HomeMy WebLinkAbout01- Economic & Housing Development 1.1
Staff Report
City of San Bernardino 0
Request for Council Action a
Date: August 21, 2017 a
To: Honorable Mayor and City Council Members N
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From: Andrea Miller, City Manager }
By: Diane Cotto, CDBG Coordinator
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Subject: Substantial Amendment to the FY2016-2017 Annual Action °
Plan and Execution of a Loan Agreement Golden Apartments
Project
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Recommendation
Adopt a resolution of the Mayor and City Council (MCC) of the City of San Bernardino,
California, authorizing the Substantial Amendment of the Fiscal Year 2016-2017 Annual
Action Plan to add the Golden Apartments Project, and the Execution of a Loan (n
Agreement for the Project. o
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Background
On August 16, 2016, a meeting was held to determine whether or not City Council
would substantially amend the Fiscal Year (FY) 2016-17 Annual Action Plan to add the w
Golden Apartments Project, and the execute a loan agreement. a
The approval of the substantial amendment would allow the City to allocate $880,000 in o
HOME funds to the Golden Apartments project. The proposed project will modernize an
existing multi-family building that is on the borderline of functional obsolescence into Q
thirty-eight units of permanent housing with on-site support services for low-income and
homeless individuals.
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The County of San Bernardino and the Housing Authority of San Bernardino are the
originator of the Golden Apartments project. They received a Conditional Use Permit for o
this project by the City of San Bernardino Planning Commission on June 13, 2017.
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Specifically, the purpose of the request for a substantial amendment to the FY 2016- a
2017 Annual Action Plan, is to allow the City to use unspent HOME funds that are
targeted to expire on August 31, 2017. It is important to note, this project will move
forward regardless of City Council approval or disapproval of the use of HOME funds for r
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this activity. 0
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City Council postponed the vote of this agenda item to allow staff to respond to their
request for more information regarding availability of permanent housing with support a
services for the homeless and to develop new language that would address the o
project's occupancy preferences and is consistent with state and federal law. a
City Council voted to continue the discussion of this issue to Monday, August 21, 2017
at 6:00 in the City Council Chambers. a
Discussion N
The City would like to invest $880,000 in HOME funds to assist the County in creating o
affordable housing solutions targeting homeless and low-income individuals, including
veterans. The investment will take the form of a loan to the developer to assist in
acquiring the property, which will be repayable form the developer's Residual Receipts. r
The loan will be secured by a deed of trust which will be junior in priority to a deed of r
trust securing a loan of $3,158,308 of HOME fund to be made by the County of San
Bernardino to assist the developer in the acquisition and rehabilitation of the property.
A loan agreement documenting the City's loan is attached to the Resolution submitted
with this report. As the City's deed of trust will be recorded before the County's, the City a
will execute an agreement to subordinate its deed of trust to that of the County, as the
County will be making the large of the two loans.
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The total development cost of the project is $4,038,308. n
Environmental Compliance M
This project is subject to environmental review under Sections 15192 and 15194 of the
California Environmental Quality Act (CEQA) regulations and 24 CFR 58.36 of the
National Environmental Protection Act regulations. Both environmental evaluations r
have been prepared. a
Fiscal Impact
There is no fiscal impact to the City's General Fund. a
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Conclusion
It is the intent of the City to facilitate the development of a variety of types of housing to N
meet the needs of all income levels in the City of San Bernardino. The proposed project r
will not only house a segment of our population that is the most difficult to house but will c
also meet several local and regional housing goals.
Attachments
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Attachment 1 — Resolution authorizing substantial amendment to 2016-2017 Annual ;
Action Plan and execution of loan agreement; Exhibit A —HOME Loan
Agreement between City and LP
Attachment 2 —August 16, 2017 Staff Report - Substantial Amendment of the Fiscal
Year 2016-2017 Annual Action Plan to add the Golden Apartments E
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Project, and the Execution of a Loan Agreement for the Project.
Attachment 3 — Letter to San Bernardino County Mayors regarding San Bernardino
County Homeless Condition a
Attachment 4 -- -- - -HACSB Permanent Supportive Housing Sites .o
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Ward: 7th
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Synopsis of Previous Council Actions:
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April 24, 2017 — Joint Special Meeting of the Mayor and City Council to
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September 19, 2016 — Resolution of the Mayor and Common Council of the City of U-
San Bernardino, California Approving the Execution of HOME Loan Agreement y
with Housing Partners I (HPI) for the Implementation of the Infill Housing o
Development Program
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April 6, 2015 - Resolution of the Mayor and Common Council of the City of San
Bernardino Approving the 2015-2020 Consolidated Plan and 2015-2016 Action E
Plan for Federal Community Development Block Grant (CDBG), Home Investment
Partnership (HOME) Interagency Agreement, Neighborhood Stabilization Program
(NSP), Emergency Solutions Grant (ESG) Entitlement Grant Programs and y
Approving Substantial Amendment #5 to the 2014-2015 Action Plan. (#3732)
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EXHIBIT A W
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HOME Investment Partnerships Act (HOME) Loan Agreement
(Golden Apartments) E
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by and between "'
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City of San Bernardino
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a municipal corporation
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Golden Apartments San Bernardino, LP o
a California Limited Partnership J
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for a loan in the principal amount of$880,000.00 in HOME Funds E
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City of San Bernardino w
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HOME INVESTMENT PARTNERSHIPS ACT LOAN AGREEMENT =
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(Golden Apartments)
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This HOME Investment Partnerships Act (HOME) Loan Agreement Q
("Agreement") is dated , 2017 ("Effective Date"), and is between
the City of San Bernardino, a municipal corporation ("City"), and Golden Apartments Q
San Bernardino, LP, a California limited partnership ("Developer").
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RECITALS
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A. The City has received HOME funds from the United States Department of U_
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Housing and Urban Development ("HUD") pursuant to the Cranston-Gonzalez National r
Housing Act of 1990 ("HOME Funds"). The HOME Funds must be used by the City in 0
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accordance with 24 C.F.R. Part 92.
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B. Developer intends to acquire real property located at 2312,2324, and 2336
N. Golden Avenue, in the City of San Bernardino ("Property"), more particularly E
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described in Exhibit A to that certain "Home Investment Partnerships Act Loan i
Agreement (HACSB Golden Apartments)" entered into by and between the County of
San Bernardino and Developer effective July 25, 2017. Developer intends to rehabilitate
the improvements on the Property into a thirty-nine (39) unit affordable housing N
development to include one manager's unit, an on-site office, and thirty-eight (38) one-
bedroom rental units ("Improvements"). The Improvements and the Property are referred M
to as the "Development." The Development will increase the supply of affordable rental
housing in the City.
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C. Developer desires to borrow from the City and the City desires to lend o
Developer Eight Hundred Eighty Thousand Dollars ($880,000) of HOME Funds ("City
Loan") to assist Developer in the acquisition of the Property. Concurrently, the County
of San Bernardino will lend Developer Three Million One Hundred Fifty-Eight Thousand
Three Hundred and Eight Dollars ($3,158,308) of HOME funds ("County Loan") to
assist Developer in the acquisition and rehabilitation of the Property. The City Loan will L
be secured by a deed of trust on the Property, which will be junior in priority to a deed of Q
trust securing the County Loan, pursuant to a subordination agreement or intercreditor
agreement to be provided by the County and executed by the City. 0
D. Developer represents that it has the capacity and expertise to carry out the
acquisition and rehabilitation of the Development.
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E. Defined terms used but not defined in these Recitals are defined in Section
2 of this Agreement.
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NOW THEREFORE, in consideration of the above recitals, the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration, the
receipt, legal sufficiency and adequacy of which are hereby acknowledged, the parties 0-
hereto
hereto agree as follows: c
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AGREEMENT a
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SECTION 1. Incorporation of Recitals. _
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The Recitals set forth above are true and correct and are incorporated into this N
Agreement.
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SECTION 2. Definitions. U.
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In addition to the meaning ascribed to certain words and phrases as set forth in the S
Recitals of this Agreement or in other sections of this Agreement, including any
attachments to this Agreement, other words and phrases shall have the meanings E
described below: c
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"Acquisition Escrow" means the land transfer transaction account by and among
the Escrow Agent, the Developer, and the City. The Developer shall acquire the Property
upon close of the Acquisition Escrow. y
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"Adjusted Income" means the total anticipated annual income of all persons in a `n
tenant household as calculated pursuant to 24 C.F.R. 92.203(b)(1). Adjusted income M
includes income from all persons in the household, including nonrelated individuals.
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"Affirmative Marketing Plan" means the Affirmative Marketing Plan described
in Attachment "D" to this Agreement, the Affirmative Marketing Requirements r
Guidelines.. c
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"Agreement" means this HOME Investment Partnerships Act Loan Agreement. Y
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"Area Median Income (AMI)" means the median gross income in the County of
San Bernardino, California, as published from time to time by HUD. In the event that a,
such income determinations are no longer published, or are not updated for a period of at
least eighteen (18) months, the City will provide Developer with other income o
determinations that are reasonably similar with respect to methods of calculation to those
previously published by HUD, in consultation with the County.
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"City"means the City of San Bernardino, a municipal corporation. Q
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"City Loan" means the loan from the City to Developer to assist in the w
acquisition of the Property, in a principal amount of Eight Hundred Eighty Thousand
Dollars ($880,000.00).
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"City Loan Documents" means, collectively, this Agreement, the Note, and the o
Deed of Trust. U
"County" means the County of San Bernardino.
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"County Loan" means the loan from the County to Developer of Three Million
One Hundred Fifty-Eight Thousand Three Hundred and Eight Dollars ($3,158,308) of N
HOME funds to assist Developer in the acquisition and rehabilitation of the Property.
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"County Loan Agreement" means that certain "Home Investment Partnerships }
Act Loan Agreement (HACSB Golden Apartments)" entered into by and between the r
County and Developer as of July 25, 2017, as such may be amended from time to time, B
including all exhibits to that agreement and all documents incorporated by reference into
that agreement. E
"Deed of Trust" means the Deed of Trust which will encumber the Property as E
security for repayment of the City Loan. The general form of the Deed of Trust is <
included as Attachment`B". c
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"Developer" means Golden Apartments San Bernardino, LP, a California limited N
partnership.
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"Effective Date" means the date this Agreement was fully executed by Developer
and the City, which shall be not later than ,2017. ti
"Escrow Agent" means an escrow agent mutually acceptable to the Developer o
and the City. The Escrow Agent shall administer the Acquisition Escrow.
"Event of Default" has the meaning set forth in Section 12 of this Agreement. .=
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"Hazardous Materials" has the meaning set forth in Section 33 of this W
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Agreement.
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"HOME" means the HOME Investment Partnerships Act program pursuant to the 0
Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12701 et seg.),
as amended.
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"HOME-Assisted Units" means the thirty-eight (38) rental units at the Property, .2
of which six (6)will be designated as assisted by the City pursuant to this Agreement, all r
of which units are "floating" units as defined in 24 C.F.R. 92.2520). W
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"Housing Affordability Covenant" means the Housing Affordability Covenant w
and Agreement and Declaration of Restrictive Covenants executed concurrently herewith
by Developer in favor of the City, the form of which is attached hereto as Attachment =
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"HUD" means the U.S. Department of Housing and Urban Development. a
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"Low-income Household"means a household with an Adjusted Income that does
not exceed eighty percent (80%) of AMI, with adjustments for smaller and larger Q
families, except that HUD may establish income ceilings higher or lower than eighty
percent (80%) of AMI on the basis of HUD findings that such variations are necessary N
because of prevailing levels of construction costs or fair market rents, or unusually high
or low family incomes, as such definition may be amended pursuant to 24 C.F.R. 92.2. C4
An individual who is a student that is ineligible to receive Section 8 assistance under 24 U.
C.F.R. 5.612, and thus ineligible to receive any type of HOME assistance, shall not
qualify as a Low Income Household. °
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"Note" means the Promissory Note that evidences Developer's obligation to E
repay the City Loan. The form of the Note is attached as Attachment"A".
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"Project" means the acquisition, rehabilitation, and rental of the Property and the
residential units therein.
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"Residual Receipts" means the amount by which Developer's Gross Revenue y
from the operation of the Property after completion of the Project exceeds Developer's
Annual Operating Expenses, as further defined in Section 2.7(a)(6) of the County Loan M
Agreement, which definition is incorporated into this Agreement by this reference.
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"Term"has the meaning set forth in Section 5 of this Agreement. o
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"Very Low Income Household" means a household with an Adjusted Income tv
that does not exceed fifty percent (50%) of AMI, with adjustments for smaller and larger °;
families, except that HUD may establish income ceilings higher or lower than fifty
percent (50%) of AMI on the basis of HUD findings that such variations are necessary 0
because of prevailing levels of construction costs or fair market rents, or unusually high a
or low family incomes, as set forth in 24 C.F.R. Section 92.2. An individual who is a Q
student that is ineligible to receive Section 8 assistance under 24 C.F.R. 5.612, and thus c
ineligible to receive any type of HOME assistance, shall not qualify as a Very Low 0
Income Household.
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SECTION 3. Parties to This Agreement.
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A. The parties to this Agreement are Developer and the City.
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B. Developer is as identified above. The principal office of Developer for w
purposes of this Agreement is located at 715 Brier Drive, San Bernardino, CA 92408.
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C. Prior to the Effective Date, Developer shall provide the City with a.
satisfactory evidence of the legal formation and the good standing of Developer to 0
transact business within California. Q
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D. Developer represents and warrants that its sole general partner is a 0
subsidiary of Housing Partners I, Incorporated ("HPI") and that HPI meets the legal and Q
organizational characteristics described in 24 CFR 92.2 and has been and continues to be
certified as a Community Housing Development Organization ("CHDO") by the City N
during the Term of this Agreement.
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SECTION 4. City Loan. U-
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A. Subject to the terms and conditions of this Agreement, the City shall loan 0
Developer the City Loan, in the principal amount of Eight Hundred Eighty Thousand
Dollars ($880,000) for the sole purpose of assisting Developer in the acquisition of the E
Property. Except as provided in Section 4.0 below, the unpaid balance of the City Loan 0
shall bear simple interest at the annual rate of three percent (3%) from the date of a
disbursement of the proceeds of the City Loan to Developer until the City Loan has been
paid in full. Interest shall be computed on the basis of actual number of days elapsed and
a 360-day year.
B. The City Loan shall be repaid by Developer to the City in annual co
payments in the amount of ten percent (10%) of Developer's Residual Receipts for the M
preceding calendar year, or as otherwise agreed pursuant to the terms and payment dates
specified in Section 2.7(a)(6) of the County Loan Agreement, incorporated herein by this ti
reference. The City shall credit each payment against the then outstanding balance of the o0
City Loan. Developer shall at all reasonable times allow the City or its agent access to 00
Developer's books and records for the purpose of verifying the amount of Residual CU
Receipts received by Developer. CD
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C. Any amounts which Developer does not pay when due under the terms of
Section 4.13 above shall bear interest at the rate of ten percent (10%) per annum, simple
interest ("Default Rate"), from the date due until the date paid.
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D. The City Loan shall be evidenced by the Note, which shall be executed by 0
Developer concurrently with execution of this Agreement or at such other time as may be
agreed on by the City in writing.
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E. The Note shall be secured by the Deed of Trust, pursuant to which a
Developer grants to the City a lien on the Property for the purpose of providing financing c
for the acquisition of the Property. The Deed of Trust shall be junior in priority to the 0
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deed of trust to be recorded in favor of the County in connection with the Project, but w
shall be senior in priority to any other liens created in connection with the Project, C
including without limitation the lien created by the deed of trust to be recorded in favor of c
the Housing Authority of San Bernardino County in connection with the Project, all as set a.
forth in a subordination agreement or intercreditor agreement in a form to be provided by o
the County and executed by the City. The Deed of Trust shall be executed by Developer Q
prior to the close of the Acquisition Escrow for the Property or at such other time as may
be agreed on by the City in writing.
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F. To be eligible to receive the proceeds of the City Loan, Developer must
not at the time of the close of the Acquisition Escrow be in default under this Agreement N
or the County Loan Agreement. tO
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G. The City acknowledges that the Note is a non-recourse obligation of U_
Developer and shall contain substantially the following text: Z
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"The sole recourse of the Holder to recover any sum under this Note shall be to
the Property subject to the Deed of Trust, except in the event of: 1) fraud by Developer E
(or its assignee), 2) any material misrepresentation made by Developer to the City under
the Agreement, 3) misappropriation by Developer (or its assignee) of any tax collection E
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amounts or insurance or condemnation awards resulting from ownership of the Property,
4) commission of bad faith waste by Developer (or its assignee) or 5) the presence of c
`Hazardous Substances' on the site of the Property, as this term is defined in the N
Agreement."
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SECTION 5. Term of Agreement. M
The Term of this Agreement shall commence on the Effective Date, and will rz
terminate fifty-seven (57) years after the Effective Date, unless earlier terminated as o
provided in this Agreement. o
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SECTION 6. Developer Performance. °1
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In consideration of the City Loan, Developer agrees to fully perform the Project E
as defined above. Developer further agrees to fully comply with all conditions,
covenants and requirements of the County Loan Agreement, and agrees that the breach of Q
any of the same shall constitute a material breach of this Agreement for which the City c
may exercise the remedies set forth in this Agreement and may exercise on its own behalf 0
the remedies for material breach of the County Loan Agreement that are made available
to the County in the County Loan Agreement.
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SECTION 7. Compliance with Legal Requirements and HOME Program Q
Requirements.
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Developer shall comply with all applicable laws and regulations, including w
without limitation the regulations governing the use of HOME funds as set forth in 24
C.F.R. Part 92, including the requirements of the Housing Affordability Covenant. In the
event of any conflict between this Agreement and applicable laws and regulations, the a
applicable laws and regulations govern. The laws and regulations governing the use of c
the HOME Funds include(but are not limited to)the following: a
A. Eligible Project Costs. Restrictions on funding only eligible project costs
as set forth in 24 C.F.R. 92.206.
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B. Environmental and Historic Preservation. 24 C.F.R. Part 50 and 24 C.F.R. N
Part 58, which prescribe procedures for compliance with the National Environmental
Policy Act of 1969 (42 U.S.C. §§ 4321-4370), and the additional laws and authorities
listed at 24 C.F.R. 58.5.
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C. Applicable OMB Circulars. The applicable policies, guidelines, and °
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requirements of OMB Circulars Nos.A-87,A-102, Revised,A-110,A-122, and A-133.
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D. Debarred, Suspended or Ineligible Contractors. The prohibition on the use
of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24. E
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E. Civil Rights, Housing and Community Development, and Age
Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et sem.) and implementing
regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; y
Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of
Title I of the Housing and Community Development Act of 1974 as amended; Section
504 of the Construction Rehabilitation Act of 1973 (29 USC § 794, et SeMc.); the Age
Discrimination Act of 1975 (42 USC § 6101, et seq.); Executive Order 11063 as amended
by Executive Order 12259 and implementing regulations at 24 C.F.R. Part 107; Cb
Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; o
Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432;
Executive Order 12138 as amended by Executive Order 12608.
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F. Discrimination against the Disabled. The requirements of the Fair E
Housing Act (42 U.S.C. 3601 et seMc.) and implementing regulations at 24 C.F.R. Part 0
100; Section 504 of the Construction Rehabilitation Act of 1973 (29 U.S.C. § 794), and
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federal regulations issued pursuant thereto, which prohibit discrimination against the
disabled in any federally assisted program, the requirements of the Architectural Barriers 0
Act of 1968 (42 U.S.C. 4151-4157) and the applicable requirements of Title II and/or
Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et N.), and
federal regulations issued pursuant thereto.
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G. Clean Air and Water Acts. The Clean Air Act, as amended, 42 U.S.C.
7401 et sem., the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et
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sec., and the regulations of the Council on Environmental Quality with respect thereto, at w
40 C.F.R. Part 1500, as amended from time to time.
H. Uniform Administrative Requirements. The provisions of 24 C.F.R. a-
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92.505 regarding cost and auditing requirements. o
I. Labor Standards. The labor requirements set forth in 24 C.F.R. 92.354; a
the prevailing wage requirements of the Davis-Bacon Act and implementing rules and
regulations (40 U.S.C. 3141-3148); the Copeland "Anti-Kickback" Act (40 U.S.C. §
3145) which requires that workers be paid at least once a week without any deductions or a
rebates except permissible deductions; the Contract Work Hours and Safety Standards
Act — CWHSSA (40 U.S.C. §§ 3701-3708) which requires that workers receive N
"overtime" compensation at a rate of 1-1/2 times their regular hourly wage after they
have worked forty (40)hours in one (1) week; and Title 29, Code of Federal Regulations,
Subtitle A, Parts 1, 3 and 5, the regulations and procedures issued by the Secretary of 'l
Labor for the administration and enforcement of the Davis-Bacon Act, as amended. r
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J. Drug Free Workplace. The requirements of the Drug Free Workplace Act
of 1988 (P.L. 100-690), 41 U.S.C. Chapter 81, and implementing regulations at 2 C.F.R. E
Part 2429.
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K. Anti-Lobbying; Disclosure Requirements. The disclosure requirements
and prohibitions of 31 U.S.C. § 1352 and implementing regulations at 24 C.F.R. Part 87. c
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L. Historic Preservation. The historic preservation requirements set forth in N
the National Historic Preservation Act of 1966, as amended (Division A of Subtitle III of
54 U.S.C.) and the procedures set forth in 36 C.F.R. Part 800. If archeological, cultural, M
or historic period resources are discovered during construction, all construction work
must come to a halt and Developer shall immediately notify the City. Developer shall not ti
shall alter or move the discovered material(s) until all appropriate procedures for "post- o
review discoveries" set forth in the National Historic Preservation Act at 54 U.S.C. § o
300101 et sec. have taken place, which include, but are not limited to, consultation with
the California State Historic Preservation Officer and evaluation of the discovered
material(s) by a qualified professional archeologist.
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M. Flood Disaster Protection. The requirements of the Flood Disaster
Protection Act of 1973 (P.L. 93-234, 42 U.S.C. § 4001) (the "Flood Act"). No portion of Q
the assistance provided under this Agreement is approved for acquisition or construction =
purposes as defined under Section 3(a) of the Flood Act, for use in an area identified by 0
HUD as having special flood hazards which is not then in compliance with the
requirements for participation in the national flood insurance program pursuant to Section
201(d) of the Flood Act. The use of any assistance provided under this Agreement for
such acquisition or construction in such identified areas in communities then participating Q
in the National Flood Insurance Program is subject to the mandatory purchase of flood
insurance requirements of Section 102(a) of the Flood Act. If the Property is located in
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an area identified by HUD as having special flood hazards and in which the sale of flood w
insurance has been made available under the National Flood Insurance Act of 1968, as
amended, 42 U.S.C. 4001 et seq., Developer and its successors or assigns must obtain and
maintain, during the ownership of the Property, such flood insurance as required with a
respect to financial assistance for acquisition or construction purposes under Section o
102(a) of the Flood Act. Such provisions are required notwithstanding the fact that the a
construction on the Property is not itself funded with assistance provided under this
Agreement.
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N. Project Requirements. The project requirements set forth in Subpart F of
24 CFR Part 92. N
O. Property Standards. The housing must meet the property standards in 24 c°
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CFR § 92.251, upon project completion. }
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P. Prohibited Fees. As required by 24 CFR Part 92.504(c)(3)(xi), the r
Developer shall not charge servicing, origination, processing, inspection, or other fees for 0
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the costs of providing homeownership assistance.
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Q. Other HUD Regulations. Any other HUD regulations presently in effect
or as may be amended, added, or waived in the future pertaining to the use of HOME E
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Funds.
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SECTION 8. Records Retention. N
Records, field notes, inspections documents, and other supporting documents co
pertaining to the use of HOME funds disbursed to Developer, shall be retained by M
Developer and available to the City, HUD, and other appropriate federal agencies and
officials for examination for a period of five (5) years from the date of expiration or
termination of this Agreement. Records shall be available for inspection during
Developer's regular business hours. In the event of litigation or audit relating to this o
Agreement, such records shall be retained by Developer until all such litigation or audit
has been resolved.
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SECTION 9. Indemnification.
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Developer shall defend, indemnify and hold harmless the City and its officers, a
employees, representatives, and agents from and against any and all actions, suits, _
proceedings, claims, demands, losses, costs and expenses, including legal costs and 0
attorney fees, for injury or damage of any type claimed as a result of the acts or omissions
of Developer, its officers, employees, subcontractors and agents, arising from or related
to performance by Developer of this Agreement, except that arising from the sole
negligence or willful misconduct of the City. Q
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SECTION 10. Insurance.
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A. Developer shall maintain insurance, as set forth below, throughout the W
term of this Agreement. Developer shall remain liable to the City pursuant to Section 9
above to the extent Developer is not covered by applicable insurance for all losses and
damages incurred by the City that are caused directly or indirectly through the actions or a.
inactions, willful misconduct or negligence of Developer in the performance of o
Developer pursuant to this Agreement. Q
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B. Developer shall maintain insurance policies issued by an insurance =
company or companies authorized to do business in the State of California and that Q
maintain during the term of the policy a Financial Strength Rating of at least A and a
Financial Size Category designation of at least V, as set forth in the then most current N
edition of"Bests Insurance Guide," as follows:
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1. Automobile Insurance. Developer and each of its subcontractors a_
shall maintain comprehensive automobile liability insurance of not less than r
$1,000,000.00 combined single limit per occurrence for each vehicle leased or owned by 0
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the Developer or its subcontractors and used in performing work under this Agreement.
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2. Worker's Compensation Insurance. Developer and each of its
subcontractors shall maintain worker's compensation coverage in accordance with E
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California workers' compensation laws for all workers under Developer's and/or
subcontractors' employment performing work under this Agreement. c
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3. Liability Insurance. Developer shall maintain comprehensive
liability insurance, including coverage for personal injury, death, property damage and
contractual liability, with a limit of at least One Million Dollars ($1,000,000), including M
products and completed operations coverage. Said insurance shall be primary insurance
with respect to the City. Developer shall require and ensure that all general liability i::-
insurance policies covering work at the Property, whether obtained by Developer or its o
contractors, include the City and its officers, employees, representatives, and agents as o
additional insureds. If required by the City from time to time, Developer shall increase
the limits of the Developer's liability insurance to reasonable amounts customary for
owners of improvements similar to the Project. The policy shall contain a waiver of
subrogation for the benefit of the City.
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4. Builders' Risk/Property Insurance. Builders' Risk insurance a
during the course of construction, and upon completion of construction, property c
insurance covering the Project, in form appropriate for the nature of such property, 0
covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the
replacement value, with deductible, if any, acceptable to the City, naming the City as a r
Loss Payee, as its interests may appear.
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5. Flood Insurance. Developer shall obtain flood insurance if
required by applicable federal regulations.
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C. Concurrent with the execution of this Agreement and prior to the
commencement of any work by Developer, Developer shall deliver to the City copies of
policies or certificates evidencing the existence of the insurance coverage required herein, a
which coverage shall remain in full force and effect continuously throughout the term of o
this Agreement. Each policy of insurance Developer purchases in satisfaction of the Q
insurance requirements of this Agreement shall provide that the policy may not be
cancelled, terminated or modified, except upon thirty (30) days' prior written notice to
the City. Q
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D. Failure on the part of Developer to procure or maintain the insurance N
coverage required herein for fifteen (15) days or longer shall constitute a material breach
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of this Agreement pursuant to which the City may exercise all rights and remedies set
forth herein and, at its sole discretion, and without waiving such default or limiting the U_
rights or remedies of the City, procure or renew such insurance and pay any and all E
premiums in connection therewith. All monies so paid by the City shall be reimbursed by 0
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Developer upon demand including interest thereon at the rate of ten percent (10%) per
annum compounded annually from the date paid by the City to the date reimbursed by E
Developer. The City shall have the right, at its election, to participate in and control any
insurance claim adjustment or dispute with the insurance carrier. Developer's failure to Q
assert or delay in asserting any claim shall not diminish or impair the rights of the City
against Developer or the insurance carrier.
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SECTION 11. Press Releases.
Press or news releases, including photographs or public announcements, or M
confirmation of the same related to the work to be performed by the Developer under this
Agreement shall be made by the Developer only with the prior written consent of the iZ
City. If not disapproved by the City, with reasons stated for disapproval, within five (5) Co
business days of receipt by the City for its review, a release or announcement shall be o
deemed to be approved. Press or news releases shall include language identifying the
Project as a City-funded project. Nothing in this Section shall require City approval for
the marketing plan for the project, which shall be subject only to the requirements of the
City approved Affirmative Marketing Plan.
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SECTION 12. Defaults and Remedies.
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A. Events of Default by Developer. The occurrence of any of the following 0
shall, after the giving of any notice and the expiration of any applicable cure period, I
constitute a default by Developer hereunder("Event of Default"):
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1. The failure of Developer to pay or perform any monetary covenant a
or obligation hereunder or under any of the documents executed in connection herewith,
without curing such failure within ten (10) calendar days after receipt of written notice of E
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such default from the City (or from any party authorized by the City to deliver such w
notice as identified by the City in writing to Developer).
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2. The failure of Developer to perform any nonmonetary covenant or a
obligation hereunder or under any of the documents executed in connection herewith, o
without curing such failure within thirty (30) calendar days after receipt of written notice Q
of such default from the City (or from any party authorized by the City to deliver such
notice as identified by the City in writing to Developer) specifying the nature of the event
or deficiency giving rise to the default and the action required to cure such deficiency; Q
provided, however, that if any default with respect to a nonmonetary obligation is such
that it cannot be cured within a thirty-day period, it shall be deemed cured if Developer N
commences the cure within said thirty-day period and diligently prosecutes such cure to
completion thereafter.
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3. The breach by Developer of any material term of the County Loan r
Agreement. Developer acknowledges and agrees that Developer's agreement to and
compliance with the terms of the County Loan Agreement is a material inducement to the
City to enter into this Agreement. Developer therefore agrees that any breach by E
Developer of a material term of the County Loan Agreement shall constitute an Event of
Default under this Agreement, for which the City shall have and may exercise any or all E
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of the remedies set forth in this Section 12.
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Notwithstanding anything herein to the contrary, the notice requirements and cure y
periods set forth above shall not apply to any Event of Default described in Subsections N
12.A.4 through 7 below:
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4. The material falsity of any representation or the breach of any
warranty or covenant made by Developer under the terms of this Agreement or any ti
documents executed in connection herewith.
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5. Developer or any constituent partner of Developer shall (a) apply
for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like
of its property, (b) fail to pay or admit in writing its inability to pay its debts generally as
they become due, (c) make a general assignment for the benefit of creditors, (d) be
adjudicated a bankrupt or insolvent or (e) commence a voluntary case under the Federal
bankruptcy laws of the United States of America or file a voluntary petition that is not a
withdrawn within ten (10) calendar days after the filing thereof seeking an arrangement c
with creditors or an order for relief or seeking to take advantage of any insolvency law or 0
file an answer admitting the material allegations of a petition filed against it in any
bankruptcy or insolvency proceeding.
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6. Without the application, approval or consent of Developer, a a
proceeding shall be instituted in any court of competent jurisdiction, under any law
relating to bankruptcy, in respect of Developer or any constituent or partner of
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Developer, for an order for relief or an adjudication in bankruptcy, a composition or W
arrangement with creditors, a readjustment of debts, the appointment of a trustee,
receiver, liquidator or custodian or the like of Developer or of all or any substantial part
of Developer's assets, or other like relief under any bankruptcy or insolvency law, and, if a.
such proceeding is being contested by Developer, in good faith, the same shall (a) result 0
in the entry of an order for relief or any such adjudication or appointment, or(b) continue a
undismissed, or pending and unstayed, for any period of ninety (90) consecutive calendar
days.
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7. Voluntary cessation of the operation of the Project for a continuous
period of more than thirty (30) calendar days or the involuntary cessation of the operation N
of the Project in accordance with this Agreement for a continuous period of more than c
sixty (60) calendar days. C4
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8. A mechanic's lien or any other type of encumbrance on the
Property resulting from Developer's failure to fulfill its financial or other contractual 0
obligations with respect to any of its vendors or contractors is not removed within ten
(10) calendar days after receipt of written notice of such default from the City. -Ea
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B. City Remedies. Upon the occurrence of an Event of Default hereunder, the E
City may, in its sole discretion,take any one or more of the following actions:
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1. By notice to Developer, declare the entire then unpaid principal y
balance of the City Loan immediately due and payable, and the same shall become due N
and payable without further demand, protest or further notice of any kind, all of which
are expressly waived. Upon such declaration, outstanding principal and (to the extent M
permitted by law) interest and any other sums outstanding in connection with the City
Loan shall thereafter bear interest at the Default Rate (as defined in Section 4.C., above),
payable from the date of such declaration until paid in full. Co
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2. Subject to any nonrecourse provisions in this Agreement, take any cc
and all actions and do any and all things which are allowed, permitted or provided by
law, in equity or by statute, in the sole discretion of the City, to collect the amounts then
due and thereafter to become due hereunder and under the City Loan, to exercise its
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rights under the Deed of Trust, and to enforce performance and observance of any
obligation, agreement or covenant of Developer under this Agreement or under any other Q
document executed in connection herewith.
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3. Demand reimbursement from Developer for any payments made to
it by the City for which the contracted performance was not satisfactorily delivered by
Developer.
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4. Confiscate any material or other work product purchased or
produced by Developer for the Project. E
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5. Upon the occurrence of an Event of Default which is occasioned
by Developer's failure under this Agreement to pay money, the City may, but shall not be
obligated to, make such payment. If such payment is made by the City, Developer shall a.
deposit with the City, upon written demand therefor, such sum plus interest at the rate of o
ten percent (10%) per annum compounded annually. The Event of Default with respect Q
to which any such payment has been made by the City shall not be deemed cured until
such repayment(as the case may be)has been made by Developer;
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6. Upon the occurrence of an Event of Default described in
Subsections 12.A.5 or 12.A.6 hereof, the City shall be entitled and empowered by N
intervention in such proceedings or otherwise to file and prove a claim for any amount
owing to the City under this Agreement and unpaid and, in the case of commencement of }
any judicial proceedings, to file suchp roof of claim and other papers or documents as
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may be necessary or advisable in the judgment of the City and its counsel to protect the y
interests of the City and to collect and receive any monies or other property in
satisfaction of its claim.
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C. City Default and Developer Remedies. Upon failure of the City to meet
any of its obligations under this Agreement without curing such failure within thirty (30) E
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calendar days after receipt of written notice of such failure from Developer specifying the
nature of the event or deficiency giving rise to the default and the action required to cure
such deficiency, Developer may, as its sole and exclusive remedies: y
1. Bring an action in equitable relief seeking the specific performance `n
by the City of the terms and conditions of this Agreement or seeking to enjoin any act by M
the City which is prohibited hereunder; and/or
2. Bring an action for declaratory relief seeking judicial co
determination of the meaning of any provision of this Agreement. Without limiting the 00
generality of the foregoing, Developer shall in no event be entitled to, and hereby waives,
any right to seek indirect or consequential damages of any kind or nature from the City
arising out of or in connection with this Agreement, and in connection with such waiver
Developer is familiar with and hereby waives the provisions of Section 1542 of the
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California Civil Code which provides as follows: A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR Q
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE c
RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY 0
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Developer further
waives the benefit of any other statute, rule, regulation, or common law principle to the
same or similar effect.
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Initials of
Developer:
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SECTION 13. Closing Conditions.
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A. Except to the extent the City Manager or his or her designee directs in o
writing that some or all of the disbursement of the proceeds of the City Loan shall occur a
outside of escrow, disbursement of the City Loan to Developer, delivery of the executed
loan documents (as specified in Subsection B below), and recordation of the appropriate
documents (as specified in Subsection B below) to be recorded shall be carried out Q
through an escrow account ("Acquisition Escrow") to be established by the parties with
First American Title Insurance Company, or a title or escrow company specifically N
approved in writing by the City ("Escrow Agent"). Developer shall obtain the City's c
approval of an Escrow Agent prior to the opening of the Acquisition Escrow. The parties
may execute supplemental instructions to the Escrow Agent consistent with the terms of U-
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this Agreement, but in the event of a conflict between the terms of this Agreement and Z
any supplemental escrow instructions, the terms of this Agreement shall control. Except 0
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as otherwise expressly provided herein, any fees and costs incurred by the Escrow Agent
in the performance of its duties hereunder and agreed to be paid by the parties shall be E
paid exclusively by Developer.
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B. Disbursement of the City Loan proceeds by the City shall be expressly
subject to satisfaction of all of the following conditions (collectively, the Closing
Conditions):
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1. Developer's due execution and deposit into the Acquisition Escrow
of a certified copy of the Note, in the form attached hereto as Attachment"A". M
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2. Developer's due execution (with notary acknowledgment) and ti
deposit into the Acquisition Escrow of the Deed of Trust, in the form attached hereto as 06
Attachment"B". 0;
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3. Developer's due execution (with notary acknowledgment) and
deposit into the Acquisition Escrow of the Housing Affordability Covenant in the form
attached hereto as Attachment "C", recorded against Developer's ownership interest in
the Property. a
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4. Receipt by the City from Developer of such other documents,
certifications and authorizations as are reasonably required by the City, in form and 0
substance satisfactory to the City, evidencing that (a) the City Loan Documents have
been duly and validly executed by Developer and constitute the valid and enforceable
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obligation of Developer pursuant to their respective terms, and (b) the execution and U
delivery of the City Loan Documents, and the performances thereunder by Developer, Q
will not breach or violate any applicable law or governmental regulation to which
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Developer is subject nor constitute a breach of or default under any instrument or w
agreement to which Developer may be a party.
5. First American Title Insurance Company or other title company a
approved by the City ("Title Company") shall have assured the City in writing that upon o
recordation of the Deed of Trust there will be provided to the City, at Developer's sole v
expense, a lender's policy of title insurance issued by the Title Company in the amount of Q
the City Loan, insuring the City's interest in the Property as beneficiary under the Deed
of Trust, and specifically insuring that the lien of the Deed of Trust and the Housing a
Affordability Covenant against the Property are subject only to any exceptions to title
which were expressly approved in writing by the City, (the "Permitted Encumbrances"). N
Standard lender's title insurance coverage (without the need for a survey) will be
accepted by the City. }
6. No Event of Default or other material breach on the part of r
Developer shall exist under this Agreement, the County Loan Agreement, or under any 0
agreement or instrument relating to any other financing obtained by Developer for the
purpose of acquiring or constructing/reconstructing the Property or the Project. E
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7. Developer shall have provided to the City, in a form satisfactory to E
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the City, certified copies of (a) Developer's governing partnership agreement, with a
certification by the managing general partner that such agreement has not been amended c
or modified except as described in the certification; (b) a good standing certificate from
the California Secretary of State, certifying that Developer is duly qualified and in good
standing, and (c) all other documents necessary to evidence to the City's satisfaction that
the individuals and entities executing this Agreement and the City Loan Documents, and M
other entities on whose behalf such documents are executed, are fully authorized to do so
and to bind the respective entities, including Developer, to the terms hereof and thereof. ti
8. Developer shall have furnished the City with evidence satisfactory co
to the City that the insurance coverages required by Section 10 of this Agreement have M
been obtained.
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C. When, and only when, the Escrow Agent has confirmed that the Closing
Conditions set forth in Subsections B.1, B.2, and B.3 have been satisfied, and has
received written certification from the City Manager, or his or her designee, that all other a
Closing Conditions have been timely satisfied or waived, then the Escrow Agent shall =
carry out the close of the Acquisition Escrow by: 0
1. Causing the Deed of Trust and the Housing Affordability Covenant
to be recorded in the Official Records of San Bernardino County, California. U
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2. Delivering the executed original Note to the City. y
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3. Causing the Title Policy to be issued to the City in the form and w
amount specified above.
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4. Promptly following recordation, delivering conformed copies of a
the recorded documents to the City and Developer. o
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SECTION 14. Marketing of Rental Units. Q
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A. At least thirty (30) calendar days prior to occupancy and prior to the Q
commencement of tenant selection for the completed rental units at the Property,
Developer shall have obtained the City's written approval of an Affirmative Marketing N
Plan for the rental of the units, including specifically the procedures to be employed by
which the tenants shall be selected in the event that there are multiple prospective tenants
qualified to rent the units. U.
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B. The parties recognize that the City currently has the highest number of °
homeless persons of the cities in the County, creating an enhanced need for affordable
housing for persons within the City. Accordingly: E
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1. To the maximum extent permitted by law and provided that the E
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applicants meet standard applicant screening standards for the Development, Developer
shall give priority in the rental of units in the Development to eligible households
displaced by activity of the City, the County, or the Housing Authority of the County of
San Bernardino, consistent with California Health and Safety Code Section 33411.3.
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2. To the maximum extent permitted by law and provided that the M
applicants meet standard screening standards for the Development, Developer shall give
preference in the rental of units in the Development to residents of, and/or persons who ti
are employed in or have been offered employment in, the City of San Bernardino and/or
the unincorporated areas of the County. Notwithstanding anything to the contrary herein,
nothing in this section shall require that said preferences be based on a minimum duration
of residency or employment. Should the Development become subject to Section 42 of
the Internal Revenue Code, then to the extent the preferences required under this
Subsection are in conflict with the requirements of said Section 42 and implementing
guidelines, the requirements of said Section 42 and guidelines shall control. The
preferences to be given hereunder shall be reflected in a tenant selection plan and an Q
affirmative fair housing marketing plan.
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SECTION 15. Use of the Property.
A. Developer hereby covenants and agrees, for itself and its successors and
assigns, that the Property shall be rehabilitated and that, during the Term of this Q
Agreement, Developer shall rent thirty-eight (38) one-bedroom rental apartment units at
the Property and ensure that these units are occupied or, if vacant, available for
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occupancy, by Low or Very Low Income Households. During the HOME Term, thirty- w
eight (38) of the one-bedroom Low or Very Low Income Units shall be considered
HOME-Assisted Units, of which six (6) shall be considered City HOME-Assisted Units. c
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B. Developer covenants and agrees that it shall not devote the Property to 0
uses inconsistent with either this Agreement or the Housing Affordability Covenant. Q
SECTION 16. Discrimination Prohibited.
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A. Except as provided in the Housing Affordability Covenant with respect to
the reservation of the rental units at the Property for occupancy by income-qualified N
tenants, there shall be no discrimination against, or segregation of, any persons, or group r-
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of persons, on account of race, color, creed, religion, sex, marital status, familial status,
physical or mental disability, ancestry or national origin in the rental, sale, lease, _
sublease, transfer, use, occupancy, or enjoyment of the Property, the rental units, or any Y
portion thereof. The nondiscrimination and nonsegregation covenants contained in the r
Housing Affordability Covenant shall remain in effect in perpetuity and shall run with the
land. -£a
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B. Developer shall not discriminate against any person on the basis of race, E
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color, creed, religion, national origin, ancestry, sex, marital status or physical handicap in
the acquisition or rehabilitation of the Property or the rental units pursuant to this c
Agreement. Without limitation, Developer hereby certifies that it will not discriminate
against any employee or applicant for employment because of race, color, religion, sex, co
marital status or national origin. Further, Developer shall promote affirmative action in
its hiring practices and employee policies for minorities and other designated classes in M
accordance with federal, state and local laws. Such action shall include, but not be
limited to, the following: recruitment and recruitment advertising, employment, ti
upgrading, and promotion. In addition, Developer shall comply with all State and o
Federal laws prohibiting the exclusion from participation under this Agreement of any o
employee or applicant for employment on the basis of age, handicap or religion.
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SECTION 17. Effect of Covenants.
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The City is the beneficiary of the terms and provisions of this Agreement and of
the restrictions and affordable housing covenants running with the land, whether or not Q
appearing in the Housing Affordability Covenant, for and in its own right and for the c
purposes of protecting the interests of the community in whose favor and for whose 0
benefit the covenants running with the land have been provided. The affordable housing
covenants in favor of the City shall run without regard to whether the City has been,
remains or is an owner of any interest in the Property, and shall be effective as both m
covenants and equitable servitudes against the Property. If any of the affordable housing Q
covenants set forth in this Agreement are breached, the City shall have the right to
exercise all rights and remedies and to maintain any actions or suits at law or in equity or W
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other proper proceedings to enforce the curing of such breaches to which it may be W
entitled.
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SECTION 18. Notices. 0-
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A. Notices, demands, and communications between the City and Developer Q
shall be sufficiently given if personally delivered or delivered by a nationally-recognized
courier service providing confirmation of delivery or sent by registered or certified mail,
postage prepaid, return receipt requested, to the following addresses: a
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If to the City: City of San Bernardino
City Manager's Office—Housing Division c
290 North "D" Street, Third Floor }
San Bernardino, CA 92401 W
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Phone: (909) 384-5122
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If to Developer: Golden Apartments San Bernardino, LP
c/o Housing Partners I, Incorporated E
Attn: Executive Director d
715 Brier Drive E
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San Bernardino, CA 92408
Phone: (909) 332-6390
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B. Notices shall be effective only upon receipt or refusal. Each party shall
promptly notify the other party of any change(s) of address to which notice shall be sent
pursuant to this Agreement.
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SECTION 19. Compliance with Laws. ti
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A. Developer shall comply with all Applicable Governmental Restrictions.
As used herein, "Applicable Governmental Restrictions" shall mean and include any and
all laws, statutes, ordinances, codes, rules, regulations, directives, writs, injunctions,
orders, decrees, rulings, conditions of approval, or authorizations, now in force or which
may hereafter be in force, of any governmental entity, agency or political subdivision as
they pertain to the performance of this Agreement or construction/reconstruction of the
Project, including specifically but without limitation all code and other requirements of
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the jurisdiction in which the Project is located; the National Environmental Policy Act of
1969, as amended; fair housing laws, prevailing wage laws per the Davis-Bacon Act 40 0
U.S.C. 3141-3148, and any other applicable federal, state and local law.
B. Developer shall maintain all necessary licenses and registrations for the
lawful performance of the actions required of Developer under this Agreement. Q
Developer shall indemnify, defend and hold the City harmless for any suit, cost, attorney
fees, claim, administrative proceeding, damage, wage award, fine, penalty or liability E
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arising out of or relating to Developer's failure to comply with any Applicable w
Governmental Restrictions, including, without limitation, the nonpayment of any r-
prevailing wages required to be paid in connection with the Project, as applicable. _
Developer is solely responsible for determining the applicability of laws, and shall not a.
rely on statements by the City as to the existence, effect, or applicability of such laws. c
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SECTION 20. Relationship of the Parties. Q
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Developer shall at all times during the performance of this Agreement be deemed Q
to be an independent contractor. Neither Developer nor any of its subcontractors shall at
any time or in any manner represent that it or any of its employees are employees of the N
City. The City shall not be requested or ordered to assume any liability or expense for
the direct payment of any salary, wage or benefit to any person employed by Developer }
or its subcontractors to perform any part of this Agreement. Developer is entirely LL
responsible for the immediate payment of all subcontractor liens. r
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SECTION 21. Severability.
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Except to the extent that partial enforcement of this Agreement would frustrate its
underlying purposes, each and every section of this Agreement shall be construed as a E
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separate and independent covenant and agreement. If any term or provision of this
Agreement or the application thereof to certain circumstances shall be declared invalid or c
unenforceable, the remainder of this Agreement, or the application of such term or N
provision to circumstances other than those to which it is declared invalid or
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unenforceable, shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law. M
SECTION 22. Amendment or Modification.
This Agreement may only be modified or amended by written instrument duly o
approved and executed by each of the parties hereto, following all necessary approvals
and authorizations for such execution.
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SECTION 23. Governing Law.
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This Agreement shall be governed by the laws of the State of California. Any Q
legal action arising from or related to this Agreement shall be brought in the Superior =
Court of the State of California in and for the County of San Bernardino. 0
SECTION 24. Non-waiver.
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Failure of either party to enforce any provision of this Agreement shall not a
constitute a waiver of the right to compel enforcement of the same provision or any
remaining provisions of this Agreement.
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SECTION 25. Assignment. _
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This Agreement shall be assignable by Developer only with the prior express a
written consent of the City, which consent may be withheld by the City in its sole c
discretion. Notwithstanding anything to the contrary in this Agreement, and irrespective a
of whether the City has consented to the assignment, no purported assignment of this
Agreement shall be effective if such assignment would violate any Applicable =
Governmental Restriction. The City's consent to any assignment shall be expressly Q
conditioned upon (i) the assignee's execution of such documents as required by the City
in its sole discretion, including, without limitation, any and all documents deemed N
necessary by the City to provide for said assignee's assumption of all of the obligations c
of Developer hereunder and under any documents executed by Developer in connection
herewith, and (ii) the City's approval of the financial and credit-worthiness of such U_
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proposed assignee and the assignee's ability to perform all of the Developer's obligations r
under this Agreement and all documents executed in connection herewith, as may be 0
determined by the City in its sole discretion.
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SECTION 26. Representations of Persons Executing this Agreement. _
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The persons executing this Agreement warrant that they are duly authorized to
execute this Agreement on behalf of and are legally able to bind the respective party that
each purports to represent.
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SECTION 27. Execution in Counterparts.
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This Agreement may be executed in one (1) or more counterparts, each of which
will constitute an original. r
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SECTION 28. Effectiveness of This Agreement as to the City. o0
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This Agreement shall not be binding on the City until signed by an authorized
representative of Developer, and executed by the City Manager or his or her designee.
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SECTION 29. Conflicts of Interest.
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Developer hereby represents that it has no interests adverse to the City at the time
of execution of this Agreement. Developer hereby agrees that, during the term of this 0
Agreement, it shall not enter into any agreement or acquire any interests detrimental or
adverse to the City. Additionally, Developer hereby represents and warrants that
Developer and any entities, individual persons, or any other party or parties that are
constituent parts of Developer, together with each subcontractor who may hereafter be a
designated to perform services pursuant to this Agreement, do not have and, during the
term of this Agreement, shall not acquire any property ownership interest, business
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interests, professional employment relationships, contractual relationships of any nature, w
or any other financial arrangements relating to the City, property over which the City has
jurisdiction, or any members or staff of the City, that have not been previously disclosed
in writing to the City. Developer further represents and warrants that any such disclosed a.
property ownership interests, business interests, professional employment relationships, o
contractual relationships of any nature, or any other financial arrangements, will not Q
adversely affect the ability of Developer to perform this Agreement.
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SECTION 30. Consequential Damages and Limitation of Liability.
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The City and Developer agree that in no event will either party be liable to the N
other under this Agreement for any damages, including, but not limited to, special �
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damages, loss of revenue, loss of profit, operating costs or business interruption losses,
regardless of cause, including breach of contract, negligence, strict liability or otherwise. a_
The limitations and exclusions of liability set forth in this Section 31 shall apply r
regardless of fault, breach of contract, tort, strict liability or otherwise of Developer and °
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the City,their employees,contractors, agents, subcontractors, or officials.
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SECTION 31. Business Registration Certificate.
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Developer warrants that it has, or shall obtain immediately after the execution and
delivery of this Agreement, and maintain during the period of time that this Agreement is c
in effect, a business registration certificate pursuant to Title 5 of the City of San N
Bernardino Municipal Code, together with any and all other licenses, permits,
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qualifications, insurance and approvals of whatever nature that are legally required to be
maintained by Developer to conduct its business activities within the City. M
SECTION 32. Enforced Delays; Extension of Time for Performance. ti
A. Neither party shall be deemed to be in default where delays or defaults in o
its performance under this Agreement are due to force majeure events beyond the control
of such party, including, without limitation, war, insurrection, strikes, lockouts, riots,
floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics,
quarantine restrictions, government imposed moratorium legislation, freight embargoes,
lack of transportation, weather-caused delays, inability to secure necessary labor, a
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materials or tools, or delays of any contractor, subcontractor or supplier that are not
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attributable to the fault of the party claiming an extension of time.
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B. An extension of time for any such force majeure cause shall be for the
period of the enforced delay and shall commence to run from the date of occurrence of
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the delay; provided, however, that the party claiming the existence of the delay first
provides the other party with written notice of the occurrence of the delay, within ten (10) a
calendar days after the commencement of such occurrence of a force majeure event and, c
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thereafter, takes prompt and reasonable action within its control to resume timely w
performance. R
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C. The legally justified failure of the City to provide any necessary approval a
relating to the development of the Project, or the failure or inability of Developer to 0
satisfy any other condition relating to the design, financing or development of the Project Q
shall not be deemed to be a force majeure event or otherwise provide grounds for the
assertion of the existence of a forced delay under this Section 32.
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D. The parties each expressly acknowledge and agree that changes in either r
general economic conditions or the economic assumptions of either of them that provided N
a basis for entering into this Agreement occurring at any time after the execution of this o
Agreement are not force majeure events and do not provide either party with grounds for
asserting the existence of a forced delay in the performance of this Agreement. Each '1
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party expressly assumes the risk that changes in general economic conditions or changes r
in their economic assumptions could impose an inconvenience or hardship on the 0
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continued performance by such party under this Agreement and that such inconvenience d
or hardship is not a force majeure event and does not excuse the performance by such E
party of its obligations under this Agreement. 0
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SECTION 33. Hazardous Materials.
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A. Developer represents and warrants that it has not deposited and will not
deposit or permit the deposit of"Hazardous Materials" (as defined below) in or upon the
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Property. Developer further covenants to remove or remediate, at its expense (subject to
any reimbursement it may be able to obtain from third parties) any Hazardous Materials M
located in or upon the Property as of the date hereof or which are deposited in or upon the
Property from and after the date hereof and during Developer's ownership of the ti
Property, including any asbestos, lead-based paint and any other Hazardous Materials Co
located in the Property, to the extent required by and in accordance with the requirements o
of all applicable governmental restrictions, including, without limitation, all applicable
environmental laws. U
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B. The foregoing shall not be construed or understood to prohibit Developer
from allowing Hazardous Materials to be brought upon the Project so long as they are
materials which are customary to the normal course of business in the operation of a Q
well-designed housing facility and so long as such materials are used, stored and disposed
of in accordance with all applicable governmental restrictions. 0
C. Except with respect to any claims solely caused by the City, Developer
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shall indemnify, defend and hold the City and its members, directors, agents, officers and U
employees harmless from and against any claims arising directly or indirectly out of the Q
presence of Hazardous Materials in, on or upon the Property, existing as of the date
hereof or deposited (or claimed to have been deposited) in, on or upon the Property from
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and after the date hereof and during Developer's ownership of the Property, including w
without limitation any claims arising out of any deposits of Hazardous Materials
described in Section 33.1) of this Agreement or out of Developer's failure to remove or c
remediate all such Hazardous Materials in, on or upon the Eligible Property, as required a.
above. Except with respect to any claims solely caused by the City, Developer hereby o
releases and forever discharges the City and its agents, officials and representatives from Q
all present and future claims, demands, suits, legal and administrative proceedings and
from all losses and liabilities arising out of or in any way connected with Developer's
ownership of the Eligible Property, or any condition of environmental contamination in, Q
under, upon or around the Eligible Property, or the existence of Hazardous Materials in
any state in, under, upon or around the Eligible Property, and in connection with such N
release and waiver Developer is familiar with and hereby waives the provisions of
Section 1542 of the California Civil Code which provides as follows: "A GENERAL }
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT LL
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF r
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST 0
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
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DEBTOR."
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Initials of Developer: E
D. For purposes of this Agreement, the term "Hazardous Materials" means, c
without limitation, gasoline, petroleum products, explosives, radioactive materials, y
hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated
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biphenyls or related or similar materials, asbestos or any other substance or material as
may now or hereafter be defined as a hazardous or toxic substance by any federal, state or M
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local environmental law, ordinance, rule or regulation, including, without limitation, (i)
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, i::�
as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C. Section
9601-9675), (ii) the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et o
seq.), (iii) the Clean Air Act (42 U.S.C. Section 7401 et seq.), (iv) the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984 (42 U.S.C. Section 6901-6992k), (v) the Toxic Substances Control
j Act (15 U.S.C. Section 2601-2629), (vi) the Hazardous Materials Transportation Act (49
U.S.C. Section 5101-5128), (vii) the Carpenter-Presley-Tanner Hazardous Substance
Account Act (CA Health & Safety Code Section 25300-25395.45), (viii) the Hazardous Q
Waste Control Law (CA Health & Safety Code Section 25100 et seq.), (ix) the Porter-
Cologne Water Quality Control Act (CA Water Code Section 13000 et seq.), (x) the Safe 0
Drinking Water and Toxic Enforcement Act of 1986 (CA Health & Safety Code Section
25249.5 - 25249.13), (xi)the Hazardous Materials Release Response Plans and Inventory r
(CA Health & Safety Code Section 25500-25547.8), (xii) the Air Resources Law (CA
Health & Safety Code Section 39000 et seq.), or (xiii) in any of the regulations adopted Q
and publications promulgated pursuant to the foregoing.
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SECTION 34. LABOR PROVISIONS—California Law.
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Unless otherwise exempted pursuant to applicable provisions of California law,
the prevailing wage provisions of California law, including but not limited to those a
regarding payrolls, records, apprentices and trainees, shall apply. o
SECTION 35. Section 3 of the Housing and Community Development Act of a
1968,as Amended.
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A. This Agreement is subject to the requirements of Section 3 of the Housing
and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu (Section 3). The N
purpose of Section 3 is to ensure that employment and other economic opportunities o
generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the
greatest extent feasible, be directed to low- and very low-income persons, particularly
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persons who are recipients of HUD assistance for housing. r
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B. The parties to this Agreement agree to comply with HUD's regulations in -Ea
24 CFR Part 135, which implement Section 3. As evidenced by their execution of this
Agreement, the parties to this Agreement certify that they are under no contractual or Q
other impediment that would prevent them from complying with the Part 135 regulations.
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C. Developer agrees to send to each labor organization or representative of 2
workers with which Developer has a collective bargaining agreement or otherCn
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understanding, if any, a notice advising the labor organization or workers' representative
of Developer's commitments under this Section 3 clause, and will post copies of the M
notice in conspicuous places at the work site where both employees and applicants for
training and employment positions can see the notice. The notice shall describe the
Section 3 preference and set forth the minimum number and job titles subject to hire; the o
availability of apprenticeship and training positions and the qualifications for each; the o
name and location of the person(s) taking applications for each of the positions; and the r_
anticipated date the work shall begin.
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D. Developer agrees to include this Section 3 clause in every subcontract
subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate
action, as provided in an applicable provision of the subcontract or in this Section 3 Q
clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR =
Part 135. Developer will not subcontract with any subcontractor where Developer has 0
notice or knowledge that the subcontractor has been found in violation of the regulations
in 24 CFR Part 135.
E. Developer will certify that any vacant employment positions, including .2
training positions, that are filled (1) after Developer is selected but before this Agreement r
is executed, and (2) with persons other than those to whom the regulations of 24 CFR
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part 135 require employment opportunities to be directed, were not filled to circumvent W
Developer's obligations under 24 CFR Part 135.
F. Noncompliance with HUD's regulations in 24 CFR Part 135 may result in a
sanctions, termination of this Agreement for default, and debarment or suspension from o
future HUD assisted contracts.
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G. With respect to work performed in connection with Section 3 covered
Indian housing assistance, section 7(b) of the Indian Self-Determination and Education =
Assistance Act (25 U.S.C. § 5307) also applies to the work to be performed under this Q
Agreement. Section 7(b) requires that to the greatest extent feasible (i) preference and c
opportunities for training and employment shall be given to Indians, and (ii)preference in
the award of contracts and subcontracts shall be given to Indian organizations and Indian- o
owned Economic Enterprises. Parties to this Agreement that are subject to the provisions
of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent
feasible, but not in derogation of compliance with section 7(b). c
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H. The City agrees to coordinate Section 3 compliance review efforts with
the County, consistent with Section 4.6(b)(11) of the County Loan Agreement,
incorporated herein by this reference. d
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SECTION 36. Entire Agreement; Attachments.
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A. This Agreement, including all attachments, addenda, and other documents
referenced herein constitutes the entire agreement between the parties. This Agreement in
supersedes all prior negotiations, discussions and agreements between the parties c
concerning the subject matters covered herein. The parties intend this Agreement to be
the final expression of their agreement with respect to the subjects covered herein and a
complete and exclusive statement of such terms.
B. The attachments to this Agreement are incorporated herein by reference o
and shall have the same force and effect as though the content of each had been included d
in the text of this Agreement. Unless the context requires to the contrary, all references
to this Agreement shall include each and every attachment hereto. Attachments
identified as forms or templates may be modified by the City as necessary to adapt the E
documents for use in connection with particular transactions.
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List of Attachments:
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Attachment"A" Promissory Note form �a
Attachment"B" Deed of Trust form r
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Attachment"C" Housing Affordability Covenant and Agreement form Q
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Attachment"D" Affirmative Marketing Requirements Guidelines E
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Attachment"E" CHDO Designation Letter and Certificate
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Attachment"F" Legal Description of the Property a
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IN WITNESS WHEREOF, the City and Developer have each executed this
Agreement as of the date first written above.
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CITY OF SAN BERNARDINO
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Andrea Miller, City Manager `L
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Approved as to Form: -Ea
Gary D. Saenz, City Attorney
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By:
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GOLDEN APARTMENTS SAN BERNARDINO, LP
a California Limited Partnership M
By: Golden Apartments HPI, LLC,
a California limited liability company,
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By: Housing Partners I, Incorporated, U
a California nonprofit public benefit corporation,
its sole member and Manager E
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By: Q
Anthony Perez, Executive Director
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Date: '
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Approved as to Form: Q
Gresham Savage Nolan & Tilden, PC
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By:
Robert W. Ritter, Legal Counsel for Developer c
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Attachment"A"
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PROMISSORY NOTE FORM
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HOUSING AFFORDABILITY COVENANT AND AGREEMENT FORM r-
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Attachment "D" w
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AFFIRMATIVE MARKETING REQUIREMENTS GUIDELINES
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In accordance with the California Fair Employment and Housing Act and the policy of the Q
City of San Bernardino, the Developer or designees must adhere to the following
affirmative marketing guidelines in order to create awareness for the general public and
certain community groups as to the availability of units available for rental to low-income Q
persons and households.
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APPLICABILITY
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Developer is required to provide an affirmative marketing plan and procedures for all
developments with HOME-assisted units. Procedures to be used must identify how
persons in the housing market area who are not likely to apply for the housing without
special outreach, shall be informed of available affordable housing opportunities. The City E
has identified three groups as least likely to apply without special outreach efforts, namely,
African-American,Asian American and Pacific Islanders, and Hispanic persons. E
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THE AFFIRMATIVE MARKETING PLAN
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The Developer's Affirmative Marketing Plan must consist of a written marketing strategy
designed to provide information and to attract eligible persons in the housing market area to `o
the available units without regard to race, color, national origin, sex, religion, marital and M
familial status, disability, medical condition, sexual orientation, or ancestry. It must
describe initial advertising, outreach (community contacts) and other marketing activities,
which will inform potential tenants of the availability of the units. It shall also outline an
outreach program which includes special measures designed to attract those groups o
identified as least likely to apply without special outreach efforts because of existing
neighborhood racial or ethnic patterns, location of housing or other factors, and other
efforts designed to attract persons from the total eligible population.
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The owner of the Property must do the following:
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Insert Equal Housing Opportunity logotype, statement or slogan on all written outreach
tools (e.g., signs, advertisements, brochures, direct mail solicitations,press releases, etc.) 0
In addition to the above, the Affirmative Fair Housing Marketing Plan shall outline: r
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Commercial and Social Media to be used (e.g., community newspapers and non-English Q
language newspapers, radio, television, billboards, religious or local real estate
publications, etc.).
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Marketing efforts to be used(e.g.,brochures, letters,handouts,direct mail, signs, etc.) w
Community contacts to supplement formal communications media for the purpose of
soliciting group(s) least likely to rent the available housing without special outreach efforts. a.
They should be individuals or organizations (e.g., service agencies, community o
organizations, places of worship, etc.) that have direct and frequent contact with those a
identified as least likely to apply. The contacts should also be chosen on the basis of their
positions of influence within the general community and the particular target group. The
owner of the Property must agree to establish and maintain contact with the identified a
contacts.
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In accordance with the City's Limited English Proficiency (LEP) Plan, all advertising and
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program information must also be available in Spanish. }
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TENANT SELECTION r
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Developer must maintain records of all prospective tenants, including their race, ethnicity
and gender,reasons for denial of application,placement on a waiting list, etc. E
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Developer must provide for the selection of tenants from a written waiting list in the E
chronological order of their application and provide prompt written notification to any
rejected applicants of the grounds for any rejection.
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The parties recognize that the City currently has the highest number of homeless persons N
of the cities in the County of San Bernardino ("County"), creating an enhanced need for
affordable housing for persons within the City. Accordingly: M
1. To the maximum extent permitted by law and provided that the ti
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applicants meet standard applicant screening standards for the Development, Developer
shall give priority in the rental of units in the Development to eligible households o
displaced by activity of the City, the County, or the Housing Authority of the County of ca
San Bernardino, consistent with California Health and Safety Code Section 33411.3.
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2. To the maximum extent permitted by law and provided that the
applicants meet standard screening standards for the Development, Developer shall give
preference in the rental of units in the Development to residents of, and/or persons who Q
are employed in or have been offered employment in, the City of San Bernardino and/or
the unincorporated areas of the County. Notwithstanding anything to the contrary herein, 0
nothing in this provision shall require that said preferences be based on a minimum
duration of residency or employment. Should the Development become subject to
Section 42 of the Internal Revenue Code, then to the extent the preferences required
under this provision are in conflict with the requirements of said Section 42 and Q
implementing guidelines, the requirements of said Section 42 and guidelines shall
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control. The preferences to be given hereunder shall be reflected in a tenant selection w
plan. C
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Attachment "E" w
CHDO DESIGNATION LETTER AND CERTIFICATE
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Attachment "F" x
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LEGAL DESCRIPTION OF THE PROPERTY
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The south 213.25 feet of the following described property: c
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That portion of the east 5 acres of Lot 3, Block 11, Orange Grove Tract, West Q
Highlands, in the City of San Bernardino, County of San Bernardino, State of
California, as per plat recorded in Book 11 of Maps, Page 14, records of said a
County, described as follows:
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Beginning at a point 41.25 feet west of the northeast corner of the east 5 acres of
said lot 3, said point of beginning being the west line of Golden Avenue; thence
west 179.12 feet, more or less, to the northeast corner of Lot 15, Tract No. 4180,
as per plat recorded in Book 53 of Maps, Pages 48 and 49, Records of said
County; thence south along the West line of the east 5 acres of said Lot 3; said 0
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west line also being the east line of said Tract No. 4180, a distance of 603.25 feet;
thence east 179.12 feet, more or less, parallel with the north line of said east 5 E
acres of the west line of Golden Avenue; thence north along the west line of said a
Golden Avenue, 603.25 feet to the point of beginning. E
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HOME INVESTMENT PARTNERSHIPS PROGRAM
PROMISSORY NOTE
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Site Address: 2312, 2324, and 2336 N. Golden Avenue, San Bernardino, CA w
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Total $880,000.00
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Date: , 2017
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For value received, the undersigned, Golden Apartments San Bernardino, LP, a California a
limited partnership ("Borrower"), whose principal address is set forth herein below, promises to
pay to the order of the City of San Bernardino ("City") at 290 North `'D" Street, Third Floor, Q
San Bernardino, California 92401 (or to such designee and/or at such other address as the City �.
may from time to time designate in writing), the principal sum of Eight Hundred Eighty N
Thousand Dollars ($880,000) with interest to accrue from and after the date of each
disbursement ( "Loan"), or such amount as may be advanced hereunder,plus accrued and unpaid
interest as provided herein below, and all other charges due hereunder, in accordance with the
terms and conditions of that certain HOME Investment Partnerships Act Loan Agreement dated w
as of , 2017 entered into between Borrower and the City ( "Agreement"), and the terms 0
and conditions of this Promissory Note ("Note"). As set forth in greater detail in the Agreement,
the purpose of the Loan is to provide Borrower with acquisition financing in connection with an E
affordable housing project ("Project") on a site more particularly described in the Agreement and
the legal description attached hereto as Exhibit"A" ("Property"). Q
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1. Interest; Term. r
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A. Basic Interest. Except as provided in Section 1.13 below, the disbursed and unpaid
principal balance of the Loan shall bear interest commencing on the date on which the Loan
proceeds are first disbursed for the account of Borrower at the rate of three percent (3%) per M
annum, simple interest ("Basic Rate"). Interest shall be computed on the basis of actual number
of days elapsed.
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B. Default Rate. Any amounts which Borrower does not pay when due under the L%
terms of this Note shall bear interest at the rate of ten percent (10%) per annum, simple interest
("Default Rate"), from the date due until the date paid. However, notwithstanding this or any E
other provision of this Note, nothing herein shall be deemed to require Borrower to pay interest °
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in an amount prohibited by any applicable usury law or other legal limitation on interest, and the
terms hereof and of this Note shall be interpreted to require in each instance the lesser of(i) the
amount stated in this Note; and (ii) the maximum applicable legal limit.
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C. Term. Except in the event of a default and acceleration as described below, the
term of the Loan expires fifty-seven (57) years after the Effective Date of the Agreement, as
Promissory Note
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defined in the Agreement. The City shall have the option of extending the terof the Loan in its M
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sole discretion.
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2. Security; Time and Source of Payment. 0
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A. Borrower's obligations under this Note shall, at all times during which any d
amount remains outstanding, be secured by a deed of trust ("Deed of Trust") made concurrently w
herewith, and of which the City is the beneficiary, recorded against Borrower's interest in the
Property. The terms of the Deed of Trust are hereby incorporated into this Note and made a part
hereof.
a.
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B. The security interest in the Property granted to the City pursuant to the Deed of
Trust shall be subordinate only to the exceptions to title shown in the title report for the Property Q
which are approved in writing by the City, or such other exceptions as may be approved in
writing by the City. a
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C. Upon the recordation of the Deed of Trust, the sole recourse of the City to recover N
any sum under this Note shall be to the Property subject to the Deed of Trust, except in the event
of: 1) fraud by Borrower or its assignee; 2) any material misrepresentation made by Borrower to
the City under the Agreement; 3) misappropriation by Borrower or its assignee of any tax ,}i
collection amounts or insurance or condemnation awards resulting from ownership of the
Property; 4) commission of bad faith waste by Borrower or its assignee; or 5) the presence of o
Hazardous Substances on the site of the Property, as that term is defined in the Agreement.
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D. The Loan shall be repaid by Borrower in annual payments in the amount of ten c
percent (10%) of Developer's Residual Receipts, as that term is defined in the Agreement, for E
the preceding calendar year, or as otherwise agreed pursuant to the terms and payment dates a
specified in Section 2.7(a)(6) of the County Loan Agreement, incorporated herein by this
reference. The City shall credit each payment against the then outstanding balance of the Loan. y
Borrower shall at all reasonable times allow the City or its agent access to Borrower's books and =
records for the purpose of verifying the amount of Residual Receipts received by Borrower.
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E. Notwithstanding Subsection 2.D above, the entire outstanding principal balance
of the Loan together with any outstanding interest and any other sums payable under this Note d
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shall be due and payable in full on the first to occur of. (i) the date on which the City exercises 0
its option to accelerate all sums due under this Note as a result of a default by Borrower as i>-,
described in Sections 3 and 9 hereof and the expiration of any applicable cure periods; or (ii) the
expiration of the term of the Loan as described in Section 1.0 hereof. E
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Promissory Note
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3. Acceleration.
Notwithstanding the payment terms set forth in Section 2 above, upon the occurrence of c
any"Event of Default" as set forth in Section 9 below, the entire outstanding principal balance of 2
this Note, together with any outstanding interest and other amounts payable hereunder, shall, at
the election of the City and upon notice to Borrower thereof become immediately due and w
payable without presentment, demand, protest or other notices of any kind, all of which are
hereby waived by Borrower. _
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4. Prepayment; Application of Pam. o
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At any time after the disbursement of the Loan proceeds, Borrower may prepay all or a a
portion of the unpaid principal amount of the Loan and accrued interest and any other sums
outstanding without penalty. All payments, including any prepayments or funds received upon Q
acceleration pursuant to Section 3 above, shall be applied first toward any outstanding costs of ti
collection or other amounts (excluding Loan principal or interest thereon) due under this Note or N
the Agreement , then toward outstanding interest accrued at the Default Rate, if any, then toward
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outstanding interest accrued at the Basic Rate, if any, and finally toward the remaining principal
balance under this Note. U-
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5. Obligation of Borrower Unconditional. o
The obligation of Borrower to repay the Loan and all accrued interest thereon and all E
other sums due thereunder shall be absolute and unconditional, and until such time as all of the c
outstanding principal of, interest on and all other sums due under, this Note shall have been fully a
paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein; and
(b) will not terminate or suspend any payment or obligations under this Note, the Deed of Trust,
the Agreement, or any other document executed hereunder or in connection herewith for any N
cause, including without limitation, any acts or circumstances that may constitute failure of
consideration, commercial frustration of purpose, or any duty, liability or obligation arising out N
of or in connection with this Note, the Deed of Trust, the Agreement, or any document executed M
hereunder or in connection herewith.
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6. Purpose of Loan. z°
The Loan proceeds shall be used by Borrower only to provide acquisition financing for N
the affordable housing development described in the Agreement. In no event shall Borrower use E
or otherwise invest the proceeds of the Loan except as expressly provided in this Note. a
7. Covenants of Borrower. r
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As additional consideration for the making of the Loan by the City, Borrower covenants Q
that it shall comply with all of its obligations under the Agreement and the Deed of Trust. Any 4.;
amounts payable by Borrower under the Deed of Trust (other than amounts also payable E
hereunder) shall be deemed added to the principal amount of the Loan payable hereunder.
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8. Assignment of this Note. c
This Note shall be assignable by Borrower only if Borrower obtains the prior express
written consent of the City, which consent may be withheld by the City in its sole discretion.
Notwithstanding anything to the contrary in this Note, no purported assignment of this Note or w
the Loan shall be effective if such assignment would violate the terms, conditions and
restrictions of any applicable governmental restrictions. The City's consent to such assignment
shall be expressly conditioned upon (i) the assignee's execution of such documents as the City a
requires in its sole discretion, including, without limitation, any and all documents deemed c
necessary by the City to provide for said assignee's assumption of all of the obligations of
Borrower hereunder and under the Loan documents, and (ii) the City's approval of the financial Q
and creditworthiness of such proposed assignee and the assignee's ability to perform all of the
Borrower's covenants under this Note,Agreement, and any of the other Loan documents. a
9. Events of Default and Remedies. N
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A. Borrower Events of Default. The occurrence of any of the following shall, after
the giving of any notice and the expiration of any applicable cure period described therein, U-
constitute an event of default by Borrower hereunder("Event of Default"): s
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(1) The failure of Borrower to pay or perform any monetary covenant or =
obligation hereunder or under the terms of this Note, the Deed of Trust, or the Agreement, E
without curing such failure within ten (10) calendar days after the date such payment is due. c
Notwithstanding anything herein to the contrary, the herein described cure period shall not apply E
to a failure by Borrower to timely repay the Loan at the maturity date of this Note; Q
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(2) The failure of Borrower to perform any nonmonetary covenant or y
obligation hereunder or under the terms of this Note, the Deed of Trust, or the Agreement, M
without curing such failure within thirty (30) calendar days after receipt of written notice of such �!?
default from the City (or from any party authorized by the City to deliver such notice as
identified by the City in writing to Borrower) specifying the nature of the event or deficiency
giving rise to the default and the action required to cure such deficiency; provided, however, that °'
if any default with respect to a nonmonetary obligation is such that it cannot be cured within a z0
thirty day period, it shall be deemed cured if Borrower commences the cure within said thirty 2:1
day period and diligently prosecutes such cure to completion thereafter with the cure completed y
in any event within 180 calendar days after the notice. Notwithstanding anything herein to the E
contrary, the herein described notice cure periods shall not apply to any Event of Default °
described in Sections 9(A)(3)through 9(A)(7)below;
(3) The material falsity of any representation or breach of any warranty or
covenant made by Borrower under the terms of this Note, the Agreement, or the Deed of Trust; Q
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(4) If Borrower should (a) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian or the like of its property; (b) fail to pay, or admit in c
writing its inability to pay, its debts generally as they become due; (c) make a general assignment c
for the benefit of creditors; (d)be adjudicated a bankrupt or insolvent; or (e) commence a 2
voluntary case under the bankruptcy laws of the United States of America that is not withdrawn
within ten (10) calendar days after the filing thereof, file an answer seeking an arrangement with w
creditors or an order for relief or seeking to take advantage of any insolvency law, or file an
answer admitting the material allegations of a petition filed against it in any bankruptcy or
insolvency proceeding;
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(5) If without the application, approval or consent of Borrower, a proceeding
shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in a
respect of Borrower or any constituent partner of Borrower, for an order for relief or an
adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of Q
debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of r�
all or any substantial part of Borrower's assets, or other like relief in respect thereof under any N
bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good
faith, the same shall (a) result in the entry of an order for relief or any such adjudication or }
appointment, or(b) continue undismissed, or pending and unstayed, for any period of ninety (90) U-
consecutive calendar days; w
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(6) Voluntary cessation of the operation of the Project during the construction c
phase for a continuous period of more than thirty (30) calendar days or the involuntary cessation
of the operation of the Project at any subsequent time during the term of this Note for a
continuous period of more than sixty(60) calendar days; E
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(7) Borrower shall be in default under the Housing Affordability Covenant, as
that term is defined in the Agreement, unless the default is cured within the cure period, if any,
applicable thereto under the terms of the obligation which is in default.
B. City Remedies. Upon the occurrence of an Event of Default hereunder, the City M
may, in its sole discretion, take any one or more of the following actions:
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(1) By notice to Borrower, declare the entire then unpaid principal balance of z
the Loan immediately due and payable, and the same shall become due and payable without 2!1
further demand, protest or further notice of any kind, all of which are hereby expressly waived y
by Borrower. Upon such declaration, outstanding principal and (to the extent permitted by law) E
interest and any other sums outstanding in connection with the Loan shall thereafter bear interest °
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at the Default Rate, payable from the date of such declaration until paid in full;
(2) Subject to the nonrecourse provisions of Section 2 above, take any and all
actions and do any and all things which are allowed, permitted or provided by law, in equity or Q
by statute, in the sole discretion of the City, to collect the amounts then due and thereafter to
become due hereunder, to exercise its rights under the Deed of Trust, and to enforce performance E
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and observance of any obligation, agreement or covenant of the Borrower under this Note or �
under any other document executed in connection herewith;
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(3) Subject to the nonrecourse provisions of Section 2 above, upon the
occurrence of an Event of Default which is occasioned by Borrower's failure to pay money,
whether under this Note or the Agreement, the City may, but shall not be obligated to, make such w
payment. If such payment is made by the City, Borrower shall deposit with the City, upon
written demand therefor, such sum plus interest at the Default Rate. The Event of Default with
respect to which any such payment has been made by the City shall not be deemed cured until a
such repayment has been made by Borrower. Until repaid, such amounts shall have the security c
afforded disbursements under this Note;
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(4) Subject to the nonrecourse provisions of Section 2 above, upon the
occurrence of an Event of Default described in Section 9(A)(4) or 9(A)(5) hereof, the City shall Q
be entitled and empowered by intervention in such proceedings or otherwise to file and prove a
claim for the whole amount owing and unpaid on the Loan and, in the case of commencement N
of any judicial proceedings, to file such proof of claim and other papers or documents as may be
necessary or advisable in the judgment of the City and its counsel to protect the interests of the
City and to collect and receive any monies or other property in satisfaction of its claim.
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C. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City o
is intended to be exclusive of any other available remedy or remedies, but each such remedy
shall be cumulative and shall be in addition to every other remedy given under this Note or now E
or hereafter existing at law or in equity or by statute; and may be exercised in such number, at c
such times and in such order as the City may determine in its sole discretion. No delay in E
exercising, or failure to exercise, any right or power upon the occurrence of any Event of Default Q
hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may be deemed w
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expedient by the City. In order to entitle the City to exercise any right or remedy reserved to it
under this Note, no notice shall be required except as expressly provided herein. U)
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D. City Default and Borrower Remedies. Upon failure of the City to meet any of its
obligations under this Note without curing such failure within thirty (30) calendar days after
receipt of written notice of such failure from Borrower specifying the nature of the event or z°
deficiency giving rise to the default and the action required to cure such deficiency, Borrower �%
may, as its sole and exclusive remedies: 0
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(1) Demand and obtain payment from the City of any sums due to or for the a
benefit of Borrower pursuant to the express terms of this Note;
(2) Bring an action in equitable relief seeking the specific performance by the
City of the terms and conditions of this Note or seeking to enjoin any act by the City which is Q
prohibited hereunder; or
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(3) Bring an action for declaratory relief seeking judicial determination of the
meaning of any provision of this Note. c
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Without limiting the generality of the foregoing, Borrower shall in no event be 3
entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or
nature from the City arising out of or in connection with this Note, and in connection with such w
waiver Borrower is familiar with and hereby waives the provisions of Section 1542 of the
California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO a
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH c
IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR." a
Initials of Borrower a
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10. Conflict of Interest,No Individual Liability.
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No official or employee of the City shall have any personal interest, direct or indirect, in
this Note,nor shall any official or employee of the City participate in any decision relating to this w
Note that affects such official's or employee's pecuniary interest in any corporation, partnership 0.-
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or association in which such official or employee is directly or indirectly interested. No official
or employee of the City shall be personally liable in the event of a breach of this Note or any E
other Loan document by the City.
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11. Amendments, Changes and Modifications. Q
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This Note may not be amended, changed, modified, or altered except by a written N
amendment duly authorized by, and signed on behalf of, both parties hereto.
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12. Notices. M
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All notices, demands, requests, elections, approvals, disapprovals, consents or other 0
communications given under this Note shall be in writing and shall be given by personal Z
delivery, certified mail (return receipt requested), or overnight guaranteed delivery service
offering confirmation of delivery, in each case addressed as follows: H
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If to the City: City of San Bernardino a
City Manager's Office - Housing Division
290 N. "D" St., Third Floor
San Bernardino, California 92401
Fax No. (909) 3 84-513 8 a
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If to Borrower: Golden Apartments San Bernardino, LP
c/o Housing Partners I, Incorporated
Promissory Note
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Attn: Executive Director
715 Brier Drive
San Bernardino, CA 92408 c
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Notices shall be effective only upon receipt or refusal. Each party shall promptly notify
the other party of any change(s)of address to which notice shall be sent pursuant to this Note. w
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13. Severability. c
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The invalidity or unenforceability of any one or more provisions of this Note will in no c
way affect any other provision.
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14. Interpretation.
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A. Whenever the context requires, all words used in the singular will be construed to
have been used in the plural, and vice versa, and each gender will include any other gender. The N
captions of the sections of this Note are for convenience only and do not define or limit any
terms or provisions. Time is of the essence in the performance of this Note by Borrower. Each N
party has been represented by counsel in the negotiation of this Note, and it shall not be
interpreted in favor of or against any party on account of relative responsibilities in drafting.
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B. Capitalized terms not otherwise defined herein shall have the meaning assigned to c
them by the Agreement. E
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15. No Waiver; Consents. E
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Any waiver by the City must be in writing and will not be construed as a continuing
waiver. No waiver will be implied from any delay or failure by the City to take action on
account of any default of Borrower. Consent by the City to any act or omission by Borrower
will not be construed as consent to any other or subsequent act or omission or to waive the �!?
requirement for the City's consent to be obtained in any future or other instance. M
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16. GoverninzLaw. d
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This Note shall be governed by the laws of the State of California. 2:1
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17. Representations, Warranties and Additional Covenants of Borrower. E
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Borrower hereby represents, warrants and covenants to the City that:
A. Organization and Standing. Borrower is a California legal entity as described in
the Agreement, duly formed, qualified to operate in California and validly existing and in good Q
standing under all applicable laws, and has all requisite power and authority to enter into and w
perform its obligations under this Note, the Agreement, the Deed of Trust, the Housing
Affordability Covenant, and all other documents executed in connection herewith.
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B. Enforceability. This Note and all other instruments to be executed by Borrower in c
connection with the Loan constitute the legal, valid and binding obligation of Borrower, without =
joinder of any other party. °
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C. Authorization and Consents. The execution, delivery and performance of this w
Note and all other instruments to be executed in connection herewith are consistent with the
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partnership agreement and any bylaws governing Borrower and have been duly authorized by all
necessary action of Borrower's partners and officers. a
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D. Due and Valid Execution. This Note and all other instruments to be executed in
connection herewith, will, as of the date of their execution, have been duly and validly executed Q
by Borrower.
E. Licenses. Borrower will obtain and maintain all licenses, permits, consents and a
approvals required by all applicable governmental authorities to own and operate the Project. N
F. Litigation and Compliance. There are no suits, other proceedings or N
investigations pending or threatened against or affecting the business or the properties of
Borrower (other than those as have been previously disclosed in writing to the City) which could w
impair its ability to perform its obligations under this Note, nor is Borrower in violation of any S
laws or ordinances which could materially impair Borrower's ability to perform its obligations c
under this Note. E
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G. Default. There are no facts now in existence which would, with the giving of Q
notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in
Section 9. r
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H. No Violations. The execution and delivery of this Note and all other documents
executed or given thereunder, and the performances hereunder and thereunder by Borrower, as
applicable, will not constitute a breach of or default under any instrument or agreement to which M
Borrower may be a party nor will the same constitute a breach of or violate any law or
governmental regulation. ar
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18. Approvals.
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A. Except with respect to those matters set forth hereinabove providing for the City's E
approval, consent or determination to be at the City's "sole discretion" or "sole and absolute
discretion," the City will not unreasonably withhold its consent to any approval to be given or
other determination to be made by the City hereunder. The City agrees to give Borrower written
notice of its approval or disapproval following submission of items to the City for approval,
including, in the case of any disapproved item, the reasons for such disapproval. Q
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B. Any review or approval of any matter by the City or any City official or employee
under this Note shall be solely for the benefit of the City, and neither Borrower nor any other
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person shall rely upon such review or approval as an indication of the wisdom, soundness, safety,
appropriateness, or presence or absence of any matter. Without limiting the generality of the -
foregoing, Borrower and not the City shall be solely responsible for assuring compliance with =
laws, the suitability of the Property for the Project, the adequacy of the plans for the Project, and °
the safety of the Project construction site, the completed Project, and the operation thereof.
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C. Any consent to a transfer given by the City under this Note, the Deed of Trust, the
Agreement, or any of other document executed in connection therewith, may be given by the
City Manager without action by the City Council unless the City Manager elects to refer the
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matter to the City Council. c
19. Good Faith and Fair Dealing. Q
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The City and Borrower agree to perform all of their obligations and the actions required Q
of each hereunder in good faith and in accordance with fair dealing. ti
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20. Waiver.
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Borrower agrees that it will still be liable for repayment of this Note, subject to the
nonrecourse provision of Section 2 above, even if the holder hereof does not follow the
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procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, r
which requirements are hereby waived. Failure of the City or other holder hereof to exercise any
right or remedy hereunder shall not constitute a waiver of any future or other default. No accep- E
tance of a past due installment or indulgence granted from time to time shall be construed to be a
waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to E
exercise any other rights the City may have. Q
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IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first
above written.
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BORROWER:
GOLDEN APARTMENTS SAN BERNARDINO, LP, w
a California limited partnership
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By: Golden Apartments HPI, LLC, a
a California limited liability company, c
its general partner
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By: Housing Partners I, Incorporated, 3
a California nonprofit public benefit corporation, Q
its sole member and Manager
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By:
Anthony Perez, Executive Director N
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EXHIBIT "A"
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LEGAL DESCRIPTION r
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Real property in the City of San Bernardino, County of San Bernardino, State of California,
described as follows:
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The south 213.25 feet of the following described property:
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That portion of the east 5 acres of Lot 3, Block 11, Orange Grove Tract, West Highlands, in the
City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in a
Book 11 of Maps, Page 14, records of said County, described as follows: ,.
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Beginning at a point 41.25 feet west of the northeast corner of the east 5 acres of said lot 3, said
point of beginning being the west line of Golden Avenue;thence west 179.12 feet, more or less,
to the northeast corner of Lot 15, Tract No. 4180, as per plat recorded in Book 53 of Maps, Pages
48 and 49, Records of said County; thence south along the West line of the east 5 acres of said w
Lot 3; said west line also being the east line of said Tract No. 4180, a distance of 603.25 feet; r
thence east 179.12 feet, more or less,parallel with the north line of said east 5 acres of the west
line of Golden Avenue; thence north along the west line of said Golden Avenue, 603.25 feet to E
the point of beginning.
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Address: 2312, 2324, and 2336 N. Golden Avenue, San Bernardino, CA y
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Promissory Note w
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Recording Requested by and E
When Recorded Mail To: L
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CITY OF SAN BERNARDINO
290 North "D" Street, Third Floor �
San Bernardino, CA 92401
Attn.: Office of the City Manager, Housing Division r_
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Above Space For Recorder's Use Only w
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Document entitled to free recording per c
Govt. Code Section 6103 a
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DEED OF TRUST,ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING a
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THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT ti
AND FIXTURE FILING("Deed of Trust") is made as of 2017, by and between N
Golden Apartments San Bernardino, LP, a California limited partnership ("Trustor"), North
American Title Company ("Trustee"); and the City of San Bernardino, a municipal corporation N
("Beneficiary" or"City"). LL
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RECITALS S
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A. The City is making a loan to Trustor in the original principal amount of eight E
hundred eighty thousand dollars ($880,000.00) ("Loan") pursuant to that certain HOME c
Investment Partnerships Act Loan Agreement ("Agreement") entered into by Trustor and E
Beneficiary and dated as of , 2017. The Loan is evidenced by a promissory note of a
even date herewith executed by Trustor("Note") in the principal amount of the Loan.
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B. Trustor intends to use the Loan proceeds for the acquisition of real property for
the development of an affordable housing project ("Project"). The Project will be developed on '!?
a site legally described in Attachment"1"to this Deed of Trust("Property").
NOW THEREFORE, in consideration of the Loan, Trustor hereby irrevocably grants,
conveys, transfers and assigns to Trustee, its successors and assigns, in trust for the benefit of o
Beneficiary, with power of sale and right of entry and possession as provided below, all of its N
present and future estate, right, title and interest in and to the Property, together with all right,
title and interest of Trustor therein , and grants to Beneficiary a security interest in, the ~
following:
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(A) All development rights, air rights, water, water rights, and water stock relating to the Q
Property.
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(B) All present and future structures, buildings, improvements, appurtenances and
fixtures of any kind on the Property, including but not limited to all apparatus, attached a
equipment and appliances used in connection with the operation or occupancy of the Property, c
such as heating and air-conditioning systems and facilities used to provide any utility services,
ventilation, vehicular cleaning, storage or other services on the Property, and all signage, -
carpeting and floor coverings, partitions, generators, screens, awnings, boilers, furnaces, pipes, o
plumbing, vacuum systems, brushes, blowers, cleaning, call and sprinkler systems, fire 0
extinguishing apparatus and equipment,water tanks, heating,ventilating, air conditioning and air
cooling equipment, and gas and electric machinery and equipment, it being intended and agreed w
that all such items will be conclusively considered to be a part of the Property, whether or not =
attached or affixed to the Property.
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(C) All appurtenances of the Property and all rights of Trustor in and to any streets, roads o
or public places, easements or rights of way,relating to the Property.
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(D) All of the rents, royalties, profits and income from the Property, to the extent not
prohibited by any applicable law. Q
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(E) All proceeds and claims arising on account of any damage to or taking of the N
Property and all causes of action and recoveries for any loss or diminution in value of the
Property. }
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(F) All existing and future goods, inventory, equipment and all other personal property r
of any nature whatsoever now or hereafter located on the Property which are now or in the future r
owned by Trustor and used in the operation or occupancy of the Property or in any construction
on the Property but which are not effectively made real property under Clause (B) above, E
including but not limited to all appliances, furniture and furnishings, building service equipment,
and building materials, supplies, equipment, machinery, plumbing and plumbing material and a
supplies, concrete, lumber, hardware, electrical wiring and electrical material and supplies,
roofing material and supplies, doors, paint, drywall, insulation, cabinets, ceramic material and
supplies, flooring, attached appliances, fencing, landscaping and all other materials, supplies and
property of every kind and nature.
(G) All present and future accounts, general intangibles, chattel paper, contract rights, M
deposit accounts, instruments and documents as those terms are defined in the California
Uniform Commercial Code, now or hereafter relating to or arising with respect to the Property
and/or the use thereof or any improvements thereto, including without limitation: (i) all rights to 0
the payment of money, including escrow proceeds arising out of the sale or other disposition of y
all or any portion of the estate of Trustor in the Property now or hereafter existing; (ii) all plans,
specifications and drawings relating to the development of the Property and/or any construction
thereon; (iii) all use permits, licenses, occupancy permits, construction and building permits, and
all other permits and approvals required by any governmental or quasi-governmental authority in
connection with the development, construction, use, occupancy or operation of the Property; Q
(iv) any and all agreements relating to the development, construction, use, occupancy and/or
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operation of the Property between Trustor and any contractor, subcontractor, project manager or d
supervisor, architect, engineer, laborer or supplier of materials; (v) all lease or rental agreements P
for the leasing or rental of the Property or any part thereof, (vi) all names under which the Q
Property is now or hereafter operated or known and all rights to carry on business under any such M
names or any variant thereof, (vii) all trademarks relating to the Property and/or the �
development, construction, use, occupancy or operation thereof; (viii) all goodwill relating to the c
Property and/or the development, construction, use, occupancy or operation thereof, (ix) all =
reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and •2
payments of any kind relating to the Property; (x) all loan commitments issued to Trustor in
connection with any sale or financing of the Property; (xi) all funds deposited with Beneficiary w
by Trustor, and all accounts of Trustor with Beneficiary, including all accounts containing
security deposits and prepaid rents paid to Trustor in connection with any leases of the Property,
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and all proceeds thereof, and (xii) all supplements, modifications and amendments to the a
foregoing. o
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(H) All of the right, title and interest of Trustor in and to all sales contracts of any nature a
whatsoever now or hereafter executed covering any portion of the Property, together with all
deposits or other payments made in connection therewith. Q
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(I) All of the right, title and interest of Trustor in and to any construction contracts, plans N
and specifications, building permits, and all other documents necessary for completion of the to
improvements to the construction of the Property. N
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(J) All water stock relating to the Property, all shares of stock or other evidence of t
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ownership of any part of the Property that is owned by Trustor in common with others, and all
documents of membership in any owners' or members' association or similar group having
responsibility for managing or operating any part of the Property. E
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Trustor does hereby covenant with Trustee and Beneficiary, that Trustor has good right to E
bargain, sell and convey Trustor's interest in the Property in manner and form as above written; a
and Trustor warrants and will defend said right and interest for the benefit of Beneficiary forever
against all lawful claims and demands whatsoever except as stated above. y
THIS DEED OF TRUST IS FOR THE PURPOSE OF SECURING:
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(1) performance of each agreement of Trustor herein contained or incorporated herein
by reference; a
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(2) payment of the indebtedness (including, without limitation, interest thereon)
evidenced by the Note, and any extension or renewal or modification thereof,
(3) performance of each agreement of Trustor contained in the Agreement or any of
the other "City Loan Documents" (as defined in the Agreement), and any extension, renewal or
modification of such other City Loan Documents; Q
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TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR HEREBY E
COVENANTS AND AGREES AS FOLLOWS: L
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1. Payment of Secured Obligations. Trustor shall pay when due (a) the
principal of, and the interest on,the indebtedness evidenced by the Note, (b) charges, fees and all �
other sums as provided in the Agreement, and (c)the principal of, and interest on, any future o
advances secured by this Deed of Trust. r-
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2. Maintenance, Repair, Alterations. Trustor shall keep the Property in good
condition and repair; complete promptly and in a good and workmanlike manner all w
improvements to be constructed on the Property, including specifically all improvements
described in the Agreement, and promptly restore in like manner any structure that may be =
damaged or destroyed thereon; pay when due all claims for labor performed and materials a
furnished therefor; comply with all laws, ordinances, regulations, covenants, conditions and o
restrictions now or hereafter affecting the Property or any part thereof or requiring any 2
alterations or improvements thereon; not commit or permit any waste or deterioration of the Q
Property; keep and maintain abutting grounds, sidewalks roads, parking and landscape areas in
good and neat order and repair; and not commit, suffer or permit, to the extent Trustor is able by a
the exercise of commercially reasonable best efforts, any act to be done in or upon the Property ti
in violation of any law, ordinance or regulation. N
3. Insurance. N
A. Trustor shall provide, maintain at its expense and deliver to
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Beneficiary at all times until payment in full of all obligations secured hereby, insurance as o
required by the Agreement or the Note. In the event of any loss or damage to the Property,
Trustor shall give immediate notice thereof to Beneficiary, and Beneficiary may thereupon make E
i proof of such loss or damage to any applicable insurer, if the same is not promptly made by c
Trustor. Trustor and Beneficiary hereby agree to cooperate in making any adjustment and E
compromise of any loss covered by the aforementioned insurance policies upon the Property, and Q
Trustor authorizes and empowers Beneficiary, at its option, to collect and receive the proceeds,
and endorse checks and drafts issued therefor. Beneficiary agrees that in the event of any loss N
covered by insurance policies on the Property, provided there is not then existing any material
default in the observance or performance of any of the covenants and agreements contained �!?
herein or in the Note or any future notes secured hereby, or in any other agreement with or for M
the benefit of the Beneficiary in connection with any indebtedness secured hereby (or such
existing default would be cured by the proceeds of such insurance), the proceeds of such
insurance shall be used for the repair or restoration of the Property and will be disbursed in o
accordance with such protective terms and conditions as Beneficiary may reasonably impose.
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B. Trustor hereby fully assigns to Beneficiary all current and future ~
claims it may have under any policy of insurance related to the Property or the Project,
regardless of whether such insurance was required to be maintained under the City Loan
Documents. Any and all unexpired insurance shall inure to the benefit of and pass to the Q
purchaser of the Property at any foreclosure sale, or any Trustee's sale held pursuant hereto.
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C. Beneficiary may at the time in its sole discretion require Trustor to P
submit satisfactory evidence of insurance policies obtained pursuant to this Section 3 and of Q
Trustor's compliance with all the provisions of said policies. M
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4. Lawsuits. Trustor shall appear in and defend, or otherwise take such
action therein as Beneficiary and Trustee or either of them may deem advisable with respect to C
any action or proceeding affecting the security for the Loan in which Beneficiary or Trustee may
appear.
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5. Beneficiary Statement. Trustor shall pay all charges for all court costs and c
expenses which Beneficiary may elect to advance in order to keep unimpaired, protect, and c
preserve the title to the Property, and shall pay for any statement provided for by law in effect at a
the date hereof regarding the obligations secured hereby, any amount demanded by the o
Beneficiary, not to exceed the maximum allowed by law at the time when said statement is
demanded. Q
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6. Condemnation. Trustor hereby assigns to Beneficiary all judgments, Q
awards of damages and settlements, hereafter made as a result of or in lieu of any condemnation ti
or other proceedings for public use of, or for any damage to, the Property or the improvements N
thereon. If(i) Trustor is not then in material default hereunder (or such default will be cured
with the proceeds from the foregoing), and (ii) the taking is a partial taking, all proceeds thereof N
shall be applied to restoring the Property, if practicable, as reasonably determined by
Beneficiary. In the event (i) Trustor is then in material default hereunder (and such default will
not be cured with the proceeds of the foregoing), (ii)the taking is a total taking, or(iii)the taking
is a partial taking and Beneficiary has reasonably determined that restoration of the Property is c
not practicable, the proceeds shall be paid to Beneficiary to the extent of those monies due and E
owing under the Note, this Deed of Trust, or future notes or future deeds of trust, and Beneficiary C
is hereby authorized to receive such monies. Trustor agrees to execute such further assignments E
of any such award,judgment or settlement which may be received by Trustor. Beneficiary may a
apply any and all such sums to the indebtedness secured hereby in such manner as it elects or, at
its option, the entire amount so received by it or any part thereof may be released. Neither the 2
application nor the release of any such sums shall cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. °?
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7. Permitted Acts of Beneficiary. Without affecting the liability of any
person, including Trustor (other than any person released pursuant hereto), for the payment of
any indebtedness secured hereby, Beneficiary is authorized and empowered as follows: o
Beneficiary may at any time, and from time to time, either before or after the maturity of the
obligations secured hereby, and without notice (a) release any person liable for the payment of
any of the indebtedness, (b) make any agreement extending the time or otherwise altering the
terms of payment of any of the indebtedness, (c) accept additional security therefor of any kind,
or(d) release any property, real or personal, securing the indebtedness.
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8. Reconveyance of Property. Upon written request of Beneficiary stating E
that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the L
Note to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall Q
reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance R
of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto." c
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9. Default and Trustee's Sale.
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A. Upon the occurrence of an "Event of Default" under this Deed of w
Trust (as defined in Section 17 below) Beneficiary may declare all principal remaining unpaid,
all interest then earned and remaining unpaid, and all sums other than principal or interest
secured hereby, immediately due and payable (and thenceforth at the option of the Beneficiary
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and except as otherwise prohibited by law, the entire balance of the unpaid principal shall c
thereafter bear interest at the Default Rate of interest per annum set forth in the Note until paid)
and may proceed to exercise the power of sale granted by this Deed of Trust by delivery to a
Trustee of written declaration of default and demand for sale and of written notice of default and
of election to cause to be sold said Property, which notice Trustee shall cause to be filed for Q
record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note and all ti
documents evidencing expenditures secured hereby. N
B. After the lapse of such time as may then be required by law
following the recordation of said notice of default, and notice of sale having been given as then
required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place s
fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it r
may determine, at public auction to the highest bidder for cash in lawful money of the United c
States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property E
by public announcement at such time and place of sale, and from time to time thereafter may C
postpone such sale by public announcement at the time fixed by the preceding postponement. E
Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any a
covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall
be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or m
Beneficiary, may purchase at such sale.
C. After deducting all costs, fees and expenses of Trustee, including M
cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to
payment of. first, all sums expended by the Beneficiary under the terms hereof or under the
Note, not then repaid, with accrued interest at the Deferral Rate, as defined in the Note; second, o
all other sums then secured hereby; and the remainder, if any, to the person or persons legally
entitled thereto. P
10. Substitute Trustees. Beneficiary, or any successor in ownership of any
indebtedness secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which instrument, a
executed by the Beneficiary and duly acknowledged and recorded in the Office of the Recorder
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of the County of San Bernardino, and by otherwise complying with the provisions of California d
Civil Code Section 2934a, or any successor section, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall, without conveyance from the Q
Trustee predecessor, succeed to all its title, estate, right, powers and duties. Said instrument
must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and �
page where this Deed of Trust is recorded, and the name and address of the new Trustee. c
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11. Successors Bound. This Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, d
assigns, trustees and receivers. In this Deed of Trust, whenever the context so requires, the W
masculine gender includes the feminine and/or neuter, and the singular number includes the
plural.
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12. Evidence of Title. If, because of any default hereunder, or because of the c
filing or contemplated filing of any legal proceedings affecting the Property, Beneficiary deems 2
it necessary to obtain an additional evidence of title or to cure any defect in title, Beneficiary a
may procure such evidence or cure such defect, pay the cost thereof, and shall have an immediate
claim against Trustor therefor, together with a lien upon the Property for the amount so paid, a
with interest at the Default Rate. Beneficiary is further authorized to require an appraisal of the ti
Property at any time that Beneficiary may reasonably request. N
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13. Statute of Limitations. The pleading of any statute of limitations as a N
defense to any and all obligations secured by this Deed of Trust is hereby waived by the Trustor, LL
to the fullest extent permissible by law.
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14. Severability. The invalidity of any one or more covenants, phrases, _
clauses, sentences, paragraphs or sections of this Deed of Trust shall not affect the remaining E
portions of this Deed of Trust or any part hereof and this Deed of Trust shall be construed as if
such invalid covenants, phrases, sentences, paragraphs or sections, if any, had not been inserted Q
herein.
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15. Order of Application. If the indebtedness secured hereby is now or N
hereafter becomes further secured by a security agreement, deed of trust, pledge, contract of
guaranty or other additional securities, Beneficiary may to the full extent allowed by law, at its �!?
option, exhaust any one or more of said securities as well as the security hereunder, either M
concurrently or independently and in such order as it may determine, and may apply the proceeds
received upon the indebtedness secured hereby without affecting the status of, or waiving any
right to exhaust all or any other security including the security thereunder and without waiving o
any breach or default in any right or power, whether exercised hereunder or contained herein, or N
in any such other security. L
16. Covenants of Trustor.
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A. Audit by State and Federal Agencies. In the event the Loan is Q
subjected to audit, monitoring or other inspections by appropriate state and federal agencies,
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Trustor shall comply with such inspections and pay, on behalf of itself and Beneficiary, the full E
amount of the cost to the inspecting agency of such inspections unless such inspection and any L
resulting liability is caused solely by the gross negligence or willful misconduct of Beneficiary. Q
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B. Program Evaluation and Review Trustor shall allow Beneficiary's �
authorized personnel to inspect and monitor its facilities and program operations as they relate to -
the Project or the Property, including the interviewing of Trustor's staff and other program C
participants, as reasonably required by Beneficiary during the term of the Loan. 0
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17. Default. Trustor shall be in default under this Deed of Trust upon any of w
the following events which, if not cured within the applicable cure period provided, if any, shall c
constitute an event of default hereunder("Event of Default"): c
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A. The failure of Trustor to pay or perform any monetary covenant or c
obligation hereunder or under the terms of the Note, the Agreement, or any other documents
executed in connection therewith, without curing such failure within ten (10) calendar days after Q
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the date such payment is due. Notwithstanding anything herein to the contrary, the herein
described cure period shall not apply to a failure by Trustor to timely repay the Loan at the Q
maturity date of the Note; ti
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B. The failure of Trustor to perform any nonmonetary covenant or
obligation hereunder or under the terms of the Agreement, the Note, or any other documents N
executed in connection therewith, without curing such failure within thirty (30) calendar days
after receipt of written notice of such default from Beneficiary (or from any party authorized by
Beneficiary to deliver such notice as identified by Beneficiary in writing to Trustor) specifying S
the nature of the event or deficiency giving rise to the default and the action required to cure such c
deficiency; provided, however, that if any default with respect to a nonmonetary obligation is E
such that it cannot be cured within a 30-day period, it shall be deemed cured if Trustor
commences the cure within said 30-day period and diligently prosecutes such cure to completion E
thereafter. Notwithstanding anything herein to the contrary, the herein described notice a
requirements and cure periods shall not apply to any Event of Default described in Sections
17(C) through 17(G) below; 2
C. The material falsity of any representation or breach of any C.n
warranty or covenant made by Trustor under the terms of this Deed of Trust, the Note, the M
Agreement, or any other document executed in connection therewith;
D. Trustor or any constituent member or partner, or majority o
shareholder, of Trustor shall (1) apply for or consent to the appointment of a receiver, trustee, N
liquidator or custodian or the like of its property, (2) fail to pay or admit in writing its inability to
pay its debts generally as they become due, (3) make a general assignment for the benefit of
creditors, (4)be adjudicated a bankrupt or insolvent or (5) commence a voluntary case under the r
bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn
within ten (10) days of the filing thereof or answer seeking an arrangement with creditors, or an a
order for relief under, or seeking to take advantage of, any insolvency law, or file an answer
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admitting the material allegations of a petition filed against it in any bankruptcy or insolvency E
proceeding;
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E. If without the application, approval or consent of Trustor, a m
proceeding shall be instituted in any court of competent jurisdiction, under any law relating to �
bankruptcy, in respect of Trustor or any constituent member or partner, or majority shareholder, w
of Trustor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement r-
with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of Trustor or of all or any substantial part of Trustor's assets, or other like
relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being w
contested by Trustor in good faith, the same shall (1)result in the entry of an order for relief or c
any such adjudication or appointment, or (2)continue undismissed, or pending and unstayed, for
any period of ninety(90) consecutive days; a
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F. Trustor shall suffer or attempt to effect a "Transfer" (as defined in
Section 31 below) other than in full compliance with the terms of this Deed of Trust. a
G. Trustor shall be in default under the Housing Affordability c
Covenant, as defined in the Agreement, unless the default is cured or waived within the cure ti
period, if any, applicable thereto under the terms of the obligation which is in default; or N
H. Voluntary cessation of the operation of the Project during the N
construction phase for a continuous period of more than thirty (30) calendar days or the U-
involuntary cessation of the operation of the Project during the construction phase in accordance
with this Deed of Trust for a continuous period of more than sixty(60) calendar days. B
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18. Acceleration. Upon the occurrence of an Event of Default, the entire E
balance of the outstanding principal and all accrued and unpaid interest on the Note, together c
with any other amounts payable thereunder, shall, at the election of Beneficiary and upon notice E
to Trustor thereof(except in the case of default described in Section 17 (D) or(E), in which case a
no notice shall be required), become immediately due and payable , withoutp resentment,
demand, protest or other notice of any kind, all of which are hereby waived by Trustor. y
19. Breach by Trustor, Cure by Beneficiary or Trustee. In the event of �
Trustor's failure to comply with any or all of the promises and agreements set forth in this Deed M
of Trust or to make any payment or to do any act required of Trustor in this Deed of Trust,
Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon
Trustor and without releasing Trustor from any obligation hereof, may make or do the same in o
such manner and to such extent as either in its sole judgment may deem necessary to protect the N
security hereof (including, without limitation, to procure insurance and pay the premiums
therefor; to pay unpaid water rents, sewer service charges, and other governmental or municipal
charges and rates, and all or any part of the unpaid taxes, assessments, and reassessments, if in its
judgment the same are just and valid; to pay the cost of appraisals, reappraisals, and extensions
of title; to enter or have its agents enter upon the Property whenever reasonably necessary for the Q
purpose of inspecting the Property or making repairs or installations as it deems necessary to
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preserve the Property or to protect the same from vandalism, without thereby becoming liable as E
a trespasser or mortgagee or beneficiary in possession, and to pay for such repairs and installa- L
tions). Beneficiary and Trustee are hereby authorized to enter upon the Property for such a
purposes; to appear in and defend any action or proceeding purporting to affect the security o
hereof or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears to be prior or superior o
hereto; and, in exercising any such powers, to pay necessary expenses, employ counsel of its c
choice and pay the reasonable fees of such counsel. Trustor agrees to pay immediately and .2
without demand all sums so expended by Beneficiary or Trustee, with interest from the date of
expenditure at the highest rate allowed by law in effect at the date thereof, and that Beneficiary w
shall have a lien upon the Property for the sums so expended and such interest thereon. c
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20. Security Agreement. All property covered by this Deed of Trust be a
deemed to constitute real property or interests in real property to the maximum extent permitted o
under applicable law. To the extent that any tangible property, equipment or other property
covered by this Deed of Trust constitutes personal property, such personal property shall Q
constitute additional security. This Deed of Trust shall create in Beneficiary a security interest in
such personal property and shall in respect thereof constitute a security agreement ("Security Q
Agreement"). Beneficiary shall be entitled to all of the rights and remedies in respect of any ti
personal property included in the Property covered by this Deed of Trust afforded a secured N
party under the Uniform Commercial Code and other applicable law. At Beneficiary's request
Trustor will at any time and from time to time furnish Beneficiary for filing financing statementsCD
signed by Trustor in form satisfactory to Beneficiary. Trustor acknowledges and agrees that u.
thirty (30) days' notice as to the time, place and date of any proposed sale of any personal Y
property shall be deemed reasonable for all purposes. Trustor agrees that the Security o
Agreement created hereby shall survive the termination or reconveyance of this Deed of Trust
unless Beneficiary executes documentation expressly terminating the Security Agreement. E
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21. Assumption of Liability. Except as provided in Section 31, the a
assumption of liability for the payment of the indebtedness hereby secured by any successor in
interest to Trustor in the Property (in the event Beneficiary elects not to accelerate the repayment
of the Loan pursuant to any transfer or disposition of the Property by operation of law or N
otherwise) shall not release Trustor from any liability Trustor has hereunder or under the other
City Loan Documents for the payment of such indebtedness or any sums advanced under and `!?
secured by this Deed of Trust. Any forbearance or indulgence of Beneficiary, or extensions of M
time for the payment of all or any part of the indebtedness secured hereby, or the release of a part
of the Property from the lien of this Deed of Trust, for, or without, payment of a consideration,
shall not in any manner diminish or reduce the liability of Trustor (subject to the nonrecourse o
provisions of Section 26) for the payment of the indebtedness now or hereafter secured hereby;
and any payments made upon the said indebtedness shall be deemed to have been made on
behalf and for the benefit of all parties obligated to pay the same. The acceptance of payments in
excess of the installments provided to be paid upon the Note or the consideration paid for any
such release shall not alter or diminish the obligation of Trustor to thereafter make payments in
the amounts and on the dates provided therein,until the same are fully paid. .2
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22. Future Advances. E
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A. Upon the request of Trustor or its successor in ownership of the Q
Property, Beneficiary may, at its option, at any time before full payment of the Note, make c
further advances to Trustor or its successors in ownership, and the same, with interest and late
charges as permitted by law, shall be secured by this Deed of Trust; and provided further that if ,-
Beneficiary, at its option, shall make a further advance or advances as aforesaid, Trustor or its =
successors in ownership agree to execute and deliver to Beneficiary a promissory note to
evidence the same, payable on or before the maturity of the indebtedness under the Note and
bearing such other terms as Beneficiary shall require. w
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B. Trustor further acknowledges and agrees that: This Deed of Trust c
is intended to, and shall, secure not only the original indebtedness under the Note, but any and all a
future advances made directly by Beneficiary to Trustor. the This Deed of Trust shall secure any c
unpaid balances of advances made by Beneficiary with respect to the Property. Beneficiary shall u
have the benefit of all statutes now existing or henceforth enacted to assure repayment of any Q
such future advances plus interest thereon.; To secure the payment of said original indebtedness
and future advances Beneficiary shall also have a lien upon all other personal property and Q
securities now or hereafter in its possession belonging to Trustor. All rights, powers and r,
remedies conferred upon Beneficiary herein are in addition to each and every other right which N
Beneficiary has hereunder, All rights, powers and remedies conferred upon Beneficiary in
equity or by law may be enforced concurrently therewith. That Beneficiary shall be subrogated N
to the rights and seniority of any prior lien paid or released by reason of the application thereon U-
of any of the proceeds hereof. Each and all of the covenants, agreements, and provisions hereof r
shall bind the respective heirs. executors, administrators, successors, and assigns of Trustor and o
Beneficiary herein, and all others who subsequently acquire any right, title, or interest in the
Property, or to this Deed of Trust and the indebtedness secured hereby. E
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23. Captions. The captions of the sections of this Deed of Trust are for E
convenience only and shall not be considered in resolving questions of interpretation or
construction.
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24. Estoppel Certificates. Trustor shall from time to time at Beneficiary's
request furnish to Beneficiary or any person designated by Beneficiary a certified statement in �!?
form reasonably satisfactory to Beneficiary confirming as of the date of the certificate the unpaid M
principal balance and accrued interest on the Note and stating that Trustor is not in default
hereunder (or describing any default), and stating that Trustor has no defense, right of set off or
counterclaim against the payment of the indebtedness, or any part thereof, or the observance or o
performance of any obligation (or describing any such defense, set off or counterclaim). Any
purchaser or assignee of the Note or this Deed of Trust or any interest therein may rely on such
certificate.
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25. Obligation Nonrecourse. Except to the extent any Event of Default
hereunder results directly or indirectly from any fraud or intentional and material Q
misrepresentation by Borrower in connection with the Loan,the Loan is a nonrecourse obligation
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of Trustor and in the event of the occurrence of an Event of Default, Beneficiary's only recourse E
under this Deed of Trust shall be against the Property, the proceeds thereof, the rents and other L
income arising from its use and occupancy as provided in the Deed of Trust, and any other Q
collateral given to Beneficiary as security for repayment of the Loan.
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26. Fixture Filing. This Deed of Trust is also a fixture filing with respect to -
the personal property which is or is to become fixtures on the Property, and is to be recorded in 0
the real property records of San Bernardino County, California. 0
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27. Assignment of Rents. All of the existing and future rents, royalties, w
income, and profits of the Property that arise from its use or occupancy are hereby absolutely and c
presently assigned to Beneficiary. However, until Trustor is in default under this Deed of Trust,
Trustor will have a license to collect and receive those rents, royalties, income and profits. Upon a
any Event of Default by Trustor, Beneficiary may terminate Trustor's license in its discretion, at o
any time, without notice to Trustor, and may thereafter collect the rents, royalties, income and 2
profits itself or by an agent or receiver. No action taken by Beneficiary to collect any rents, Q
royalties, income or profits will make Beneficiary a "mortgagee-in-possession" of the Property,
unless Beneficiary personally or by agent enters into actual possession of the Property.
Possession by a court-appointed receiver will not be considered possession by Beneficiary. All Q
rents, royalties, income and profits collected by Beneficiary or a receiver will be applied first to N
pay all expenses of collection, and then to thepayment of all costs of operation and management
of the Property, and then to the payment of the indebtedness and obligations secured by this N
Deed of Trust in whatever order Beneficiary directs in its absolute discretion and without regard U_
to the adequacy of its security. If required by Beneficiary, each lease or occupancy agreement
affecting any of the Property must provide, in a manner approved by Beneficiary, that the tenant r
will recognize as its lessor any person succeeding to the interest of Trustor upon any foreclosure =
of this Deed of Trust. The expenses (including receivers' fees, if any, compensation to any agent E
appointed by Beneficiary, counsel fees, costs and compensation to any attorney retained by c
Beneficiary, and disbursements) incurred in taking possession and making such collection, shall E
be deemed a portion of the expense of the foreclosure of this Deed of Trust. The entering upon a
and taking possession of the Property, and/or the collection of such rents, issues and profits and
the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. Beneficiary may exercise any one
or more of the remedies in this section without waiving its right to exercise any such remedies �!?
again or for the first time in the future. The foregoing shall be subject to the provisions of M
applicable law.
28. Applicable Law. This Deed of Trust shall be governed by, and construed o
in accordance with,the laws of the State of California.
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29. Approvals. Except with respect to those matters set forth hereinabove ~
providing for Beneficiary's approval, consent or determination to be at Beneficiary's "sole
discretion or sole and absolute discretion Beneficiaryshall not unreasonably y withhold any �
approval, consent, or other permission required to be given by Beneficiary hereunder. .2
Beneficiary agrees to give Trustor written notice of its approval or disapproval following
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submission of items to Beneficiary for approval, including, in the case of any disapproved item, E
the reasons for such disapproval. Any consent to a transfer under Section 31 of this Deed of L
Trust, and any other consent or approval by Beneficiary under this Deed of Trust or any of the Q
other City Loan Documents, may be given by the City Manager or his or her designee without
action of the City Council unless the City Manager or his or her designee, in his or her sole
discretion, elects to refer the matter to the Council. w
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30. Good Faith and Fair Dealing. Beneficiary and Trustor agree to perform all
of their obligations and the actions required of each hereunder in good faith and in accordance
with fair dealing. w
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31. Assignment of Interest.
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A. Without the prior written approval of Beneficiary, which approval o
Beneficiary may withhold in its sole and absolute discretion, Trustor shall not (i) sell, encumber,
assign or otherwise transfer (collectively, "Transfer") all or any portion of its interest in the Q
Property or the Project, (ii) permit the Transfer of any portion of its ownership and/or control of
the Property or the Project, or (iii) Transfer any of its rights or obligations under the City Loan Q
Documents. Trustor hereby agrees that any purported Transfer not approved by Beneficiary as ,.
required herein shall be ipso facto null and void, and no voluntary or involuntary successor to N
any interest of Trustor under such a proscribed Transfer shall acquire any rights pursuant to the
Agreement or this Deed of Trust.
B. At any time Trustor desires to effect a Transfer hereunder, Trustor
shall notify Beneficiary in writing (the "Transfer Notice") and shall submit to Beneficiary for its r
prior written approval (i) all proposed agreements and documents (collectively, the "Transfer =
Documents") memorializing, facilitating, evidencing and/or relating to the circumstances sur- E
rounding such proposed Transfer, and (ii) a certificate setting forth representations and
warranties by Trustor and the proposed transferee to Beneficiary sufficient to establish and Q
ensure that all requirements of this Section 31 have been and will be met. No Transfer
Documents shall be approved by Beneficiary unless they expressly provide for the assumption
by the proposed transferee of all of Trustor's obligations under the City Loan Documents. The N
Transfer Notice shall include a request that Beneficiary consent to the proposed Transfer and
shall also include a request that Trustor be released from further obligations under the City Loan U)
Documents. Beneficiary agrees to make its decision on Trustor's request for consent to such �Q,
Transfer as promptly as possible, and, in any event, not later than thirty (30) calendar days after
Beneficiary receives the last of the items required by this Section 31. In the event Beneficiary
consents to a proposed Transfer, then such Transfer shall not be effective unless and until c
Beneficiary receives copies of all executed and binding Transfer Documents which Transfer N
Documents shall conform with the proposed Transfer Documents originally submitted by Trustor
to Beneficiary. From and after the effective date of any such Transfer, Trustor shall be released
from its obligations under this Deed of Trust and the other City Loan Documents accruing
subsequent to such effective date.
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C. Notwithstanding anything in this Deed of Trust to the contrary, E
Trustor agrees that it shall not be permitted to make any Transfer, whether or not Beneficiary L
consent is required therefor and even if Beneficiary has consented thereto, if there exists an a
Event of Default under this Deed of Trust at the time the Transfer Notice is tendered to R
Beneficiary or at any time thereafter until such Transfer is to be effective.
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D. The provisions of this Section 31 shall apply to each successive c
Transfer and proposed transferee in the same manner as initially applicable to Trustor under the
terms set forth herein.
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IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the E
date first above written.
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TRUSTOR:
GOLDEN APARTMENTS SAN BERNARDINO, LP,
a California limited partnership c
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By: Golden Apartments HPI, LLC, 2
a California limited liability company,
its general partner W
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By: Housing Partners I, Incorporated,
a California nonprofit public benefit corporation, a
its sole member and Manager c
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Date: By a
Anthony Perez, Executive Director
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BENEFICIARY: N
CITY OF SAN BERNARDINO
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Date: By: g
Andrea Miller, City Manager
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Attachment 1
to a
Deed of Trust
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Legal Description of the Property c
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Real property in the City of San Bernardino, County of San Bernardino, State of California, W
described as follows: c
The south 213.25 feet of the following described property: a
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That portion of the east 5 acres of Lot 3, Block 11, Orange Grove Tract, West Highlands, in the
City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in Q
Book 11 of Maps, Page 14, records of said County, described as follows: 3
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Beginning at a point 41.25 feet west of the northeast corner of the east 5 acres of said lot 3, said
point of beginning being the west line of Golden Avenue; thence west 179.12 feet, more or less, N
to the northeast corner of Lot 15, Tract No. 4180, as per plat recorded in Book 53 of Maps, Pages
48 and 49, Records of said County; thence south along the West line of the east 5 acres of said N
Lot 3; said west line also being the east line of said Tract No. 4180, a distance of 603.25 feet; LL
thence east 179.12 feet, more or less, parallel with the north line of said east 5 acres of the west
line of Golden Avenue; thence north along the west line of said Golden Avenue, 603.25 feet to 0
the point of beginning.
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APN: 0155-183-27-0-000 =
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Address: 2312, 2324, and 2336 N. Golden Avenue, San Bernardino, CA a
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO: f6
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City of San Bernardino
201 North"E" Street, Suite 301 a
San Bernardino, CA 92401
Attn: Housing Division a
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(Space Above Line Reserved For Use By Recorder) N
Recordation of this Instrument is exempt cm
from all fees and taxes pursuant to
Government Code Section 6103 s
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HOUSING AFFORDABILITY COVENANT AND AGREEMENT E
AND DECLARATION OF RESTRICTIVE COVENANTS =
(Golden Apartments) Q
This Housing Affordability Covenant and Agreement and Declaration of Restrictive
Covenants ("Agreement") is dated [date of closing], and is between the City of San Bernardino, N
a municipal corporation("City"), and Golden Apartments San Bernardino, LP, a California
limited partnership("Borrower"). N
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RECITALS
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A. Defined Terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
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B. Borrower owns or will acquire a fee interest in real property located in the City of y
San Bernardino, County of San Bernardino, State of California, more particularly described in
Exhibit A("Property"). Borrower intends to rehabilitate the improvements on the Property into
a development which will include thirty-eight(38) affordable housing units, one manager's unit, 0
and an on-site office ("Improvements"). The Improvements and the Property are referred to as r
the "Development".
C. Pursuant to a HOME Investment Partnerships Act Loan Agreement by and 0
between the City and Borrower, dated as of , 2017 ("Loan Agreement"), the a
City has agreed to make a loan to Borrower of up to Eight Hundred Eighty Thousand Dollars
($880,000)of HOME Investment Partnerships Act funds("HOME Funds")to fund costs U
associated with the acquisition of the Property ("Loan"). The City has the authority to loan the a
HOME Funds pursuant to 24 C.F.R. 92.205.
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D. In addition to the Loan to be made by the City,the County of San Bernardino
("County")will make a loan of up to Three Million One Hundred Fifty-Eight Thousand Three a
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Hundred Eight Dollars ($3,158,308) of HOME funds ("County Loan") to assist Developer in the
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acquisition and rehabilitation of the Property. In connection with the County Loan, Borrower =
will execute a Housing Affordability Covenant and Agreement and Declaration of Restrictive a
Covenants in favor of the County("County Affordability Covenant"). _
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E. The City has agreed to make the Loan on the condition that the Development be Q
maintained and operated in accordance with the HOME Regulations for the entire HOME Term
and thereafter in accordance with restrictions concerning affordability, operation, and
maintenance that are set forth in this Agreement, the related documents evidencing the Loan, and a
the County Affordability Covenant. o
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F. In consideration of receipt of the Loan at an interest rate substantially below the o
market rate, Borrower agrees to observe all the terms and conditions set forth below. LL
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The parties therefore agree as follows. r
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ARTICLE 1 E
DEFINITIONS; EXHIBITS d
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1.1 Definitions.
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The following terms have the following meanings:
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(a) "Actual Household Size"means the actual number of persons in the co
applicable household. M
(b) "Adjusted Income"means the total anticipated annual income of all
persons in the Tenant household as calculated pursuant to 24 C.F.R. 92.203(b)(1). Adjusted o
income includes income from all persons in the household, including nonrelated individuals. o
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(c) "Agreement" has the meaning set forth in the first paragraph of this
Agreement.
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(d) "City"means the City of San Bernardino, a municipal corporation.
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(e) "Completion Date"means the date that all of the following have occurred: r
(1) a final certificate of occupancy, or equivalent document is issued by the City to certify
completion of the rehabilitation of the Development; (2)the final disbursement of HOME -a
funds for the Development has been made; (3)the City and/or the County has verified the 0
Development complies with the property standards set forth in 24 C.F.R. 92.251; and (4) all Q
project completion information has been entered by the City and/or the County into the
Integrated Disbursement and Information System (IDIS).
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(f) "Completion of Construction"means the date the rehabilitation of the
Development is completed as evidenced by the issuance of a certificate of occupancy or
equivalent document issued by the City,to certify completion of the construction of the
Development.
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(g) "Deed of Trust"means the Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing of even date herewith by and among Borrower, as
trustor,North American Title Company, as trustee, and the City, as beneficiary,that will a
encumber the Property to secure repayment of the Loan and Borrower's performance of the c
covenants set forth in the documents evidencing the Loan. 2
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(h) "Development"has the meaning set forth in Paragraph B of the Recitals.
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(i) "High HOME Rent"means a monthly Rent amount not exceeding the
maximum rent published by HUD for a Low Income Household for the applicable bedroom o
size as set forth in 24 C.F.R. 92.252(a).
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(j) "HOME" means Home Investment Partnerships Act Program funded
pursuant to the Cranston-Gonzalez National Housing Act of 1990. _
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(k) "HOME-Assisted Units"means the Six(6)Units within the Development
designated as assisted with the City HOME funds, all of which Units are"floating"Units as E
defined in 24 C.F.R. 92.2520).
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(1) "HOME Funds"has the meaning set forth in Paragraph C of the Recitals. a
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(m) "HOME Regulations"means the regulations set forth in 24 C.F.R. Part 92. r
(n) "HOME Term"means the period beginning on the date of this Agreement in
and ending on the twentieth(20th)anniversary of the date of this Agreement. After the c
expiration of the HOME Term, for the purposes of the HOME Regulations,the Development
will no longer be considered an existing HOME assisted rental project.
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(o) "HUD"means the United States Department of Housing and Urban
Development. _
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(p) "Loan Documents"means the documents executed by Borrower
evidencing the Loan, including this Agreement,the Note, Deed of Trust, and the Loan
Agreement. 4)
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(q) "Low HOME Rent"means a monthly Rent amount not exceeding the
maximum rent published by HUD for a Very Low Income Household for the applicable Z
bedroom size or as otherwise set forth in 24 C.F.R. 92.252(b).
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(r) "Low Income Household" means a Tenant household with an Adjusted a
Income that does not exceed eighty percent(80%) of Median Income,with adjustments for
smaller and larger families, except that HUD may establish income ceilings higher or lower
than eighty percent(80%)of Median Income on the basis of HUD findings that such variations a
are necessary because of prevailing levels of construction costs or fair market rents, or
unusually high or low family incomes, as such definition may be amended pursuant to 24 a
C.F.R. 92.2. An individual who is a student that is ineligible to receive Section 8 assistance
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under 24 C.F.R. 5.612, and thus ineligible to receive any type of HOME assistance, shall not
qualify as a Low Income Household. fE
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(s) "Low Income Units"means the Units which, pursuant to Section 2.1 c
below, are required to be occupied by Low Income Households. u
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(t) "Management Agent"has the meaning set forth in Section 5.2.
(u) "Median Income"means the median gross yearly income, adjusted for Q
Actual Household Size as specified herein, in the County of San Bernardino, California, as N
published from time to time by HUD. In the event that such income determinations are no
longer published, or are not updated for a period of at least eighteen(18)months,the City N
and/or the County will provide Borrower with other income determinations that are reasonably U_
similar with respect to methods of calculation to those previously published by HUD. s
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(v) "Note"means the promissory note dated , 2017,that
evidences Borrower's obligation to repay the Loan, as such may be amended from time to E
time. c
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(w) "Property"has the meaning set forth in Paragraph B of the Recitals. a
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(x) "Rent" means the total monthly payments by the Tenant of a Unit for the y
following: (1)use and occupancy of the Unit and land and associated facilities, including
parking; (2)any reasonable and customary separately charged fees or service charges assessed �?
by Borrower which are required of all Tenants which meet the requirements under 24 C.F.R. M
92.214(b)(3), other than security deposits; (3)the utility allowance approved by the City and/or
the County, calculated pursuant to 24 C.F.R. 92.252(d) or otherwise determined based upon the
specific utilities used at the Development as allowed under 24 C.F.R. 92.252(d)(1), for the cost
of an adequate level of service for utilities paid by the Tenant, including garbage collection, r
sewer,water, electricity, gas and other heating, cooking and refrigeration fuel, but not
telephone service or cable TV; and (4) any other interest,taxes, fees or charges for use of the
land or associated facilities and assessed by a public or private entity other than Borrower, and
paid by the Tenant. In no event shall the Rent of a Unit exceed the amount approved by the
City and/or the County pursuant to Section 2.2 hereof.
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(y) "Service Provider"has the meaning set forth in Section 5.6.
(z) "Tenant"means the tenant household that occupies a Unit in the To
Development.
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(aa) "Tenant Services"has the meaning set forth in Section 5.6.
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(bb) "Term"means the term of this Agreement which commences as of the Q
date of this Agreement, and unless sooner terminated pursuant to the terms of this Agreement,
expires on the date fifty-five (55)years from the Completion Date.
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(cc) "Unit(s)"means one (1) or more of the units in the Development. Y
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(dd) "Very Low Income Household"means a household with an Adjusted
Income that does not exceed fifty percent(50%)of Median Income,with adjustments for a
smaller and larger families, except that HUD may establish income ceilings higher or lower o
than fifty percent(50%) of Median Income on the basis of HUD findings that such variations
are necessary because of prevailing levels of construction costs or fair market rents, or a
unusually high or low family incomes, as set forth in 24 C.F.R. Section 92.2. An individual
who is a student that is ineligible to receive Section 8 assistance under 24 C.F.R. 5.612, and Q
thus ineligible to receive any type of HOME assistance, shall not qualify as a Very Low ti
Income Household. c
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(ee) "Very Low Income Units"means the Units which, pursuant to N
Section 2.1(a)below, are required to be occupied by Very Low Income Households. U_
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1.2 Exhibits o
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The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
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Exhibit A: Legal Description of the Property a
Exhibit B: Schedule of HOME Rents r
Exhibit C: Certificate of Continuing Program Compliance r
Exhibit D: Form of Certification of Tenant Eligibility
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ARTICLE 2 ,
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) Very Low Income Units. During the Term, Borrower shall rent eight(8)
of the one-bedroom Units and ensure that these Units are occupied or, if vacant, available for
occupancy,by Very Low Income Households. During the HOME Term,two (2) of the one-
bedroom Very Low Income Units shall be considered City HOME-Assisted Units.
0
(b) Low Income Units. During the Term, Borrower shall rent thirty(30) of
the one-bedroom Units and ensure that these Units are occupied or, if vacant, available for
occupancy, by Low Income Households. During the HOME Term, four(4) of the one-
bedroom Low Income Units shall be considered City HOME-Assisted Units.
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a (c) Intermingling of Units. The HOME-Assisted Units are required to be
intermingled throughout the Development and of comparable quality to all other Units. All
Tenants must have equal access to and enjoyment of all common facilities in the Development. a
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(d) Disabled Persons Occupancy. Borrower shall cause the Development to a
be operated at all times in compliance with the provisions of: (1)the Unruh Act; (2)the
California Fair Employment and Housing Act; (3) Section 504 of the Rehabilitation Act of .2
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1973; (4)the United States Fair Housing Act, as amended; and (5)the Americans With
Disabilities Act of 1990,which relate to disabled persons access. Borrower shall indemnify,
protect,hold harmless and defend(with counsel reasonably satisfactory to the City)the City a
and its elected officials, officers, and employees, from all suits, actions, claims, causes of =
action, costs, demands,judgments and liens arising out of Borrower's failure to comply with 2
applicable legal requirements related to housing for persons with disabilities. The provisions a
of this subsection will survive expiration of the Term or other termination of this Agreement,
and remain in full force and effect.
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2.2 Allowable Rent. o
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(a) Very Low Income Rent. Subject to the provisions of Section 2.3 below, N
the Rent paid by Tenants of Very Low Income Units may not exceed the Low HOME Rent LL
provided annually by the City and/or the County pursuant to Section 2.2 of the County
Regulatory Agreement,which shall prevail in the event of inconsistency. c
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(b) Low Income Rent. Subject to the provisions of Section 2.3 below,the
Rent paid by Tenants of Low Income Units may not exceed the High HOME Rent provided
annually by the City and/or the County pursuant to Section 2.2 of the County Regulatory
Agreement,which shall prevail in the event of inconsistency. a
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(c) No Additional Fees. Borrower may not charge any fee, other than Rent,to
any Tenant of the Units for any housing or other services provided by Borrower. 3
2.3 Rent Increases, Increased Income of Tenants. o
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(a) Rent Increases. The proposed initial Rents and subsequent Rents for all
Units shall be provided to Borrower by the City and/or the County prior to initial or subsequent
occupancy and prior to a rent increase, and shall be subject to the HOME Regulations. A
schedule of current HOME rents is attached as Exhibit B. Borrower may not impose any Rent
increases on Units,without prior submission to the City and County of any proposed Rent
increases and without written approval from the City and County of the proposed Rent
increases. The Rent for such Units may be increased no more than once annually based upon
the annual income certification described in Article 3 and in no event shall any increase exceed
three(3%)percent. Tenants shall be given at least sixty(60)days written notice prior to any 0
Rent increase. The City and/or the County will provide Borrower with a schedule of maximum
permissible Rents for the Units annually. _
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(b) Increased income above Very Low but below Low Income Limit. Subject c
to Subsection(a)above, if, upon the annual certification of the income of a Tenant of a a
HOME-Assisted Unit, Borrower determines that the income of a Very Low Income Household
has increased above the qualifying limit for a Very Low Income Household, but not above the
qualifying income for a Low Income Household, the Tenant may continue to occupy the Unit
and the Tenant's Rent shall be the Low HOME Rent. Borrower shall then rent the next Q
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available Unit to a Very Low Income Household, as applicable,to comply with the
requirements of Section 2.1 above, at a Rent not exceeding the maximum Rent specified in s
Section 2.2, or re-designate another comparable Unit in the Development with a Very Low y
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Income Household,to comply with the requirements of Section 2.1 above. Upon renting the
next available Unit in accordance with Section 2.1 or re-designating another Unit in the
Development as a HOME-Assisted Unit,the Unit with the over-income Tenant will no longer
be considered a HOME-Assisted Unit. _
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(c) Non-Qualifying Household. If,upon the annual certification of the a
income a Tenant of a HOME-Assisted Unit, Borrower determines that the income of a Very
Low Income Household has increased above the qualifying limit for a Very Low Income Q
Household or Low Income Household, such Tenant shall be permitted to retain the Unit and ti
upon expiration of the Tenant's lease and u on sixty(60)days written notice,the Rent must be o
increased to the lesser of one-twelfth(1/12 of thirty percent(30%) of the actual Adjusted c
Income of the Tenant, or fair market rent(subject to 24 C.F.R. 92.252(1)(2) regarding low N
income housing tax credit requirements), and Borrower shall rent the next available Unit to a U_
Very Low Income Household or Low Income Household as applicable to comply with the
requirements of Section 2.1 above, at a Rent not exceeding the maximum Rent specified in o
Section 2.2, or re-designate another comparable Unit in the Development with a Very Low
Income Household or Low Income Household as applicable as a HOME-Assisted Unit,to meet E
the requirements of Section 2.1 above. Upon renting the next available Unit in accordance
with Section 2.1 or re-designating another Unit in the Development as a HOME-Assisted Unit, E
the Unit with the over-income Tenant will no longer be considered a HOME-Assisted Unit. a
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(d) Termination of Occupancy. Upon termination of occupancy of a HOME- .2
Assisted Unit by a Tenant, such Unit will be deemed to be continuously occupied by a
household of the same income level as the initial income level of the vacating Tenant, until C.n
such Unit is reoccupied or another Unit is re-designated as a HOME-Assisted Unit, at which M
time categorization of the Unit will be established based on the occupancy requirements of
Section 2.1.
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2.4 Units Available to the Disabled. Borrower shall rehabilitate the Development in
compliance with all applicable federal and state disabled persons accessibility requirements c
including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act d
of 1973; Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the w
California Code of Regulations. In compliance with Section 504 of the Rehabilitation Act, a
minimum of three (3)units in the Development shall be constructed so as to be readily accessible
and usable by households with a mobility impaired member and a minimum of one (1) unit shall v
be constructed so as to be readily accessible and usable by households with a hearing or visually y
impaired member. Not less than thirty(30) days from the Completion Date, Borrower shall
deliver to the City a certification that it has complied with these requirements.
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ARTICLE 3
INCOME CERTIFICATION AND REPORTING U
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3.1 Income Certification.
(a) Borrower shall obtain, complete, and maintain on file, immediately prior s
to initial occupancy and annually thereafter, income certifications from each Tenant renting
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any of the Units. Borrower shall make a good faith effort to verify the accuracy of the income
provided by all applicants or all members of the occupying household, as the case may be, in
the income certification. To verify the information Borrower shall take two or more of the a
following steps: (1)obtain pay stubs for the most recent two months; (2)obtain an income tax o
return for the most recent tax year; (3)conduct a credit agency or similar search; (4)obtain an 2
income verification form from the applicant's current employer verifying employment for the Q
last two months; (5) obtain an income verification form from the Social Security
Administration and/or the California Department of Social Services if the applicant receives a
assistance from either of such agencies,verifying assistance for the last two months; or(6)if ti
the applicant is unemployed and does not have a tax return, obtain another form of independent N
verification.
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(b) In addition, during the HOME Term, Borrower shall cause each Tenant in LL
a HOME-Assisted Unit to execute a Certification of Tenant Eligibility in the form attached as
Exhibit D. Borrower shall fill out the "Development Owner"portion of the Certification of o
Tenant Eligibility and provide it to the City along with supporting documentation collected by
Borrower. Copies of the Certifications of Tenant Eligibility and accompanying documentation E
must be submitted ed to
the City annually for each of the City HOME-Assisted Units.
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3.2 Reporting Requirements. Borrower shall submit to the City: (a)not later than the a
forty-fifth(45th) day after the close of each calendar year, or such other date as may be requested
by the City, a signed copy of the Certification of Program Compliance in the form attached as y
Exhibit C; and(b)within fifteen(15)days after receipt of a written request, and any other
information or completed forms requested by the City in order to comply with reporting
requirements of HUD,the State of California, and the City. M
3.3 Additional Information. Borrower shall provide any additional information
reasonably requested by the City.
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3.4 Records. Borrower shall maintain complete, accurate and current records
pertaining to the Development, and shall permit any duly authorized representative of the City to
inspect records, including records pertaining to income and household size of Tenants and Rent '?
charged to such Tenants. All Tenant lists, applications and waiting lists relating to the
Development are to be at all times: (a) separate and identifiable from any other business of
Borrower; (b)maintained as required by the City, in a reasonable condition for proper audit; and c0
(c) subject to examination during business hours by representatives of the City. Borrower shall
retain copies of all materials obtained or produced with respect to occupancy of the units for a
period of at least five(5)years. The City may audit, examine and make copies of all books,
records or other documents of Borrower that pertain to the Development. 0
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3.5 HOME Record Requirements. All records maintained by Borrower pursuant to
Sections 3.2 and 3.4 above are to be: (a)maintained in compliance with all applicable HUD
records and accounting requirements; and (b) open to and available for inspection and copying Q
by HUD and its authorized representatives at reasonable intervals during normal business hours;
provided however, records pertaining to Tenant income verifications,Rents, and Development
physical inspections must be kept for the most recent five (5) year period and are subject to HUD E
inspection for five (5) years after expiration of the HOME Term. Borrower is subject to the audit
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requirements set forth in 24 CFR 92.505 during the HOME Term.
3.6 On-Site Inspection.
a.
(a) The City may perform, or cause to be performed, an on-site inspection of .2
the Development(including Units, subject to the rights of Tenants) at least one (1)time per year Q
upon twenty-four(24)hours' written notice during normal business hours to monitor compliance
with this Agreement. Borrower shall cooperate in making the Property available for such
inspection. Borrower agrees and acknowledges that during the HOME Term the City must Q
conduct on-site inspections, consistent with the requirements of 24 C.F.R. 92.504(d),to 0
determine compliance with the property standards set forth in 24 C.F.R. 92.251, at least once
every three(3)years after the completion of construction of the Development. o
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(b) After the completion of an inspection the City shall deliver a copy of the
inspection report to the Borrower. If the City determines as a result of the inspection that there r
are any life-threatening health and safety related deficiencies, Borrower has the obligation to
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correct such deficiencies immediately, in accordance with 24 C.F.R. 92.251. If the City a
determines as a result of the inspection that there are any deficiencies other than life-threatening
health and safety related deficiencies,Borrower shall correct such deficiencies within fifteen (15)
days from the delivery of the inspection report or if a period longer than fifteen(15) days is Q
reasonably necessary to correct a deficiency, then Borrower must begin to correct the deficiency
within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition,
Borrower acknowledges that the City may re-inspect the Development to verify all deficiencies
have been corrected or rely on third party documentation submitted by Borrower for non- co
hazardous deficiencies in conformance with 24 C.F.R 92.504(d). o
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(c) Upon expiration of the HOME Term,the City may perform on-site
inspections as deemed reasonably necessary by the City.
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ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use. Borrower shall operate the Development for residential use only
and such ancillary uses permitted at the Development as approved by the City. No part of the o
Development may be operated as an emergency shelter(including shelter for disaster victims)or
facilities such as nursing homes, convalescent homes, hospitals,residential treatment facilities,
correctional facilities,halfway houses, housing for students, or dormitories (including
farmworker dormitories). o
4.2 Compliance with Loan Documents and Program Requirements. Borrower's
actions with respect to the Property shall at all times be in full conformity with: (a)all
requirements of the Loan Documents; (b) all requirements imposed on projects assisted with a
HOME Funds as contained in 42 U.S.C. Section 12701, et seq., 24 C.F.R. Part 92, and other a
implementing rules and regulations, as such may be amended or supplemented from time to c
time; and (c)any other regulatory requirements imposed on Borrower. E
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4.3 Taxes and Assessments. Borrower shall pay all real and personal property taxes,
assessments and charges and all franchise, income, employment, old age benefit,withholding,
sales, and other taxes assessed against it,or payable by it, at such times and in such manner as to a
prevent any penalty from accruing, or any lien or charge from attaching to the Property; o
provided,however,that Borrower may apply for a property tax exemption for the Property under
any provision of law or contest in good faith any such taxes, assessments, or charges. In the Q
event Borrower exercises its right to contest any tax, assessment, or charge against it,Borrower,
on final determination of the proceeding or contest,will immediately pay or discharge any a
decision or judgment rendered against it,together with all costs, charges and interest. ti
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4.4 Property Tax Exemption. Borrower may apply for a property tax exemption for
the Property under any provision of law. N
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ARTICLE 5
PROPERTY MANAGEMENT, MAINTENANCE AND TENANT SERVICES e
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5.1 Management Responsibilities. Borrower is responsible for all management
functions with respect to the Development, including without limitation the selection of Tenants
in accordance with the requirements of 24 C.F.R. 92.253(d), certification and recertification of E
household size and income, evictions, collection of rents and deposits,maintenance, landscaping, Q
routine and extraordinary repairs,replacement of capital items, and security. The City has no
responsibility for management of the Development. Borrower shall retain a professional
property management company approved by the City in its reasonable discretion to perform 3
Borrower's management duties hereunder. An on-site property manager is also required. Cn
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5.2 Management Agent. Borrower shall cause the Development to be managed by an
experienced management agent("Management Agent")reasonably acceptable to the City,with a
demonstrated ability to operate residential facilities like the Development in a manner that will
provide decent, safe, and sanitary housing. Borrower must submit for the City's approval the
identity and qualifications of the proposed Management Agent and any proposed subsequent ;
Management Agent. The information submitted shall include the background, experience and
financial condition of any proposed Management Agent as is reasonably necessary for the City to
determine whether the proposed Management Agent meets the standard for a qualified
Management Agent set forth above. If the proposed Management Agent meets that standard,the
City shall approve the proposed Management Agent by notifying Borrower in writing. Unless 0
the proposed Management Agent is disapproved by the City within thirty(30)days,which r
disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed
approved. The management agreement with Reliant Asset Management("RAMS")dated May 1,
2017 is hereby deemed acceptable by the parties and the fees set forth therein are hereby 0
approved. Q
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5.3 Periodic Performance Review. The City reserves the right to conduct an annual
(or more frequently, if deemed necessary by the City)review of the management practices and Q
financial status of the Development. The purpose of each periodic review will be to enable the
City to determine if the Development is being operated and managed in accordance with the E
requirements and standards of this Agreement. Borrower shall cooperate with the City in
making such reviews.
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5.4 Replacement of Management Agent.
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(a) If, as a result of a periodic review, the City determines in its reasonable
judgment that the Development is not being operated and managed in accordance with any one
of the material requirements and standards of this Agreement,the City shall deliver notice to w
Borrower of its intention to cause replacement of the Management Agent, including the reasons Q
therefor. Within fifteen (15) days after receipt by Borrower of such written notice, City staff and
Borrower shall meet in good faith to consider methods for improving the financial and operating
status of the Development, including, without limitation, replacement of the Management Agent.
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(b) If, after such a meeting, City staff recommends in writing the replacement
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of the Management Agent, Borrower will promptly dismiss the then-current Management Agent, o
and must appoint as the Management Agent a person or entity meeting the standards for a
management agent set forth in Section 5.2 above and approved by the City pursuant to Section d
5.2 above, and subject to the rights of any senior lender. c
(c) Any contract for the operation or management of the Development entered a
into by Borrower must provide that the Management Agent may be dismissed and the contract
terminated as set forth above. Failure to remove the Management Agent in accordance with the
provisions of this Section constitutes a default under this Agreement, and the City may enforce Q
this provision through legal proceedings as specified in Section 6.7 below.
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5.5 Approval of Management Policies. Borrower must submit its written v
management policies with respect to the Development to the City for its review, and must amend
such policies in any way necessary to ensure that such policies comply with the provisions of this
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Agreement.
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5.6 Tenant Services Provider. ti
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(a) Borrower will be providing on-site services which Borrower will make o
available to all Tenants in the Development("Tenant Services"). Borrower must submit to the
City for approval the name and qualifications of any proposed services provider("Services
Provider").
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(b) The Services Provider must demonstrate the ability to provide Tenant >
Services in residential facilities like the Development in an effective manner. Borrower must v
submit such additional information about the background, experience and financial condition
of any proposed Services Provider as is reasonably necessary for the City to determine whether
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the proposed Services Provider meets the standards for a qualified Services Provider of
developments of this type. Q
(c) If the proposed Services Provider meets the standard for a qualified
Services Provider set forth above, the City shall approve the proposed Services Provider by w
notifying Borrower in writing. Unless the proposed Services Provider is disapproved in Q
writing by the City within thirty(30) days, which disapproval is to state with reasonable
specificity the basis for disapproval, it shall be deemed approved. E
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5.7 Property Maintenance.
(a) Borrower must maintain, for the entire Term of this Agreement, all
interior and exterior Improvements, including landscaping, on the Property in good condition and
repair(and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, 2
rules, ordinances, orders and regulations of all federal, state, county,municipal, and other a
governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials, and in a decent, safe, sanitary condition and in good repair a
pursuant to the Uniform Physical Conditions Standards established by HUD pursuant to 24
C.F.R. 5.703 and as required under 24 C.F.R. 92.251. N
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(b) The City places prime importance on quality maintenance to protect its N
investment and to ensure that all City funded affordable housing projects within the City are not LL
allowed to deteriorate due to below-average maintenance. Normal wear and tear of the =
Development will be acceptable to the City assuming Borrower agrees to provide all necessary o
improvements to assure the Development is maintained in good condition. Borrower shall make
all repairs and replacements necessary to keep the improvements in good condition and repair. 4)
(c) In the event that Borrower breaches any of the covenants contained in this W
section and such default continues for a period of five (5) days after written notice from the City a
with respect to graffiti, debris,waste material, and general maintenance or thirty(30) days after
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written notice from the City with respect to landscaping and building improvements,the City, in
addition to whatever other remedy it may have at law or in equity, shall have the right to enter
upon the Property and perform or cause to be performed all such acts and work necessary to cure cn
the default. Pursuant to such right of entry,the City shall be permitted(but not required)to enter o
upon the Property and to perform all acts and work necessary to protect,maintain, and preserve
the improvements and landscaped areas on the Property, and to attach a lien on the Property in
the amount of the expenditures arising from such acts and work of protection,maintenance, and
preservation by the City and/or costs of such cure, which amount shall be promptly paid by
Borrower to the City upon demand. 00
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5.8 Crime Prevention Program. During the Term of this Agreement, Borrower agrees v
to participate in the San Bernardino County Sheriff's Department's Crime Free Multi-Housing
program or similar program administered by the City(the "Crime Prevention Program").
Information on the County's Crime Prevention Program is currently available at o
http://www.sbcounty.gov/sheriff/publicaffairs/crime free.asp. The City's periodic review of the T
management of the Development pursuant to Section 5.3 will include an evaluation of
Borrower's participation in the Crime Prevention Program. CU
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ARTICLE 6
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MISCELLANEOUS
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6.1 Lease Provisions. a
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(a) In leasing the Units within the Development, Borrower shall use a form of
written lease approved by the City and the County. The form of lease must comply with all ca
requirements of this Agreement and the other Loan Documents and must, among other matters: a
(1) provide for termination of the lease for failure to: (1)provide any 2
information required under this Agreement or reasonably requested by Borrower to establish or Q
recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy
in the Development in accordance with the standards set forth in this Agreement; or(2)qualify
as a Very Low Income Household or Low Income Household as a result of any material Q
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misrepresentation made by such Tenant with respect to the income computation. o
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(2) be for an initial term of not less than one (1) year, unless otherwise N
mutually agreed between the Tenant and Borrower, and provide for no increase in Rent during
such year. After the initial year of tenancy,the lease may be month-to-month by mutual
agreement of Borrower and the Tenant. Notwithstanding the above, any rent increases are o
subject to the requirements of Section 2.3(a) above.
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(3) include a provision which requires a Tenant who is residing in a
Unit required to be accessible pursuant to Section 2.4 and who is not in need of an accessible
Unit to move to a non-accessible Unit when a non-accessible Unit becomes available and another Q
Tenant or prospective Tenant is in need of an accessible Unit.
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(b) The lease must not contain any provision which is prohibited by 24 C.F.R.
Section 92.253(b) and any amendments thereto. co
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6.2 Lease Termination. Any termination of a lease or refusal to renew a lease for a
Unit within the Development must be in conformance with 24 C.F.R. 92.253 c and must be
preceded by not less than sixty(60)days written notice to the Tenant by Borrower specifying the f
grounds for the action. co
6.3 Nondiscrimination.
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(a) All of the Units must be available for occupancy on a continuous basis to =
members of the general public who are income eligible. Except as provided in subsection(c) c
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below, Borrower may not give preference to any particular class or group of persons in renting o
or selling the Units, except to the extent that the Units are required to be leased to income
eligible households pursuant to this Agreement. Borrower covenants by and for Borrower, its
assigns, and all persons claiming under or through Borrower,that there will exist no
discrimination against or segregation of any person or group of persons on account of race, o
color, creed,religion, sex, gender, gender identity, gender expression, sexual orientation, a
marital status,national origin, source of income (e.g., SSI), ancestry, disability, age, or military
and veteran status in the leasing, subleasing,transferring, use, occupancy,tenure, or enjoyment
of any Unit, nor will Borrower or any person claiming under or through Borrower establish or .2
permit any such practice or practices of discrimination or segregation with reference to the Q
? selection, location,number, use, or occupancy of tenants, lessees, sublessees, subtenants, or
vendees of any Unit or in connection with the employment of persons for the construction, E
operation and management of any Unit. Borrower shall comply with Executive Orders 11246,
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11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964,the =
California Fair Housing and Employment Act and other applicable federal, state and local laws c
and regulations and policies relating to equal employment and contracting opportunities, a
including laws and regulations hereafter enacted.
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(b) Borrower shall accept as Tenants, on the same basis as all other Q
prospective Tenants,persons who are recipients of federal certificates for rent subsidies
pursuant to the existing housing program under Section 8 of the United States Housing Act, or Q
its successor. Borrower may not apply selection criteria to Section 8 certificate or voucher ti
holders that are more burdensome than criteria applied to all other prospective Tenants, nor N
will Borrower apply or permit the application of management policies or lease provisions with
respect to the Development which have the effect of precluding occupancy of units by such N
prospective Tenants. U-
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(c) The parties recognize that the City currently has the highest number of r
homeless persons of the cities in the County, creating an enhanced need for affordable housing
for persons within the City. Accordingly: E
(1) To the maximum extent permitted by law and provided that the Q
applicants meet standard applicant screening standards for the Development, Borrower shall give
priority in the rental of units in the Development to eligible households displaced by activity of
the City,the County,or the Housing Authority of the County of San Bernardino, consistent with
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California Health and Safety Code Section 33411.3.
(2) To the maximum extent permitted by law and provided that the M
applicants meet standard screening standards for the Development, Borrower shall give
preference in the rental of units in the Development to residents of,and/or persons who are
employed in or have been offered employment in,the City of San Bernardino and/or the
unincorporated areas of the County. Notwithstanding anything to the contrary herein,nothing in
this section shall require that said preferences be based on a minimum duration of residency or
employment. Should the Development become subject to Section 42 of the Internal Revenue
Code,then to the extent the preferences required under this Subsection are in conflict with the
requirements of said Section 42 and implementing guidelines,the requirements of said Section co
42 and guidelines shall control. The preferences to be given hereunder shall be reflected in a
tenant selection plan and an affirmative fair housing marketing plan. v
6.4 Term. The provisions of this Agreement apply to the Property for the entire Term
even if the Loan is paid in full prior to the end of the Term. This Agreement binds any Io
successor,heir or assign of Borrower,whether a change in interest occurs voluntarily or
involuntarily,by operation of law or otherwise, except as expressly released by the City. The
City is making the Loan on the condition of Borrower's compliance with, and in consideration
of,this provision, and would not do so otherwise. For the purposes of the HOME Regulations,
the Development shall only be considered a HOME assisted project for the duration of the a
HOME Term, and nothing in this Agreement may be read to imply otherwise.
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6.5 Notice of Expiration of Term. _
(a) At least six (6)months prior to the expiration of the Term, Borrower will
provide by first-class mail,postage prepaid, a notice to all Tenants containing: (1)the a
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anticipated date of the expiration of the Term; (2) any anticipated increase in Rent upon the
expiration of the Term; (3)a statement that a copy of such notice will be sent to the City; and Q
(4) a statement that a public hearing may be held by the City on the issue and that the Tenant
will receive notice of the hearing at least fifteen (15)days in advance of any such hearing.
Borrower shall also file a copy of the above-described notice with the City Manager.
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(b) In addition to the notice required above, Borrower shall comply with the
requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such N
notice requirements include: (1) a twelve (12)month notice to existing tenants,prospective >_
tenants and Affected Public Agencies (as defined in California Government Code Section
65863.10(a))prior to the expiration of the Term; (2)a six(6)month notice requirement to 0
existing tenants,prospective tenants and Affected Public Agencies prior to the expiration of the
Term; (3) a notice of an offer to purchase the Development to "qualified entities" (as defined in E
California Government Code Section 65863.11(d)), if the Development is to be sold within
five (5) years of the end of the Term; and(4) a notice of right of first refusal within the one
hundred eighty(180)day period during which qualified entities may purchase the Q
Development.
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6.6 Covenants to Run With the Land. The City and Borrower hereby declare their
express intent that the covenants and restrictions set forth in this Agreement run with the land, U)
and bind all successors in title to the Property,provided, however,that on the expiration of the M
Term of this Agreement said covenants and restrictions expire. Each and every contract,deed or
other instrument hereafter executed covering or conveying the Property or any
portion thereof, is
'i to be held conclusively to have been executed, delivered and accepted subject to the covenants
and restrictions, regardless of whether such covenants or restrictions are set forth in such
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contract, deed or other instrument, unless the City expressly releases such conveyed portion of
the Property from the requirements of this Agreement.
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6.7 Enforcement b the Cit . If Borrower fails to perform an obligation
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under this
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Agreement, and fails to cure the default within thirty(30) days after the City has notified l >
Borrower in writing of the default or, if the default cannot be cured within thirty (30) days, fails 0
to commence to cure within thirty(30)days and thereafter diligently pursue such cure and >,
complete such cure within ninety(90)days,the City may enforce this Agreement by any or all of
3 the following actions, or any other remedy provided by law:
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(a) Calling the Loan. The City may declare a default under the Note, Q
accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the
Deed of Trust.
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(b) Action to Compel Performance or for Damages. The City may bring an Q
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action at law or in equity to compel Borrower's performance of its obligations under this
Agreement, and may seek damages. s
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(c) Remedies Provided Under Loan Documents. The City may exercise any
other remedy provided under the Loan Documents.
6.8 Recording and Filing. The City and Borrower shall cause this Agreement, and all c
amendments and supplements to it, to be recorded in the Official Records of the County of San
Bernardino. Q
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6.9 Governing Law. This Agreement is governed by the laws of the State of a
California. ti
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6.10 Waiver of Requirements. Any of the requirements of this Agreement may be o
expressly waived by the City in writing, but no waiver by the City of any requirement of this N
Agreement extends to or affects any other provision of this Agreement, and may not be deemed LL
to do so.
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6.11 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successors in title that is duly recorded in the official
records of the County of San Bernardino.
a�
6.12 Notices. Notices, demands, and communications between the City and Developer a
shall be sufficiently given if personally delivered or delivered by a nationally-recognized courier �a
service providing confirmation of delivery or sent by registered or certified mail, postage
prepaid, return receipt requested,to the following addresses:
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City: City of San Bernardino
Office of the City Manager, Housing Division M
290 North"D" Street, Third Floor
San Bernardino, CA 92401
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With a copy to: Office of the City Attorney, at the above address co
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Borrower: Golden Apartments San Bernardino, LP
c/o Housing Partners I, Incorporated c
715 East Brier Drive >
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San Bernardino, CA 92408-2841
Attn: Executive Director
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With a copy to: Gresham Savage Nolan & Tilden, PC c
550 East Hospitality Lane, Suite 300 Q
San Bernardino, CA 92408-4205 a
Attn: Robert Ritter
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Notices shall be effective only upon receipt or refusal. Such addresses may be changed by notice a
to the other party given in the same manner as provided above.
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H776-019-3215945.1
Packet Pg. 88
II,
1.5
6.13 Severability. If any provision of this Agreement is determined by a court of
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competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining portions of this Agreement will not in any way be affected or
impaired thereby.
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6.14 Multiple Originals; Counterparts. This Agreement may be executed in multiple Q
originals, each of which is deemed to be an original, and may be signed in counterparts.
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6.15 Revival of Agreement after Foreclosure. In the event there is a foreclosure on the a
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Property, this Agreement will revive according to its original terms if, during the Term, the c
owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes
the former owner or those with whom the former owner has or had family or business ties, o
obtains an ownership interest in the Development or Property.
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H776-019-3215945.1
' Packet Pg.89
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1.5
WHEREAS, this Agreement has been entered into by the undersigned as of the Effective Date. c
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BORROWER: c
GOLDEN APARTMENTS SAN BERNARDINO, LP,
a California limited partnership Q
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By: Golden Apartments HPI, LLC, a
a California limited liability company, ti
its general partner N
By: Housing Partners I, Incorporated,
a California nonprofit public benefit corporation, 1>7'
its sole member and Manager r
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By: d
Anthony Perez, Executive Director E
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Date: E
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Signature page
H776-01
Packet Pg.90
1.5
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CITY:
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CITY OF SAN BERNARDINO c
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By: 3
Andrea Miller, City Manager a
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Date: o
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APPROVED AS TO LEGAL FORM: LL
GARY D. SAENZ c
City Attorney
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Signature page
H776-01
Packet Pg. 91
1.5
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A notary public or other officer completing this certificate verifies only the a
identity of the individual who signed the document to which this certificate is c
attached, and not the truthfulness, accuracy, or validity of that document. Q
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STATE OF CALIFORNIA ) N
COUNTY OF ) N
On , before me, Notary Public, _
personally appeared , who proved to me on the c
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 E
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
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WITNESS my hand and official seal.
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Name:
Name: Notary Public
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A notary public or other officer completing this certificate verifies only the a
identity of the individual who signed the document to which this certificate is c
attached, and not the truthfulness, accuracy, or validity of that document.
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STATE OF CALIFORNIA ) o
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On , before me, ,Notary Public, s
personally appeared ,who proved to me on the
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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.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
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Name:
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Name: Notary Public
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EXHIBIT A
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LEGAL DESCRIPTION `6
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The land is situated in the State of California, County of San Bernardino, City of San Bernardino a
and is described as follows:
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The south 213.25 feet of the following described property: a
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That portion of the east 5 acres of Lot 3, Block 11, Orange Grove Tract, West Highlands, in the co
City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in N
Book 11 of Maps, Page 14, records of said County, described as follows: LL
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Beginning at a point 41.25 feet west of the northeast corner of the east 5 acres of said lot 3, said r
point of beginning being the west line of Golden Avenue; thence west 179.12 feet, more or less,
to the northeast corner of Lot 15, Tract No. 4180, as per plat recorded in Book 53 of Maps, Pages £
48 and 49, Records of said County; thence south along the West line of the east 5 acres of said
Lot 3; said west line also being the east line of said Tract No. 4180, a distance of 603.25 feet;
thence east 179.12 feet, more or less, parallel with the north line of said east 5 acres of the west a
line of Golden Avenue; thence north along the west line of said Golden Avenue, 603.25 feet to
the point of beginning.
APN: 0155-183-27-0-000 `o
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Packet Pg.94
1.5
EXHIBIT B
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HOME PROGRAM RENTS
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The initial Rents and subsequent Rents for all Units must be provided to the Borrower by the
City and/or the County prior to occupancy and are subject to the HOME Regulations. The City a
and/or the County will provide Borrower with a schedule of maximum permissible Rents for the
Units annually. Following are the annual incomes associated with the various rent levels. Q
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1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 PERSON 6 PERSON 7 PERSON 8 PERSON }
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30%LIMITS 13550 15500 17450 19350 20900 22450 24000 25550 d
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VERY LOW INCOME 22600 25800 29050 32250 34850 37450 40000 42600 r5
60%LIMITS 27120 30960 34860 38700 41820 44940 48000 51120 YO
LOW INCOME 36150 41300 46450 51600 55750 59900 64000 68150
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H776-01
Packet Pg. 95
1.5
EXHIBIT C
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INITIAL CERTIFICATE OF a
PROGRAM COMPLIANCE c
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Golden Apartments San Bernardino, LP, a California limited partnership ("Owner"), hereby a
certifies that it will comply with all applicable, ongoing HOME Program requirements for the entire
HOME Tenn, and the requirements of the Housing Affordability Covenant and Agreement and a
Declaration of Restrictive Covenants ("Housing Affordability Covenant") executed by and ti
between Owner and the City of San Bernardino ("City") for the Property's Affordability Period N
which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of
Occupancy for the above-described Project. Affordability shall be maintained as follows: N
U_
Owner is operating a thirty-nine(39)unit affordable housing development(including one manager's r
unit). During the Tenn of the Housing Affordability Covenant, Owner shall rent: two (2) of the r
one-bedroom Units and ensure that these Units are occupied or, if vacant, available for occupancy,
by Very Low Income Households, and four (4) of the one-bedroom Units and ensure that these E
Units are occupied or, if vacant, available for occupancy,by Low Income Households.
E
During the HOME Tenn Owner will rent a total of six (6) City HOME-Assisted Units, and ensure a
that these units are occupied or, if vacant, available for occupancy, by Very Low Income
Households and Low Income Households in conformance with the HOME Regulations, as 2
follows: two (2) one-bedroom Units of the Very Low Income Units shall be considered City
HOME-Assisted Units and four(4) one-bedroom Units of the Low Income Units shall be �!?
considered City HOME-Assisted Units. M
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Property owners and managers have participated in the San Bernardino County Sheriff-Coroner
Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other
resources are provided to multi-family property owners and managers to reduce the potential for .-
onsite criminal activity. Completion of the Department's four (4) training phases, a Final
Certification (Phase V) has been achieved and will be maintained by the owner/representative d
and/or regional/-onsite property manager.
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Owner is maintaining and attaching the following records and reports in order to assist the City of
San Bernardino ("City") in meeting its record keeping and reporting requirements: v
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1. Files on the annual review and certification of tenant income;
2. All information on the qualification of affordable rents; a
3. Terms and conditions of all signed leases between Tenants and Owner;
4. All other reports and records requested by the City pursuant to the Loan a
Documents.
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Packet Pg.96
1.5
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OWNER: —°
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GOLDEN APARTMENTS SAN BERNARDINO, LP, a Q
California limited partnership
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By: its general partner N
By: N
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Packet Pg. 97
1.5
ANNUAL CERTIFICATION OF
CONTINUING PROGRAM COMPLIANCE
Golden Apartments San Bernardino, LP, a California limited partnership ("Owner"), hereby o
certifies that it will comply with all applicable, ongoing HOME Program requirements for the entire 2
HOME Term, and the requirements of the Housing Affordability Covenant and Agreement and Q
Declaration of Restrictive Covenants executed by and between Owner and the City of San 3
Bernardino ("Housing Affordability Covenant") for the Property's Affordability Period which has Q
been determined to be fifty-five(55)years from the date of issuance of the Certificate of Occupancy ti
for the above-described Project. Affordability shall be maintained as follows: N
Owner is operating a thirty-nine(39)unit affordable housing development(including one manager's }
unit). During the Term of the Housing Affordability Covenant, Owner shall rent: two (2) of the
one-bedroom Units and ensure that these Units are occupied or, if vacant, available for occupancy, s
by Very Low Income Households, and four (4) of the one-bedroom Units and ensure that these o
Units are occupied or, if vacant, available for occupancy, by Low Income Households.
d
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During the HOME Term Owner will rent a total of six (6) City HOME-Assisted Units, and ensure =
that these units are occupied or, if vacant, available for occupancy, by Very Low Income E
Households and Low Income Households in conformance with the HOME Regulations, as Q
follows: two (2) one-bedroom Units of the Very Low Income Units shall be considered City
HOME-Assisted Units and four(4) one-bedroom Units of the Low Income Units shall be N
considered City HOME-Assisted Units.
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Property owners and managers have participated in the San Bernardino County Sheriff-Coroner M
Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other
resources are provided to multi-family property owners and managers to reduce the potential for
onsite criminal activity. Completion of the Department's four (4) training phases, a Final
Certification (Phase V) has been achieved and will be maintained by the owner/representative
and/or regional/-onsite property manager.
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Owner is maintaining and attaching the following records and reports in order to assist the City of
San Bernardino ("City") in meeting its record keeping and reporting requirements:
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1. Files on the annual review and certification of tenant income; °
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2. All information on the qualification of affordable rents; r
3. Terms and conditions of all signed leases between Tenants and Owner;
4. All other reports and records requested by the City pursuant to the Loan -a
Documents.
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Packet Pg. 98
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OWNER:
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GOLDEN APARTMENTS SAN BERNARDINO, LP, a
California limited partnership Q
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By: , its general partner a
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Packet Pg. 99
1.5
CERTIFICATE OF =
CONTINUING PROGRAM COMPLIANCE _
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The following information with respect to Golden Apartments (the "Development"), is being
provided by Golden Apartments San Bernardino, LP, a California limited partnership company Q
("Owner") to the City of San Bernardino, ("City"), pursuant to that certain HOME Investment
Partnerships Act Loan Agreement dated as of 2017, and the Housing c
Affordability Covenant dated as of , 2017, with respect to the Development: ti
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(A) The total number of residential units which are completed and available for
occupancy is N
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The total number of such units occupied is
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(B) The following residential units (identified by unit number) have been
designated HOME-Assisted Units, as described in the Housing Affordability Covenant and E
Agreement and Declaration of Restrictive Covenants executed by and between Owner and the
City of San Bernardino ("Housing Affordability Covenant"), (for a total of ); E
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(C) The following residential units which are included in (B) above, have been
designated as HOME-Assisted Units since , 20 the date on which the last N
"Certificate of Continuing Program Compliance"was filed with the City by
Unit Number Previ Unius t�(if ana�ion of Replacing Unit Number
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1.5
Unit Number Previous Designation of Replacing Unit Number C
Unit if any)
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If a floating unit was substituted, please attach any information on unit substitutions and
filling of vacancies to evidence maintenance of required unit mix and income targeting.)
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(D) The following residential units are considered to be occupied by Very Low v
Income Households and Low Income Households based on the information set forth below: r
Persons Total Monthly
Number Date of Adjusted Initial Rental
Name of Tenant Residing Q
of Unit Unit No. in Unit Gross Occupancy Amount
Income
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Total Monthly
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Number Date of Persons Adjusted Initial Rental
of Unit Unit No. Name of Tenant Residing Gross Occupancy Amount
in Unit a
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Attach a Separate Sheet if Necessary Q
(E) In renting the residential units in the Development, Owner has not given
preference to any particular group or class of persons not allowed under the Housing w
Affordability Covenant except for persons who qualify as qualified Very Low Income Q
Households or Low Income Households. All of the residential units in the Development have
been rented pursuant to a written lease, and the term of each lease is at least 12 months. A
copy of the form lease is attached.
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11776-01
Packet Pg. 102
1.5
(F) Property owners and managers have participated in the San Bernardino County
Sheriff-Coroner Department's Crime Free Multi-Housing Unit Program, wherein specialized
training and other resources are provided to multi-family property owners and managers to �o
reduce the potential for onsite criminal activity. Completion of the Department's four (4) c
training phases, a Final Certification (Phase V) has been achieved and is being maintained by the
owner/representative and/or regional/-onsite property manager. Q
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(G) Each building in the Development and all Units in the Development are suitable Q
for occupancy and comply with all applicable state and local health, safety and other applicable ti
codes, ordinances, and requirements and the ongoing property standards, as specified in N
Section of the 5.7 of the Housing Affordability Covenant. c�
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(H) The information provided in this "Certificate of Continuing Program U.
Compliance" is accurate and complete, and no matters have come to the attention of Owner s
which would indicate that any of the information provided herein, or in any "Certification of o
Tenant Eligibility obtained from the tenants named herein, is inaccurate or incomplete in any
respect.
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IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Owner, _
on this day of , 20_
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OWNER: a
GOLDEN APARTMENTS SAN BERNARDINO, LP, a a
California limited partnership
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By: , its general partner
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Packet Pg. 104
1.5
EXHIBIT D =
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FORM OF CERTIFICATION OF TENANT ELIGIBILITY f°
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Rental Unit
Street Address c
Unit No. Q
city N
Zip Code co
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I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and LL
truthfully each of the following questions for all persons who are to occupy the unit in the above t
Development for which application is made, all of whom are listed below: o
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Name of Members Relationship to Place of c
in the Household Head of Household Age Ethnicity Em to ment E
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Ethnicity: ❑ White ❑ Black or African American ❑ Asian ❑ Asian & White
❑ American Indian or Alaska Native co
❑ Native Hawaiian or Other Pacific Islander ❑ American Indian or Alaska Native & White
❑ Black or African American & White
❑ American Indian or Alaska Native&Black or African American
❑ Other Multi Race ❑ Hispanic
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Date of Occupancy of Rental Unit by Tenant: v
Date of Lease Signed for Rental Unit by Tenant: r
Amount of Rent Paid Per Month:
Certification Date (Earlier of Date of Occupancy or Date Lease signed):
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6. Anticipated Annual Income. The anticipated total annual income from all sources of
each person listed in Section 1 for the twelve (12) month period beginning on the
_ Certification Date listed above, including income described in (a) below, but excluding
all income described in (b) below, is $ Q
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(a) The amount set forth above includes all of the following income (unless such
income is described in (b) below): all wages and salaries, overtime pay, commissions, fees, tips
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H776-019
Packet Pg. 105
1.5
and bonuses before payroll deductions; 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 amortization of capital indebtedness or any allowance for depreciation of capital a
assets); interest and dividends (including income from assets as set forth in item 7(b)below); full o
amount of periodic payments received from Social security, annuities, insurance policies,
retirement funds,pensions, disability or death benefits and other similar types of periodic Q
receipts; payments in lieu of earnings, such as unemployment and disability compensation, 3
worker's compensation and severance pay;the maximum amount of public assistance available a
to the above persons;periodic and determinable allowances, such as alimony and child support ti
payments and regular contributions and gifts received from persons not residing in the dwelling; N
all regular pay, special pay and allowances of a member of the Armed Forces (whether or not
living in the dwelling)who is the head of the household or spouse; and any earned income tax N
credit to the extent it exceeds income tax liability. U_
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(b) The following income is excluded from the amount set forth above: o
casual, sporadic or irregular gifts; amounts that are specifically for or in reimbursement of
medical expenses; lump sum additions to family assets, such as inheritances, insurance payment Q
(including payments under health and accident insurance and worker's compensation), capital
gains and settlements for personal or property losses; amounts of educational scholarships paid E
directly to a student or educational institution, and amounts paid by the government to a veteran Q
for use in meeting the costs of tuition, fees, books and equipment,but in either case only to the
extent used for such purposes;hazardous duty pay to a member of the household in the armed y
forces who is away from home and exposed to hostile fire; relocation payments under Title II of
the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; income N
from employment of children(including foster children)under the age of eighteen(18)years; M
foster child care payments;the value of coupon allotments under the Food Stamp Act of 1977;
payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received
under the Alaska Native Claims Settlement Act; income derived from certain submarginal land
of the United States that is held in trust for certain Indian tribes; payments on allowances made
under the Department of Health and Human Services' Low-Income Home Energy Assistance
Program; and payments received from the Workforce Innovation and Opportunity Act. d
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7. Net Family Assets. If any of the persons described in item 1 above (or any person
whose income or contributions were included in item 6) has any savings, stocks, bonds, 0
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 persons: $ , and 0
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(b) the amount of income expected to be derived from such assets in the twelve (12)
month period commencing this date: $
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8. Students
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(a) Will any of the persons listed in item 1 above be or have they been full-time
students during five (5) calendar months of this calendar year at an educational institution (other c
than a correspondence school) with regular faculty and students?
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Yes No
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(b) (Complete only if the answer to Question 8(a) is "Yes"). Is any such person a
(other than nonresident aliens) married and eligible to file a joint federal income tax return, a o
veteran of the U.S. military?
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Yes No >_
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The above information is full, true, and complete to the best of my knowledge. I have no r
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objections to inquiries being made for the purpose of verifying the statements made herein.
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Signature: Date a
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(Signature Must be Notarized)
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A notary public or other officer completing this certificate verifies only the r-
identity of the individual who signed the document to which this certificate is 0
attached, and not the truthfulness, accuracy, or validity of that document. Q
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STATE OF CALIFORNIA ) N
COUNTY OF ) N
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On , before me, ,Notary Public,
personally appeared , who proved to me on the c
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.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
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Name:
Name: Notary Public
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FOR COMPLETION BY DEVELOPMENT OWNER ONLY:
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A. Calculation of eligible income:
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(1) Enter amount entered for entire household in 6 above: $ °
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(2) If the amount entered in 7(a) above is greater than $5,000, enter $
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(i) the product of the amount entered in 7(a) above Q
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multiplied by the current passbook savings rate as determined by HUD: $ N
(ii) the amount entered in 7(b) above: $ N
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(iii) enter the greater of line (i) or line (ii): $ C
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(3) TOTAL ELIGIBLE INCOME (Line A(I)plus line A(2)(iii)): $
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B. Enter number of family members listed in item 1 above:
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C. The amount entered in A(3) (Total Eligible Income) is: $ Q
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Less than $ of median income for the area in which the Development r
is located, which is the maximum income at which a household may be
determined to be a tenant qualifying to reside in the Development as specified in r!?
the Housing Affordability Covenant and Agreement and Declaration of M
Restrictive Covenants executed by and between Owner and the City of San
Bernardino ("Housing Affordability Covenant").
More than the above-mentioned amount. 7
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D. Number of units assigned: d
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E. Monthly rent: $
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F. This unit (was/was not) last occupied for a period of thirty-one (3 1) consecutive days v
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 Housing Affordability Covenant . a
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G. Applicant: Q
Qualifies as a qualifying tenant.
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1 RESOLUTION NO. a
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2 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN a
3 BERNARDINO, CALIFORNIA, AUTHORIZING A SUBSTANTIAL AMENDMENT TO ti
THE FISCAL YEAR 2016-2017 ANNUAL ACTION PLAN TO ADD THE GOLDEN N
4 APARTMENTS PROJECT AND THE EXECUTION OF A HOME INVESTMENT
PARTNERSHIPS ACT LOAN AGREEMENT WITH GOLDEN APARTMENTS SAN N
5 BERNARDINO, LP AND RELATED DOCUMENTS AND ACTIONS LL
6 0
WHEREAS, prior to 2015, the City of San Bernardino was a recipient of, HOME 0
7 Investment Partnerships Act (HOME) funds from the United States Department of Housing
and Urban Development ("HUD") pursuant to the Cranston-Gonzalez National Housing Act E
8of 1990. The HOME funds must be used by the City in accordance with 24 C.F.R. Part 92; c
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9 and E
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10 WHEREAS, the HOME Program is designed exclusively to create affordable housing
for low-income households and may be used to fund a wide range of activities including 1
11 building, buying, and/or rehabilitating affordable housing for rent or homeownership or
12 providing direct rental assistance to low-income people; and
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13 WHEREAS, the City maintains a balance of Pre-2015 HOME dollars in its federal n
line of credit to use for the development of affordable housing;
14 N
15 WHEREAS, the City has identified an opportunity to partner with the County of San
Bernardino to develop an existing twenty-one (21) unit apartment complex, located at 2312, E
16 2324, and 2336 North Golden Avenue (project site) in the city of San Bernardino, into thirty- a
eight units of permanent housing with on-site support services for homeless veterans; and Q
17
18 WHEREAS, the total estimated cost to acquire and redevelop the project site is c
approximately $4,038,308; and 0i
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WHEREAS, The City of San Bernardino desires to invest EIGHT HUNDRED
20 EIGHTY THOUSAND DOLLARS ($880,000) of HOME funds in the form of a loan to the a
21 project developer to assist in the acquisition of the project site for development into thirty-
eight(38)residential apartments, one (1) resident manager unit and 1,208 square feet of office
22 space with support services for homeless veterans; and co•,
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23 WHEREAS, if left unspent, these funds will to be returned to the U.S. Treasury and 0
24 will not be available to the City to reprogram to other eligible HOME activities;
25 WHEREAS, the County's developer, Housing Partners 1, Inc. (HP1), which will Q
develop the project through its affiliate, Golden Apartments San Bernardino, LP, is a certified
26 Community Housing Development Organization ("CHDO") under the HOME Final Rule and `n
is an experienced non-profit developer dedicated to developing, rehabilitating, owning, and r
27 managing affordable housing for low and moderate income people in the County of San E
28 Bernardino; and
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1 WHEREAS, Golden Apartments San Bernardino, LP will comply with the terms and a
conditions set forth in the HOME Loan Agreement and will deliver to the City among other
2 items, a "Deed of Trust", a "Promissory Note", and a "Housing Affordability Covenant", as
defined in the HOME Loan Agreement; and Q
3 ti
4 WHEREAS, this project is subject to environmental review under 14 California Code N
of Regulations (CCR) sections 15192 and 15194 of the regulations implementing the
5 California Environmental Quality Act (CEQA) and 24 Code of Federal Regulations (CFR) Cq
section 58.36 of the regulations implementing the National Environmental Protection Act U-
6 (NEPA); and r
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WHEREAS, after such environmental review, the City Planning Commission found
8 that the project is categorically exempt from CEQA under 14 CCR section 15332 (infill E
development), and the County determined that the project is categorically excluded from
9 NEPA under 24 CFR section 58.35(a) (rehabilitation of buildings and improvements).
a
10 BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY c
11 OF SAN BERNARDINO, CALIFORNIA AS FOLLOWS: 2
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12 SECTION 1. The Mayor and City Council do hereby authorize the City Manager or `n
his or her designee to enter into a HOME Loan Agreement with Golden Apartments San M
13 Bernardino, LP to reconstruct 2312, 2324, and 2336 North Golden Avenue (a.k.a. Golden
14 Apartments), San Bernardino, in substantially the form attached to this Resolution as Exhibit
A, and in connection therewith, to enter into a Promissory Note, Deed of Trust, and Housing .N
15 Affordability Covenant to secure the loan and ensure the affordability of the housing to be
created by the project.
16 Q
17 SECTION 2. The City Manager or his or her designee is authorized to
administratively make minor modifications to the HOME Loan Agreement and the related
18 documents identified in Section 2 above, and to execute such further documents and take such 0
further actions as are necessary to effectively implement the reconstruction of 2312, 2324, and
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19 2336 North Golden Avenue (a.k.a. Golden Apartments), San Bernardino.
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20 SECTION 3. The Mayor and City Council find that the project is categorically a
21 exempt from CEQA under 14 CCR section 15332 (infill development), and is categorically
excluded from NEPA under 24 CFR section 58.35(a) (rehabilitation of buildings and r
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22 improvements). N
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN v
1 BERNARDINO, CALIFORNIA, AUTHORIZING THE SUBSTANTIAL a
2 AMENDMENT TO THE FISCAL YEAR 2016-2017 ANNUAL ACTION PLAN TO
ADD THE GOLDEN APARTMENTS PROJECT AND THE EXECUTION OF A Q
3 HOME INVESTMENT PARTNERSHIPS ACT LOAN AGREEMENT WITH
GOLDEN APARTMENTS SAN BERNARDINO, LP AND RELATED DOCUMENTS N
4 AND ACTIONS
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6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
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7 and City Council of the City of San Bernardino at a
8 meeting thereof, held on the day of , 2017, by the following vote, 0
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9 to wit: Q
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11 Council Members: AYES NAYS ABSTAIN ABSENT
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12 MARQUEZ
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13 BARRIOS
14 VALDIVIA
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SHORETT
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17NICKEL
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18 RICHARD 0
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19 MULVIHILL 0
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Georgeann Hanna, CMC, City Clerk
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The foregoing Resolution is hereby approved this_day of 2017.
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25 R. Carey Davis, Mayor Q
City of San Bernardino
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27 Approved as to form: w
Gary D. Saenz, City Attorney
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By:
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Staff Report �
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v City of San Bernardino °
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Request for Council Action r
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Date: August 16, 2017
To: Honorable Mayor and City Council Members °
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From: Andrea M. Miller, City Manage \ `
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By: Diane Cotto, CDBG C inator a
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Subject: Substantial Amendment to the FY2016-2017 Annual Action a
Plan and Execution of a Loan Agreement Golden Apartments
Project N
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Recommendation C4
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Adopt a resolution of the Mayor and City Council (MCC) of the City of San Bernardino,
California, authorizing the Substantial Amendment of the Fiscal Year 2016-2017 Annual
Action Plan to add the Golden Apartments Project, and the Execution of a Loan w
Agreement for the Project.
Background
Substantial Amendment Process a
Prior to 2015, the City of San Bernardino was a recipient of HOME funds from the U.S.
Department of Housing and Urban Development. HOME funds were used by the City to
create affordable housing for low-income households. Eligible activities included
building, buying, and/or rehabilitating affordable housing for rent or homeownership or
providing direct rental assistance to low-income people. . o
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The City maintains a balance of Pre-2015 HOME dollars in its federal line of credit to
use for the development of affordable housing. To ensure the timely commitment and y
expenditure of HOME Program funds, staff seeks the Mayor and City Council's
i authorization to amend the FY 2016-2017 Annual Action Plan to invest $880,000 of o
HOME funds to assist in the redevelopment of the Golden Apartments project, a 21- unit w
apartment complex located at 2312-2336 North Golden Avenue, and authorization to
execute a loan agreement for the project in that amount. a
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These funds are unspent funds from HOME activities previously approved by the Mayor o
y and City Council. If left unspent, these funds will to be returned to the U.S. Treasury
and will not be available to the City to reprogram to other eligible HOME activities.
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Citizen Participation o
The City's Citizens Participation Plan requires that a Substantial Amendment to the
City's Consolidated or Annual Action Plan be made available to citizens for public o
comment and to be considered by the City Council at a public hearing. In accordance o
with the Citizen Participation Plan, a notice was published in the San Bernardino Sun on
July 20, 2017 inviting the public to provide comments on the Substantial Amendment to x
FY 2016-17 Annual Action Plan. w
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The Substantial Amendment to the City's 2016-2017 Annual Action Plan was made
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available for public review for a thirty (30) day period, at the following locations: a
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1. City Clerk's Office, 215 North "D" Street, San Bernardino, CA, 92401 a
2. City Manager's Office, 290 North "D" Street, San Bernardino, CA, 92401
3. Norman F. Feldheym Central Library, 555 W 6th St, San Bernardino, CA 92410
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As of the date of the agenda preparation, no comments were received.
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Discussion o
San Bernardino County Homeless Partnership }
The City is a member of the San Bernardino County Homeless Partnership (SBCHP). _
SBCHP is a strong collaboration of community and faith-based organizations, w
educational institutions, non-profit organizations, private industry, and federal, state, and w
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local governments whose purpose is to provide a more focused approach to
homelessness issues within the County and the implementation of the regional 10-year E
Strategy to end chronic homelessness.
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On April 24, 2017, a Joint Special Meeting of the Mayor and City Council was held to
receive status reports on the 2017 Point-In-Time Homeless Count (PITC) and San
Bernardino County 10-year Strategy to end chronic homelessness (Homeless Services)
and the City's HUD Program funding and Housing Strategy.
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At this meeting SBCHP and San Bernardino County representatives reported that they M
have made great strides in addressing homelessness. Since 2013, San Bernardino
County homelessness has decreased by approximately 46% (.e.g. 908 unsheltered r
persons to 491 unsheltered persons). a
Success in reducing homelessness was attributed to prioritizing the most challenging w
homeless issues (e.g. chronic homelessness) identified in the PITC and developing a Ix
team of experts to address these issues. Success was also attributed to fully supporting a
a Housing First strategy that provides permanent housing to homeless households first a
(housing stabilization) then surrounds these households with necessary support w
services (e.g. job training/placement, case management, mental health counseling, etc.)
to ensure these households remain stably housed. 0
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Housing Strategy o
On September 19, 2016, the Mayor and City Council requested a status report of the
City's HUD Program funding and Housing Strategies. This report was delivered to MCC o
at the April 24th Special Meeting of the MCC. The Housing Strategy focused on creating c
decent and affordable housing as well as a suitable living environment for all segments
of the City's population, including the homeless population. x
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Project Description
To address homelessness, the City has identified an opportunity to partner with the
County of San Bernardino to develop an existing twenty-one (21) unit apartment a
complex into a thirty-eight units of permanent housing with on-site support services for o
low-income and homeless individuals. The estimated total cost of the project is $4.038 a
million dollars. The City desires to invest $880,000 of HOME funds to assist the County CU
in creating affordable housing solutions targeting homeless and low-income individuals, _
including veterans. This investment will take the form of a loan to the developer to a
assist in acquiring the property, which will be repayable from the developer's Residual
Receipts, defined as the amount by which the developer's gross revenue from the N
operation of the of the project exceeds its annual operating expenses. The loan will be o
secured by a deed of trust which will be junior in priority to a deed of trust securing a r
loan of $3,158,308 of HOME funds to be made by the County of San Bernardino to
assist the developer in the acquisition and rehabilitation of the property. A loan y
agreement documenting the City's loan is attached to the Resolution submitted with this
report. As the City's deed of trust will be recorded before the County's, the City will
execute an agreement to subordinate its deed of trust to that of the County, as the E
County will be making the larger of the two loans.
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The proposed project will modernize an existing multi-family building that is on the
borderline of functional obsolescence. The modernization of the building will be safer
and provide useful service extending at least 40 years. Renovation is expected to be W
completed in July 2018 and units would be available in August 2018. CO
Currently, the proposed site (referred to as the Golden Apartments) is a three building, M
two-story (21-unit) apartment complex, built in 1963, located at 2312-2336 North Golden
Avenue in the City of San Bernardino, between Highland Avenue and the 210 Freeway. y
Currently all units in the complex are two-bedroom/two-bathroom units averaging 1,110 a
square feet.
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Upon the completion of the renovation, the proposed project will convert the site into
thirty-eight (38) residential apartments, one (1) resident manager unit and 1,208 square a
feet of office space for on-site support services. On the ground level, each apartment a
will be approximately 500 square feet comprised of one bedroom, one bathroom and w
kitchen. All ground level units will be Disabled Accessible as required by the 2016
California Building Code. The second floor units will be approximately 708 square feet 0
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and include one bedroom, one bathroom, and a kitchenette.
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Developer
Housing Partners 1, Inc. (HPI) will serve as the developer for the project, through its 0
affiliate, Golden Apartments San Bernardino, LP, a California limited partnership (the o
LP). HPI is an experienced developer founded in 1991. As an affiliate of the Housing
Authority of the County of San Bernardino, HPI is dedicated to developing, x
rehabilitating, owning, and managing affordable housing, and providing housing w
counseling services to low and moderate income people in the County of San
Bernardino. To date, HPI has acquired and/or built 1,135 housing units.
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The City is required to set aside at least 15 percent of its HOME funds for specific 0
activities to be undertaken by a Community Housing Development Organization a
(CHDO). HPI is a qualified CHDO which means that it meets certain regulatory
requirements that allow HPI to use these set aside funds for the development of
affordable housing for the community it serves. It is expected that the LP will also a
qualify as a CHDO. r
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On-Site Service Provider
Based out of Santa Monica, California, and with a satellite office in San Bernardino, }
Step Up will provide on-site services to the residents of the proposed project. Step Up _
assists individuals experiencing mental health issues, and helps them by providing r
permanent supportive housing (Golden Apartments); vocational training and 0
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employment; and member-driven support programs and services to reduce harm,
prevent relapse and foster recovery. E
City of San Bernardino Planning Commission E
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On June 13, 2017, City of San Bernardino Planning Commission approved a E
Conditional Use Permit (CUP) for the renovation of 2312, 2324 and 2336 North Golden
Avenue, San Bernardino (a.k_a. Golden Apartments).
General and Consolidated Plan Objectives N
The City of San Bernardino General Plan and HUD Consolidated Plan includes goals M
and policies to guide future development and use of federal funds within the City. The
Golden Apartment project will meet the following General Plan and Consolidated Plan w
goals and objectives: a
• Improving Neighborhood Conditions w
• Preservation and Rehabilitation of Housing W
• Conserve and improve the existing affordable housing stock and revitalize Cl)
deteriorating neighborhoods a
• Assist in the provision of housing affordable to lower and moderate income w
households. o
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• Fair housing 0
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Environmental Compliance 0
This project is subject to environmental review under Sections 15192 and 15194 of the
California Environmental Quality Act (CEQA) regulations and 24 CFR 58.36 of the 0
National Environmental Protection Act regulations. Both environmental evaluations 0
have been prepared.
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Fiscal Impact w
There is no fiscal impact to the City's General Fund.
Conclusion a
It is the intent of the City to facilitate the development of a variety of types of housing to 0
meet the needs of all income levels in the City of San Bernardino. The proposed project a
will not only house a segment of our population that is the most difficult to house but will
also meet several local and regional housing goals.
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Attachments
Attachment 1 — Resolution authorizing Substantial Amendment to 2016-2017 Annual N
Action Plan and execution of loan agreement; Exhibit A — HOME Loan Agreement
between City and Golden Apartments San Bernardino, LP
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Ward: _
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Synopsis of Previous Council Actions:
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April 24, 2017 — Joint Special Meeting of the Mayor and City Council a
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September 19, 2016 — Resolution of the Mayor and Common Council of the City of w
{ San Bernardino, California Approving the Execution of HOME Loan Agreement
j with Housing Partners I (HPI) for the Implementation of the Infill Housing �!?
Development Program M
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April 6, 2015 - Resolution of the Mayor and Common Council of the City of San N
Bernardino Approving the 2015-2020 Consolidated Plan and 2015-2016 Action a
Plan for Federal Community Development Block Grant (CDBG), Home Investment
Partnership (HOME) Interagency Agreement, Neighborhood Stabilization Program
(NSP), Emergency Solutions Grant (ESG) Entitlement Grant Programs and
Approving Substantial Amendment#5 to the 2014-2015 Action Plan. (#3732)
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1.8
OFFICE OF THE MAYOR
R. CAREY DAVIcc
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290 North"D"Street•San Bernardino•CA 92401 0
909.384.5133•Fax:909.384.5067 v
rl�1l), `� t"� ♦ti''�� www.sbcity.org
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Dear Mayor v;
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I am reaching out to encourage and promote efforts in addressing the critical issue of LL
ending homelessness in our region.The January 2017 Point in Time Count, conducted by r
the San Bernardino County Homeless Partnership, counted a total of 1,866 individuals. This o
reflected a 1.1% decrease in homelessness across the County over the previous year.
E
The City of San Bernardino has taken many steps in addressing the homelessness problem d
in our community and we have seen successes. In 2013,the San Bernardino County Point Q
in Time Count showed that San Bernardino had 908 homeless individuals. By 2017,that <
number had dropped to 491. Our community's efforts toward reducing the homeless
population are the result of the City Council's action of allocating funds for homelessness y
solutions, including the City's Homeless Access Center.While this reduction illustrates n
success,we continue to work toward better and more effective solutions.
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On April 24, 2017,the San Bernardino City Council hosted a workshop facilitated by Phil
Mangano,the former homeless czar under President Bush and Obama.At the workshop, ;n
County officials and nonprofit leaders gathered to discuss approaches in addressing
homelessness. In its FY 17/18 budget,the City Council authorized the funding of a
homeless coordinator to help synchronize the efforts of the City and County,as well as our
nonprofit partners and community based organizations. San Bernardino continues to 0
examine and explore solutions to this problem. m
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Homelessness is a complex social issue with many underlying and contributing factors. My
hope is that as we continue working towards solutions,we will decrease the number of
homeless in the region. I encourage you to continue working with our County, nonprofit
partners, and your community members to implement solutions for homelessness. The E
County's Interagency Council on Homelessness (ICH) holds monthly meetings that =
highlight the importance of working together. M
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I thank you for your commitment in improving the quality of life for all residents in the
region,and hope to work collaboratively with you in finding solutions to combat Q
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homelessness.
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1.9
715 East Brier Drive, San Bernardino CA 92408 Phone: 909.890.0644 Fax: 909.890.4618 TTY: 711
www.hur4
FHOUSINIG AUTHORITYCOUNTY C?
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HACSB PSH Project based voucher sites by City w
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Bloomington 2
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Fontana 4 E
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Hesperia 5
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Loma Linda 10 N
Montclair 4
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Ontario 13 0
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Rancho Cucamonga 5
Redlands 2
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San Bernardino 13 0
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Victorville 19 m
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Yucaipa 1.4
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Yucca Valley 6 y
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*Note, San Bernardino only makes up 13.4%of the total. c
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Future Units: >_
Loma Linda —78 units currently under construction (Homeless Veterans) 0
0.
Redlands—68 units (Homeless Veterans) —slated for Council approval Sept, 2017CL
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Site Based Mental Health Services Act(MHSA)
No.Assisted f°
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Development City Units `m
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Lillian Court Bloomington 9 MHSA units Qp
Mountain Breeze Highland 20 MHSA units v
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Sienna Fontana 15 MHSA units =
Horizons at �r
Yucaipa Yucaipa 10 MHSA units v
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San Q
Phoenix Bernardino 6 MHSA units
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Ch&irmam First,Dierks sewind District Dird Diatrit VirA Cbsti-men,Fourth District Fifth District Packet Pg. 119