Project" ) , all as more fully described in the
Scope of Development attached hereto as Exhibit "B" and incorporated
herein by this reference, in order to facilitate development of the
Property for uses consistent with the redevelopment goals of the
Agency; and
2
WHEREAS, the Participating Owner has requested the Agency
to exercise certain redevelopment powers, pursuant to the Community
Redevelopment Law, and to assist the Participating Owner with respect
to undertaking the Project; and
WHEREAS, it is proposed that the Agency assistance with
respect to the development of the Project will consist of the
provision of (i) a construction financing loan in the amount of Two
Million Three Hundred Twenty-Six Thousand Two Hundred Fifteen Dollars
( $2 , 326, 215) (the "Construction Loan" ) and (ii) upon completion of
construction and after having obtained a permanent loan, a secondary
loan in an amount not in excess ofAFour Hundred Ninety Thousand
Thirty Dollars ($490,030) (the "Secondary Loan" ) ; and
WHEREAS, the proceeds of the Construction Loan and the
Secondary Loan shall be used to fund the construction costs of the
Project as well as related costs and both Loans shall be evidenced by
a single Promissory Note (the "Promissory Note" ) executed by the
Participating Owner in favor of the Agency, substantially in the form
as attached hereto as Exhibit "C" and incorporated herein by this
reference and secured by a single Deed of Trust (the "Deed of Trust" )
substantially in the form of Exhibit "D" attached hereto and
incorporated herein by this reference; and
WHEREAS , upon repayment of the Construction Loan by the
Participating Owner, which shall be in an amount equal to the
Construction Loan less the amount of the Secondary Loan, the
3
Participating Owner shall continue to have the obligation to repay
the Secondary Loan upon the terms and conditions as more fully
hereinafter described; and
WHEREAS, the California Housing Finance Agency ( "CHFA" ) has
previously agreed to provide the permanent financing for the Project
in an amount equal to One Million Seven Hundred Twenty Thousand
Dollars ($1 ,720,000) (the "Permanent Financing" as such term is used
herein shall also include any other permanent loan, such as one
utilized in connection with low income housing tax credits, that is
recorded against the Property in lieu of the CHFA loan) , and, upon
the funding of such Permanent Financing, the Participating Owner
shall have the immediate obligation to repay the outstanding balance
of the Construction Loan; and
WHEREAS, the Participating Owner has more recently proposed
to submit an application to the California Tax Credit Allocation
Committee to obtain low income housing tax credit, to assist in the
financing of the Project together with a County grant, a loan by Casa
Ramona, Inc. of $320,000 and a conventional first mortgage permanent
loan; and
WHEREAS, the Agency intends to assist the Participating
Owner in completing the Project to the extent that the Agency shall
provide the Construction Loan and the Secondary Loan pursuant to the
terms hereof (collectively the Construction Loan and the Secondary
Loan shall be referred to herein as the "Agency Assistance" ) ; and
4
I?y- 1
WHEREAS, the development of the Project will benefit the
Project Area by providing senior citizen housing to the community and
the City thereby eliminating blighting conditions within and adjacent
to the Project Area; and
WHEREAS, the Project will facilitate development of the
Property in a manner consistent with the Redevelopment Plan and help
encourage economic growth and revitalization in and around the
Project Area; and
WHEREAS, the Agency deems it desirable to use its low and
moderate income housing funds for the purposes of providing the
Agency Assistance; and
WHEREAS, the Participating Owner has demonstrated to the
satisfaction of the Agency its commitment to undertake the completion
of the Project.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS :
Section 1 . Defined Terms. All terms not otherwise
defined herein shall have the same meaning as used in the Community
Redevelopment Law, Health and Safety Code Section 33000, et sea. (the
"Law" ) . The recitals are by reference incorporated herein and made
a part of this Agreement.
5
Section 2 . Public Purpose. The Agency and the
Participating Owner agree that the completion of the Project shall be
undertaken for the common benefit of the parties hereto and the
residents of the City in order to eliminate blight within the City
and areas adjacent to the Project Area. The Agency and the
Participating Owner further agree that the development of the Project
shall not only eliminate blight on the Property, but will also assist
in creating an environment which will encourage and facilitate the
elimination of blight within the Project Area and in neighborhoods in
proximity to the Project Area. Therefore, the completion of the
Project will be of benefit to the Project Area, and will help
improve, upgrade and revitalize, both economically and physically, a
portion of the City located adjacent to the Project Area that
manifests itself as a blighted area. In addition, the Project will
provide an affordable residential base to persons and households who
may be presently residing in the Project Area and in other
redevelopment project areas of the Agency.
Section 3 . Agency Assistance. The Agency hereby agrees
that in order to assist the Participating Owner in the development of
the Project, the Agency shall provide the Construction Financing in
an amount equal to Two Million Three Hundred Twenty-Six Thousand Two
Hundred Fifteen Dollars ($2,326,215) and the Secondary Loan, which is
included within the amount of the Construction Loan, in an amount not
to exceed Four Hundred Ninety Thousand Thirty Dollars ($490 ,030) all
6
as evidenced by the Promissory Note attached hereto as Exhibit "C"
and secured by the Deed of Trust attached hereto as Exhibit "D" .
The Participating Owner shall purchase the Property from a
third party owner for $320,000 with proceeds from the first draw
under the Construction Loan. Such land draw proceeds shall be
deposited in the appropriate title company escrow account to be
established for completing such transfer of title for the Property to
the Participating Owner. Simultaneously, with the transfer of title
for the Property to the Participating Owner, this Agreement shall be
recorded against the Property on a first lien priority position .
Upon the provision of the funds representing the Permanent
Financing to be provided by either CHFA, low income housing tax
credits or such alternate permanent funding source, the Participating
Owner shall immediately repay all principal and interest due and
payable on the Construction Loan, less the principal amount of the
Secondary Loan, with the remaining principal balance of the Secondary
Loan, together with interest thereon, to be repaid on the terms and
conditions as hereinafter set forth. The Participating Owner hereby
agrees to obtain from any available source of funds of either the
Participating Owner or any other third party such moneys as may be
necessary to complete the construction of the Project, fulfill the
financial obligations of the Participating Owner pursuant to this
Agreement, repay the principal portion of the Construction Loan, plus
interest as required under this Agreement and to pay all required
7
fees and demonstrate the necessary equity requirements to obtain the
Permanent Loan on the Project.
4
The interest rate of the Construction Loan shall be equal
to the prime rate established by Bank of America and existing on the
date on which this Agreement is fully executed, plus one percent
( 1% ) , fixed for the term of the Construction Loan, until repaid in
full , plus interest, to the Agency. Interest on the Construction
Loan shall initially be paid from interest reserve as contained as a
line item in the Construction Loan and upon depletion of said
interest reserve additional payments of interest shall be the sole
obligation of the Participating Owner to pay from other available
sources. Interest shall accrue on the principal amount of each
disbursement of the Construction Loan from the date of such
disbursement until the outstanding principal balance, plus all
accrued and unpaid interest are paid in full . All payments made by
the Participating Owner shall first be applied to the payment of
accrued and unpaid interest and then to the payment of principal .
Interest on the Secondary Loan shall be at the rate of
three percent (3%) per annum to be accrued and paid monthly from
Distributable Cash Flow and shall accrue on the unpaid principal
balance thereof from the date the Permanent Loan is funded and the
Secondary Loan is therefore deemed to have been advanced by the
Agency.
8
The Secondary Loan shall be a,,fifty-five (55) year loan
with a final maturity date being fifty-five (55 ) years from the
funding thereof, and the unpaid principal and accrued interest
thereon shall be deemed to be forgiven as to the unpaid balance, both
principal and interest, on said fifty-five (55) year maturity date.
Except as hereinafter provided, the Secondary Loan shall be reduced
in principal amount immediately upon, or as soon as practicable
after, the funding of the conventional first mortgage permanent loan
and the funding by the tax credit investors of their ownership
interest in the Project, to the extent there are available funds in
excess of the estimated line item amounts set forth in the tax credit
application. Any moneys available to the Project after the date of
Amendment No. 1 to this Agreement from the proceeds as set forth
above and from sources exclusive of the operating revenues of the
Project, shall be applied in equal amounts to reduce the principal
balance of (i) the Secondary Loan as may have been funded at such
time or as shall thereafter be funded and (ii) then hereinafter
described Casa Ram'Dna, Inc. , loan of $320,000 . Except the extent as
provided above, neither the Participating Owner nor Casa Ramona,
Inc . , shall receive any payments, directly or indirectly, or any
other reimbursements for Project costs, regardless of when such
Project costs were .laid or incurred until such time as the Secondary
Loan has been paid in full . The parties agree that not in excess of
$320,000 was loaned by Casa Ramona, Inc. , to the Participating Owner
for the payment of Project costs which loan shall be subordinate to
the Secondary Loan. No payments of principal or interest on said
9
$320,000 amount or any lesser outstanding balance shall
be paid by the Participating Owner to Casa Ramona, Inc . , from any
operating revenues, Surplus Cash Flow or Distributable Cash Flow,
until the Secondary Loan has been repaid to the Agency in full as to
both principal and interest. For such period of time as the
Secondary Loan is outstanding, all Surplus Cash Flow (as hereinafter
defined) which is then determined to be Distributable Cash Flow (as
hereinafter defined) shall be used solely to repay the principal of
and interest on the Secondary Loan. The Secondary Loan shall be
subordinate to any conventional first mortgage permanent loan
obtained as required for compliance with the grant of low income
housing tax credits. Any cash flow distributions to the
Participating Owner or Casa Ramona, Inc . , and any repayment
obligations or reimbursements to Casa Ramona, Inc. , by the
Participating Owner shall also be subordinate to the Secondary Loan
and the repayment thereof. "Surplus Cash Flow, " as used herein,
shall mean that amount of monthly cash flow from the operations of
the Project after the payment of actual operating expenses of the
Project including, specifically, debt service on the conventional
first mortgage permanent loan; utilities; replacement reserves;
vacancy or other operating reserves; repairs; maintenance;
janitorial; management fees and employee expenses to third parties
unrelated in any manner to and not employed by Casa Ramona, Inc . , or
the Participating Owner; taxes; licenses; governmental fees and
assessments, if any. "Distributable Cash Flow, " as used herein, shall
mean not less than fifty percent (50%) of the Surplus Cash Flow which
10
shall be disbursed, if and to the extent available, on a monthly
basis to first pay the interest on and then the principal balance of
the Secondary Loan. The remaining not to exceed fifty percent (500)
of the Surplus Cash Flow shall be held and retained by the
Participating Owner in a reserve, replacement or other sinking fund
to be used solely for the purposes of operating and maintaining the
Project or for the purpose of providing for the repair, replacement
or reconstruction of the Project or any component thereof and not for
the payment of any other subordinate indebtedness until the Secondary
Loan has been paid in full . Any deposits not so made by the
Participating Owner in such reserve, replacement or other sinking
fund shall be paid to the Agency as payments of interest on and
principal of the Secondary Loan. The determination of the items and
the dollar amount thereof that shall be paid as Project operating
expenses to thereby calculate Surplus Cash Flow shall be subject to
review by the Agency upon request. Any dispute between the Agency
and the Participating Owner as to the appropriateness or
reasonableness of any operating expense item and whether any such
item should be paid and excluded before there is a determination of
Surplus Cash Flow or SCF shall be resolved by a three (3) person
committee of which (i) the Participating Owner shall appoint one (1 )
member; (ii) the Agency Administrator of the Economic Development
Agency of the City of San Bernardino shall appoint one (1 ) member,
and (iii) a representative of the Agency audit firm shall
automatically be a member thereof. Any determination by a majority
of such committee members shall be binding upon both the
11
Participating Owner and the Agency provided that all such
determinations must be consistent with the applicable provisions of
the conventional first mortgage permanent loan and documents relative
to the granting of low income housing tax credits to the Project.
The Secondary Loan shall be due and payable, both as to principal and
accrued and unpaid interest, prior to maturity from the first moneys
realized upon any refinancing of the Project. not to exceed the
principal and interest then owed on the outstanding balance of the
Secondary Loan, or upon a sale of the Project except as set forth in
paragraph (a) immediately following, and shall be paid as a first
priority claim against all net proceeds of such sale until the
Secondary Loan, including accrued interest, shall have been paid in
full . The Secondary Loan shall become due and payable in full
immediately upon any or all of the following events:
(a) A sale of the Project or of the stock of the
Participating Owner, except that if the sale (i) is to a non-profit
corporation which is an Internal Revenue Code Section 501 (c) (3)
exempt person and exempt from taxation pursuant to California
corporate income tax laws, and (ii) the Agency, in its sole
discretion, has approved the purchaser and the terms of the sale, and
(iii) the purchaser expressly and in writing assumes all obligations
of the Participating Owner under this Agreement, then the Secondary
Loan shall be assumable by the purchaser;
12
(b) A refinancing of the Project which is defined as any
financial transaction which affects the Secondary Loan or any loan
senior to the Secondary Loan or which adds new debt secured by the
Proj ect irrespective that such new debt may be subordinate to the
Secondary Loan;
(c) A change in the use of the Project which affects the
availability or quantity of senior citizen housing in the Project.
The Secondary Loan shall not be due and payable and shall
remain outstanding pursuant to the provisions hereof upon any
transfer of the Project to an entity in which the Participating Owner
maintains all or a portion of the general partner interest therein or
some degree of control of the Project solely for the purpose of
obtaining low income housing tax credits from the California Tax
Credit Allocation Committee complying with the requirements as
further provided in Section 8.
The Agency shall have the right from time-to-time, upon
reasonable notice, to review the books and records of the Project
and/or the Participating Owner regarding the finances and operations
of the Project.
The Agency Assistance is predicated upon the current and
continuing status of the Participating Owner as a non-profit
corporation. The Participating Owner represents that it is a validly
13
�s- r
formed California non-profit corporation and that it has obtained the
appropriate certifications and determinations of tax exempt status
from the Internal Revenue Service and the California State Board of
Equalization.
The parties recognize that the Participating Owner has
obtained a $300,000 grant from the County of San Bernardino which
must be utilized solely for housing purposes related to the Project
for which the City of San Bernardino shall be the grant administrator
pursuant to the applicable grant agreement.
Section 4 . Construction Loan Funding Procedure. Except
for the portion of the Construction Loan to be deposited in a title
company escrow account in accordance with Section 3, the proceeds of
the Construction Loan shall be disbursed in the manner as hereinafter
set forth after the Participating Owner has provided the Agency with
an endorsement or title policy from a title insurance company in
favor of the Agency showing fee simple title in the site in the name
of the Participating Owner and the lien free status of the site. It
is acknowledged that the Agency has previously advanced $60 , 200
towards CHFA loan fees, and that said sum shall be deemed an advance
on the Construction Loan.
(a) The Agency shall make monthly disbursements based upon
Progress Payment Requests, to be submitted by and certified as to
correctness by a project manager to be approved by the Chairman,
14
Secretary and the Oversight Committee (the "Project Manager" ) , to the
Agency on or before the first business day of each calendar month.
Progress Payment Requests timely received by the Agency in said
manner shall be paid in one or more checks of the Agency to one or
more suppliers of labor or materials and for the payment of fees and
other related construction expenses on or before twenty (20) business
days after actual receipt by the Agency and acceptance of a properly
prepared Progress Payment Request.
(b) Such Progress Payment Requests shall include for
payment only those construction expense items of the Project (i) as
were previously paid as an advance of funds, if any, to the Project
Manager or the Participating Owner, (ii) incurred by either the
Project Manager or the Participating Owner for which labor or
materials were previously rendered and/or supplied and for which
payment has not been made, if any, and/or (iii) which are expense
items for labor or materials to be incurred and paid within the next
succeeding thirty (30) calendar day period.
(c) The Project Manager or the Participating Owner shall
provide the Agency with a current engineering schedule of values
denoting each line item for which a Progress Payment Request has been
submitted. Such schedule of values shall include any estimates,
agreements or contracts to evidence the actual dollar amount to be
paid to any subcontractor, labor contractor, vendor or supplier.
15
(d) Payments shall be made by the Agency for only those
line items included on a Progress Payment Request which have attached
thereto evidence of the actual dollar amount to be paid to any
subcontractor, labor contractor, vendor or supplier.
(e) Agency Staff shall conduct routine on-site inspections
on at least a weekly basis to verify that labor has been performed
and materials supplied to the Project in accordance with the most
recent Progress Payment Request for which payment has been made in
whole or in part. In the event Agency Staff determines that all or
a portion of the dollar amount advanced for one or more line items
has not in fact been paid or will not be paid by the date of
submission by the Project Manager of the next monthly Progress
Payment Request, the Agency shall deduct such unpaid amount from the
total to be paid by the Agency pursuant to such next monthly Progress
Payment Request.
(f) The Project Manager shall submit with each Progress
Payment Request appropriate evidence of either conditional releases
for labor and material for which payment was not made and/or
unconditional releases for labor and material for which payment was
made, plus, if applicable, cash receipts or invoices indicating that
payment was made with regard to all labor and material costs advanced
or paid by the Agency for the immediately preceding monthly Progress
Payment Request.
16
(g) Except for the actual purchase of materials from
vendors or suppliers evidenced by unconditional releases, all labor
contracts and fixed fee labor and material contracts with
subcontractors as shall be entered into by the Participating Owner
shall provide for a ten percent (10%) retention of each draw under
the Construction Loan to be held by the Agency and properly noted as
funds not advanced under the Construction Loan for each appropriate
line item. The Project Manager shall so indicate on the Progress
Payment Request the line items for which the ten percent (l0%)
retention is applicable and subtract such amount from the total draw
request. The aggregate ten percent (10%) retention shall not be paid
under such labor and material contracts until (i) sixty ( 60) days
after recordation which shall be filed within ten (10 ) business days
by the City of San Bernardino of a certificate of completion for the
Project, (ii) there are no (a) labor or material liens filed against
the Project, (b) lis pendens recorded against the Project, and (c)
there is no court action filed against the Participating Owner, the
Project Manager or the Agency disputing any amounts paid or owed for
labor or materials as to the Project, and (iii) a title insurance
company has issued an appropriate lien release endorsement to the
Agency under a lender's title policy. If liens, lis pendens or court
actions are filed, the Agency shall withhold one hundred fifty
percent (150%) of the estimated or actual stated value of each lien,
lis pendens or court action until such time as the matters addressed
therein have been either adjudicated or otherwise resolved.
17
�l ` I
(h) Each disbursement requested on the Progress Payment
Request shall include the applicable monthly interest draw from the
$123 , 840 interest reserve contained within the total amount of the
Construction Loan. Such monthly interest shall be calculated at the
rate set forth in Section 3 hereof and shall be applied to the total
principal balance of the Construction Loan outstanding as of the date
of submission of each Progress Payment Request. The Agency shall
draw such monthly interest from said interest reserve and credit it
to the accrued interest on the then outstanding principal balance.
It is the intent that said $123,840 interest reserve figure will not
be funded as a cash disbursement but will be treated as a bookkeeping
entry and thus increase the outstanding unpaid principal balance of
the Construction Loan until said interest reserve has been depleted.
The initial draw from the interest reserve shall include a portion
thereof representing interest due and owing on the previously
disbursed Advance as set forth in Section 3 hereof from the date of
the disbursement of said Advance until the date of the appropriate
draw from the interest reserve. Upon depletion of said interest
reserve amount, it will thereupon be the sole obligation of the
Participating Owner to pay any accrued and unpaid interest on the
Construction Loan from all other available sources . The parties
recognize and agree that said interest reserve figure was utilized to
pay Project costs, and therefore, the Participating Owner owes from
sources other than the Construction Loan the full amount of the
accrued and unpaid interest on the Construction Loan from the date of
each withdrawal of Construction Loan proceeds.
18
The Participating Owner and the Agency agree that an
oversight management committee comprised of the individuals and
designated as the Ramona Senior Complex Committee shall be formed as
soon as practicable after the date of execution of this Agreement to
function and to have the responsibilities as set forth in Exhibit "F"
as attached hereto. The Ramona Senior Complex Committee shall be
abolished to avoid the possibility of conflicting direction being
given to the Participating Owner as a result of the compliance
requirements in connection with the operation, management and rental
policies of the Project to be dictated by the CHFA, an alternate tax-
exempt for conventional financing source, or California Tax Credit
Allocation Committee, the conventional first mortgage permanent
lender, the tax credit investors and applicable federal tax laws .
The Ramona Senior Complex Committee shall be deemed to be no longer
in existence as of the dat e Aof approval of the Amendment No. 1 to
this Agreement.
Section 5 . Construction of the Project. The
Participating Owner shall undertake or cause to be undertaken the
acquisition, construction and installation of the private
improvements and public improvements comprising the Project. The
Participating Owner anticipates the employment of the Project Manager
to act as the project manager on behalf of the Participating Owner.
The Participating Owner shall be responsible for the payment of any
and all fees and assessments that may be levied against the Project
or the Property or which may be required in connection with the
19
construction of the private or public improvements which comprise the
Project. The Participating Owner shall commence construction of such
private improvements prior to December 1 , 1992 and shall complete
such construction within twenty-four (24) months of commencement of
construction subject to any extensions by mutual written consent of
the parties hereto.
Section 6 . Compliance with Community Redevelopment Law;
Income and Rental Price Limitations . Provided that either the CHFA
financing or the low income housing tax credit financing, as referred
to in Section 3 hereof in the form of the Permanent Financing as
defined in the recitals, is funded as contemplated by this Agreement,
the Agency shall not impose any additional income limitations,
affordability covenants or rental restrictions on the units
comprising the Project or upon the individuals who may , rent and
occupy such units . In the event that the CHFA or the low income
housing tax credit imposed income and rental restrictions are
released or eliminated at any time prior to thirty (30) years from
the date that said CHFA or the low income housing tax credit income
and rental restrictions were initially imposed by either financing
alternative, the Participating Owner or its successor or assigns
shall execute and record such documents as deemed necessary by the
Agency to continue such limitations and restrictions as were
previously imposed by either the CHFA financing or the low MMM@
housing tax credit financing.
20
If eithere the CHFA Permanent Financing or the low income
moo
housing tax credit financing is not obtained for any reason
whatsoever and an alternative permanent loan is obtained, whether
from a governmental agency, federal, state or local , or from a
conventional lending source, the Participating Owner shall impose by
recorded documents satisfactory to the Agency the following
restrictions which shall remain in effect for thirty (30) years from
the date that either (i) fifty percent (50% ) of the units in the
Project are rented or (ii) two (2 ) years after the issuance of a
certificate of occupancy for the Project by the City or (iii) four
(4) years from the date of this Agreement, whichever of (i) , (ii) or
(iii) is the first in time to occur.
(1 ) Eight (8) very low income one-bedroom units for a household
of one (1) whose income does not exceed fifty percent (500)
of area median income for a household size of one (1 ) whose
rent shall not exceed twenty-five percent ( 25%) of actual
gross monthly income.
( 2 ) One ( 1 ) very low income two-bedroom units for a household
of two (2) whose income does not exceed fifty percent (50%)
of area median income for a household size of two (2) whose
rent shall not exceed twenty-five percent (25%) of actual
gross monthly income; such residents by virtue of their
relationship must be considered as a household and both
21
incomes, if applicable, will be taken into account to
determine income qualifications.
(3) Three (3) units, which may or may not be those referred to
in ( 1 ) and (2 ) above, shall be rented to handicapped
individuals; such units rented to the handicapped may be
separately reserved units provided that three ( 3) units
shall be exclusively for handicapped applicants on an as
available basis and not rented to non-handicapped persons
until similar sized units within the complex are occupied
and rented; rental of units reserved for handicapped
occupants must evidence a good faith effort to solicit
handicapped tenants prior to being rented to non-
handicapped tenants; "handicapped" as used herein shall
mean individuals who are either entirely bedridden or who
have lost the use of one or more arms or legs or are
confined to a wheelchair for all ambulatory access.
Section 7 . Participating Owner' s Responsibilities . A
substantial portion of the consideration which supports the agreement
as herein contained of the Agency to assist in the redevelopment of
the Property is the agreement of the Participating Owner to complete
the Project as set forth in the Scope of Development attached hereto
as Exhibit "B" , including the construction of the public improvements
and cause the commencement of operations within the specified period,
all as evidenced by the issuance of a Certificate of Completion in
22
the form attached hereto as Exhibit "E" , subject to any extensions as
mutually agreed upon by the Parties hereto.
However, the foregoing responsibility of the Participating
Owner shall be subject to the following limitations: By reason of
acts of God; strikes, lockouts or other industrial disturbances; acts
of public enemies; orders of any kind of the Government of the United
States or of the State of California or any department, agency,
political subdivision, court or official of any of them, or any civil
or military authority; insurrections; riots; epidemics; landslides;
lightning; earthquakes; volcanoes; fires; hurricanes; tornados;
storms; floods; washouts; droughts; arrests; restraint of government
and people; civil disturbances; explosions; breakage or accident to
machinery; partial or entire failure of utilities; or any cause or
event not reasonably within the control of the Participating Owner,
the Participating Owner is unable in whole or in part to carry out
any one or more of its agreements or obligations contained in this
Agreement, the Participating Owner shall, for the time of said delay
or such longer period as shall be agreed in writing by the Agency,
not be deemed in default pursuant to Section 19 hereof by reason of
not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such inability.
The Participating Owner shall make reasonable effort to remedy with
all reasonable dispatch the cause or causes preventing it from
carrying out its agreements; provided, that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely
23
within the discretion of the Participating Owner, and the
Participating Owner shall not be required to make settlement of
strikes, lockouts and other industrial disturbances by acceding to
the demands of the opposing party or parties when such course is in
the judgment of the Participating Owner unfavorable to the
Participating Owner.
The completion and operation of the Project by the
Participating Owner shall substantially assist the Agency to
implement the Redevelopment Plan. Therefore, the Participating Owner
will take all reasonable steps to enable the Project to be completed
within twenty-four (24) months of the date of execution of this
Agreement. The Agency has relied upon such representations in
determining the scope of the Agency Assistance that would be
warranted under the circumstances to encourage the construction of
the Project.
For the purposes hereof, completion of the Project shall
mean the date on which the Agency approves the issuance of a
Certificate of Completion provided that such approval shall not be
unreasonably withheld and which Certificate of Completion shall be
substantially in the form attached hereto as Exhibit "E" , certifying
that the construction of the Project has been completed and that
operations as contemplated by the construction of the Project by the
Participating Owner have commenced.
24
Section 8. Certain Sales or Transfers of the Project.
The Participating Owner hereby covenants and agrees not to sell,
transfer or otherwise dispose of the Property or the Project located
thereon prior to the completion of the Project and for a period of
five (5) years therefrom without obtaining the prior express written
consent of the Agency which consent shall be at the sole discretion
of the Agency; except, however, as provided in Section 3 in
connection with a low income housing tax credit financing, the Agency
shall at any time upon request of the Participating Owner have the
right to object to such transaction and deny the Participating Owner
the ability to proceed but only for reasonable cause.
Section 9 . Notice of Sales and Transfers.
Notwithstanding the foregoing, and for the term of this Agreement,
the Participating Owner agrees to notify the Agency in writing of any
sales or transfers of any portion of the Property or the Project
prior to the consummation of such sale and/or transfer, which notice
shall contain the name, address and formal description of the entity
so acquiring interests in the Project or the Property.
Section 10 . Public Bid and Compliance with State Laws.
The Participating Owner shall comply with any applicable public bid
procedures and all other State Laws in connection with the
construction of the public improvements and the private improvements
which comprise the Project.
25
�5- �
Section 11 . Plans and Specifications. The Participating
Owner agrees that the plans and specifications to be prepared for the
acquisition, construction and installation of the improvements
comprising the Project shall be submitted to the appropriate
department of the City for approval prior to commencement of
construction; provided, however, that said plans and specifications
shall be in all respects in accordance and in conformity with this
Agreement and all appropriate plans or building standards of the
City. In the event said plans and specifications are not reasonably
acceptable to such department of the City and in compliance with this
Agreement, then, in such event, the Participating Owner agrees to
amend or modify said plans and specifications or to submit such
further or additional plans and specifications as may reasonably be
required by the appropriate department of the City. The plans and
specifications approved by the appropriate department of the City
shall not be amended or modified in any material respect subsequent
to such date of approval without the prior written approval of either
or both the City or the Agency, as applicable.
Section 12 . Remedies . In the event the Participating
Owner breaches any of its covenants or obligations under this
Agreement, the Participating Owner shall, at the option of the Agency
and upon demand by the Agency to the Participating Owner, immediately
repay to the Agency all amounts due and owing under the Construction
Loan and/or the Secondary Loan. As a further and cumulative remedy,
the Participating Owner, for itself, legal representatives,
26
Q4
successors and assigns, agrees that the Agency, its successors and
assigns, shall have the right and power to institute and prosecute
any proceeding at law or in equity to enforce any covenants and
agreements herein contained and to enjoin the threatened or attempted
violation thereof by the Participating Owner, legal representatives,
successors, tenants and assigns and/or to collect damages from the
aforesaid, whomsoever of which may violate said covenants and
agreements; and in addition, the Participating Owner for itself,
legal representatives, successors and assigns does hereby grant the
Agency such right and power to institute and prosecute such
proceedings.
The remedies for the benefit of the Agency set forth in
this Section 12 shall be in addition to any and all other remedies
available to the Agency under this Agreement or as a matter of law.
The parties acknowledge and agree that the Agency may exercise any
and all legal and equitable remedies available to the Agency under
the laws of the State of California to enable the Agency to exercise
the rights of the Agency hereunder and to enforce the provisions of
this Agreement including, but not limited to, those which are
contained in this Section 12 .
The Participating Owner further agrees to pay upon written
demand of the Agency all costs, fees and expenses of the Agency
including, but not limited to, attorneys' fees, court costs and costs
attributable to Agency Staff time, incurred in connection with any
27
enforcement by the Agency of the provisions of this Section 12 or the
seeking of any remedies legally available to the Agency related to
this Agreement.
In the event the Agency breaches any of its covenants or
obligations under this Agreement, the Participating owner may
exercise all legal and equitable remedies available to the
Participating Owner under the laws of the State of California.
Section 13 . Obligation to Obtain Financing. The Agency
shall have no obligation or commitment to provide any form of
financial assistance to the Participating Owner in connection with
the Property or the completion of the Project, except as is
specifically provided in this Agreement.
Section 14 . Notices . All notices and demands of any
kind which any party hereto may be required to serve upon any other
party under the terms of this Agreement shall be served in writing on
such other party by personal service or by leaving a copy of such
notice or demand at the address hereinafter set forth, whereupon
service shall be deemed complete and notices and demands shall be
deemed to have been received on the date of such personal service; or
by mailing a copy thereof by certified or registered mail, postage
prepaid, airmail if the address is outside the State in which the
same is mailed, with return receipt requested, addressed as follows:
28
If to the Agency: Redevelopment Agency of the City of
San Bernardino
201 North "E" Street, Third Floor
San Bernardino, California 92401-1507
Attention: Executive Director
With a copy to: Sabo & Green
6320 Canoga Avenue
Suite 400
Woodland Hills, California 91367
Attention: Timothy J. Sabo
If to the
Participating owner: Ramona Senior Complex, Inc.
1524 West 7th Street
San Bernardino, California 92411
Attention: Ray V. Coronado, Chairman
In case of service by mail, service shall be deemed complete and
notices and demands shall be deemed to have been received at the
expiration of the third calendar day after the date of mailing,
notwithstanding any other date for receipt set forth on any return
receipt or the failure of any party to receive a return receipt. The
addresses to which notices and demands may be delivered or sent may
be changed from time to time by service of notice as hereinabove
provided by any party upon the other party.
Section 15 . Applicability of Laws and Litigation Costs .
This Agreement shall be construed and enforced in accordance with the
laws of the State of California. Should any action be brought in any
court of competent jurisdiction, the prevailing party in such action
shall be entitled to reimbursement by the other party for all
reasonable attorney' s fees, court costs and other costs related to
such litigation.
29
Section 16 . Nondiscrimination and Related Covenants.
The Participating Owner agrees that, in addition to the other
provisions set forth in this Agreement, every conveyance of the
Property, in whole or in part to the extent as permitted pursuant to
this Agreement, shall, in addition to any other covenants, contain
covenants on the part of the Participating Owner, for itself, its
successors and assigns of the Property and which covenants shall be
covenants running with the land and shall bind the Participating
Owner, its successors and assigns and all persons claiming under or
through it to effectuate the following:
(a) That the work of the redevelopment of the Property or
part or parts thereof as in this Agreement provided shall be
implemented as intended by this Agreement.
(b) That there shall be no discrimination against or
segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, or
ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the premises to be conveyed, nor shall the
Participating Owner or any grantees or any persons claiming under or
through the Participating Owner establish or permit any such practice
or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the premises to be conveyed.
30
(c) That, after the satisfactory completion of the Project
made necessary by this Agreement, the Property shall be devoted to
the uses specified in this Agreement and consistent with the
Redevelopment Plan and shall not, in whole or in part, be devoted to
any other use or used for any other purposes .
(d) That such agreements and covenants shall run with the
land, and shall inure to the benefit of and be enforceable by the
Agency, its successors and assigns. Furthermore, it is intended and
agreed that the covenants contained in subsection (b) of this
Section 16 shall remain in effect without limitation as to time.
(e) Such agreements and covenants shall run in favor of
the Agency for the entire period during which such agreements shall
remain in force and effect without regard to whether the Agency has
at any time been, remains, or is an owner of any land or interest
therein to which these covenants relate. In the event of any breach,
the Agency shall have the right to exercise all the rights and
remedies available at law or in equity to enforce the curing of such
breach.
(f) That no portion of the Project or the Property shall
be sold or used by any tax-exempt entity for the duration of the
Redevelopment Plan without written consent of the Agency.
31
It is the intent hereof that the provisions of subsections
(a) through (f) , inclusive, hereof shall survive the termination of
the other operative provisions of this Agreement and as may
additionally be required by the Constitution and laws of the State of
California and the Law.
Section 17 . Certificate of Completion. The Agency, its
successors and assigns agree that upon the full compliance by the
Participating Owner with the terms of this Agreement which pertain to
the construction of the Project upon the Property, and following
completion of the Project, the receipt by the Agency of a written
request from the Participating Owner for a Certificate of Completion
and notification that the Property is ready for occupancy, the Agency
shall provide promptly and furnish to the Participating Owner a
Certificate of Completion, substantially in the form as attached
hereto as Exhibit "E" , certifying that the construction and
acquisition or installation of the Project, as required pursuant to
this Agreement, has been completed to the satisfaction of the Agency,
its successors and assigns. Upon issuance of the Certificate of
Completion by the Agency, each of the covenants, restrictions,
warranties and conditions contained in this Agreement relating to the
construction of the Project shall be deemed satisfied and shall
terminate.
Section 18 . Successors and Assigns; Assignment. The
provisions of this Agreement shall be binding upon and inure to the
32
benefit of the heirs, executors, administrators, successors and
assigns of the parties hereto. The Participating Owner shall not
assign, transfer or in any manner hypothecate any or all of the
rights and obligations of the Participating Owner under this
Agreement or with respect to the Property without the prior written
approval and consent of the Agency except as specifically provided in
Section 3 hereof.
Section 19 . Events of Default. "Event of Default"
wherever used in this Section, means any one of the following events
(whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary, or be effectual by operation of law
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body
superior to the Agency) :
(a) Default in the performance, or breach, of any
provision of this Agreement by the Participating Owner, and
continuance of such Default or breach for a period of thirty ( 30 )
calendar days after the Agency has given notice as specified in
Section 14, and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(b) The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Participating owner
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
33
in respect of the Participating Owner under the Federal Bankruptcy
Act or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Participating Owner or of any substantial
part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of thirty (30) calendar days; or
(c) The institution by the Participating Owner of
proceedings to be adjudged bankrupt or insolvent, or the consent by
it to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Act or any
other applicable federal or state law, or the consent by it to the
filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Participating Owner or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Participating Owner in furtherance of any such action.
Section 20 . Entire Agreement; Amendment. Except as
otherwise expressly provided herein, this Agreement constitutes the
entire agreement between the parties pertaining to the subject matter
hereof and supersedes all prior and contemporary agreements and
34
understandings . The parties intend this Agreement to be the final
expression of their agreement with respect to the terms hereof and a
complete and exclusive statement of such terms . No modification,
amendment or waiver of any term hereof shall be binding unless
executed in writing by any party or parties to be bound thereby.
This Agreement may be amended from time-to-time as deemed
necessary by the parties hereto upon written instruments duly
approved and executed by the parties hereto. Any such amendments or
modifications shall be valid, binding and legally enforceable only if
in written form and executed by both the Participating Owner and the
Agency after the same have been duly approved and authorized for
execution.
Section 21 . Severability. Each and every section of
this Agreement is, and shall be construed to be, a separate and
independent covenant and agreement. If any term or provision of this
Agreement or the application thereof shall to any extent be invalid
or unenforceable, the remainder of this Agreement, or the application
of such term or provision to circumstances other than those to which
it is invalid or unenforceable shall not be affected thereby, and
each term and provision of this Agreement shall be valid and shall be
enforced to the extent permitted by law.
Section 22 . Section Headinas. The headings of the
several sections of this Agreement are inserted solely for
35
convenience of reference, and are not a part of and are not intended
to govern, limit or aid in the construction of any term or provision
hereof .
Section 23 . Meaning of Terms. Where the context so
requires, the use of the masculine gender shall include the feminine
and the neuter gender, and the singular shall include the plural and
vice versa.
Section 24 . Indemnification. It is understood and
agreed that no official, employee or agent of the Agency shall be
personally liable to the Participating Owner or to anyone else as to
any obligation or obligations under the terms of this Agreement. The
Participating Owner shall save the Agency, and all parties in privity
to it, harmless from all claims, demands, causes of action, expenses,
and liability of whatsoever kind or nature which may arise out of,
because of, concerning, or incident to the performance of the
Participating Owner under this Agreement, including all court
actions, costs and expenses and attorney' s fees relative to the
Agency being a party to this Agreement as may be initiated by the
Participating Owner or any third party for any reason whatsoever,
including any claims for damages or with respect to personal injuries
on the Property.
Section 25 . Effective Date of This Agreement; Execution;
Term of Agreement. This Agreement shall not be effective for any
36
purpose whatsoever or binding and enforceable upon the Agency until
such time as this Agreement has been approved pursuant to official
action of the Agency in accordance with a duly adopted and approved
Agency resolution authorizing the Chairman and Secretary of the
Agency to execute this Agreement on behalf of the Agency. This
Agreement may be executed in original counterparts, each of which
shall be deemed to be an original for all purposes, and such
counterparts shall constitute one and the same instrument. This
Agreement shall remain in full force and effect until all of the
obligations hereunder have been satisfied in full .
37
• �h r
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the year and day first hereinabove written.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By:
(SEAL)
Attest:
By:
Secretary
Approved as to Form:
By:
Agency Attorney
"PARTICIPATING OWNER"
RAMONA SENIOR COMPLEX, INC.
a California non-profit
corporation
BY:
38
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me,
(here insert name and title of the officer) , personally appeared
, 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 signature(s) on the
instrument the person(s) , or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal .
Signature (Seal )
39
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me,
(here insert name and title of the officer) , personally appeared
, 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 signature(s) on the
instrument the person(s) , or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal .
Signature (Seal )
40
Ramona Senior Complex
Distribution of Monthly Surplus Cash Flow
Year 1 Rental Income $170, 000/year
Debt Service 50, 000/year
Operating Expense 96 , 800/year
Surplus Cash Flow 23 , 200
Distributable Cash Flow
to Agency $11, 600
Distributable Cash Flow
to Ramona Senior Complex
for reserve, replacement
or sinking fund $11, 600
Year 12 Rental Income $237, 900/year
Debt Service 50, 000/year
Operating Expense 145, 000/year
Surplus Cash Flow 42 , 900
Distributable Cash Flow
to Agency $21, 450
Distributable Cash Flow
to Ramona Senior Complex
for reserve, replacement
or sinking fund $21, 450
-1-
Distribution of Amounts to
Reduce Principal on Agency Secondary
Loan and Casa Ramona Loan
to Ramona Senior Complex
A. Tax Credits $1, 600, 000
First Mortgage 500, 000
County Grant 300, 000
Casa Ramona Loan 265, 000
Secondary Loan 435, 000
$3 , 100, 000
Available Release of Surplus
Reserves, Reimbursements, etc. ,
after closing $200, 000
Casa Ramona $100, 000 165, 000 loan balance
Secondary Loan $100, 000 335, 000 loan balance
B . Tax Credits $1, 600 , 000
First Mortgage 800 , 000
County Grant 300, 000
Casa Ramona Loan 115, 000
Secondary Loan 285, 000
$3 , 100, 000
Available Release of Surplus
Reserves, Reimbursements, etc . ,
after closing $80, 000
Casa Ramona $40, 000 75, 000 loan balance
Secondary Loan $40, 000 295, 000 loan balance
-2-