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HomeMy WebLinkAboutR34-Economic Development Agency ORIGINAL ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco SUBJECT: HOME Grant Agreement - Mary's Interim Executive Director Mercy Center, Inc. for Veronica's Home Transitional Housing Project DATE: December 12,2005 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On September 6,2005,Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the Mayor and Common Council and Community Development Commission consider this action for approval. ---------------------------------------------------------------------------—--—----------------—-------------------------------------------------------------------------------------------------- Recommended Motion(s): Open/Close Public Hearing (Mayor and Common Council) Motion: That the Mayor and Common Council of the City of San Bernardino approve an Amendment to the 2005-2010 Five Year Consolidated Plan and the 2005-2006 Annual Action Plan authorizing$800,000 of HOME Program Funds to Mary's Mercy Center, Inc. (Community Development Commission) Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino ("Agency")to execute the HOME Grant Agreement by and between the Agency and Mary's Mercy Center, Inc.,a non-profit public benefit corporation ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Maggie Pacheco Phone: (909)663-1044 Project Area(s) IVDA Redevelopment Project Area Ward(s): 1St Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) ❑Map(s) ❑Letters FUNDING REQUIREMENTS Amount: $ 800,000 Source: 2001-2005 HOME Funds Budget Authority: 2005 EDA Budget SIGNATURE: Z�; MPa agggieec ,Interim Executive Director Barbara Lindseth,Director Admi .Services ---------------------------------------ion/Council Notes:------------ miss -------------------------------------------------------------------------------------------------------------------------------------------------------------- Com ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- PAAgendas\Comm Dev Commission\CDC 2005\05-12-19 Mary's-Veronicas Transitional Housing SR.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 3t. Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY STAFF REPORT HOME GRANT AGREEMENT -MARY'S MERCY CENTER,INC. FOR VERONICA'S HOME TRANSITIONAL HOUSING PROJECT BACKGROUND: At the May 16, 2005 Mayor and Common Council public hearing, Mary's Mercy Center, Inc. ("Mary's") was allocated $300,000 of Federal HOME funds for the construction of a Men's Transitional Housing Shelter, proposed to be built at their present site. On August 25, 2005, Mary's Executive Director sent a letter to Agency Staff, requesting that the $300,000 be transferred from the proposed Men's Transitional Housing Shelter Project to help with the funding shortfall for the expansion of Veronica's Home of Mercy and to assist in the acquisition of property adjacent to Veronica's Home as described below. CURRENT ISSUE: Transitional Facility In 2004, Mary's was awarded a HUD grant in the amount of$1,070,927 for the development, expansion, and operation of Veronica's Home of Mercy, an existing long-term transitional facility for pregnant adult women and their children. Certain portions of the HUD Grant ($770,927) are required to be used as operations after the completion of the construction. $300,000 of the allocated HUD grant may be used for construction purposes relative to the expansion project; however, Mary's is responsible for securing the remaining funds for the completion of the construction. Veronica's Home, located at 1476 West 6'h Street, is a 40-bed facility that can accommodate 13 women and up to 27 children. Due to the high demand for this type of facility and their associated programs, Mary's Board of Directors began the planning and fundraising for the expansion of the existing facility. An architect was hired and renderings for the proposed expansion were created. The expanded facility will provide a 20-unit multi-family affordable transitional rental housing facility for 60-70 beds for pregnant women and their children. Due to the length of time that it has taken Mary's to raise additional capital, and seek additional grant funds, the original construction costs have increased from $1.4 million to $2 million dollars, creating a $600,000 shortfall. The financial status of the expansion project is as follows: i) Fund Raising - $401,500; ii) Weingart Foundation - $100,000; iii) HUD Grant - $300,000; iv) HomeAide Inland Empire - $600,000 for a total of$1,401,500 and a shortfall of$ 600,000. --------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------- P:Wgendas\Comm Dev Commission\CDC 2005\05-12-19 Mary's-Veronica's Transitional Housing SR.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 n J�. Agenda Item Number: _ Economic Development Agency Staff Report Mary's Mercy Center—Veronica's Transitional Housing Page 2 When this item went before the Redevelopment Committee back in September 2005, the construction budget was estimated at $2,000,000. Since that time, the Architect estimates that an p additional $425,500 of construction costs will be needed. Mary's will continue their fund raising efforts and California Endowment of the Arts has stated that the organization will allocate funds to the project. Transitional Re-Entry Home In addition to the $600,000 needed for the expansion, Mary's is requestinE the Agency's assistance for the acquisition of a vacant single family home located at 1490 6` Street, located adjacent to Veronica's Home of Mercy ("Property"). The Property will be utilized as a Transitional Re-Entry Home for women who have finished their program at Veronica's Home of Mercy, but still need more time to finish school or training or just need more time to accumulate money for housing. Women who are placed at these re-entry homes show a strong determination to set their lives and their children's lives in a straight motion. Mary's has another re-entry home located in the north end of San Bernardino, near Cal-State that was also assisted by the Agency. Although the Property has not been listed for sale, the Executive Director of Mary's has spoken to the executors of the deceased owner and they have expressed an interest in selling to Mary's. Recent survey of "comps" in the area show sales in the range of $200,000 to $250,000. However, per the HOME Grant Agreement, Mary's will have the option of finding another three (3) bedroom home in the City in the event that the 6th Street property is not available. Mary's is able to provide $50,000 for the acquisition of the Property and is asking that the Agency make up the difference between the actual sales price and Mary's contribution, or approximately $200,000. Consequently, the total amount of requested HOME is $800,000 for both projects. In accordance with Section 4.1 of the proposed HOME Grant Agreement, the disbursement of the $800,000 of HOME funds to Mary's will be in the form of four (4) installments as follows: i) $200,000-for the acquisition of the Transitional Re-Entry Home; ii) $200,000-upon certification by the architect and general contractor that 50% of improvements have been constructed; iii) $200,000- upon certification by the architect and general contractor that 75% of improvements have been completed; iv) $200,000-upon certification by the architect and general contractor that the improvements have been completed and the City has issued a Certificate of Occupancy of the completed improvements. Pursuant to the proposed HOME Regulatory Agreement between the Agency and Mary's, the Agency will obtain affordability and maintenance covenants for a period of not less than 55 years. Only those tenants whose income does not exceed 80% of Area Median Income (AMI) will be allowed residency at the new expansion site or Transitional Re-Entry Home. In addition, Mary's will be required to certify the tenants' eligibility for residency on an annual basis. Moreover, if and when Mary's is ready to develop the Men's Transitional Housing Project, which is not expected to occur for another 3-4 years, they can return to the Agency and request financial assistance at that time. PAAgendas\Comm Dev Commission\CDC 2005\05-12-19 Mary's-Veronica's Transitional Housing SR.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 '7 n , Agenda Item Number: KJ Economic Development Agency Staff Report Mary's Mercy Center—Veronica's Transitional Housing Page 3 ENVIRONMENTAL IMPACT: The Planning Commission has reviewed the Initial Study related to the Transitional Housing Project and the City made a finding that the Project is exempt from the California Environmental Quality Act (CEQA) for the project. The Agency is relying on this action for purposes of satisfying CEQA and NEPA and the appropriate Notices will be filed. FISCAL IMPACT: A total of$800,000 of HOME Funds are currently available in the Agency's 2001/2005 HOME Program Fund. RECOMMENDATION: That the Mayor and Common Council adopt the Motion and Community Development Commission adopt the attached Resolution. Ma ie Pacheco,Interim Executive Director ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- PAAgendas\Comm Dev Commission\CDC 2005\05-12-19 Mary's-Veronica's Transitional Housing SR.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 Agenda Item Number: J RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE 4 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE HOME GRANT AGREEMENT BY AND BETWEEN THE AGENCY AND MARY'S MERCY CENTER, INC., A NON-PROFIT PUBLIC BENEFIT CORPORATION 6 7 WHEREAS, the City of San Bernardino (the "City") is an entitlement jurisdiction an 8 annually receives certain federal funds under the HOME Investment Partnership Act (the 9 "HOME Program") from the United States Department of Housing and Urban Developmen to ("HUD") in order to carry out eligible affordable housing activities within the City in accordance 11 with the HOME Program Regulations set forth in Title 24 Code of Federal Regulations Part 92 12 et seq. (24 CFR Part 92); and 1; WHEREAS, the City has designated and authorized the Agency to administer an Q14 implement the HOME Program of the City; and 1 WHEREAS, HOME Program funds of the City may be used by the Agency for locally 16 based nonprofit housing entities to carry out affordable housing activities in compliance with th 17 HOME Program Regulations, including without limitation "transitional housing" development I8 projects as this term is defined at 24 CFR Part 92.2; and 19 WHEREAS, the Grantee is a locally certified and/or approved and experienced nonprofi housing organization, and the Grantee has obtained HUD Grant No. CAI 613209-004 (the "HUD 20 _ Transitional Housing Grant") in the proposed sum of One Million Seventy Thousand Nin 21 Hundred Twenty Seven Dollars ($1,070,927) for the development and operation of a transitions 22 housing facility to be called Veronica's Home of Mercy (the "Project"); and 23 WHEREAS, the Grantee has proposed that the Agency participate with the Grantee in the 24 funding of the acquisition and construction of transitional housing facilities such as the Project -1- P:\Agendas�Resolutions\Resolutions\200.5\05-12-19 plan's Mercy Center Reso.doc - I and the hereinafter defined Transitional Re-entry Home which are eligible under the HOME 2 Program; and 3 WHEREAS, the Agency deems that the activities to be undertaken by the Grantee herein 4 are consistent with and supportive of the HOME Program Regulations and that the financial assistance of the Agency is necessary and appropriate to initiate the transitional housin 6 activities of the Grantee as set forth herein; and WHEREAS, the Agency deems it desirable to enter into this HOME Grant Agreemen 8 xvith the Grantee in order to provide HOME Program funds of the City for the acquisition an 9 development of the transitional housing facilities to be operated by the Grantee and for the 10 provision of affordable rental housing to low-income persons and families in accordance with the HOME Program guidelines; and 11 WHEREAS, the Agency desires to provide the sum of Eight Hundred Thousand Dollar 12 (5800,000) in HOME Program Funds of the City as a grant to the Grantee as the "Agency 13 HOME Grant Contribution", subject to the terms and conditions of this HOME Gran 14 Agreement. 15 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 16 CITY OF SALT BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 17 FOLLOWS: 1s ' Section 1. The Agency finds and determines that the development of the Project an 19 acquisition of Property as described in the HOME Grant Agreement is within the scope, term 20 and provisions of the Redevelopment Plan for the Project Area, is consistent with the Agency' 21 Housing Implementation Plan, City's Consolidated Plan and will help eliminate blighting 22 conditions in the Project Area by creating affordable rental housing opportunities for families 23 and persons who meet the income eligibility guidelines. 24 Section 2. The Agency authorizes the appropriation of $800,000 from the federal 25 HOME grant Program, fiscal year 2004-2005 for Mary's Mercy Center, Inc. to carry out the Project and the acquisition of a defined Transitional Re-Entry Home, and the Interim Executive -2- P:\Agendas\Resoiut ions\Rewlutions.2005'.05-12-19 Mary's Mercy Center Reso.dor 1 Director of the Agency is authorized to execute the HOME Grant Agreement and execute am 02 such other documents as may be necessary to implement the HOME Grant Agreement and to 3 make any necessary non-substantive changes in the HOME Grant Agreement as may be 4 approved by Agency Counsel, provided such changes do not increase the Agency's financial 5 contribution of$800,000 to the project. 6 Section 3. On August 19, 2003, the Planning Commission considered and approve Mary's Conditional Use Permit (CUP) No. 02-02 request and in conjunction with said CUP 8 made a finding that the Project is exempt from the California Environmental Quality Ac 9 (CEQA), pursuant to Section 15332, in fill development, and no further environmental document 10 is required pursuant to Section 15168 of the CEQA guidelines and the Community Development 11 Commission is relying on this determination and the necessary Notices of Determination an Exemption will be filed with HUD and the City Clerk. 12 Section 4. The Resolution shall become effective immediately upon its adoption. 13 14 15 16 17 18 19 20 21 22 23 r � 24 25 0 P:Wgendas`,Resolutions\Resolutions\2005\05.12.19 Mary's Mercy Center Reso.doc L 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND 2 AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE HOME GRANT AGREEMENT BY a AND BETWEEN THE AGENCY AND MARY'S MERCY CENTER, INC., A NON-PROFIT PUBLIC BENEFIT CORPORATION 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernardino at a meeting thereof, held on the day of , 2005, by the following vote to wit: 8 Commission Members: Aves Nays Abstain Absent 9 ESTRADA to LONGVILLE 11 MCGINNIS 12 DERRY 13 KELLEY 14 JOHNSON 1' MC CAMMACK 16 17 Secretary 18 19 The foregoing resolution is hereby approved this day of , 2005. 20 21 I Judith Valles, Chairperson Community Development Commission '-'- of the City of San Bernardino 23 Approved as to form and Legal Content: 24 /) ,j By: i V AL)c11cy C unsel -4- Pd Agendas`.Resolutions\Resolutions'5005\05-12-19 Man's Nlercv Center Reso_doc I HOME GRANT AGREEMENT BY AND BETWEEN MARY'S MERCY CENTER, INC. AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO THIS HOME GRANT AGREEMENT (this "HOME Grant Agreement") is dated as of December 19, 2005, by and between Mary's Mercy Center, Inc., a California non-profit public benefit corporation (the "Grantee") and the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") and is entered into in light of the facts set forth in the following recital paragraphs: RECITALS 1. The City of San Bernardino (the "City") is an entitlement jurisdiction and receives annually certain federal funds under the HOME Investment Partnership Act (the "HOME Program") from the United States Department of Housing and Urban Development ("HUD") in order to carry out eligible affordable housing activities within the City in accordance with the HOME Program Regulations set forth in Title 24 Code of Federal Regulations Part 92, et seq. (24 CFR Part 92); and 2. The City has designated and authorized the Agency to administer and implement the HOME Program of the City-, and 3. HOME Program funds of the City may be used by the Agency for locally based nonprofit housing entities to carry out affordable housing activities in compliance with the HOME Program Regulations, including without limitation "transitional housing" development projects as this term is defined at 24 CFR Part 92.2; and 4. The Grantee is a locally certified and/or approved and experienced nonprofit housing organization, and the Grantee has previously obtained HUD Grant No. CA1613209-004 during 2004 (the "HUD Transitional Housing Grant") in the anticipated sum of$1,070,927 for the development and operation of a transitional housing facility to be called Veronica's Home of Mercy at a total anticipated construction cost of$2,427,000 (the -Project"); of said total dollar figure, an amount equal to $300,000 of the HUD Transitional Housing Grant shall be used in the manner as provided in paragraph 5 below for construction purposes related to the Project with the remaining $770,927 to be used for the operation of the Project upon the completion of the construction thereof, and 5. Certain portions of the funds allocated to the Grantee under the HUD Transitional HUD Grant in an amount equal to $770,927 are intended to be used and applied by the Grantee for the operation of the Project after the completion of the construction thereof, and the Grantee is responsible for obtaining additional funds in addition to the remaining $300,000 of the HUD Transitional Housing Grant in an amount equal to approximately $1,947,000 to be used for the construction of improvements constituting the Project which is intended to provide for the housing of low-income persons and families who will be benefited by the transitional housing project and supportive services provided by the Grantee under the HUD Transitional Housing Grant; and 6. The Grantee has proposed that the Agency participate with the Grantee in the funding of the acquisition and construction of transitional housing facilities such as the Project and the hereinafter defined Transitional Re-Entry Home which are eligible under the HOME Program, and the Grantee further covenants that the beneficiaries of its activities under the HOME Program and this HOME Grant Agreement, are or will be families and persons who meet the income eligibility guidelines of 24 CFR Part 92.252; and 4846-4224-2560.1 1 P '.gcndas`Agenda Anxhr. nts'Agrnns-Amend 200`.05-12 19 Mary's Macy HOME Agreement Fina1 d« 7. The Agency deems that the activities to be undertaken by the Grantee herein are consistent with and supportive of the HOME Program Regulations and that the financial assistance of the Agency is necessary and appropriate to initiate the transitional housing activities of the Grantee as set forth herein; and 8. The Agency deems it desirable to enter into this HOME Grant Agreement with the Grantee in order to provide HOME Program funds for the acquisition and development of the Project as a transitional housing facilities and the Transitional Re-Entry Home both of which shall be operated by the Grantee and for the provision of affordable rental housing to low-income persons and families in accordance with the HOME Program guidelines; and 9. The Agency shall provide the sum of$800,000 in HOME Program Funds of the City as a grant to the Grantee as the "Agency HOME Fund Grant Contribution", subject to the terms and conditions of this HOME Grant Agreement; said amount shall be applied in part for the purchase of a single family home in an amount not to exceed $200,000 constituting the Transitional Re-Entry Home as hereinafter defined, together with other funds of the Grantee as specified herein, and the remaining $600,000 shall be used and applied to fund a portion of the construction costs of the Project; and 10. The funds as provided in this HOME Grant Agreement by the Agency to the Grantee in the amount of $800,000 are in consideration of the Grantee agreeing to the 55-year affordability covenant as shall be applicable to the Project and the Transitional Re-Entry Home all as further set forth herein and the Agency HOME Covenant attached hereto as Exhibit "C". None of the proceeds of the Agency HOME Fund Grant Contribution shall be repayable to the Agency unless a default shall have occurred pursuant to either this HOME Grant Agreement and said Agency HOME Covenant. NOW, THEREFORE, GRANTEE, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DO HEREBY COVENANT AND AGREE AS FOLLOWS: ARTICLE I CERTAIN DEFINITIONS AND GENERAL MATTERS Section 1.1. Definitions. In addition to the definitions of certain terms and phrases, which appear in the introduction paragraph, the recitals or elsewhere in this HOME Grant Agreement, the following words and phrases are defined as follows: • "Agency HOME Covenant" refers to the "2005 Redevelopment Agency of the City of San Bernardino HOME Program Regulatory Agreement and Project Site and Transitional Re-Entry Home Use Covenant" by and between the Grantee and the Agency substantially in the form attached hereto as Exhibit "C" of this HOME Grant Agreement and incorporated herein by this reference. The Agency HOME Covenant shall be recorded upon the date of the initial HOME Grant Advance by the Agency to the Grantee for the Project and separately for the Transitional Re-Entry Home upon the acquisition of the fee title thereto by the Grantee. Such Agency HOME Covenant shall be in effect for the Project and the Transitional Re-Entry Home for a period of time equal to fifty-five (55) years from and after the date of recordation as to each of said properties. 48464224-2560.1 2 Agendas Agenda Attachments Agrnas-Amend 20050',-12.19 Mary's Mercy HOME Agreement Final doc • "Agency HOME Fund Grant Contribution" refers to the sum of $800,000 which the Agency shall contribute in four (4) separate installments of $200,000 each for the account of the Grantee for the purposes set forth in this HOME Grant Agreement; • "Architect" refers to the licensed firm of architects or the firm of civil engineers retained by the Grantee to design the Improvements and manage the oversight of the construction of the Improvements on the Project Site. • "City CUP" refers to the City Conditional Use Permit No. 02-02 as amended, which sets forth the various conditions of approval for the construction and operation of the Improvements on the Project Site as part of the Project. • "Escrow Holder" refers to escrow company to be designated in the manner as provided herein who shall serve as the escrow holder of the parties for the Grantee's acquisition of the Transitional Re-Entry Home. • "General Contractor" refers to the licensed general contractor retained by the Grantee to construct the Improvements on the Project Site. • "HOME Affordability Period" refers to the period of time when the Agency HOME Covenant is in effect as a covenant, which affects the Project Site and the Transitional Re-Entry Home. • "HOME Grant Advance" refers to the disbursement by the Agency to the Grantee of an installment of the Agency HOME Fund Grant Contribution. Each HOME Grant Advance shall be as follows: (1) $200,000: for the acquisition of the Transitional Re-Entry Home; and (ii) $200,000: upon certification of the Architect and General Contractor that 50% of the Improvements have been constructed on the Project; (iii) $200,000: upon certification of the Architect and General Contractor that 75% of the Improvements have been constructed on the Project; (iv) $200,000: upon certification of the .Architect and General Contractor that the Improvements have been completed and the City has issued a certificate of occupancy of the completed Improvements on the Proj ect. $500,000: Total amount of Agency HOME Fund Grant Contribution 0 "Home Grant Documents" refers, collectively, to this HOME Grant Agreement, the Agency HOME Covenant and the other documents and certificates delivered by the Grantee to the Agency as provided for under this HOME Grant Agreement. • "HUD Transitional Housing Grant Agreement" refers to the HUD Grant Agreement No. CAI 613209-004, dated June 7, 2004, by and between HUD and the Grantee. 4846-4224-:560.1 3 'r AgendulAgenda Anachmenis Agrmas-Amend 2005',05-12.19 Mary's Mercy HOME Agreement Final duc • "Improvement Construction Budget" refers to the itemized budget for the estimated cost of constructing the Improvements on the Project Site and the Transitional Re-Entry Home. The Improvement Construction Budget set forth on a line item basis is attached hereto as Exhibit "B". • "Improvements" refer to the design and construction of a two and one-half(2 %2) story structure, including approximately 15,000 square feet of interior area with twenty (20) residential dwelling units, additional management and supervisory units and a common dining area, laundry area, nursery, training rooms, staff offices and appurtenant facilities. • "Plans" refer to the plans and specifications for the construction of the Improvements as required to be prepared for the Project in accordance with the City CUP. • "Project" refers to the transitional housing facility for persons and families consisting of adult pregnant women and their children, who are at the time of the initial occupancy at the Project, homeless individuals. The Project shall be acquired, constructed and operated by the Grantee subject to the terms and conditions of HUD Transitional Housing Grant and this HOME Grant Agreement. • "Project Site" refers to the land described in Exhibit "A". The Project Site includes lands which are owned by the Grantee as of the date of this HOME Grant Agreement. The Improvements shall be constructed on the Project Site, and upon the completion of the Improvements, the Project shall be operated by the Grantee on the Project Site. • "Title Company" refers to such title insurance company as may be designated by the Grantee in the manner as provided herein and which shall issue an owner's policy of title insurance in favor of the Grantee at the close of the Transitional Re-Entry Home Escrow insuring the lien-free fee title interest of the Grantee in the Transitional Re- Entry Home, subject only to the affordable rental housing use restrictions imposed on the Transitional Re-Entry Home by the Agency under the Agency HOME Covenant. • "Transitional Re-Entry Home" refers to a three (3) bedroom single-family residential real property, which the Grantee shall acquire in addition to the construction of the Project. Such Transitional Re-Entry Home is presently intended to be located at 1490 West 6`h Street, City of San Bernardino, and such location of the Transitional Re-Entry Home may be modified to include another suitable three (3) bedroom single-family residential real property with the written consent of the Interim Executive Director. • "Transitional Re-Entry Home Escrow" refers to the escrow or property transfer account transaction by and between the Grantee and the third party owner of the Transitional Re-Entry Home pursuant to which such third party owner shall covey all of its right, title and interest in the Transitional Re-Entry Home to the Grantee. Section 1.2. Exhibits. The following is an index of the various exhibits, which are attached to this HOME Grant Agreement: Exhibit "A" Project Site Legal Description and Property Address; Transitional Re-Entry Home 3 48464224-2560.1 4 P lAgendas\Agenda Anachnnenrs'.Agrrras-Amend 2005,05-12-19 Mary's Mercy HOME Agreement Final doc Exhibit "B" Improvement Construction Line Item Budget Exhibits "C" Agency HOME Covenant including Exhibit "A" Legal Description of the Project Site and Transitional Re-Entry Home and Exhibit "B" thereto entitled General Form of HOME Program Rental Housing Income Certification Section 1.3. Effective Date. This HOME Grant Agreement is dated as of as of the date written above, and shall take effect when each of the following has occurred: (1) this HOME Grant Agreement has been approved by the Community Development Commission of the City; and (ii) this HOME Grant Agreement has been fully executed by the parties as evidenced by the signature of the authorized officers of each of them as appear on page 28; and (iii) the Grantee has provided the Agency with evidence of the existence and coverage in favor of the Agency of the insurance described in Section 4.1(6). When all of the events described in the preceding such paragraphs have occurred, the "Effective Date" of this HOME Grant Agreement shall have occurred; provided however that the Effective Date shall have occurred by a date no later than thirty (30) calendar days following the date on which the Community Development Commission of the City has approved this HOME Grant Agreement. ARTICLE II HOME PROGRAM AND USE OF FUNDS Section 2.1. Amount and Purpose and Special Fund Obligation of Citv. In reliance upon the Grantee's representations and warranties, and subject to the terms and conditions herein and in the HOME Grant Documents, the Agency hereby agrees to make the Agency HOME Fund Grant Contribution to the Grantee from the available HOME Program funds of the City as administered by the Agency upon the terms and conditions set forth in this HOME Grant Agreement and the other HOME Grant Documents. No other source of funds of the City or the Agency are available or shall be used in connection with any HOME Grant Advance under the Agency HOME Fund Grant Contribution, and the obligation of the Agency to provide the Agency HOME Fund Grant Contribution and each HOME Grant Advance hereunder, is a special limited fund obligation payable solely from the available HOME Program funds of the City s administered by the Agency. Section 2.2. Fiscal Limitation of HOME Program Imposed On the City and the Agency By HUD. The United States of America through the Secretary of the United States Department of Housing and Urban Development ("HUD"), may in the future place programmatic or fiscal limitations on the available HOME Program funds of the City as administered by the Agency not presently anticipated. Accordingly, the Agency reserves the right to revise this HOME Grant Agreement in order to take account of federal government and HUD actions affecting the HOME Program funding available to the Agency to provide the Agency HOME Fund Grant Contribution and each HOME Grant Advance to the Grantee hereunder, and the Grantee consents to such revisions. In the event of funding reduction in the HOME Program funds of the City to such a level that materially affects the ongoing HOME Program activities of the City as administered by the Agency, the Agency may suspend further HOME Grant Advances to the Grantee. 48464224-2560.1 5 P AgendasWgcnda AttacAmems',Agrrtas-Amend 2005.05-12-19 Mary's Mercy HOME Agreement Final doc ARTICLE III GRANTEE'S REPRESENTATIONS AND WARRANTIES TO THE AGENCY Section 3.1. In order to induce the Agency to make the Agency HOME Fund Grant Contribution and to pay each installment of a HOME Grant Advance, the Grantee represents and warrants as follows, which representations and warranties shall be true and correct as of the execution hereof and shall survive the execution and delivery of this HOME Grant Agreement and any of the HOME Grant Documents: (1) Organization of Grantee; Authority to Enter Into HOME Grant Agreement. The Grantee is a California non-profit corporation organized and existing under the laws of the State of California. The Grantee has the right and power to purchase, occupy and develop the Transitional Re- Entry Home and the Project Site, and the Grantee has full power and authority to enter into this HOME Grant Agreement, the HOME Grant Documents and to expand on proceeds of the HUD Transitional Housing Grant Agreement, the Agency HOME Fund Grant Contribution and the private funds of the Grantee in support of the Project as contemplated herein and to execute and carry out the provisions of the HOME Grant Documents. The execution, delivery and performance of this HOME Grant Agreement and the HOME Grant Documents have been duly authorized by all of the governing board of the Grantee, and no other action of the Grantee is required for the execution, delivery and performance of this HOME Grant Agreement or the HOME Grant Documents. This HOME Grant Agreement and other HOME Grant Documents which have been executed and delivered pursuant to this HOME Grant Agreement constitute, or, if not yet executed or delivered, will when so executed and delivered, constitute valid and binding obligations of the Grantee, each enforceable in accordance with its terms. (2) Financial Statements. All financial statements and all financial data heretofore delivered to the Agency in connection with the Agency HOME Fund Grant Contribution or the application therefore by the Grantee, are true and correct in all material respects, have been prepared in accordance with sound accounting principles, fairly represent the respective financial conditions of the Grantee as of the dates thereof and for the periods covered thereby, and no material adverse change has occurred in the financial conditions presented therein since the respective dates thereof. (3) No Litigation or Changes in Laws. There are no actions, suits or proceedings which have been served on the Grantee or which the Grantee is otherwise aware, or any changes to any law, ordinance or regulation pending, or to the knowledge of the Grantee threatened against or affecting the Grantee or the Project Site or the Transitional Re-Entry Home in any court at law or in equity, or before or by any governmental or municipal authority which might adversely affect the ability of the Grantee to perform its obligations hereunder, under any of the HOME Grant Documents, or under any other agreement to which the Grantee is a party, or which might adversely affect the priority of the lien of the Agency HOME Covenant on the Project Site and the Transitional Re-Entry Home, the construction of the Improvements in accordance with the Plans and applicable laws or the use, occupancy or operation of the Project and the Transitional Re-Entry Home or any part thereof. (4) Covenants, Zoning and Codes. The Grantee has complied and will continue to comply with all applicable environmental statutes and regulations of the City to be complied with in connection with the construction of the Improvements. All permits, consents, approvals or authorizations by, or registrations, declarations, withholding of objections or filings with the City necessary in connection with the construction of the Improvements, have been or will be obtained, are 48464224-2560.1 6 P Agendas,Agenda Anxhments\Agrtns-Amend 2005105.12-19 Mary's Mucy HOME Agreement Final doc I valid, adequate and in full force and effect or will be obtained prior to the commencement of the construction of any part of the Improvements. C onstruction of the Improvements and the intended use, t occupancy and operation thereof will in all respects conform to and comply with the City CUP and all covenants, conditions, restrictions and reservations affecting the Project Site, and with all applicable zoning, environmental protection, use and building codes, laws, regulations, and ordinances. (5) Compliance with Agreements. The execution, delivery and performance of this HOME Grant Agreement and the other HOME Grant Documents have not and will not constitute a breach or default under any other agreements, law or court order under which the Grantee is a party or may be bound or affected or which may affect the Project or the construction, use, occupancy or operation of the Project or any part thereof. (6) Compliance By Grantee With HOME Funded Program and Activity Regulations. The Grantee shall comply with the HOME Program and activity regulations of HUD and the Agency as set forth in 24 CFR Part 92.350 et. seq. (Subpart H of the HOME Program Regulations); provided, however, that notwithstanding the provisions of 24 CFR Part 85.46(b), upon the occurrence of an Event of Default (as defined hereafter in Section 9.1) by the Grantee, the Grantee shall be deemed to have waived any right to a hearing, appeal or other administrative proceeding with the Agency as may otherwise be available under 24 CFR Part 85.43(b), and the Agency may exercise its rights and remedies upon such Event of Default as provided in this HOME Grant Agreement and the HOME Grant Documents. Any breach or default by the Grantee of the HOME Program regulations shall be deemed to be an Event of Default. (7) Prohibited Interest of Officials and Employees of Agency and Grantee. No member of the Congress of the United States, and no other officer or employee of the United States shall be admitted to any share or part of this HOME Grant Agreement or to any benefit arising herefrom. Furthermore, no member of the governing board of the Grantee and no other officer or employee of the Grantee, or its agents and no member of the Community Development Commission of the City of San Bernardino or any other officer or employee of the City, or its agents, who exercises any function or responsibility with respect to this HOME Grant Agreement during his tenure employment or engagement, or for one (1) year thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed pursuant to this HOME Grant Agreement. The Grantee shall incorporate or cause to be incorporated, in all contracts and subcontracts relating in any manner to this HOME Grant Agreement, including the Grantee's construction contracts (as defined below), a provision prohibiting such interest. The officers and employees of the Grantee have read and are aware of the provisions of Government Code Section 1090, et seq., and Government Code Section 87100 et seq., relating to prohibited interests and conflicts of interest of public officers and employees. The Grantee represents and warrants based upon due and diligent inquiry that the Grantee is unaware of any financial or economic interest of any public officer or employee of either the Grantee or the Agency relating to the execution of this HOME Grant Agreement. It is further understood and agreed that if such a prohibited financial interest under Government Code Section 1090 et seq., does exist at the inception of this HOME Grant Agreement, the Agency may immediately terminate this HOME Grant Agreement by giving written notice thereof. The members of the governing board of the Grantee, and its officers, employees and agents shall comply with the requirements of Government Code Section 87100 et seq., during the term of this HOME Grant Agreement. 48464224-2560.1 7 P Agendas Agenda Attachments`Agrrnts-Amend 2005\05-12-19 Mary's Mercy HOME Agteemcnt Final doc (8) Federal Labor Standards Provisions. The Grantee, the Architect and the General Contractor and all subcontractors engaged under contracts in excess of $1,000 for the construction, alteration, and/or repair of the Improvements shall comply with State of California Labor Code Section 1720, et seq. and HUD requirements pertaining to such contracts and the applicable requirements of the regulations of the State of California Department of Industrial Relations under Title 8 California Code of Regulations Section 16000, et seq., and the Department of Labor under 29 CFR Parts 3, 5 and Section 5.5(a), governing the payment of wages and the ratio of apprentices and trainees to journeymen; provided, that if wage rates higher than those required under such regulations are imposed by the State of California, nothing hereunder is intended to relieve the Grantee of its obligation to require payment by its contractors and subcontractors of higher rates. The Grantee shall cause or require to be inserted in full, in the Grantee's Construction Contract and all such other contracts subject to such regulations, the "Federal Labor Standards Provisions" clause. The Grantee shall comply with the procedures set out in HUD Handbook 1344.1, "Federal Labor Standards Compliance in Housing and Community Development Programs", as amended, which is incorporated herein by this reference as if set forth in full. No award of a contract by the Grantee relating to the Improvements shall be made to any General Contractor or any subcontractor who is ineligible to bid on or perform such work under the provisions of any applicable regulations of the State of California Department of Industrial Relations or the Department of Labor. (9) Nondiscrimination Requirements. The Grantee is subject to all applicable requirements of the following Acts, promulgations, and regulations with respect thereto: A. Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and the regulations issued pursuant thereto (24 CFR Subtitle A, Part 1), which provides that no person in the United States shall on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for which the applicant receives federal financial assistance and will immediately take any measures necessary to effectuate this assurance. Where the federal financial assistance is to provide or is in the form of personal property or real property interest therein or structures thereon, this assurance shall obligate the applicant, or in the case of any transfer of such property, any transferee, via the instrument effecting any disposition by the applicant or transferee, in the case of a subsequent transfer, of such real property, structures or improvements thereon, or interest therein, to require a covenant running with the land assuring nondiscrimination for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the applicant retains ownership or possession of the property, whichever is longer. Under this assurance, the United States shall have the right to seek its judicial enforcement. The Grantee is required to take all measures necessary to effectuate this Title in the manner set forth in Section 1.5 of the above-mentioned regulation. B. Title VIII of the Civil Rights Act of 1968 (P.L. 90-284) as amended, administering all programs and activities relating to housing and community development in a manner to affirmatively further fair housing; and requiring action to affirmatively further fair housing in the sale, lease or rental of housing, the financing of housing, and the provision of brokerage services within the jurisdiction of the County of San Bernardino. 4846-4224-2560.1 8 P\Agenda Agenda Attachrncnts',Agrrnts-Arnend 2005\05-12.19 Mary's Mercy HOME Agreement Final dm C. Section 109 of the Housing and Community Development Act of 1974, and the regulations issued pursuant thereto (24 CFR Part 92.350), which provide that no person in the United States shall, on the ground of race, color, national origin or sex, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under, any program or activity funded in whole or in part with Title I funds. D. Executive Order 11063, as amended, and the regulations issued pursuant thereto (24 CFR Part 107) which require that all actions necessary and appropriate be taken to prevent discrimination because of race, color, creed, or national origin in the sale, rental, leasing or other disposition of residential property and related facilities or in the use or occupancy thereof where such property or facilities are owned or operated by the federal government, or provided with federal assistance by HUD, and in the lending practices with respect to residential property and related facilities of lending institutions insofar as such practices relate to Grants insured, guaranteed or purchased by HUD. (10) Equal Employment Opportunity. During the course of the planning, design, and construction of the Improvements, and during subsequent operation of the Project, the Grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and the selection for training, including apprenticeship. The Grantee shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Agency and/or HUD setting forth the provisions of this nondiscrimination clause. The Grantee shall state, through such nondiscrimination clause, that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. Except as otherwise provided for in Parts II, III and IV of Executive Order 11246, dated September 24, 1965, as amended, and in attendant Code of Federal Regulation provisions, the Grantee shall require to be included in each contract entered into by the Grantee and modification thereof if not included in the original contract, the "Equal Opportunity" clause contained in Section 202 of Executive Order 11246 (48 CFR 52.222-26). The Grantee agrees that it shall assist and cooperate actively with the Agency, HUD and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor; that it will furnish the Agency, HUD and the Secretary of Labor such information as they may require for the supervision of such compliance; and that it will otherwise assist the Agency and HUD in the discharge of their primary responsibilities for securing compliance. The Grantee agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a contractor debarred from, or who has not demonstrated eligibility for, government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by HUD or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, the Grantee agrees that if it fails or refuses to comply with the undertaking set forth in this Section 2.17, an Event of Default shall be deemed to have occurred under this HOME Grant Agreement and the Agency may refer the matter to the United States Department of Justice. 9 4846-4224-2560.1 P Ageud—kgenda Attach—ts Agrnvs Amend 2005 05-12-19 Mary's Mercy HOW Agreenxnt Final doc (11) HUD Transitional Housing Grant Agreement. As of the Effective Date of this HOME Grant Agreement, the Grantee is in full compliance with the terms and conditions of the HUD Transitional Housing Grant Agreement, the HUD Transitional Housing Grant Agreement is in full force and effect and no event has occurred, which with the giving of notice and the passage of time, would be an event of default under such HUD Transitional Housing Grant Agreement. (12) Improvement Construction Budget. After diligent investigation of the relevant conditions, including the provisions of the City CUP, the property improvement construction standards of 24 CFR Part 92.251(a), consultations with the Architect and such other persons as the Grantee deems appropriate, the Grantee represents that the Improvement Construction Budget attached as Exhibit '`B" reflects the Grantee's best true, accurate and complete estimate of the costs of the Improvements as shown therein, as necessary to construct the Improvements in accordance with the City CUP, the property construction standards of 24 CFR Part 92.251(a) and the Plans. (13) Grantee Funds to Complete the Improvements. The Grantee covenants to the Agency that it has reserved and allocated and has available to the Grantee, the sum of$1,400,500 in funds of the Grantee, which when added to the sum of$300,000 available to the Grantee under the HUD Transitional Housing Grant Agreement and the sum of $600,000 of the Agency HOME Fund Grant, $406,500 from fundraising events and California Endowment of the Arts Contribution available to the Grantee under this HOME Grant Agreement for the cost of construction of the Improvements, shall be sufficient for the Grantee to pay for the cost of constructing and installing the Improvements on the Project Site. (14) Grantee Funds to Acquire the Transitional Re-Entry Home. The Grantee covenants to the Agency that it has reserved and allocated and has available to it the sum of not less than $50,000 in funds of the Grantee, which when added to the sum of$200,000 of the Agency HOME Fund Grant Contribution available to the Grantee under this HOME Grant Agreement, shall be sufficient for the Grantee to acquire the Transitional Re-Entry Home. (15) Function of Architect. All of the work of the design and construction of the Improvements shall be supervised for the Grantee by the Architect. The Grantee shall not terminate the services of the Architect during the time when the Improvements are under design and construction except upon prior written notice to the Agency. (16) Faith-Based Activities of the Grantee on the Project Site and the Transitional Re- Entry Home. In its operation of the Project and the Transitional Re-Entry Home, the Grantee shall comply with- the provisions of 24 CFR Part 92.257, as relate to the activities of faith-based organizations. (17) Incorporation of Representations and Warranties. The request by the Grantee for any HOME Grant Advance proceeds under this HOME Grant Agreement shall constitute a certification by the Grantee that the aforesaid representations and warranties are true and correct in all material respects as of the date of such request, except with respect to financial statements to the extent that such statements have been prepared with respect to an earlier date. (18) Survival of Representations and Warranties. All of the representations and warranties contained in this Article III shall be true and correct in all material respects on the Effective Date through and until the final disbursement of the last HOME Grant Advance, and shall continue to be true and correct in all material respects at all times during the HOME Affordability Period. 48464224-2560.1 10 P Agcndas`Agenda Attachmems Agrmts-Amend.2005\05-12.19 Mary's Mach HOME Agr"r i Fwal doc (19) Continuing Accuracy. During the entire period of the term of the Agency HOME Grant, the Grantee shall promptly notify the Agency of any event, which would render any of said misrepresentations and warranties untrue or misleading in any material respect. ARTICLE IV CONDITIONS PRECEDENT TO INITIAL HOME GRANT ADVANCE Section 4.1. The Agency's obligation to disburse the initial HOME Grant Advance to the Grantee Agreement shall be subject to the full and complete satisfaction of the following conditions precedent: (1) If the HOME Grant Advance is for the Grantee's purchase of the Transitional Re-Entry Home, fully executed copies of each of the HOME Grant Documents which documents shall have been duly authorized, executed (and, where appropriate, acknowledged), and delivered by the parties thereto encumbering the Transitional Re-Entry Home with the HOME Grant Documents, and any and all other documents as the Agency may deem reasonably necessary with respect to the acquisition of the Transitional Re-Entry Home. (2) If the HOME Grant Advance is for the payment of the cost of construction of the Improvements, the Grantee shall certify that the services of the Architect have been retained and a complete set of the Plans, and all addendums thereto issued by the Grantee has been approved by the Architect and is consistent with the City CUP. (3) If the HOME Grant Advance is for the payment of the cost of construction of the Improvements, the Grantee shall certify that it has executed a fixed price construction contract for the Improvements presently estimated not to exceed $2,427,000 between the Grantee and the General Contractor and that such contract is in full force and effect and the Grantee shall provide the Agency with a copy of such construction contract. (4) If the HOME Grant Advance is for the payment of the cost of construction of the Improvements, the Architect and the General Contractor shall each certify in writing addressed to the Agency that: (1) in the case of the first HOME Grant Advance for $200,000 to pay for the cost of Improvements, that at least fifty percent (50%) of the aggregate value of the Improvements has been constructed and installed on the Project Site; (ii) in the case of the second HOME Grant Advance for $200,000 to pay for the cost of Improvements, that at least seventy five percent (75%) of the aggregate value of the Improvements has been constructed and installed on the Project Site; (iii) in the case of the third HOME Grant Advance for $200,000 to pay for the cost of Improvements that the work has been completed and the City has issued its certificate of occupancy to the Grantee for such completed Improvements. (5) The Agency shall have received evidence satisfactory to it that the Grantee and the persons signing this HOME Grant Agreement and each of the HOME Grant Documents on behalf of the Grantee have the capacity and authority to execute and deliver the HOME Grant Documents. Such 4546-4224.2560.1 11 P.''Agcndas\Agenda Attachments Agrmts-Amend 2005,15.12.19 Mary's Mere)HOME Agreement Final.doc documentation shall include, without limitation, a certified copy of a resolution of the governing board of the Grantee authorizing the Grantee to enter into the HOME Grant Agreement and the officers to execute the HOME Grant Documents. (6) The Grantee is required to maintain, or cause to be maintained, and shall deposit with the Agency, original insurance policies issued by insurance companies acceptable to the Agency and written in form and content acceptable to the Agency, providing the following minimum insurance coverages: (i) All risk course of construction insurance with the Agency's Loss Payable Endorsement (438BFU) naming the Agency attached, on a Builder's Risk Completed Value non-reporting form of policy (provided that in no event may the amount of coverage to be maintained by the Grantee be less than the amount of coverage necessary to eliminate any risk of co-insurance of loss). (ii) Comprehensive public liability insurance in amounts reasonably required by the Agency from time to time, and in no event less than $2,000,000 combined single limit liability insurance, naming the Agency as an additional insured. (iii) Workers' compensation insurance for all persons employed by the Grantee in connection with the construction of the Improvements. (iv) All insurance coverage required under the HUD Transitional Housing Grant Agreement, as applicable. Each of the foregoing policies shall contain a thirty (30) calendar day notice of cancellation clause to the Agency except as the Agency otherwise approves. No such insurance shall include deductible amounts to which the Agency has not previously consented in writing. No less than thirty (30) calendar days prior to the expiration of each policy, the Grantee shall deliver to the Agency evidence of renewal or replacement of such policy satisfactory to the Agency. (7) If the HOME Grant Advance for the Grantee's purchase of the Transitional Re-Entry Home, the condition of title to the Transitional Re-Entry Home, the legal description and street address of the Transitional Re-Entry Home and all documents and other matters relating in any way to the Transitional Re-Entry Home must be to the satisfaction of the Agency. (8) The Grantee shall have furnished to the Agency a current report ("Environmental — Report") regarding the possible presence of any hazardous substances on, in, or around the Project Site and the Transitional Re-Entry Home. Such report shall be in form and substance acceptable to the Agency, prepared by a registered certified engineer or geologist acceptable to the Agency, and showing no state of facts objectionable to the Agency. (9) If requested by the Agency in connection with a HOME Grant Advance for the payment of the cost of construction of the Improvements, the Grantee shall: (i) provide the Agency with evidence satisfactory to the Agency (A) that the Grantee has complied with all covenants, conditions, restrictions and reservations affecting the Project Site, including without limitation those imposed by the City under its development plan approval for the Improvements; (B) that the Project Site is duly and validly zoned for the 4846-4224-2560.1 12 P .agendas kgerda Anechroenls Agrmts-Amend 2005,05-1:-19 Mary's Mercy HOME Agreement Final doc intended use; and (C) that the Grantee has obtained all zoning, subdivision and environmental approvals, permits and maps required to be obtained in order to construct the Improvements. I (ii) provide the Agency with evidence that all building and other permits required for construction of the Improvements have been issued in accordance with the Plans. (iii) provide written confirmation to the Agency that neither the Improvements, to the extent then constructed, nor the Project Site, nor any part thereof, shall have been materially damaged, destroyed, condemned or threatened with condemnation, subject to any rights the Grantee may have to rebuild the Improvements. (iv) provide written confirmation to the Agency that no order or notice shall have been made by, or received from, any governmental agency having jurisdiction stating that all or a portion of the work of construction of the Improvements is or will be in violation of any law, ordinance, code or regulation affecting the Project Site. (v) provide the Agency with a report from the either the Architect or the General Contractor which allocates the amount of the HOME Grant Advance to the appropriate Grantee construction contract and certify the amount of such disbursement fairly reflects the value of the work and materials incorporated into the Improvements under each such Grantee construction contract and that the work being paid for with the HOME Grant Advance has been satisfactorily completed substantially in accordance with the Plans and the Improvement Construction Budget. (vi) receipt by the Agency of written assurance satisfactory to the Agency that the Grantee has available funds (other than the Agency HOME Fund Grant Contribution and the HUD Transitional Housing Grant) sufficient to complete the construction of the Improvements. (vii) all of the representations and warranties of the Grantee contained in this HOME Grant Agreement shall remain true and correct in all material respects. Section 4.2. Conditions Precedent to Final HOME Grant Advance. In addition to the conditions set forth in Section 4.1 hereof, the Agency's obligation to make the final advance of the Agency HOME Fund Grant Contribution for construction purposes shall be subject to the satisfaction of the following conditions precedent, each of which the Grantee shall endeavor to furnish as promptly as is reasonably possible. (i) substantial completion of construction of the Improvements in accordance with the Plans, and if required by the Agency, its receipt of a certificate of completion from the Architect and the General Contractor certifying that the Improvements have been completed substantially in accordance with the Plans. (ii) receipt by the Agency of a copy of a Notice of Acceptance duly authorized and recorded by the Grantee sufficient to effect the purpose of such notices as contemplated by the Civil Code Section 3184 with respect to the stop notice rights of mechanics and materials suppliers engaged on the Improvements. / "A (iii) receipt by the Agency of the final Certificate(s) of Occupancy for the r+,l Improvements issued by the City of San Bernardino evidencing that the Improvements have been completed and that the Improvements may be lawfully occupied by the Grantee in accordance with applicable laws. 48464224-2560.1 13 P.Agendas'Agerda Anachm nls Agrmis-Anxnd 200 05-12-N Mm,'s Merc}idOME Agreer nt final do (iv) there shall be no statutory liens on record for labor or material arising out of the construction of the Improvements; provided, however, that if there are any such liens the Grantee shall have made arrangements satisfactory to the Agency for the disposition or bonding thereof. ARTICLE V CONSTRUCTION COVENANTS Section 5.1. The Grantee covenants and agrees that from and after the execution of this HOME Grant Agreement and the commencement of construction of the Improvements that it will: (i) preserve and keep in full force and effect its existence as a non-profit public benefit corporation and retain title to the Project Site subject only to title exceptions permitted by the Agency; (ii) maintain, preserve and keep its properties and equipment situated on the Project Site in good repair, working order and condition and from time to time make all needful and proper repairs, renewals, replacements and additions thereto so that at all times the efficiency thereof shall be fully preserved and maintained; (iii) maintain the insurance required herein; (iv) the Grantee shall commence the construction of the Improvements on the Project Site by a date not later than June 30, 2006; (v) the Grantee shall complete the construction of the Improvements within two hundred seventy (270) calendar days following the commencement of construction thereof, except in the case of"Unavoidable Delay", as defined in Section 5.1(vi), below; (vi) after commencement of the work of construction of any phase of the Improvements, the Grantee shall not permit, and shall not allow the General Contractor for the respective phase of the Improvements to permit, cessation of, for a period in excess, in the aggregate, of thirty (30) calendar days for any reason. Notwithstanding the foregoing, such thirty (30) calendar day period may be extended by the Agency acting by and through the Interim Executive Director, but only up to an aggregate maximum of forty five (45) for any delays which are beyond the control-of the Grantee, including delays caused by strikes, acts of God, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, fire or similar causes ("Unavoidable Delay") (but excluding financial circumstances or events which may be resolved by the payment of money); provided, however, that the Grantee has notified the Agency of such delay within ten (10) calendar days of occurrence of such Unavoidable Delay. No Unavoidable Delay shall suspend or otherwise abate any obligation of the Grantee under the HOME Grant Documents. Section 5.2. Chances to Plans and Construction Contracts. Either before the award of a Grantee construction contract for any phase of the Improvements, or after a contract has been awarded to a General Contractor for any phase of the Improvements, there shall be no material change of any of the Plans or working drawings, or any of the Grantee's construction contracts, whether by change 48464224-2560.1 14 P\AgendasAgenda AnwhmentsWgrnvs-Amend 2005,05-12-19 Mary's Mary HOME Agreenxnt final dot I order or otherwise which may affect the cost of the Improvements by more than $100,000, without the prior written approval of the Agency, and, to the extent that such approvals may be required, the prior written approval of all appropriate governmental authorities. The Agency, acting by and through the Interim Executive Director, shall respond to the Grantee's request for approval of a material change to the Plans or working drawings or any of the Grantee's construction contracts, within five (5) business days of its receipt of such request; provided, however, that the Agency's failure to respond within such five-day period shall constitute the Agency's disapproval of the request. As a condition to its approval of any change, the Agency may require verification that the change will not increase the total cost of constructing the Improvements or the time required to complete their construction. If the proposed change may affect the Improvement Construction Budget, the Grantee shall follow the procedure described in Section 6.2 hereof with respect to additional Grantee funds in requesting the Agency to approve such a change. Section 5.3. Compliance with Laws. All work performed in connection with the Improvements shall comply with all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or which may be enacted hereafter, and with all applicable directions, rules and regulations of the fire department, health department, building department or other departments of every governmental agency now having or hereafter acquiring jurisdiction over the Property or construction of Improvements. Section 5.4. Protection Against Mechanics' Liens or Stop Notice Claims. The Grantee agrees to pay and discharge all claims for labor performed and material and services furnished in connection with construction of the Improvements, to diligently record or procure the recordation of a valid Notice of Acceptance upon completion of construction, to diligently record or procure for recordation of a Notice of Cessation in the event of a cessation of labor, on the work of improvement for a continuous period of thirty (30) calendar days or more, and to take all other steps necessary to forestall the assertion of claims or liens either against the Grantee, the Project Site, or the Improvements, or any part thereof or right or interest appurtenant thereto, or of claims against the Agency or the HOME Grant funds. Nothing herein contained shall require the Grantee to pay any claims for labor, materials or services which the Grantee, in good faith disputes and which the Grantee, at its own expense, is currently and diligently contesting, provided, however, that not later than ten (10) business days after the notice of the filing of any claim or lien against the Grantee, or the Property which is disputed or contested by the Grantee, the Grantee shall either (a) record a surety bond sufficient to release said claim or lien and promptly give notice of such recordation to the lienholder or claimant, or (b) make other arrangements therefore satisfactory to the Agency and provided further, that the Grantee's refusal to pay such claims shall not cause a default to exist under the HUD Transitional Housing Grant Agreement. Section 5.5. Construction Inspections. The Agency and its representatives shall have the right at all reasonable times during regular business hours (and at any time in the event of an emergency) to enter upon the Project Site and inspect the work of construction to determine that the same is in conformity with the Plans and all of the requirements hereof. If in the Agency's reasonable judgment it is necessary, the Agency shall have the further right, from time to time, to retain a consultant or consultants, at the Grantee's expense, to inspect the work and verify compliance by the Grantee with the provisions hereof. The Grantee understands and agrees that said inspections are for the sole purpose of protecting the Agency's HOME Grant Advances and are made solely for the Agency's benefit; that such inspections may be superficial and general in nature, primarily to inform the Agency of the progress of construction of the Improvements and that, in any event, the Grantee shall not be entitled to rely on any such inspection(s) as constituting the Agency's approval, 48464224-2560.1 15 P Agenda'Agenda Aaachmenis\Agnvs-Amend 2005\05-12-19 Mary's Mercy HOME Agreem ni Final doc i satisfaction or acceptance with respect to materials, workmanship, conformance to Plans or otherwise. The Grantee hereby agrees to make its own inspections of the construction to determine that the quality of the Improvements and all other requirements of the work of construction financed in whole or in part by the Agency HOME Fund Grant are being performed in a manner satisfactory to the Grantee, and the Grantee agrees to immediately notify the Agency in writing should the same show any work to be unsatisfactory in any manner. Without limiting the foregoing, the Grantee shall permit the Agency to examine and copy all books and account records and other papers relating to the Project Site and the construction of the Improvements; and the Grantee will, and will use commercially reasonable efforts to cause all contractors, subcontractors and materialmen to cooperate with the Agency to enable it to do so. Section 5.6. Operating Statements Additional Financial and Other Records. In addition to any written reports or records of the Grantee as the Agency may request under the HOME Program Regulations, the Grantee shall also furnish to the Agency upon written request but not more frequently than once per one hundred eighty (180) calendar days during the term of this HOME Grant Agreement, copies of reasonably detailed annual operating statements for the Project and the Transitional Re-Entry Home, prepared in accordance with sound accounting principles, certified by the Grantee to be true and correct as of the date made. Such statements shall specify, in addition to other information requested by the Agency, the rents and income (including grant income) received from the Project and the Transitional Re-Entry Home, the disbursements made for such period. The Grantee shall furnish to the Agency, from time to time, promptly upon request (1) current financial statements of the Grantee; (ii) other or further information as to the financial condition of the Grantee; (iii) a list of all material suppliers and of all contractors and subcontractors employed or to be employed in the construction of the Improvements showing the nature and the cost of the work to be performed by each; (iv) copies and/or lists of all paid and/or unpaid bills for construction of the Improvements; (v) budgets of the Grantee and any revisions thereof showing the estimated costs of construction; and (vi) such reports as to the status of other matters relating to the Project as the Agency may reasonably request. Section 5.7. Notify Agencv of Litigation or Compliance. The Grantee shall promptly notify the Agency in writing of all litigation or overtly threatened litigation affecting the Grantee, the Transitional Re-Entry Home or the Project or any part thereof, and of all complaints or charges made by any governmental authority affecting the Project the Transitional Re-Entry Home or the Grantee which may delay, or require changes in, the construction of the Improvements or impair the security of the Agency. Section 5.8. No Secondary Financing. At no time during the term of this HOME Grant Agreement will the Project Site be encumbered by the lien of any creditor except HUD under the terms of the HUD Transitional Housing Grant Agreement and the Agency under the HOME Grant Documents or except as may be specifically approved in advance and in writing by the Agency. Section 5.9. Indemnify the Citv and the Agency. The Grantee shall indemnify, defend and hold the City and the Agency and the boards, commissions, elected officials, members, appointed officers, employees, agents and lawyers of each of them, harmless from all losses for any actual or alleged damage or injury of whatsoever nature arising out of or in any way connected with the Project and/or the construction of the Improvements or arising out of the Grantee's breach of the provisions of this HOME Grant Agreement or any of the other HOME Grant Documents unless such loss is caused solely by the gross negligence or willful misconduct of the Agency. The Agency may commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties hereto, or the Transitional Re-Entry Home, the Project Site or the Improvements, and the 4846-4224-2560.1 16 P.Agendas Agenda AttwhrnentsA"s-Amend:005\05-12-19 Mar)'s Mercy HOME Agreement Final doc Grantee shall pay all of the Agency's costs and expenses incurred thereby on demand, including reasonable legal fees. The words "reasonable legal fees" of the Agency mean and refer to the salaries and benefits and costs of the attorneys employed by the Office of the City Attorney of the City, allocated on an hourly basis, who may participate in the defense of the City or the Agency hereunder. This Section shall survive the payment in full of the Note and the discharge and release of the other HOME Grant Documents. Section 5.10. Environmental Covenants. (a) The Grantee will not use any Hazardous Materials (as defined hereinbelow) in the construction of the Improvements except in compliance with all applicable laws regulating Hazardous Materials. (b) The Grantee shall, at its expense, comply and cause each tenant leasing space within the Project to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined hereinbelow), including, without limitation, obtaining and filing all applicable notices, permits, licenses and similar authorizations. The Grantee shall establish and maintain a management and operating policy for the Project and the Transitional Re-Entry Home to assure and monitor continued compliance by the Grantee and each tenant leasing space in the Project and the Transitional Re-Entry Home with all such laws, regulations, codes, and ordinances. (c) The Grantee agrees to submit from time to time, if an Event of Default has occurred as is continuing or if the Agency has reason to believe Hazardous Materials are present on either the Project Site or the Transitional Re-Entry Home or if otherwise reasonably requested by the Agency, a report, satisfactory to the Agency, certifying that the Transitional Re-Entry Home, the Project Site and the Improvements are not now being used nor been used in the past for any Environmental Activities. The Agency reserves the right, in its reasonable discretion, to retain, at the Grantee's expense, an independent professional consultant to review any report prepared by the Grantee and/or to conduct its own investigation of the premises and Improvements for Hazardous Materials. The Grantee hereby grants to the Agency, its agents, employees, consultants and contractors the right to enter upon the Project Site, the Transitional Re-Entry Home, and the Improvements and to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by the Grantee of any event or situation which would render any of the representations or warranties contained in this HOME Grant Agreement inaccurate in any respect if made at the time of such discovery, the Grantee shall promptly notify the Agency of such event or situation and, within thirty (30) calendar days after such discovery, submit to the Agency a preliminary written environmental plan setting forth a general description of such event or situation and the action, that the Grantee proposes to take to correct such a condition with respect thereto. (e) The Grantee agrees to submit from time to time, if requested by the Agency, a report, reasonably satisfactory to the Agency, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Project Site, the Transitional Re-Entry Home or in the Improvements. The Agency reserves the right, in its sole and good faith discretion, to retain, at the Grantee's expense, an independent professional consultant to review any report prepared by the Grantee and/or to conduct its own 48464224-2560.1 . 17 P\Agendas',Agenda AnwhmentsWgrmts-Amend 2005`05-12-19 Mary's Macy HOME Agreement Final doc investigation of the Project Site and the Transitional Re-Entry Home. The Grantee hereby grants to the Agency, its agent, employees, consultants and contractors the right to enter upon the Project Site and the Transitional Re-Entry Home and to perform such tests as the Agency deems are necessary to conduct such a review and/or investigation. "Hazardous Materials" as used in this HOME Grant Agreement and the other HOME Grant Documents shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regionai or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Project Site and the Transitional Re-Entry Home including, without limitation; (1) asbestos; (ii) petroleum and petroleum by-products; (iii) urea formaldehyde foam insulation; (iv) polychlorinated biphenyls; (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601, et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251, et seq. the Clean Air Act, 42 U.S.C. Section 7401, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity; or(viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. "Environmental Activities" as used in this HOME Grant Agreement shall mean the use, generation, transportation, treatment, storage, or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. ARTICLE VI DISBURSEMENT OF HOME GRANT ADVANCE FUNDS Section 6.1. Advances of HOME Grant Funds. Unless the Agency elects otherwise in the Agency's sole discretion, each HOME Grant Advance shall be made in accordance with the following: (1) at the time of the requested HOME Grant Advance, the Grantee must: (i) not be in default under this HOME Grant Agreement; (ii) have cured any non-performance of any event which, after notice thereof by the Agency, or with the passage of time or both, could constitute a default or an Event of Default; and (iii) have met all requirements of any governmental authority with regulatory authority pertaining to the Grantee, the Transitional Re- Entry Home or the Project Site. (2) subject to the provisions of this HOME Grant Agreement, each HOME Grant Advance will be made by the Agency only for payment of those items shown in the Improvement Construction Budget including funds in the agreed upon dollar amount for the purchase of the Transitional Re-Entry Home. 48464224-2560.1 18 P Agendas Agenda Attachments-Agmvs-Am d 2005,05-12-19 Mary's Mcscy HOME Agreenrnt Final doc (3) disbursements of the Agency HOME Fund Grant Contribution proceeds for construction items shall be made within thirty (30) calendar days after the Grantee's compliance with the terms hereof. (4) certification acceptable to the Agency from the Grantee, the Architect and the General Contractor stating: (i) the percentage of completion of the Improvements on a line item basis (as such line items are identified in the Improvement Construction Budget) with respect to each aspect of the cost of construction; (ii) the costs to complete the Improvements in accordance with the Plans approved by the Agency on a line item basis (as such line items are identified in the Improvement Construction Budget for each phase of the Improvements); and (iii) that all Improvements are constructed substantially in accordance with the Plans approved by the Agency. (5) appropriate lien releases from all contractors, subcontractors and materialmen who were paid with the prior HOME Grant Advance disbursement, if applicable. (6) a copy of the certification of the payroll records of the General Contractor and each subcontractor prepared in accordance with Labor Code Section 1776 provided to the Grantee by the General Contractor for the period of time covered by the current request for disbursement. Section 6.2. Grantee's Funds. Any money required in excess of the funds available to the Grantee under the HUD Transitional Housing Grant Agreement and this HOME Grant Agreement to fully pay all costs incurred in construction of the Improvements shall be provided by the Grantee as "Grantee Funds" and the Grantee shall provide the Agency with evidence reasonably satisfactory to the Agency that such Grantee Funds are available therefore, prior to the disbursement of any HOME Grant Advance hereunder. The amount of the Grantee's initial equity contribution to the Improvements as the Grantee Funds is set forth in the Improvement Construction Budget. In the event that the Agency determines that either that the amount of the Grantee's construction contract(s) for the Improvements is more than the amount authorized in the Improvement Construction Budget or that change orders to any of the Grantee's construction contracts, may result in an increase of the amount shown in the Improvement Construction Budget for the Improvements affected by such change order, the Grantee shall provide the Agency with evidence reasonably satisfactory to the Agency that such additional Grantee Funds are available to the Grantee within ten (10) calendar days after its receipt of the Agency's written demand therefore. Notwithstanding any provisions to the contrary contained herein, at no time shall the Agency be obligated to make any HOME Grant Advance hereunder if in the Agency's judgment, it appears that for any reason the remaining undisbursed Agency HOME Fund Grant Contribution will be insufficient to complete construction of the Improvements in accordance with the Plans and for all financing and development costs to be incurred by the Grantee until such time as the Grantee provides the Agency with satisfactory evidence that such additional money as, in the Agency's judgment, will be sufficient to complete and fully pay the costs of the Improvements is available to the Grantee and shall be advanced prior to the HOME Grant Advance funds unless the Agency in its discretion otherwise determines. The Grantee hereby acknowledges and confirms that the Grantee's Funds shall not constitute a trust fund and may be commingled with other monies of the Grantee. 48464224.2560.1 19 F Agendas\Agenda Attachments Agrmts-Amend 2005',05-12-19 Mary's Mercy HOME Agreement Final dot Section 6.3. Remittance of HOME Grant Advance. Upon its confirmation that the applicable conditions for a disbursement of a HOME Grant Advance have been satisfied by the Grantee, the Agency shall remit the particular installment of the HOME Grant Advance in accordance with the written instruction of the Grantee. The Agency may provide that all or a portion of a HOME Grant Advance may be jointly payable to the Grantee and the General Contractor, as appropriate. ARTICLE VII HOME GRANT ADVANCE FOR THE ACQUISITION OF THE TRANSITIONAL RE-ENTRY HOME Section 7.1. Acquisition of the Transitional Re-Entry Home. The Grantee shall within one hundred twenty (120) calendar days after the Effective Date of this HOME Grant Agreement identify a single family residential property and submit copies of a sale and purchase agreement with respect thereto. Such single family residential property may be the same property as identified in Section 1.1 hereof or such other substitute single family residential property approved in the manner as provided herein. Section 7.2. Procedures for Deposit of Funds. That portion of the funds identified in this HOME Grant Agreement to be used and applied for the purchase and acquisition of the Transitional Re-Entry Home shall be disbursed in the manner as set forth in Section 1.1 and 3.1(14) for disbursement to the Escrow Holder or Title Company upon written notification from such Escrow Holder or Title Company that the escrow for the acquisition of the Transitional Re-Entry Home by the Grantee is in a position to close such escrow within three (3) business days thereafter. Section 7.3. Substitution of Property. In the event the Grantee elects to not close the escrow for the purchase of the Transitional Re-Entry Home as initially identified in this HOME Grant Agreement, the Grantee shall have the right to submit in writing a request to the Interim Executive Director to approve such substitution of the actual property to constitute the Transitional Re-Entry Home. Upon the written approval of the Interim Executive Director to approve such substitution of the initially identified Transitional Re-Entry Home, the Grantee shall thereupon be required to cause the close of escrow to occur within thirty(30) calendar days thereafter. Section 7.4. Inspection of Transitional Re-Entry Home. The Agency shall have the right to inspect the single family residential dwelling unit identified by the Grantee as the proposed Transitional Re-Entry Home prior to the Grantee acquiring such single family residential dwelling unit in part with the proceeds of the Agency HOME Fund Grant Contribution pursuant to this HOME Grant Agreement. The Grantee shall give the Agency written notice of not less than twenty (20) calendar days prior to any anticipated close of escrow for the proposed Transitional Re-Entry Home to allow the Agency the opportunity to inspect said property for such number of on-site inspections as deemed necessary by the Agency to assure compliance with all health and safety requirements, consistency with the City of San Bernardino zoning and building codes and all other applicable City rules and regulations. Such inspection or inspections may be conducted by the staff of the Agency, consultants to the Agency or by City of San Bernardino employees at the option of the Agency. Section 7.5. Failure to Timely Acquire Transitional Re-Entry Home. In the event the Grantee has not acquired the Transitional Re-Entry Home by the close of escrow and the transfer of title thereto into the name of the Grantee on or before twelve (12) from and after the Effective Date, such amount of the HOME Grant Advance shall revert to the Agency for further use and disposition by 4946-4224-2560.1 20 P Agcndas\Agenda Anachments\Agrmts-Amend:005`05-12-19 Mary's Mercy HOME Agreement Final doc i the Agency without any further restrictions or limitations being imposed by this HOME Grant Agreement. The Grantee agrees that in the event such acquisition of the Transitional Re-Entry Home has not occurred by the date set forth above, the Grantee shall have no further claim or right to the use of such portion of the HOME Grant Advance in the amount of$200,000 at anytime thereafter. ARTICLE VIII OPERATION OF TRANSITIONAL HOUSING FACILITY ON THE PROJECT SITE AND THE TRANSITIONAL RE-ENTRY HOME Section 8.1. Operation of Transitional Housing Facility. Promptly following (i) the completion of the Improvements constituting the Project, or (ii) acquisition of the fee title to the Transitional Re-Entry Home, the Grantee shall commence the operation of the Project and the Transitional Re-Entry Home as transitional housing facilities on the Project Site and the Transitional Re-Entry Home for low income persons and families in accordance with the descriptions of both the Project and the Transitional Re-Entry Home. The Grantee shall operate such transitional housing facilities for the HOME Affordability Period as set forth in the Agency HOME Covenant and shall submit to the Agency on an annual basis the document attached to the Agency HOME Covenant as Exhibit "B" thereto and entitled and described herein as the "GENERAL FORM OF HOME PROGRAM RENTAL HOUSING CERTIFICATION/ANNUAL RECERTIFICATION OF TENANT ELIGIBILITY" (the "Annual Tenant Certification Form"). Such Annual Tenant Certification From shall be submitted on an annual basis commencing as of January 1, 2007, and annually thereafter as of January 1 of each succeeding calendar year with respect to both the Project and the Transitional Re- Entry Home to the extent either of both of said properties may then be owned and operated by the Grantee as of any required date of certification. Section 8.2. HOME Program Operating Covenants Relating to Transitional Housing Facilities Operated on the Project Site and the Transitional Re-Entry Home. (a) The Agency hereby authorizes the Grantee to establish reasonable residency durational limits for its tenants at the transitional housing facilities operated by the Grantee on the Project Site as part of the Project and for the Transitional Re-Entry Home. For the purposes hereof, the tenant residency durational limits approved by HUD under the HUD Transitional Housing Grant Agreement are hereby approved by the Agency. (b) The Grantee hereby further covenants and agrees with the Agency that upon the completion of the Improvements constituting the Project and the acquisition of the fee title to the Transitional Re-Entry Home, as applicable, shall be used and reserved for use in accordance with-the followings: (1) Notwithstanding any other provision of 24 CFR Part 92.252(a) to the contrary, the Grantee hereby covenants and agrees for itself and its successors and assigns that during the HOME Affordability Period the Grantee shall use the Project and the Project Site for the operation of at least a twenty (20) unit multifamily affordable transitional rental housing facility reserved for occupancy by low income persons and families. As used herein the words "Rental Unit" refers to each of(i) the twenty (20) affordable transitional rental housing facility dwelling units in the Project and (ii) the three (3) units available for rental in the Transitional Re-Entry Home. Furthermore, the Grantee similarly agrees to maintain the use and occupancy of the Transitional Re-Entry Home as an affordable transitional rental housing facility for the re-entry of tenants into the mainstream housing market, which shall be reserved for occupancy by low-income persons and families. 4846-4224-2560.1 21 P Agendas Agenda Anachnsenii;Agrrr0s-Amend_2005'05-12-19 Mary's Mere-HOME Agreensem Final doc (2) During the HOME Affordability Period, each Rental Unit shall meet at a minimum the HOME Program rental housing unit affordability requirements of 24 CFR Part 92.252(b), and the HOME Program rental housing unit affordability requirements applicable to each of the Rental Units shall remain in full force and effect with respect to the Project following the effective date of this Agreement during the HOME Affordability Period without regard to any subsequent transfer of ownership of the Project or the Project Site or of the Transitional Re-Entry Home. (3) In the event that the Grantee may charge rent to a household for the occupancy of any Rental Unit, the amount of rent payable by the household which occupies any such Rental Unit shall not exceed an amount per month for such Rental Unit as determined in accordance with 24 CFR Part 92.252(a) and (b), as applicable. (4) The Grantee hereby agrees to comply with the rental housing unit certification requirements of 24 CFR Part 92.203 during each year of the HOME Affordability Period for each of the Rental Units as provided in 24 CFR Part 92.252, including confirmation of compliance with the annual income certification requirements of 24 CFR Part 92.252(h) and shall provide such annual reports to the Agency. The Grantee may use the general form of the HOME Program Rental Housing Certification for such purposes in the form as attached to this HOME Grant Agreement as Exhibit `B" to Exhibit "C". (5) The Grantee shall comply with all applicable provisions of this HOME Grant Agreement and the provision of the Agency HOME Covenant, and all federal regulations that apply to the HOME Program and the Project during the HOME Affordability Period including: (1) the maintenance of the Project Site and the Transitional Re-Entry Home and each of the Rental Units in compliance with applicable Housing Quality Standards; (ii) the uniform administration requirements of 24 CFR Part 92.505; and (iii) rental agreements by and between the Grantee and each resident/household shall conform to the requirements of 24 CFR Part 92.253. (6) The provisions of this HOME Grant Agreement and in particular, the specific affordable rental housing regulatory covenants set forth in this Section 8.2, are declared by the parties to be covenants which touch and concern the Property and shall run with the land for the term of the Affordability Period as set forth in the Agency HOME Covenant. ARTICLE IX DEFAULT AND REMEDIES Section 9.1. Event of Default. The occurrence of any of the following events shall cJnstitute an Event of Default hereunder: (1) Any breach by the Grantee of any of the covenants and conditions of this HOME Grant Agreement or of the other HOME Grant Documents, which breach is not cured to the Agency's reasonable satisfaction on or before the expiration of any applicable cure period .et forth in the NOME Grant Documents. 4846-4224-2560.1 1 'A.genOas._genda AnKhnxnss Agmts-Amend.W5.05-12-19 F1asy s Macy HOME Agseemeni Final d« (2) Any representation, warranty or disclosure made to the Agency by the Grantee proves to be materially false or misleading, and whether or not such representation or disclosure appears in this HOME Grant Agreement. (3) Any breach by the Grantee of any of the covenants and conditions of the HUD Transitional Housing Grant Agreement which breach is not cured to the satisfaction of HUD on or before the expiration of any applicable cure period set forth in the HUD Transitional Housing Grant Agreement. (4) The filing of any claim or lien or stop notice relating to the Project Site or the Transitional Re-Entry Home or any part thereof provided, however, that no default shall exist hereunder as long as the Grantee has fully complied with Section 5.4 of this HOME Grant Agreement. (5) Any material deviation in the work of construction of the Improvements from the Plans without the approval of the Agency, or the appearance of defective workmanship or materials, which deviations or defects are not corrected or substantially corrected within ten (10)calendar days after receipt of written notice thereof from the Agency to the Grantee. (6) The work of construction of the Improvements is delayed or suspended for a period in excess of that permitted under Section 5.1(iv) hereof, or the work of construction does not proceed with due diligence and in accordance with the schedule of completion subject to Unavoidable Delay or is not completed by June 30, 2007, or such later date as the Agency may elect. (7) A stop notice is served on the Agency and is not released or an acceptable counterbond provided to the Agency within fifteen (15) calendar days after the Grantee's receipt of written notice from the Agency that such stop notice has been served on the Agency. (8) There occurs any event which in the Agency's judgment materially adversely affects (i) the ability of the Grantee to perform any of its obligations hereunder or under any of the HOME Grant Documents, including, without limitation, the occurrence of any event of dissolution or termination of the Grantee, or (ii) material adverse change in the business or financial condition of the Grantee. (9) The discovery of hazardous or toxic substances on, under or about the Project Site or-the Transitional Re-Entry Home in violation of applicable laws or ordinances. (10) The expenditure by the Grantee of any portion of the Agency HOME Fund Grant Contribution on any item, other than the items listed on the Improvement Construction Budget or the acquisition of the Transitional Re-Entry Home. (11) The Grantee's failure to timely comply with the conditions and obligations contained in Article V. (12) The Grantee sells, transfers, hypothecates, encumbers or assigns its interest in the Project Site or the Project or the Transitional Re-Entry Home, or any portion thereof, whether voluntarily or involuntarily, or by operation of law in violation of any other applicable restrictions. 23 48464224-2560.1 P Agendas Agenda AnachmemrAgmus•Amend 2005'05-12-19 Mary's Mercy HOME Agreenxm FFnal doc I, (13) The Grantee fails to promptly commence construction of the Improvements within the time periods authorized in Section 5.1(iv), or fails to satisfy all of the conditions of this HOME Grant Agreement with respect to disbursement of the Agency HOME Fund Grant Contribution for costs of such construction, on or before the expiration of ninety (90) calendar days after the date of this HOME Grant Agreement. (14) There occurs a default by the Grantee beyond any applicable cure period under the terms of the Grantee's construction agreement for the Improvements with the General Contractor. (15) There occurs a default under the Grantee's construction agreement by the General Contractor, which is not cured by the General Contractor within any applicable cure period thereunder. (16) Failure to complete construction of the Improvements in accordance with the Plans on or before March 1, 2006, subject to Unavoidable Delay. Section 9.2. Remedies. Upon the occurrence of an Event of Default, the Agency may, in addition to any other remedies which the Agency may have hereunder or under the HOME Grant Documents or by law, at its option and without prior demand or notice but subject to the senior creditor rights of HUD under the HUD Transitional Housing Grant Agreement, as applicable, take any or all of the following actions: (1) Immediately terminate any further advance of the Agency HOME Fund Grant Contribution hereunder. (2) Declare the Grant immediately due and payable and proceed to undertake all available remedies after a default as provided in this HOME Grant Agreement. (3) Enter upon the Project Site and complete construction of the Improvements in accordance with the Plans with such changes therein as the Agency may from time to time and in its judgment deem appropriate, all at the risk and expense of the Grantee. The Agency shall have the right at any time to discontinue any work commenced by it in respect to the Improvements or to change any course of action undertaken by it and not be bound by any limitations or requirements of time whether set forth herein or otherwise. The Agency shall have the right and power (but shall not be obligated) to assume any construction contract made by or on behalf of the Grantee in any way relating to the Improvements and to take over and use all or any part of the labor, materials, supplies and equipment contracted for by or on behalf of the Grantee whether or not previously incorporated into the Improvements, all in the discretion of the Agency. In connection with any work of construction undertaken by the Agency pursuant to the provisions of this Section 9.2(3), the Agency may: (i) engage builders, contractors, architects, engineers and others for the purpose of furnishing labor, materials and equipment in connection with the work of construction; (ii) pay, settle or compromise all bills or claims which may become liens against the Project Site or the Transitional Re-Entry Home or which have been or may be incurred in any manner in connection with completing construction of the Improvements or for the discharge of liens, encumbrances or defects in title of the Project Site or the Transitional Re-Entry Home; (iii) take such other action, including the employment of watchmen to protect the Improvements, or refrain from taking action under this HOME Grant Agreement as the Agency may in its discretion determine from time to time. The 24 48464224-2560.1 P Agendas Agenda AlltachmentslAgrmis-Amend 2005,05-12-19 Mary's Mac)HOME Agreement Final doc Grantee shall be liable to the Agency for all sums paid or incurred for completing construction of the Improvements, whether the same shall be paid or incurred pursuant to the provisions of this Section 9.2(3) or otherwise, and all payments made or liabilities incurred by the Agency hereunder of any kind whatsoever shall be paid by the Grantee to the Agency upon demand and all of the foregoing shall be deemed and shall constitute advances under this HOME Grant Agreement and be secured by the HOME Grant Documents. For the purpose of carrying out the provisions and exercising the rights, powers and privileges granted by this Section 9.2(3) hereof, the Grantee hereby unconditionally and irrevocably constitutes and appoints the Agency its true and lawful attorney-in-fact to enter into such contracts, perform such acts and incur such liabilities as are referred to in this Section 9.2(3) in the name and on behalf of the Grantee. This power of attorney is coupled with an interest. (4) Where substantial deviations from the Plans appear which have not been approved as set forth herein, or defective or unworkmanlike labor or materials are being used in the construction of the Improvements, the Agency shall have the right immediately to order stoppage of the construction and demand that such condition(s) be corrected. After issuance of such an order in writing, no further work shall be done on the Improvements where there is a substantial deviation from the Plans which has not been approved as set forth herein or where there is defective or unworkmanlike labor or materials, without the prior written consent of the Agency unless and until said condition has been fully corrected. (5) Foreclose on any security for the Agency HOME Fund Grant Contribution without waiving its rights to proceed against other security or other entities or individuals directly or indirectly responsible for repayment of the Agency HOME Fund Grant Contribution, or waive any and all security for the Agency HOME Fund Grant Contribution as the Agency may in its discretion so determine, and pursue any such other remedy or remedies as the Agency may so determine to be in its best interest. All remedies of the Agency provided for herein and in any other HOME Grant Document are cumulative and shall be in addition to all other rights and remedies provided by law. The exercise of any right or remedy by the Agency hereunder shall not in any way constitute a cure or waiver of default hereunder or under any other HOME Grant Document or invalidate any act done pursuant to any notice of default, or prejudice the Agency in the exercise of any of its rights hereunder or under any other HOME Grant Documents unless, in the exercise of said rights, the Agency realizes all amounts owed to it under such HOME Grant Documents. ARTICLE X MISCELLANEOUS Section 10.1. No Waiver. No waiver of any default or breach by the Grantee hereunder shall be implied from any failure by the Agency to take action on account of such default if such default persists or is repeated, or from the Agency's finding of one or more advances of funds during a period of time when the Grantee is in default or breach of its obligations hereunder, and no express waiver shall affect any default other than the default specified in the waiver and shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by the Agency to, or of, any act by the Grantee requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to, or of, any subsequent similar act. 4846-4224-2560.1 25 P'Agendas Agenda Attxhments Agrmts-Amend 2005N05.12-19 Mary's Mercy HOME Agreement Final doc Section 10.2. Successors and Assigns. This HOME Grant Agreement is made and entered into for the sole protection and benefit of the Agency and the Grantee, their successors and assigns, and no other person or persons shall have any right of action hereunder. The terms hereof shall inure to the benefit of the successors and assigns of the parties hereto; provided, however, that the Grantee's interest hereunder cannot be assigned or otherwise transferred without the prior consent of the Agency except as expressly permitted herein. Section 10.3. Notices. All notices hereunder shall be in writing and sent by personal delivery, nationally recognized overnight delivery service, certified or registered mail, return receipt requested, or by facsimile transmission with a "hard" copy delivered within the next two (2) business days addressed as follows: If to the Grantee: Mary's Mercy Center, Inc. P.O. Box 7563 San Bernardino, California 92411 If to the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 (909) 663-1044 FAX: (909) 888-9413 Notices shall be deemed given upon receipt at the address set forth above. Notice of any changes of address or of the person to whom notices are to be sent shall be given in the manner set forth in this Section 10.3. Section 10.4. Authority to File Notices. After an Event of Default, the Grantee irrevocably appoints, designates and authorizes the Agency as its agent (said agency being coupled with an interest) to file for record any Notices of Completion, Cessation of Labor, or file or send to any third party any other notice or documents or take any other action that the Agency deems necessary or desirable to protect its interest hereunder, or under the HOME Grant Documents, and will upon request by the Agency, execute such additional documents as the Agency may require to further evidence the grant of the aforesaid right to the Agency. Section 10.5. Time. Time is of the essence hereof. Section 10.6. Si ns. The Grantee shall place signs on the Project Site evidencing that HOME Program funds are being provided by the Agency in support of the Project; provided, however, that the Agency shall have first approved the text set forth on such signs. Section 10.7. Attorney Fees. In the event that either party brings an action to enforce any condition or covenant, representation or warranty arising out of this HOME Grant Agreement, the prevailing party in such action shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. For the purposes of this Section 10.7, the words "reasonable attorneys' fees" in the case of the Agency include the salaries, costs, and overhead of lawyers employed in the Office of the City Attorney of the City of San Bernardino. 48464224-2560.1 26 P Agendas Agenda Anachments\Agrmts-Amend 2005\05-12-19 Mary's Mercy HOME Agreement Final dec Section 10.8. HUD Provisions. Notwithstanding anything herein to the contrary, in the event that HUD may take title to the Project Site through foreclosure, deed-in-lieu of foreclosure, or otherwise under the HUD Transitional Housing Grant Agreement, all covenants, conditions and restrictions set forth in this HOME Grant Agreement shall upon the written request of HUD addressed to the Agency cease and terminate and be of no further force or effect. Notwithstanding any statement in this HOME Grant Agreement to the contrary, no provision of this HOME Grant Agreement shall be effective without the prior written approval of HUD, if such prior approval of HUD is required under the terms of the HUD Transitional Housing Grant Agreement. The provisions of this Section 10.8 shall not be applicable to the acquisition of the Transitional Re-Entry Home with the proceeds of the Agency HOME Fund Grant Contribution pursuant to this HOME Grant Agreement. Section 10.9. Amendments, Etc. No amendment, modification, termination or waiver of any provision of this HOME Grant Agreement or of any of the HOME Grant Documents, nor consent to any departure by Grantee therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agency, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Section 10.10. Headings. The article and section headings set forth herein are for reference only and in no way define, limit, extend or interpret the scope of this HOME Grant Agreement or of any particular article or section.. Section 10.11. Number and Gender. When the context in which the words are used in this HOME Grant Agreement indicate that such is the intent, words in the singular number shall include the plural and vice-versa. References to any one gender shall also include the other gender if applicable under the circumstances. Section 10.12. Validity. In the event that any provision of this HOME Grant Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this HOME Grant Agreement. Section 10.13. Governing Law. This HOME Grant Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 10.14. Survival of Warranties. All agreements, representations and warranties made herein shall survive the execution and delivery of this HOME Grant Agreement, of the HOME Grant Documents, and the making of the Grant hereunder and continue in full force and effect until the obligations of the Grantee hereunder have been fully satisfied. Section 10.15. Incorporation of Exhibits. All Exhibits referenced herein and attached hereto are incorporated into this HOME Grant Agreement by reference as if fully set forth herein. Section 10.16. Venue and Forum. In the event that any legal action should be filed by either party against the other, the venue and forum for such action shall be the Superior Court of the State of California for the County of San Bernardino, San Bernardino District. Each of the persons and entities who are shareholders or partners of the Grantee also agree to said venue and forum and further agree that, if they are not residents of California at the time of such actions, service of process may be made upon them by delivery via United States registered or certified mail. 27 48464224-2560.1 P.Agendas\Agenda Attuhments`,ApmIs-Amend 2005.05-12-19 Mary's M.,y HOME Agme—nt F-1 d., Section 10.17. Legal Relationships. The relationship between the Grantee and the Agency is that of the Agency and Grantee in their respective separate capacities, and no partnership, joint venture, or other similar relationship shall be inferred from this HOME Grant Agreement. The Grantee shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of the Agency. The Grantee is not executing this HOME Grant Agreement as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this HOME Grant Agreement. Section 10.19. Signatory Authority. Each individual executing this HOME Grant Agreement on behalf of the Grantee represents and warrants that he/she is duly authorized to execute and deliver this HOME Grant Agreement on behalf of the Grantee and that this HOME Grant Agreement is binding on the Grantee in accordance with its terms. The Grantee shall, prior to the initial HOME Grant Advance under this HOME Grant Agreement, deliver to the Agency a copy of a resolution of the Grantee's governing body authorizing the execution of this HOME Grant Agreement. IN WITNESS WHEREOF, the Grantee and the Agency have executed this HOME Grant Agreement as of the date first written above by and through their duly authorized representatives. GRANTEE Mary's Mercy Center, Inc., a California non-profit public benefit corporation Date: By: By: AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Interim Executive Director 7 Ppr r ved As To Form: I W/I jz-)/Y,/), Z--? I Agency C nsel 28 48461224-2560.1 P WgmdasVAgenda Anachrnans'Agrmts-Amend 2005`05-12-19.Marys}dcrq HOME Agre mrnt final dm Section 10.17. Legal Relationships. The relationship between the Grantee and the Agency is that of the Agency and Grantee in their respective separate capacities, and no partnership, joint venture, or other similar relationship shall be inferred from this HOME Grant Agreement. The Grantee shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of the Agency. The Grantee is not executing this HOME Grant Agreement as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this HOME Grant Agreement. Section 10.19. Signatory Authority. Each individual executing this HOME Grant Agreement on behalf of the Grantee represents and warrants that he/she is duly authorized to execute and deliver this HOME Grant Agreement on behalf of the Grantee and that this HOME Grant Agreement is binding on the Grantee in accordance with its terms. The Grantee shall, prior to the initial HOME Grant Advance under this HOME Grant Agreement, deliver to the Agency a copy of a resolution of the Grantee's governing body authorizing the execution of this HOME Grant Agreement. IN WITNESS WHEREOF, the Grantee and the Agency have executed this HOME Grant Agreement as of the date first written above by and through their duly authorized representatives. GRANTEE Mary's Mercy Center, Inc., a California non-profit public benefit corporation yl Date: By: By: AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Interim Executive Director Approved As To Form: Agency Co sel 48464224-2560.1 28 P,Agendws Agenda Attachments\Agmits-Amend 2005\05-12-19 Mary's Mercy HOME Agreement Final doc Section 10.17. Legal Relationships. The relationship between the Grantee and the Agency is that of the Agency and Grantee in their respective separate capacities, and no partnership, joint venture, or other similar relationship shall be inferred from this HOME Grant Agreement. The Grantee shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of the Agency. The Grantee is not executing this HOME Grant Agreement as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this HOME Grant Agreement. Section 10.19. Si2natory Authority. Each individual executing this HOME Grant Agreement on behalf of the Grantee represents and warrants that he/she is duly authorized to execute and deliver this HOME Grant Agreement on behalf of the Grantee and that this HOME Grant Agreement is binding on the Grantee in accordance with its terms. The Grantee shall, prior to the initial HOME Grant Advance under this HOME Grant Agreement, deliver to the Agency a copy of a resolution of the Grantee's governing body authorizing the execution of this HOME Grant Agreement. IN WITNESS WHEREOF, the Grantee and the Agency have executed this HOME Grant Agreement as of the date first written above by and through their duly authorized representatives. GRANTEE Mary's Mercy Center, Inc., a California non-profit public benefit corporation Date: By: By: AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Interim Executive Director Approved As To Form: I 11 Agency C fUnsel 48464224-2560.1 28 P Agendas'.Agada AnxhmenlsNgrnas-Amend:005,05-12-19 Mary's Mnry HOME Agreement Final doc EXHIBIT "A" Project Site Legal Description and Property Address Lots 26, 27, 289 51 and 52 of Tract 3137, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in Book 42 of maps, page 86 records of said County. SEC Western and Victoria Streets San Bernardino, California 92411 Legal Description of Transitional Re-Entry Home Lot 30 of Tract 3137, in the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded in Book 42 of maps, page 86 records of said County. v.46-4224-2500.1 29 ' acendw\Agenda Anachments'Agrmts-Arnend 1005,05.12-19 Mary s Mercy HOME Agreement Final doc j EXHIBIT "B" AWN 3 Improvement Construction Line Item Budget I. Base Construction Cost $1,672,000 (includes professional fees) 2. Fire Sprinkler Costs $45,000 3. Water Service in Street $85,000 4. Street Repair Work $120,000 5. Fire Hydrant $15,000 6. Street Lights $20,000 7. Parking Lot Lights and Perimeter Wall $20,000 8. City Fees $200,000 9. Increase for time to commence $250,000 Estimated Grand Total: $2,427,000 a i 30 4846-4224-2560.1 _cnda;A.enda.ava:hments�Agrmu-.Amend 2uu5 05.12-19\larv' \term HO\1E Agre mein hnal.doc i EXHIBIT "C" l Agency HOME Covenant including Exhibit "B" thereto entitled "General Form of HOME Program Rental Housing Income Certification" i a o' 1 i 1 I 9 3 .J { '1 6 48464224-2560.1 31 `s P AgendmAgenda Attachments;Agrmis-Amend 2005W5-12-19 Marys Macy HOME Agreement Final doc RECORDING REQUESTED BY AND ) WHEN RECORDED MAIL TO: ) Redevelopment Agency ) of the City of San Bernardino ) 201 North "E" Street, Suite 301 ) San Bernardino, California 92401 ) Attn.: Interim Executive Director ) (Space above line reserved for use by Recorder) Recording Fee Exempt Pursuant to Government Code Section 6103 2005 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO HOME PROGRAM REGULATORY AGREEMENT AND PROJECT SITE AND TRANSITIONAL RE-ENTRY HOME USE COVENANT (San Bernardino Grantee Assessor Parcel No. ) -- VERONICA'S HOME OF MERCY PROJECT OF MARY'S MERCY CENTER, INC. -- THIS 2005 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO HOME PROGRAM REGULATORY AGREEMENT AND USE COVENANT (the "Agency HOME Covenant") is dated as of 2005, by and between Mary's Mercy Center, Inc., a California non-profit public benefit corporation (the "Grantee") and the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency") as the affordable rental housing administration agency of the City of San Bernardino (the "City"), with respect to the following facts set forth in the RECITALS of this Agency HOME Covenant: -- RECITALS -- 1. This Agency HOME Covenant affects the Project Site located at , San Bernardino, California (the "Project Site") and that certain house owned by the Grantee located at , San Bernardino, California (the "Transitional Re-Entry House"). The Project Site and the Transitional Re-Entry Home shall be used and reserved for use and occupancy as affordable multifamily rental, reserved for occupancy by persons or households of Very Low Income as set forth herein. A legal description and street address of the Project Site and the Transitional Re-Entry Home are attached herein as Exhibit "A". 2. The Grantee is the owner of the Project Site and the Transitional Re-Entry Home. 3. The Grantee obtained a substantial portion of the proceeds for its construction and installation on the Project Site of an affordable rental housing facility from the Agency pursuant to the terms and conditions of an agreement entitled "HOME Grant Agreement", dated as of December 19, 2005 (the "HOME Grant Agreement") by and between the Grantee and the Agency. 4. The Grantee and the Agency have caused this Agency HOME Covenant to be recorded as a covenant which affects the Project Site and the Transitional Re-Entry Home and which runs with the land for the term set forth herein in order to implement certain provisions of the "HOME Program" 48464224-2560.1 32 ?'Agenda,Agenda Anachrnents Agrmts-Amend 2005105-12-19 Mary's Mercy HOME Agreement Final doc with respect to the "Project" and the "Transitional Re-Entry Home", as these terms are defined in the HOME Grant Agreement, and the implementing regulations of the United States Secretary of the Department of Housing and Urban Development (herein "HUD"). Attached hereto as Exhibit "B" is the document entitled "General Form of HOME Program Rental Housing Income Certification" which shall be used by the Grantee in the manner required in Section 8.1 of the HOME Grant Agreement for the certification of the tenants as to eligibility for residency in the Project and the Transitional Re- Entry Home. MARY'S MERCY CENTER, INC. AND THE AGENCY FOR THEMSELVES, AND THEIR SUCCESSORS AND ASSIGNS, HEREBY COVENANT AND AGREE AS FOLLOWS: Section 1. Incorporation by Reference of HOME Grant Agreement. The provisions of the HOME Grant Agreement are hereby incorporated into this Agency HOME Covenant by this reference. A true and correct copy of the HOME Grant Agreement is on file with the Agency Secretary of the Redevelopment Agency of the City of San Bernardino as a public record, and interested persons may inspect the HOME Grant Agreement during regular business hours of the Agency Secretary. Unless the context of the usage of a particular defined term as used in this Agency HOME Covenant may specifically require, the meaning of all defined terms as used in this Agency HOME Covenant shall have the same meaning as set forth in the HOME Grant Agreement. Section 2. Term of Agency HOME Covenant. Unless sooner terminated as set forth in Section 7, below, this Agency HOME Covenant shall have a term, which ends on the earlier of the following dates to occur: (i) fifty-five (55) years following the date of recordation of this Agency HOME Covenant separately as to the Project and as to the Transitional Re-Entry Home; or (ii) on the fifty-fifth (55`h) anniversary following (i) the recordation of a Notice of Completion for the work of improvements on the Improvements as set forth in the HOME Grant Agreement with respect to the Project, and (ii) the acquisition of the fee title to the Transitional Re-Entry Home. The term of this Agency HOME Covenant is also referred to in both the HOME Grant Agreement and herein as the "HOME Affordability Period". Section 3. Agenev HOME Covenant; Use-of the Proiect Site and Transitional Re- Entry Home. During the term of this Agency HOME Covenant (e.g.: the HOME Affordability Period), the Project Site and the Transitional Re-Entry Home shall be used or reserved by use and occupancy by Very Low Income Households in compliance with the HOME Grant Agreement. The Grantee shall complete the form attached hereto as Exhibit "B" and designated as the "General Form of HOME Program Rental Housing Income Certification" and obtain all required information as requested therein by the dates and times required herein and in the HOME Grant Agreement and submit same to the Agency in a timely manner. Said form shall be submitted on an annual basis commencing as of January 1, 2008, and annually thereafter as of January 1 of each succeeding calendar year with respect to both the Project and the Transitional Re-Entry Home to the extent either of both of said properties may then be owned and operated by the Grantee as of any required date of certification and subject to the provisions of this Agency HOME Covenant. 33 4846-4224-2560.1 P UAgendasWgenda Anachmcnts''Agrnns-Amend 2005'05-12-19 Mary's Mercy HOME Agreement Final doc Section 4. Agency HOME Covenant--Business and Compliance Records. (a) During the HOME Affordability Period, certain business records must be established and maintained in accordance with the provisions of 24 CFR Part 92.500 and 24 CFR Part 92.252 which relate to the use of the Project Site and the Transitional Re-Entry Home for the affordable rental housing facility use purposes authorized under Section 3 of this Agency HOME Covenant and the HOME Grant Agreement. The Grantee shall be responsible for establishing and maintaining such records and the Grantee shall provide the Agency with copies of such records within thirty (30) calendar days after written request by the Agency. (b) The Grantee and all persons in possession of the Project Site and the Transitional Re- Entry Home shall permit the Agency to conduct inspections of the Project Site and the Transitional Re- Entry Home from time-to-time for purposes of verifying compliance with this Agency HOME Covenant upon thirty(30) calendar days prior written notice to the Grantee. Section 5. RESERVED—NO TEXT Section 6. Early Termination of Agency HOME Covenant. (a) This Agency HOME Covenant shall remain in effect during the HOME Affordability Period unless sooner terminated in the sole and absolute discretion of the Grantee as set forth in this Section 6. (b) In accordance with 24 CFR Part 92, the Grantee may determine that the continued use of the Project Site and the Transitional Re-Entry Home for the affordable rental housing purposes described in Section 3 of this Agency HOME Covenant, is no longer necessary or appropriate. In such an event, the Grantee shall give the Agency at least ninety(90) calendar days prior written notice of its intention to consider such a determination. Such written notice of the Grantee shall include a reference to Section 6(b) of this Agency HOME Covenant. (c) In the event that the Grantee may determine to use the Project Site or the Transitional Re-Entry Home for a purpose other than as described under Section 3 of this Agency HOME Covenant, the Grantee shall reimburse the Agency for the account of the City a sum equal to the amount in cash derived by the application of the following formula:' (1) Amount payable to the Agency equals the sum of"A" plus interest calculated at -the rate of six (6%) per annum, covering the date when the Notice of Completion is recorded through the date on which the Grantee remits the sum indicated by this formula to the Agency.' (d) The Grantee shall pay to the Agency the sum indicated in Section 6(c)(i) within ninety (90) calendar days following the date on which the Grantee may complete the actions necessary to terminate the affordable rental housing facility use restriction affecting the Project Site and the Transitional Re-Entry Home as described in Section 3. Concurrently, upon receipt of such sum, the Agency shall deliver to the Grantee a written acknowledgment of cancellation and discharge of this Agency HOME Covenant in recordable form acceptable to the Grantee, which has been duly executed by authorized officers of the Agency. ' Notes for Section 6(c) above. "A"= Agency HOME Program funds disbursed for the Project. 34 4846-4224-2560.1 P'.^.gendas\Agenda AtuchmemsWgrnrs-Amend 2005'05-12-19 Mary's Mercy HOME Agreemeni Final doc i I • Section 7. Covenant Against Unlawful Discrimination. No person shall, on the grounds of race, sex, creed, color, religion, or national origin, be excluded from participating in or be refused the benefits of or otherwise subjected to discrimination in connection with the use of the Project Site and the Transitional Re-Entry Home. Section 8. Maintenance Condition of the Project Site and Transitional Re-Entry Home. The Grantee for itself, its successors and assigns hereby covenants and agrees that the areas of the Project Site and the Transitional Re-Entry Home, which are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the HOME Affordability Period of this Agency HOME Covenant there is an occurrence of an adverse condition on any area of the Project Site or the Transitional Re- Entry Home which is subject to public view in contravention of the general maintenance standard described above (a "Maintenance Deficiency"), then the Agency shall notify the Grantee in writing of the Maintenance Deficiency and give the Grantee sixty (60) calendar days from and after the receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Grantee fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereof to the Grantee ten (10) calendar days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Grantee has failed to comply with the provision of this Section 8. If upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, described above, thereafter the Agency shall have the right to enter the Project Site or the Transitional Re-Entry Home, as applicable, and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Project Site or the Transitional Re-Entry Home authorized by this Section 8 shall be paid to the Agency within thirty (30) calendar days after written demand for payment by the Agency to the Grantee. Section 9. Notice, Defaults and Breach - General. Failure or delay by either party to perform any material teen or provision of this Agency HOME Covenant or the HOME Grant Agreement shall constitute a default hereunder; provided however, that if the party who is otherwise claimed to be in default by the other party commences to cure, correct or remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such party shall not be deemed to be in default hereunder. The party, which may claim that a default has occurred shall give written notice of default to the party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. Any failure to delay by a party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. Except with respect to rights and remedies expressly declared to be exclusive in this Agency HOME Covenant, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 4846-4224-2560.1 35 . P Agendas Agenda Anachmeres�Agrmts-Amend 2005\05-12-19 Marys Mercy HOME Agreement fmal do In the event that a default of either party may remain uncured for more than thirty (30) calendar days following written notice, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings. For the purposes of giving notice under any provision of this Agency HOME Covenant, the addresses to which such notice shall be transmitted are as follows: For Grantee: For Agency: Redevelopment Agency of the City of San Bernardino Attn.: Attn.: Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 Section 10. Agency HOME Covenant Runs With the Land. The provisions of this Agency HOME Covenant shall be covenants, which run with the land and the Project Site and the Transitional Re-Entry Home for the HOME Affordability Period. This Agency HOME Covenant is expressly declared by the parties to be for the benefit of the Project Site and the Transitional Re-Entry Home and the redevelopment project area of the Mt. Vernon Redevelopment Project. IN WITNESS HEREOF, the parties authorized officers of the parties have caused this Agency HOME Covenant to be executed on the dates indicated below. GRANTEE Mary's Mercy Center, Inc., a California non-profit public benefit corporation Date: By: [NOTARY JURAT ATTACHED] AGENCY Redevelopment Agency of the City of San Bernardino a public body, corporate and politic Date: By: Chair of the Community Development Commission By: Maggie Pacheco, Interim Executive Director Approved As to Form: Agency Counsel [NOTARY JURAT ATTACHED] 48464224-2560.1 36 P AgendwAgenda Attxhm nts\Agrms-Ar nd 2 0051•05-I.-I9 Mary's Mmy HOME Agrecment Final do EXHIBIT "B" to the Agency HOME Covenant General Form of HOME Program Rental Housing Income Certification 4846-4224-2560.1 37 P Agend.s Agcnda Anachmems',Agrmis-Amend 2005\05-12A9 Mary's Mercy HOME Agreemem Fnal do GENERAL FORM HOME PROGRAM RENTAL HOUSING CERTIFICATION/ANNUAL RECERTIFICATION OF TENANT ELIGIBILITY Rental Unit: Bedroom Size: Street Address: Unit No.: City: Zip Code: I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above apartment development for which application is made, all of whom are listed below: HOUSEHOLD Age Ethnicity Social Security# Place of Employment Name of Members Relationship Date of Occupancy of Rental Unit by Tenant: Date of Lease Signed for Rental Unit by Tenant: Certification Date (Earlier of Date of Occupancy or Date Lease Signed): Anticipated Annual Income The anticipated total annual income from all sources of each person listed in above for the twelve month period beginning on the Certification Date listed above, including income described in(a) below, but excluding all income described in (b) below, is S (a) The amount set forth above includes all of the following income (unless such income is described in(b) below): (i) all wages and salaries, overtime pay, commissions, fees, tips and bonuses before payroll deductions; (ii) net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (iii) interest and dividends (including income from assets as set forth in item (b)below); (iv) full amount of periodic payments received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic reports; (v) payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation, and severance pay; 4846-4224-2560.1 38 P Agmdas.Agmda Attachmcros Agrmts-Amrnd 200905-12-19 Map's Mac)HOME Agreemrnt Final do (vi) the maximum amount of public assistance available to the above persons; (vii) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (viii) 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 (ix) any earned income tax credit to the extent it exceeds income tax liability. (b) The following income is excluded from the amount set forth above: (1) casual, sporadic, or irregular gifts; (ii) amounts that are specifically for or in reimbursement of medical expenses; (iii) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; (iv) amounts of educational scholarships paid directly to student or educational institution, and amounts paid by the goverrunent to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purposes; (v) hazardous duty pay to a member of the household in the armed forces who is away from home and exposed to hostile fire; (vi) relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; (vii) income from employment of children (including foster children) under the age of 18 years, (viii) foster child care payments; (ix) the value of coupon allotments under the Food Stamp Act of 1977; (x) payments to volunteers under the Domestic Volunteer Service Act of 1973; (xi) payments received under the Alaska Native Claims Settlement Act; (xii) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (xiii) payments on allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; and Y>'vl payments r ece ived from the Job Partnership Training Act. 39 4846-4224-2560.1 gmda Agmda Attachm is�Agrmts-Amrnd 2001 ,M-1:-IV Mary's Macy HOME Agreement hmal d� Net Family Assets E If any of the persons described in Members of the Household (or any person whose income or contributions were included in Anticipated Annual Income has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interest in Indian trust lands), provide: (a) the total value of all such assets owned by all such persons: $ , and (b) the amount of income expected to be derived from such assets in the 12-month period commencing this date: $ Students (a) Will all of the persons listed in Members of Household above be or have they been fulltime students during five calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students? ❑ Yes ❑ No (b) If yes, is any such person (other than non-resident aliens) married and eligible to file a joint federal income tax return? ❑ Yes ❑ No The above information is full, true, and complete to the best of my knowledge. I have no objections to inquiries being made for the purpose of verifying the statements made herein. F I acknowledge that all of the above information is relevant to the status under federal law of the HOME funds used in the acquisition and rehabilitation of the Project for which application is being made. I consent to the disclosure of such information to the Economic Development Agency of the City of San Bernardino, County, State and Federal Department of Housing and Urban Development or agent acting on their behalf and any authorized agent of the Treasury Department or Internal Revenue Service. Date: Signature: (Signature Must be Notarized) 4846-4224-2560.1 40 P Agendas'Agenda Attachments Agrmts-Amend 2005\05-12.19 Mary's Macy HOME Agreement Final doc FOR COMPLETION BY ONLY: A. Calculation of Eligible Income (1) Enter amount entered for entire household in Anticipated Annual Income: $ (2) If the amount entered in (a) of Net Family Assets above is greater than $5,000, enter: (1) the product of the amount entered in (a) of Net Family Assets above multiplied by the current passbook savings rate as determined by HUD $ (ii) the amount entered in (b) of Net Family Assets above: $ (iii) enter the greater of line (i) or line (ii): $ (3) TOTAL ELIGIBLE INCOME (Line A (1) plus line A (2) (iii)] $ B. Enter Number of family members listed in item I above: C. The amount entered in A (3) (Total Eligible Income) is $ ❑ Less than $ of median income for the area in which the Project is located, which is the maximum income at which a household may be determined to be a Qualifying Tenant as that term is defined in the Grant Agreement and Declaration of Restrictive covenants (the "Regulatory Agreement") ('Qualifying Tenant'). ❑ More than the above-mentioned amount. D. Number of apartment units assigned: E. Monthly Rent: $ F. This apartment unit (was/was not) last occupied for a period of thirty one (3 1) consecutive calendar days by a person or persons whose adjusted income, as certified in the above manner, was equal to or less than the amount at which a person would have qualified as a Qualifying Tenant under the terms of the Regulatory Agreement. G. Applicant: ❑ Qualifies as a Qualifying Tenant, household income is at or below 50% of the area median income ❑ Qualifies as a Qualifying Tenant, household income is at or below 60% of the area median income ❑ Qualifies as a Qualifying Tenant, household income is at or below 80% of the area median income ❑ Does Not Qualify as a Qualifying Tenant 4846-4224-2560.1 41 P`Ag=das'Agenda Attachments',Agrmts-Amend 2005'45-12-19 Marys Mercy HOME Agreement Final d« ECONOMIC DEVELOPMENT AGENCY ORIGINAL OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco SUBJECT: Implementation of a Homebuyer Assistance Interim Executive Director Program - California State University San Bernardino DATE: December 12,2005 Synopsis of Previous Commission/Council/Committee Action(s): On November 21, 2005, at the meeting of the Community Development Commission, the Homebuyer Assistance Program for California State University San Bernardino failed by a vote of 3-3. On November 8,2005,Redevelopment Committee Chairperson,Estrada forwarded this item to the Community Development Commission without a recommendation due to a lack of a quorum. - ------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) Motion: That the Community Development Commission a pp rove the Implementation of the Homebuyer Assistance Program for California State University San Bernardino -------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- Contact Person(s): Maggie Pacheco Phone: (909)663-1044 Project Area(s): City Wide Ward(s): 1-7 Supporting Data Attached: R1 Staff Report❑Resolution(s)❑Agreement(s)/Contract(s)❑Map(s) ❑Letters 1,000,000 Annually for FUNDING REQUIREMENTS: Amoun $ 2 Years Source: Low/Mod Funds Budget Authority: See Fiscal Impact i SIGNATURE: p � Maggie Pacheco,Interim Executive Director ` Barbara Lindseth,Director Admin. Services i S Commission/Council Notes: ------------------------—---—----------------_------------------ - -- —---------------------------------------------------------------------------------------- - P:Wgendas\Comm Dev Commission\CDC 2005\05-12-19 CSUSB HAP 2.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 Agenda Item Number: OJ .*wrw.rwriwroeYrarrrm ECONOMIC DEVELOPMENT AGENCY STAFF REPORT IMPLEMENTATION OF A HOMEBUYER ASSISTANCE PROGRAM- CALIFORNIA STATE UNIVERSITY SAN BERNARDINO Background On November 21, 2005, at the meeting of the Community Development Commission, the Homebuyer Assistance Program for California State University San Bernardino failed by a vote of 3-3. This item is being placed on the agenda for recommendation at the request of Councilperson Longville. Current Issue• On October 3, 2005, City and Agency staff met with Dr. Kamig and other faculty members from California State University San Bernardino (CSUSB) to discuss developing a program specifically geared to assist entry-level professors with a purchase of a home in the City with assistance from both the Agency and CSUSB. With the median price of a home in the Riverside/San Bernardino County averaging $350,000, an entry-level faculty member will experience difficulty in purchasing a home. In CSUSB's efforts to recruit educators, the majority coming from outside of California, the high price of housing is a major obstacle in CSUSB's recruitment in highly educated professionals to its University and its relocation process. CSUSB is currently recruiting educators to fill 40 positions at the University. The positions will be entry-level at the following beginning salaries: POSITION BEGINNING SALARY Assistant Professor $53,000 Associate Professor $66,000 Full Professor $82,500 Consequently, the homebuyer assistance program outlined below was jointly developed by Agency and CSUSB Staff. PROGRAM OUTLINE: • Educator must be income qualified and meet the income limits as per State Law. The annual income of a family/household cannot exceed 120% of area median income as shown below. Family Size *Maximum Annual Family Size *Maximum Annual Income Income 1 $46,750 5 $72,150 2 $53,450 6 $77,500 3 $60,100 7 $82,850 4 $66,800 8 $88,200 t California Association of Realtors,September 2005 *These incomes are_subject to annual_revisions,_adjusted-for-family-size------------------------------------------------------------------------------------------------------ PADevelopment Dept\t isa\05-12-19 CSUSB HAP 2.doc COMMISSION MEETING AGENDA Meeting Date: 11/21/2ff005 Agenda Item Number: !�-vJ Economic Development Agency Staff Report Homebuyer Assistance Program—CSUSB Page 2 • Program will be open to all new educators and faculty currently employed at CSUSB who do not own a home, or who are renting, and purchase a home in the City. • Homebuyer must contribute $1,000 out-of-pocket towards down payment, plus closing costs and must attend an approved 16-hour Homebuyer Education Program. • The loan amount by the Agency to the homebuyer will be up to 20% of the purchase price of the home, but not to exceed $70,000, accruing 3% interest a year. (3.5% of the 20% loan assistance can be applied towards closing costs. The homebuyer will more than likely pay average closing costs of about $7,000 depending on the loan amount). (Funds will be reserved for an eligible homebuyer for up to 2 years). • The maximum purchase price is based on the Affordable Housing Cost (AHC), as set forth in Health & Safety Code Section 50052.5(b)(4), and the educator's ability to pay. For example: A family of four with a gross income of$66,800 may not expend more than $1,948.33 a month for total housing expenses, including principle & interest, insurance, property taxes and utilities (translates to a maximum purchase price of approximately $350,000, assuming a down payment of$70,000). • The loan assistance, plus interest, will be forgiven after ten (10) years with a ten percent (10%) forgiveness credit factor given for each year the educator remains in the home. [Should an educator not be retained by CSUSB during the 10-year loan term, and must sell the home in year 5, the educator would receive a 50% credit deduction from the original down payment and interest. Educators who are not retained by CSUSB, but remain in the home for the duration of the loan term will not be required to repay the loan before the 10-year term.] • During the ten (10) year loan term, conditions that will cause loan to become due and payable to the Agency(except for the forgiveness credit factor provisions above) are: (1) When home is sold to an non-eligible successor-in-interest; (2) When home is refinanced to take cash out or consolidate debt; and (3) When home ceases to be educator's primary residence. The Loan can be assumed by an income-qualified successor-in-interest who meets program criteria. The Covenant also requires property to remain affordable and maintained, in addition to above three conditions. The uniqueness of this program is that the educator must live and work in San Bernardino for the duration of the loan with a maximum loan amount of$70,000. Because of the length of time it may take to recruit faculty/educators to CSUSB, Dr. Karnig has requested that the Agency reserve at least $2 million for 2 years for the proposed homebuyer program. CSUSB, through the State Public Employees Retirement System (PERS), will have access to primary mortgage loan products that offer interest rates at .025% below market rate. The California State University system, through a master agreement with Citimortgage, will also have affordable primary mortgage products available to CSUSB faculty. Moreover, the University will seek private endowment funding which can be employed to further subsidize faculty housing. ----------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- ------------ P:\Development Dept\Lisa\05-12-19 CSUSB HAP 2.&c COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 Agenda Item Number: ' �, :) Economic Development Agency Staff Report Homebuyer Assistance Program—CSUSB Page 3 CSUSB plays a critical role in preparing its students for the job market by offering up-to-date skills and knowledge through its commitment to recruiting highly trained educators and faculty and encourages its educators to live in the community they work in. In closing, the proposed program will give CSUSB a valuable tool to use in its efforts to recruit quality faculty to assist in building a stronger university. As CSUSB continues to promote educational, social, economic, and cultural advancement in the region, this tool is important in assisting CSUSB realize its vision of becoming one of the leading comprehensive universities in the nation. ENVIRONMENTAL IMPACT: None. FISCAL IMPACT: The Agency will set aside $1,000,000 in Low/Moderate Housing Funds annually for two (2) years commencing in budget year 2005/2006. Funds are subject to availability and program success. RECOMMENDATION: That the Community Development Commission adopt the Motion. a Maggie Pacheco, Interim Executive Director --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- PADevelopment Dept\Lisa\05-12-19 CSUSB HAP 2.doc COMMISSION MEETING AGENDA Meeting Date: 12/19/2005 Agenda Item Number: J